exv4w12






Exhibit 4.12



Dated 16 August 2010




SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORPORATION




and



DATANG TELECOM TECHNOLOGY & INDUSTRY HOLDINGS CO., LTD.



 





Subscription Agreement

relating to 1,528,038,461 shares of

Semiconductor Manufacturing International Corporation



 





Slaughter and May

47th Floor

Jardine House

One Connaught Place

Central, Hong Kong

BKPY/VHCC/SSNW



 









 





THIS AGREEMENT is made on 16 August 2010



BETWEEN:





	(1)	 	Semiconductor Manufacturing International Corporation, a company incorporated in the Cayman
Islands whose principal place of business in Hong Kong is at Suite 3003, 30th Floor, No.9
Queen’s Road Central, Hong Kong (the “Company”); and
	 
	(2)	 	Datang Telecom Technology & Industry Holdings Co., Ltd., a company incorporated under the
laws of the People’s Republic of China whose registered office is at No.40 Xueyuan Road,
100191, Beijing, the People’s Republic of China (the “Subscriber”).




WHEREAS:





	(A)	 	The Company is incorporated with limited liability under the Companies Law, Cap 22 (Law 3 of
1961, as consolidated and revised) of the Cayman Islands and has an authorised share capital
of US$20,000,000 divided into 50,000,000,000 shares of US$0.0004 each of which 25,782,947,570
Shares have been issued and are fully paid and all of which are listed on the Stock Exchange.
	 
	(B)	 	The Company has entered into the Placing Agreement with the Placing Agents in respect of the
Placing.
	 
	(C)	 	Pursuant to the Datang Share Purchase Agreement, if the Company proposes to issue new Shares,
the Subscriber has a right of pre-emption to subscribe for a pro rata portion of Shares, being
the Pre-emptive Shares, which is equivalent to such number of Shares as will result in its
percentage shareholding in the Company not being diluted by such placing. The Company has
notified the Subscriber in writing by way of an issue notice specifying the numbers and type
of securities to be offered and the Subscription Price of the proposed offer (the “Issue
Notice”). Upon receipt of the Issue Notice, the Subscriber has written to the Company to
exercise its right of pre-emption to subscribe for the Pre-Emptive Shares.
	 
	(D)	 	The Subscriber and the Company have agreed that the Company shall issue and the Subscriber
shall through Datang Holdings (Hongkong) Investment Company Limited, its wholly-owned
subsidiary incorporated in the Hong Kong Special Administrative Region of the People’s
Republic of China (the “HKCo”), subscribe for the Subscription Shares on and subject to the
terms and conditions of this Agreement and on and subject to substantially the same terms as
that of the Placing Agreement.
	 
	(E)	 	The Subscription Shares will be issued and allotted under the Special Mandate to be obtained
from the Independent Shareholders at the EGM.




NOW IT IS HEREBY AGREED as follows:





	1.	 	DEFINITIONS AND INTERPRETATION
	 
	1.1	 	In this Agreement (including the recitals of this agreement), terms used and/or defined in
the Placing Agreement shall have the same meaning, when used herein unless specifically
provided below:






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	 	(A)	 	the following expressions shall have the following meanings:
	 
	 	 	 	“Amendment Letter” means the amendment letter executed by the Company and Datang on
8 July 2010;
	 
	 	 	 	“Announcement” means the announcement dated on or around the date hereof proposed
to be issued by the Company in connection with this Agreement;
	 
	 	 	 	“Business Day” means any day (excluding Saturday, Sundays and public holidays in
Hong Kong) on which banks generally are open for business in Hong Kong;
	 
	 	 	 	“Company’s solicitors” means Slaughter and May, whose office is at 47th Floor,
Jardine House, One Connaught Place, Central, Hong Kong
	 
	 	 	 	“Conditions” means the conditions set out in Clause 3.1;
	 
	 	 	 	“Completion” means completion of the allotment and issue of the Subscription Shares
under this Agreement;
	 
	 	 	 	“Datang Share Purchase Agreement” means the share purchase agreement dated 6
November 2008 relating to the sale and purchase of an aggregate of 3,699,094,300
shares of the Company;
	 
