Document:

Exhibit 4.14

 

Dated 4 June 2014

 

(1) SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORPORATION

 

and

 

(2) DATANG HOLDINGS (HONGKONG) INVESTMENT COMPANY LIMITED

 

and

 

(3) DEUTSCHE BANK AG, HONG KONG BRANCH

 

and

 

(4) J.P. MORGAN SECURITIES (ASIA PACIFIC) LIMITED

 

PLACING AND SUBSCRIPTION AGREEMENT

 

relating to Shares in the share capital of 
 Semiconductor Manufacturing International Corporation

 

 

10th Floor, Alexandra House

Chater Road

Hong Kong

 

Telephone (852) 2842 4888

Facsimile (852) 2810 8133/2810 1695

 

Ref: L- 215340

 

 

Table of Contents

 

	
Clause
    	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
1
    	
 
    	
DEFINITIONS AND   INTERPRETATION
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
2
    	
 
    	
APPOINTMENT OF THE JOINT   PLACING AGENTS AND THE PLACING
    	
 
    	
5
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
3
    	
 
    	
ANNOUNCEMENT
    	
 
    	
7
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
4
    	
 
    	
COMPLETION OF THE PLACING
    	
 
    	
7
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
5
    	
 
    	
SUBSCRIPTION
    	
 
    	
8
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
6
    	
 
    	
CONDITIONS OF SUBSCRIPTION
    	
 
    	
8
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
7
    	
 
    	
COMPLETION OF THE   SUBSCRIPTION
    	
 
    	
9
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
8
    	
 
    	
UNDERTAKINGS OF THE VENDOR   AND THE COMPANY
    	
 
    	
9
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
9
    	
 
    	
PAYMENT OF FEES,   COMMISSIONS AND EXPENSES
    	
 
    	
11
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
10
    	
 
    	
REPRESENTATIONS,   WARRANTIES AND UNDERTAKINGS
    	
 
    	
12
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
11
    	
 
    	
INDEMNITY
    	
 
    	
23
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
12
    	
 
    	
TERMINATION
    	
 
    	
25
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
13
    	
 
    	
ANNOUNCEMENTS
    	
 
    	
26
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
14
    	
 
    	
TIME OF THE ESSENCE
    	
 
    	
26
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
15
    	
 
    	
NOTICES
    	
 
    	
26
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
16
    	
 
    	
MISCELLANEOUS
    	
 
    	
27
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
17
    	
 
    	
APPLICABLE LAW AND   JURISDICTION
    	
 
    	
28
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SCHEDULE 1 PROFESSIONAL INVESTOR TREATMENT NOTICE
    	
 
    	
5
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SCHEDULE 2 PLACING AGENTS’ COMMITMENT FOR THE SALE SHARES
    	
 
    	
8
    

 

i

 

THIS PLACING AND SUBSCRIPTION AGREEMENT is made on 4 June 2014

 

BETWEEN:

 

(1)                             SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORPORATION, a company duly incorporated in the Cayman Islands whose principal place of business in Hong Kong is at Suite 3003, 30th Floor, 9 Queen’s Road Central, Hong Kong (the “Company”);

 

(2)                              DATANG HOLDINGS (HONGKONG) INVESTMENT COMPANY LIMITED, a company duly incorporated in Hong Kong whose principal place of business is 18/F Edinburgh Tower, The Landmark, 15 Queen’s Road, Central, Hong Kong (the “Vendor”);

 

(3)                              DEUTSCHE BANK AG, HONG KONG BRANCH, whose registered office is at 52nd Floor, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong (“DB”); and

 

(4)                              J.P. MORGAN SECURITIES (ASIA PACIFIC) LIMITED, whose registered office is at 28/F Chater House, 8 Connaught Road Central, Hong Kong, (“J.P. Morgan”, and together with DB, the “Joint Placing Agents” or each a “Joint Placing Agent”).

 

WHEREAS:

 

(A)                            At the date hereof, the Company has an authorised capital of US$20,000,000 divided into 50,000,000,000 Shares, of which 32,232,140,774 Shares have been issued and are fully paid up as at the date of this Agreement and are beneficially owned as to 6,116,138,341 Shares by the Vendor including the Sale Shares (as defined below).

 

(B)                            All of the issued Shares are currently listed on the Stock Exchange and American Depositary Shares over certain of the Shares are listed on the New York Stock Exchange.

 

(C)                            The Vendor has agreed to appoint the Joint Placing Agents and each of the Joint Placing Agents has agreed, severally and not jointly, to purchase and pay for, or to procure Subscribers to purchase and pay for the Sale Shares on the terms and subject to the conditions herein contained as part of a fund raising exercise which also involves the offering of the Further Bonds by the Company through the Joint Placing Agents.

 

(D)                           The Company has agreed to issue and the Vendor has agreed to subscribe for the Subscription Shares, on and subject to the terms set out in this Agreement.

 

(E)                            The Parties hereto acknowledge that Datang has a pre-emptive right to subscribe for the Datang Pre-Emptive Securities and Country Hill has a pre-emptive right to subscribe for the Country Hill Pre-Emptive Securities, which if exercised, would be subject to approval by a general meeting of the independent shareholders of the Company.

 

NOW IT IS HEREBY AGREED as follows:

 

1                                     DEFINITIONS AND INTERPRETATION

 

1.1                           In this Agreement (including the recitals), the following expressions shall, unless the context requires otherwise, have the following meanings:

 

“Affiliate” means any person that directly or indirectly controls or is controlled by, or is under common control with the Vendor and including, without limitation, the Company;

 

“Agreement” means this placing and subscription agreement (as may be amended or varied from time to time by an agreement in writing duly executed by the Parties);

 

“Announcements” means the First Announcement and the Second Announcement;

 

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“Associate” has the meaning ascribed thereto in the Listing Rules;

 

“Bonds” means the Original Bonds, the Original Pre-emptive Bonds, the Further Bonds and any other convertible bonds issued or to be issued by the Company which are to be consolidated and form a single series with the Original Bonds;

 

“Business Day” means any day (excluding a Saturday) on which banks are generally open for business in Hong Kong;

 

“CCASS” means the Central Clearing and Settlement System operated by Hong Kong Securities Clearing Company Limited;

 

“Closing Date” means two Business Days after the Trade Date or such other date as the Vendor and the Joint Placing Agents may agree in writing;

 

“Companies Ordinance” means the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32 of the Laws of Hong Kong) for the time being in force;

 

“Conditions” means the conditions to completion of the Subscription set out in Clause 6.1;

 

“Country Hill” means Country Hill Limited, a wholly-owned subsidiary of China Investment Corporation;

 

“Country Hill Pre-Emptive Securities” means any Shares or Bonds to be issued to Country Hill (or any Shares to be issued thereunder) pursuant to any exercise of its pre-emptive right in connection with the issue of the Subscription Shares and the Further Bonds as will result in Country Hill’s percentage shareholding (on a fully converted basis) in the Company not being diluted by the issue of the Subscription Shares, the Further Bonds and any issuance of Datang Pre-Emptive Securities;

 

“Datang” means Datang Telecom Technology & Industry Holdings Co., Ltd, the holding company of the Vendor;

 

“Datang Pre-Emptive Securities” means any Shares or Bonds to be issued to Datang (or any Shares to be issued thereunder) pursuant to any exercise of its pre-emptive right in connection with the issue of the Subscription Shares and the Further Bonds as will result in Datang’s percentage shareholding (on a fully converted basis) in the Company not being diluted by the issue of the Subscription Shares, the Further Bonds and any issuance of Country Hill Pre-Emptive Securities;

 

“Directors” means the directors of the Company for the time being;

 

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended;

 

“Expenses” means the commissions and other expenses relating to the Placing set out in Clause 9 and the Vendor’s costs and expenses (including but not limited to legal fees) properly incurred by it in relation to the Placing and/or the Subscription;

 

“First Announcement” means the announcement dated the date hereof issued by the Company regarding the potential exercise of pre-emptive rights by Datang and CHL and the potential participation of Shanghai Industrial Investment (Holdings) Co., Ltd. in the Placing;

 

“Further Bonds” means the US$95,000,000 zero coupon convertible bonds due 2018 to be issued pursuant to a subscription agreement entered into between the Company and the Placing Agents on or about the date of this Agreement to be consolidated and form a single series with the Original Bonds;

 

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“General Rules” means the General Rules of CCASS from time to time in force;

 

“Group” means the Company and its subsidiaries and the expression “member of the Group” shall be construed accordingly;

 

“Hong Kong” means the Hong Kong Special Administrative Region of the People’s Republic of China;

 

“HK$” means Hong Kong dollars, the lawful currency of Hong Kong;

 

“Independent Persons” means those persons who are independent of and not acting in concert (as defined under the Takeovers Code) with any of the Vendor, Datang, Country Hill or their respective concert parties and are not any of the Vendor’s, Datang’s, Country Hill’s, the Company’s or its subsidiaries’ directors (as defined in the Listing Rules), chief executive (as defined in the Listing Rules) or substantial shareholders (as defined in the Listing Rules), or any of their respective Associates and “Independent Person” means each one of them;

 

“Internal Revenue Code” means the U.S. Internal Revenue Code of 1986, as amended;

 

“Investment Company Act” means the U.S. Investment Company Act of 1940, as amended;

 

“Listing Committee” means the listing sub-committee of the board of directors of the Stock Exchange;

 

“Listing Rules” means the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited for the time being in force;

 

“NDAs” means the non-disclosure agreement dated 3 June 2013 between the Company and Deutsche Bank AG, Hong Kong Branch and the non-disclosure agreement dated 21 June 2013 between the Company and J.P. Morgan Securities (Asia Pacific) Limited;

 

“Operational Procedures” means the Operational Procedures of Hong Kong Securities Clearing Company Limited in relation to CCASS from time to time in force;

 

“Original Bonds” means the US$200,000,000 Zero Coupon Convertible Bonds due 2018 issued on 7 November 2013;

 

“Original Pre-emptive Bonds” means the US$54,600,000 zero coupon convertible bonds issued to Datang pursuant to a subscription agreement dated 18 December 2013 between Datang and the Company and the US$32,200,000 zero coupon convertible bond due 2018 issued to Country Hill pursuant to a subscription agreement dated 18 December 2013 between Country Hill and the Company, which are to be consolidated and form a single series with the Original Bonds;

 

“Participant” means a person admitted for the time being by Hong Kong Securities Clearing Company Limited as a participant of CCASS;

 

“Parties” means the named parties to this Agreement and their respective successors and permitted assigns and “Party” means each one of them;

 

“Placee” means any professional institutional and other investor whom any of the Joint Placing Agents have procured to purchase any of the Sale Shares pursuant to its obligations hereunder;

 

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“Placing” means the private placing by or on behalf of the Joint Placing Agents, on a several basis, of the Sale Shares on the terms and subject to the conditions set out in this Agreement;

 

“Placing Period” means the period commencing upon the execution of this Agreement and terminating at 7:30 p.m. (Hong Kong time) on the Trade Date (or such later time and date as the Vendor and the Joint Placing Agents may agree in writing);

 

“Placing Price” means HK$0.60 per Share;

 

“PRC” means the People’s Republic of China;

 

“Professional Investor Treatment Notice” means the notice from the Joint Placing Agents in the form set out in Schedule 1 to this Agreement;

 

“Regulation D” means Regulation D under the Securities Act;

 

“Regulation S” means Regulation S under the Securities Act;

 

“Relevant Securities” means the Subscription Shares, the Country Hill Pre-Emptive Securities and the Datang Pre-Emptive Securities;

 

“Rule 144A” means Rule 144A under the Securities Act;

 

“Sale Shares” means the 2,590,000,000 Shares to be sold by the Vendor pursuant to Clause 2.1;

 

“Second Announcement” means the announcement in the agreed form to be issued by the Company as soon as possible following the execution of this Agreement pursuant to the requirements under the Listing Rules relating to, amongst other things, the Placing;

 

“Securities Act” means the U.S. Securities Act of 1933, as amended and the rules and regulations promulgated thereunder;

 

“Seller” has the meaning ascribed in Clause 2.2;

 

“SFC” means the Securities and Futures Commission;

 

“SFO” means the Securities and Futures Ordinance (Cap 571 of the Laws of Hong Kong) for the time being in force;

 

“Shares” means the ordinary Shares of US$0.0004 each in the share capital of the Company;

 

“Stock Exchange” means The Stock Exchange of Hong Kong Limited;

 

“Subscription” means the subscription by the Vendor for the Subscription Shares on and subject to the terms and conditions set out in this Agreement;

 

“Subscription Monies” means such sum as is the aggregate of the Placing Price multiplied by the number of Subscription Shares less the Expenses;

 

“Subscription Shares” means 2,590,000,000 new Shares to be issued by the Company under the Subscription;

 

“subsidiary” has the same meaning as in Section 2 of the Companies Ordinance;

 

“Takeovers Code” means the Hong Kong Code on Takeovers and Mergers issued by the SFC;

 

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“Taxation” or “Tax” mean all forms of taxation whether of Hong Kong or elsewhere in the world whenever imposed and all statutory, governmental, state, provincial, local governmental or municipal impositions, duties and levies and all penalties, charges, costs and interests relating thereto;

 

“Trade Date” means the date when the sale of the Sale Shares shall be reported as a cross-trade to the Stock Exchange which shall be (i) 5 June 2014 or, (ii) if dealings in the Shares on the Stock Exchange are suspended at all times on 5 June 2014, the first day on which dealings resume and the cross-trade can be reported to the Stock Exchange in accordance with its rules, or such other date as the Vendor and the Joint Placing Agents may agree in writing;

 

“U.S.” or “United States” means the United States of America, its territories and possessions, any state of the United States, and the District of Columbia; and

 

“US$” means United States dollars, the lawful currency of the United States of America.

 

1.2                           In this Agreement, references to any statute, statutory provision, Listing Rule or a rule of the Takeovers Code include a reference to that statute, statutory provision, Listing Rule or a rule of the Takeovers Code as from time to time amended, extended or re-enacted.

 

1.3                           In this Agreement, references to persons include references to bodies corporate, references to singular include references to the plural and vice versa; and words denoting one gender only shall include other genders.

 

1.4                           Headings are inserted for convenience only and shall not affect the interpretation of this Agreement.

 

1.5                           All references in this Agreement in relation to any time, date or period shall mean Hong Kong time.

 

1.6                           References to Clauses, Sub-clauses and the Schedule are references to clauses and sub-clauses of and schedules to this Agreement.

 

2                                      APPOINTMENT OF THE JOINT PLACING AGENTS AND THE PLACING

 

2.1                           Subject to the provisions of this Agreement, the Vendor hereby appoints each of the Joint Placing Agents as agent to the exclusion of all others, and each of the Joint Placing Agents, relying on the representations, warranties and undertakings herein contained and subject to the conditions as hereinafter mentioned, agrees, severally and not jointly, to act as agent for the Vendor during the Placing Period to purchase or procure purchasers for such number of Sale Shares as set out opposite its name in Schedule 2 herein, at the Placing Price (together with such Hong Kong stamp duty, brokerage, SFC transaction levy and Stock Exchange trading fee payable by the purchasers).

 

2.2                           Any Sale Shares purchased by any of the Joint Placing Agents and/or its nominee(s) as principal from the Vendor at the Placing Price may subsequently be sold by such Joint Placing Agent(s) and/or their respective nominee(s) (each, a “Seller”) as principal to purchasers at any price(s) as the Seller in its discretion may determine, without being under any obligation to notify the Vendor of such election or of the number of Sale Shares so purchased as principal, or of the price(s) at which those Shares are sold to purchasers provided that any stamp duty payable in respect of such sale by a Seller as principal shall be borne by the relevant Seller.

 

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2.3                           The Vendor hereby confirms that the appointment set forth in Clause 2.1 confers on the Joint Placing Agents all powers, authorities and discretions on behalf of the Vendor which are reasonably and properly necessary for, or reasonably incidental to, the making of the Placing and hereby agrees to ratify and confirm everything which the Joint Placing Agents have done for the Placing prior to the date of this Agreement or may lawfully do in the exercise of such powers, authorities and discretions in accordance with this Agreement.

 

2.4                           The Vendor shall sell the Sale Shares pursuant to the Placing free from all liens, charges and encumbrances, and together with all rights attaching to them as at the Trade Date, including the right to receive all dividends declared, made or paid on or after the Trade Date.

 

2.5                          The Sale Shares shall be offered to not less than six independent professional, institutional and/or individual investors in board lots of 1,000 Shares. Subject to the requirements of the Listing Rules, the choice of Placees for the Sale Shares shall be determined solely by the Joint Placing Agents after consultation with the Vendor. The Joint Placing Agents shall use reasonable endeavours not to place any of the Sale Shares to any person other than the Independent Persons.

 

2.6                           Each of the Joint Placing Agents hereby confirms that it has complied and will comply, for the purposes of the Placing, with the Placing Guidelines contained in the Listing Rules, other relevant provisions of the Listing Rules and laws and regulations (if any) applicable to the Joint Placing Agents and to the extent they are material to the Placing.

