TNAG-2474-FCO40-3604-Business-matters-in-Hong-Kong-acquisition-of-Midland-Bank-by-1992 — Page 51

APPENDIX I

CONDITIONS AND FURTHER TERMS OF THE FINAL OFFER

AND THE CASH ELECTION

Except where the context requires otherwise, any reference in Part B and Part C of this Appendix I and in the Form of Acceptance:

(i) to Final Offer shall mean, separately, each of the Final Offer and the Cash Election (and any other election) and any

revision thereof or extension thereto;

(ii) to the Final Offer becoming unconditional shall include the Final Offer being declared unconditional;

(iii) to the Final Offer being or becoming or being declared unconditional shall be construed as the Final Offer being or becoming or being declared unconditional as to acceptances whether or not any other condition thereof remains to be fulfilled;

(iv) to Cash Election shall mean the Cash Election and any revision thereof or extension thereto;

(v) to acceptance of the Cash Election shall include an election therefor;

(vi) to acceptances of the Final Offer or the Cash Election shall include deemed acceptances thereof; and

(vii) to Parts A and B of this Appendix shall mean Parts A and B of Appendix I to the Original Offer Document as varied

by and incorporated into this Appendix.

The Final Offer and the Cash Election constitute revisions of the Original Offer and shall be construed accordingly.

Part A: Conditions of the Final Offer and the Cash Election

The Final Offer is, save as set out herein and in the Form of Acceptance, made on and subject to the conditions of the Original Offer set out in Part A of Appendix I to the Original Offer Document which shall be deemed to be incorporated in and form part of this Appendix provided that references in such Part A to the “Offer” shall be deemed to be references to the “Final Offer” and that references in such Part A to “3.00 p.m. on 9 June 1992” shall be deemed to be references to “1.00 p.m. on 25 June 1992”. References to the “new HSBC Holding bonds” shall be deemed to be references to the bonds as defined in this document. The Cash Election is conditional on the Final Offer becoming or being declared unconditional in all respects.

The conditions contained in paragraphs 2, 5 and 6 of Part A of Appendix I to the Original Offer Document have been satisfied. HSBC Holdings reserves the right to waive, in whole or in part, all or any of conditions 7 to 11 inclusive.

Part B: Further Terms of the Final Offer and the Cash Election

The Final Offer will close at 1.00 p.m. on 25 June 1992 unless it has by or on that date become or been declared unconditional as to acceptances. It will not otherwise be extended.

The Final Offer is, save as set out in this document and in the Form of Acceptance, made on and subject to the conditions and further terms of the Original Offer set out or referred to in this Appendix I and in Part B of Appendix I to the Original Offer Document which shall be deemed to be incorporated in and form part of this Appendix provided that the provisions of such Part B to be so incorporated shall be varied as follows:

(i)

(ii)

(iii)

(iv)

(v)

references to the “Offer” shall be deemed to be references to the “Final Offer";

references to the Form of Acceptance shall be construed as references to the blue Form of Acceptance, unless the context otherwise requires;

the Final Offer is made at 11.59 p.m. on 11 June 1992 and is capable of acceptance from and after that time; Forms of Acceptance are available at National Westminster Bank Plc, Registrar's Department, New Issues Section, P.O. Box 859, Hartcliffe, Bristol BS99 1XZ from that time. The Final Offer is being made by means of this document and by means of an advertisement inserted in the Financial Times (UK edition) dated 11 June 1992;

references in Part B of Appendix I to the Original Offer Document to “3.00 p.m. on 9 June 1992” and to “9 June 1992” shall be deemed to be references to “1.00 p.m. on 25 June 1992” and to “25 June 1992” respectively; paragraph 5 of Part B of Appendix I to the Original Offer Document shall be replaced by the following paragraph: "5 The Cash Election

(a) The cash required to satisfy elections for the Cash Election will be provided, as regards each Midland shareholder's holding of Midland shares in respect of which such holder has both validly accepted the Final Offer and validly elected for the Cash Election, by a payment in cash by HSBC Holdings of 65p in respect of each such Midland share instead of the allotment of 65p nominal of new HSBC Holdings bonds to which such Midland shareholder would otherwise have been entitled in respect thereof, which will constitute a variation of the consideration payable under the Final Offer to that extent. By a Subscription Agreement dated 2 June 1992, Credit Suisse First Boston Limited, Schroders, Cazenove & Co. and S.G. Warburg Securities have jointly and severally agreed with HSBC Holdings, subject to the Final Offer becoming or being declared unconditional in all respects, to subscribe or procure subscribers for such nominal amount of new HSBC Holdings bonds as is equal to the nominal amount of such bonds not issued to, and thereby made available as a result of, accepting Midland shareholders validly making Cash Elections (subject to a maximum nominal amount of £454,168,067) at a price of 100 per cent. of their nominal amount.

(b) No election for the Cash Election will be valid unless both a valid acceptance of the Final Offer and a valid election for the Cash Election, together with the relevant document(s) of title duly completed in all respects and accompanied by all relevant share certificate(s) and/or other document(s) of title, are duly received by the time and date on which the Cash Election closes.

(c) If any Form of Acceptance where a Cash Election is made is received after 1.00 p.m. on the day on which the Cash Election closes, or is received before such time but is not valid or complete in all respects at such time, such Cash Election shall, for all purposes, be void and the Midland shareholder purporting to make such Cash Election shall not, for any purpose, be entitled to receive any consideration under such void Cash Election, but the relevant Midland shareholder shall, if the acceptance is otherwise valid, be deemed to have accepted the

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