EXHIBIT 1.1
____ AMERICAN DEPOSITARY SHARES
EACH REPRESENTING ONE ORDINARY SHARE, PAR VALUE $0.001 PER ORDINARY SHARE
E-HOUSE (CHINA) HOLDINGS LIMITED
UNDERWRITING AGREEMENT
_____, 2007
CREDIT SUISSE SECURITIES (USA) LLC,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
Four World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, X.X. 00000
As Representatives of the Several Underwriters
Dear Sirs:
1. Introductory E-House (China) Holdings Limited, an exempted company with
limited liability incorporated under the laws of the Cayman Islands ("COMPANY"),
agrees with the several Underwriters named in Schedule A hereto ("UNDERWRITERS")
to issue and sell _____ American Depositary Shares ("ADSS"), each ADS
representing one ordinary share of the Company, par value US$0.001 per share
(collectively, "ORDINARY SHARES") and the shareholders listed in Schedule B
hereto ("SELLING SHAREHOLDERS") propose to sell severally an aggregate of _____
ADSs (together with the ADSs being sold by the Company being hereinafter
referred to as the "FIRM SECURITIES"). The Company agrees to issue and sell, and
the Selling Shareholders agree to sell severally, to the Underwriters, at the
option of the Representatives, an aggregate of not more than _____ additional
ADSs (the "OPTIONAL SECURITIES"). The Firm Securities and the Optional
Securities are herein collectively called the "OFFERED SECURITIES". Unless the
context otherwise requires, each reference to the Firm Securities, the Optional
Securities or the Offered Securities herein also includes the Ordinary Shares
underlying such Securities.
The ADSs purchased by the Underwriters will be evidenced by American
Depositary Receipts ("ADRS") to be issued pursuant to a Deposit Agreement dated
as of [_____], 2007 (the "DEPOSIT AGREEMENT"), to be entered into among the
Company, JPMorgan Chase Bank, N.A., as depositary (the "DEPOSITARY"), and all
owners and beneficial owners from time to time of the ADSs.
2. Representations and Warranties of the Company and Selling Shareholders.
(a) The Company represents and warrants to, and agrees with, the several
Underwriters that:
(i) Filing and Effectiveness of Registration Statement; Certain
Defined Terms. The Company has filed with the Commission a registration
statement on Form F-1 (No. 333-144451) covering the registration of the
Offered Securities under the Act, including a related preliminary
prospectus or prospectuses. At any particular time, this initial
registration statement, in the form then on file with the Commission,
including all information contained in the registration statement (if any)
pursuant to Rule 462(b) and then deemed to be a part of the initial
registration statement, and all 430A Information and all 430C Information,
that in any case has not then been superseded or modified, shall be
referred to as the "INITIAL REGISTRATION STATEMENT". The Company may also
have filed, or may file with the Commission, a Rule 462(b) registration
statement covering the registration of Offered Securities. At any
particular time, this Rule 462(b) registration statement, in the form then
on file with the Commission, including the contents of the Initial
Registration Statement incorporated by reference therein and including all
430A Information and all 430C Information, that in any case has not then
been superseded or modified, shall be referred to as the "ADDITIONAL
REGISTRATION STATEMENT". A registration statement on Form F-6
(No.333-144450) relating to the ADSs has been filed with the Commission and
has become effective; no stop order suspending the effectiveness of the ADS
Registration Statement (as defined below) is in effect, and no proceedings
for such purpose are pending before or, to the knowledge of the Company,
threatened by the Commission (such registration statement on Form F-6,
including all exhibits thereto, as amended at the time such registration
statement becomes effective, being hereinafter called the "ADS REGISTRATION
STATEMENT").
As of the time of execution and delivery of this Agreement, the
Initial Registration Statement has been declared effective under the Act
and is not proposed to be amended. Any Additional Registration Statement
has or will become effective upon filing with the Commission pursuant to
Rule 462(b) and is not proposed to be amended. The Offered Securities all
have been or will be duly registered under the Act pursuant to the Initial
Registration Statement and, if applicable, the Additional Registration
Statement.
For purposes of this Agreement:
"430A INFORMATION", with respect to any registration statement, means
information included in a prospectus and retroactively deemed to be a part
of such registration statement pursuant to Rule 430A(b).
"430C INFORMATION", with respect to any registration statement, means
information included in a prospectus then deemed to be a part of such
registration statement pursuant to Rule 430C.
"ACT" means the Securities Act of 1933, as amended.
"APPLICABLE TIME" means ____:00 [a/p]m (Eastern time) on the date of
this Agreement.
"CLOSING DATE" has the meaning defined in Section 3 hereof.
"COMMISSION" means the Securities and Exchange Commission.
"EFFECTIVE DATE" with respect to the Initial Registration Statement or
the Additional Registration Statement (if any) means the date of the
Effective Time thereof.
"EFFECTIVE TIME" with respect to the Initial Registration Statement
or, if filed prior to the execution and delivery of this Agreement, the
Additional Registration Statement means the date and time as of which such
Registration Statement was declared effective by the Commission or has
become effective upon filing pursuant to Rule 462(c). If an Additional
Registration Statement has not been filed prior to the execution and
delivery of this Agreement but the Company has advised the Representatives
that it proposes to file one, "EFFECTIVE TIME" with respect to such
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Additional Registration Statement means the date and time as of which such
Registration Statement is filed and becomes effective pursuant to Rule
462(b).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FINAL PROSPECTUS" means the Statutory Prospectus that discloses the
public offering price, other 430A Information and other final terms of the
Offered Securities and otherwise satisfies Section 10(a) of the Act.
"GENERAL USE ISSUER FREE WRITING PROSPECTUS" means any Issuer Free
Writing Prospectus that is intended for general distribution to prospective
investors, as evidenced by its being so specified in Schedule C to this
Agreement.
"ISSUER FREE WRITING PROSPECTUS" means any "issuer free writing
prospectus," as defined in Rule 433, relating to the Offered Securities in
the form filed or required to be filed with the Commission or, if not
required to be filed, in the form retained in the Company's records
pursuant to Rule 433(g).
"LIMITED USE ISSUER FREE WRITING PROSPECTUS" means any Issuer Free
Writing Prospectus that is not a General Use Issuer Free Writing
Prospectus.
The Initial Registration Statement and the Additional Registration
Statement are referred to collectively as the "REGISTRATION STATEMENTS" and
individually as a "REGISTRATION STATEMENT". A "REGISTRATION STATEMENT" with
reference to a particular time means the Initial Registration Statement and
any Additional Registration Statement as of such time. A "REGISTRATION
STATEMENT" without reference to a time means such Registration Statement as
of its Effective Time. For purposes of the foregoing definitions, 430A
Information with respect to a Registration Statement shall be considered to
be included in such Registration Statement as of the time specified in Rule
430A.
"RULES AND REGULATIONS" means the rules and regulations of the
Commission.
"SECURITIES LAWS" means, collectively, the Xxxxxxxx-Xxxxx Act of 2002
("XXXXXXXX-XXXXX"), the Act, the Exchange Act, the Rules and Regulations,
the auditing principles, rules, standards and practices applicable to
auditors of "issuers" (as defined in Xxxxxxxx-Xxxxx) promulgated or
approved by the Public Company Accounting Oversight Board and, as
applicable, the rules of the New York Stock Exchange ("EXCHANGE RULES").
"STATUTORY PROSPECTUS" with reference to a particular time means the
prospectus included in a Registration Statement immediately prior to that
time, including any 430A Information or 430C Information with respect to
such Registration Statement. For purposes of the foregoing definition, 430A
Information shall be considered to be included in the Statutory Prospectus
as of the actual time that form of prospectus is filed with the Commission
pursuant to Rule 424(b) or Rule 462(c) and not retroactively.
Unless otherwise specified, a reference to a "rule" is to the
indicated rule under the Act.
(ii) Compliance with Securities Act Requirements. (i) (A) On their
respective Effective Dates, (B) on the date of this Agreement and (C) on
each Closing Date, each of the Initial Registration Statement, the ADS
Registration Statement and the Additional Registration Statement (if any)
conformed and will conform in all material respects to the requirements of
the Act and the Rules and Regulations and did not and will not include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading and (ii) on its date, at the time of filing of the Final
Prospectus pursuant to Rule 424(b) or (if no such filing is required) at
the Effective Date of the Additional Registration Statement in which the
Final Prospectus is included, and on each Closing Date, the Final
Prospectus will conform in all respects material to the requirements of the
Act and the Rules and Regulations and will not include any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not
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misleading. The preceding sentence does not apply to statements in or
omissions from any such document based upon written information furnished
to the Company by any Underwriter through the Representatives specifically
for use therein, it being understood and agreed that the only such
information is that described as such in Section 8(b) hereof.
(iii) Ineligible Issuer Status. (i) At the time of initial filing of
the Initial Registration Statement and (ii) at the date of this Agreement,
the Company was not and is not an "ineligible issuer," as defined in Rule
405, including (x) the Company or any other subsidiary in the preceding
three years not having been convicted of a felony or misdemeanor or having
been made the subject of a judicial or administrative decree or order as
described in Rule 405 and (y) the Company in the preceding three years not
having been the subject of a bankruptcy petition or insolvency or similar
proceeding, not having had a registration statement be the subject of a
proceeding under Section 8 of the Act and not being the subject of a
proceeding under Section 8A of the Act in connection with the offering of
the Offered Securities, all as described in Rule 405.
(iv) General Disclosure Package. As of the Applicable Time, neither
(i) the General Use Issuer Free Writing Prospectus(es) issued at or prior
to the Applicable Time, the preliminary prospectus, dated July 23, 2007
(which is the most recent Statutory Prospectus distributed to investors
generally) and the other information, if any, stated in Schedule C to this
Agreement to be included in the General Disclosure Package, all considered
together (collectively, the "GENERAL DISCLOSURE PACKAGE"), nor (ii) any
individual Limited Use Issuer Free Writing Prospectus, when considered
together with the General Disclosure Package, included any untrue statement
of a material fact or omitted to state any material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The preceding sentence does not apply
to statements in or omissions from any Statutory Prospectus or any Issuer
Free Writing Prospectus in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and
agreed that the only such information furnished by any Underwriter consists
of the information described as such in Section 8(b) hereof.
(v) Issuer Free Writing Prospectuses. Each Issuer Free Writing
Prospectus, as of its issue date and at all subsequent times through the
completion of the public offer and sale of the Offered Securities or until
any earlier date that the Company notified or notifies the Representatives
as described in the next sentence, did not, does not and will not include
any information that conflicted, conflicts or will conflict with the
information then contained in the Registration Statement. If at any time
following issuance of an Issuer Free Writing Prospectus there occurred or
occurs an event or development as a result of which such Issuer Free
Writing Prospectus conflicted or would conflict with the information then
contained in the Registration Statement or as a result of which such Issuer
Free Writing Prospectus, if republished immediately following such event or
development, would include an untrue statement of a material fact or
omitted or would omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading, (i) the Company has promptly notified or will
promptly notify the Representatives and (ii) the Company has promptly
amended or will promptly amend or supplement such Issuer Free Writing
Prospectus to eliminate or correct such conflict, untrue statement or
omission.
(vi) Good standing of the Company. The Company has been duly
incorporated and is existing and in good standing under the laws of the
Cayman Islands, with power and authority (corporate and other) to own its
properties and conduct its business as described in the General Disclosure
Package; and the Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires such
qualification, except where the failure to so qualify would not reasonably
be expected to have a material adverse effect on the condition (financial
or otherwise), results of
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operations, business, properties or prospects of the Company and its
subsidiaries taken as a whole ("MATERIAL ADVERSE EFFECT").
(vii) Subsidiaries. The Company does not own or control, directly or
indirectly, any corporation, association or entity other E-House &
Cityrehouse Real Estate Consultancy Ltd. ("CITYREHOUSE CONSULTANCY");
E-House Real Estate Ltd. ("E-HOUSE REAL ESTATE"); CRIC (China)
Information Technology Co., Ltd. ("CRIC BVI"); E-House (China) Capital
Investment Management Ltd. ("E-HOUSE CAPITAL"); E-House & Cityrehouse Real
Estate Development Limited ("CITYREHOUSE DEVELOPMENT"), 85% of which is
owned by Cityrehouse Consultancy and the 15% of which is owned by Home
Advisor Properties Limited, which is wholly-owned by Ber Xxx Xx, one of our
executive officers; E-House International Estate Agency Limited "E-HOUSE
HONG KONG"), which is wholly owned by Cityrehouse Consultancy; E-House
China Inc. ("E-HOUSE USA"), which is wholly owned by E-House Hong Kong;
E-House (Macau) International Property Limited ("E-HOUSE MACAU"), 90% of
which is owned by E-House Hong Kong and 10% of which is owned by
Cityrehouse Consultancy; E-House Property Investment Management (China)
Limited ("E-HOUSE PROPERTY"), 55% of which is owned by E-House Capital and
45% of which is owned by unrelated third parties; E-House (China)
International Property Development Ltd. ("E-HOUSE PROPERTY BVI"), which is
wholly owned by E-House Real Estate; Kornwell Investments Limited
("KORNWELL"), which is wholly owned by E-House Real Estate; E-House
International Estate Agency Limited ("E-HOUSE ESTATE AGENCY"), which is
wholly owned by Cityrehouse Consultancy; Shanghai Cityrehouse Real Estate
Agency Co., Ltd. ("CITYREHOUSE CHINA"), which is wholly-owned by
Cityrehouse Development; Shanghai Real Estate Consultant and Sales (Group)
Co., Ltd. ("E-HOUSE SHANGHAI"), which is wholly-owned by E-House Real
Estate; Shanghai CRIC Information Technology Co., Ltd. ("CRIC CHINA"); and
the real estate agency subsidiaries owned by E-House Shanghai in the
proportions set forth on Schedule G hereto (the "OPERATING SUBSIDIARIES").
Each of Cityrehouse Consultancy, E-House Real Estate, CRIC BVI, E-House
Capital, Cityrehouse Development, E-House Estate Agency, Citryrehouse
China, E-House Shanghai, CRIC China and the Operating Subsidiaries is
referred to as a "SUBSIDIARY" and collectively as the "SUBSIDIARIES", and
each of Cityrehouse China, E-House Shanghai, CRIC China and each of the
Operating Subsidiaries is referred to as a "PRC SUBSIDIARY" and
collectively as the "PRC SUBSIDIARIES". Each of Cityrehouse Consultancy,
Cityrehouse Development, E-House Real Estate Ltd., CRIC BVI, E-House
Capital, E-House Property BVI and Kornwell is referred to as a "BVI
SUBSIDIARY" and collectively as the "BVI SUBSIDIARIES". Each subsidiary of
the Company has been duly incorporated and is existing and in good standing
under the laws of the jurisdiction of its incorporation, with power and
authority (corporate and other) to own its properties and conduct its
business as described in the General Disclosure Package; and each
subsidiary of the Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which it
ownership or lease of property or the conduct of its business requires such
qualification, except where the failure to so qualify would not reasonably
be expected to have a Material Adverse Effect; all of the issued and
outstanding capital stock of each subsidiary of the Company has been duly
authorized and validly issued and is fully paid and nonassessable; and the
capital stock of each subsidiary owned by the Company, directly or through
subsidiaries, is owned free from liens, encumbrances and defects.
(viii) Offered Securities. The Offered Securities and all other
outstanding shares of capital stock of the Company have been duly
authorized; the authorized equity capitalization of the Company is as set
forth in the General Disclosure Package and, upon (A) the automatic
conversion of all of the Company's outstanding Series A preferred shares
par value $0.001 per share (collectively, the "PREFERRED SHARES") as
described in the General Disclosure Package as of the Applicable Time and
the Registration Statement and (B) the issuance and sale of the Firm
Securities, the Company shall have an authorized and outstanding capital as
set forth under the column of the Capitalization table labeled "As
Adjusted"; all outstanding shares of capital stock of the Company are, and,
when the Offered Securities and the underlying Ordinary Shares have been
issued, delivered and paid for in accordance with this Agreement and the
Deposit Agreement, as
5
the case may be, on each Closing Date, such Offered Securities will have
been, validly issued, fully paid and nonassessable, will conform to the
information in the General Disclosure Package and to the description of
such Offered Securities contained in the Final Prospectus; the shareholders
of the Company have no preemptive rights with respect to the Securities,
and none of the outstanding shares of capital stock of the Company have
been issued in violation of any preemptive or similar rights of any
security holder, the Offered Securities and the underlying Ordinary Shares
to be sold by the Company, when issued and delivered against payment
heretofore pursuant to this Agreement, will not be subject to any security
interest, other encumbrance or adverse claims, and have been issued in
compliance with all federal and state securities laws and were not issued
in violation of any preemptive right, resale right, right of first refusal
or similar right; upon payment of the purchase price in accordance with
this Agreement at each Closing Date, the Depositary or its nominee, as the
registered holder of the Ordinary Shares represented by the Offered
Securities, will be, subject to the terms of the Deposit Agreement,
entitled to all the rights of a shareholder conferred by the Memorandum and
Articles of Association of the Company; except as disclosed in the General
Disclosure Package as of the Applicable Time and subject to the terms and
provisions of the Deposit Agreement, there are no restrictions on transfers
of Ordinary Shares represented by the Offered Securities or the Offered
Securities under the laws of the Cayman Islands or the United States, as
the case may be; the Ordinary Shares represented by the Offered Securities
may be freely deposited by the Company with the Depositary or its nominee
against issuance of ADRs evidencing the Offered Securities as contemplated
by the Deposit Agreement.