 

2.7                           Each of the Joint Placing Agents hereby warrants and undertakes, severally not jointly, to the Vendor and the Company as follows:

 

2.7.1                 such Joint Placing Agent, its affiliates (as defined in Rule 501(b) of Regulation D) or any persons acting on it or their behalf (except for the Vendor and the Company and their respective affiliates in respect of which no representation is being given), directly or indirectly, has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with any offer or sale of the Sale Shares in the United States;

 

2.7.2                 such Joint Placing Agent, its affiliates (as defined in Rule 405 under the Securities Act) or any persons acting on it or their behalf (except for the Vendor and the Company and their respective affiliates in respect of which no representation is being given) has engaged or will engage in any “directed selling efforts” (as defined in Regulation S) with respect to the Sale Shares;

 

2.7.3                 such Joint Placing Agent has offered the Sale Shares and will offer and sell the Sale Shares only (a) outside the United States in accordance with Rule 903 of Regulation S or (b) to qualified institutional buyers (as defined in Rule 144A) in the United States pursuant to an exemption from the registration requirements under the Securities Act; and

 

2.7.4                 it will deliver to any Placee located in the United States a form of placing letter substantially in the same form as the copy which has been previously provided to the Vendor.

 

6

 

3                                      ANNOUNCEMENT

 

The Company shall release, or cause to be released, for publication, as soon as possible upon the execution of this Agreement, the Second Announcement in accordance with applicable laws and regulations (including without limitation the Listing Rules).

 

4                                      COMPLETION OF THE PLACING

 

4.1                           Completion of the Placing will take place on the Closing Date in respect of the Sale Shares. Completion of the transfer of the Sale Shares shall take place in CCASS on a free of payment basis. On or before 10:00 a.m.(Hong Kong time) on the Closing Date, the Vendor shall procure that its designated Participant(s) (including, where applicable, the Joint Placing Agents or DB acting as the Settlement Agent (the “Settlement Agent”)) inputs free of payment delivery instructions in CCASS to deliver the Sale Shares on completion of the Placing in accordance with this Agreement and the General Rules and the Operational Procedures to the CCASS stock accounts of the relevant Participant(s) of the Joint Placing Agents.

 

4.2                           The Vendor shall procure that the Sale Shares delivered at completion of the Placing in accordance with the preceding provisions of this Clause 4 shall comply in all respects with Clause 2.4.

 

4.3                           Against compliance by the Vendor with its obligations pursuant to Clauses 4.1 and 4.2 and subject to Clause 12, the Settlement Agent shall on the Closing Date make or procure the making of payment to the Vendor in Hong Kong dollars of the aggregate Placing Price of the Sale Shares (less the commission and expenses payable to the Joint Placing Agents referred to in Clause 9), the payment of which shall constitute a complete discharge of the Joint Placing Agents’ obligations to purchase or procure the purchase of the Sale Shares hereunder. Such payment shall be made for value on the Closing Date and to the following bank account:

 

	
Name of Bank:
    	
 
    	
DBS Bank Ltd, Hong Kong Branch
    
	
 
    	
 
    	
 
    
	
Swift Code:
    	
 
    	
DBSSHKHH
    
	
 
    	
 
    	
 
    
	
Account Name:
    	
 
    	
DATANG HOLDINGS (HONGKONG)   INVESTMENT COMPANY LIMITED
    
	
 
    	
 
    	
 
    
	
Account Number:
    	
 
    	
30010939088
    

 

4.4                           The Vendor hereby acknowledges that each Joint Placing Agent in performing its obligations and functions under Clauses 2 and 4, is authorised to appoint one or more sub-placing agents or selling agents in the United States and/or elsewhere and that such agents shall be agents of the Vendor in despatching documents relating to the Placing to Placees and the Vendor hereby authorises and confirms that it will, on the terms of and subject to the provisions of this Agreement, as soon as practicable upon request by the Joint Placing Agents ratify and approve all actions lawfully, properly and reasonably taken or to be taken by such agents and the Joint Placing Agents in connection with the Placing in accordance with or in anticipation of the terms of this Agreement. All fees of such agents shall be paid and borne by the Joint Placing Agents severally out of the commissions, costs, charges and expenses payable by the Vendor under Clause 9. Any Joint Placing Agent may enter into any agreements with any of the agents for such purpose PROVIDED 

 

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THAT such Joint Placing Agent shall remain responsible for any act or omission carried out by such agent in the performance of the respective obligations of the Joint Placing Agent hereunder.

 

4.5                           The Sale Shares shall be offered by the Joint Placing Agents as agents for the Vendor at the Placing Price (together with such Hong Kong stamp duty, brokerage, SFC transaction levy and Stock Exchange trading fee payable by purchasers) during the Placing Period.

 

5                                      SUBSCRIPTION

 

5.1                           The Vendor agrees to subscribe as principal for, and the Company agrees to issue, the Subscription Shares at the Placing Price, free from all liens, charges, security interests, encumbrances and adverse claims on the terms and subject to the conditions set out in this Agreement.

 

5.2                           The Company agrees that the Subscription Shares shall, when fully paid, rank pari passu in all respects with the other Shares in issue or to be issued by the Company on or prior to the date of completion of the Subscription including the rights to all dividends and other distributions declared, made or paid at any time after the date of allotment.

 

6                                      CONDITIONS OF SUBSCRIPTION

 

6.1                           Completion of the Subscription is conditional upon the fulfilment of the following conditions:

 

6.1.1                 the Listing Committee of the Stock Exchange granting listing of and permission to deal in the Subscription Shares (and such listing and permission not subsequently revoked prior to the delivery of definitive share certificate(s) representing the Subscription Shares under Clause 7.3 hereof); and

 

6.1.2                 completion of the Placing having occurred pursuant to the terms of this Agreement.

 

6.2                           The Company shall, as soon as is reasonably practicable, apply to the Stock Exchange for the granting of listing of, and permission to deal in, the Subscription Shares after the signing of this Agreement and the Company shall use all reasonable endeavours to obtain the granting of such listing and permission to deal by the Listing Committee of the Stock Exchange as soon as is reasonably practicable and will inform the Vendor promptly following the granting of the same. The Company shall furnish such information, supply such documents, pay such fees and do all such acts and things as may reasonably be required by the Vendor, the Joint Placing Agents, SFC and/or the Stock Exchange in connection with the fulfilment of the Conditions. The Joint Placing Agents shall provide the Company with such necessary assistance as may be reasonably requested by the Company and the Vendor in connection with the fulfilment of the Conditions.

 

6.3                           If the Conditions are not fulfilled within 14 days after the date of this Agreement or such later date as may be agreed between the Company and the Vendor, the Company and the Vendor shall take any necessary steps to fulfil any applicable requirements under the Listing Rules, including but not limited to, obtaining the approval of the independent shareholders of the Company prior to completion of the Subscription.  If such approval is not granted by the independent shareholders, the obligations and liabilities of the Vendor and the Company under the Subscription shall be terminated and neither the Company nor the Vendor shall have any claim against the other for costs, damages, compensation or otherwise provided that the Company shall reimburse the Vendor any Expenses which the Vendor shall be obliged to pay in connection with the Placing and/or the Subscription. 

 

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Notwithstanding the provisions of this Clause 6.3, the Vendor may in its absolute discretion continue to take all necessary steps but subject to compliance with the Listing Rules, to proceed to complete the subscription for or purchase the shares equivalent to the amount of Subscription Shares in any other manner as soon as practicable thereafter.

 

7                                      COMPLETION OF THE SUBSCRIPTION

 

7.1                           Completion of the Subscription shall take place on the second Business Day after the date upon which the last of the Conditions to be satisfied shall have been so satisfied (provided that the Vendor and the Company shall use all reasonable endeavours to procure that it shall take place on a date no later than a date falling 14 days after the date of this Agreement) or such other time and/or date as the Vendor and the Company may agree in writing.

 

7.2                           At completion of the Subscription, the Vendor shall pay or shall procure the payment of the Subscription Monies by electronic funds transfer in the amount thereof.

 

7.3                           Against compliance with the provisions of Clause 7.2, the Company shall:

 

7.3.1                 forthwith duly allot and issue to the Vendor (or as it may direct) the Subscription Shares and shall promptly register without registration fee the Vendor and/or its nominees as members in respect of the Subscription Shares; and

 

7.3.2                 at the option of the Vendor, either (i) deliver to the Vendor (or as it may direct) the definitive certificates in respect of the Subscription Shares in favour of the Vendor and/or its nominees or (ii) deposit the same into the account of the relevant Participant with whom the Vendor has accounts in accordance with the Vendor’s instructions.

 

8                                      UNDERTAKINGS OF THE VENDOR AND THE COMPANY

 

8.1                           The Company shall promptly make all notifications, registrations and filings as may from time to time be required in relation to the Sale Shares, the Subscription Shares and the transactions contemplated under this Agreement including, without prejudice to the generality of the foregoing, the filings with the Stock Exchange.

 

8.2                           The Vendor and the Company shall make all appropriate disclosures pursuant to, and will comply in all respects with all applicable laws, regulations and directions (including without limitation the Listing Rules, the Takeovers Code and the SFO) and all requirements of the Stock Exchange, the SFC or any other applicable regulatory body in connection with the Placing and the Subscription.

 

8.3                           The Company shall, as soon as reasonably practicable, provide the Joint Placing Agents upon request, with all such information known to it or which on reasonable enquiry ought to be known to it relating to the Company and/or any other member of the Group or otherwise as may be reasonably required by the Joint Placing Agents in connection with the Placing for the purpose of complying with any applicable law, regulation or direction (including the establishment of any defence to any action under any of the same, whether relating to due diligence or otherwise) or any requirement of the Stock Exchange, the SFC or any other applicable regulatory body. In addition, each of the Vendor and the Company undertakes and agrees that up to the Closing Date it will forthwith notify the Joint Placing Agents of any change affecting, or if at any time anything has occurred which would or would be likely to

 

9

 

render untrue, inaccurate, misleading or breached in any respect, any of the representations, warranties and undertakings referred to in Clause 10.

 

8.4                           Each of the Vendor and the Company shall procure that particulars of every significant new factor known to it which is capable of materially and adversely affecting the Placing and which arises between the date hereof and the Closing Date shall be promptly provided to the Joint Placing Agents.

 

8.5                           The Vendor undertakes with each of the Joint Placing Agents that it shall use reasonable endeavours to do all such other acts and things as may be reasonably required to be done by it to carry into effect the Placing in accordance with the terms of this Agreement.

 

8.6                           The Company undertakes to each of the Joint Placing Agents that for a period commencing on the date of this Agreement and ending on the date falling on 90 days after the date hereof (inclusive), the Company will not, except for the issue of (1) the Relevant Securities; (2) any Shares issuable under the Original Bonds and the Original Pre-emptive Bonds; (3) the Further Bonds and any Shares issuable thereunder; (4) securities under the terms of any employee share scheme of the Company or any other scheme that has been publicly announced or disclosed by the Company as of the date of this Agreement; (5) bonus or scrip dividend or similar arrangements which provide for the allotment of Shares in lieu of the whole or part of a dividend on Shares of the Company in accordance with its articles of association; and (6) Shares or any securities convertible into or exercisable or exchangeable for or substantially similar to Shares which are issued as consideration for any merger or acquisition provided that (A) the aggregate value of the Shares issued (as calculated by the Current Market Price (as defined in the Terms & Conditions of the Bonds) is less than US$100,000,000 and (B) the Issuer procures that the person receiving such Shares executes a shareholder lock-up undertaking on substantially the same terms as provided in this Clause prior to any such issue:

 

8.6.1                 allot or issue or offer to allot or issue or grant any option, right or warrant to subscribe for (either conditionally or unconditionally, or directly or indirectly, or otherwise) any Share(s) or any interests in Shares or any securities convertible into or exercisable or exchangeable for or substantially similar to Shares or interest in Shares; or

 

8.6.2                 agree (conditionally or unconditionally) to enter into or effect any such transaction with the same economic effect as any of the transactions described in Clause 8.6.1 above; or

 

8.6.3                 announce any intention to enter into or effect any such transaction described in Clauses 8.6.1 or 8.6.2 above,

 

without first having obtained the written consent of the Joint Placing Agents (such consent not to be unreasonably withheld or delayed).

 

For the avoidance of doubt, any additional lock-up undertaking entered into pursuant to 8.6(3) above shall only be for a period of 90 days from the date of this Agreement.

 

8.7                           In consideration of the Vendor agreeing to enter into and performing this Agreement and without prejudice to the parties’ respective rights and obligations under this Agreement, the Company shall use all reasonable endeavours (i) to fulfil its obligations under the Placing Agreement to procure that completion of the Subscription shall take place on a date no later than a date falling 14 days after the date of this Agreement and (ii) in the case of any 

 

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independent shareholders’ approval being required therefor, to take necessary steps to convene a shareholders’ meeting with a view to seek such approval.

 

9                                      PAYMENT OF FEES, COMMISSIONS AND EXPENSES

 

9.1                           In consideration of the services of the Joint Placing Agents in relation to the Placing, the Vendor shall, subject to completion of the Placing taking place in accordance with Clause 4, pay to the Settlement Agent:

 

9.1.1                 a commission of 1.10 per cent. of the amount equal to the Placing Price multiplied by the number of Sale Shares (the “Commissions”), to be retained and divided among the Joint Placing Agents in the proportion of 45 per cent. to DB and 55 per cent. to J.P. Morgan. An additional incentive fee of up to 0.20 per cent. of the amount equal to the Placing Price multiplied by the number of Sale Shares may be payable at the sole discretion of the Company to either or both Joint Placing Agents. The Settlement Agent is hereby authorised to deduct the Commissions payable to the Joint Placing Agents pursuant to this Clause 9.1 from the payment to be made by it to the Vendor pursuant to Clause 4.3 and out of which the Joint Placing Agents agree to pay all brokerage fees and all expenses of the Placing other than those specified in this Clause 9.1;

 

9.1.2                 stamp duty at the rate of 0.1 per cent. on the amount equal to the Placing Price per Sale Share multiplied by the number of Sale Shares which amounts each of the Joint Placing Agents is hereby authorised to deduct from the payments to be made by it to the Vendor pursuant to Clause 4.3;

 

9.1.3                 any printing or publishing costs associated with the Placing and the issue of the Announcement and all costs and expenses in relation to depositing the Sale Shares into CCASS, all charges, fees and expenses of the Company’s share registrars in Hong Kong including, without limitation, its fees and expenses in effecting the transfer of the Sale Shares and the issue of certificates therefor in board lots, to the Placees or, where applicable, the Joint Placing Agents or their nominees, which amounts the Settlement Agent is hereby authorised to deduct from the payments to be made by it to the Vendor pursuant to Clause 4.3 for the purposes of paying on the Vendor’s behalf such costs, charges, fees and expenses, which the Joint Placing Agents hereby undertake to do so on a prompt basis after such deduction;

 

9.1.4                 the seller’s SFC transaction levy at the prevailing applicable rate and the seller’s Stock Exchange trading fee at the prevailing applicable rate on the amount equal to the Placing Price multiplied by the number of Sale Shares which amounts the Settlement Agent is hereby authorised to deduct from the payments to be made by the Joint Placing Agents to the Vendor pursuant to Clause 4.3; and

 

9.1.5                 the costs and expenses reasonably incurred by the Joint Placing Agents (including but not limited to legal costs) in connection with the Placing and the Settlement Agent is hereby authorised to deduct such sums from the payments to be made by the Joint Placing Agents to the Vendor pursuant to Clause 4.3.

 

9.2                           If this Agreement is terminated pursuant to Clause 12 or if for any reason the Placing is not completed the Company shall remain liable to the Joint Placing Agents for the payment of all costs, charges and expenses referred to in Clauses 9.1.3 and 9.1.5 and for the stamp 

 

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duty, the SFC transaction levy and Stock Exchange trading fee referred to in Clauses 9.1.2 and 9.1.4 to the extent already incurred.

 

9.3                           The Vendor hereby acknowledges that, in addition to the commissions, costs, charges and expenses referred to in Clause 9.1, the Joint Placing Agents shall be entitled to keep for their respective own account any brokerage fees or commission (“Brokerage”) in excess of the Placing Price that they may receive from the Placees procured by them respectively in the same proportion as the commissions provided in Clause 9.1.1. The Brokerage received by each Joint Placing Agent shall be paid to the Settlement Agent by each such Joint Placing Agent on the Closing Date, and the Settlement Agent shall, within 90 days from the Closing Date and subject to this Clause 9.3, pay to each Placing Sgent such amount of Brokerage each such placing agent is entitled.

 

9.4                           All payments to be made by the Vendor to the Settlement Agent pursuant to this Agreement shall be denominated in Hong Kong dollars free and clear of, and without deduction or withholding for or on account of tax, unless the Vendor is required by applicable law to make payment subject to the deduction or withholding of tax, in which case, the amount payable to the Settlement Agent shall be increased to the extent necessary to ensure that, after making such deduction or withholding, the Settlement Agent receives and retains a net sum equal to the sum which it would have received and retained had no such deduction or withholding been made or required to be made.

