Deed of Tax Indemnity - Hutchison Telecommunications Ltd. and Hutchison Telecommunications International Ltd.
Dated 24 September 2004
DEED OF TAX INDEMNITY
Linklaters
10th Floor, Alexandra House
Chater Road
Hong Kong
Telephone (852) 2842 4888
Facsimile (852) 2810 8133/2810 1695
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THIS DEED is made on 24 September 2004
BETWEEN:
(1) Hutchison Telecommunications Limited, a company incorporated under the
laws of Hong Kong whose registered office is at 22nd Floor, Hutchison
House, 10 Harcourt Road, Hong Kong (the "Indemnifier");
and
(2) Hutchison Telecommunications International Limited, a company
incorporated under the laws of the Cayman Islands whose principal place
of business is at 18th Floor, Two HarbourFront, 22 Tak Fung Street,
Hunghom, Kowloon, Hong Kong (the "Company"), for itself and in its
capacity as trustee for the other Beneficiaries (as defined below).
WHEREAS:
(A) A number of restructuring steps have been taken to transfer certain
companies within the group of the Indemnifier to the Company and its
group (the "Restructuring") prior to a global offering and listing of
the Company's shares.
(B) In order to effect the Restructuring and the global offering and
listing, the Indemnifier has agreed to execute and deliver this Deed in
favour of the Company in respect of the Beneficiaries (as defined in
Clause 1 of this Deed).
(C) By restructuring documentation dated on or about the date of this Deed
agreed between, inter alia, the Indemnifier and the Company, the
Indemnifier and certain of its subsidiaries have agreed to sell and the
Company and the Purchasing Companies have agreed to purchase the
Beneficiaries (as defined in Clause 1 of this Deed) on the terms and
conditions contained in those documents.
Now THIS DEED WITNESSES as follows:
1 DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Deed, except to the extent that the context requires
otherwise:
"Beneficiaries" means the Company and those companies which are
accounted for in the combined financial statements of the Group
for the year ended 31 December 2003 and as at 31 December 2003,
contained in the accountants' report on the Group attached in
Appendix 1 to the Prospectus and "Beneficiary" means any one of
them as the context permits;
"Claim" means the issue of any claim, notice, assessment,
demand, letter or other document by or on behalf of any person,
authority or body whatsoever or the taking of any other action
by or on behalf of any person, authority or body from which it
appears that a liability for or in respect of taxation is or may
be imposed on any Beneficiary;
"Commissioner" has the meaning given in section 3 of the Estate
Duty Ordinance;
"Costs" means all costs (including all legal costs), expenses,
interests, penalties, fines, charges or other liabilities which
any of the Beneficiaries may properly incur in connection with:
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(i) the investigation, assessment or the contesting of any
Claim contemplated in Clause 3 or 4.1, as the case may
be;
(ii) the settlement of any Claim contemplated in Clause 3 or
4.1, as the case may be;
(iii) any legal proceedings in which any of the Beneficiaries
make any Claim, as contemplated in Clause 3 or 4.1, as
the case may be, and in which judgment is given for any
of the Beneficiaries; or
(iv) the enforcement of any such settlement or judgement.
"Estate Duty Law" means the Estate Duty Ordinance (or any other
law having similar effect in the relevant jurisdiction in which
any Beneficiary is affected).
"Estate Duty Ordinance" means the Estate Duty Ordinance (Chapter
111 of the Laws of Hong Kong);
"Estate Duty Provision" means the provisions of section 35
and/or section 43 of the Estate Duty Ordinance (or any other
provision of law having similar effect in the relevant
jurisdiction in which any Beneficiary is affected).
"event" includes (without limitation) the death of any person,
any action, omission or transaction whether or not any of the
Beneficiaries is a party thereto and includes completion of the
sale of the Beneficiaries to the Company or any of the
Purchasing Companies and references to the result of events on
or before the date hereof shall include the combined result of
two or more events one or more of which shall have taken place
before the date hereof;
"Group" means the "Group" as defined in the Prospectus;
"Hong Kong" means the Hong Kong Special Administrative Region of
the People's Republic of China;
"Indemnity Period" means a period of six years commencing on the
Restructuring Date;
"Listing Date" means the date, expected to be on or about 15
October 2004 on which trading in the shares of the Company
commences on The Stock Exchange of Hong Kong Limited;
"Party" means a party to this Deed and includes its successors
in title, permitted assigns and permitted transferees;
"Prospectus" means the document so entitled to be dated on or
about 30 September 2004 relating to the offering for sale of
shares in the Company to potential investors in Hong Kong;
"Purchasing Companies" means the companies listed in Schedule 1
of this Deed;
"Relief" means any relief, allowance, set-off or deduction in
computing income, profits or gains or credits or rights to
repayment of taxation available to any Beneficiary granted by or
pursuant to any legislation concerning or otherwise relating to
all forms of taxation;
"Restructuring Date" means 22 September 2004;
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"taxation" means any tax, levy, impost, duty or other charge or
withholding of a similar nature (and, without prejudice to the
generality of the foregoing, includes any amount payable to the
revenue, customs or fiscal authorities in any part of the world
and any costs, charges, penalty or interest payable in
connection with any failure to pay or any delay in paying any of
them).