	 	 	 	“Directors” means the director(s) of the Company;
	 
	 	 	 	“EGM” means the extraordinary general meeting of the Company proposed to be held to
approve, among other things, this Subscription Agreement, the Special Mandate and
the Amendment Letter;
	 
	 	 	 	“Further Shares” means 1,258,307,617 further new Shares, representing such number
of further new Shares which is arrived at by dividing the amount of US$102,000,000
by the Subscription Price and deducting therefrom the number of Pre-emptive Shares,
rounded down to the nearest whole number, allotted and issued pursuant to the terms
of this Agreement;
	 
	 	 	 	“Group” means the Company and its subsidiaries;
	 
	 	 	 	“Listing Rules” means the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited;
	 
	 	 	 	“Placing” means the placing by the Placing Agents of the Placing Shares on the
terms and conditions of the Placing Agreement;




“Placing Agents” means J.P. Morgan Securities (Asia Pacific) Limited and The Royal
bank of Scotland N.V., Hong Kong;
	 
	 	 	 	“Placing Agreement” means an agreement dated 8 July 2010 entered into between the
Company and the Placing Agents in respect of the Placing;




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	 	 	 	“Placing Shares” means 1,500,000,000 new Shares issued and allotted by the Company
under the Placing Agreement;
	 
	 	 	 	“PRC” means the People’s Republic of China;
	 
	 	 	 	“Pre-emptive Shares” means 269,730,844 new Shares allotted and issued pursuant to
the terms of this Agreement;
	 
	 	 	 	“SFC” means the Securities and Futures Commission;
	 
	 	 	 	“Shares” means the ordinary shares of the Company with a par value of US$0.0004 per
share;
	 
	 	 	 	“Special Mandate” means the authority granted to the Directors to allot and issue
the Subscription Shares under the this Agreement;
	 
	 	 	 	“Stock Exchange” means The Stock Exchange of Hong Kong Limited;
	 
	 	 	 	“Subscription Price” means HK$0.52 per Share, equivalent to the price at which the
Placing Shares are issued;
	 
	 	 	 	“Subscription Shares” means the Pre-emptive Shares and the Further Shares; and
	 
	 	 	 	“US$” or “USD” means United States dollars, the lawful currency of the United
States of America.






	 	(B)	 	reference to Clauses are to clauses of this Agreement;
	 
	 	(C)	 	words importing the singular include the plural and vice versa, words
importing a gender include every gender and references to persons include bodies
corporate and unincorporate; and
	 
	 	(D)	 	in this Agreement, any reference to a document in the “agreed form” is to a
form of the relevant document which is in form and substance satisfactory to the
parties.






	1.2	 	Headings are for convenience only and shall not affect the construction of this Agreement.
	 
	2.	 	SUBSCRIPTION
	 
	2.1	 	The Subscriber shall as principal subscribe for, and the Company shall issue, the
Subscription Shares fully paid at the Subscription Price together with SFC transaction levy
and Stock Exchange trading fee (if applicable) and free from all liens, charges, security
interests, encumbrances and adverse claims. All payments made to the Company shall be paid in
USD. The total consideration for the sale of the Subscription Shares shall be the payment by
the Purchaser of the sum of US$102,000,000. Of this sum, approximately US$18,005,140 shall be
allocated to the Pre-emptive Shares and the remainder to the Further Shares.




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	2.2	 	The Subscription Shares, when fully paid, shall rank pari passu in all respects with the
Shares in issue at the date of allotment and issue.
	 
	3.	 	CONDITIONS
	 
	3.1	 	Completion of this Agreement is conditional on:






	 	(A)	 	the Listing Committee of Stock Exchange granting listing of and permission to
deal in all of the Subscription Shares;
	 
	 	(B)	 	the passing by the independent shareholders of the Company of a resolution to
approve the allotment and issue of the Subscription Shares to the Subscriber on the
terms and conditions and the other arrangements contemplated by this Agreement and the
grant of the Special Mandate in order to comply with the Listing Rules; and
	 
	 	(C)	 	in relation to Datang, all necessary shareholder, PRC governmental and
regulatory approvals and consents being obtained, to the satisfaction of the Company,
including (but not limited to) the following:






	 	(i)	 	approval from the National Development and Reform Commission
in relation to the subscription of Shares in the Company;
	 
	 	(ii)	 	approval from the Ministry of Commerce in relation to the
increase in shareholding in the Company;
	 
	 	(iii)	 	approval from the State Administration of Foreign Exchange
in relation to Datang’s direct investment in the Company’s Shares as overseas
securities.