 

10                              REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS

 

10.1                    In consideration of the Joint Placing Agents entering into this Agreement and agreeing to perform their respective obligations hereunder, the Vendor hereby represents, warrants and undertakes to each of the Joint Placing Agents as follows:

 

10.1.1          Ownership of Sale Shares: the Vendor is the beneficial owner of the Sale Shares and the Sale Shares are held in CCASS as at the date of this Agreement;

 

10.1.2          Sale Shares not encumbered: the Sale Shares are fully paid up and the Vendor is the beneficial owner of the Sale Shares and has the necessary power and authority to enable it to sell the Sale Shares hereunder free from any lien, charge, encumbrance or third party right whatsoever and together with all rights attaching thereto as at the Trade Date and the Company has not exercised any lien over any of the Sale Shares;

 

10.1.3          Consents: all regulatory and judicial consents, approvals, orders or qualifications required to be obtained or made under all relevant jurisdictions for the sale of the Sale Shares or the consummation of the transactions contemplated by this Agreement have been duly obtained and are in full force and effect;

 

10.1.4          Incorporation: the Vendor is duly incorporated and validly existing under the laws of the place of its incorporation and the Vendor has the power under its constitutional documents to enter into this Agreement and this Agreement (and its performance) has been duly authorised (such authorisation remaining in full force and effect) and executed by, and constitutes valid and legally binding and enforceable obligations of the Vendor in accordance with its terms;

 

10.1.5          No purchase by connected persons: to the extent that is has been kept informed of the Placing process, the Vendor shall use its reasonable endeavours to 

 

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cooperate with the Joint Placing Agents in ensuring that none of its Associates shall purchase the Sale Shares under the Placing;

 

10.1.6              Professional Investor Treatment Notice:  the Vendor has read and understood the Professional Investor Treatment Notice and acknowledges and agrees to the representations, waivers and consents contained in the Professional Investor Treatment Notice, in which the expressions “you” or “your” shall mean “the Vendor” and “us” and “our” shall mean the Joint Placing Agents;

 

10.1.7              Non-public information: save for the matters set out in the Announcements, the Vendor is not in possession of any non-public information relating to the Company, any other member of the Group or their respective businesses the release of which would materially affect the trading price of the Shares;

 

10.1.8              Insider Dealing: the Vendor has not been, is not and will not be at any time engaged in insider dealing for the purposes of the SFO in connection with the Placing and the related transactions entered into or to be entered into pursuant to this Agreement;

 

10.1.9              No Registration: neither the Vendor, its respective affiliates (as defined in Rule 501(b) of Regulation D) nor any persons acting on its or their behalf (except for the Joint Placing Agents and their respective affiliates in respect of which no representation is being given):

 

(i)                                  directly or indirectly has made or will make offers or sales of any security, or directly or indirectly has solicited or will solicit offers to buy, or otherwise negotiated or will negotiate in respect of, any security, under circumstances that would require the registration of the Sale Shares under the Securities Act; or

 

(ii)                               directly or indirectly, has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with any offer or sale of the Sale Shares in the United States;

 

10.1.10       No Directed Selling Efforts: neither the Vendor, its affiliates (as defined in Rule 405 under the Securities Act) nor any persons acting on its or their behalf (except for the Joint Placing Agents and their respective affiliates in respect of which no representation is being given) has engaged or will engage in any “directed selling efforts” (as defined in Regulation S) with respect to the Sale Shares;

 

10.1.11       No Price Manipulation: neither the Vendor, its affiliates (as defined in Rule 405 under the Securities Act) nor any persons acting on its or their behalf, directly or indirectly, has taken or will take any action designed to cause or to result in, or that has constituted or which might reasonably be expected to cause or result in, the stabilisation in violation of applicable laws or manipulation of the price of the Relevant Securities or other security of the Company to facilitate the sale or resale of the Sale Shares;

 

10.1.12       No Unlawful Payments: none of the Vendor nor any director, officer or employee of, and to the best knowledge of the Vendor (after due and careful enquiry), any agent, affiliate of or other person acting on behalf of the Vendor, is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), or any other applicable anti-bribery or 

 

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anti-corruption law or regulation similar to the FCPA (including but not limited to, the UK Bribery Act of 2010), in any other jurisdiction in which the Vendor operates including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorisation of the payment of any money, or other property, gift, promise to give, or authorisation of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA or any other similar applicable anti-bribery or anti-corruption law or regulation of any such other jurisdiction; the Vendor and its Affiliates has conducted their businesses in compliance with the FCPA and any other similar applicable anti-bribery or anti-corruption law or regulation of any such other jurisdiction and have instituted and maintain policies and procedures designed to ensure continued compliance with, and prevent violation of, such laws, rules and regulations;

 

10.1.13       Sanctions: none of the Vendor and its Affiliates, nor any director, officer or employee of, and to the best knowledge of the Vendor (after due and careful enquiry), any agent, affiliate of or other person acting on behalf of the Vendor:

 

(i)                                  is an individual or entity (a “Person”) currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”) or the U.S. Government (including but not limited to the designation as a “specially designated national” or “blocked person” thereunder) or any sanctions or requirements imposed by, or based upon the obligations or authorisations set forth in, the U.S. Trading With The Enemy Act, the U.S. International Emergency Economic Powers Act, the U.S. United Nations Participation Act, the Iran Sanctions Act, the Comprehensive Iran Sanctions Accountability and Divestment Act and Section 1245 of the National Defense Authorization Act for Fiscal Year 2012, the U.S. Syria Accountability and Lebanese Sovereignty Act, or the Iran Threat Reduction and Syria Human Rights Act of 2012, all as amended, or any Executive Orders issued in relation to the imposition of sanctions, or any sanctions or measures imposed by the United Nations Security Council, the European Union or Her Majesty’s Treasury (“HMT”) (collectively, the “Sanctions”);

 

(ii)                               is located, organised or operating in a country or territory that is the subject of Sanctions;

 

(iii)                            has for the past five years engaged in, and is now engaged in any dealings or transactions with any government, person, entity or project targeted by, or located in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions;

 

(iv)                           is or has been in violation of or subject to an investigation relating to any Sanctions;

 

10.1.14       Use of Proceeds: the Vendor will not directly or indirectly use the proceeds of the Placing hereunder, or lend, contribute or otherwise make available all or part of such proceeds to any subsidiary, joint venture partner or other Person, for the purpose of financing the activities of or business with any Person currently subject to any Sanctions or operating in any country or territory that is the subject of 

 

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Sanctions where such operations are in violation of such Sanctions or in any other manner that would result in a violation by any Person (including any Person participating in the offering, whether as underwriter, adviser, investor or otherwise) of Sanctions;

 

10.1.15       Anti-money Laundering: the operations of the Vendor and its Affiliates are and have been conducted at all times in compliance with all applicable anti-money laundering laws, regulations, rules and guidelines in its jurisdiction and in each other jurisdiction in which such entity, as the case may be, conducts business (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Vendor or its Affiliates with respect to the Money Laundering Laws is pending or, to the best knowledge of the Vendor (after due and careful enquiry), threatened; and

 

10.1.16       Arm’s-length Transaction: the placing of the Sale Shares pursuant to this Agreement, including the determination of any related discounts and commissions, is an arm’s-length commercial transaction between the Vendor, on the one hand, and the Joint Placing Agents, on the other hand; none of the Joint Placing Agents has assumed nor will it assume an advisory or fiduciary responsibility in favour of the Vendor with respect to the Placing or the process leading thereto (irrespective of whether any of the Joint Placing Agents has advised or are currently advising the Vendor on other matters) and none of the Joint Placing Agents has any obligation to the Vendor with respect to the Placing except the obligations expressly set forth in this Agreement or in any other written agreement in respect of the Further Bonds.

 

10.2                   The Company warrants and undertakes to each of the Joint Placing Agents as follows:

 

10.2.1              Announcements: all statements of fact contained in the Announcements (including but not limited to the disclosure on the use of proceeds) are true and accurate in all material respects as at the dates of their publication and all statements of opinion, intention, expectation or estimates of the Directors in relation to the Company and/or any other member(s) of the Group contained therein (if any) are truly and honestly held and have been made on reasonable grounds after due and careful consideration, and the Announcements do not include an untrue statement of a material fact or omit to state a fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect;

 

10.2.2              No non-public information: save for the matters set out in the Announcements, the Company is not in possession of any non-public information relating to the Company, any other member of the Group or their respective businesses the release of which would materially affect the trading price of the Shares and there is not in existence any material or information relating to the Company which will be required to be but has not been disclosed by the Company under the Listing Rules or the Exchange Act. Without prejudice to the generality of the foregoing, there is no material information (including, without limitation, any information regarding any material adverse change or prospective material adverse change in the condition of, or any actual, pending or threatened litigation, arbitration or similar proceeding involving, the Group) that is not described in the Company’s most recent annual report or subsequent public information releases (the “Company Information”) 

 

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which information is necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profits and losses and prospects of the Group; the Company Information does not include any untrue statement of a material fact or omit to state any fact necessary in order to make the statements therein not misleading in any material respect;

 

10.2.3              Information: all information (whether oral, written, electronic or in any other form) supplied by or on behalf of the Company, any other member of the Group or any of their respective officers, directors, employees or advisers, for the purpose of or in connection with the Placing, the Company or the Vendor and all publicly available information and records of the Company (including information contained in annual reports, statutory filings and registrations) is and was, when supplied or published, true and accurate in all material respects and not misleading in any material respect;

 

10.2.4              Litigation: save as disclosed in the Company Information, there is no claim, litigation, arbitration, prosecution or other legal proceedings or investigation or enquiry in progress or pending or threatened against any member of the Group or any of its properties or (as far as the Company is aware) the Company’s executive directors, officers or employees nor, so far as the Company is aware, is there any claim or any facts or circumstances of a material nature which would give rise to a claim against any member of the Group or any of its properties or the Company’s executive director, which in any such case would have or have had a material adverse effect on the condition, financial, trading or otherwise, or the earnings or business affairs (whether or not arising in the ordinary course of business) of the Company and the Group as a whole or which is material for disclosure in the context of the Placing;

 

10.2.5              No material adverse change: save as disclosed in the Company Information, there has been no material adverse change, or any development involving or reasonably likely to involve a prospective material adverse change, in the condition, financial or otherwise, or the earnings, net assets, business affairs or business prospects (whether or not arising in the ordinary course of business) of the Company or the Group as a whole since 31 December 2013;

 

10.2.6              Incorporation: each member of the Group is duly incorporated and validly existing under the laws of the place of its incorporation and each member of the Group has power to own its assets and to conduct its business in the manner presently conducted and there has been no petition filed, order made or effective resolution passed for the liquidation or winding up of the Company or any member of the Group;

 

10.2.7              Approvals: each member of the Group has obtained such authorisations and licences (if any) as are required under the provisions of any applicable law in connection with the operation of its business and there is no breach by any member of the Group of the provisions of any ordinance, statute or regulation governing such authorisations or licences nor is there any reason why any such authorisation or licence should be withdrawn or cancelled, in each case other than any authorisation and licence the lack of which would not have a material adverse effect on the condition, earnings or business affairs of the Group as a whole;

 

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10.2.8              Laws and Listing Rules: the Company is not in breach of any rules, regulations or requirements of the Stock Exchange and, in particular, the Company has complied at all times with the disclosure requirements under the Listing Rules, save for any breach or non-compliance which is not material in the context of the Placing, and, other than the Conditions and subject to Clause 6.3, all necessary consents (if any) have been obtained from the Stock Exchange and other authorities to complete the Placing and the Subscription in the manner contemplated. The Placing and the Subscription will not trigger a general offer under the Takeovers Code;

 

10.2.9              No order or judgment: save as disclosed in the Company Information, there is no order, decree or judgement of any court or governmental agency or regulatory body outstanding or anticipated against any member of the Group which may have or has had a material adverse effect upon the condition, financial or otherwise or the earnings or business affairs (whether or not arising in the ordinary course of business) of the Group (taken as a whole) or which is material in the context of the Placing;

 

10.2.10       No default:

 

(i)                                  save as disclosed in the Company Information, no outstanding indebtedness of any member of the Group has become payable or repayable by reason of any default of any member of the Group and no event has occurred or is impending which may result in such indebtedness becoming payable or repayable prior to its maturity date, in a demand being made for such indebtedness to be paid or repaid or in any step being taken to enforce any security for any such indebtedness of any member of the Group, in each case which is material in the context of the Placing;

 

(ii)                               save as disclosed in the Company Information, no member of the Group is a party to or under any obligation which is material and which is of an unusual or unduly onerous nature; no member of the Group is in breach of or in default of its constitutional documents or any contract or agreement which may have or has had a material adverse effect upon the condition, financial or otherwise or the earnings or business affairs (whether or not arising in the ordinary course of business) of the Company or of the Group (taken as a whole) or which is material in the context of the Placing; neither this Agreement nor the Placing nor the Subscription will constitute or give rise to a breach of or default under the constitutional documents or any agreement or other arrangement to which any member of the Group is party or give rise to any rights of any third party in respect of any assets of the Company or of the Group, in each case which is material in the context of the Placing;

 

10.2.11       Financial Statements: the audited consolidated accounts for the Group for the financial year ended on 31 December 2013 and the reviewed consolidated financial statements of the Consolidated Group as at and for the three months ended 31 March 2014, a copy of which has been provided to the Joint Placing Agents prior to the execution of this Agreement:

 

(i)                                  have been prepared on a recognised and consistent basis and in accordance with International Financial Reporting Standards; and

 

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(ii)                               comply with applicable ordinances, statutes and regulations and show a true and fair view of the state of affairs of the Group and of its results for the period in question;

 

10.2.12       Validity of Contracts: the Company has power under its constitutional documents to permit its entry into, and perform its obligations under, this Agreement in the manner set out herein and this Agreement (and its performance) has been duly authorised (such authorisation remaining in full force and effect) and executed by, and constitutes legally binding and enforceable obligations of the Company in accordance with its terms, subject to the laws relating to bankruptcy, insolvency, liquidation, possessory liens, rights of set off, reorganisation, amalgamation, merger, consolidation, moratorium or any other laws or legal procedures, whether of a similar nature or otherwise, generally affecting the rights of creditors, and general principles of equity; there is no authorisation, consent, approval, licence or notification required for the Placing or the Subscription either from governmental, regulatory or other public bodies (including, without limitation, the Stock Exchange except for the approval for the listing of and permission to deal in the Sale Shares by the Stock Exchange) or authorities or courts or from any third party pursuant to any contractual or other arrangement to which the Company or any other member of the Group is a party, except for those which have been, or will on or prior to the Closing Date be, obtained;

 

10.2.13       Compliance: the compliance by the Company with all of the provisions of this Agreement, as well as the consummation of the transactions herein contemplated will not conflict with or result in a breach or violation of, or result in any third party consent (other than the approval of the Stock Exchange as set out in the Conditions) being required under, any of the terms or provisions of any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument, decree, regulation or law to or by which any member of the Group is a party or to which any of the property or assets of any member of the Group is subject, or any statute or any order, rule or regulation, including, without limitation, to the extent applicable, the Companies Ordinance, the Listing Rules, the Takeovers Code or any judgment, decree or order of any court or governmental agency or body having jurisdiction over any member of the Group or the property or assets of any member of the Group, in each case where such breach, violation would have a material adverse effect on the conditions, earnings or business affairs of the Group as a whole;

 

10.2.14       Pre-emptive Rights and Options: except for the Relevant Securities, any Shares issuable under the Original Bonds and the Original Pre-emptive Bonds, the Further Bonds and any Shares issuable thereunder, the employee share options and restricted share units and restricted shares of the Company in issue as at the date of this Agreement, no unissued share capital of any member of the Group is under any option or agreed conditionally or unconditionally to be put under any option and, other than Datang and Country Hill, no person has an outstanding warrant, pre-emptive right or any other right of any description to require Shares to be allotted or issued by any member of the Group;

 

10.2.15       Professional Investor Treatment Notice: the Company has read and understood the Professional Investor Treatment Notice and acknowledges and agrees to the representations, waivers and consents contained in the Professional Investor 

 

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Treatment Notice, in which the expressions “you” or “your” shall mean “the Company”, and “us” or “our” shall mean the Joint Placing Agents;

 

10.2.16       No insider dealing: the Company has not been, is not and will not be at any time engaged in insider dealing for the purposes of the SFO in connection with the Placing and the related transactions entered into or to be entered into pursuant to this Agreement; neither the Company nor any person acting on behalf of the Company or under the control of the Company has taken or will take, directly or indirectly, any action designed or which was designed, or which constitutes or has constituted or might reasonably be or have been expected to cause or result in, stabilisation or manipulation of the price of any Shares or other securities of the Company to facilitate the sale or resale of the Sale Shares;

 

10.2.17       No Registration: neither the Company, its affiliates (as defined in Rule 501(b) of Regulation D) nor any persons acting on its or their behalf (except for the Joint Placing Agents and their respective affiliates in respect of which no representation is being given):

 

(i)                                  directly or indirectly has made or will make offers or sales of any security, or directly or indirectly has solicited or will solicit offers to buy, or otherwise negotiated or will negotiate in respect of, any security, under circumstances that would require the registration of the Sale Shares under the Securities Act; or

 

(ii)                               directly or indirectly, has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with any offer or sale of the Sale Shares in the United States;

 

10.2.18       No Directed Selling Efforts: neither the Company, its affiliates (as defined in Rule 405 under the Securities Act) nor any persons acting on its or their behalf (except for the Joint Placing Agents and their respective affiliates in respect of which no representation is being given) has engaged or will engage in any “directed selling efforts” (as defined in Regulation S) with respect to the Sale Shares;

 

10.2.19       No Price Manipulation:  neither the Company, its affiliates (as defined in Rule 405 under the Securities Act) nor any persons acting on its or their behalf, directly or indirectly, has taken or will take any action designed to cause or to result in, or that has constituted or which might reasonably be expected to cause or result in, the stabilisation in violation of applicable laws or manipulation of the price of the Relevant Securities or other security of the Company to facilitate the sale or resale of the Sale Shares;