(ix) No Finder's Fee. Except as disclosed in the General Disclosure
Package, there are no contracts, agreements or understandings between the
Company and any person that would give rise to a valid claim against the
Company or any Underwriter for a brokerage commission, finder's fee or
other like payment in connection with this offering.
(x) Registration Rights. Except as disclosed in the General Disclosure
Package, there are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person or to require
the Company to include such securities in the securities registered
pursuant to a Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Company under the
Act (collectively, "REGISTRATION RIGHTS"), and any person to whom the
Company has granted registration rights has agreed not to exercise such
rights until after the expiration of the Lock-Up Period referred to in
Section 5 hereof.
(xi) Listing. The ADSs have been approved for listing on the New York
Stock Exchange, subject only to notice of issuance.
(xii) Absence of Further Requirements. No consent, approval,
authorization, or order of, or filing or registration ("GOVERNMENT
AUTHORIZATION") with, any person (including any governmental agency or body
or any court) (a "GOVERNMENT AGENCY") is required for the consummation of
the transactions contemplated by this Agreement in connection with the
offering, issuance and sale of the Offered Securities by the Company,
except such as have been obtained, or made and such as may be required
under state securities laws.
(xiii) Title to Property. Except as disclosed in the General
Disclosure Package, the Company and its subsidiaries have good and
marketable title to all real properties and all other properties and assets
owned by them, in each case free from liens, charges, encumbrances and
defects that would materially affect the value thereof or materially
interfere with the use made or to be made thereof by them and, except as
disclosed in the General Disclosure Package, the Company and its
subsidiaries hold any leased real or personal property under valid and
enforceable leases (the "COMPANY LEASES") with no terms or provisions that
would materially interfere with the use
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made or to be made thereof by them. Neither the Company nor any of its
subsidiaries is in default under any of the Company Leases that would,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, and neither the Company nor any of the subsidiaries knows
of any event, which but for the passage of time or the giving of notice, or
both, would constitute a default under any of such documents or agreements
that would reasonably be expected to have Material Adverse Effect.
(xiv) Validity of Leases. Except as disclosed in the General
Disclosure Package, no consent, approval, authorization, or order of, or
filing or registration with, any person (including any governmental agency
or body or any court) is required for the validity, enforceability or
effectiveness of the Company Leases and to the best of the Company's
knowledge, no party to any Company Lease is in violation or breach of any
PRC national, provincial, municipal or other local law, regulation statute,
rule or order, which violation or breach could invalidate, impair or result
in any fine, penalty or government sanction with regard to any Company
Lease, except as disclosed in the General Disclosure Package or as would
not reasonably be expected to result in a Material Adverse Effect.
(xiv) Absence of Defaults and Conflicts Resulting from Transaction.
The execution, delivery and performance of this Agreement and the Deposit
Agreement, and the issuance and sale of the Offered Securities and Ordinary
Shares represented by the Offered Securities will not result in a breach or
violation of any of the terms and provisions of, or constitute a default or
a Debt Repayment Triggering Event (as defined below) under, or result in
the imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, the charter
or by-laws of the Company or any of its subsidiaries, any statute, rule,
regulation or order of any governmental agency or body or any court,
domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or any of their properties, or any agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the
properties of the Company or any of its subsidiaries is subject; a "DEBT
REPAYMENT TRIGGERING EVENT" means any event or condition that gives, or
with the giving of notice or lapse of time would give, the holder of any
note, debenture, or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any of
its subsidiaries.
(xv) Absence of Existing Defaults and Conflicts. Neither the Company
nor any of its subsidiaries is in violation of its respective charter or
by-laws or in default (or with the giving of notice or lapse of time would
be in default) under any existing obligation, agreement, covenant or
condition contained in any indenture, loan agreement, mortgage, lease or
other agreement or instrument to which any of them is a party or by which
any of them is bound or to which any of the properties of any of them is
subject, except such defaults that would not, individually or in the
aggregate, result in a Material Adverse Effect.
(xvi) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(xvii) Authorization of Deposit Agreement. The Deposit Agreement has
been duly authorized, executed and delivered by the Company and, assuming
due authorization, execution and delivery by the Depositary, constitutes a
valid and legally binding obligation of the Company, enforceable in
accordance with its terms, subject, as to enforceability, to bankruptcy,
insolvency, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; upon due issuance by the Depositary of the ADRs
evidencing the Offered Securities against the deposit of the underlying
Ordinary Shares in respect thereof in accordance with the provisions of the
Deposit Agreement, such ADRs will be duly and validly issued and the
persons in whose names the ADRs are registered will be entitled to
7
the rights specified therein and in the Deposit Agreement; the Deposit
Agreement and the ADRs conform in all material respects to the descriptions
thereof contained in the General Disclosure Package as of the Applicable
Time.
(xviii) Possession of Licenses and Permits. The Company and its
subsidiaries possess, and are in compliance with the terms of, all adequate
certificates, authorizations, franchises, licenses and permits ("LICENSES")
necessary or material to the conduct of the business now conducted or
proposed in the General Disclosure Package to be conducted by them and have
not received any notice of proceedings relating to the revocation or
modification of any Licenses that, if determined adversely to the Company
or any of its subsidiaries, would individually or in the aggregate have a
Material Adverse Effect.
(xix) Absence of Labor Dispute. No labor dispute with the employees of
the Company or any of its subsidiaries exists or, to the knowledge of the
Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or its
subsidiaries' principal suppliers, contractors or customers, that, in any
such case, could have a Material Adverse Effect.
(xx) Possession of Intellectual Property. Except as otherwise
disclosed in the General Disclosure Package and the Final Prospectus, the
Company and its subsidiaries own, possess or can acquire on reasonable
terms, adequate trademarks, trade names and other rights to inventions,
know-how, patents, copyrights, confidential information and other
intellectual property (collectively, "INTELLECTUAL PROPERTY RIGHTS")
necessary to conduct the business now operated by them, or presently
employed by them, and have not received any notice of infringement of or
conflict with asserted rights of others with respect to any intellectual
property rights that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material
Adverse Effect.
(xxi) Environmental Laws. Except as disclosed in the General
Disclosure Package, neither the Company nor any of its subsidiaries is in
violation of any statute, any rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to
the use, disposal or release of hazardous or toxic substances or relating
to the protection or restoration of the environment or human exposure to
hazardous or toxic substances (collectively, "ENVIRONMENTAL LAWS"), owns or
operates any real property contaminated with any substance that is subject
to any environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any
claim relating to any environmental laws, which violation, contamination,
liability or claim would individually or in the aggregate have a Material
Adverse Effect; and the Company is not aware of any pending investigation
which might lead to such a claim.
(xxii) Accurate Disclosure. The statements in the General Disclosure
Package and the Final Prospectus under the headings "Prospectus Summary",
"Risk Factors", "Use of Proceeds", "Dividend Policy", "Enforceability of
Civil Liabilities", "Management's Discussion and Analysis of Financial
Condition and Results of Operations", "Regulation", "Management", "Related
Party Transactions", "Description of Share Capital", "Description of
American Depositary Shares", "Shares Eligible for Future Sale", "Taxation"
and "Underwriting", insofar as such statements summarize legal matters,
agreements, documents or proceedings discussed therein, are accurate and
fair summaries of such legal matters, agreements, documents or proceedings
and present the material information required to be shown.
(xxiii) Statistical and Market-Related Data. Any third-party
statistical and market-related data included in a Registration Statement, a
Statutory Prospectus or the General Disclosure Package are based on or
derived from sources that the Company believes to be reliable and
8
accurate, and relevant third-party consents for such data to be included
therein have been duly obtained and have not been revoked.
(xxiv) Internal Controls and Compliance with the Xxxxxxxx-Xxxxx Act.
Except as set forth in the General Disclosure Package, the Company, its
subsidiaries and the Company's Board of Directors (the "BOARD"), Audit
Committee ("AUDIT COMMITTEE"), Compensation Committee and Corporate
Governance and Nominating Committee are in compliance with Xxxxxxxx-Xxxxx
and all applicable Exchange Rules. The Company maintains a system of
internal controls, including, but not limited to, disclosure controls and
procedures, internal controls over accounting matters and financial
reporting, an internal audit function and legal and regulatory compliance
controls (collectively, "INTERNAL CONTROLS") that comply with the
Securities Laws and are sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with U.S. General
Accepted Accounting Principles and to maintain accountability for assets,
(iii) access to assets is permitted only in accordance with management's
general or specific authorization, (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences and (v) the
Company has adopted and applies corporate governance guidelines. The
Internal Controls are, or upon consummation of the offering of the Offered
Securities will be, overseen by the Audit Committee of the Board in
accordance with Exchange Rules. The Company has not publicly disclosed or
reported to the Audit Committee or the Board, and within the next 135 days
the Company does not reasonably expect to publicly disclose or report to
the Audit Committee or the Board, a significant deficiency, material
weakness, change in Internal Controls or fraud involving management or
other employees who have a significant role in Internal Controls (each, an
"INTERNAL CONTROL EVENT"), any violation of, or failure to comply with, the
Securities Laws, or any matter which, if determined adversely, would have a
Material Adverse Effect. Each of the Company's independent directors meets
the criteria for "independence" under Xxxxxxxx-Xxxxx and the Exchange
Rules.
(xxv) Absence of Accounting Issues. The Board has confirmed to the
Chief Executive Officer, Chief Financial Officer or General Counsel that,
except as set forth in the General Disclosure Package, the Board is not
reviewing or investigating, and neither the Company's independent auditors
nor its internal auditors have recommended that the Board review or
investigate, (i) adding to, deleting, changing the application of, or
changing the Company's disclosure with respect to, any of the Company's
material accounting policies; (ii) any matter which could result in a
restatement of the Company's financial statements for any annual or interim
period during the current or prior three fiscal years; or (iii) any
Internal Control Event.
(xxvi) Litigation. Except as disclosed in the General Disclosure
Package, there are no pending actions, suits or proceedings (including any
inquiries or investigations by any court or governmental agency or body,
domestic or foreign) against or affecting the Company, any of its
subsidiaries or any of their respective properties that, if determined
adversely to the Company or any of its subsidiaries, would individually or
in the aggregate have a Material Adverse Effect, or would materially and
adversely affect the ability of the Company to perform its obligations
under this Agreement or the Deposit Agreement, or which are otherwise
material in the context of the sale of the Offered Securities; and, to the
Company's knowledge, no such actions, suits or proceedings (including any
inquiries or investigations by any court or governmental agency or body,
domestic or foreign) are threatened or contemplated.
(xxvii) Financial Statements. The financial statements included in
each Registration Statement and the General Disclosure Package comply as to
form in all material respects with the requirements of Regulation S-X under
the Act and present fairly the financial position of the Company and the
Company's consolidated subsidiaries and affiliates as of the dates shown
and their results of operations and cash flows for the periods shown, and,
except as otherwise disclosed
9
in the General Disclosure Package, such financial statements have been
prepared in conformity with the generally accepted accounting principles in
the United States applied on a consistent basis; and the schedules included
in each Registration Statement present fairly the information required to
be stated therein.
(xxviii) Independent Auditors. Deloitte Touches Tohmatsu, who have
certified the financial statements filed with the Commission as part of the
General Disclosure Package as of the Applicable Time and the Registration
Statement, are independent public accountants as required by the Act and
are registered with the Public Company Accounting Oversight Board.
(xxix) No Material Adverse Change in Business. Except as disclosed in
the General Disclosure Package, since the end of the period covered by the
latest audited financial statements included in the General Disclosure
Package (i) there has been no change, nor any development or event
involving a prospective change, in the condition (financial or otherwise),
results of operations, business, properties or prospects of the Company and
its subsidiaries, taken as a whole which would have a Material Adverse
Effect, (ii) except as disclosed in or contemplated by the General
Disclosure Package, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock,
(iii) except as disclosed in or contemplated by the General Disclosure
Package, there has been no material adverse change in the capital stock,
short-term indebtedness, long-term indebtedness, net current assets or net
assets of the Company and its subsidiaries, (iv) except as disclosed in or
contemplated by the General Disclosure Package, there has been no
transaction by the Company and its subsidiaries which would have a Material
Adverse Effect, and (v) except as disclosed in or contemplated by the
General Disclosure Package, there has been no obligation, direct or
contingent (including any off-balance sheet obligations), incurred by the
Company or any subsidiary which would have a Material Adverse Effect.
(xxx) Investment Company Act. The Company is not and, after giving
effect to the offering and sale of the Offered Securities and the
application of the proceeds thereof as described in the General Disclosure
Package, will not be an "investment company" as defined in the Investment
Company Act of 1940 (the "INVESTMENT COMPANY ACT").
(xxxi) Payments in Foreign Currency. Except as disclosed in the
General Disclosure Package, under current laws and regulations of the
Cayman Islands, Hong Kong, the PRC and any political subdivision thereof,
all dividends and other distributions declared and payable on the Offered
Securities and the underlying Ordinary Shares may be paid by the Company to
the holder thereof in United States dollars that may be converted into
foreign currency and freely transferred out of the Xxxxxx Xxxxxxx, xxx
Xxxxxxx Xxxxxx Xxxxxxx, Xxxx Xxxx, Xxxxx and the PRC and all such payments
made to holders thereof or therein who are non-residents of the Cayman
Islands, the British Virgin Islands, Hong Kong, Macau or the PRC will not
be subject to income, withholding or other taxes under laws and regulations
of the Cayman Islands, the British Virgin Islands, Hong Kong, Macau, the
PRC or any political subdivision or taxing authority thereof or therein and
will otherwise be free and clear of any other tax, duty, withholding or
deduction in the Xxxxxx Xxxxxxx, xxx Xxxxxxx Xxxxxx Xxxxxxx, Xxxx Xxxx,
Xxxxx and the PRC or any political subdivision or taxing authority thereof
or therein and without the necessity of obtaining any governmental
authorization in the Cayman Islands, the British Virgin Islands, Hong Kong,
Macau, the PRC or any political subdivision or taxing authority thereof or
therein.
(xxxii) Compliance with Anti-Bribery, Anti-Money and Related Laws.
Each of the Company, its subsidiaries, its affiliates and any of their
respective officers and executive directors and each of its supervisors,
managers, agents, or employees, has not violated, its participation in the
offering will not violate, and it has instituted and maintains policies and
procedures designed to ensure continued compliance with each of the
following laws: (a) anti-bribery laws, including but not limited to, any
applicable law, rule, or regulation of any locality, including but not
limited to any
10
law, rule, or regulation promulgated to implement the OECD Convention on
Combating Bribery of Foreign Public Officials in International Business
Transactions, signed December 17, 1997, including the U.S. Foreign Corrupt
Practices Act of 1977 or any other law, rule or regulation of similar
purpose and scope under U.S federal, Cayman Islands, the British Virgin
Islands, Hong Kong, Macau or PRC law, (b) anti-money laundering laws,
including but not limited to, applicable federal, state, international,
foreign or other laws, regulations or government guidance regarding
anti-money laundering, including, without limitation, Title 18 U.S. Code
section 1956 and 1957, the Patriot Act, the Bank Secrecy Act, and
international anti-money laundering principals or procedures by an
intergovernmental group or organization, such as the Financial Action Task
Force on Money Laundering, of which the United States is a member and with
which designation the United States representative to the group or
organization continues to concur, all as amended, and any Executive order,
directive, or regulation pursuant to the authority of any of the foregoing,
or any orders or licenses issued thereunder or (c) laws and regulations
imposing U.S. economic sanctions measures, including, but not limited to,
the International Emergency Economic Powers Act, the Trading with the Enemy
Act, the United Nations Participation Act, and the Syria Accountability and
Lebanese Sovereignty Act, all as amended, and any Executive Order,
directive, or regulation pursuant to the authority of any of the foregoing,
including the regulations of the United States Treasury Department set
forth under 31 CFR, Subtitle B, Chapter V, as amended, or any orders or
licenses issued thereunder. Neither the Company nor any of its subsidiaries
does business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida Statutes and
the Company agrees to comply with such Section if prior to the completion
of the distribution of the Offered Securities it commences doing such
business. None of the Company, any of its subsidiaries or, to the knowledge
of the Company, any director, officer, agent, employee or affiliate of the
Company or any of its subsidiaries, is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury ("OFAC").