	3.2	 	The Company undertakes to use reasonable endeavours to procure the fulfilment of the
conditions referred to in Clause 3.1(A) and (B) as soon as is reasonably practicable and will
inform the Subscriber promptly following the fulfilment of such conditions.
	 
	3.3	 	The Subscriber undertakes to use reasonable endeavours to procure the fulfilment of the
conditions referred to in Clause 3.1(C) as soon as is reasonably practicable and will inform
the Company promptly following the fulfilment of such condition;
	 
	3.4	 	In the event that the Conditions are not fulfilled within three (3) months after the date of
this Agreement (or such later date as may be agreed between the parties and subject to
compliance with the Listing Rules, then this Agreement and all rights and obligations
hereunder will cease and terminate and none of the parties shall have any claim against the
other for costs, damages, compensation or otherwise (save in respect of any antecedent breach
hereunder and save for the provisions of Clause 7, 9, 10, 11 and 12).
	 
	4.	 	COMPLETION
	 
	4.1	 	Completion shall take place at the offices of Slaughter and May, 47th Floor, Jardine House,
One Connaught Place, Central, Hong Kong at a time to be fixed between the parties and in any
event no later than a date falling three (3) months after the date of




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	 	 	this Agreement (or such
other time or date as the Subscriber and the Company may agree in writing and subject to
compliance with the Listing Rules).
	 
	4.2	 	At Completion:






	 	(A)	 	the Subscriber shall:






	 	(i)	 	make or procure to make payment to the Company of the
aggregate amount of the Subscription Price for the Subscription Shares, which
shall constitute a complete discharge of the Subscriber’s obligations in
respect thereof;
	 
	 	(ii)	 	deliver to the Company or the Company’s solicitors a
certified copy of each of the following:






	 	(1)	 	approval from the National Development and
Reform Commission in relation to the subscription of Shares in the
Company;
	 
	 	(2)	 	approval from the Ministry of Commerce in
relation to the increase in shareholding in the Company;
	 
	 	(3)	 	approval from the State Administration of
Foreign Exchange in relation to Datang’s direct investment in the
Company’s Shares as overseas securities; and
	 
	 	(4)	 	such other documents as the Company shall
reasonably request prior to the date of Completion; and






	 	(B)	 	the Company shall, for value received, allot and issue the Subscription
Shares to the HKCo and shall promptly thereafter register the HKCo as a member in
respect of the Subscription Shares, and shall deliver to the Subscriber (or as it may
direct) a definitive certificate of title in respect thereof.






	5.	 	THE ANNOUNCEMENT
	 
	 	 	The parties hereby authorise the release for publication of the Announcement immediately
following signing of this Agreement subject to compliance with the Listing Rules.
	 
	6.	 	REPRESENTATIONS AND WARRANTIES AND UNDERTAKINGS
	 
	6.1	 	The Company hereby represents and warrants to the Subscriber that:






	 	(A)	 	subject to the condition set out at clause 3.1(B) above being satisfied, it
has full power, authority and capacity to allot and issue the Subscription Shares
pursuant to this Agreement under the memorandum of association and articles of
association of the Company and the directors of the Company have full power and
authority to effect such allotment, all other authorisations, approvals, consents and
licences required in order to issue the Subscription Shares and




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	 	 	 	enter into this
Agreement by the Company have been obtained and remain in full force and effect;






	 	(B)	 	this Agreement constitute legal, valid and binding obligations of the Company
enforceable in accordance with its terms; and
	 
	 	(C)	 	the proceeds received from the sale of the Subscription Shares shall be used
for the phase one expansion plan of Semiconductor Manufacturing International
(Beijing) Corporation








	6.2	 	The Subscriber hereby:






	 	(A)	 	represents and warrants to the Company that, subject to the condition set out
at clause 3.1 (C) above being satisfied, it has full power, authority and capacity
under its constitutional documents and applicable law, and all authorisations,
approvals, consents and licenses required by it (if any) have been unconditionally
obtained and are in full force and effect, to permit it to enter into and perform its
obligations under this Agreement; and
	 
	 	(B)	 	undertakes to accept the Subscription Shares subject to the memorandum of
association and articles of association of the Company.






