\n1 NAME: Shanxi Mobile Communication Company Limited<\/p>\n2 PLACE OF INCORPORATION: Shanxi, PRC<\/p>\n
3 NATURE: Limited liability company<\/p>\n
4 SCOPE OF BUSINESS: engaging in the construction and investment
\n of mobile telecommunication networks;
\n engaging in the operation of mobile
\n telecommunication business; engaging in IP
\n phone business; operating computer networks
\n and international internet and engaging in
\n value-added business relating to mobile
\n telecommunication business; engaging in
\n system integration, settlement and clearing
\n of roaming, technological development,
\n technological service, and equipment
\n maintenance in relation to mobile
\n telecommunication business; engaging in sale
\n or lease of mobile telecommunication
\n terminal equipment and their accessories and
\n spare parts and providing after-sale
\n services of the above businesses.<\/p>\n
5 REGISTERED OFFICE: No. 39 Shuangtaxi Street, Taiyuan, Shanxi
\n Province, PRC<\/p>\n
6 REGISTERED CAPITAL: RMB10,000,000<\/p>\n
7 TAX RESIDENCE: Shanxi Province, PRC<\/p>\n
8 SUBSIDIARIES: None<\/p>\n
9 MORTGAGES AND CHARGES: None
\n<\/c><\/c><\/s><\/table>\n
– 38 –<\/p>\n
SCHEDULE 2
\n THE WARRANTIES
\n PART A: GENERAL<\/p>\n
1 INFORMATION<\/p>\n
1.1 All information relating to the Target Companies Group provided to the
\n Purchaser or its representatives and advisers for the purposes of
\n inclusion in the Circular or preparation of the Financial Statements
\n and the Appraisal Report is true, accurate and not misleading and does
\n not contain an untrue statement of a material fact or omit to state a
\n material fact required to be stated therein or necessary to make the
\n statements therein not misleading.<\/p>\n
1.2 Save as already disclosed in writing to the Purchaser, there are no
\n other facts or matters which might reasonably be expected to have a
\n material adverse effect on the financial or trading position or
\n prospects of any member of the Target Companies Group.<\/p>\n
2 CORPORATE MATTERS<\/p>\n
THE TARGET COMPANIES GROUP<\/p>\n
2.1 (a) All of the Target BVI Shares are fully-paid or properly credited
\n as fully-paid and the Vendor is the sole legal and beneficial
\n owner of them free from all Encumbrances. The Target BVI Shares
\n constitute the entire issued share capital of each of the Target
\n BVI Companies.<\/p>\n
(b) The information in respect of each of the Target BVI Companies
\n set out in Part A of Schedule 1 is true and accurate and not
\n misleading.<\/p>\n
(c) Each of the Target BVI Companies has been duly incorporated and
\n is validly existing under the laws of the British Virgin Islands,
\n with legal right, power and authority (corporate and other) to
\n own, use, lease and operate its properties and conduct its
\n business in the manner presently conducted and as described in
\n the Circular, and is duly qualified to transact business in any
\n jurisdiction in which it owns or leases properties or conducts
\n any business and such qualification is required, or is subject to
\n no material liability or disability by reason of the failure to
\n be so qualified in any such jurisdiction; the Memorandum of
\n Association and Articles of Association of each Target BVI
\n Company comply with the requirements of applicable laws of the
\n British Virgin Islands and are in full force and effect.<\/p>\n
2.2 (a) The Target BVI Companies are, or will by Completion be, the sole
\n legal and beneficial owner of the whole of the registered capital
\n of each of the Target Companies, respectively, free from all
\n Encumbrances.<\/p>\n
(b) The information in respect of each of the Target Companies set
\n out in Part B of Schedule 1 is true and accurate and not
\n misleading.<\/p>\n
(c) Each of the Target Companies is (or a valid application has been
\n made for it to be registered as) a wholly-foreign owned
\n enterprise with limited liability and has been duly organised and
\n is validly existing under the laws of the PRC, and its business
\n licence is in full force and effect; the Articles of <\/p>\n
– 39 –<\/p>\n
Association of each Target Company comply with the requirements
\n of applicable PRC law and are in full force and effect; each
\n Target Company has all consents, approvals, authorizations,
\n orders, registrations, clearances and qualifications of or with
\n any court, governmental agency or body having jurisdiction over
\n each Target Company or any of its properties in each jurisdiction
\n in which the ownership or lease of property by it or the conduct
\n of its business (as described in the Circular) requires such
\n qualification, except for such consents, approvals,
\n authorizations, orders, registrations, clearances and
\n qualifications the absence of which is disclosed in the Circular
\n or which is not material to such Target Company, and has the
\n legal right and authority to own, use, lease and operate its
\n assets and to conduct its business in the manner presently
\n conducted and as described in the Circular.<\/p>\n
2.3 Save for the unlisted equity securities in the PRC as disclosed in the
\n Accounts and the interest of the Target BVI Companies in the Target
\n Companies at Completion, no member of the Target Companies Group (that
\n is, the Target BVI Companies and the Target Companies) owns or has any
\n interest of any nature whatsoever in any shares, debentures or other
\n securities issued by any undertaking.<\/p>\n
2.4 No Target BVI Company carries on any business other than holding the
\n respective Target Companies, or owns any asset other than the shares
\n of the respective Target Companies at Completion or has any
\n liabilities.<\/p>\n
THE VENDOR AND THE WARRANTOR<\/p>\n
2.5 Each of the Vendor and the Warrantor is duly incorporated or
\n established and is validly existing under the laws of its jurisdiction
\n of incorporation, with full power and authority to own, lease and
\n operate its properties and assets and to execute and perform its
\n obligations under this Agreement and the Tax Indemnity.<\/p>\n
2.6 The execution, delivery and performance by each of the Vendor and the
\n Warrantor of this Agreement and the Tax Indemnity has been duly
\n authorised by it and this Agreement and the Tax Indemnity constitute a
\n legal, valid and binding obligation of the Vendor or the Warrantor
\n enforceable in accordance with its terms, subject to the laws of
\n bankruptcy and other similar laws affecting the rights of creditors
\n generally.<\/p>\n
2.7 All regulatory, corporate and other approvals (including shareholder
\n approvals) and authorisations required by the Vendor and the Warrantor
\n for the execution and delivery of this Agreement and the Tax Indemnity
\n and any agreement or instrument contemplated hereby, the performance
\n of the terms hereof and thereof and the sale of the Target BVI Shares
\n have been obtained, are unconditional and are in full force and
\n effect.<\/p>\n
2.8 All consents, approvals and authorisations of any court, government
\n department or other regulatory body required with respect to the
\n Vendor and the Warrantor for the execution of this Agreement and the
\n Tax Indemnity and the performance of its terms have been obtained and
\n are unconditional and in full force and effect.<\/p>\n
2.9 The execution and delivery by the Vendor and the Warrantor of this
\n Agreement and the Tax Indemnity, and the performance and completion of
\n the transactions herein contemplated: (a) will not infringe any
\n applicable laws or regulations; (b) will not <\/p>\n
– 40 –<\/p>\n
result in any breach of the terms of, or constitute a default under,
\n its constitutional documents and business licence (as applicable) or
\n any instrument, agreement or governmental, regulatory or other
\n judgement, decree or order to which the Vendor or the Warrantor is a
\n party or by which it or its property is bound; and (c) will not
\n conflict with any of the certificates, licences or permits of the
\n Vendor or the Warrantor that enable it to carry on the business or