1.2 INTERPRETATION
In this Deed, except to the extent that the context requires
otherwise:
1.2.1 references to a statute, treaty or legislative provision
or to a provision of it shall be construed, at any
particular time, as including a reference to any
modification, extension or re-enactment at any time then
in force and to all subordinate legislation made from
time to time under it;
1.2.2 references to this Deed include its Schedule, references
to Clauses or Schedules are references to such
provisions of this Deed;
1.2.3 references to an agreement, deed, instrument, licence,
code or other document (including this Deed), or to a
provision contained in any of these, shall be construed,
at the particular time, as a reference to it as it may
then have been amended, varied, supplemented, modified,
suspended, assigned or novated;
1.2.4 references in the singular shall include references in
the plural and vice versa, words denoting any gender
shall include any other gender and words denoting
natural persons shall include any other Persons;
1.2.5 references to a Claim shall include any Claim whether
made before or after the date hereof and whether
satisfied or unsatisfied at the date hereof and shall
also include:
(i) the loss of any Relief which could but for the
Claim in question have been available to the
Company or any of the Beneficiaries whether or
not the said loss results in any taxation being
payable at the time of such loss; and
(ii) the nullifying or cancellation of a right to
repayment of taxation which would have been so
available or is at the date hereof assumed by
any of the Beneficiaries or the Company to be
available;
and in such a case the amount of taxation which could
otherwise have been relieved, allowed or credited by the
Relief so lost or the amount of repayment which would
otherwise have been obtained shall be treated as an
amount of taxation for which a liability has arisen;
1.2.6 headings shall be ignored in construing this Deed;
1.2.7 the language which governs the interpretation of this
Deed is the English language. All notices to be given by
any Party and all other communications and documentation
which are in any way relevant to this Deed or the
performance or termination of this Deed, including any
dispute resolution proceedings, shall be in the English
language;
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1.2.8 a reference to a "Person" includes any person, firm,
company, corporation, government, state or agency of a
state, or any association, trust or partnership (whether
or not having separate legal personality) or two or more
of the foregoing.
2 CONDITION
This Deed shall become effective on the Listing Date.
3 INDEMNITY
The Indemnifier hereby undertakes to indemnify and keep indemnified the
Company (both for itself and as trustee for each of the Beneficiaries)
in accordance with the terms of this Deed on a full indemnity basis and
hold the Company (both for itself and as trustee for each of the
Beneficiaries) harmless from and against any diminution in the value of
the assets of any Beneficiary which are attributable to the Company
(through, in the case of a Beneficiary other than the Company, the
Company's direct or indirect shareholding interest in any Beneficiary),
as a result of any loss or liability suffered by any Beneficiary
including, but not limited to, any diminution in the value of the assets
of or shares in any Beneficiary, any payment made or required to be made
by any Beneficiary and any Costs incurred as a result of or in
connection with any Claim falling on any Beneficiary resulting from or
by reference to any income, profits or gains earned, accrued or received
on or before, or in respect of a period ending on or before, the
Restructuring Date or as a consequence of any event which occurred on or
before the Restructuring Date whether alone or in conjunction with other
circumstances and whether or not such taxation is chargeable against or
attributable to any other Person.