(xxxiii) Tax Filings. The Company and its subsidiaries have filed all
federal, state, local and non-U.S. tax returns that are required to be
filed or have requested extensions thereof (except in any case in which the
failure so to file would not have a Material Adverse Effect); and, except
as set forth in the General Disclosure Package, the Company and its
subsidiaries have paid all taxes (including any assessments, fines or
penalties) required to be paid by them, except for any such taxes,
assessments, fines or penalties currently being contested in good faith or
as would not, individually or in the aggregate, have a Material Adverse
Effect.
(xxxiv) Insurance. The Company and its subsidiaries are insured by
insurers with appropriately rated claims paying abilities against such
losses and risks and in such amounts as are prudent and customary for the
businesses in which they are engaged; all policies of insurance insuring
the Company or any of its subsidiaries, or their respective businesses,
assets, employees, officers and directors are in full force and effect; the
Company and its subsidiaries, are in compliance with the terms of such
policies and instruments in all material respects; and there are no claims
by the Company or any of its subsidiaries, under any such policy or
instrument as to which any insurance company is denying liability or
defending under a reservation of rights clause; neither the Company nor any
such subsidiary has been refused any insurance coverage sought or applied
for; neither the Company nor any such subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost that would
not have a Material Adverse Effect, except as set forth in or contemplated
in the General Disclosure Package; and the Company will obtain directors'
and officer's insurance in such amounts as is customary for an initial
public offering.
(xxxv) Related Party Transactions. There are no material relationships
or transactions between the Company or any of its subsidiaries on one hand
and their respective 10% or greater shareholders, affiliates, directors or
officers, or any affiliates or members of the immediate
11
families of such persons, on the other hand that are not disclosed in the
General Disclosure Package as of the Applicable Time within the past three
years.
(xxxvi) Passive Foreign Investment Company. The Company does not
expect to be a Passive Foreign Investment Company ("PFIC") within the
meaning of Section 1297(a) of the United States Internal Revenue Code of
1986, as amended, and the regulations and published interpretations
thereunder for the taxable year ending December 31, 2006, and has no plan
or intention to conduct its business in a manner that would be reasonably
expected to result in the Company becoming a PFIC in the future under
current laws and regulations.
(xxxvii) Stabilization. Neither the Company nor any subsidiary nor any
of their respective directors, officers, affiliates or controlling persons
has taken, directly or indirectly, any action designed, or which has
constituted or might reasonably be expected to cause or result in, under
the Exchange Act or otherwise, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
Ordinary Shares or the Offered Securities.
(xxxviii) Foreign Private Issuer. The Company is a "foreign private
issuer" within the meaning of Rule 405 under the Act.
(xxxix) No Transaction or Other Taxes. Except as disclosed in the
General Disclosure Package as of the Applicable Time and the Registration
of the PRC and the Cayman Islands, no transaction, stamp, capital or other
issuance, registration, transaction, transfer or withholding taxes or
duties are payable in the PRC and the Cayman Islands by or on behalf of the
Underwriters to any PRC or Cayman Islands taxing authority in connection
with (A) the issuance, sale and delivery of the Ordinary Shares represented
by the Offered Securities by the Company, the issuance of the Offered
Securities by the Depositary, and the delivery of the Offered Securities to
or for the account of the Underwriters, (B) the purchase from the Company
and the initial sale and delivery by the Underwriters of the Offered
Securities to purchasers thereof, (C) the deposit of the Ordinary Shares
with the Depositary and the Custodian (as defined in the Deposit Agreement)
and the issuance and delivery of the ADRs evidencing the Offered
Securities, or (D) the execution and delivery of this Agreement or the
Deposit Agreement.
(xl) Proper Form of Agreements. This Agreement and the Deposit
Agreement are in proper form under the laws of the Cayman Islands for the
enforcement thereof against the Company in accordance with the laws of the
Cayman Islands and to ensure the legality, validity, enforceability or
admissibility into evidence in the Cayman of this Agreement and the Deposit
Agreement; it is not necessary that this Agreement, the Deposit Agreement,
the Prospectus or any other document be filed or recorded with any court or
other authority in the Cayman Islands or that any Cayman Islands stamp duty
or similar tax be paid on or in respect of this Agreement, the Deposit
Agreement or any other document to be furnished hereunder or thereunder.
(xli) Validity of Choice of Law. The choice of laws of the State of
New York as the governing law of this Agreement and the Deposit Agreement
is a valid choice of law under the laws of the Cayman Islands and the PRC
and will be honored by courts in the Cayman Islands and, to the extent
permitted under the PRC civil law and rules of civil procedures, will be
honored by the courts in the PRC. The Company has the power to submit, and
pursuant to Section 16 of this Agreement and Section 7.8 of the Deposit
Agreement, has legally, validly, effectively and irrevocably submitted, to
the personal jurisdiction of each United States federal court and New York
state court located in the Borough of Manhattan, in The City of New York,
New York, U.S.A. (each, a "NEW YORK COURT"), and the Company has the power
to designate, appoint and authorize, and pursuant to Section 16 of this
Agreement and Section 19 of the Deposit Agreement, has legally, validly,
effectively and irrevocably designated, appointed an authorized agent for
service of process in any action arising out of or relating to this
Agreement, the Deposit Agreement or the Offered Securities in any New
York Court, and service of process effected on
12
such authorized agent will be effective to confer valid personal
jurisdiction over the Company as provided in Section 20 hereof.
(xlii) No Immunity. Neither the Company, or any subsidiary nor any of
their respective properties, assets or revenues has any right of immunity
under Cayman Islands, PRC or New York law, from any legal action, suit or
proceeding, from the giving of any relief in any such legal action, suit or
proceeding, from set-off or counterclaim, from the jurisdiction of any
Cayman Islands, PRC, New York or U.S. federal court, from service of
process, attachment upon or prior to judgment, or attachment in aid of
execution of judgment, or from execution of a judgment, or other legal
process or proceeding for the giving of any relief or for the enforcement
of a judgment, in any such court, with respect to its obligations,
liabilities or any other matter under or arising out of or in connection
with this Agreement or the Deposit Agreement; and, to the extent that the
Company, or any subsidiary or any of their respective properties, assets or
revenues may have or may hereafter become entitled to any such right of
immunity in any such court in which proceedings may at any time be
commenced, each of the Company and the subsidiaries waives or will waive
such right to the extent permitted by law and has consented to such relief
and enforcement as provided in Section 20 of this Agreement.
(xliii) Judgment Currency. Any final judgment for a fixed sum of money
rendered by a New York Court having jurisdiction under its own domestic
laws in respect of any suit, action or proceeding against the Company based
upon this Agreement and the Deposit Agreement would be recognized and
enforced against the Company by Cayman Islands courts without re-examining
the merits of the case under the common law doctrine of obligation;
provided that (A) adequate service of process has been effected and the
defendant has had a reasonable opportunity to be heard, (B) such judgments
or the enforcement thereof are not contrary to the law, public policy,
security or sovereignty of the Cayman Islands, (C) such judgments were not
obtained by fraudulent means and do not conflict with any other valid
judgment in the same matter between the same parties, and (D) an action
between the same parties in the same matter is not pending in any Cayman
Islands court at the time the lawsuit is instituted in the foreign court;
it is not necessary that this Agreement, the Deposit Agreement, the
Prospectus or any other document be filed or recorded with any court or
other authority in the Cayman Islands or the PRC.
(xliv) Registration Statement Exhibits. There are no legal or
governmental proceedings or contracts or other documents of a character
required to be described in the Registration Statement, the ADS
Registration Statement, any Additional Registration Statement or the most
recent Preliminary Prospectus or, in the case of documents, to be filed as
exhibits to the Registration Statement, that are not described and filed as
required. Neither the Company nor any of its subsidiaries has knowledge
that any other party to any such contract, agreement or arrangement has any
intention not to render full performance as contemplated by the terms
thereof.
(xlv) Critical Accounting Policies. The section entitled "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
in the General Disclosure Package as of the Applicable Time accurately and
fully describes (A) accounting policies that the Company believes are the
most important in the portrayal of the Company's financial condition and
results of operations and that require management's most difficult,
subjective or complex judgments ("CRITICAL ACCOUNTING POLICIES"); (B)
judgments and uncertainties affecting the application of Critical
Accounting Policies; and (C) the likelihood that materially different
amounts would be reported under different conditions or using different
assumptions and an explanation thereof; and the Company's management have
reviewed and agreed with the selection, application and disclosure of the
Critical Accounting Policies as described in the General Disclosure Package
as of the Applicable Time, and have consulted with its legal advisers and
independent accountants with regards to such disclosure.
13
(xlvi) No Unapproved Marketing Documents. The Company has not
distributed and, prior to the later to occur of any Delivery Date and
completion of the distribution of the Offered Securities, will not
distribute any offering material in connection with the offering and sale
of the Offering Securities other than any Preliminary Prospectus, the
Prospectus, any Issuer Free Writing Prospectus to which the Representatives
have consented in accordance with this Agreement and any Issuer Free
Writing Prospectus set forth on Schedule C hereto.
(xlvii) Employee Benefits. Except as set forth in the most recent
Preliminary Prospectus, the Company has no obligation to provide
retirement, death or disability benefits to any of the present or past
employees of the Company or any subsidiary, or to any other person; the
Company and its subsidiaries are in compliance with all applicable laws
relating to employee benefits.
(xlviii) No Broker-Dealer Affiliation. Except as set forth in the
General Disclosure Package, there are no affiliations or associations
between any member of the NASD and any of the officers or directors of the
Company or the subsidiaries, or holders of 5% or greater of the securities
of the Company.
(xlix) SAFE Compliance. The Company has taken all reasonable steps to
comply with, and to ensure compliance by all of the Company's shareholders
and option holders who are PRC residents or PRC citizens with any
applicable rules and regulations of the State Administration of Foreign
Exchange (the "SAFE RULES AND REGULATIONS"), including without limitation,
requiring each shareholder and option holder that is, or is directly or
indirectly owned or controlled by, a PRC resident or PRC citizen to
complete any registration and other procedures required under applicable
SAFE Rules and Regulations.
(l) No Trading. None of the Company or any of the subsidiaries is
engaged in any trading activities involving commodity contracts or other
trading contracts which are not currently traded on a securities or
commodities exchange and for which the market value cannot be determined.
(lii) Compliance with Internal Policies. The sale of the Ordinary
Shares by the Selling Shareholders does not violate any of the Company's
internal policies regarding the sale of shares by its affiliates.
(lii) Representation of Officers. Any certificate signed by any
officer of the Company and delivered to the Representative or counsel for
the Underwriters as required or contemplated by this Agreement shall
constitute a representation and warranty hereunder by the Company, as to
matters covered thereby, to each Underwriter.
(b) Each Selling Shareholder severally represents and warrants to, and
agrees with, the several Underwriters that:
(i) Offered Securities. Such Selling Shareholder has and at each
Closing Date (as hereinafter defined), will have (A) good and marketable
title to the Ordinary Shares underlying the Firm Securities and the
Optional Securities to be delivered by such Selling Shareholders, free and
clear of any liens, encumbrances, equities and claims and (B) full right,
power and authority to effect the sale and delivery of such Firm Securities
and Optional Securities.
(ii) Security Interests. Upon payment for the Offered Securities sold
by such Selling Shareholder under this Agreement and the delivery by such
Selling Shareholder to DTC or its agent of the Securities in book entry
form to a securities account maintained by the Representatives at the DTC
or its nominee, and payment therefor in accordance with this Agreement, the
Underwriters' will acquire a securities entitlement (within the meaning of
Section 8-501 of the UCC) with respect to such Offered Securities, and no
action based on an "adverse
14
claim" (as defined in UCC Section 8-102) may be asserted against the
Underwriters with respect to such security entitlement if, at such time,
the Underwriters do not have notice of any adverse claim within the meaning
of UCC Section 8-105.
(iii) General Disclosure Package. If the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement: (A) on the Effective Date of the Initial Registration Statement,
the statements in the Initial Registration Statement under "Principal and
Selling Shareholders" relating to such Selling Shareholder did not include
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make such statements therein
not misleading, (B) on the Effective Date of the Additional Registration
Statement (if any), the statements in the Registration Statement under
"Principal and Selling Shareholders" relating to such Selling Shareholder
did not include, or will not include, any untrue statement of a material
fact and did not omit, or will not omit, to state any material fact
required to be stated therein or necessary to make such statements therein
not misleading, (C) on the date of this Agreement, the statements in the
Initial Registration Statement and, if the Effective Time of the Additional
Registration Statement is prior to the execution and delivery of this
Agreement, the Additional Registration Statement under "Principal and
Selling Shareholders" applicable to such Selling Shareholder, and at the
time of filing of the Prospectus pursuant to Rule 424(b) or (if no such
filing is required) at the Effective Date of the Additional Registration
Statement in which the Prospectus is included and on the Closing Date, the
statements in each of the Registration Statement and the Prospectus under
"Principal and Selling Shareholders" applicable to such Selling
Shareholder, do not include, or will not include, any untrue statement of a
material fact or omits, or will omit, to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading, and (D) the statements in any individual Limited Use Issuer
Free Writing Prospectus under "Principal and Selling Shareholders" relating
to such Selling Shareholder, when considered together with the General
Disclosure Package, do not include, or will not include, any untrue
statement of a material fact or omits, or will omit, to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading. If the Effective Time of the Initial Registration
Statement is subsequent to the execution and delivery of this Agreement, on
the Effective Date of the Initial Registration Statement, the statements in
each of the Initial Registration Statement and the Prospectus under
"Principal and Selling Shareholders" relating to such Selling Shareholder
do not include any untrue statement of a material fact or will omit to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading.
(iv) Non-public Information. Such Selling Shareholder has reviewed the
Registration Statement and the sale of the Offered Securities by such
Selling Shareholder pursuant hereto is not prompted by any information
concerning the Company or any of its subsidiaries which is not set forth in
the Prospectus or any supplement thereto.
(v) Selling Shareholder Questionnaire. The director and officer
questionnaire or selling shareholder questionnaire, as applicable,
containing certain information regarding such Selling Shareholder and the
election form which sets forth the amount of Ordinary Shares such Selling
Shareholder has elected to sell in the Offering (the "QUESTIONNAIRE AND
ELECTION FORM"), completed by such Selling Shareholder and submitted to the
Company by facsimile on or before July 20, 2007 and by mail on or before
July 17, 2007, does not and as of each applicable Closing Date will not
contain any untrue statement of material fact nor does it omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading and such Selling Shareholder's election
to sell the number of Ordinary Shares indicated in the Election Form is
valid and binding on such Selling Shareholder.
(vi) Custody Agreement. Such Selling Shareholder has full right, power
and authority to execute and deliver this Agreement and Custody Agreement
(the "CUSTODY AGREEMENT") in
15
connection with the offer and sale of the Offered Securities contemplated
herein and to perform its obligations under such agreements.
(vii) Power-of-Attorney. The power of attorney ("POWER OF ATTORNEY"),
appointing certain individuals named therein as such Selling Shareholder's
attorneys-in-fact (each, an "ATTORNEY-IN-FACT") relating to the
transactions contemplated hereby and by the Prospectus, constitutes a valid
instrument granting the Attorneys-in-Fact named in such Power of Attorney,
the power and authority stated therein, and permits the Attorneys-in-Fact,
singly or collectively, to bind such Selling Shareholder with respect to
all matters granted, conferred and contemplated in such Power of Attorney
and such Power of Attorney has not been revoked, cancelled or terminated at
any time.
(viii) Authorization of Agreements. Each of this Agreement and the
power of attorney and Custody Agreement in connection with the offer and
sale of the Offered Securities contemplated herein has been duly
authorized, executed and delivered by such Selling Shareholder.