 

10.2.20       Qualification: the Company will arrange for the qualification of the Sale Shares for offer and sale by the Joint Placing Agents through their respective affiliates or agents under the laws of such States of the United States or other jurisdictions as the Joint Placing Agents may reasonably designate and shall maintain such qualifications in effect so long as required for the sale of the Sale Shares; provided, however, that, in connection therewith, the Company shall not be obliged to file any general consent to service of process or to qualify as a foreign corporation in any jurisdiction in which they are not qualified. The Company will promptly advise the Joint Placing Agents of the receipt by the Company of any notification with respect to the suspension of the qualification of the Sale Shares, for sale in any jurisdiction or the initiation or threatening of any proceeding for such purposes;

 

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10.2.21      Investment Company: the Company is not, and as a result of the Placing contemplated herein will not be, an “investment company” under, and as such term is defined in, the Investment Company Act;

 

10.2.22      Passive Foreign Investment: the Company is not, and does not intend to become, and will not as a result of the Placing or otherwise become, a “passive foreign investment company” within the meaning of Section 1297 of the Internal Revenue Code;

 

10.2.23      Foreign Issuer: the Company is a “foreign issuer” (as such term is defined in Regulation S of the Securities Act) and reasonably believes that there is no “substantial U.S. market interest” (as such term is defined in Regulation S of the Securities Act) in the Sale Shares or in any securities of the same class as the Sale Shares;

 

10.2.24      Offer and Sale: relying on the representation provided in Clause 2.7.3, the offer and sale of the Subscription Shares by the Company and the Sale Shares by the Vendor will be made outside the United States in accordance with Regulation S under the Securities Act and within the United States to qualified institutional buyers (as defined in Rule 144A) pursuant to an exemption from the registration requirements under the Securities Act;

 

10.2.25      Anti-Money Laundering: the operations of the Company and each member of the Group (excluding Brite Semiconductor, Inc) and, to the best of the knowledge of the Issuer and after due and careful enquiry, Brite Semiconductor, Inc and any of the Company’s jointly controlled entities are and have been conducted at all times in compliance with all applicable anti-money laundering laws, regulations, rules and guidelines in its jurisdiction and in each other jurisdiction in which such entity, as the case may be, conducts business (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any member of the Group and any of their jointly controlled entities of the Company with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company (after due and careful enquiry), threatened;

 

10.2.26      No Unlawful Payments: none of the Company, any member of the Group, any director, officer or employee of, and to the best knowledge of the Company (after due and careful enquiry), any agent, affiliate of or other person acting on behalf of the Company or any member of the Group, is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), or any other applicable anti-bribery or anti-corruption law or regulation similar to the FCPA (including but not limited to, the UK Bribery Act of 2010), in any other jurisdiction in which the Company or any member of the Group operates including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorisation of the payment of any money, or other property, gift, promise to give, or authorisation of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA or any other similar applicable anti-bribery or anti-corruption law or regulation of any such other jurisdiction; the Company, its affiliates and every member of the 

 

20

 

Group has conducted their businesses in compliance with the FCPA and any other similar applicable anti-bribery or anti-corruption law or regulation of any such other jurisdiction and have instituted and maintain policies and procedures designed to ensure continued compliance with, and prevent violation of, such laws, rules and regulations;

 

10.2.27      Sanctions: none of the Company, the members of the Group, any director, officer or employee of, and to the best knowledge of the Company (after due and careful enquiry), any agent, affiliate of or other person acting on behalf of the Company or any member of the Group:

 

(i)                                  is an individual or entity (a “Person”) currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”) or the U.S. Government (including but not limited to the designation as a “specially designated national” or “blocked person” thereunder) or any sanctions or requirements imposed by, or based upon the obligations or authorisations set forth in, the U.S. Trading With The Enemy Act, the U.S. International Emergency Economic Powers Act, the U.S. United Nations Participation Act, the Iran Sanctions Act, the Comprehensive Iran Sanctions Accountability and Divestment Act and Section 1245 of the National Defense Authorization Act for Fiscal Year 2012, the U.S. Syria Accountability and Lebanese Sovereignty Act, or the Iran Threat Reduction and Syria Human Rights Act of 2012, all as amended, or any Executive Orders issued in relation to the imposition of sanctions, or any sanctions or measures imposed by the United Nations Security Council, the European Union or Her Majesty’s Treasury (“HMT”) (collectively, the “Sanctions”);

 

(ii)                               is located, organised or operating in a country or territory that is the subject of Sanctions;

 

(iii)                            has for the past five years engaged in, and is now engaged in any dealings or transactions with any government, person, entity or project targeted by, or located in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions;

 

(iv)                           is or has been in violation of or subject to an investigation relating to any Sanctions;

 

10.2.28      Use of Proceeds: neither the Company nor any member of the Group will directly or indirectly use the proceeds of the Placing or the Subscription hereunder, or lend, contribute or otherwise make available all or part of such proceeds to any subsidiary, joint venture partner or other Person, for the purpose of financing the activities of or business with any Person currently subject to any Sanctions or operating in any country or territory that is the subject of Sanctions where such operations are in violation of such Sanctions or in any other manner that would result in a violation by any Person (including any Person participating in the offering, whether as underwriter, adviser, investor or otherwise) of Sanctions;

 

10.2.29      Environmental Laws: each member of the Group has complied in all respects with all applicable Environmental Laws, save where any non-compliance would not have a material adverse effect. For the purpose of this Clause 10.2.29, “Environmental Laws” means any and all supra-national, national, state, local and 

 

21

 

foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licences, agreements or other governmental restrictions relating to the protection of the environment (including, without limitation, human, animal and plant life, ambient air, surface water, ground water, or land), the protection of property and proprietary rights or for the compensation of harm to the environment whether by clean-up, remediation, containment or other treatment or the payment of monies to any competent authority; and

 

10.2.30      No fiduciary: in connection with the Placing, each of the Joint Placing Agents is and has been acting solely as an agent and not as a fiduciary of the Company, or its stockholders, creditors, employees or any other party; (iii) none of the Joint Placing Agents has assumed nor will it assume an advisory or fiduciary responsibility in favour of the Company with respect to the Placing or the process leading thereto (irrespective of whether any of the Joint Placing Agents has advised or are currently advising the Company on other matters) and none of the Joint Placing Agents has any obligation to the Company with respect to the Placing except the obligations expressly set forth in this Agreement or in any other written agreement in respect of the Further Bonds; (iv) each of the Joint Placing Agents and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company; and (v) none of the Joint Placing Agents has provided any legal, accounting, regulatory or tax advice with respect to the Placing and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it deemed appropriate. This Agreement supersedes any prior agreement or understanding (whether written or oral) between the Company and any of the Joint Placing Agents with respect to the subject matter of this Clause 10.2.30.

 

10.3                    The Company hereby represents, warrants and undertakes to the Vendor on the following terms:

 

10.3.1             the Company has the full right, power and authority to enter into and perform its obligations under this Agreement and, subject to satisfaction of the Conditions, to allot and issue the Subscription Shares without any sanction or consent of its members and all necessary authorisations, approvals, consents and licences relating to the same have been, or will, prior to completion of the Subscription, be unconditionally obtained and are, or will, prior to completion of the Subscription, be in full force and effect, and this Agreement is a legal, valid and binding agreement of the Company, enforceable in accordance with its terms; and

 

10.3.2             the allotment and issue of the Subscription Shares pursuant to this Agreement will not result in any breach of and will comply with all relevant provisions of Hong Kong, the Companies Ordinance, the Listing Rules and all other applicable laws, rules and regulations.

 

10.4                    The Company hereby represents, warrants and undertakes to each of the Joint Placing Agents as follows:

 

10.4.1             for so long as any Sale Shares are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, the Company will, during any period in which it is neither subject to Section 13 or 15(d) of the U.S. Securities Exchange Act of 1934 nor exempt from reporting pursuant to Rule 12g3-2(b) thereunder, 

 

22

 

provide to any holder or beneficial owner of such restricted securities or to any prospective purchaser of such restricted securities designated by such holder or beneficial owner, upon the request of such holder, beneficial owner or prospective purchaser, the information required to be provided by Rule 144A(d)(4) under the Securities Act; and

 

10.4.2             for so long as the Sale Shares are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, the Company will not become an “open-end company”, “unit investment trust” or “face-amount certificate company”, as such terms are defined in, and that is or is required to be registered under Section 8 of, the Investment Company Act.

 

10.5                    The Vendor hereby undertakes to the Company to subscribe for the Subscription Shares subject to the Memorandum and Articles of Association of the Company and the terms of this Agreement.

 

10.6                    The representations, warranties and undertakings set out in Clause 2.7 and this Clause 10 are given as at the date hereof and repeated on the Closing Date, with reference in each case to the facts and circumstances then subsisting. Each of the Vendor and the Company undertakes to notify the Joint Placing Agents of any matter or event coming to its attention prior to the completion of the Placing (in the case of those given to the Joint Placing Agents) and of the Subscription (in the case of those given to the Vendor) which shows or may show any of the representations, warranties and undertakings set out in Clause 10 to be or to have been untrue, inaccurate or misleading.

 

10.7                    Save as a result of its own gross negligence, fraud or wilful default, a Joint Placing Agent shall not be responsible for and no claim shall be made against such Joint Placing Agent by the Company or the Vendor to recover any damage, cost, charge or expense which the Company or the Vendor may suffer or incur by reason of or arising out of the carrying out by the Joint Placing Agent of any work pursuant to its obligations hereunder.

 

10.8                    The rights and remedies of each Party in respect of the representations, warranties and undertakings referred to in this Clause 10 shall not be affected by:

 

10.8.1             completion of the Placing or the Subscription;

 

10.8.2             any investigation made into the affairs of any Party or any knowledge held or gained of any such affairs by or on behalf of the other Parties; or

 

10.8.3             termination of this Agreement or any event or matter whatsoever, other than a specific and duly authorised written waiver or release by the other Parties.

 

11                               INDEMNITY

 

11.1                    The Company undertakes to indemnify and hold harmless each of the Joint Placing Agents and each of their respective agents, subsidiaries, affiliates or associated companies, their respective directors, officers, employees and agents including, but not limited to, the directors, officers, employees and controlling persons within the meaning of the Securities Act, as the case may be, of each of the Joint Placing Agents and each of their respective affiliates within the meaning of the Securities Act or the U.S. Securities Exchange Act of 1934 (and shall include the partners of any such affiliates) (the “Indemnified Parties”) against all or any costs, expenses (including legal fees), fees, claims, claims, actions, liabilities, demands, proceedings or judgments (including, but not limited to, all such losses, costs, charges or expenses suffered or incurred in disputing or defending any 

 

23

 

costs, fees, claims, actions, liabilities, demands, proceedings or judgments (the “Proceedings”) and/or in establishing its rights to be indemnified pursuant to this Clause 11 and/or in seeking advice in relation to any Proceedings brought or established or threatened to be brought or established against any of the Indemnified Parties by any Placee or by any governmental agency, regulatory body or other person (the “Losses”)):

 

11.1.1             directly or indirectly arising out of or in connection with or based on any breach or alleged breach of any of the representations, warranties and undertakings contained in this Agreement; or

 

11.1.2             which are, directly or indirectly, resulting from or are attributable to the performance by the Joint Placing Agents of their respective obligations under this Agreement in relation to the Placing and which do not in any such case arise from that Joint Placing Agent’s own gross negligence, fraud or wilful default as determined by final judgment of a court of competent jurisdiction.

 

11.2                    The Vendor undertakes to indemnify and hold harmless the Indemnified Parties against the Losses directly or indirectly arising out of or in connection with or based on any breach or alleged breach of any of the representations, warranties and undertakings of the Vendor contained in this Agreement.

 

11.3                    The indemnities contained in Clause 11.1 and Clause 11.2 shall remain in full force and effect notwithstanding completion of each of the Placing and the Subscription in accordance with the terms and conditions herein contained, shall be in addition to any liability which the Vendor or the Company may have and shall extend to include all costs, charges and expenses which the Joint Placing Agents and/or any of the Indemnified Parties may reasonably incur or pay in disputing, settling or compromising any matter to which the indemnity might relate and in establishing the right to indemnification pursuant to this Clause 11 in respect of any matter. Neither the Vendor nor the Company shall, without the prior written consent of the Joint Placing Agents, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the Indemnified Parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each Indemnified Party from all liability arising out of such claim, action, suit or proceeding.

 

11.4                    If a Joint Placing Agent becomes aware of any claim which is relevant for the purposes of Clause 11.1 and Clause 11.2, it will as soon as reasonably practicable give notice in writing thereof to the other Joint Placing Agent, the Vendor and the Company and will consult with the other Joint Placing Agent, the Vendor and the Company and, subject to being indemnified against any additional or increased expenses it may suffer or incur as a result of so doing, give full consideration to the views of the other Joint Placing Agent, the Vendor and the Company in relation to the manner in which the Joint Placing Agent shall conduct such claim.

 

11.5                    The Company shall not, and shall procure that no member of the Group shall, at any time prior to or on the Closing Date do or omit to do anything which would cause any of the representations, warranties and undertakings set out in Clause 10 to be untrue.

 

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12                               TERMINATION

 

12.1                    Notwithstanding anything contained in this Agreement, if at any time prior to 9:00 a.m. (Hong Kong time) on the Closing Date:

 

12.1.1          there develops, occurs or comes into force:

 

(i)                                  any new law or regulation or any change or development involving a prospective change in existing laws or regulations in any relevant jurisdiction which in the opinion of the Joint Placing Agents has or is likely to have a material adverse effect on the financial position of the Group as a whole; or

 

(ii)                               any significant change (whether or not permanent) in local, national or international monetary, economic, financial or political conditions which in the opinion of the Joint Placing Agents is or would be materially adverse to the success of the Placing; or

 

(iii)                            any significant change (whether or not permanent) in local, national or international securities market conditions or currency exchange rates or foreign exchange rates or foreign exchange controls which in the reasonable opinion of the Joint Placing Agents is or would be materially adverse to the success of the Placing or make it impracticable or inexpedient to proceed therewith; or

 

(iv)                           a general moratorium on commercial banking activities in Hong Kong, the PRC, London or New York declared by the relevant authorities or a material disruption in commercial banking or securities settlement or clearance services in Hong Kong, the PRC, Singapore, the United Kingdom or the United States; or

 

(v)                              a change or development involving a prospective change in Taxation which materially adversely affects the Group as a whole or the Sale Shares; or

 

(vi)                           any outbreak or escalation of hostilities or act of terrorism involving Hong Kong, the PRC, Singapore, the United Kingdom or the United States or the declaration by Hong Kong, the PRC, Singapore, the United Kingdom or the United States of a national emergency or war; or

 

(vii)                        any suspension of dealings in the Shares on the Stock Exchange or American Depository Shares over the Shares on the New York Stock Exchange for any period whatsoever (other than a voluntary suspension or as a result of the Placing, the Announcement or in connection with the issuance of the Relevant Securities); or

 

(viii)                     any moratorium, suspension or material restriction on trading in shares or securities generally on the Stock Exchange, the Shanghai Stock Exchange, the London Stock Exchange or the New York Stock Exchange due to exceptional financial circumstances or otherwise at any time prior to the Closing Date; or

 

12.1.2          any breach of any of the representations, warranties and undertakings set out in Clause 8 (other than Clause 8.7) or Clause 10 comes to the knowledge of any of the Joint Placing Agents or any event occurs or any matter arises on or after the date hereof and prior to the Closing Date which if it had occurred or arisen before 

 

25

 

the date hereof would have rendered any of such representations, warranties and undertakings untrue or incorrect in any respect, or there has been a breach of, or failure to perform, any other provision of this Agreement on the part of the Vendor or the Company; or

 

12.1.3          there is any such adverse change, or development involving a prospective adverse change in the general affairs, condition, results of operations or prospects, management, business or in the financial or trading position of the Group as a whole which in the opinion of the Joint Placing Agents is materially adverse to the success of the Placing,

 

then and in any such case, the Joint Placing Agents may terminate this Agreement without liability to any of the Joint Placing Agents and/or the Company and the Vendor (other than for any antecedent breach) by giving notice in writing to the Vendor and the Company, which notice may be given at any time prior to 9:00 a.m. (Hong Kong time) on the Closing Date.

 

12.2                    Without prejudice to any other provisions of this Agreement, the Joint Placing Agents shall have the right exercisable at any time by notice in writing to the Vendor and the Company to terminate this Agreement if any of the Sale Shares are not delivered by or on behalf of the Vendor in accordance with Clause 4.

 

12.3                    In the event that all of the Joint Placing Agents agree to terminate this Agreement in accordance with Clauses 12.1 or 12.2, all obligations of each of the Parties under this Agreement shall cease and no Party shall have any claim against any other Party in respect of any matter arising out of or in connection with this Agreement except for:

 

12.3.1          any antecedent breach of any obligation under this Agreement; and

 

12.3.2          liabilities under Clauses 9.2 and 11.

 

13                               ANNOUNCEMENTS

 

Save for the Second Announcement and save as required by law or applicable regulation or by the U.S. Securities and Exchange Commission, the Stock Exchange or the SFC, each of the Parties hereby undertakes to procure that no public announcement or communication to the press or to the Stock Exchange concerning the Placing shall be made by or on behalf of the Company between the date hereof and the Closing Date without the prior written approval (such approval not to be unreasonably withheld or delayed) from the Joint Placing Agents as to the content, timing and manner of making thereof.