4 ESTATE DUTY INDEMNITY
4.1 The Indemnifier shall indemnify and at all times keep the
Company (both for itself and as trustee for each of the other
Beneficiaries) fully and effectively indemnified from and
against any depletion in or reduction in value of the assets of
any Beneficiary which are attributable to the Company (through,
in the case of a Beneficiary other than the Company, the
Company's direct or indirect shareholding interest in any
Beneficiary) as a consequence of, and in respect of any amount
which any of the Beneficiaries may hereafter become liable to
pay, being:
(a) any duty which is or hereafter becomes payable by the
Beneficiaries or any of them by virtue of an Estate Duty
Provision by reason of the death of any person and by
reason of the assets of the Beneficiaries or any of them
being deemed for the purpose of estate duty to be
included in the property passing on his or her death by
reason of that person making or having made a relevant
transfer to the Beneficiaries or any them;
(b) any amount recovered against the Beneficiaries or any of
them under an Estate Duty Provision in respect of any
duty payable under an Estate Duty Provision by reason of
the death of any person and by reason of the assets of
the Beneficiaries or any of them being deemed for the
purpose of estate duty to be included in the property
passing on his death by reason of that person making or
having made a relevant transfer to the Beneficiaries or
any of them;
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(c) any amount of duty which the Beneficiaries or any of
them is obliged to pay by virtue of an Estate Duty
Provision in respect of the death of any person in any
case where the assets of another company are deemed for
the purpose of estate duty to be included in the
property passing on that person's death by reason of
that person making or having made a relevant transfer to
that other company and by reason of the Beneficiaries or
any of them having received and distributed assets of
that other company on their distribution within the
meaning of an Estate Duty Law, but only to the extent to
which the Beneficiaries or any of them is unable to
recover an amount or amounts in respect of that duty
from any other person under an Estate Duty Provision;
and
(d) all Costs.
4.2 Notwithstanding any other provision of this Deed, the
Indemnifier will not be liable for any penalty imposed on the
Beneficiaries or any of them under section 42 of the Estate Duty
Ordinance (or any other provision of law having a similar effect
in the relevant jurisdiction in which any Beneficiary is
affected) by reason of the relevant Beneficiary defaulting in
any obligation to give information to the Commissioner under
section 42(1) of the Estate Duty Ordinance (or any other
provision of law having a similar effect in the relevant
jurisdiction in which any Beneficiary is affected), provided
that any such obligations on the part of the Beneficiaries or
any of them to give information do not go beyond the extent of
the actual knowledge of the relevant Beneficiary, but the
Indemnifier shall be liable for any interest on unpaid estate
duty.
5 EXCLUSIONS
Clauses 3 and 4 do not cover, and the Indemnifier shall be under no
liability in respect of, any Claim:
5.1 to the extent that provision has been made for such Claim in the
combined financial statements of the Group as shown in the
accountants' report in Appendix I to the Prospectus or to the
extent that it relates to taxation incurred or accrued since 30
June 2004 which arises in the ordinary course of business of the
Group as described in the section entitled "Business" in the
Prospectus; or
5.2 falling on any Beneficiary in respect of any accounting period
commencing on or after 30 June 2004 unless liability for such a
Claim would not have arisen but for some act or omission of, or
transaction entered into by, the Indemnifier, the Beneficiaries
or any of them (whether alone or in conjunction with some other
act, omission or transaction, whenever occurring), otherwise
than in the ordinary course of business or in the ordinary
course of acquiring or disposing of assets, on or before the
date of this Deed; or
5.3 to the extent of any provisions or reserve made for any Claim in
the audited accounts of any Beneficiaries or of the Group up to
and including 30 June 2004 which is finally established to be an
over-provision or an excessive reserve provided that the amount
of any such provision or reserve applied pursuant to this Clause
5 to reduce the Indemnifier's liability in respect of the
taxation shall not be available in respect of any such liability
arising thereafter; or
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5.4 to the extent that such a Claim is discharged by another person
who is not any of the Beneficiaries and none of the
Beneficiaries is required to reimburse such person in respect of
the discharge of the Claim; or
5.5 to the extent that such Claim would not have arisen but for a
voluntary act or transaction carried out (other than pursuant to
a legally binding commitment created on or before the date of
this Deed) by the relevant Beneficiary after the date of this
Deed; or
5.6 to the extent that such Claim arises or is increased as a result
wholly or partly of any increases in rates of taxation or change
in law made after the date of this Deed with retrospective
effect; or
5.7 which arises as a result of any Beneficiary failing to act in
accordance with the reasonable request of the Indemnifier in
avoiding, resisting, compromising or settling such taxation but
only where such failure to act occurs after the Restructuring
Date, or;
5.8 to the extent that such Claim arises, or is referable to any
period, after the end of the Indemnity Period.
6 COSTS AND EXPENSES
The indemnities given under this Deed shall cover all costs and expenses
(on a full indemnity basis) attributable to the Company (through, in the
case of a Beneficiary other than the Company, the Company's direct or
indirect shareholding interest in any Beneficiary) and incurred by any
Beneficiary in connection with any Claim, and any penalties, fines or
interest payable by any Beneficiary relating to any Claim for which the
Indemnifier is liable under this Deed.