\n operations now operated by it.<\/p>\n
2.10 Each of the Vendor and the Warrantor is not: (a) in breach of the
\n terms of, or in default under, any instrument, agreement or order to
\n which it is a party or by which it or its property is bound to an
\n extent which is material in the context of the transactions herein
\n contemplated; (b) involved in or the subject of any current or
\n pending investigation or proceedings (whether administrative,
\n regulatory or otherwise), whether in the PRC or elsewhere.<\/p>\n
3 FINANCIAL MATTERS<\/p>\n
FINANCIAL STATEMENTS<\/p>\n
3.1 (a) The Financial Statements give a true and fair view of the state
\n of affairs and financial results of the Target Companies for the
\n periods and as at the dates stated therein.<\/p>\n
(b) Without limiting the generality of paragraph (a):<\/p>\n
(i) the Accounts of the Target Companies either make full
\n provision for or disclose all liabilities (whether actual,
\n contingent or disputed and including financial lease
\n commitments and pension liabilities), all outstanding
\n capital commitments and all bad or doubtful debts of the
\n Target Companies as at the Accounts Dates, in each case in
\n accordance with applicable accounting principles;<\/p>\n
(ii) the Accounts of the Target Companies for each of the
\n periods ended on the Accounts Dates were prepared under
\n the historical convention, complied with the requirements
\n of all relevant laws and regulations then in force and
\n with all statements of standard accounting practice (or
\n financial reporting standards) and applicable accounting
\n principles then in force;<\/p>\n
(iii) the rate of depreciation adopted by the Target Companies
\n in its Accounts for each of the periods ended on the
\n Accounts Dates was sufficient for each of the fixed assets
\n of the Target Companies to be written down to nil by the
\n end of its useful life;<\/p>\n
(iv) except as stated in its Accounts, no changes in the
\n accounting policies were made by any of the Target
\n Companies in any of the periods ended on the Accounts
\n Dates; and<\/p>\n
(v) the results shown by the Accounts of the Target Companies
\n for each of the periods ended on the Accounts Dates were
\n not (except as therein disclosed) affected by any
\n extraordinary or exceptional item or by any other factor
\n rendering such results for all or any of such periods
\n unusually high or low.<\/p>\n
– 41 –<\/p>\n
3.2 None of the financial information provided to the Purchaser or its
\n representatives and advisers is misleading in any material respect nor
\n materially over-state the value of the assets nor materially
\n under-state the liabilities of any Target Company as at the dates to
\n which they were drawn up and do not materially over-state the profits
\n of any Target Company in respect of the periods to which they relate.<\/p>\n
POSITION SINCE LAST ACCOUNTS DATE<\/p>\n
3.3 (a) Since the Last Accounts Date and compared to the Last Accounts,
\n there has been no material adverse change in the financial or
\n trading position or in the prospects of any Target Company and no
\n event, fact or matter has occurred which is likely to give rise
\n to any such change.<\/p>\n
(b) Since the Last Accounts Date and compared to the Last Accounts:<\/p>\n
(i) the business of each Target Company has been carried on
\n in the ordinary and usual course and no Target Company
\n has made or agreed to make any payment other than
\n routine payments in the ordinary and usual course of
\n trading;<\/p>\n
(ii) no dividend or other distribution has been declared,
\n paid or made by any Target Company;<\/p>\n
(iii) there has been no material change in the level of
\n borrowing or in the working capital requirements of any
\n Target Company;<\/p>\n
(iv) all transactions between each Target Company and any
\n Vendor Group Company have been on an arm’s length basis
\n and commercial terms;<\/p>\n
(v) save for the Restructuring Agreements, the Connected
\n Transactions and the Trademark Licensing Agreement, no
\n contract, liability or commitment (whether in respect of
\n capital expenditure or otherwise) has been entered into
\n by any Target Company which is of a long term or unusual
\n nature or which involved or could involve an obligation
\n of a material nature or magnitude;<\/p>\n
(vi) save as provided in the Restructuring Agreements or in
\n the usual and ordinary course of business of the Target
\n Companies, no Target Company has (whether in the
\n ordinary and usual course of business or otherwise)
\n acquired or disposed of, or agreed to acquire or dispose
\n of any material business or any material asset having a
\n value in excess of RMB50,000,000;<\/p>\n
(vii) no debtor has been released by any Target Company on
\n terms that it pays less than the book value of its debt
\n and no material debt owing to any Target Company has
\n been deferred, subordinated or written off or has proved
\n to any extent irrecoverable;<\/p>\n
(viii) no change has been made in terms of employment and any
\n benefits in kind payable to employees and other
\n employment related matters by any Target Company or any
\n Vendor Group Company (other than those required by law)
\n which could materially <\/p>\n
– 42 –<\/p>\n
increase the total costs attributable to employment and
\n employee benefits of the Target Companies;<\/p>\n
(ix) there has been no material increase or decrease in the
\n levels of debtors or creditors or in the average
\n collection or payment periods for the debtors and
\n creditors respectively;<\/p>\n
(x) no Target Company has repaid any borrowing or
\n indebtedness in advance of its stated maturity;<\/p>\n
(xi) there has been no material reduction in the cash balances
\n of any Target Company;<\/p>\n
(xii) no resolution of the members of any Target Company has
\n been passed whether in general meeting or otherwise
\n (other than resolutions relating to the routine business
\n of annual general meetings);<\/p>\n
(xiii) the business of each Target Company has not been
\n affected by any abnormal factor not affecting to a
\n similar extent generally all companies carrying on
\n similar businesses; and<\/p>\n
(xiv) no Target Company has agreed to any variation or
\n termination of any existing contract to which that
\n Target Company is a party and which may have a material
\n effect upon the nature or scope of the operations of
\n such Target Company.<\/p>\n
WORKING CAPITAL<\/p>\n
3.4 Having regard to existing bank and other financial facilities, each
\n Target Company has sufficient working capital available to it as at
\n the date of this Agreement to enable it to continue to carry on its
\n business in its present form and at its present level of turnover and
\n for the purpose of performing in accordance with their terms all
\n orders, projects and other obligations and discharging all liabilities
\n which ought properly to be discharged during the period of 12 months
\n after Completion.<\/p>\n
ACCOUNTING AND OTHER RECORDS<\/p>\n
3.5 (a) The books of account and other records of each Target Company:<\/p>\n
(i) are up-to-date and have been maintained in accordance with
\n all applicable laws and generally accepted accounting
\n practices on a proper and consistent basis;<\/p>\n
(ii) comprise complete and accurate records of all information
\n required to be recorded therein;<\/p>\n
(iii) are in its possession or under its control together with
\n all documents of title and executed copies of all existing
\n agreements to which the relevant Target Company is a
\n party.<\/p>\n
(b) All accounts, documents and returns required by law to be
\n delivered or made by any Target Company to any government
\n authority or regulatory body or any other authority have been
\n duly and correctly delivered or made.<\/p>\n
– 43 –<\/p>\n
4 DEBT POSITION<\/p>\n
DEBTS OWED TO THE TARGET COMPANIES<\/p>\n
4.1 There are no debts owing to any Target Company other than;<\/p>\n
(i) the Intra-Group Loans; and<\/p>\n
(ii) trade debts incurred in the ordinary and usual course of
\n business which do not exceed 120% of the trade debts as set out