(ix) Absence of Further Requirements. The execution and delivery of
this Agreement, the Power-of-Attorney and the Custody Agreement, and the
consummation by such Selling Shareholder of the transactions herein
contemplated and the fulfillment by such Selling Shareholder of the terms
hereof will not require any consent, approval, authorization, or other
order of any court, regulatory body, administrative agency or other
governmental body (except as may be required under the Act or by the
securities or Blue Sky laws of the various states of the United States) and
will not result in a breach of any of the terms and provisions of, or
constitute a default under, organizational documents of such Selling
Shareholder, if not an individual, or any indenture, mortgage, deed of
trust or other agreement or instrument to which such Selling Shareholder is
a party, or of any order, rule or regulation applicable to such Selling
Shareholder of any court or of any regulatory body or administrative agency
or other governmental body having jurisdiction.
(x) Ordinary Shares Freely Depositable. The Ordinary Shares
represented by the Offered Securities to be sold by such Selling
Shareholder may be freely deposited by such Selling Shareholder with the
Depositary or with the Custodian as agent for the Depositary in accordance
with the Deposit Agreement against the issuance of ADRs evidencing
Securities representing such Ordinary Shares so deposited by such Selling
Shareholder.
(xi) No Conflicting Obligations. The Shares to be sold by the Selling
Shareholder hereunder is subject to the interest of the Underwriters, and
the obligations of the Selling Shareholder hereunder shall not be
terminated by any act of the Selling Shareholder, by operation of law or
the occurrence of any other event.
(xii) Ordinary Shares Freely Transferable. The Firms Securities and
the Optional Securities, as well as the Ordinary Shares underlying such
Securities, delivered at each Closing Date by such Selling Shareholder will
be freely transferable by such Selling Shareholder.
(xiii) Absence of Defaults and Conflicts Resulting from Transaction.
The execution, delivery and performance of this Agreement, the
Power-of-Attorney and the Custody Agreement, the deposit of Ordinary Shares
with the Depositary and the consummation of the transactions herein
contemplated by such Selling Shareholder will not result in a breach or
violation of any of the terms and provisions of, or constitute a default
under, any statute, any rule, regulation or order of any governmental
agency or body or any court, domestic or foreign, having jurisdiction over
such Selling Shareholder or any of its properties, or any agreement or
instrument to which such Selling Shareholder is a party or by which the
such Selling Shareholder is bound or to which any of the properties of such
Selling Shareholder is subject, or if the Selling Shareholder is a
corporate entity, the charter or by-laws of such Selling Shareholder.
16
(xiv) No Stabilization. Such Selling Shareholder has not taken,
directly or indirectly, any action designed, or which has constituted or
might reasonably be expected to cause or result in, under the Exchange Act
or otherwise, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of Ordinary Shares
or the Offered Securities.
(xv) No NASD Affiliations. Such Selling Shareholder has no
affiliations or associations with any member of the NASD.
(xvi) No Finder's Fee. There are no contracts, agreements or
understandings between such Selling Shareholder and any person that would
give rise to a valid claim against such Selling Shareholder or any
Underwriter for a brokerage commission, finder's fee or other like payment
in connection with this offering.
(xvii) No Stamp or Transaction Taxes. No transaction, stamp, capital
or other issuance, registration, transaction, transfer or withholding taxes
or duties are payable by or on behalf of the Underwriters in connection
with (A) the sale and delivery of the Ordinary Shares represented by the
Offered Securities by such Selling Shareholder, the issuance of such
Offered Securities by the Depositary, and the delivery of such Offered
Securities to or for the account of the Underwriters, (B) the purchase from
such Selling Shareholder and the initial sale and delivery by the
Underwriters of the Offered Securities to purchasers thereof, (C) the
deposit by such Selling Shareholder of the Ordinary Shares with the
Depositary and the Custodian and the issuance and delivery of the ADRs
evidencing the Offered Securities, or (E) the execution and delivery of
this Agreement.
(xviii) No Other Marketing Documents. Such Selling Shareholder has not
distributed and will not distribute, prior to the later of the latest
Closing Date and the completion of the Underwriters' distribution of the
Shares, any offering material in connection with the offering and sale of
the Shares by the Selling Shareholders, including any free writing
prospectus.
(xix) No Registration Rights. Other than as disclosed in the most
recent Preliminary Prospectus, such Selling Shareholder does not have any
registration or other similar rights to have any equity or debt securities
registered for sale by the Company under the Registration Statement or
included in this offering.
(xx)No Pre-emptive Rights. Such Selling Shareholder does not have, or
has waived prior to the date hereof, any preemptive right, co-sale right or
right of first refusal or other similar right to purchase any of the Shares
that are to be sold by the Company or any other Selling Shareholder to the
Underwriters pursuant to this Agreement; and such Selling Shareholder does
not own any warrants, options or similar rights to acquire, and does not
have any right or arrangement to acquire, any capital shares, right,
warrants, options or other securities from the Company, other than those
described in the most recent Preliminary Prospectus.
(xxi) Compliance with Internal Policies. The sale of the Ordinary
Shares by the Selling Shareholder does not violate any of such Selling
Shareholders internal policies regarding the sale of shares by its
affiliates.
(xxii) Compliance with Anti-Bribery, Anti-Money and Related Laws. Each
of such Selling Shareholder, its subsidiaries, its affiliates and, to such
Selling Shareholder's knowledge, any of their respective officers,
executive directors or employees, has not violated, its participation in
the offering will not violate, and it has instituted and maintains policies
and procedures designed to ensure continued compliance with each of the
following laws: (a) anti-bribery laws, including but not limited to, any
applicable law, rule, or regulation of any locality, including but not
limited to any law, rule, or regulation promulgated to implement the OECD
Convention on Combating
17
Bribery of Foreign Public Officials in International Business Transactions,
signed December 17, 1997, including the U.S. Foreign Corrupt Practices Act
of 1977 or any other law, rule or regulation of similar purpose and scope
under U.S federal, Cayman Islands, Hong Kong or PRC law, (b) anti-money
laundering laws, including but not limited to, applicable federal, state,
international, foreign or other laws, regulations or government guidance
regarding anti-money laundering, including, without limitation, Title 18
U.S. Code section 1956 and 1957, the Patriot Act, the Bank Secrecy Act, and
international anti-money laundering principals or procedures by an
intergovernmental group or organization, such as the Financial Action Task
Force on Money Laundering, of which the United States is a member and with
which designation the United States representative to the group or
organization continues to concur, all as amended, and any Executive order,
directive, or regulation pursuant to the authority of any of the foregoing,
or any orders or licenses issued thereunder or (c) laws and regulations
imposing U.S. economic sanctions measures, including, but not limited to,
the International Emergency Economic Powers Act, the Trading with the Enemy
Act, the United Nations Participation Act, and the Syria Accountability and
Lebanese Sovereignty Act, all as amended, and any Executive Order,
directive, or regulation pursuant to the authority of any of the foregoing,
including the regulations of the United States Treasury Department set
forth under 31 CFR, Subtitle B, Chapter V, as amended, or any orders or
licenses issued thereunder. Neither such Selling Shareholder nor any of its
subsidiaries does business with the government of Cuba or with any person
or affiliate located in Cuba within the meaning of Section 517.075, Florida
Statutes and such Selling Shareholder agrees to comply with such Section if
prior to the completion of the distribution of the Offered Securities it
commences doing such business. None of such Selling Shareholder, any of its
subsidiaries or, to the knowledge of such Selling Shareholder, any
director, officer or employee of such Selling Shareholder or any of its
subsidiaries, is currently subject to any U.S. sanctions administered by
the Office of Foreign Assets Control of the U.S. Department of the Treasury
("OFAC").
(xxii) Representation of Officers. Any certificate signed by any
officer of such Selling Shareholder and delivered to the Representative or
counsel for the Underwriters as required or contemplated by this Agreement
shall constitute a representation and warranty hereunder by such Selling
Shareholder, as to matters covered thereby, to each Underwriter.
(c) Xxx Xxxx (the "CONTROLLING PERSON"), the chairman, chief executive
officer and a beneficial owner of the Company, in his capacity as an
individual, represents and warrants to, and agrees with, the several
Underwriters that:
(i) General Disclosure Package. As of the Applicable Time, neither (i)
General Disclosure Package, nor (ii) any individual Limited Use Issuer Free
Writing Prospectus, when considered together with the General Disclosure
Package, included any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
preceding sentence does not apply to statements in or omissions from any
Statutory Prospectus or any Issuer Free Writing Prospectus in reliance upon and
in conformity with written information furnished to the Company by any
Underwriter through the Representatives specifically for use therein, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in Section 8(b)
hereof.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements and subject to the terms and
conditions set forth herein, the Company and each Selling Shareholder, severally
and not jointly, agree to sell to the several Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company and
the Selling Shareholders, at a purchase price of $ per ADS, the respective
number of Firm Securities set forth opposite the names of the Underwriters in
Schedule A hereto (rounded up or down, as determined by the Representatives in
the discretion, in order to avoid fractions).
18
Executed transfer forms for the Ordinary Shares represented by the Offered
Securities to be sold by the Selling Shareholders hereunder have been placed in
custody, for delivery under this Agreement, under Custody Agreements made with
the Company, as custodian (in such capacity, the "CUSTODIAN"). Each Selling
Shareholder agrees that the Ordinary Shares represented by the transfer forms
held in custody for the Selling Shareholders under such Custody Agreements are
subject to the interests of the Underwriters hereunder, that the arrangements
made by the Selling Shareholders for such custody are to that extent
irrevocable, and that the obligations of the Selling Shareholders hereunder
shall not be terminated by operation of law, whether by the death of any
individual Selling Shareholder or the occurrence of any other event, or in the
case of a trust, by the death of any trustee or trustees or the termination of
such trust. If any individual Selling Shareholder or any such trustee or
trustees should die, or if any other such event should occur, or if any of such
trusts should terminate, before the delivery of the Offered Securities
hereunder, such Offered Securities shall be delivered by the Custodian in
accordance with the terms and conditions of this Agreement as if such death or
other event or termination had not occurred, regardless of whether or not the
Custodian shall have received notice of such death or other event or
termination.
The Company and the Custodian will deliver the Firm Securities to or as
instructed by the Representatives for the accounts of the several Underwriters
through the facilities of The Depository Trust Company ("DTC") in a form
reasonably acceptable to the Representatives against payment of the purchase
price by the Underwriters in Federal (same day) funds by official bank check or
checks or wire transfer to an account at a bank acceptable to the
Representatives drawn to the order of the Company for itself and as Custodian on
behalf of the Selling Shareholders, as the case may be, at the Hong Kong office
of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, at 10:00 A.M., New York time, on ____________
2007, or at such other time not later than seven full business days thereafter
as the Representatives and the Company determine, such time being herein
referred to as the "FIRST CLOSING DATE". For purposes of Rule 15c6-1 under the
Securities Exchange Act of 1934, the First Closing Date (if later than the
otherwise applicable settlement date) shall be the settlement date for payment
of funds and delivery of securities for all the Offered Securities sold pursuant
to the offering. The ADRs evidencing the Firm Securities will be in definitive
form, in such denominations and registered in such names as the Representatives
request. The ADRs will be made available for checking and packaging at the above
office or such other place designated by the Representatives at least 24 hours
prior to the First Closing Date.
In addition, upon written notice from the Representatives given to the
Company and the Selling Shareholders from time to time not more than 30 days
subsequent to the date of the Final Prospectus, the Underwriters may purchase
all or less than all of the Optional Securities at the purchase price per
Security to be paid for the Firm Securities. The Company and the Selling
Shareholders agree to sell to the Underwriters the number of Optional Securities
specified in such notice and the Underwriters agree, severally and not jointly,
to purchase such Optional Securities. Such Optional Securities shall be
purchased for the account of each Underwriter in the same proportion as the Firm
Securities set forth opposite such Underwriter's name bears to the total number
of Firm Securities (subject to adjustment by the Representatives to eliminate
fractions) and may be purchased by the Underwriters only for the purpose of
covering over-allotments made in connection with the sale of the Firm
Securities. No Optional Securities shall be sold or delivered unless the Firm
Securities previously have been, or simultaneously are, sold and delivered. The
right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and to the extent not previously exercised may be
surrendered and terminated at any time upon notice by the Representatives to the
Company and the Selling Shareholders.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "OPTIONAL CLOSING DATE", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "CLOSING DATE"), shall be determined by the
Representatives but shall be not later than five full business days after
written notice of election to purchase Optional Securities is given. The Company
will deliver the Optional Securities being purchased on each Optional Closing
Date to or as instructed by the Representatives for the accounts of the several
Underwriters in a form reasonably acceptable to the Representatives against
payment of the purchase price therefor in Federal (same day) funds by official
bank check or checks or wire transfer to an account at a
19
bank acceptable to the Representatives drawn to the order of the Company for
itself and as Custodian on behalf of the Selling Shareholders, as the case may
be, at the above office. The ADRs evidencing the Optional Securities will be in
definitive form, in such denominations and registered in such names as the
Representatives request. The ADRs will be made available for checking and
packaging at the above office or such other place designated by the
Representatives at least 24 hours prior to the Optional Closing Date.
4. Offering by Underwriters. It is understood that the several Underwriters
propose to offer the Offered Securities for sale to the public as set forth in
the Final Prospectus.
5. Certain Agreements of the Company and the Selling Shareholders. (a) The
Company agrees with the several Underwriters that:
(i) Additional Filings. Unless filed pursuant to Rule 462(c) as part
of the Additional Registration Statement in accordance with the next
sentence, the Company will file the Final Prospectus, in a form approved by
the Representatives, with the Commission pursuant to and in accordance with
subparagraph (1) (or, if applicable and if consented to by the
Representatives, subparagraph (4)) of Rule 424(b) not later than the
earlier of (A) the second business day following the execution and delivery
of this Agreement or (B) the fifteenth business day after the Effective
Date of the Initial Registration Statement. The Company will advise the
Representatives promptly of any such filing pursuant to Rule 424(b) and
provide satisfactory evidence to the Representatives of such timely filing.
If an Additional Registration Statement is necessary to register a portion
of the Offered Securities under the Act but the Effective Time thereof has
not occurred as of the execution and delivery of this Agreement, the
Company will file the additional registration statement or, if filed, will
file a post-effective amendment thereto with the Commission pursuant to and
in accordance with Rule 462(b) on or prior to 10:00 P.M., New York time, on
the date of this Agreement or, if earlier, on or prior to the time the
Final Prospectus is finalized and distributed to any Underwriter, or will
make such filing at such later date as shall have been consented to by the
Representatives.
(ii) Filing of Amendments; Response to Commission Requests. The
Company will promptly advise the Representatives of any proposal to amend
or supplement at any time the Initial Registration Statement, any
Additional Registration Statement or any Statutory Prospectus and will not
effect such amendment or supplementation without the Representatives'
consent (which consent shall not be unreasonably withheld); and the Company
will also advise the Representatives promptly of (i) the effectiveness of
any Additional Registration Statement (if its Effective Time is subsequent
to the execution and delivery of this Agreement), (ii) any amendment or
supplementation of a Registration Statement or any Statutory Prospectus,
(iii) any request by the Commission or its staff for any amendment to any
Registration Statement, for any supplement to any Statutory Prospectus or
for any additional information, (iv) the institution by the Commission of
any stop order proceedings in respect of a Registration Statement or the
threatening of any proceeding for that purpose, and (v) the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Offered Securities in any jurisdiction or the
institution or threatening of any proceedings for such purpose. The Company
will use its best efforts to prevent the issuance of any such stop order or
the suspension of any such qualification and, if issued, to obtain as soon
as possible the withdrawal thereof.
(iii) Continued Compliance with Securities Laws. If, at any time when
a prospectus relating to the Offered Securities is (or but for the
exemption in Rule 172 would be) required to be delivered under the Act by
any Underwriter or dealer, any event occurs as a result of which the Final
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary at any time to
amend the Registration Statement or supplement the Final Prospectus to
comply with the Act, the Company will promptly notify the Representatives
of such event and will promptly
20
prepare and file with the Commission and furnish, at its own expense, to
the Underwriters and the dealers and any other dealers upon request of the
Representatives, an amendment or supplement which will correct such
statement or omission or an amendment which will effect such compliance.
Neither the Representatives' consent to, nor the Underwriters' delivery of,
any such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 7 hereof.
(iv) Rule 158. As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally
available to its securityholders an earnings statement covering a period of
at least 12 months beginning after the Effective Date of the Initial
Registration Statement (or, if later, the Effective Date of the Additional
Registration Statement) which will satisfy the provisions of Section 11(a)
of the Act and Rule 158 under the Act. For the purpose of the preceding
sentence, "AVAILABILITY DATE" means the 45th day after the end of the
fourth fiscal quarter following the fiscal quarter that includes such
Effective Date, except that, if such fourth fiscal quarter is the last
quarter of the Company's fiscal year, "AVAILABILITY DATE" means the 90th
day after the end of such fourth fiscal quarter.