 

14                               TIME OF THE ESSENCE

 

Any time, date or period mentioned in this Agreement may be extended by mutual agreement between the Vendor, the Company and the Joint Placing Agents but as regards any time, date or period originally fixed or any date or period so extended as aforesaid, time shall be of the essence.

 

15                               NOTICES

 

15.1                    All notices delivered hereunder shall be in writing in English and shall be communicated to the following addresses:

 

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If to the Company, to:

 

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

 

If to the Vendor, to:

 

Datang Holdings (Hongkong) Investment Company Limited 
 18/F Edinburgh Tower
 The Landmark
 15 Queen’s Road
 Central
 Hong Kong

 

Facsimile:                                         +86 01062303153 
 Attention:                                            Wang Shihui

 

If to the Joint Placing Agents, to:

 

Deutsche Bank AG, Hong Kong Branch
 52nd Floor, International Commerce Centre
 1 Austin Road West
 Kowloon
 Hong Kong

 

Facsimile:                                         +852 2203 7202 
 Attention:                                            Head of ECM

 

AND

 

J.P. Morgan Securities (Asia Pacific) Limited
 28/F Chater House
 8 Connaught Road
 Central
 Hong Kong

 

Facsimile:                                         +852 2810 8819
 Attention:                                            ECM Syndicate Desk

 

15.2                    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 Saturday, Sunday or public holiday shall be deemed to be received on the next Business Day.

 

16                              MISCELLANEOUS

 

16.1                    Each Party undertakes with the other Parties that it shall execute and perform and procure that there are executed and performed such further documents and acts as any other Party may reasonably require to give effect to the provisions of this Agreement.

 

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16.2                    This Agreement and the NDAs (save for Clauses 6 and 12 of the NDAs, which shall be superseded by this Agreement) together constitute the entire agreement and understanding between the Parties in connection with the Placing and the Subscription. This Agreement and the NDAs (save for Clauses 6 and 12 of the NDAs, which shall be superseded by this Agreement) together supersede all previous agreements or understandings which shall cease to have any further force or effect and no Party has entered into this Agreement in reliance upon any representation, warranty or undertaking which is not set out or referred to in this Agreement and the NDAs together.

 

16.3                    No variation of this Agreement shall be valid unless it is in writing and signed by or on behalf of each of the Joint Placing Agents, the Vendor and the Company. The expression “variation” shall include any variation, supplement, deletion or replacement however effected.

 

16.4                    This Agreement may be executed in any number of counterparts and by the Parties on separate counterparts, each of which is an original but all of which together constitute one and the same instrument.

 

16.5                    No failure or delay by any Party in exercising any right or remedy provided by law under or pursuant to this Agreement shall impair such right or remedy or operate or be construed as a waiver or variation of it or preclude its exercise at any subsequent time and no single or partial exercise of any such right or remedy shall preclude any other or further exercise of it or the exercise of any other right or remedy.

 

16.6                    This Agreement shall be binding upon, and inure solely to the benefit of, each Party and, to the extent provided herein, any directors, officers, employees and controlling persons of each Party, and their 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 Sale Shares from any of the Joint Placing Agents shall be deemed a successor or assign by reason merely of such purchase.

 

17                               APPLICABLE LAW AND JURISDICTION

 

17.1                    This Agreement is governed by and shall be construed in accordance with the laws of Hong Kong for the time being in force and each of the Parties hereby irrevocably submits to the non-exclusive jurisdictions of the courts of Hong Kong in any legal suit, action or proceeding arising out of or based upon this Agreement. Each of the Vendor and the Company hereby irrevocably waives any objection which it may now or hereafter have to the service of process or the laying of venue in connection with any such proceedings.

 

17.2                    Each of the Vendor and the Company agrees that the process by which any legal proceedings in Hong Kong are begun may be served on it by being delivered to the Company it at its principal place of business in Hong Kong. If the Company ceases to have a place of business in Hong Kong, each of the Vendor and the Company shall forthwith appoint a further person in Hong Kong to accept service of process on its behalf in Hong Kong and notify the Joint Placing Agents of such appointment, and, failing such appointment within fifteen days, the Joint Placing Agents shall be entitled to appoint such a person by notice to the Vendor and the Company. Nothing contained herein shall affect the right to serve process in any other manner permitted by law.

 

28

 

IN WITNESS WHEREOF this Agreement has been entered into the day and year first before written.

 

 

	
SIGNED by
    	

    	
 
    
	
for and on behalf of
    	
 
    
	
SEMICONDUCTOR MANUFACTURING   INTERNATIONAL CORPORATION
    	
 
    
	
in the presence of:
    	
 
    

 

Signature Page – Placing Agreement

 

 

	
SIGNED by  
    for and on behalf of  
    DATANG HOLDINGS (HONGKONG)
   INVESTMENT COMPANY LIMITED  
   in the presence of:
    	

    	
 
    

 

Signature Page – Placing Agreement

 

 

	
SIGNED  
    for and on behalf of  
    DEUTSCHE BANK AG, HONG KONG
   BRANCH  
    	

    	
 
    
	
 
    	
 
    
	
By:
    	
By:
    

 

Signature Page – Placing Agreement

 

 

	
SIGNED by  
    for and on behalf of  
    J.P. MORGAN SECURITIES (ASIA 
   PACIFIC) LIMITED
   in the presence of:
    	

    	
 
    

 

Signature Page – Placing Agreement

 

 

SCHEDULE 1
 PROFESSIONAL INVESTOR TREATMENT NOTICE

 

1                                      You are a Professional Investor by reason of your being within a category of person described in the Securities and Futures (Professional Investor) Rules as follows:

 

1.1                           a trust corporation having been entrusted with total assets of not less than HK$40 million (or equivalent) as stated in its latest audited financial statements prepared within the last 16 months, or in the latest audited financial statements prepared within the last 16 months of the relevant trust or trusts of which it is trustee, or in custodian statements issued to the trust corporation in respect of the trust(s) within the last 12 months;

 

1.2                           a high net worth individual having, alone or with associates on a joint account, a portfolio of at least HK$8 million (or equivalent) in securities and/or currency deposits, as stated in a certificate from an auditor or professional accountant or in custodian statements issued to the individual within the last 12 months;

 

1.3                           a corporation the sole business of which is to hold investments and which is wholly owned by an individual who, alone or with associates on a joint account, falls within paragraph 1.2 above; and

 

1.4                           a high net worth corporation or partnership having total assets or at least HK$40 million (or equivalent) or a portfolio of at least HK$8 million (or equivalent) in securities and/or currency deposits, as stated in its latest audited financial statements prepared within the last 16 months or in custodian statements issued to the corporation or partnership within the last 12 months.

 

We have categorised you as a Professional Investor based on information you have given us. You will inform us promptly in the event any such information ceases to be true and accurate. You will be treated as a Professional Investor in relation to all investment products and markets.

 

2                                      As a consequence of categorisation as a Professional Investor, we are not required to fulfil certain requirements under the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission (the “Code”) and other Hong Kong regulations. While we may in fact do some or all of the following in providing services to you, we have no regulatory responsibility to do so.

 

2.1                           Client agreement

 

We are not required to enter into a written agreement complying with the Code relating to the services that are to be provided to you.

 

2.2                           Risk disclosures

 

We are not required by the Code to provide you with written risk warnings in respect of the risks involved in any transactions entered into with you, or to bring those risks to your attention.

 

2.3                           Information about us

 

We are not required to provide you with information about our business or the identity and status of employees and others acting on our behalf with whom you will have contact.

 

 

2.4                           Prompt confirmation

 

We are not required by the Code to promptly confirm the essential features of a transaction after effecting a transaction for you.

 

2.5                           Information about clients

 

We are not required to establish your financial situation, investment experience or investment objectives, except where we are providing advice on corporate finance work.

 

2.6                           Nasdaq–Amex Pilot Program

 

If you wish to deal through the Stock Exchange in securities admitted to trading on the Stock Exchange under the Nasdaq-Amex Pilot Program, we are not required to provide you with documentation on that program.

 

2.7                           Suitability

 

We are not required to ensure that a recommendation or solicitation is suitable for you in the light of your financial situation, investment experience and investment objectives.

 

3                                      You have the right to withdraw from being treated as a Professional Investor at any time in respect of all or any investment products or markets on giving written notice to our Compliance Department.

 

4                                      By entering into this Agreement, you represent and warrant to us that you are knowledgeable and have sufficient expertise in the products and markets that you are dealing in and are aware of the risks in trading in the products and markets that you are dealing in.

 

5                                      By entering into this Agreement, you hereby agree and acknowledge that you have read and understood and have had explained to you the consequences of consenting to being treated as a Professional Investor and the right to withdraw from being treated as such as set out herein and that you hereby consent to being treated as a Professional Investor.

 

6                                      By entering into this Agreement, you hereby agree and acknowledge that we and the Settlement Agent will not provide you with any contract notes, statements of account or receipts under the Hong Kong Securities and Futures (Contract Notes, Statements of Account and Receipts) Rules where such would otherwise be required.

 

 

SCHEDULE 2
 PLACING AGENTS’ COMMITMENT FOR THE SALE SHARES

 

	
Placing Agent
    	
 
    	
Number of Sale Shares
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Deutsche Bank AG, Hong Kong Branch
    	
 
    	
1,165,500,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
J.P. Morgan Securities (Asia Pacific) Limited 
    	
 
    	
1,424,500,000EXHIBIT 4.15

 

SHARE PURCHASE AGREEMENT

 

SHARE PURCHASE AGREEMENT (the “Agreement”), dated as of 12 February 2015, by and among Semiconductor Manufacturing International Corporation, a company established under the laws of Cayman Islands (the “Company”), and China Integrated Circuit Industry Investment Fund Co., Ltd. (国家集成电路产业投资基金股份有限公司), a company established under the laws of the People’s Republic of China (the “Buyer”).

 

WHEREAS

 

A.         The Buyer wishes to purchase through its wholly-owned subsidiary incorporated in the Hong Kong Special Administrative Region of the People’s Republic of China (the “HKCo”), and the Company wishes to sell, upon the terms and conditions stated in this Agreement an aggregate of 4,700,000,000 common shares, par value US$0.0004 per share, of the Company (the “New Common Shares”) at a purchase price of HK$0.6593 per share for an aggregate purchase price of HK$3,098,710,000 (the “Aggregate Purchase Price”).  Unless the context otherwise requires, the New Common Shares subscribed for shall be referred to herein as the “Securities”.

 

B.         The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration under the U.S. Securities Act of 1933, as amended (the “1933 Act”) afforded by Regulation S (“Regulation S”) as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the 1933 Act.

 

NOW, THEREFORE, the Company and the Buyer hereby agree as follows:

 

1.                                     PURCHASE AND SALE OF NEW COMMON SHARES

 

(a) Purchase of New Common Shares.  Subject to the satisfaction or waiver of the conditions set forth in Sections 5, 6 and 7 below, the Company shall issue and sell to the Buyer, and the Buyer through HKCo shall purchase from the Company on the Closing Date (as defined in Section 1(c)(i) below), the New Common Shares (the “Closing”).

 

(b) Purchase Price.  The Aggregate Purchase Price shall be HK$3,098,710,000.

 

(c) Closing.

 

(i)         Date and Time. The date and time of the Closing (the “Closing Date”) shall be 10:00 a.m., Hong Kong time, on such date as is specified by the Company and the Buyer, which date shall be no later than the third Business Day after the satisfaction or waiver of the conditions to the Closing set forth in Sections 5, 6 and 7 below and no later than the expiry of four months after this Agreement is 

 

 

signed (or such later date as may be agreed between the parties), at the offices of Slaughter and May, 47th Floor, Jardine House, One Connaught Place, Central, Hong Kong or at such other time, date and location as is mutually agreed in writing by the Company and the Buyer.

 

(ii)         Payment and Delivery.  On or before the Closing Date:

 

(A) the Buyer shall pay the Aggregate Purchase Price to the Company for the New Common Shares to be issued and sold to the Buyer at the Closing, by electronic bank transfer, in immediately available funds. The payment shall be made to the bank account, bank and bank address as specified by the Company in writing prior to the Closing Date;

 

(B) the Buyer shall deliver:

 

(1)                      to the parties an original deed of adherence in the form set out in Appendix 1 (the “Deed of Adherence”) duly executed by HKCo; and

 

(2)                      to the Company a certificate signed by a director or an authorized representative of the Buyer certifying as to the matters set forth in Section 6(c).

 

(C) the Company shall deliver to the Buyer:

 

(1)                      certificates in respect of the New Common Shares, respectively, duly executed on behalf of the Company and registered in the name of the HKCo;

 

(2)                      a certified register of members of the Common Shares of the Company, reflecting HKCo’s ownership of the New Common Shares, respectively;

 

(3)                      a certified register of directors of the Company reflecting the Buyer Nominee’s (as defined below) membership on the Board of Directors of the Company (the “Board”) as appointed pursuant to Section 4(e) below;

 

(4)                      copies of the board resolutions of the Company approving the entering into and execution of this Agreement and all transactions contemplated herein and the appointment of the director pursuant to Section 4(e);

 

(5)                      a certificate, executed on behalf of the Company by the Secretary of the Company and dated as of the Closing Date, as to (i) the resolutions consistent with Section 3A(b) as adopted by the Board, and (ii) the Articles, in the form attached hereto as Schedule A; and

 

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(6)                      the Company shall deliver to the Buyer a certificate signed by a director of the Company certifying as to the matters set forth in Section 7(b).

 

2.                                     BUYER’S REPRESENTATIONS AND WARRANTIES.

 

The Buyer hereby represents and warrants to the Company that as at the date of this Agreement and as at the Closing Date (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specified date):

 

(a) Regulation S.

 

(i)         The Buyer (A) is domiciled and has its principal place of business outside the United States, (B) certifies that it is not a U.S. Person as defined under Rule 902 of Regulation S and is not acquiring the Securities for the account or benefit of any U.S. Person, (C) at the time of offering to the Buyer and communication of the Buyer’s order to purchase the Securities and at the time of the Buyer’s execution of this Agreement, the Buyer was located outside the United States, and (D) at the time of the Closing the Buyer or persons acting on the Buyer’s behalf in connection therewith, will be located outside the United States. As used herein, the term “United States” means and includes the United States of America, its territories and possessions, any state of the United States, and the District of Columbia

 

(ii)         The Buyer has been advised and acknowledges that: (A) the Securities issued pursuant to this Agreement have not been, and when issued, will not be registered under the 1933 Act or the securities laws of any state of the United States, (B) in issuing and selling the Securities to the Buyer pursuant hereto, the Company is relying upon the exemption from registration provided by Regulation S of the 1933 Act, and (C) it is a condition to the availability of the Regulation S safe harbor that the Securities not be offered or sold in the United States or to a U.S. Person until the expiration of a period of six months after the Closing Date (the “Distribution Compliance Period”).

 

(iii)        The Buyer acknowledges and covenants that until the expiration of the Distribution Compliance Period: (A) it and its agents or representatives have not and will not solicit offers to buy, offer for sale or sell any of the Securities or any beneficial interest therein in the United States or to or for the account of a U.S. Person, and (B) notwithstanding the foregoing, prior to the expiration of the Distribution Compliance Period, the Securities may be offered and sold by the holder thereof only if such offer and sale is made in compliance with the terms of this Agreement and either, (X) the offer or sale is within the United States or to or for the account of a U.S. Person and pursuant to an effective registration statement, Rule 144 promulgated under the 1933 Act or an exemption from the registration requirements of the 1933 Act, or (Y) the offer and sale is outside the United States and to other than a U.S. Person.  The foregoing restrictions are binding upon subsequent transferees of the Securities, except for transferees pursuant to an effective registration statement.  The Buyer agrees that after the Distribution Compliance Period, the Securities may be offered or sold within the United States or to or for the account of a U.S. Person only in accordance with this Agreement and pursuant to applicable securities laws.

 

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(iv)        The Buyer is not a “distributor” (as defined in Regulation S) or a “dealer” (as defined in the Act).

 

(v)        The Buyer understands that the Securities constitute “restricted securities” within the meaning of Rule 144 inasmuch as they are being acquired from the Company in a transaction pursuant to Regulation S.  Under applicable laws and regulations, the Securities may be resold without registration under the 1933 Act only in certain limited circumstances.  In this connection, the Buyer represents that it understands the resale limitations imposed thereby and by the 1933 Act.  The Buyer understands that under Rule 144, except as otherwise provided by section (k) of that Rule, the limitations include, among other things:  (A) the availability of certain current public information about the issuer, (B) the resale occurring not less than six months after the party has purchased and paid for the securities to be sold and (C) limitations on the amount of securities to be sold and the manner of sale.  The Buyer acknowledges that in the event all of the requirements of Rule 144 are not met, registration under the Act or compliance with another exemption from registration will be required for any disposition of the Securities.  The Buyer understands that although Rule 144 is not exclusive, the SEC has expressed its opinion that persons proposing to sell restricted securities received in a private offering other than in a registered offering or pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales and that such persons and the brokers who participate in the transactions do so at their own risk.