\n in the Last Accounts.<\/p>\n
DEBTS OWED BY THE TARGET COMPANIES<\/p>\n
4.2 (a) No Target Company has outstanding any borrowing or indebtedness
\n in the nature of borrowing (including, without limitation, any
\n indebtedness for moneys borrowed or raised under any acceptance
\n credit, bond, note, bill of exchange or commercial paper, finance
\n lease, hire purchase agreement, trade bills (other than those on
\n terms normally obtained), forward sale or purchase agreement or
\n conditional sale agreement or other transaction having the
\n commercial effect of a borrowing) other than:<\/p>\n
(i) the Intra-Group Loans; and<\/p>\n
(ii) moneys borrowed from or otherwise owed to third parties
\n which do not exceed 120% of the money borrowed from or
\n otherwise owed to third parties as set out in the Last
\n Accounts.<\/p>\n
(b) No Target Company has received any notice to repay under any
\n agreement relating to any borrowing or indebtedness in the nature
\n of borrowing which is repayable on demand.<\/p>\n
(c) There has not occurred any event of default or any other event or
\n circumstance which would entitle any person to call for early
\n repayment under any agreement relating to any borrowing or
\n indebtedness of any Target Company or to enforce any security
\n given by any Target Company (or, in either case, any event or
\n circumstance which with the giving of notice and\/or the lapse of
\n time and\/or a relevant determination would constitute such an
\n event or circumstance).<\/p>\n
5 REGULATORY MATTERS<\/p>\n
5.1 (a) Each Target Company has, or will by Completion have, obtained all
\n licences, permissions, authorisations and consents required for
\n carrying on its business effectively in the places and in the
\n manner in which such business is now carried on.<\/p>\n
(b) The licences, permissions, authorisations and consents referred
\n to in paragraph (a) are (or will by Completion be) in full force
\n and effect, not limited in duration or subject to any unusual or
\n onerous conditions, have been (or will by Completion have been)
\n complied with in all respects.<\/p>\n
(c) To the best knowledge of the Vendor and the Warrantor, there are
\n no circumstances which indicate that any of the licences,
\n permissions, authorisations or consents referred to in paragraph
\n (a) will or are likely to be revoked or not renewed, in whole or
\n in part, in the ordinary course of events <\/p>\n
– 44 –<\/p>\n
(whether as a result of the acquisition of the Target BVI Shares
\n by the Purchaser or otherwise).<\/p>\n
5.2 (a) Each Target Company has conducted its business and corporate
\n affairs in accordance with its business licence and with all
\n applicable laws and regulations (whether of the PRC or any other
\n jurisdiction).<\/p>\n
(b) No Target Company is in default of any order, decree or judgment
\n of any court or any governmental or regulatory authority (whether
\n of the PRC or any other jurisdiction).<\/p>\n
6 THE REORGANISATION AND THE ASSETS<\/p>\n
THE REORGANISATION<\/p>\n
6.1 The property and other assets transferred into the Target Companies
\n pursuant to the Reorganisation comprise all the assets necessary for
\n the carrying on of the business carried on or to be carried on by the
\n Target Companies in the manner it is presently conducted and as
\n described in the Circular and the liabilities assumed by the Target
\n Companies pursuant to the Reorganisation represent the only
\n liabilities of the Target Companies and are fully, fairly and
\n accurately provided for in, the Financial Statements.<\/p>\n
6.2 The events and transactions contemplated by the Reorganisation do not
\n contravene any provision of applicable law, rule or regulation and do
\n not contravene the Articles of Association, other constitutional
\n documents or the business licence of the Target Companies or
\n contravene the terms or provisions of, or constitute a default under,
\n any indenture, mortgage, deed of trust, loan agreement, note, lease or
\n other agreement or instrument binding upon the Target Companies that,
\n singly or in the aggregate, is material to the Target Companies, or
\n any judgement, rule or regulation, order or decree of any governmental
\n body, agency or court having jurisdiction over the Target Companies
\n and will not result in the creation or imposition of any Encumbrance
\n or other restriction upon any assets of the Target Companies.<\/p>\n
6.3 All consents, approvals, authorisations, orders, registrations and
\n qualifications required in the PRC in connection with the events and
\n transactions contemplated by the Reorganisation have been (or will by
\n Completion have been) made or unconditionally obtained in writing
\n (including, without limitation, all PRC Relevant Governmental
\n Approvals), and no such consent, approval, authorisation, order,
\n registration or qualification has been withdrawn or is subject to any
\n condition precedent which has not been fulfilled or performed.<\/p>\n
6.4 There are no legal or government proceedings pending against any of
\n the Target Companies in the PRC challenging the effectiveness or
\n validity of the events and transactions contemplated by the
\n Reorganisation and, to the best knowledge of the Vendor and the
\n Warrantor, no such proceedings are threatened or contemplated by any
\n governmental agencies in the PRC or elsewhere.<\/p>\n
OWNERSHIP<\/p>\n
6.5 (a) For the purpose of this Warranty 6.5, assets shall not include
\n the Properties, to which the provisions of Part B of this
\n Schedule shall apply.<\/p>\n
– 45 –<\/p>\n
(b) Each of the assets included in the Last Accounts of each Target
\n Company or acquired by it since the Last Accounts Date (other
\n than assets disposed of in the ordinary course of business and
\n pursuant to the Reorganisation) is the absolute property of that
\n Target Company. Save as disclosed in the Last Accounts, those
\n assets are not the subject of any security interest or any
\n assignment, equity, option, right of pre-emption, royalty,
\n factoring arrangement, leasing or hiring agreement, hire purchase
\n agreement, conditional sale or credit sale agreement, agreement
\n for payment on deferred terms or any similar agreement or
\n arrangement (or any agreement or obligation, including a
\n conditional obligation, to create or enter into any of the
\n foregoing).<\/p>\n
POSSESSION AND THIRD PARTY FACILITIES<\/p>\n
6.6 (a) All of the assets owned by each Target Company, or in respect of
\n which any Target Company has a right of use, are in the
\n possession or under the control of that Target Company.<\/p>\n
(b) Where any assets are used but not owned by any Target Company or
\n any facilities or services are provided to any Target Company by
\n any third party, there has not occurred any event of default or
\n any other event or circumstance which may entitle any third party
\n to terminate any agreement or licence in respect of the provision
\n of such facilities or services (or any event or circumstance
\n which with the giving of notice and\/or the lapse of time and\/or a
\n relevant determination would constitute such an event or
\n circumstance).<\/p>\n
ADEQUACY OF ASSETS<\/p>\n
6.7 (a) The assets of each Target Company and the facilities and services
\n to which each Target Company has a contractual right include all
\n rights, properties, assets, facilities and services necessary or
\n desirable for the carrying on of the business of that Target
\n Company in the manner in which it is currently carried on.<\/p>\n
(b) The assets of each Target Company and the facilities and services
\n to which the relevant Target Company has a contractual right
\n include all assets, facilities and services necessary to enable
\n such Target Company to conduct its business after Completion in
\n the same manner in all material respects as it was conducted
\n immediately prior to the transfer of such business to the
\n relevant Target Company pursuant to the Reorganisation.<\/p>\n