(v) Furnishing of Prospectuses. The Company will furnish to the
Representatives copies of each Registration Statement (three of which will
be signed and will include all exhibits and the remainder of which may be
provided without exhibits), each related Statutory Prospectus, and, so long
as a prospectus relating to the Offered Securities is (or but for the
exemption in Rule 172 would be) required to be delivered under the Act and
in no event exceeding nine months, the Final Prospectus and all amendments
and supplements to such documents, in each case in such quantities as the
Representatives may reasonably request. The Final Prospectus shall be so
furnished on or prior to 3:00 P.M., New York time, on the business day
following the execution and delivery of this Agreement. All other documents
shall be so furnished as soon as available. The Company will pay the
expenses of printing and distributing to the Underwriters all such
documents.
(vi) Blue Sky Qualifications. The Company will arrange for the
qualification of the Offered Securities for sale under the laws of such
jurisdictions as the Representatives designate and will continue such
qualifications in effect so long as required for the distribution.
(vii) Reporting Requirements. During the period of five years
hereafter, the Company will furnish to the Representatives and, upon
request, to each of the other Underwriters, as soon as practicable after
the end of each fiscal year, a copy of its annual report to stockholders
for such year; and the Company will furnish to the Representatives (i) as
soon as available, a copy of each report and any definitive proxy statement
of the Company filed with the Commission under the Exchange Act or mailed
to stockholders, and (ii) from time to time, such other information
concerning the Company as the Representatives may reasonably request.
However, so long as the Company is subject to the reporting requirements of
either Section 13 or Section 15(d) of the Exchange Act and is timely filing
reports with the Commission on its Electronic Data Gathering, Analysis and
Retrieval system ("XXXXX"), it is not required to furnish such reports or
statements to the Underwriters.
(viii) Payment of Expenses. The Company will pay all expenses incident
to the performance of its obligations under this Agreement, including but
not limited to any filing fees and other expenses incurred in connection
with qualification of the Offered Securities for sale under the laws of
such jurisdictions as the Representatives designate and the preparation and
printing of memoranda relating thereto, costs and expenses related to the
review by the National Association of Securities Dealers, Inc. of the
Offered Securities, costs and expenses relating to investor presentations
or any "road show" in connection with the offering and sale of the Offered
Securities including, without limitation, any travel expenses of the
Company's officers and employees and any other expenses of the Company
including the chartering of airplanes, fees and expenses
21
incident to listing the Offered Securities on the New York Stock Exchange
and other national and foreign exchanges, fees and expenses in connection
with the registration of the Offered Securities under the Exchange Act, and
expenses incurred in distributing preliminary prospectuses and the Final
Prospectus (including any amendments and supplements thereto) to the
Underwriters and for expenses incurred for preparing, printing and
distributing any Issuer Free Writing Prospectuses to investors or
prospective investors; provided that the Company will not be responsible
for the fees and disbursements of counsel to the Underwriters.
(ix) Use of Proceeds. The Company will use the net proceeds received
in connection with this offering in the manner described in the "Use of
Proceeds" section of the General Disclosure Package and the Company does
not intend to use any of the proceeds from the sale of the Offered
Securities hereunder to repay any outstanding debt owed to any affiliate of
any Underwriter.
(x) Absence of Manipulation. The Company will not take, directly or
indirectly, any action designed to or that would constitute or that might
reasonably be expected to cause or result in, stabilization or manipulation
of the price of any securities of the Company to facilitate the sale or
resale of the Offered Securities.
(xi) Taxes. The Company will indemnify and hold harmless the
Underwriters against any documentary, stamp or similar issue tax, including
any interest and penalties, on the creation, issue and sale of the Offered
Securities and on the execution and delivery of this Agreement. All
payments to be made by the Company hereunder shall be made without
withholding or deduction for or on account of any present or future taxes,
duties or governmental charges whatsoever unless the Company is compelled
by law to deduct or withhold such taxes, duties or charges. In that event,
the Company shall pay such additional amounts as may be necessary in order
that the net amounts received after such withholding or deduction shall
equal the amounts that would have been received if no withholding or
deduction had been made.
(xii) Restriction on Sale of Securities. For the period specified
below (the "LOCK-UP PERIOD"), the Company will not, directly or indirectly,
take any of the following actions with respect to its Securities, the
Ordinary Shares underlying the Securities, or any securities convertible
into or exchangeable or exercisable for any of its Securities or Ordinary
Shares ("LOCK-UP SECURITIES"): (i) offer, sell, issue, contract to sell,
pledge or otherwise dispose of Lock-Up Securities, (ii) offer, sell, issue,
contract to sell, contract to purchase or grant any option, right or
warrant to purchase Lock-Up Securities, (iii) enter into any swap, hedge or
any other agreement that transfers, in whole or in part, the economic
consequences of ownership of Lock-Up Securities, (iv) establish or increase
a put equivalent position or liquidate or decrease a call equivalent
position in Lock-Up Securities within the meaning of Section 16 of the
Exchange Act or (v) file with the Commission a registration statement under
the Act relating to Lock-Up Securities, or publicly disclose the intention
to take any such action, without the prior written consent of the
Representatives, and to cause each officer, director and shareholder of the
Company set forth on Schedule A hereto to furnish to the Representatives,
prior to the First Closing Date, a letter or letters, substantially in the
form of Exhibit E hereto (the "LOCK-UP AGREEMENTS"). The initial Lock-Up
Period will commence on the date hereof and continue for 180 days after the
date of the commencement of the public offering of the Offered Securities
or such earlier date that the Representatives consent to in writing;
provided, however, that if (1) during the last 17 days of the initial
Lock-Up Period, the Company releases earnings results or material news or a
material event relating to the Company occurs or (2) prior to the
expiration of the initial Lock-Up Period, the Company announces that it
will release earnings results during the 16-day period beginning on the
last day of the initial Lock-Up Period, then in each case the Lock-Up
Period will be extended until the expiration of the 18-day period beginning
on the date of release of the earnings results or the occurrence of the
materials news or material event, as applicable, unless the Representatives
waive, in writing, such extension. The Company will provide the
Representatives with notice of
22
any announcement described in clause (2) of the preceding sentence that
gives rise to an extension of the Lock-Up Period.
(xiii) Listing of Securities. The Company will use its best efforts to
have the Offered Securities accepted for listing on the New York Stock
Exchange and maintain the listing of the Offered Securities on the New York
Stock Exchange.
(xiv) Filing of Reports. The Company, during the period when a
prospectus (or, in lieu thereof, the notice referred to in Rule 173(a)
under the Securities Act) is required to be delivered under the Securities
Act in connection with the offer or sale of the Offered Securities, will
file all reports and other documents required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act and the Rules and Regulations within the time periods required
thereby.
(xvii) Performance of Obligations. The Company will use its best
efforts to do and perform all things required to be done or performed under
this Agreement by the Company prior to each Closing Date and to satisfy all
conditions precedent to the delivery of the Firm Securities and the
Optional Securities.
(xviii) No Stabilization. The Company will not take, and will cause
its affiliates (within the meaning of Rule 144 under the Securities Act)
not to take, directly or indirectly, any action which constitutes or is
designed to cause or result in, or which could reasonably be expected to
constitute, cause or result in, the stabilization or manipulation of the
price of any security to facilitate the sale or resale of the Shares.
(xix) SAFE Compliance. The Company shall comply with the SAFE Rules
and Regulations, and shall use best efforts to cause its option holders and
shareholders that are, or that are directly or indirectly owned or
controlled by, PRC residents or PRC citizens, to comply with the SAFE Rules
and Regulations applicable to them in connection with the Company,
including without limitation, requesting each shareholder and option
holder, that is, or is directly or indirectly owned or controlled by, a PRC
resident or PRC citizen to complete any registration and other procedures
required under applicable SAFE Rules and Regulations.
(xx) D&O Insurance. Prior to the First Closing Date, the Company will
purchase insurance covering its directors, officers for liabilities or
losses arising in connection with this offering, including, without
limitation, liabilities or losses arising under the Securities Act, the
Exchange Act and the Rules and Regulations.
(xxi) Local Security Laws. The Company shall arrange for the
qualification of the Offered Securities for sale under the foreign or state
securities or Blue Sky laws of such jurisdictions as the Representatives
designate and will continue such qualifications in effect so long as
required for the distribution.
(xxii) Transfer Restrictions. The Company shall at all times maintain
transfer restrictions (including the inclusion of legends in share
certificates, as may be required) with respect to the Company's Ordinary
Shares which are subject to transfer restrictions pursuant to this
Agreement and the Lock-Up Agreements and shall ensure compliance with such
restrictions on transfer of restricted Ordinary Shares. The Company shall
retain all share certificates which are by their terms subject to transfer
restrictions until such time as such transfer restrictions are no longer
applicable to such securities.
23
(xxiii) Deposit Agreement. The Company will comply with the terms of
the Deposit Agreement so that the ADRs evidencing the ADSs will be executed
by the Depositary and delivered to the Underwriters, pursuant to this
Agreement at the applicable Closing Date.
(xxiv) Cayman Islands Approvals. The Company agrees (i) not to attempt
to avoid any judgment obtained by it or denied to it in a court of
competent jurisdiction outside the Cayman Islands; (ii) following the
consummation of the offering of the Offered Securities, it will use its
best efforts to obtain and maintain all approvals required in the Cayman
Islands to pay and remit outside the Cayman Islands all dividends declared
by the Company and payable on the Ordinary Shares; and (iii) it will use
its best efforts to obtain and maintain all approvals required in the
Cayman Islands for the Company to acquire sufficient foreign exchange for
the payment of dividends and all other relevant purposes.
(xxv) The Company will use its best efforts to comply with
Xxxxxxxx-Xxxxx, and to use its best efforts to cause the Company's
directors and officers, in their capacities as such, to comply in with
Xxxxxxxx-Xxxxx.
(xxvi) OFAC. The Company will not directly or indirectly use the
proceeds of the Offered Securities hereunder, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture
partner or other person or entity, for the purpose of financing the
activities of any person currently subject to any U.S. sanctions
administered by OFAC.
(b) Each of the Selling Shareholders agrees with the several
Underwriters that:
(i) Such Selling Shareholder, severally and not jointly, will pay all
expenses incident to the performance of their respective obligations under,
and the consummation of the transactions contemplated by this Agreement,
including (i) any stamp duties, capital duties and stock transfer taxes, if
any, payable upon the sale of the Offered Securities by such Selling
Shareholder to the Underwriters, (ii) the fees and disbursements of their
respective local counsel and accountants, except for the fees and expenses,
if any, incurred by the Company's counsel on behalf of the Selling
Shareholders which will be borne by the Company and (iii) to the extent
applicable, any fees and expenses of the authorized agent for service of
process in the State of New York, County of New York in any action arising
out of or relating to this Agreement.
(ii) Such Selling Shareholder, severally and not jointly, will
indemnify and hold harmless the Underwriters against any documentary, stamp
or similar issue tax, including any interest and penalties, on the
creation, issue and sale of the Offered Securities by such Selling
Shareholder and on the execution and delivery of this Agreement. All
payments to be made by each Selling Shareholder hereunder shall be made
without withholding or deduction for or on account of any present or future
taxes, duties or governmental charges whatsoever unless such Selling
Shareholder or the Company is compelled by law to deduct or withhold such
taxes, duties or charges. In that event, a Selling Shareholder shall pay
such additional amounts as may be necessary in order that the net amounts
received after such withholding or deduction shall equal the amounts that
would have been received if no withholding or deduction had been made.
(iii) Such Selling Shareholder agrees during the relevant Lock-Up
Period not to (i) offer, sell, issue, contract to sell, pledge or otherwise
dispose of Lock-Up Securities, (ii) offer, sell, issue, contract to sell,
contract to purchase or grant any option, right or warrant to purchase
Lock-Up Securities, (iii) enter into any swap, hedge or any other agreement
that transfers, in whole or in part, the economic consequences of ownership
of Lock-Up Securities, (iv) establish or increase a put equivalent position
or liquidate or decrease a call equivalent position in Lock-Up Securities
within the meaning of Section 16 of the Exchange Act or (v) demand the
filing with the Commission of a registration statement under the Act
relating to Lock-Up Securities, or publicly
24
disclose the intention to take any such action, without the prior written
consent of the Representatives.
The initial Lock-Up Period for each Selling Shareholder will commence
on the date hereof and will continue and include the date 180 days after
the date hereof or such earlier date that the Representatives consent to in
writing; provided, however, that if (1) during the last 17 days of the
initial Lock-Up Period, the Company releases earnings results or material
news or a material event relating to the Company occurs or (2) prior to the
expiration of the initial Lock-up Period, the Company announces that it
will release earnings results during the 16-day period beginning on the
last day of the initial Lock-Up Period, then in each case the Lock-Up
Period will be extended until the expiration of the 18 day period beginning
on the date of release of the earnings results or the occurrence of the
material news or material event, as applicable, unless the Representatives
waive, in writing, such extension.
(iv) Sales of Company Securities. Prior to engaging in any transaction
or taking any other action that is subject to the terms of Section
6(b)(iii) during the period from the date of this Agreement to and
including the 34th day following the expiration of the relevant Lock-Up
Period, it will give notice thereof to the Company and will not consummate
such transaction or take any such action unless it has received written
confirmation from the Company that the relevant Lock-Up Period (as such may
have been extended pursuant to Section 7(a)) has expired.
(v) W-9 / W-8 Form. Each Selling Shareholder agrees to procure
delivery to the Representatives on or prior to the First Closing Date a
properly completed and executed United States Treasury Department Form W-9
or applicable Form W-8 (or other applicable form or statement specified by
Treasury Department regulations in lieu thereof).
(vi)Interest of Underwriters. That the Shares to be sold by the
Selling Shareholder hereunder is subject to the interest of the
Underwriters and that the obligations of the Selling Shareholder hereunder
shall not be terminated by any act of the Selling Shareholder, by operation
of law, by the death or incapacity of any individual Selling Shareholder
or, in the case of a trust, by the death or incapacity of any executor or
trustee or the termination of such trust, or the occurrence of any other
event.
(vii) Material Event. To notify promptly the Company and the
Representatives if, at any time prior to the date on which the distribution
of the Offered Securities as contemplated herein and in the Prospectus has
been completed, as determined by the Representatives, such Selling
Shareholder has knowledge of the occurrence of any event relating to such
Selling Shareholder as a result of which the Prospectus or the Registration
Statement, in each case as then amended or supplemented, would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein (except in the case of the
Registration Statement), in the light of the circumstances under which they
were made not misleading.
(viii) Further Agreement. To cooperate to the extent necessary to
cause the Registration Statement or any post-effective amendment thereto to
become effective at the earliest practical time and to do and perform all
things to be done and performed under this Agreement prior to any Closing
Date and to satisfy all conditions precedent of such Selling Shareholder to
the delivery of the Offered Securities and underlying Ordinary Shares to be
sold by such Selling Shareholder pursuant to this Agreement.
(c) The Controlling Person agrees with the several Underwriters:
(i) Material Event. To notify promptly the Company and the
Representatives if, at any time prior to the date on which the distribution of
the Offered Securities as contemplated herein and in the
25
Prospectus has been completed, as determined by the Representatives, the
Controlling Person has knowledge of the occurrence of any event as a result
of which the Prospectus or the Registration Statement, in each case as then
amended or supplemented, would include an untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein (, in
the light of the circumstances under which they were made not misleading.
6. Free Writing Prospectuses. The Company, the Controlling
Person and each Selling Shareholder represents and agrees that,
unless it obtains the prior consent of the Representatives, and each
Underwriter represents and agrees that, unless it obtains the prior consent
of the Company and the Representatives, it has not made and will not make
any offer relating to the Offered Securities that would constitute an
Issuer Free Writing Prospectus, or that would otherwise constitute a "free
writing prospectus," as defined in Rule 405, required to be filed with the
Commission. Any such free writing prospectus consented to by the Company
and the Representatives is hereinafter referred to as a "PERMITTED FREE
WRITING PROSPECTUS." Each of the Company and each Selling Shareholder
represent that it has treated and agrees that it will treat each Permitted
Free Writing Prospectus as an "issuer free writing prospectus," as defined
in Rule 433, and has complied and will comply with the requirements of
Rules 164 and 433 applicable to any Permitted Free Writing Prospectus,
including timely Commission filing where required, legending and record
keeping. The Company represents that is has satisfied and agrees that it
will satisfy the conditions in Rule 433 to avoid a requirement to file with
the Commission any electronic road show.
7. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties of the Company and each Selling Shareholder herein (as though made on
such Closing Date), to the accuracy of the statements of officers of the Company
and each Selling Shareholder, as the case may be, made pursuant to the
provisions hereof, to the performance by the Company and each Selling
Shareholder of its respective obligations hereunder and to the following
additional conditions precedent:
(a) Accountants' Comfort Letter and Reports. The Representatives shall
have received letters, dated, respectively, the date hereof and each
Closing Date, of Deloitte Touche Tohmatsu confirming that they are a
registered public accounting firm and independent public accountants within
the meaning of the Securities Laws and substantially in the form of
Schedule D hereto (except that, in any letter dated a Closing Date, the
specified date referred to in Schedule D) hereto shall be a date no more
than three days prior to such Closing Date).
The Company shall have received from Deloitte Touche Tohmatsu (and
furnished to the Representatives) an examination report with respect to
Management's Discussion and Analysis of Financial Condition and Results of
Operations of the Company for the fiscal years ended December 31, 2006, and
review report with respect to Management's Discussion and Analysis of
Financial Condition and Results of Operations of the Company for the
three-month period ended March 31, 2007 and the corresponding period for
the prior fiscal year, each in accordance with Statement on Standards for
Attestation Engagement No. 10 issued by the Auditing Standards Board of the
American Institute of Certified Public Accountants, and such examination
report shall be included in the Registration Statement and the General
Disclosure Package.
The Company shall have received and furnished to the Representatives
an examination report of Deloitte Touche Tohmatsu with respect to the
internal control over financial reporting of the Company dated no earlier
than the date of the accountants' report on the Company's most recent
annual financial statements.
26
(b) Effectiveness of Registration Statement. If the Effective Time of
the Additional Registration Statement (if any) is not prior to the
execution and delivery of this Agreement, such Effective Time shall have
occurred not later than 10:00 P.M., New York time, on the date of this
Agreement or, if earlier, the time the Final Prospectus is finalized and
distributed to any Underwriter, or shall have occurred at such later time
as shall have been consented to by the Representatives. The Final
Prospectus shall have been filed with the Commission in accordance with the
Rules and Regulations and Section 5(a) hereof. Prior to such Closing Date,
no stop order suspending the effectiveness of a Registration Statement
shall have been issued and no proceedings for that purpose shall have been
instituted or, to the knowledge of the Company or the Representatives,
shall be contemplated by the Commission.
(c) No Material Adverse Change. Subsequent to the execution and
delivery of this Agreement, there shall not have occurred (i) any change,
or any development or event involving a prospective change, in the
condition (financial or otherwise), results of operations, business,
properties or prospects of the Company and its subsidiaries taken as a
whole which, in the judgment of the Representatives, is material and
adverse and makes it impractical or inadvisable to market the Offered
Securities; (ii) if applicable, any downgrading in the rating of any debt
securities of the Company by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g)), or any public
announcement that any such organization has under surveillance or review
its rating of any debt securities of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any change in
either U.S., Xxxxxx Xxxxxxx, XXX, Xxxx Xxxx or international financial,
political or economic conditions or currency exchange rates or exchange
controls the effect of which is such as to make it, in the judgment of the
Representatives, impractical to market or to enforce contracts for the sale
of the Offered Securities, whether in the primary market or in respect of
dealings in the secondary market; (iv) any suspension or material
limitation of trading in securities generally on the New York Stock
Exchange, the Nasdaq Global Market, or any setting of minimum or maximum
prices for trading on such exchanges; (v) or any suspension of trading of
any securities of the Company on any exchange or in the over-the-counter
market; (vi) any banking moratorium declared by any U.S. federal, New York,
Cayman Islands, PRC or Hong Kong authorities; (vii) any major disruption of
settlements of securities, payment, or clearance services in the United
States, the Cayman Islands, the PRC, Hong Kong or any other country where
such securities are listed or (viii) any attack on, outbreak or escalation
of hostilities or act of terrorism involving the United States, the Cayman
Islands, the PRC or Hong Kong, any declaration of war by Congress or any
other national or international calamity or emergency if, in the judgment
of the Representatives, the effect of any such attack, outbreak,
escalation, act, declaration, calamity or emergency is such as to make it
impractical or inadvisable to market the Offered Securities or to enforce
contracts for the sale of the Offered Securities.
(d) Opinion of U.S. Counsel for Company. The Representatives shall
have received an opinion, dated such Closing Date, of Xxxxxx & Xxxxxxx LLP,
counsel for the Company, addressed to the Underwriters in substantially the
form set forth in Annex 1 hereto.
(e) Opinion of Selling Shareholders U.S. Counsel. The Representatives
shall have received an opinion, dated such Closing Date, of Xxxxxx &
Xxxxxxx LLP, U.S. counsel for the Selling Shareholders, addressed to the
Underwriters in substantially the form set forth in Annex 2 hereto.
(f) Opinion of Cayman Islands Counsel for Company. The Representatives
shall have received an opinion, dated such Closing Date, of Xxxxxx &
Calder, Cayman Islands counsel for the Company, addressed to the
Underwriters in substantially the form set forth in Annex 3 hereto.
(g) Opinion of British Virgin Islands Counsel for Company. The
Representatives shall have received an opinion, dated such Closing Date, of
Xxxxxx & Xxxxxx, British Virgin Islands
27
counsel for the Company, addressed to the Underwriters in substantially the
form set forth in Annex 4 hereto.
(h) Opinion of PRC Counsel for Company. The Representatives shall have
received an opinion, dated such Closing Date, of Xxx Xxx Law Firm, PRC
counsel for the Company, addressed to the Underwriters in substantially the
form set forth in Annex 5 hereto.
(i) Opinion of Local Counsel for each Selling Shareholder. The
Representatives shall have received an opinion, dated such Closing Date, of
the counsel for each Selling Shareholder for its jurisdiction of
incorporation or organization, addressed to the Underwriters in
substantially the form set forth in Annex 6 hereto.
(j) Opinion of Depositary's Counsel. The Representatives shall have
received an opinion, dated such Closing Date, of Xxxxxxx, Xxxxxxx &
Associates LLP, counsel for the Depositary, addressed to the Underwriters
in substantially the form set forth in Annex 7 hereto.
(k) Opinion of U.S. Counsel for Underwriters. The Representatives
shall have received from Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, U.S. counsel for
the Underwriters, such opinion or opinions, dated such Closing Date, with
respect to such matters as the Representatives may require, and the Company
and the Selling Shareholders shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters. In rendering such opinion, Xxxxxxx Xxxxxxx & Xxxxxxxx LLP may
rely as to all matters governed by Cayman Islands law upon the opinion of
Xxxxxx & Calder referred to above, all matters governed by British Virgin
Islands law upon the opinion of Xxxxxx & Xxxxxx referred to above, all
matters governed by Hong Kong law upon the opinion of [_____] referred to
above, and all matters governed by PRC law upon the opinions of Xxx Xxx Law
Firm and Commerce & Finance Law Offices, each as referred to above.
(l) Opinion of PRC Counsel for Underwriters. The Representatives shall
have received from Commerce & Finance Law Offices, PRC counsel for the
Underwriters, such opinion or opinions, dated such Closing Date, with
respect to such matters as the Representatives may require, and the Company
and the Selling Shareholders shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters.
(m) Officer's Certificate. The Representatives shall have received a
certificate, dated such Closing Date, of an executive officer of the
Company and a principal financial or accounting officer of the Company in
which such officers shall state that: the representations and warranties of
the Company in this Agreement are true and correct; the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to such Closing Date; no stop
order suspending the effectiveness of any Registration Statement has been
issued and no proceedings for that purpose have been instituted or, to the
best of their knowledge and after reasonable investigation, are
contemplated by the Commission; the Additional Registration Statement (if
any) satisfying the requirements of subparagraphs (1) and (3) of Rule
462(b) was timely filed pursuant to Rule 462(b), including payment of the
applicable filing fee in accordance with Rule 111(a) or (b) of Regulation
S-T of the Commission; and, subsequent to the date of the most recent
financial statements in the General Disclosure Package, there has been no
material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or
otherwise), results of operations, business, properties or prospects of the
Company and its subsidiaries taken as a whole except as set forth in the
General Disclosure Package or as described in such certificate.
(n) Controlling Person's Certificate. The Representative shall
have received a certificate, dated such Closing Date, of the Controlling
Person in which the Controlling
28
Person shall state that: the representations and warranties of the
Controlling Person in this Agreement are true and correct; and the
Controlling Person has complied with all agreements and satisfied all
conditions on their part to be performed or satisfied hereunder at or prior
to such Closing Date.
(o) Selling Shareholders' Certificates. The Representative shall have
received a certificate, dated such Closing Date, of an authorized
representative of each Selling Shareholder in which such authorized
representative, to the best of its knowledge after reasonable
investigation, shall state that: the representations and warranties of such
Selling Shareholder in this Agreement are true and correct; and the Selling
Shareholders have complied with all agreements and satisfied all conditions
on their part to be performed or satisfied hereunder at or prior to such
Closing Date.
(p) Lock-up Agreements. On or prior to the date hereof, the
Representatives shall have received the Lock-up Agreements.
(q) Depositary's Certificate. The Depositary shall have furnished or
caused to be furnished to the Underwriters a certificate satisfactory to
the Representative of one of its authorized officers with respect to the
deposit with it of the Ordinary Shares represented by the Offered
Securities against issuance of the ADRs evidencing the Offered Securities,
the execution, issuance, countersignature and delivery of the ADRs
evidencing the Offered Securities pursuant to the Deposit Agreement and
such other matters related thereto as the Representative may reasonably
request.
(r) Execution of Deposit Agreement. The Company and the Depositary
shall have executed and delivered the Deposit Agreement and the Deposit
Agreement shall be in full force and effect and the Company and the
Depositary shall have taken all action necessary to permit the deposit of
the Ordinary Shares and the issuance of the Offered Securities in
accordance with the Deposit Agreement.
(s) Form 1099. The Custodian shall have delivered to the
Representative a letter stating that it will deliver to each Selling
Shareholder a United States Treasury Department Form 1099 (or other
applicable form or statement specified by the United States Treasury
Department regulations in lieu thereof) on or before January 31 of the year
following the date of this Agreement.
(t) Form W-9 / W-8. On or prior to the First Closing Date, the
Representative shall have received from the Custodian United States
Treasury Department Form W-9 or the applicable Form W-8 (or other
applicable form or statement specified by Treasury Department regulations
in lieu thereof) properly completed and executed by each Selling
Shareholder.
(u) The Offered Securities shall have been approved to be listed on
the New York Stock Exchange.
(v) On or prior to the First Closing Date, the Offered Securities
shall be eligible for clearance and settlement through the facilities of
DTC.
(w) No Issuer Free Writing Prospectus, Prospectus or amendment or
supplement to the Registration Statement, the ADS Registration Statement or
the Prospectus shall have been filed to which the Representatives object in
writing.
(x) Between the time of execution of this Agreement and such Closing
Date, no material adverse change or any development involving a prospective
material adverse change in the earnings, business, properties, management,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, shall occur or become known.
29
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as the Representatives reasonably
requests. The Representatives may in their sole discretion waive on behalf of
the Underwriters compliance with any conditions to the obligations of the
Underwriters hereunder, whether in respect of an Optional Closing Date or
otherwise.
8. Indemnification and Contribution. (a) Indemnification of Underwriters by
Company and Controlling Person. Each of the Company and the Controlling Person,
jointly and severally, will indemnify and hold harmless each Underwriter, its
partners, members, directors, officers, employees, agents, affiliates and each
person, if any, who controls such Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act (each, an "INDEMNIFIED PARTY"),
against any and all losses, claims, damages or liabilities, joint or several, to
which such Indemnified Party may become subject, under the Act, the Exchange
Act, other Federal or state statutory law or regulation or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any part of any Registration Statement at any
time, any Statutory Prospectus as of any time, the Final Prospectus or any
Issuer Free Writing Prospectus, or arise out of or are based upon the omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Indemnified Party for any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending against any
loss, claim, damage, liability, action, litigation, investigation or proceeding
whatsoever (whether or not such Indemnified Party is a party thereto), whether
threatened or commenced, and in connection with the enforcement of this
provision with respect to any of the above as such expenses are incurred;
provided, however, that neither the Company nor the Controlling Person will be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives specifically for use
therein, it being understood and agreed that the only such information furnished
by any Underwriter consists of the information described as such in subsection
(c) below, and provided further that the aggregate liability of the Controlling
Person pursuant to this subsection (a) shall not exceed the sum of (x) the
product of (i) 95%, multiplied by (ii) the number of Offered Securities sold by
On Chance Inc. as set forth on Schedule B hereto and (iii) the public offering
price per Offered Security as set forth in Section 3 hereof, plus (y) the
product of (i) 48.96%, multiplied by (ii) the number of Offered Securities sold
by Jun Heng Investment Limited as set forth on Schedule B hereto and (iii) the
public offering price per Offered Security as set forth in Section 3 hereof.
(b) Indemnification of Underwriters by the Selling Shareholders. The
Selling Shareholder, severally and not jointly, will indemnify and hold harmless
each Indemnified Party against any and all losses, claims, damages or
liabilities, joint or several, to which such Indemnified Party may become
subject, under the Act, the Exchange Act, other Federal or state statutory law
or regulation or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any part of any Registration Statement at any time, any Statutory Prospectus as
of any time, the Final Prospectus or any Issuer Free Writing Prospectus, or
arise out of or are based upon the omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Indemnified Party for any legal
or other expenses reasonably incurred by such Indemnified Party in connection
with investigating or defending against any loss, claim, damage, liability,
action, litigation, investigation or proceeding whatsoever (whether or not such
Indemnified Party is a party thereto), whether threatened or commenced, and in
connection with the enforcement of this provision with respect to any of the
above as such expenses are incurred; provided, however, that the Selling
Shareholder will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (c) below; provided, further, that a
Selling Shareholder will only be liable to the extent that any
30
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents based upon written information furnished to the Company by
such Selling Shareholder; and provided further that the liability of each
indemnifying Selling Shareholder pursuant to this subsection shall not exceed
the product of the number of shares of Offered Securities sold by such
indemnifying Selling Shareholder multiplied by the price per share of Offered
Securities set forth in Section 3 hereof.
(c) Indemnification of the Company, the Controlling Person and the Selling
Shareholders. Each Underwriter will severally and not jointly indemnify and hold
harmless the Company, each of its directors and each of its officers who signs a
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, the
Controlling Person and each Selling Shareholder (each, an "UNDERWRITER
INDEMNIFIED PARTY"), against any losses, claims, damages or liabilities to which
such Underwriter Indemnified Party may become subject, under the Act, the
Exchange Act, other Federal or state statutory law or regulation or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any part of any Registration
Statement at any time, any Statutory Prospectus as of any time, the Final
Prospectus, or any Issuer Free Writing Prospectus, or arise out of or are based
upon the omission or the alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through the Representatives specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by such Underwriter
Indemnified Party in connection with investigating or defending against any such
loss, claim, damage, liability, action, litigation, investigation or proceeding
whatsoever (whether or not such Underwriter Indemnified Party is a party
thereto), whether threatened or commenced, based upon any such untrue statement
or omission, or any such alleged untrue statement or omission as such expenses
are incurred, it being understood and agreed that the only such information
furnished by any Underwriter consists of (i) the following information in the
Final Prospectus furnished on behalf of each Underwriter: the concession and
reallowance figures appearing in the fourth paragraph under the caption
"Underwriting" and the information contained in the fourteenth, fifteenth and
sixteenth paragraphs under the caption "Underwriting".
(d) Actions against Parties; Notification. Promptly after receipt by an
indemnified party under this Section or Section 10 of notice of the commencement
of any action, such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under subsection (a), (b) or (c) above or
Section 10, notify the indemnifying party of the commencement thereof; but the
failure to notify the indemnifying party shall not relieve it from any liability
that it may have under subsection (a), (b) or (c) above or Section 10 except to
the extent that it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure; and provided further that the
failure to notify the indemnifying party shall not relieve it from any liability
that it may have to an indemnified party otherwise than under subsection (a),
(b) or (c) above or Section 10. In case any such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section or Section 10, as the case may be, for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened action in respect of
which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party unless such settlement (i)
includes an unconditional release of such indemnified party from all liability
on any claims
31
that are the subject matter of such action and (ii) does not include a statement
as to, or an admission of, fault, culpability or a failure to act by or on
behalf of an indemnified party.