 

(vi)        The Buyer hereby acknowledges that during the Distribution Compliance Period, no deposit of the Securities issued hereunder will be accepted into its American Depositary Shares (“ADS”) program, and the Securities may not be offered or sold in the United States or to U.S. Persons unless the Securities are registered under the 1933 Act, or an exemption from the registration requirements of the 1933 Act is available.  The Buyer further acknowledges that, for so long as the Securities are held by “affiliates” within the meaning of Rule 144(a)(1) under the 1933 Act or are “restricted securities” within the meaning of Rule 144(a)(3) under the 1933 Act, the Securities will not be eligible for deposit under any unrestricted depositary receipt facility.

 

(vii)       The Buyer has not engaged or cause any third party to engage in any directed selling efforts (as such term is defined in Regulation S) in the United States with respect to the Securities.

 

(viii)      The Buyer has not engaged in hedging transactions (within the meaning of Rule 903(b)(3)(iii)(B)(4) of Regulation S) with regard to the Securities unless in compliance with the 1933 Act.

 

(b) No Public Sale or Distribution.  Subject to the Buyer’s right to transfer the New Common Shares to the Permitted Transferee (as defined in Section 4(g)(iii)), the Buyer is acquiring the Securities for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the 1933 Act.  The Buyer  does not presently have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities.  The Buyer is not a broker-dealer registered with the SEC under the U.S. Securities Exchange Act of 1934, as amended (the “1934 Act”) or an entity engaged in a business that would require it to be so registered as a broker-dealer.  “Person” means an individual, a limited liability 

 

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company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization or a government or any department or agency thereof.

 

(c) Reliance on Exemptions.  The Buyer understands that the Securities are being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and its compliance with, the representations, warranties, agreements, acknowledgments and understandings of it set forth herein in order to determine the availability of such exemptions and the eligibility of it to acquire the Securities.

 

(d) Information.  The Buyer has received all information that it believes is necessary or appropriate in connection with its purchase of the Securities. The Buyer understands that its investment in the Securities involves a high degree of risk and is able to afford a complete loss of such investment.  The Buyer has conducted its own investigations with respect to the Securities and the Company.  The Buyer has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of prospective investment in the Securities.

 

(e) No Governmental Review.  The Buyer understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

(f) Transfer or Resale.  The Buyer understands that: (i) the Securities have not been and are not being registered under the 1933 Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred within the United States or to or for the account or benefit of a U.S. Person unless (A) subsequently registered thereunder, (B) the Buyer shall have delivered to the Company an opinion of counsel, in form, scope and substance reasonably acceptable to the Company, to the effect that such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) the Buyer provides the Company with reasonable assurance that such Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act, as amended, (or a successor rule thereto) (collectively, “Rule 144”); (ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller (or the Person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other Person is under any obligation to register the Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.

 

(g) Legends.  The Buyer understands that the certificates or other instruments representing the Securities, until such time as the resale of the Securities have been registered under the 1933 Act, shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):

 

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“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE ACT, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH BELOW.  BY ITS ACQUISITION HEREOF, THE HOLDER, IF NOT A U.S. PERSON: (1) REPRESENTS THAT IT IS NOT A U.S. PERSON AND IS ACQUIRING THESE SHARES IN AN OFFSHORE TRANSACTION; (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THESE SHARES EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (C) INSIDE THE UNITED STATES, TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE ACT, (D) INSIDE THE UNITED STATES, TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE COMPANY A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THESE SHARES IN THE FORM SATISFACTORY TO THE COMPANY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE COMPANY), (E) OUTSIDE THE UNITED STATES, IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULES 904 AND 905 UNDER THE ACT, OR (F) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE ACT (IF AVAILABLE); AND (3) AGREES THAT IT WILL GIVE EACH PERSON TO WHOM THESE SHARES ARE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  IN CONNECTION WITH ANY TRANSFER OF THESE SHARES PURSUANT TO CLAUSES (2)(C), (D), (E) OR (F) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS, OR OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION OR IN A TRANSACTION NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE ACT.  AS USED HEREIN, THE TERMS ‘OFFSHORE TRANSACTION’, ‘UNITED STATES’, AND ‘U.S. PERSON’ HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE ACT.”

 

(h) Validity; Enforcement.  The Buyer is duly organized, validly existing and in good standing under the laws of their respective jurisdiction of formation, and has all requisite corporate power and authority to enter into and perform this Agreement and consummate the transactions contemplated hereby. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Buyer and shall constitute the legal, valid and binding obligations of the Buyer enforceable against the Buyer in accordance with its terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

 

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(i) No Conflicts.  The execution, delivery and performance by the Buyer of this Agreement and the consummation by the Buyer of the transactions contemplated hereby will not (i) result in a violation of their respective organizational or constitutional documents (including, but not limited to, the Memorandum and Articles of Association of the Buyer), (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Buyer is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to the Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the Buyer to enter into this Agreement and perform their respective obligations hereunder; and no authorization, approval, consent and license from any supranational, national, state, municipal, local or foreign government, any instrumentality, subdivision, court, administrative agency or commission or other governmental authority or regulatory body or instrumentality, or any quasi-governmental or private body exercising any regulatory, taxing, importing or other governmental or quasi-governmental authority (a “Governmental Entity”) is required for the entering into by Buyer of this Agreement and the performance by the Buyer of its obligations under this Agreement, except for (i) such as have already been obtained and are in full force and effect and (ii) those approvals and authorizations specifically listed in Section 5(a) hereof.

 

(j) General Solicitation.  The Buyer is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any general advertisement.

 

(k) Brokers and Finders. Subject to Section 4(d), no Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid right, interest or claim against or upon the Company for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding with a placement agent entered into by or on behalf of the Buyer.

 

(l) Prohibited Transactions.  Since the time when the Buyer and the Company first came into contact regarding the transactions contemplated hereby, neither the Buyer nor any Affiliate of the Buyer nor any Person acting on behalf of or pursuant to any understanding with the Buyer (collectively, “Trading Affiliates”) has, directly or indirectly, effected or agreed to effect any short sale, whether or not against the box, established any “put equivalent position” (as defined in Rule 16a-1(h) under the 1934 Act) with respect to the Common Shares, granted any other right (including without limitation, any put or call option) with respect to the Common Shares or with respect to any security that includes, relates to or derived any significant part of its value from the Common Shares or otherwise sought to hedge its position in the Common Shares (each, a “Prohibited Transaction”), and neither the Buyer nor its Trading Affiliates will enter into a Prohibited Transaction after the date hereof until the later to occur of (A) the transactions contemplated hereby being publicly announced and (B) the Closing Date.

 

(m) Not a connected person.      To the best knowledge of the Buyer, the Buyer is not a connected person (as defined in The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Hong Kong Listing Rules”)) of the Company.

 

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(n) Acknowledgement.  The Buyer acknowledges and agrees that the foregoing representations, warranties, covenants and acknowledgments are made by it with the intention that they may be relied upon by the Company.

 

3.         A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

The Company represents and warrants to the Buyer that as at the date of this Agreement and as at the Closing Date (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specified date), except as set forth in its Public Documents (as defined in Section 3A(h) below) (excluding disclosures of non-specific risks faced by the Company and its subsidiaries (the “Group”)) included in any forward-looking statement, disclaimer, risk factor disclosure or other similarly non-specific statements that are similarly predictive or forward-looking in nature; provided, however that (i) any historical facts related to the Group and (ii) any specific exposure or effect faced by the Group emanating from specifically disclosed facts contained within any such disclosure shall be deemed disclosed for purposes of the representations and warranties set forth in this Article 3A):

 

(a) Organization and Qualification.  The Company is a corporation duly incorporated and validly existing in good standing under the laws of the jurisdiction in which it is incorporated, and has the requisite corporate power and authorization to own its properties and to carry on its business as now being conducted.  The Company is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect.  As used in this Agreement, “Material Adverse Effect” means any material adverse effect on (i) the business, properties, assets, liabilities, operations, results of operations or financial condition of the Company and its subsidiaries, taken as a whole, or (ii) the authority or ability of the Company to perform its obligations under the Transaction Documents (as defined in Section 3A(b) below); provided, however, that for purposes of clause (i) above, in no event shall any of the following exceptions, alone or in combination with the other enumerated exceptions below, be deemed to constitute, nor shall be taken into account in determining whether there has been or will be, a Material Adverse Effect: (A) any effect resulting from compliance with the terms and conditions of, or from the announcement of the transactions contemplated by this Agreement, (B) any effect that results from changes affecting any of the industries in which the Company operates generally or the economy generally, (C) any effect that results from changes affecting general worldwide economic or capital market conditions, provided that any such changes in (B) and (C) do not substantially disproportionately affect the Company in any material respect, or (D) any change in the Company’s share price or trading volume, in and of itself, primarily resulting from any of the effects or changes described in the foregoing clauses (A), (B) or (C).  Each subsidiary of the Company that is a “significant subsidiary” within the meaning of Rule 1-01(w) of Regulation S-X under the Securities Act (individually a “Significant Subsidiary” and collectively the “Significant Subsidiaries”) has been duly organized and is validly existing in good standing under the laws of its jurisdiction of organization except to the extent that the failure to be in good standing would not reasonably be expected to have a Material Adverse Effect.

 

(b) Authorization; Enforcement; Validity.  The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and each of the other 

 

8

 

agreements entered into by the parties hereto in connection with the transactions contemplated by this Agreement (collectively, the “Transaction Documents”) and to issue the Securities in accordance with the terms hereof and thereof.  The issuance of the Securities is within the scope of the general mandate granted to the Board by the Company’s shareholders at the Company’s annual general meeting held on 27 June 2014 to allot, issue, grant, distribute and otherwise deal with additional securities in the Company, not exceeding twenty percent of the issued share capital of the Company at the date of such resolution.  The execution and delivery of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Securities, has been duly authorized by the Board and no further filing, consent or authorization is required for the issuance of the Securities on the part of the Company, except for the filing, consent or authorization in connection with the satisfaction of the conditions in Sections 5(a) and (b) below and any required filings regarding the issuance or listing of additional securities with The Stock Exchange of Hong Kong Limited (the “SEHK”) or the New York Stock Exchange (the “NYSE”).  This Agreement and the other Transaction Documents when duly executed and delivered by the Company constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

 

(c) Issuance of Securities.  The Securities are duly authorized and, when issued and paid for in accordance with the terms hereof, shall be validly issued and free from all preemptive or similar rights, taxes, liens and charges with respect to the issue thereof and the Securities shall be fully paid with the holders being entitled to all rights accorded to a holder of the Common Shares.  Assuming the accuracy of each of the representations and warranties set forth in Section 2 of this Agreement, the offer and issuance by the Company of the Securities is exempt from registration under the 1933 Act.  The Securities, when allotted, issued and delivered, will (i) be validly issued and fully-paid, (ii) rank pari passu and carry the same rights in all aspects as the other Common Shares in issue as at the date on which the Securities are issued, (iii) subject to the memorandum and articles of association of the Company (the “Memorandum and Articles”), be entitled to all dividends and other distributions declared, made or paid in relation to the Securities save for any right or entitlement the record date for which precedes the date on which the Securities are allotted and issued, (iv) subject to the Memorandum and Articles, be freely transferable, free and clear of all liens, encumbrances, security interests or claims of third Parties and will not be subject to calls for further funds, and (v) free from any restrictions on the voting or transfer of any of the Securities or payment of dividends with respect to the Securities pursuant to any agreement, contract, undertaking or similar instrument to which the Company is bound (other than any restrictions referred to in this Agreement).

 

(d) No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Securities) will not (i) result in a violation of the Articles, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any Significant Subsidiary is a party, or (iii) subject to the terms of this Agreement, result in a violation of any law, rule, regulation, order, judgment or decree (including the Hong Kong Codes on Takeovers and Mergers and 

 

9

 

Share Buy-backs (the “Hong Kong Takeovers Code”), foreign, U.S. federal and state securities laws and regulations and the rules and regulations of the SEHK or of the NYSE applicable to the Company or by which any property or asset of the Company or any Significant Subsidiary is bound or affected), except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not reasonably be expected to result in a Material Adverse Effect.

 

(e) Consents.  The Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, (i) any court, Governmental Entity or any regulatory or self-regulatory agency in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents or (ii) any third party pursuant to any agreement, indenture or instrument to which the Company or any Significant Subsidiary is a party, in each case in accordance with the terms hereof or thereof other than such as have been made or obtained, and except for the filings or notifications in connection with the satisfaction of the conditions set forth in Sections 5(a) and (b) below and any required filings or notifications regarding the issuance or listing of additional securities with the SEHK or the NYSE or such consents as will be obtained by the Company on or before Closing.  The Company has no knowledge of any facts or circumstances that might prevent the Company from obtaining or effecting any of the filings or notifications described in the preceding sentence.  The Company is not in violation of the listing requirements of the SEHK or the NYSE and has no knowledge of any facts that would reasonably lead to delisting or suspension of its Common Shares from the SEHK or of its American depository receipts from the NYSE in the foreseeable future, apart from such suspension from SEHK and/or NYSE in connection with or resulting from the entering into of this Agreement.  As used herein, “knowledge” shall mean actual knowledge of the executive officers (as defined in Rule 405 under the 1933 Act) of the Company after due inquiry.

 

(f) No General Solicitation.  Neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Securities.  No Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid right, interest or claim against or upon the Company, the Buyer for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding with a placement agent entered into by or on behalf of the Company.

 

(g) No Integrated Offering.  Assuming the accuracy of the Buyer’s representations and warranties set forth in Section 2 hereof, none of the Company, any of its affiliates, or any Person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of the issuance of any of the Securities under the 1933 Act, whether through integration with prior offerings or otherwise, or cause the offering of Securities hereunder to require approval of shareholders of the Company for purposes of any applicable shareholder approval provisions, including, without limitation, under the rules and regulations of the SEHK and the NYSE.  None of the Company, their affiliates and any Person acting on their behalf will take any action or steps referred to in the preceding sentence that would require registration of the issuance of any of the Securities under the 1933 Act or cause the offering of the Securities to be integrated with other offerings for purposes of any such applicable shareholder approval provisions.

 

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(h) Public Documents.  The Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act or with the SEHK and has timely issued all announcements and circulars required to be issued by it by the SEHK or the NYSE (all of the foregoing filed or announced prior to the date of this Agreement and all exhibits included therein and financial statements, notes and schedules thereto and documents and incorporated by reference therein being hereinafter referred to as the “Public Documents”).  As of their respective filing or issuance dates, the Public Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder and the rules and regulations of the SEHK and the NYSE, as applicable, to the respective Public Documents, and, other than as corrected or clarified in a subsequent Public Document, none of the Public Documents, at the time they were filed or issued, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(i) Financial Statements. The consolidated financial statements (including any related notes thereto) included or incorporated by reference in the Public Documents fairly presented in all material respects the consolidated financial position of the Company and its consolidated subsidiaries as of the dates indicated therein and the consolidated results of their operations for the periods specified therein, other than as corrected or clarified in a subsequent Public Document.

 

(j) No Material Adverse Effect.  Since 30 September 2014, no event or circumstance has occurred that, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect.

 

(k) Litigation.  There are no claims, suits, actions or proceedings pending or, to the Company’s knowledge, threatened against the Company or any of its Significant Subsidiaries before any court, governmental department, commission, agency, instrumentality or authority, or any arbitrator that seeks to restrain or enjoin the consummation of the transactions contemplated by this Agreement or which could reasonably be expected, to have, individually or in the aggregate, a Material Adverse Effect.  Except for evidence or materials subject to a protective order, attorney-client privilege or otherwise made available to the Buyer or its counsel, no existing facts or developments related to the Company's pending litigation, taken as a whole, have been omitted from the Public Documents that would reasonably be expected to have a Material Adverse Effect (it being understood that this representation and warranty shall not be taken as a guarantee as to the outcome of such litigation).

 

(l) Compliance with Applicable Laws.  The Company and each of its Significant Subsidiaries have conducted their businesses in compliance with all applicable federal, state and foreign laws, regulations and applicable stock exchange requirements, except where the failure to be in compliance could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

The Company and each of its Significant Subsidiaries  have all permits, licenses, authorizations, orders and approvals of, and have made all filings, applications and registrations with, any 

 

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Governmental Entities that are required in order to carry on their business as presently conducted, except where the failure to have such permits, licenses, authorizations, orders and approvals or the failure to make such filings, applications and registrations, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect; and all such permits, licenses, certificates of authority, orders and approvals are in full force and effect and, to the knowledge of the Company, no suspension or cancellation of any of them is threatened, and all such filings, applications and registrations are current, except where such absence, suspension or cancellation, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

(m) Equity Capitalization.  As of 12 Feburary 2015, the authorized share capital of the Company consists of (A) 50,000,000,000 Common Shares, of which as of such date, 35,875,497,416 shares are issued, (as at 31 January 2015, 496,601,328 shares may be issued pursuant to the Company’s employee incentive plan and other options and warrants outstanding) and 3,932,570,996 Common Shares may be issued (as of the date of this Agreement) pursuant to the conversion of the (i) US$200,000,000 Zero Coupon Convertible Bonds due 2018 issued on 7 November 2013; (ii) the US$54,600,000 Zero Coupon Convertible Bonds due 2018 issued to Datang Holdings (Hongkong) Investment Company Limited (“Datang”); (iii) the US$32,200,000 Zero Coupon Convertible Bonds due 2018 issued to Country Hill Limited (“Country Hill”); (iv) the US$95,000,000 Zero Coupon Convertible Bonds due 2018 issued on 24 June 2014; and (v) the US$22,200,000 Zero Coupon Convertible Bonds due 2018 issued to Datang on 4 December 2014 (together, the “Convertible Bonds”) and there are no other agreement or commitment outstanding which calls for the allotment or issue or accords to any person the right to call for the allotment or issue of any shares (including shares issued pursuant to securities exercisable or exchangeable for, or convertible into, or agreements relating to the issuance of Common Shares) (except that Datang will, as a result of the issue and sale of the New Common Shares to the Buyer pursuant to this Agreement, have the right to subscribe for a pro rata portion of Common Shares equivalent to the percentage of the issued share capital of the Company then beneficially owned by Datang (the “Datang Pre-emptive Right”) and Country Hill will, as a result of the issue and sale of the New Common Shares to the Buyer pursuant to this Agreement, have the right to subscribe for a pro rata portion of Common Shares equivalent to the percentage of the issued share capital of the Company then beneficially owned by Country Hill (the “Country Hill Pre-emptive Right”)) immediately prior to the issue of the New Common Shares), and (B) 5,000,000,000 Preferred Shares, of which none are issued.  All of such issued shares have been validly issued and are fully paid.