(c) Save as otherwise provided in the Connected Transactions and the
\n Trademark Licensing Agreement, no Target Company depends in any
\n material respect upon the use of assets owned by, or facilities
\n or services provided by, any Vendor Group Company.<\/p>\n
CONDITION<\/p>\n
6.8 All the plant, machinery, systems, equipment and vehicles used by each
\n Target Company:<\/p>\n
– 46 –<\/p>\n
(a) are in a good state of repair and have been regularly and
\n properly maintained in accordance with appropriate technical
\n specifications, safety regulations and the terms and conditions
\n of any applicable agreement;<\/p>\n
(b) are capable of being efficiently and properly used for the
\n purposes for which they were acquired or are retained;<\/p>\n
(c) are not dangerous, inefficient, obsolete or in need of renewal or
\n replacement.<\/p>\n
INSURANCES<\/p>\n
6.9 (a) The insurances for the business, undertakings, properties and
\n other assets of each Target Company are in full force and effect
\n and there are no circumstances which could render any of such
\n insurances void or voidable and all due premiums in respect
\n thereof have (if due) been paid.<\/p>\n
(b) No claim is outstanding by any Target Company under any such
\n policy of insurance and, to the best knowledge of the Vendor and
\n the Warrantor, there are no circumstances likely to give rise to
\n such a claim.<\/p>\n
7 INTELLECTUAL PROPERTY RIGHTS<\/p>\n
REGISTERED RIGHTS<\/p>\n
7.1 (a) Each of the Target Companies is the sole legal owner of all
\n Intellectual Property Rights registered or sought to be
\n registered in any jurisdiction which are held or beneficially
\n owned by such Target Company.<\/p>\n
(b) No act has been done or omitted to be done and no event has
\n occurred or is likely to occur which may render any of such
\n Intellectual Property Rights subject to revocation, compulsory
\n licence, cancellation or amendment or may prevent the grant or
\n registration of a valid Intellectual Property Right pursuant to a
\n pending application.<\/p>\n
INFRINGEMENT<\/p>\n
7.2 (a) None of the operations of any Target Company infringe, or are
\n likely to infringe, any rights held by any third party or involve
\n the unauthorised use of confidential information disclosed to any
\n Target Company (or any Vendor Group Company) in circumstances
\n which might entitle a third party to make a claim against a
\n Target Company.<\/p>\n
(b) No claim has been made by any third party which alleges any
\n infringing act or process which would fall within paragraph (a)
\n above or which otherwise disputes the right of any Target Company
\n to use any Intellectual Property Rights relating to its business
\n and the Vendor and the Warrantor are not aware of any
\n circumstances (including any act or omission to act) likely to
\n give rise to such a claim.<\/p>\n
(c) There exists no actual or threatened infringement by any third
\n party of any intellectual Property Rights held or used by a
\n Target Company (including misuse of confidential information) or
\n any event likely to constitute such an infringement nor has a
\n Target Company (or any Vendor Group Company) <\/p>\n
– 47 –<\/p>\n
acquiesced in the unauthorised use by any third party of any such
\n Intellectual Property Rights.<\/p>\n
INTELLECTUAL PROPERTY LICENCES<\/p>\n
7.3 No Target Company is in default under any licence, sub-licence or
\n assignment granted to it in respect of any Intellectual Property
\n Rights used by any Target Company.<\/p>\n
LOSS OF RIGHTS<\/p>\n
7.4 No Intellectual Property Rights owned or used by a Target Company and
\n no licence of Intellectual Property Rights of which a Target Company
\n has the benefit will be lost, or rendered liable to any right of
\n termination or cessation by any third party, by virtue of the
\n acquisition by the Purchaser of the Target BVI Shares.<\/p>\n
RECORDS AND SOFTWARE<\/p>\n
7.5 (a) All the accounting records and systems (including but not limited
\n to computerised accounting systems) of the Target Companies are
\n recorded, stored, maintained or operated or otherwise held by a
\n Target Company and are not wholly or partly dependent on any
\n facilities or systems which are not under the exclusive ownership
\n or control of a Target Company.<\/p>\n
(b) Each Target Company is licensed to use all software necessary to
\n enable it to continue to use its computerised records for the
\n foreseeable future in the same manner in which they have been
\n used prior to the date of this Agreement and does not share any
\n user rights in respect of such software with any other person.<\/p>\n
8 CONTRACTUAL MATTERS<\/p>\n
MATERIAL CONTRACTS<\/p>\n
8.1 Save for the Restructuring Agreements, the Connected Transactions and
\n the Trademark Licensing Agreement, there is not outstanding any
\n agreement or arrangement to which any Target Company is a party:<\/p>\n
(a) which, by virtue of the acquisition of the Target BVI Shares by
\n the Purchaser or other performance of the terms of this
\n Agreement, will result in:<\/p>\n
(i) any other party being relieved of any obligation or
\n becoming entitled to exercise any right (including any
\n right of termination or any right of pre-emption or other
\n option); or<\/p>\n
(ii) any Target Company being in default under any such
\n agreement or arrangement or losing any benefit, right or
\n licence which it currently enjoys or in a liability or
\n obligation of any Target Company being created or
\n increased;<\/p>\n
(b) to which any Vendor Group Company is a party or in which any
\n Vendor Group Company or any connected person (as defined under
\n the Listing <\/p>\n
– 48 –<\/p>\n
Rules) is interested or from which any such person takes benefit,
\n whether directly or indirectly;<\/p>\n
(c) entered into otherwise than by way of a bargain at arm’s length
\n and on commercial terms;<\/p>\n
(d) which establishes any guarantee, indemnity, suretyship, form of
\n comfort or support (whether or not legally binding) given by any
\n Target Company in respect of the obligations or solvency of any
\n third party;<\/p>\n
(e) pursuant to which any Target Company has sold or otherwise
\n disposed of any company or business in circumstances such that it
\n remains subject to any liability (whether contingent or
\n otherwise) which is not fully provided for in its Last Accounts;<\/p>\n
(f) which, upon completion by a Target Company of its work or the
\n performance of its other obligations under it, is likely to
\n result in a loss for that Target Company which is not fully
\n provided for in its Last Accounts or which either is not expected
\n to make a normal profit margin or involves an abnormal degree of
\n risk;<\/p>\n
(g) which establishes any joint venture, consortium, partnership or
\n profit (or loss) sharing agreement or arrangement to which any
\n Target Company is a party;<\/p>\n
(h) any power of attorney given by any Target Company or any other
\n authority which would enable any person not employed by any
\n Target Company to enter into any contract or commitment on behalf
\n of any Target Company;<\/p>\n
(i) which involves or is likely to involve (i) material expenditure
\n by any Target Company or (ii) material obligations or
\n restrictions of any Target Company of an unusual or exceptional
\n nature or magnitude and not in the ordinary and usual course of
\n business;<\/p>\n
(j) which establishes any material agency, distributorship,
\n marketing, purchasing, manufacturing or licensing agreement or
\n arrangement to which any Target Company is a party;<\/p>\n
(k) which is a currency and\/or interest rate swap agreement, asset
\n swap, future rate or forward rate agreement, interest cap, collar
\n and\/or floor agreement or other exchange or rate protection
\n transaction or combination thereof or any option with respect to
\n any such transaction or any other similar transaction to which
\n any target Company is a party;<\/p>\n
(l) which is any other agreement or arrangement having or likely to
\n have a material effect on the financial or trading position or