(e) Contribution. If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a), (b) or (c)
above (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company, the Controlling Person and the Selling Shareholders on
the one hand and the Underwriters on the other from the offering of the
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company, the Controlling Person and the Selling Shareholders on the
one hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities as well
as any other relevant equitable considerations. The relative benefits received
by the Company, the Controlling Person and the Selling Shareholders on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company, the Controlling Person and the Selling
Shareholders bear to the total underwriting discounts and commissions received
by the Underwriters. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company, the Controlling Person and the Selling
Shareholders or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this subsection (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this subsection (e).
Notwithstanding the provisions of this subsection (e), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(e) to contribute are several in proportion to their respective underwriting
obligations and not joint. The Company, the Controlling Person the Selling
Shareholders and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this Section 8(e) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in this Section 8(e).
(f) Control Persons. The obligations of the Company, the Controlling Person
and the Selling Shareholders under this Section or Section 10 shall be in
addition to any liability which the Company, the Controlling Person and the
Selling Shareholders may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls any Underwriter or the QIU
(as hereinafter defined) within the meaning of the Act; and the obligations of
the Underwriters under this Section shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each director of the Company, to each officer of the
Company who has signed a Registration Statement and to each person, if any, who
controls the Company within the meaning of the Act.
9. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities hereunder on either the First
or any Optional Closing Date and the aggregate number of Offered Securities that
such defaulting Underwriter or Underwriters agreed but failed to purchase does
not exceed 10% of the total number of Offered Securities that the Underwriters
are obligated to purchase on such Closing Date, Credit Suisse may make
arrangements satisfactory to the Company for
32
the purchase of such Offered Securities by other persons, including any of the
Underwriters, but if no such arrangements are made by such Closing Date, the
non-defaulting Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Offered Securities that such
defaulting Underwriters agreed but failed to purchase on such Closing Date. If
any Underwriter or Underwriters so default and the aggregate number of Offered
Securities with respect to which such default or defaults occur exceeds 10% of
the total number of Offered Securities that the Underwriters are obligated to
purchase on such Closing Date and arrangements satisfactory to the
Representatives and the Company and the Selling Shareholders for the purchase of
such Offered Securities by other persons are not made within 36 hours after such
default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Selling Shareholders, except as
provided in Section 11 (provided that if such default occurs with respect to
Optional Securities after the First Closing Date, this Agreement will not
terminate as to the Firm Securities or any Optional Securities purchased prior
to such termination). As used in this Agreement, the term "Underwriter" includes
any person substituted for an Underwriter under this Section. Nothing herein
will relieve a defaulting Underwriter from liability for its default.
10. Qualified Independent Underwriter. The Company hereby confirms that at
its request Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx has without compensation acted
as "qualified independent underwriter" (in such capacity, the "QIU") within the
meaning of Rule 2720 of the Conduct Rules of the National Association of
Securities Dealers, Inc. in connection with the offering of the Offered
Securities. The Company will indemnify and hold harmless the QIU, its directors,
officers, employees and agents and each person, if any, who controls such
Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act against any and all losses, claims, damages or liabilities,
joint or several, to which the QIU may become subject, under the Act, the
Exchange Act, other Federal or state statutory law or regulation or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon the QIU's acting (or alleged failing to
act) as such "qualified independent underwriter" and will reimburse the QIU for
any legal or other expenses reasonably incurred by the QIU in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred.
11. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers on behalf of the Company, of the Selling Shareholders
and of the several Underwriters set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation, or
statement as to the results thereof, made by or on behalf of any Underwriter,
any Selling Shareholder or the Company or, in each case, any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Offered Securities. If the purchase of
the Offered Securities by the Underwriters is not consummated for any reason
other than solely because of the termination of this Agreement pursuant to
Section 9 hereof, the Company and the Selling Shareholders will reimburse the
Underwriters for all out-of-pocket expenses (including fees and disbursements of
counsel) reasonably incurred by them in connection with the offering of the
Offered Securities, and the respective obligations of the Company, the Selling
Shareholders and the Underwriters pursuant to Section 8 hereof and the
obligations of the Company pursuant to Section 10 hereof shall remain in effect.
In addition, if any Offered Securities have been purchased hereunder, the
representations and warranties in Section 2 and all obligations under Section 5
shall also remain in effect.
12. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
the Representatives, Credit Suisse Securities (USA) LLC, Eleven Madison Avenue,
New York, N.Y. 10010-3629, Attention: LCD-IBD, and Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated, Four World Financial Center, 000 Xxxxx Xxxxxx, Xxx Xxxx,
X.X. 00000, Attention: Equity Capital Markets, if sent to the Company, the
Controlling Person, or any Selling Shareholder, will be mailed, delivered
or telegraphed and confirmed to it at E-House (China) Holdings Limited, 17/F,
Merchandise Harvest Building (East), Xx. 000 Xxxxx Xxxxxxx Xxxx, Xxxxxxxx,
000000, Xxxxxx'x Xxxxxxxx of China, Attention: Chief Financial Officer;
provided, however, that any notice
33
to an Underwriter pursuant to Section 8 will be mailed, delivered by hand or
sent via facsimile and confirmed to such Underwriter.
13. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 8, and no other person
will have any right or obligation hereunder.
14. Representation of Underwriters. The Representatives will act for the
several Underwriters in connection with this financing, and any action under
this Agreement taken by the Representatives jointly or by either Representative
individually will be binding upon all the Underwriters.
15. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
16. Absence of Fiduciary Relationship. The Company, the Controlling
Person and each Selling Shareholder acknowledge and agree that:
(a) No Other Relationship. The Representatives have been retained
solely to act as underwriters in connection with the sale of Offered Securities
and that no fiduciary, advisory or agency relationship between the Company or
the Selling Shareholders on the one hand and the Representatives on the other
has been created in respect of any of the transactions contemplated by this
Agreement or the Final Prospectus, irrespective of whether the Representatives
have advised or is advising the Company, the Controlling Person or the
Selling Shareholders on other matters;
(b) Arms' Length Negotiations. The price of the Offered Securities set
forth in this Agreement was established by the Company and the Selling
Shareholders following discussions and arms-length negotiations with the
Representatives, and the Company and the Selling Shareholders are capable of
evaluating and understanding and understands and accept the terms, risks and
conditions of the transactions contemplated by this Agreement;
(c) Absence of Obligation to Disclose. The Company, the Controlling
Person and the Selling Shareholders have been advised that the Representatives
and their affiliates are engaged in a broad range of transactions which may
involve interests that differ from those of the Company, the Controlling Person
and the Selling Shareholders, and that the Representatives have no obligation to
disclose such interests and transactions to the Company, the Controlling Person
or the Selling Shareholders by virtue of any fiduciary, advisory or agency
relationship; and
(d) Waiver. The Company, the Controlling Person and each Selling
Shareholder waive, to the fullest extent permitted by law, any claims any of
them may have against the Representatives for breach of fiduciary duty or
alleged breach of fiduciary duty and agree that the Representatives shall have
no liability (whether direct or indirect) to the Company, the Controlling
Person or the Selling Shareholders in respect of such a fiduciary duty
claim or to any person asserting a fiduciary duty claim on behalf of or in right
of the Company, the Controlling Person, or any Selling Shareholder,
including their respective stockholders, employees or creditors.
17. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company, the Controlling Person and each Selling Shareholder
hereby submit to the non-exclusive jurisdiction of the Federal and state courts
in the Borough of Manhattan in The City of New York in any suit or proceeding
arising out of or relating to this Agreement or the transactions contemplated
34
hereby. The Company, the Controlling Person and each Selling Shareholder
irrevocably and unconditionally waive any objection to the laying of venue of
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby in Federal and state courts in the Borough of
Manhattan in The City of New York and irrevocably and unconditionally waive and
agree not to plead or claim in any such court that any such suit or proceeding
in any such court has been brought in an inconvenient forum. The Company, the
Controlling Person and each Selling Shareholder irrevocably appoint CT
Corporation System, currently of 000 Xxxxxx Xxxxxx, Xxx Xxxx, XX, 00000, as each
of their authorized agent in the Borough of Manhattan in The City of New York
upon which process may be served in any such suit or proceeding, and agree that
service of process upon such agent, and written notice of said service to the
Company, the Controlling Person or any Selling Shareholder by the person
serving the same to the address provided in Section 12 hereof, shall be deemed
in every respect effective service of process upon the Company, the Controlling
Person or such Selling Shareholder in any such suit or proceeding. The
Company, the Controlling Person and each Selling Shareholder further agree
to take any and all action as may be necessary to maintain such designation and
appointment of such agent in full force and effect for a period of seven years
from the date of this Agreement.
The obligation of the Company, the Controlling Person and the Selling
Shareholders pursuant to this Agreement in respect of any sum due to any
Underwriter shall, notwithstanding any judgment in a currency other than United
States dollars, not be discharged until the first business day, following
receipt by such Underwriter of any sum adjudged to be so due in such other
currency, on which (and only to the extent that) such Underwriter may in
accordance with normal banking procedures purchase United States dollars with
such other currency; if the United States dollars so purchased are less than the
sum originally due to such Underwriter hereunder, the Company, the Controlling
Person and the Selling Shareholders agree, as a separate obligation and
notwithstanding any such judgment, to indemnify such Underwriter against such
loss. If the United States dollars so purchased are greater than the sum
originally due to such Underwriter hereunder, such Underwriter agrees to pay to
the Company, the Controlling Person and the Selling Shareholders an amount
equal to the excess of the dollars so purchased over the sum originally due to
such Underwriter hereunder.
35
If the foregoing is in accordance with the Representatives' understanding
of our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement among the Company, the
Controlling Person, the Selling Shareholders and the several Underwriters
in accordance with its terms.
Very truly yours,
E-HOUSE (CHINA) HOLDINGS LIMITED
By
-------------------------------------
Name:
Title:
CONTROLLING PERSON
By
-------------------------------------
Xxx Xxxx
SELLING SHAREHOLDERS
By
-------------------------------------
Name:
Attorney-in-fact for and on behalf of
the Selling Shareholders
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
Acting on behalf of themselves and as
the Representatives of the several
Underwriters
By CREDIT SUISSE SECURITIES (USA) LLC
By:
---------------------------------
Name:
Title:
By XXXXXXX XXXXX, XXXXXX XXXXXX & XXXXX
INCORPORATED
By:
---------------------------------
Name:
Title:
36
SCHEDULE A
UNDERWRITERS
NUMBER OF NUMBER OF
UNDERWRITER FIRM SECURITIES OPTIONAL SECURITIES*
----------- --------------- --------------------
Credit Suisse Securities (USA) LLC.......
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated.................
CIBC World Markets Corp. ................
Lazard Capital Markets LLC...............
--------------- --------------------
Total.................................
=============== ====================
* Assumes option is exercised in full.
37
SCHEDULE B
SELLING SHAREHOLDERS
NUMBER OF NUMBER OF OPTIONAL
FIRM SECURITIES NET PROCEEDS - SECURITIES NET PROCEEDS -
SELLING SHAREHOLDER TO BE SOLD FIRM SECURITIES TO BE SOLD* OPTIONAL SECURITIES*
------------------- --------------- --------------- ------------------ --------------------
On Chance Inc. .................
Jun Heng Investment Limited.....
--------------- --------------- ------------------ --------------------
Total........................ $ $
=============== =============== ================== ====================
* Assumes option is exercised in full.
38
SCHEDULE C
1. GENERAL USE FREE WRITING PROSPECTUSES (INCLUDED IN THE GENERAL DISCLOSURE
PACKAGE)
"General Use Issuer Free Writing Prospectus" includes each of the
following documents:
[1.]
2. OTHER INFORMATION INCLUDED IN THE GENERAL DISCLOSURE PACKAGE
The following information is also included in the General Disclosure
Package:
1. The initial price to the public of the Offered Securities.
39
SCHEDULE D
The Representatives shall have received letters, dated, respectively, the
date hereof and the First Closing Date, of Deloitte Touche Tohmatsu, confirming
that they are a registered public accounting firm and independent public
accountants within the meaning of the Securities Laws to the effect that:
(i) in their opinion the audited consolidated financial statements and
schedules examined by them and included in the Registration Statements and
the General Disclosure Package comply as to form in all material respects
with the applicable accounting requirements of the Securities Laws;
(ii) with respect to the periods covered by the unaudited quarterly
consolidated financial statements included in the Registration Statements
and the General Disclosure Package, they have performed the procedures
specified by the American Institute of Certified Public Accountants for a
review of interim financial information as described in XX 000, Xxxxxxx
Financial Information, on the unaudited quarterly consolidated financial
statements (including the noted thereto) of the Company and its
consolidated subsidiaries included in the Registration Statements and the
General Disclosure Package, and have made inquiries of certain officials of
the Company who have responsibility for financial and accounting matters of
the Company and its consolidated subsidiaries as to whether such unaudited
quarterly consolidated financial statements comply as to form in all
material respects with the applicable accounting requirements of the
Securities Act and the related published rules and regulations; they have
read the latest unaudited monthly consolidated financial statements
(including the notes thereto) of the Company and its consolidated
subsidiaries made available by the Company] and the minutes of the meetings
of the stockholders, Board of Directors and committees of the Board of
Directors of the Company; and have made inquiries of certain officials of
the Company who have responsibility for financial and accounting matters of
the Company and its consolidated subsidiaries as to whether the unaudited
monthly financial statements are stated on a basis substantially consistent
with that of the audited consolidated financial statements included in the
Registration Statement and General Disclosure Package; and on the basis
thereof, nothing came to their attention which caused them to believe that:
(A) the unaudited financial statements included in the
Registration Statements or the General Disclosure Package do not
comply as to form in all material respects with the applicable
accounting requirements of the Securities Laws, or that any material
modifications should be made to the unaudited quarterly consolidated
financial statements for them to be in conformity with generally
accepted accounting principles;
(B) with respect to the period subsequent to the date of the most
recent unaudited quarterly consolidated financial statements included
in the General Disclosure Package, at a specified date at the end of
the most recent month, there were any increases in the short-term debt
or long-term debt of the Company and its consolidated subsidiaries, or
any change in stockholders' equity or the consolidated capital stock
of the Company and its consolidated subsidiaries or any decreases in
the net current assets or net assets of the Company and its
consolidated subsidiaries, as compared with the amounts shown on the
latest balance sheet included in the General Disclosure Package; or
for the period from the day after the date of the most recent
unaudited quarterly consolidated financial statements for such
entities included in the General Disclosure Package to such specified
date, there were any decreases, as compared with the corresponding
period in the preceding year, in consolidated net sales, net operating
income, in the total or per share amounts of income
40
before extraordinary items or of net income or any increases as
compared to the corresponding period in the preceding year, in
operating costs and expenses of the Company and its consolidated
subsidiaries, except for such changes, increases or decreases set
forth in such letter which the General Disclosure Package discloses
have occurred or may occur;
(iii) With respect to any period as to which officials of the Company
have advised that no consolidated financial statements as of any date or
for any period subsequent to the specified date referred to in (ii)(B)
above are available, they have made inquiries of certain officials of the
Company who have responsibility for the financial and accounting matters of
the Company and its consolidated subsidiaries as to whether, at a specified
date not more than three business days prior to the date of such letter,
there were any increases in the short-term debt or long-term debt of the
Company and its consolidated subsidiaries, or any change in stockholders'
equity or the consolidated capital stock of the Company and its
consolidated subsidiaries or any decreases in the net current assets or net
assets of the Company and its consolidated subsidiaries, as compared with
the amounts shown on the most recent balance sheet for such entities
included in the General Disclosure Package; or for the period from the day
after the date of the most recent unaudited quarterly financial statements
for such entities included in the General Disclosure Package to such
specified date, there were any decreases, as compared with the
corresponding period in the preceding year, in net sales, net operating
income, in the total or per share amounts of income before extraordinary
items or of net income or any increases as compared to the corresponding
period in the preceding year, in operating costs and expenses of the
Company and its consolidated subsidiaries and, on the basis of such
inquiries and the review of the minutes described in paragraph (ii) above,
nothing came to their attention which caused them to believe that there was
any such change, increase, or decrease, except for such changes, increases
or decreases set forth in such letter which the General Disclosure Package
discloses have occurred or may occur; and
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial and statistical
information contained in the Registration Statements, each Issuer Free
Writing Prospectus (other than any Issuer Free Writing Prospectus that is
an "electronic road show," as defined in Rule 433(h)) and the General
Disclosure Package (in each case to the extent that such dollar amounts,
percentages and other financial and statistical information are derived
from the general accounting records of the Company and its subsidiaries or
are derived directly from such records by analysis or computation) with the
results obtained from inquiries, a reading of such general accounting
records and other procedures specified in such letter and have found such
dollar amounts, percentages and other financial and statistical information
to be in agreement with such results.