 

(n) Information provided. All information given in connection with the transactions contemplated by this Agreement by the Company or on its behalf by the Company's advisers, to the Buyer or the Buyer's advisers, relating to the Company, its Significant Subsidiaries or their respective business, activities, affairs, or assets or liabilities (including all documents attached thereto) was, when given, and is now accurate in all material respects and not misleading in any material respect, and there is no material omission that would render the information given misleading in any material respect, provided that nothing herein shall constitute any obligation on the Company to disclose any information over and above what is required to be disclosed by the Company under the requirements of applicable laws and regulations (including, but not limited to, the Hong Kong Listing Rules) or requirements of regulatory bodies (including, but not limited to the SEHK and the SEC).

 

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(o) Ownership of assets.  Save as disclosed publicly or to the Buyer or its advisors as stated in Appendix 2, as may be updated by the Company in writing prior to Closing, so far as the Company is aware, there are no mortgages, charges, pledges, liens (other than liens arising in the ordinary course of trading) or other forms of security or encumbrances given by the Company for the purpose of securing financing, over or affecting the whole or any part of the material assets of the Company or any of its Significant Subsidiaries.

 

(p) Intellectual Property. To the knowledge as of the date hereof of the Company, the Company owns or possesses sufficient legal rights including but not limited to trade secrets, licenses, confidential information and proprietary rights and manufacturing processes and all copyrights, mask work rights, all patents and patent rights, as are necessary to the conduct of the business as now conducted or presently proposed to be conducted on such products of 0.13um, 0.18um, 0.35um, 28nm, 45nm, 90nm, and/or 65nm processes (or as presently proposed to be conducted on products) by the Company or any of its Significant Subsidiaries, without any known conflict with, or known infringement of, the rights of others except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  To the knowledge as of the date hereof of the Company, no products manufactured, marketed or sold (or products proposed to be manufactured, marketed or sold) by the Company or any of its Significant Subsidiaries violates any license or infringes any intellectual property rights of any other party which could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  The representation and warranty set forth in Section 3(A)(l) (Compliance with Applicable Laws) shall not be deemed or interpreted to apply to matters related to intellectual property and intellectual property rights.  For the avoidance of doubt and notwithstanding the foregoing, the parties acknowledge that the Company has not conducted an analysis of the Company’s freedom to operate in a particular field with respect to ownership and use of intellectual property rights.

 

3.                               B. LIMITATIONS ON REPRESENTATIONS AND WARRANTIES.

 

The Buyer agrees and acknowledges that all claims made by the Buyer under any of the representations and warranties set out in Section 3A above shall not, whether individually or in the aggregate, exceed the Aggregate Purchase Price (it being understood that any assessment of damages shall not include any special, consequential or punitive damages and shall only be limited to actual damages suffered including any diminution in the value of the Securities purchased as a result of any breaches).

 

4.                               COVENANTS.

 

(a) Best Efforts.  Each party shall use its best efforts to satisfy each of the covenants and conditions to be satisfied by it as provided in Sections 5, 6 and 7 of this Agreement on a timely basis.

 

(b) Regulatory Filings.  Without limiting the generality of Section 4(a) above, the Buyer shall use its best efforts to obtain all governmental approvals required for Buyer to complete the transactions contemplated by this Agreement and, as promptly as practicable after the date hereof, the Buyer shall make all filings, notices, petitions, statements, registrations, submissions of information, application or submission of other documents required by any Governmental Entity required in connection with this Agreement and the transactions contemplated hereby.  Buyer will, upon request by the Company, 

 

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promptly update the Company on its progress of obtaining governmental approvals. In addition, the Buyer shall use best endeavors to furnish such information, supply such documents, give such undertakings and do all such acts and things as may reasonably be required by the SEHK and/or any other Governmental Entity in relation to or arising out of the transactions contemplated hereby.  The Company shall, subject to applicable laws and regulations (including the Hong Kong Listing Rules), provide such information in respect of itself as reasonably requested by the Buyer for the purpose of facilitating the Buyer’s fulfillment of its obligation to obtain all governmental approvals under this Section 4(b).

 

(c) Listing.  The Company shall use reasonable best efforts to promptly secure the listing of, and permission to deal in, all of the New Common Shares on the SEHK and shall use reasonable best efforts to maintain such listing of and permission to deal in such Common Shares, so long as any other shares of the Common Shares shall be so listed.  The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 4(c).

 

(d) Fees.  Each party to this Agreement shall bear its own expenses and the fees relating to or arising out of the transactions contemplated hereby.

 

(e) Board Nominees. The Buyer shall have the right to nominate one member of the Board (the “Buyer Nominee”); provided that:

 

(i)                                     the nomination and appointment of the Buyer Nominee is considered by the Board to be in the best interest of the Company and its shareholders as a whole;

 

(ii)                                  the Buyer Nominee shall pass the Company’s conflict and background check in accordance with common and usual standards and policies generally applicable to the appointment and nomination of a director of the Company;

 

(iii)                               the Buyer shall not be entitled to nominate a director in the event that the Buyer (together with the HKCo and the Permitted Transferee) hold less than 5% of the total issued share capital of the Company from time to time;

 

(f) Ownership of the Company.         The Buyer shall not take any actions (including acquiring or subscribing for Common Shares or other securities convertible or exchangeable into Common Shares in the Company) that will (assuming full conversion or exchange, if applicable) result in the shareholding in the Company held by it, HKCo and/or any Permitted Transferee which, when aggregated with the shareholdings of other shareholders of the Company whose ultimate controlling shareholders are (x) of PRC nationality or (y) incorporated in the PRC (in each case, a “Chinese Shareholder”), to exceed 48% of the total issued share capital of the Company. For the purpose of this Agreement, the PRC shall mean the People's Republic of China excluding Hong Kong, Macau Special Administrative Region and Taiwan. The parties agree and acknowledge that the foregoing restrictions on the Buyer are aimed to support the company's growth of business and in the event that anytime in the future the parties agree that there is no need for such restrictions to remain in place, the parties shall discuss the process for termination 

 

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of such restriction. For the avoidance of any doubt, in the event the aggregate shareholding of the Chinese Shareholders exceeds 48% of the total issued share capital of the Company other than as a result of any action on the part of the Buyer, the Buyer or HKCo shall be under no obligation to reduce its shareholding.

 

(g) Lock-Up.

 

(i)                                     The Buyer (and to the extent any Securities are Transferred to the Permitted Transferee in accordance with the provisions of Section 4(g)(iii), the Permitted Transferee) shall not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any of the Securities purchased hereunder or enter into any swap, hedging or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of such securities (any of the foregoing, a “Transfer”) without the prior written consent of the Company for a period of two (2) years from the Closing Date (the “Lock-Up Period”), provided that nothing herein shall restrict the Buyer from pledging any of the Securities purchased hereunder with the Permitted Transferee and the rights of the Buyer under this Agreement shall not be affected by such pledge.

 

(ii)                                  The Buyer (and, to the extent any Securities are Transferred to the Permitted Transferee in accordance with the provisions of Section 4(g)(iii), the Permitted Transferee) shall refrain at all times (including with respect to time periods after the expiration of the Lock-Up Period) from selling the New Common Shares to any person or entity that is a Competitor (as defined below) of the Company or a member of the Competitor’s Group (as defined below), except in a genuine open market sale where the identity of the purchaser of the Common Shares is not known to, and cannot reasonably be determined by, the Buyer or its agent effecting such sale and provided that the number of Common Shares that the Buyer is permitted to sell in the open market shall not exceed 1% of the issued share capital of the Company at the relevant time during any 30-day period.  For the purpose of this Section 4(g), “Competitor” means (a) the leading ten (10) companies in the area of pure foundry or semiconductor, respectively, in terms of annual global revenues according to the most recent data of Gartner and/or iSuppli as at the Closing Date, or (b) the leading ten (10) semiconductor manufacturing companies in the PRC according to the most recent data of the Ministry of Industry and Information Technology of the PRC or other institutions under its supervision (such as but not limited to the China Semiconductor Industry Association) as at the Closing Date. “Competitor’s Group” means the Competitor, its subsidiaries and holding company, and any subsidiaries of the Competitor’s holding company.

 

(iii)                               Notwithstanding the provisions of this Section 4(g)(i) or (ii), the Company hereby agrees that the Buyer may, subject to compliance with the rules (including the Hong Kong Listing Rules), regulations, laws of Hong Kong and the requirements of the SEHK, applicable securities laws in the United States or any other jurisdictions, transfer New Common Shares to a subsidiary or fund under the control and management of the Buyer  (the “Permitted Transferee”) provided, that, as a condition to any such transfer:

 

(A)                     the Buyer shall inform the Company in writing of the proposed Transfer to the Permitted Transferee before effecting it; and

 

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(B)                        the Permitted Transferee shall provide to the parties a Deed of Adherence and shall undertake in the Deed of Adherence that it shall, prior to the expiry of the Lock-Up Period, promptly transfer any New Common Shares held by it back to the Buyer if it ceases to be a Permitted Transferee.

 

(h) Public Disclosure. Without limiting any other provision of this Agreement, the Company and Buyer (and to the extent any Securities are Transferred to the Permitted Transferee in accordance with the provisions of this Section 4(g)(iii), the Permitted Transferee), to the extent permitted by applicable law, will consult with each other before issuance, and provide each other the opportunity to review, comment upon and concur with, and use all reasonable efforts to agree on any press release or public statement with respect to this Agreement and the transactions contemplated hereby, and will not (to the extent practicable) issue any such press release or make any such public statement prior to such consultation and agreement, except as may be required by law, rules, regulations or any listing agreement with or requirement of the NYSE, SEHK or any other applicable securities exchange, provided that the disclosing party shall, to the extent permitted by applicable law, rules, regulations or any listing agreement with or requirement of the NYSE, SEHK or any other applicable securities exchange and if reasonably practicable, inform the other parties about the disclosure to be made pursuant to such requirements prior to the disclosure.

 

(i) Conduct of Business.  Save as disclosed in this Agreement or any public disclosure made by the Company prior to the date of this Agreement, or consented in writing by the Buyer, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to Section 8(a) hereof or the Closing, the Company shall, except as permitted and contemplated by the terms of this Agreement or disclosed in any public disclosure made by the Company prior to the date of this Agreement, carry on its business, in all material respects, in the ordinary and normal course and, not (i) undertake any construction of any new plants and buildings, (ii) enter into any notifiable transactions (as such term is defined under the Hong Kong Listing Rules) (iii) agree to, either verbally or in writing, authorize or approve any of the foregoing.

 

For the avoidance of doubt, the Company may continue to be involved in the existing construction of plants and buildings, as the Board may consider appropriate from time to time but in any event such involvement would not result in or reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(j) Use of Proceeds.  The Company shall use the proceeds received from the issue of the Securities hereunder for the purpose of capital expenditure and debt repayment and general corporate purposes.

 

(k) Pre-emptive Rights.

 

(i)                                     If the Company proposes, following the Closing, to issue any new Common Shares, any securities convertible into or exchangeable into Common Shares or any warrants or other 

 

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rights to subscribe for Common Shares (“Relevant Securities”), the Company shall notify Buyer in writing of such proposal (an “Issue Notice”).  The Issue Notice shall specify the number and type of Relevant Securities to be offered by the Company and the material terms of the proposed offer (including the proposed price per Relevant Security to be paid by the proposed third party purchaser(s)).

 

(ii)                                  Subject to sub-paragraph (vii) below, the Buyer shall have the right to purchase or to purchase through HKCo such number of the Relevant Securities which are the subject of the Issue Notice so as to enable the Buyer (together with HKCo) to hold, after the issue of the Relevant Securities

 

                                      a pro rata portion of the Relevant Securities equal to the percentage of the issued share capital of the Company then beneficially owned by the Buyer (together with the HKCo and the Permitted Transferee) prior to the issuance of the Relevant Securities, provided that the Buyer, HKCo and the Permitted Transferee together maintains an ownership interest equal to  not less than five per cent. (5%) of the Company’s issued share capital from time to time,

 

upon the same terms and conditions set forth in the Issue Notice, by giving written notice to the Company of the exercise of this right within ten (10) Business Days (as defined below) of the giving of the Issue Notice.  If such notice is not given by the Buyer within such ten (10) Business Days (as defined below), the Buyer shall be deemed to have elected not to exercise its rights under this Section 4(k)(ii) with respect to the issuance described in that specific Issue Notice.  The parties acknowledge that any rights of the Buyer to purchase the Relevant Securities pursuant to this Section 4(k)(ii) will lapse if completion thereof does not occur simultaneously with the Buyer’s completion of the offering of Relevant Securities or at such other time and place as shall be mutually agreed by the Company and the Buyer, provided that if the reason for the Buyer’s failure to complete by the time specified above is solely due to a delay of the Governmental Entity in granting the relevant authorizations, approvals, permits, qualifications or exemptions, the Buyer shall notify the Company in writing at least seven (7) days prior to the completion of the offering of the Relevant Securities to extend the completion date for Buyer to a date within three (3) months or such other reasonable period as may be mutually agreed between the parties following the completion of the issue of the Relevant Securities, after such period the right to the Buyer to purchase the Relevant Securities pursuant to this Section 4(k)(ii) shall lapse.  A notice given by the Buyer pursuant to this section shall be irrevocable.

 

(iii)                               Subject to Section 4(k)(ii) above, the completion of the Buyer’s purchase of Relevant Securities pursuant to section (ii) above shall occur simultaneously with the completion of the offering of Relevant Securities.  For the avoidance of doubt, the completion by the Company of the offering of the Relevant Securities shall not be affected by the timing of the completion of any issue of the Relevant Securities to the Buyer or the HKCo.  The Buyer shall execute and deliver to the Company all transaction documents related to Buyer’s purchase of Relevant Securities as may be reasonably requested by the Company prior to the completion of the Buyer’s purchase of Relevant Securities. At such completion, the Buyer shall deliver the aggregate purchase price for the Relevant Securities to be purchased by the Buyer pursuant to Section 4(k)(ii) above.

 

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(iv)                              Any Common Shares issued to the Buyer pursuant to this Section 4(k)(ii) above shall be issued on the same terms and subject to the same conditions as the Relevant Securities are issued to any proposed third party purchaser(s), such terms and conditions being set out in the Issue Notice.

 

(v)                                 The provisions of Section 4(k)(i) to (iv) shall not apply to:

 

(1)  the grant of any employment options (including those given to directors or consultants), or the issue of any Relevant Securities pursuant to the exercise of employment based share options (including those given to directors or consultants) granted (whether prior to or after the date of this Agreement), pursuant to any share purchase or share option plans of the Company in effect from time to time;

 

(2)  the issue of any Relevant Securities pursuant to any share incentive scheme operated by the Company from time to time;

 

(3) the issue of any Common Shares or other securities pursuant to the conversion, exchange or exercise of any securities that were previously offered and/or issued to Buyer (including HKCo and its Permitted Transferee, if applicable) as Relevant Securities;

 

(4) any offer of the Relevant Securities open for a period fixed by the Board to holders of Common Shares on the register of members on a fixed record date in proportion to their then holdings of Common Shares; provided that such offer of Relevant Securities is also made to Buyer (including HKCo), unless it is restricted by any legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place to make such offer to the Buyer;

 

(5) an issue of Common Shares as fully paid to holders of Common Shares (including without limitation, Common Shares paid up out of distributable profits or reserves and/or share premium account issued in lieu of the whole or any part of any cash dividend and free distributions or bonus issue of Common Shares); provided that such issuance of Common Shares is also made to Buyer (including HKCo, if applicable);

 

(6) an issue of the Relevant Securities pursuant to the acquisition of another corporation by the Company by merger, purchase of substantially all of the assets or other reorganization or to a joint venture agreement; provided, that such issuance is approved by the Board;

 

(7) the issue of any Relevant Securities as a result of the conversion of the Convertible Bonds; or

 

(8) the issue of any Relevant Securities to Datang pursuant to the Datang Pre-emptive Right and/or to Country Hill pursuant to the Country Hill Pre-emptive Right, in each case as a result of the issuance of the New Common Shares pursuant to this Agreement.

 

(vi)                              The rights set forth in this Section 4(k) shall not apply with respect to and shall expire immediately prior to a transaction that would result in a change of control (as such term is defined under the Hong Kong Takeovers Code).