\n prospects of any Target Company;<\/p>\n
(m) which is a bid, tender, proposal or offer which, if accepted,
\n would result in any Target Company becoming a party to any
\n agreement or arrangement of a kind described in paragraphs (a) to
\n (l) above.<\/p>\n
– 49 –<\/p>\n
DEFAULTS<\/p>\n
8.2 (a) No Target Company is in default under any agreement to which
\n it is a party and there are no circumstances likely to give
\n rise to any such default.<\/p>\n
(b) No party with whom any Target Company has entered into any
\n agreement or arrangement is in default under such agreement
\n or arrangement and there are no circumstances likely to give
\n rise to any such default.<\/p>\n
9 LITIGATION AND INVESTIGATIONS<\/p>\n
LITIGATION<\/p>\n
9.1 (a) Except as plaintiff in the collection of debts arising in the
\n ordinary course of business, no Target Company is a plaintiff or
\n defendant in or otherwise a party to any material litigation,
\n arbitration or administrative proceedings which are in progress
\n or threatened or pending by or against or concerning any Target
\n Company or any of its assets.<\/p>\n
(b) No governmental or official investigation or inquiry concerning
\n any Target Company is in progress or pending.<\/p>\n
(c) The Vendor and the Warrantor are not aware of any circumstances
\n which are likely to give rise to any such proceeding,
\n investigation or inquiry as is referred to in paragraph (a) or
\n paragraph (b).<\/p>\n
10 DIRECTORS AND EMPLOYEES<\/p>\n
EMPLOYEES<\/p>\n
10.1 No Target Company has entered into any arrangements regarding any
\n future variation in any contract of employment in respect of any of
\n its directors and employees or any agreement imposing an obligation
\n on the Target Company to increase the basis and\/or rates of
\n remuneration and\/or the provision of other benefits in kind to or on
\n behalf of any of its directors or employees at any future date.<\/p>\n
COMPLIANCE<\/p>\n
10.2 Each Target Company has in relation to each of its employees (and so
\n far as relevant to each of its former employees) complied in all
\n material respects with all statutes, regulations, codes of conduct,
\n collective agreements, terms and conditions of employment, orders and
\n awards relevant to their conditions of service or to the relations
\n between it and its employees (or former employees, as the case may
\n be) or any recognised trade union.<\/p>\n
INCENTIVE SCHEMES<\/p>\n
10.3 No Target Company has in existence any share incentive scheme, share
\n option scheme or profit sharing scheme for all or any of its
\n directors or employees.<\/p>\n
PAYMENTS ON TERMINATION<\/p>\n
10.4 Except to the extent (if any) to which provision or allowance has
\n been made in the Last Accounts of each Target Company:<\/p>\n
– 50 –<\/p>\n
(a) no outstanding liability has been incurred by any Target Company
\n for breach of any contract of employment or for services or for
\n long service or redundancy payments, protective awards,
\n compensation for dismissal or for any other liability accruing
\n from the termination of any contract of employment or for
\n services, and no such liability will be incurred by any Target
\n Company as a result of the Reorganisation or the acquisition of
\n the Target BVI Shares by the Purchaser or other performance of
\n the terms of this Agreement and the Restructuring Agreements;<\/p>\n
(b) no gratuitous payment has been made or benefit given (or promised
\n to be made or given) by any Target Company in connection with the
\n actual or proposed termination or suspension of employment, or
\n variation of any contract of employment, of any present or former
\n director or employee of any Target Company.<\/p>\n
11 INSOLVENCY ETC.<\/p>\n
11.1 No order has been made, petition presented or meeting convened for
\n the purpose of considering a resolution for the winding up of any
\n member of the Target Companies Group or for the appointment of any
\n provisional liquidator. No petition has been presented for an
\n administration order to be made in relation to any member of the
\n Target Companies Group, and no receiver (including any administrative
\n receiver) has been appointed in respect of the whole or any part of
\n any of the property, assets and\/or undertaking of any member of the
\n Target Companies Group.<\/p>\n
11.2 No composition in satisfaction of the debts of any member of the
\n Target Companies Group, or scheme of arrangement of its affairs, or
\n compromise or arrangement between it and its creditors and\/or members
\n or any class of its creditors and\/or members, has been proposed,
\n sanctioned or approved.<\/p>\n
11.3 No distress, distraint, charging order, garnishee order, execution or
\n other process has been levied or applied for in respect of the whole
\n or any part of any of the property, assets and\/or undertaking of any
\n member of the Target Companies Group.<\/p>\n
11.4 No events or circumstances analogous to any of those referred to in
\n Warranties 11.1 to 11.3 have occurred in any jurisdiction outside the
\n PRC.<\/p>\n
11.5 No circumstances exist which are likely to give rise to the
\n occurrence of any events or circumstances described in Warranties
\n 11.1 to 11.4 if the Warranties were to be repeated at any time on or
\n before Completion.<\/p>\n
– 51 –<\/p>\n
PART B: TAX AND PROPERTY WARRANTIES<\/p>\n
1 TAX<\/p>\n
1.1 Each of the Target Companies has all necessary tax registration
\n certificates which are in full force and effect and no Target Company
\n has established any place of business or carried on any business and
\n has not made any filing with any tax authority in any part of the
\n world other than the PRC.<\/p>\n
1.2 Each of the Target Companies has complied in all material respects
\n with all statutory provisions, rules, regulations, orders and
\n directions concerning profits or enterprise income tax, foreign
\n enterprise income tax, value-added tax, business tax and stamp duty
\n (and any similar applicable tax or taxation in the PRC).<\/p>\n
1.3 No tax authority has agreed to operate any special arrangement (being
\n an arrangement which is not based on a uniform application of the
\n relevant legislation whether expressly provided for in the relevant
\n legislation or operated by way of extra statutory concession or
\n otherwise) in relation to any of the Target Companies.<\/p>\n
1.4 Each of the Target Companies has duly, within all appropriate time
\n limits, made all returns, given all notices and supplied all
\n information required to be supplied to all relevant tax authorities,
\n All such information was when provided and remain complete and
\n accurate and all such returns and notices were when provided and
\n remain complete and accurate and were made on a proper basis.<\/p>\n
1.5 No Target Company has received any notice or allegation from any tax
\n authorities that it has not complied with any relevant legal
\n requirement relating to registration or notification for taxation
\n purposes and no Target Company is involved in any dispute or
\n investigation with any tax authority and there are no facts or matters
\n which it reasonably believes will cause any such dispute or
\n investigation or any liability for taxation (present or future).<\/p>\n
1.6 Each of the Target Companies:<\/p>\n
(a) has paid or accounted for all taxation (if any) due to be paid or
\n accounted for by it before the date of this Agreement;<\/p>\n
(b) is not under any liability to pay any penalty or interest in
\n connection with any taxation referred to in paragraph (a);<\/p>\n
(c) has made all deductions and withholdings in respect or on account
\n of taxation which it is required or entitled by any relevant
\n legislation to make from any payments made by it including,
\n without limitation, interest annuities or other annual payments,
\n royalties, rent, remuneration payable to employees or
\n sub-contractors or payments to a non-resident and where
\n appropriate each Target Company has accounted in full to the
\n relevant fiscal authority for any taxation so deducted or