	7.	 	COSTS AND EXPENSES
	 
	 	 	Save as otherwise provided herein, each of the parties to this Agreement will bear its own
costs and expenses incurred in relation to the preparation of this Agreement and the
subscription of, the Subscription Shares.
	 
	8.	 	TIME OF THE ESSENCE
	 
	 	 	Time will be of the essence in this Agreement.






	9.	 	ANNOUNCEMENTS
	 
	 	 	Save as otherwise required by the Stock Exchange, none of the parties shall make any public
announcement or communication relating to this Agreement or the matters contained herein
other than the Announcement in without the prior written approval of the other party to
this Agreement.
	 
	10.	 	NOTICES
	 
	10.1	 	All notices delivered hereunder shall be in writing in the English language and shall be
communicated to the following addresses:
	 
	 	 	If to the Subscriber to:





	 	 	 	 	 

	 

	 	Address:
	 	Datang Telecom Technology & Industry Holdings Limited
	 
	 	 	 	 
	 

	 	 	 	No. 40 Xueyuan Road, 100191, Beijing






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	 	Facsimile:
	 	+86 10 6230 1140
	 
	 	 	 	 
	 

	 	Attention:
	 	Zheng Jinliang/Chen Shanzhi







	 	 	If to the Company to:





	 	 	 	 	 

	 

	 	Address:
	 	Semiconductor Manufacturing International Corporation
	 
	 	 	 	 
	 

	 	 	 	No. 18 Zhangjiang Road
	 
	 	 	 	 
	 

	 	 	 	Pudong New Area
	 
	 	 	 	 
	 

	 	 	 	Shanghai 201203
	 
	 	 	 	 
	 

	 	 	 	The People’s Republic of China
	 
	 	 	 	 
	 

	 	Facsimile:
	 	+86 21 3861 0000 (ext 18017)
	 
	 	 	 	 
	 

	 	Attention:
	 	Barry Quan







	10.2	 	Any such notice shall be served either by hand or by facsimile. Any notice shall be deemed
to have been served, if served by hand, when delivered and if sent by facsimile, on receipt of
confirmation of transmission. Any notice received on a day which is not a business day shall
be deemed to be received on the next business day.
	 
	11.	 	COUNTERPARTS
	 
	11.1	 	This Agreement may be executed in any number of counterparts, and by the parties on separate
counterparts, but shall not be effective until each party has executed at least one
counterpart.
	 
	11.2	 	Each counterpart shall constitute an original of this Agreement, but all the counterparts
shall together constitute but one and the same instrument.
	 
	12.	 	ILLEGALITY, INVALIDITY AND UNENFORCEABILITY
	 
	 	 	If any provision of this Agreement shall be held to be illegal, invalid or unenforceable,
in whole or in part, under any enactment or rule of law, such provision or part shall to
that
extent be deemed not to form part of this Agreement but the legality, validity and
enforceability of the remainder of this Agreement shall not be affected.
	 
	13.	 	GOVERNING LAW
	 
	 	 	This Agreement shall be governed by and construed in accordance with the laws of Hong Kong
and each of the parties hereto submits to the non-exclusive jurisdiction of the Hong Kong
courts in respect thereof.




IN WITNESS whereof this Agreement has been entered into the day and year first above written.







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	SIGNED by
	 	)
	 
	 	)
	duly authorised for and on behalf of
	 	)
	Semiconductor Manufacturing
	 	) 
	International Corporation
	 	)
	in the presence of
	 	)






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	SIGNED by
	 	)
	 
	 	)
	duly authorised for and on behalf of
	 	)
	Datang Telecom Technology & Industry
	 	) 
	Holdings Co., Ltd.
	 	)
	in the presence of
	 	)









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