 

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“Business Day” shall mean a day that is not a Saturday, Sunday or a public holiday in Hong Kong or the PRC.

 

(vii)                           The Company and Buyer acknowledge and agree that the Buyer’s exercise of the rights in this Section 4(k) shall in all cases be subject to compliance with the rules, regulations, laws and requirements of applicable government and regulatory bodies, including the Hong Kong Listing Rules, the Hong Kong Takeovers Code, the Stock Exchange of Hong Kong Limited and the Securities and Futures Commission of Hong Kong (including, where applicable any requirements to obtain the approval of the shareholders of the Company), and shall take such steps reasonably necessary to give effect to the rights contained in this Section 4(k) in compliance with rules, regulations, laws and requirements of applicable government and regulatory bodies, provided that all costs and expenses (including, without limitation, reasonable legal fees and expenses) incurred by the Company shall be resolved in a manner consistent with any terms agreed to by the Company and the other potential investor(s) with respect to the issuance described in the relevant Issue Notice.

 

(l) Exclusivity.  During the period from the date of this Agreement and continuing until the earliest of (A) the termination of this Agreement pursuant to Section 8(a) hereof or (B) the Closing, the Company agrees not to initiate, solicit, encourage or engage in any discussion or negotiation of any type with, provide any information to, accept and proposal from, or enter into any letter of intent, purchase contract or any other similar agreement, or consummate any transaction, with any persons or entities other than the Buyer with respect to any equity or convertible debt instrument in the Company or with respect to any sale of substantially all of the assets of the Company or any Significant Subsidiary, provided that nothing in this section shall prohibit the Company from carrying out any normal investor or public relations activities in its ordinary course of business.

 

(m) Discussion.  Subject to applicable law, rules, regulations and requirements (including the Hong Kong Listing Rules and the requirements of the SEHK and NYSE), during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to Section 8(a) hereof or the Closing, the Company will use its reasonable efforts to meet with, and/or communicate with representatives of the Buyer upon reasonable request and to discuss any material operational matters in good faith and to consider whether and how to exercise its discretion to implement any reasonable suggestions from the Buyer.

 

5.                                     CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL AND TO THE BUYER’S OBLIGATION TO PURCHASE.

 

The obligation of the Company hereunder to issue and sell the New Common Shares to the Buyer at the Closing and the obligation of the Buyer hereunder to purchase the New Common Shares from the Company hereunder are each subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions may be waived, in whole or in part, by either party hereto only as regards the obligations of the other party to procure the relevant conditions, at any time in its sole discretion by providing the other party hereto with prior written notice thereof:

 

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(a)                                 Governmental Approvals.  The Buyer shall have obtained all authorizations, approvals, permits, qualifications or exemptions, if any, of any Governmental Entity that are required in connection with the lawful purchase of the Securities hereunder by the Buyer and the performance of the Buyer’s other obligations hereunder, and such authorizations, approvals, permits, qualifications or exemptions including, in relation to the Buyer, those from the National Development and Reform Commission (NDRC), the State Administration of Foreign Exchange and the Ministry of Commerce or the local branch offices of each of the foregoing, as applicable, in each case of the PRC shall be in effect as of the date of the Closing.

 

(b)                                SEHK Listing.  Approval for the listing of, and permission to deal in the New Common Shares shall have been duly obtained from the SEHK and such approval not subsequently being revoked prior to Closing.

 

(c)                                 No Governmental Prohibition.  The sale of the Securities by the Company and the purchase of the Securities by the Buyer shall not be prohibited by any law or governmental order or regulation.

 

6.                                     CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.

 

The obligation of the Company hereunder to issue and sell the New Common Shares to the Buyer at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole benefit and may be waived by the Company, in whole or in part, at any time in its sole discretion by providing the Buyer with prior written notice thereof:

 

(a)                                 Execution of Transaction Documents and other documents.  The Buyer shall have executed each of the Transaction Documents to which it is a party and delivered the same to the Company and the documents set forth in Section 1(c)(ii)(B).

 

(b)                                Delivery of the Aggregate Purchase Price.  The Buyer shall have delivered to the Company the Aggregate Purchase Price for the Securities at the Closing by wire transfer of immediately available funds pursuant to the wire instructions provided by the Company as set forth in Section 1(c)(ii)(A).

 

(c)                                 Representations and Warranties; Covenants.  The representations and warranties of the Buyer shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or material adverse effect, which shall be true and correct to such extent) , and the Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date.

 

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(d) Absence of Litigation.  No proceeding challenging this Agreement or the transactions contemplated hereby, or seeking to prohibit, alter, prevent or delay the Closing, shall have been instituted or be pending before any court, arbitrator, governmental body, agency or official.

 

7.                                     CONDITIONS TO THE BUYER’S OBLIGATION TO PURCHASE.

 

The obligation of the Buyer hereunder to purchase the New Common Shares at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, and may be waived by the Buyer, in whole or in part, at any time in its sole discretion by providing the Company with prior written notice thereof:

 

(a) Execution of Transaction Documents and other documents.  The Company shall have duly executed and delivered to the Buyer each of the Transaction Documents and the documents set forth in Section 1(c)(ii)(C).

 

(b) Representations and Warranties; Covenants.  The representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct to such extent), and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the Closing Date.

 

(c) Legal opinion.                                         The Buyer shall have received a legal opinion from the Company’s Cayman Islands legal counsel in form and substance solely to the satisfaction to the Buyer.

 

8.                                     TERMINATION.

 

(a) Subject to Section 8(b) below, this Agreement may be terminated and the transactions contemplated by this Agreement abandoned at any time prior to the Closing:

 

(i)                                     by mutual agreement of the Company and the Buyer;

 

(ii)                                  by the Company or the Buyer if the Closing Date shall not have occurred by the date falling four months after the date of this Agreement or any other date as may be agreed between the parties; provided, however, that the right to terminate this Agreement under this Section 8(a)(ii) shall not be available to a party if such party’s action or failure to act has been a principal cause of or resulted in the failure of the Closing to occur on or before such date and such action or failure to act constitutes breach of this Agreement;

 

(iii)                               by the Company or the Buyer if any legislative body, court, administrative agency or commission or other governmental authority, instrumentality, agency or commission shall have enacted, issued, promulgated, enforced or entered any law or governmental regulation or order which has the effect of prohibiting the sale and issuance of the Securities;

 

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(iv)                              by the Buyer if there has been a material breach of any representation or warranty of the Company hereunder that would have a Material Adverse Effect on the Company or any material breach of any covenant or agreement of the Company hereunder;

 

(v)                                 by the Company if there has been a material breach of any representation, warranty, covenant or agreement of the Buyer contained in this Agreement; and

 

(vi)                              by the Buyer if, from the date of this Agreement to the Closing Date, there shall have occurred (i) a material limitation of trading of the Shares on the SEHK; or (ii) a suspension in trading of the Common Shares on the SEHK for a consecutive period of five Trading Days (save in respect of any suspension in trading of the Common Shares which is of a routine nature).

 

(b) In the event of termination of this Agreement as provided in Section 8(a) above, this Agreement shall forthwith become void and there shall be no liability or obligation on the part of the parties hereto and, as applicable, the officers, directors and shareholders of each party; provided that each party hereto shall remain liable for any breaches of this Agreement or of any certificate or other instruments delivered pursuant to this Agreement prior to its termination; and provided further that the provisions of Sections 8 and 9 hereof shall remain in full force and effect and survive any termination of this Agreement pursuant to the terms of this Section 8.

 

9.                                     EFFECTIVENESS

 

This Agreement shall not take effect until the Company has received from the Buyer evidence reasonably satisfactory to the Company that the National Development and Reform Commission have given its approval for the Buyer’s entry into and performance of this Agreement and the transactions contemplated hereunder.

 

10.                              MISCELLANEOUS.

 

(a) Governing Law; Arbitration.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed in accordance with the laws of Hong Kong.  Any dispute, controversy or claim arising out of or relating to this Agreement, or the interpretation, breach, termination or validity hereof, shall be submitted to arbitration upon the request of any party with notice to the other parties.  The arbitration shall be conducted in Hong Kong under the auspices of the Hong Kong International Arbitration Centre (the “HKIAC”) in accordance with the UNCITRAL Arbitration Rules (“UNCITRAL Rules”) in effect, which rules are deemed to be incorporated by reference into this Section 10(a).  There shall be three (3) arbitrators.  The complainant and the respondent to such dispute shall each select one arbitrator within thirty (30) days after giving or receiving the demand for arbitration.  The Chairman of the HKIAC shall select the third arbitrator, who shall be qualified to practice law in Hong Kong.  If either party to the arbitration does not appoint an arbitrator who has consented to participate within thirty (30) days after selection of the first arbitrator, the relevant appointment shall be made by the Chairman of the HKIAC.  The arbitration proceedings shall be conducted in English.  Each party hereto shall cooperate with any party to the dispute in making full disclosure of and providing complete access to all information and documents requested by such party in connection with such arbitration proceedings, subject only to any confidentiality obligations binding on the 

 

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party receiving the request.  Each party irrevocably 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 arbitration in Hong Kong and the HKIAC, and hereby submits to the exclusive jurisdiction of HKIAC in any such arbitration.  The award of the arbitration tribunal shall be conclusive and binding upon the disputing parties, and any party to the dispute may apply to a court of competent jurisdiction for enforcement of such award.  Any party to the dispute shall be entitled to seek preliminary injunctive relief, if possible, from any court of competent jurisdiction pending the constitution of the arbitral tribunal.

 

(b) Claim in respect of Representations and Warranties.  The representation, warranty, covenant or undertaking (the “Warranties”) contained in this Agreement shall remain in full force and effect notwithstanding Closing except as terminated pursuant to the terms hereof or by a waiver or release by the party entitled to enforce such Warranties.  No claim shall be brought against any party in relation to the Warranties unless the party making the claim shall have given the other party written notice of such claim specifying (in reasonable detail) the matter which gives rise to the claim, the nature of the claim and the amount claimed in respect thereof promptly and in any event before the date falling 12 months after the Closing Date. The parties agree that any assessment of damages shall not include any special, consequential or punitive damages and shall only be limited to actual damages suffered including any diminution in the value of the Securities purchased as a result of any breaches.

 

(c) Remedies and waivers. No delay or omission by any party to this Agreement in exercising any right, power or remedy provided by law or under this Agreement or any other documents referred to in it shall: (i) affect that right, power or remedy; or (ii) operate as a waiver thereof.  The single or partial exercise of any right, power or remedy provided by law or under this Agreement shall not preclude any other or further exercise or any other right, power or remedy. Except as otherwise expressly provided in this Agreement, the rights, powers and remedies provided in this Agreement are cumulative and not exclusive of any rights, powers and remedies provided by law.

 

(d) Counterparts.  This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.  A facsimile signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile signature.

 

(e) Languages.  This Agreement is being executed in English only.

 

(f) Headings.  The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

 

(g) Severability.  If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

 

23

 

(h) Confidentiality.  The parties hereto acknowledge that the Company and Buyer have previously executed a Confidentiality Agreement dated on or around the date of this Agreement (the “Confidentiality Agreement”), which Confidentiality Agreement will continue in full force and effect in accordance with its terms and shall survive any termination of this Agreement.

 

(i) Entire Agreement; Amendments.  This Agreement, the other Transaction Documents and the Confidentiality Agreement supersede all other prior oral or written agreements between the Buyer, the Company, their affiliates and Persons acting on their behalf with respect to the matters discussed herein, and this Agreement, the other Transaction Documents and the instruments referenced herein and therein contain the entire understanding of and agreement between the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters.  In entering into this Agreement and the other Transaction Documents, each part to such agreements acknowledges that it is not relying upon any pre-contractual statement which is not expressly set out in them.  No provision of this Agreement may be amended other than by an instrument in writing signed by the Company and the Buyer.  No provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought.

 

Without prejudice to Section 3A(n) above pursuant to which the Company represents and warrants that all information given in connection with the transactions contemplated by this Agreement by the Company or on its behalf by the Company’s advisers, to the Buyer or the Buyer’s advisers, relating to the Company, its Significant Subsidiaries or their respective business, activities, affairs, or assets or liabilities (including all documents attached thereto) was, when given, and is now accurate in all material respects and not misleading in any material respect, and there is no material omission that would render the information given misleading in any material respect, except in the case of fraud, no party shall have any right of action against any other party to this Agreement or the other Transaction Documents arising out of or in connection with any pre-contractual statement except to the extent that it is repeated in this Agreement and/or the other Transaction Documents.

 

For the purposes of this section, “pre-contractual statement” means any draft, agreement, undertaking, representation, warranty, promise, assurance or arrangement of any nature whatsoever, whether or not in writing, relating to the matters covered in this Agreement and/or the other Transaction Documents made or given by any person at any time prior to the date of this Agreement or the other Transaction Documents.

 

(j) Notices.  Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one Business Day after deposit with an overnight courier service, in each case properly addressed to the party to receive the same.  The addresses and facsimile numbers for such communications shall be:

 

24

 

	
If   to the Company:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Semiconductor Manufacturing International Corporation
    
	
Address:
    	
 
    	
Suite 3003,   30th Floor
    
	
 
    	
 
    	
No. 9   Queen’s Road Central
    
	
 
    	
 
    	
Hong   Kong
    
	
Telephone:
    	
 
    	
(852)   2537-8458
    
	
Facsimile:
    	
 
    	
(852)   2537 8206
    
	
Attention:
    	
 
    	
Ms. Meifung   Hoo
    
	
 
    	
 
    	
 
    
	
If   to the Buyer:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
China   Integrated Circuit Industry Investment Fund Co., Ltd.
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
21/F   Bldg.C, No.1 Zhenwumiao Rd., Xicheng Dist., Beijing, PRC
    
	
Telephone:
    	
 
    	
(86)   (10) 58878589
    
	
Facsimile:
    	
 
    	
(86)   (10) 58369088
    
	
Attention:
    	
 
    	
Mr. Wei   Linyi
    

 

 

(k) Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.  Neither party hereto shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the other party hereto.

 

(l) No Third Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

(m) Further Assurances.  Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

(n) Agent for Service. The Buyer irrevocably appoints Xinxin (HongKong) Capital Co., Limited, c/o SBS Nominee Limited at Unit 802A, 8/F, Fortress Tower, 250 King’s Road, North Point, Hong Kong for the receipt of service of process in Hong Kong.

 

[Signature Page Follows]

 

25

 

IN WITNESS WHEREOF, the Buyer and the Company have caused its respective signature page to this Share Purchase Agreement to be duly executed as of the date first written above.

 

 

	
 
    	
COMPANY:
    
	
 
    	
 
    
	
 
    	
Semiconductor Manufacturing International Corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

SIGNATURE PAGE TO SHARE PURCHASE AGREEMENT

 

 

IN WITNESS WHEREOF, the Buyer and the Company have caused their respective signature page to this Share Purchase Agreement to be duly executed as of the date first written above.

 

 

	
 
    	
BUYER:
    
	
 
    	
 
    
	
 
    	
China Integrated Circuit Industry Investment Fund   Co., Ltd.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

SIGNATURE PAGE TO SHARE PURCHASE AGREEMENT

 

 

Appendix 1

Form of Deed of Adherence

 

THIS  DEED  is made on [·] by [·] [(the “HKCo”) / (the “Permitted Transferee”)] and is supplemental to the Share Purchase Agreement dated [·] 2015 made between Semiconductor Manufacturing International Corporation and China Integrated Circuit Industry Investment Fund Co., Ltd. (the “Buyer”) (such agreement as amended, restated or supplemented from time to time, the “Share Purchase Agreement”) and the Confidentiality Agreement (as defined in the Share Purchase Agreement, together with the Share Purchase Agreement, the “Agreements”)).

 

WITNESSETH  as follows:

 

1.                                     The [HKCo / Permitted Transferee] confirms that it has been provided with a copy of the Share Purchase Agreement (including all amendments, restatements and supplements thereto) and hereby agrees to become a party to the Share Purchase Agreement and covenants with the Company and the Buyer [Note: include any other party that is a party to the Share Purchase Agreement on such date] (the “Existing Parties”) to give the same representations and warranties as the Buyer under the Agreements and observe, perform and be bound by the same terms and conditions of the Agreements as the Buyer and agrees that references to  “party” or the Buyer (in whichever form) in the Agreements shall be deemed to include a reference to the [HKCo / Permitted Transferee] as the context requires or admits.

 

2.                                     The address and facsimile number at which notices are to be served on the [HKCo / Permitted Transferee] under the Agreement and the person for whose attention notices are to be addressed are as follows:

 

[·]

 

3.                                     The Permitted Transferee undertakes that it shall, prior to the expiry of the Lock-Up Period, promptly transfer any New Common Shares held by it to the Buyer if it ceases to be a Permitted Transferee.

 

4.                                     Unless otherwise defined, words and expressions defined in the Agreement shall have the same meanings in this Deed.  This Deed shall be governed by and construed in accordance with the laws of Hong Kong.

 

5.                                     This Deed shall take effect for the benefit of the Existing Parties.

 

 

IN WITNESS  whereof the [HKCo / Permitted Transferee] has executed this Deed the day and year first above written.

 

 

	
Executed   as a Deed
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
(Director)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
(Director/Secretary)
    	
 
    

 

 

Appendix 2

Assets of the Company subject to encumbrance

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