\n withheld; and<\/p>\n
(d) has taken all necessary steps to obtain any repayment of or
\n relief from taxation available to it.<\/p>\n
1.7 All sums due and payable to any taxation authority in respect of
\n emoluments paid and benefits provided to the employees of the Target
\n Companies at the date of this <\/p>\n
– 52 –<\/p>\n
Agreement have been paid and all such deductions and retentions as are
\n required under the laws of the PRC have been made.<\/p>\n
1.8 All remuneration, compensation payments, payments on retirement or
\n removal from an office or employment and other sums paid or payable to
\n employees or officers or former employees or officers of each Target
\n Company and all interest, annuities, royalties, rent and other annual
\n payments paid or payable by each Target Company (whether before or
\n after the date hereof) pursuant to any obligation in existence at the
\n date hereof are and will (on the basis of the taxation legislation in
\n force at the date hereof) be deductible for incomes tax purposes
\n either in computing the profits of each Target Company or as a charge
\n on the income of such Target Company.<\/p>\n
1.9 Each of the Target Companies has made or caused to be made the returns
\n which ought to be made by or in respect of each Target Company for any
\n taxation purposes and no returns are the subject of any dispute with
\n any tax authority.<\/p>\n
2 PROPERTY<\/p>\n
2.1 The Target Companies have valid title to all of the Properties and
\n valid title to all material personal property owned by them, in each
\n case free and clear of all Encumbrances, defects or any other
\n restrictions except such as are described in the Property Legal
\n Opinions or such as do not materially affect the value of such
\n property and do not interfere with the use made and proposed to be
\n made of such property by the Target Companies.<\/p>\n
2.2 The Target Companies do not own, operate, manage or have any other
\n right or interest, directly or indirectly, in any other material real
\n property of any kind save for those described in the Property Legal
\n Opinions and the telecommunications services agreements referred to in
\n paragraphs 1 to 8 of Appendix 1.<\/p>\n
– 53 –<\/p>\n
APPENDIX 1
\n CONNECTED TRANSACTIONS<\/p>\n
1 Telecommunications Services Agreement between Anhui Mobile and Anhui
\n Communication Services Company.<\/p>\n
2 Telecommunications Services Agreement between Jiangxi Mobile and Jiangxi
\n Communication Services Company.<\/p>\n
3 Telecommunications Services Agreement between Chongqing Mobile and
\n Chongqing Communication Services Company.<\/p>\n
4 Telecommunications Services Agreement between Sichuan Mobile and Sichuan
\n Communication Services Company.<\/p>\n
5 Telecommunications Services Agreement between Hubei Mobile and Hubei
\n Communication Services Company.<\/p>\n
6 Telecommunications Services Agreement between Hunan Mobile and Hunan
\n Communication Services Company.<\/p>\n
7 Telecommunications Services Agreement between Shaanxi Mobile and Shaanxi
\n Communication Services Company.<\/p>\n
8 Telecommunications Services Agreement between Shanxi Mobile and Shanxi
\n Communication Services Company.<\/p>\n
9 Transmission Tower Sales, Installation and Maintenance Agreement between
\n the Purchaser and Hubei Communication Services Company.<\/p>\n
10 Letters of Consent between the Warrantor, Anhui Mobile, Anhui Communication
\n Services Company and the relevant banks regarding the assignment of loans
\n from Anhui Communication Services Company to Anhui Mobile.<\/p>\n
11 Letters of Consent between the Warrantor, Jiangxi Mobile, Jiangxi
\n Communication Services Company and the relevant banks regarding the
\n assignment of loans from Jiangxi Communication Services Company to Jiangxi
\n Mobile.<\/p>\n
12 Letters of Consent between the Warrantor, Chongqing Mobile, Chongqing
\n Communication Services Company and the relevant banks regarding the
\n assignment of loans from Chongqing Communication Services Company to
\n Chongqing Mobile.<\/p>\n
13 Letters of Consent between the Warrantor, Sichuan Mobile, Sichuan
\n Communication Services Company and the relevant banks regarding the
\n assignment of loans from Sichuan Communication Services Company to Sichuan
\n Mobile.<\/p>\n
14 Letters of Consent between the Warrantor, Hubei Mobile, Hubei Communication
\n Services Company and the relevant banks regarding the assignment of loans
\n from Hubei Communication Services Company to Hubei Mobile.<\/p>\n
15 Letters of Consent between the Warrantor, Hunan Mobile, Hunan Communication
\n Services Company and the relevant banks regarding the assignment of loans
\n from Hunan Communication Services Company to Hunan Mobile.<\/p>\n
– 54 –<\/p>\n
16 Letters of Consent between the Warrantor, Shaanxi Mobile, Shaanxi
\n Communication Services Company and the relevant banks regarding the
\n assignment of loans from Shaanxi Communication Services Company to Shaanxi
\n Mobile.<\/p>\n
17 Letters of Consent between the Warrantor, Shanxi Mobile, Shanxi
\n Communication Services Company and the relevant banks regarding the
\n assignment of loans from Shanxi Communication Services Company to Shanxi
\n Mobile.<\/p>\n
18 Principle Agreement for Indirect Loans between the Warrantor and the
\n Purchaser.<\/p>\n
19 Agreement for the Use of Spectrum and Number Resources between the
\n Warrantor and the Purchaser.<\/p>\n
20 Inter-provincial Long Distance Transmission Lines Leasing Fee Sharing
\n Agreement between the Warrantor and the Purchaser.<\/p>\n
21 Inter-provincial Interconnection and Domestic and International Roaming
\n Settlement Agreement between the Warrantor and the Purchaser.<\/p>\n
22 Agreement for the Sharing and Settlement of Revenue from Prepaid
\n Value-adding Cards between the Warrantor and the Purchaser.<\/p>\n
23 Supplemental Agreement for the Sharing and Settlement of Revenue from
\n Prepaid Value-Adding Cards between the Warrantor and the Purchaser.<\/p>\n
24 Supplemental Agreement (in relation to agreements 19 to 23 above) between
\n the Warrantor, the Purchaser and the Target Companies.<\/p>\n
– 55 –<\/p>\n
APPENDIX 2
\n THE RESTRUCTURING AGREEMENTS<\/p>\n
1 Investment Agreement dated 15 May 2002 between the Warrantor, Anhui Mobile
\n and Anhui Communication Services Company, pursuant to which the Warrantor
\n injected all interests, assets, liabilities, personnel and businesses in
\n relation to the mobile telecommunications services in Anhui into Anhui
\n Mobile.<\/p>\n
2 Confirmation of Rights and Obligations Agreement dated 15 May 2002 between
\n Anhui Mobile and Anhui Communication Services Company to confirm the rights
\n and obligations in respect of the interests, assets, liabilities, personnel
\n and businesses transferred under the Investment Agreement.<\/p>\n
3 Investment Agreement dated 15 May 2002 between the Warrantor, Jiangxi
\n Mobile and Jiangxi Communication Services Company, pursuant to which the
\n Warrantor injected all interests, assets, liabilities, personnel and
\n businesses in relation to the mobile telecommunications services in Jiangxi
\n into Jiangxi Mobile.<\/p>\n
4 Confirmation of Rights and Obligations Agreement dated 15 May 2002 between
\n Jiangxi Mobile and Jiangxi Communication Services Company to confirm the
\n rights and obligations in respect of the interests, assets, liabilities,
\n personnel and businesses transferred under the Investment Agreement.<\/p>\n
5 Investment Agreement dated 15 May 2002 between the Warrantor, Chongqing
\n Mobile and Chongqing Communication Services Company, pursuant to which the
\n Warrantor injected all interests, assets, liabilities personnel and
\n businesses in relation to the mobile telecommunications services in
\n Chongqing into Chongqing Mobile.<\/p>\n
6 Confirmation of Rights and Obligations Agreement dated 15 May 2002 between
\n Chongqing Mobile and Chongqing Communication Services Company to confirm
\n the rights and obligations in respect of the interests, assets,
\n liabilities, personnel and businesses transferred under the Investment