7 REIMBURSEMENT
In the event that any Claim the subject of an indemnity hereunder is or
has been discharged or suffered by any of the Beneficiaries (whether by
payment or by the loss of any Relief) the indemnity given hereunder
shall take effect as a covenant by the Indemnifier forthwith to
indemnify the Company (both for itself and as trustee for each of the
other Beneficiaries) pursuant to the terms of this Deed.
8 CONDUCT OF CLAIMS
If the Company becomes aware of a Claim relevant for the purposes of
this Deed, it shall as soon as reasonably practicable give notice
thereof to the Indemnifier and shall (subject to the Company being
indemnified to its satisfaction against any liability, costs, damages or
expenses which may be incurred thereby) take such action and procure
that the Beneficiaries shall take such action as the Indemnifier may
reasonably request to avoid, resist, dispute, defend, compromise or
appeal against the Claim, provided that none of the Beneficiaries shall
be required to take any steps which would require any admission of guilt
or liability relating to matters connected with the Claim in question or
which would affect the future conduct of the business of the relevant
Beneficiary or affect the rights or reputations of any of them nor shall
they be required to take any such action unless the Indemnifier shall
have produced to them a leading barrister's opinion that such action is
reasonable.
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9 SET-OFF AND DEDUCTIONS
All payments to be made by the Indemnifier under this Deed shall be made
in full without set-off or counterclaim or any restriction or condition
and free and clear of any present or future taxes, duties, charges or
other deductions or withholdings of any nature. If any deduction or
withholding is required to be made from any such payment the Indemnifier
shall, together with such payment, pay such additional amount as is
necessary to ensure that the recipient receives the full amount due
hereunder.
10 WAIVER AND SEVERABILITY
No failure or delay by any Beneficiary in exercising any right, power or
remedy under this Deed shall operate as a waiver thereof, nor shall any
single or partial exercise of the same preclude any further exercise
thereof or the exercise of any other right, power or remedy. If at any
time any provision of this Deed is or becomes illegal, invalid or
unenforceable in any respect, the legality, validity and enforceability
of the remaining provisions of this Deed shall not be affected or
impaired thereby.
11 ASSIGNMENT
The Company may assign its rights and benefits under this Deed.
12 NOTICES
12.1 Each notice, demand or other communication given or made under
this Deed shall be in writing and delivered or sent to the
relevant party at its address or telex number or fax number set
out in Clause 12.2.
12.2 The addresses and fax numbers of the parties for the purpose of
Clause 12.1 are as follows:
The Indemnifier
HUTCHISON TELECOMMUNICATIONS
LIMITED
Address: 22nd Floor, Hutchison House, 10
Harcourt Road, Hong Kong
Fax Number: (852) 2128 1778
Attention: Company Secretary
THE COMPANY
HUTCHISON TELECOMMUNICATIONS
INTERNATIONAL
Limited
Address: 18th Floor, Two HarbourFront,
22 Tak Fung Street, Hunghom,
Kowloon, Hong Kong
Fax Number: (852) 2827 1393
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Attention: Company Secretary
With a copy to:
HUTCHISON WHAMPOA LIMITED
Address: 22nd Floor, Hutchison House,
10 Harcourt Road, Hong Kong
Fax Number: (852) 2128 1778
Attention: Company Secretary
13 GOVERNING LAW, JURISDICTION AND SERVICES OF PROCESS
This Deed shall be governed by and construed in accordance with the laws
of Hong Kong and the parties irrevocably agree that the Hong Kong courts
are to have non-exclusive jurisdiction to settle any disputes which may
arise out of or in connection with this Deed.
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IN WITNESS WHEREOF this Deed has been executed on the day and year first above
written.
EXECUTED AND DELIVERED as a DEED )
under the COMMON SEAL of HUTCHISON )
TELECOMMUNICATIONS LIMITED ) [Common Seal]
in the presence of: )
/s/ Edith Shih
/s/ Susan Chow
EXECUTED AND DELIVERED as a DEED )
under the COMMON SEAL of HUTCHISON )
TELECOMMUNICATIONS INTERNATIONAL ) [Common Seal]
LIMITED )
in the presence of:
/s/ Susan Chow
/s/ Edith Shih
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SCHEDULE 1
PURCHASING COMPANIES
1. HTI (BVI) Holdings Limited
2. Hutchison Telecommunications International (Thailand) Holdings Limited
3. Hutchison Telecommunications International (Cayman) Holdings Limited
4. Hutchison Telecommunications International Limited
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