\n Agreement.<\/p>\n
7 Investment Agreement dated 15 May 2002 between the Warrantor, Sichuan
\n Mobile and Sichuan Communication Services Company, pursuant to which the
\n Warrantor injected all interests, assets, liabilities, personnel and
\n businesses in relation to the mobile telecommunications services in Sichuan
\n into Sichuan Mobile.<\/p>\n
8 Confirmation of Rights and Obligations Agreement dated 15 May 2002 between
\n Sichuan Mobile and Sichuan Communication Services Company to confirm the
\n rights and obligations in respect of the interests, assets, liabilities,
\n personnel and businesses transferred under the Investment Agreement.<\/p>\n
9 Investment Agreement dated 15 May 2002 between the Warrantor, Hubei Mobile
\n and Hubei Communication Services Company, pursuant to which the Warrantor
\n injected all interest, assets, liabilities, personnel and businesses in
\n relation to the mobile telecommunications services in Hubei into Hubei
\n Mobile.<\/p>\n
10 Confirmation of Rights and Obligations Agreement dated 15 May 2002 between
\n Hubei Mobile and Hubei Communication Services Company to confirm the rights
\n and obligations in respect of the interests, assets, liabilities, personnel
\n and businesses transferred under the Investment Agreement.<\/p>\n
– 56 –<\/p>\n
11 Investment Agreement dated 15 May 2002 between the Warrantor, Hunan Mobile
\n and Hunan Communication Services Company, pursuant to which the Warrantor
\n injected all interests, assets, liabilities, personnel and businesses in
\n relation to the mobile telecommunications services in Hunan into Hunan
\n Mobile.<\/p>\n
12 Confirmation of Rights and Obligations Agreement dated 15 May 2002 between
\n Hunan Mobile and Hunan Communication Services Company to confirm the rights
\n and obligations in respect of the interests, assets, liabilities, personnel
\n and businesses transferred under the Investment Agreement.<\/p>\n
13 Investment Agreement dated 15 May 2002 between the Warrantor, Shaanxi
\n Mobile and Shaanxi Communication Services Company, pursuant to which the
\n Warrantor injected all interests, assets, liabilities, personnel and
\n businesses in relation to the mobile telecommunications services in Shaanxi
\n into Shaanxi Mobile.<\/p>\n
14 Confirmation of Rights and Obligations Agreement dated 15 May 2002 between
\n Shaanxi Mobile and Shaanxi Communication Industrial Company to confirm the
\n rights and obligations in respect of the interests, assets, liabilities,
\n personnel and businesses transferred under the Investment Agreement.<\/p>\n
15 Investment Agreement dated 15 May 2002 between the Warrantor, Shanxi Mobile
\n and Shanxi Communication Services Company, pursuant to which the Warrantor
\n injected all interests, assets, liabilities, personnel and businesses in
\n relation to the mobile telecommunications services in Shanxi into Shanxi
\n Mobile.<\/p>\n
16 Confirmation of Rights and Obligations Agreement dated 15 May 2002 between
\n Shanxi Mobile and Shanxi Communication Services Company to confirm the
\n rights and obligations in respect of the interests, assets, liabilities,
\n personnel and businesses transferred under the Investment Agreement.<\/p>\n
17 Transfer of Interests Agreement between the Warrantor, China Mobile (Hong
\n Kong) Group Company Limited, the Vendor, Anhui Mobile BVI, Jiangxi Mobile
\n BVI, Chongqing Mobile BVI, Sichuan Mobile BVI, Hubei Mobile BVI, Hunan
\n Mobile BVI, Shaanxi Mobile BVI and Shanxi Mobile BVI.<\/p>\n
– 57 –<\/p>\n
APPENDIX 3
\n FORM OF TAX INDEMNITY<\/p>\n
Dated 2002<\/p>\n
CHINA MOBILE HONG KONG (BVI) LIMITED<\/p>\n
CHINA MOBILE (HONG KONG) LIMITED<\/p>\n
CHINA MOBILE COMMUNICATIONS CORPORATION<\/p>\n
TAX INDEMNITY<\/p>\n
– 58 –<\/p>\n
THIS DEED OF TAX INDEMNITY is made on 2002<\/p>\n
BETWEEN:<\/p>\n
(1) CHINA MOBILE HONG KONG (BVI) LIMITED a company incorporated under the laws
\n of the British Virgin Islands whose registered office is at PO Box 957,
\n Offshore Incorporation Centre, Road Town, Tortola, British Virgin Islands
\n (the “VENDOR”);<\/p>\n
(2) CHINA MOBILE (HONG KONG) LIMITED a company incorporated under the laws of
\n Hong Kong whose registered office is at 60th Floor, The Center, 99 Queen’s
\n Road Central, Hong Kong (the “PURCHASER”); and<\/p>\n
(3) CHINA MOBILE COMMUNICATIONS CORPORATION a company incorporated under the
\n laws of the PRC whose registered office is at 53A Xibianmennei Dajie,
\n Xuanwuqu, Beijing, PRC (the “WARRANTOR”).<\/p>\n
WHEREAS:<\/p>\n
(A) By a Conditional Sale and Purchase Agreement dated 16 May 2002 (the
\n “AGREEMENT”) made between the Vendor, the Warrantor and the Purchaser, the
\n Vendor has agreed to sell and the Purchaser has agreed to purchase the
\n Target BVI Shares (as defined in the Agreement) on the terms and conditions
\n therein contained.<\/p>\n
(B) It is a term of the Agreement that the Vendor and the Warrantor deliver to
\n the Purchaser this Deed of Tax Indemnity on Completion (as defined in the
\n Agreement).<\/p>\n
NOW THIS DEED WITNESSES as follows:<\/p>\n
1 INTERPRETATION<\/p>\n
1.1 In this Deed, unless the context requires otherwise:<\/p>\n
(a) words and expressions and other rules of interpretation defined,
\n used or set out in the Agreement have the same meanings and
\n application in this Deed;<\/p>\n
(b) “TAXATION” means and includes all forms of tax, levy, duty,
\n charge, impost, fee, deduction or withholding of any nature now
\n or hereafter imposed, levied, collected, withheld or assessed by
\n any taxing or other authority in any part of the world and
\n includes any interest, additional tax, penalty or other charge
\n payable or claimed in respect thereof,<\/p>\n
(c) “CLAIM” means any assessment, notice, demand, letter or other
\n document issued or action taken by or on behalf of any person,
\n authority or body whatsoever and of whatever country from which
\n it appears that any member of the Target Companies Group is
\n liable or is sought to be made liable to make any payment or is
\n deprived or is sought to be deprived of any relief or allowance
\n or credit or right to repayment of taxation;<\/p>\n
(d) “EVENT” includes (without limitation) the death of any person,
\n any action, omission or transaction whether or not any member of
\n the Target Companies Group is a party thereto and includes
\n completion of the sale of the Target BVI Shares to the Purchaser
\n and references to the result of events on or before the date
\n hereof shall include the combined result of two or more events
\n one or more of which shall have taken place before the date
\n hereof;<\/p>\n
– 59 –<\/p>\n
(e) references to income or profits or gains earned, accrued or
\n received shall include income or profits or gains deemed to have
\n been or treated as or regarded as earned, accrued or received for
\n the purposes of any legislation;<\/p>\n
(f) references to a Claim shall include any Claim whether made before
\n or after the date hereof and whether satisfied or unsatisfied at
\n the date hereof and shall also include:<\/p>\n
(i) the loss of any relief, allowance or credit granted by or
\n pursuant to any legislation or otherwise for taxation
\n purposes which could but for the Claim in question have
\n been available to the Purchaser or any member of the
\n Target Companies Group whether or not the said loss
\n results in any taxation being payable at the time of such
\n loss; and<\/p>\n
(ii) the nullifying or cancellation of a right to repayment of
\n taxation which would have been so available or is at the
\n date hereof assumed by the Vendor, the Warrantor or the
\n Purchaser to be available;<\/p>\n
and in such a case the amount of taxation which could otherwise
\n have been relieved, allowed or credited by the relief, allowance
\n or credit so lost or the amount of repayment which would
\n otherwise have been obtained shall be treated as an amount of
\n taxation for which a liability has arisen;<\/p>\n
(g) references to the Agreement shall be construed as references to
\n the Agreement as amended or supplemented from time to time.<\/p>\n
1.2 The expressions the VENDOR, THE WARRANTOR, the TARGET COMPANIES GROUP
\n and the PURCHASER shall, where the context permits, include their
\n respective successors and assigns.<\/p>\n
2 INDEMNITY<\/p>\n
Subject as hereinafter provided, each of the Vendor and the Warrantor
\n hereby jointly and severally undertakes to indemnify and keep indemnified
\n the Purchaser (for itself and as trustee for the Target Companies Group)
\n against any loss or liability suffered by the Purchaser or any member of
\n the Target Companies Group including, but not limited to, any diminution in
\n the value of the assets of or shares in any member of the Target Companies
\n Group, any payment made or required to be made by the Purchaser or any
\n member of the Target Companies Group and any costs and expenses incurred as
\n a result of or in connection with any Claim falling on any member of the
\n Target Companies Group resulting from or by reference to any income,
\n profits or gains earned, accrued or received on or before the date hereof
\n or any event on or before the date hereof whether alone or in conjunction
\n with other circumstances and whether or not such taxation is chargeable
\n against or attributable to any other person, firm or company.<\/p>\n
3 EXCEPTIONS<\/p>\n
The indemnities given by this Deed do not cover any Claim to the extent
\n that provision or reserve in respect thereof has been made in the Last
\n Accounts or to the extent that payment or discharge of such Claim has been
\n taken into account therein.<\/p>\n
– 60 –<\/p>\n
4 COSTS AND EXPENSES<\/p>\n
The indemnities given by this Deed shall cover all costs and expenses
\n incurred by the Purchaser or any member of the Target Companies Group in
\n connection with any Claim, and any penalties, fines or interest payable by
\n the Purchaser or any member of the Target Companies Group relating to any
\n Claim for which the Vendor or the Warrantor is liable under this Deed.<\/p>\n
5 REIMBURSEMENT<\/p>\n
In the event that any Claim which is the subject of an indemnity hereunder
\n is or has been discharged (whether by payment or by the loss of any relief,
\n allowance, credit or right to repayment of taxation) or suffered by any
\n member of the Target Companies Group, the indemnity given hereunder shall
\n take effect as a covenant by the Vendor and the Warrantor forthwith to
\n reimburse the relevant member of the Target Companies Group (through the
\n Purchaser) for any amount so paid or to compensate the relevant member of
\n Target Companies Group for any loss of relief, allowance, credit or right
\n to repayment so suffered.<\/p>\n
6 CONDUCT OF CLAIMS<\/p>\n
If the Purchaser becomes aware of a Claim relevant for the purposes of this
\n Deed, it shall as soon as reasonably practicable give notice thereof to the
\n Vendor and the Warrantor and shall (subject to the Purchaser and the Target
\n Companies Group being indemnified to the Purchaser’s satisfaction against
\n any liability, costs, damages or expenses which may be incurred thereby)
\n take such action and procure that the Target Companies Group shall take
\n such action as the Vendor and the Warrantor may reasonably request to
\n avoid, resist, dispute, defend, compromise or appeal against the Claim,
\n provided that neither the Purchaser nor any member of the Target Companies
\n Group shall be required to take any steps which would require any admission
\n of guilt or liability relating to matters connected with the Claim in
\n question or which would affect the future conduct of the business of the
\n Purchaser or any member of the Target Companies Group or affect the rights
\n or reputations of any of them nor shall they be required to take any such
\n action unless the Vendor and the Warrantor shall have produced to them a
\n leading barrister’s opinion that such action is reasonable.<\/p>\n
7 SET-OFF AND DEDUCTIONS<\/p>\n
All payments to be made by the Vendor and the Warrantor under this Deed
\n shall be made in full without set-off or counterclaim or any restriction or
\n condition and free and clear of any present or future taxes, duties,
\n charges or other deductions or withholdings of any nature. If any deduction
\n or withholding is required to be made from any such payment the Vendor and
\n the Warrantor shall, together with such payment, pay such additional amount
\n as is necessary to ensure that the recipient receives the full amount due
\n hereunder.<\/p>\n
8 WAIVER AND SEVERABILITY<\/p>\n
No failure or delay by the Purchaser or any member of the Target Companies
\n Group in exercising any right, power or remedy under this Deed shall
\n operate as a waiver thereof, nor shall any single or partial exercise of
\n the same preclude any further exercise thereof or the exercise of any other
\n right, power or remedy. If at any time any provision of this Deed is or
\n becomes illegal, invalid or unenforceable in any respect, the legality,
\n validity and enforceability of the remaining provisions of this Deed shall
\n not be affected or impaired thereby.<\/p>\n
– 61 –<\/p>\n
9 ASSIGNMENT<\/p>\n
The Purchaser and any member of the Target Companies Group may assign its
\n respective rights and benefits under this Deed.<\/p>\n
10 NOTICES<\/p>\n
Each notice, demand or other communication given or made hereunder shall be
\n in writing and delivered or sent to the relevant party at its address or
\n telex number or fax number set out in the Agreement. The provisions of
\n clause 21 of the Agreement shall apply to this Deed as though they have
\n been fully set out herein.<\/p>\n
11 GOVERNING LAW AND JURISDICTION<\/p>\n
11.1 This Deed shall be governed by and construed in accordance with the
\n laws of Hong Kong.<\/p>\n
11.2 Any dispute arising out of or in connection with this Deed shall be
\n resolved by arbitration in Hong Kong International Arbitration Centre
\n by a single arbitrator in accordance with the UNCITRAL Arbitration
\n Rules in force from time to time. The parties agree that the arbitral
\n award will be final and binding.<\/p>\n
IN WITNESS WHEREOF this Deed has been executed on the day and year first above
\nwritten.<\/p>\n
\n
\nTHE COMMON SEAL OF )<\/p>\nCHINA MOBILE HONG KONG (BVI) LIMITED )<\/p>\n
was affixed hereto in the presence of: )
\n<\/c><\/s><\/table>\n
——————————— ———————————–
\n[NAME OF DIRECTOR] [NAME OF DIRECTOR]
\nDirector Director<\/p>\n
\n
\nTHE COMMON SEAL OF )<\/p>\nCHINA MOBILE (HONG KONG) LIMITED )<\/p>\n
was affixed hereto in the presence of: )
\n<\/c><\/s><\/table>\n
——————————— ———————————–
\n[NAME OF DIRECTOR] [NAME OF DIRECTOR]
\nDirector Director<\/p>\n
– 62 –<\/p>\n
\n
\nSIGNED, SEALED AND DELIVERED )<\/p>\nBY )<\/p>\n
a duly authorised representative on behalf of )<\/p>\n
CHINA MOBILE COMMUNICATIONS CORPORATION )
\n<\/c><\/s><\/table>\n
– 63 –<\/p>\n
SIGNATURE PAGE<\/p>\n
\n
\nSIGNED by WANG XIAOCHU )<\/p>\nfor and on behalf of ) \/s\/ Wang Xiaochu<\/p>\n
CHINA MOBILE HONG KONG (BVI) LIMITED )<\/p>\n
in the presence of: )<\/p>\n
\/s\/ Celia Lam<\/p>\n
SIGNED by WANG XIAOCHU )<\/p>\n
for and on behalf of ) \/s\/ Wang Xiaochu<\/p>\n
CHINA MOBILE (HONG KONG) LIMITED )<\/p>\n
in the presence of: )<\/p>\n
\/s\/ Celia Lam<\/p>\n
SIGNED by XUE TAOHAI )<\/p>\n
for and on behalf of ) \/s\/ Xue Taohai<\/p>\n
CHINA MOBILE COMMUNICATIONS CORPORATION )<\/p>\n
in the presence of: )<\/p>\n
\/s\/ Celia Lam
\n<\/c><\/c><\/s><\/table>\n
– 64 –<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[],"corporate_contracts_industries":[9519],"corporate_contracts_types":[9622,9627],"class_list":["post-43370","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_industries-telecommunications__telephone","corporate_contracts_types-planning","corporate_contracts_types-planning__purchase"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43370","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43370"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43370"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43370"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43370"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}