For purposes of this Schedule, if the Effective Time of the Additional
Registration Statement is subsequent to the execution and delivery of this
Agreement, "REGISTRATION STATEMENTS" shall mean the Initial Registration
Statement and the Additional Registration Statement as proposed to be filed
shortly prior to its Effective Time.
41
SCHEDULE E
FORM OF SELLING SHAREHOLDER LOCK-UP AGREEMENT
CREDIT SUISSE SECURITIES (USA) LLC,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
Two World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, X.X. 00000
As Representatives of the several Underwriters named in
Schedule A attached to the Underwriting Agreement
[DATE], 2007
Ladies and Gentlemen:
This Lock-Up Agreement is being delivered to you in connection with the
proposed Underwriting Agreement (the "UNDERWRITING AGREEMENT") to be entered
into by E-House (China) Holdings Limited (the "COMPANY") and you, as
Representatives of the several Underwriters named therein, with respect to the
public offering (the "OFFERING") of American depositary shares (the "ADSS"),
each representing one ordinary share, par value US$0.001 per share, of the
Company (the "ORDINARY SHARES").
In order to induce you to enter into the Underwriting Agreement, the
undersigned agrees that during the Lock-Up Period (as described below) not to
(i) 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 Ordinary Shares or ADSs or any securities convertible into or
exercisable or exchangeable for Ordinary Shares or ADSs or enter into a
transaction which would have the same effect or (ii) enter into any swap, hedge,
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Ordinary Shares or ADSs, whether any
such aforementioned transaction is to be settled by delivery of Ordinary Shares,
ADSs or such other securities, in cash or otherwise, (iii) demand the filing of
a registration statement pursuant to a shareholder's agreement or otherwise, or
(iv) publicly disclose the intention to make any such offer, sale, pledge, or
disposition, or enter into any such transaction, swap, hedge, or other
arrangement, without, in each case as mentioned in (i), (ii), (iii) or (iv)
above, the prior written consent of the Representatives, except (A) the Ordinary
Shares in the form of ADSs to be sold by the Selling Shareholder hereunder or
(B) the automatic conversion of the Preferred Shares upon the consummation of
the Offering. The initial Lock-Up Period will commence on the date of the final
Prospectus covering the Offering (the "PROSPECTUS") and will continue and
include the date 180 days after the date of the Prospectus or such earlier date
that the Representatives consent to in writing; provided, however, that if (1)
during the last 17 days of the initial Lock-Up Period, the Company releases
earnings results or material news or a material event relating to the Company
occurs or (2) prior to the expiration of the initial Lock-up Period, the Company
announces that it will release earnings results during the 16-day period
beginning on the last day of the initial Lock-Up Period, then in each case the
Lock-Up Period will be extended until the expiration of the 18 day period
beginning on the date of release of the earnings results or the occurrence of
the material news or material event, as applicable, unless the Representatives
waive, in writing, such extension.
Very truly yours,
----------------------------------------
(Name)
----------------------------------------
(Address)
SCHEDULE F
LIST OF MATERIAL CONTRACTS
SCHEDULE G
LIST OF OPERATING SUBSIDIARIES
ANNEX 1
FORM OF OPINION OF XXXXXX & XXXXXXX LLP, U.S. COUNSEL TO THE COMPANY
(i) Authorization of Agreements. The Underwriting Agreement has been
duly executed and delivered by the Company, in accordance with the laws of
the State of New York.
(ii) Authorization of Deposit Agreements. The Deposit Agreement has
been duly executed and delivered by the Company in accordance with the laws
of the State of New York, and is the legally valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms.
(iii) Offered Securities. Upon due issuance and delivery by the
Depositary of ADRs evidencing ADSs against the deposit of the Ordinary
Shares in respect thereof in accordance with the terms of the Deposit
Agreement and payment therefor in accordance with the terms of the
Underwriting Agreement, such ADRs will be duly and validly issued and will
entitle the holders thereof to the rights specified therein and in the
Deposit Agreement.
(iv) No Violation. The execution and delivery of the Underwriting
Agreement and the Deposit Agreement by the Company, the deposit of the
Ordinary Shares with the Depositary against issuance of the ADSs, and the
issuance and sale of the ADSs by the Company to the Underwriters pursuant
to the Underwriting Agreement and the Deposit Agreement do not:
(1) result in the breach of or a default under any of the
Specified Agreements which are expressly governed by the
laws of the State of New York and to which the Company or
any of its consolidated subsidiaries is a party;
(2) violate any United States federal or New York statute, rule
or regulation applicable to the Company; or
(3) require any consents, approvals or authorizations to be
obtained by the Company from, or any registrations,
declarations or filings to be made by the Company with, any
governmental authority under any United States federal or
New York statute, rule or regulation applicable to the
Company on or prior to the date hereof that have not been
obtained or made.
(v) Effectiveness. The Registration Statements have become effective
under the Act. With your consent, based solely on a telephonic confirmation
by a member of the Staff of the Commission on ________, 2007, no stop order
suspending the effectiveness of the Registration Statements has been issued
under the Act and no proceedings therefor have been initiated or are
pending or contemplated by the Commission. The Prospectus has been filed in
accordance with Rule 424 under the Act.
(vi) Compliance with Registration Requirements. The F-1 Registration
Statement, at _________, 2007, including the information deemed to be a
part thereof pursuant to Rule 430A under the Act, and the Prospectus, as of
its date, each appeared on their face to be appropriately responsive in all
material respects to the applicable form requirements for registration
statements on Form F-1 under the Act and the rules and regulations of the
Commission thereunder; it being understood, however, that we express no
view with respect to Regulation S T or the financial statements, schedules,
or other
financial data, included in, or omitted from, the F-1 Registration
Statement or the Prospectus; and the F-6 Registration Statement, at
___________, 2007, appeared on its face to be appropriately responsive in
all material respects to the applicable form requirements for registration
statements on Form F-6 under the Act and the rules and regulations of the
Commission thereunder. For purposes of this paragraph, we have assumed that
the statements made in the Registration Statements and the Prospectus are
correct and complete.
(vii) Accurate Summary. The statements in the Preliminary Prospectus
and the Prospectus under the caption "Description of American Depositary
Shares," insofar as they purport to describe or summarize the terms of the
ADSs and the Deposit Agreement, and under the caption "Shares Eligible for
Future Sale," insofar as they purport to describe or summarize certain
provisions of the documents or U.S. federal laws referred to therein, are
accurate descriptions or summaries in all material respects.
(viii) Investment Company Act. The Company is not, and immediately
after giving effect to the offering and sale of the ADSs in accordance with
the Underwriting Agreement and the application of the proceeds thereof as
described in the Prospectus under the caption "Use of Proceeds" will not
be, required to be registered as an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
(ix) Submission to Jurisdiction. Pursuant to Section 17 of the
Underwriting Agreement and Section 19 of the Deposit Agreement, under the
laws of the State of New York, the Company has validly (i) chosen New York
law to govern its rights and duties under the Underwriting Agreement and
the Deposit Agreement, (ii) submitted to the personal jurisdiction of state
and federal courts located in the City and County of New York in connection
with an action or proceeding arising out of or related to the Underwriting
Agreement or the Deposit Agreement, (iii) to the extent permitted by law,
waived any objection to the venue of a proceeding in any such court, and
(iv) appointed CT Corporation System as its authorized agent for the
purpose described in Section 17 of the Underwriting Agreement and Section
19 of the Deposit Agreement. Service of process in the manner set forth in
Section 17 of the Underwriting Agreement and Section 19 of the Deposit
Agreement will be effective to confer valid personal jurisdiction over the
Company in connection with an action or proceeding arising out of or
related to the Underwriting Agreement and the Deposit Agreement in any such
court.
(x) No Additional Contracts. To the best of our knowledge, there are
no contracts or documents of a character required to be described in the
Registration Statements or the Prospectus or to be filed as exhibits to the
Registration Statements that are not described or filed.
(xi) Disclosure. Each Registration Statement and the Final Prospectus,
and each amendment or supplement thereto, as of their respective effective
or issue dates, complied as to form in all material respects with the
requirements of the Act and the Rules and Regulations; such counsel have no
reason to believe that any part of a Registration Statement or any
amendment thereto, as of its effective date or as of such Closing Date,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Final Prospectus or any
amendment or supplement thereto, as of its issue date or as of such Closing
Date, contained any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; such
counsel have no reason to believe that the General Disclosure Package, as
of the Applicable Time or as of such Closing Date, contained any untrue
statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
ANNEX 2
FORM OF OPINION OF XXXXXX & XXXXXXX LLP,
U.S. COUNSEL TO THE SELLING SHAREHOLDER
(i) Authorization of Agreements. Each of the Custody Agreements and
the Powers of Attorney has been duly executed and delivered by the Selling
Shareholders in accordance with the laws of the State of New York.
(ii) Validity. We have assumed, with your consent, that (A) each
Selling Shareholder has the capacity, power and authority, as applicable,
to execute, deliver and perform the Powers of Attorney, the Custody
Agreement and the Underwriting Agreement, (B) each Selling Shareholder, as
applicable, has duly authorized the execution, delivery and performance of
the Powers of Attorney, the Custody Agreement, and the Underwriting
Agreement, (C) each Selling Shareholder has duly executed and delivered the
Powers of Attorney and the Custody Agreement (other than with respect to
the execution and delivery thereof under the laws of the State of New
York), (D) the Powers of Attorney, the Custody Agreement, and the
Underwriting Agreement constitute legally valid and binding obligations of
the parties thereto other than the Selling Shareholders, and (E) the status
of enforceability of the Powers of Attorney, the Custody Agreement, and the
Underwriting Agreement is not affected by any (i) breach of, or defaults
under, any agreement or instruments, (ii) violation of statutes, rules or
regulations or court or governmental orders, or (iii) failures to obtain
required consents, approvals or authorization from, or make required
registration, declaration or filings with, governmental authorities
provided that we make no such assumption to the extent we have specifically
opined as to such matters with respect to the Company and the Selling
Shareholders. On the basis of such assumptions, each of the Powers of
Attorney and the Custody Agreements constitutes a legally valid and binding
obligation of such Selling Shareholder, enforceable against the Selling
Shareholders in accordance with its terms.
(iii) Authorization of Underwriting Agreements. The Underwriting
Agreement has been duly executed and delivered by Mr. Xxx Xxxx and by an
Attorney-in-Fact under the Powers of Attorney on behalf of the Selling
Shareholders in accordance with the laws of the State of New York.
(iv) No Violation. The execution and delivery of the Custody
Agreements and the Powers of Attorney by the Selling Shareholders do not,
the execution and delivery of the Underwriting Agreement by an
Attorney-in-Fact under the Powers of Attorney on behalf of the Selling
Shareholders do not, and the deposit of the Ordinary Shares with the
Depositary by the Selling Shareholders against issuance of the ADRs
evidencing the ADSs and the sale of the ADSs by the Selling Shareholders to
you and the other Underwriters pursuant to the Underwriting Agreement do
not:
(i) violate any United States federal or New York statute, rule
or regulation applicable to such Selling Shareholder;
(ii) require any consents, approvals, or authorizations to be
obtained by such Selling Shareholder from, or any
registrations, declarations or filings to be made by such
Selling Shareholder with, any governmental authority under
any United States federal or New York statute, rule or
regulation applicable to such Selling Shareholder on or
prior to the date hereof that have not been obtained or
made; or
(iii) result in the breach of or default under any of the
agreements which are governed by the laws of the State of
New York and to which any of the Selling Shareholders is a
party or by which such
Selling Shareholder is bound and which has been filed as an
exhibit to the F-1 Registration Statement.
(v) Submission to Jurisdiction. Pursuant to Section 17 of the
Underwriting Agreement, Section [_____] of the Custody Agreements and
Section [______] of the Powers of Attorney, under the laws of the State of
New York each of the Selling Shareholders and, pursuant to the Underwriting
Agreement, Mr. Xxx Xxxx has validly (i) chosen New York law to govern its
respective rights and duties under the Underwriting Agreement, and, with
respect to the Selling Shareholders, the Custody Agreements and the Powers
of Attorney, (ii) submitted to the personal jurisdiction of state and
federal courts located in the City and County of New York in connection
with an action or proceeding arising out of or related to the Underwriting
Agreement, (iii) to the extent permitted by law, waived any objection to
the venue of a proceeding in any such court and (iv) appointed CT
Corporation System as its initial authorized agent for the purpose
described in Section 17 of the Underwriting Agreement. Service of process
in the manner described in Section 17 of the Underwriting Agreement will be
effective to confer valid personal jurisdiction over Mr. Xxx Xxxx and such
Selling Shareholder in connection with an action or proceeding arising out
of or related to the Underwriting Agreement in any such court.
(vi) Security Entitlement. Upon indication by book entry that the ADSs
have been credited to a securities account maintained by the
Representatives at the Depository Trust Company ("DTC") and payment
therefor in accordance with the Underwriting Agreement, the Representatives
will acquire a securities entitlement on behalf of the several Underwriters
with respect to the ADSs and, under the Uniform Commercial Code as in
effect on the date hereof in the State of New York (the "NY UCC"), an
action based on an adverse claim to such securities entitlement, whether
framed in conversion, replevin, constructive trust, equitable lien or other
theory, may not be asserted against the Representatives.
ANNEX 3
FORM OF OPINION OF XXXXXX & CALDER, CAYMAN ISLANDS COUNSEL TO THE COMPANY
(i) Due Incorporation; Corporate Power. The Company has been duly
incorporated as an exempted company with limited liability for an unlimited
duration and is validly existing under the laws of the Cayman Islands, with
full corporate power and authority to own its property and assets and to
carry on its business in accordance with the Company's Memorandum and
Articles of Association and as described in the General Disclosure Package
as of the Applicable Time and the Final Prospectus and to execute, deliver
and perform its obligations under this Agreement, the Deposit Agreement and
the Registration Statements.
(ii) Good Standing. The Company is in good standing with the Registrar
of Companies in the Cayman Islands.
(iii) Capitalization. The Company has the authorized and issued share
capital as set forth under the caption "Actual" in the Section headed
"Capitalization" in the General Disclosure Package as of the Applicable
Time, and, immediately after (A) the automatic conversion of the Company's
Series A Preferred Shares and (B) the issuance and sale of the Firm
Securities (as defined in the Underwriting Agreement), the Company will
have the authorized and issued share capital as set forth under the caption
" As adjusted" therein. All of the issued shares in the capital of the
Company (including the Shares (i) issued and delivered in accordance with
the terms of this Agreement and the Deposit Agreement and (ii) resulting
from the automatic conversion of Series A Preferred Shares as described in
the General Disclosure Package as of the Applicable Time) have been or will
be duly and validly authorized and issued, as fully paid and
non-assessable, conform with the laws of the Cayman Islands, following
conversion are free from any restriction on voting or transfer under the
laws of the Cayman Islands and the Company's Memorandum and Articles of
Association, are not subject to any pre-emptive or similar rights under
Cayman Islands law or the Company's Memorandum and Articles of Association,
conform to the description thereof contained in the General Disclosure
Package as of the Applicable Time and will be registered in the Company's
register of members. When allotted, issued and paid for and registered in
the register of members (shareholders), shares are considered to be legally
issued and allotted, fully paid and non-assessable.
(iv) No Violation. The execution and delivery of this Agreement and
the Deposit Agreement by the Company and the performance of its obligations
thereunder, the Registration Statements, the issuance and sale of the
Shares and the filing of the Registration Statements and the General
Disclosure Package as of the Applicable Time and the Final Prospectus have
been duly authorized and approved by all necessary corporate action of the
Company, and the execution and delivery of this Agreement and the Deposit
Agreement by the Company and the performance of its obligations hereunder
and thereunder do not violate, conflict with or result in a breach of any
of the terms or provisions of the Company's Memorandum and Articles of
Association or any law, public rule or regulation applicable to the Company
in the Cayman Islands currently in force and do not violate, conflict with
or result in a breach of any existing order or decree of any governmental
authority or agency or any official body in the Cayman Islands.
(v) Execution of Agreements. Each of this Agreement and the Deposit
Agreement has been duly executed and delivered for and on behalf of the
Company and constitutes legal, valid and binding obligations of the Company
enforceable in the Cayman Islands in accordance with its terms except and
in so far as such enforcement may be limited as hereinafter set forth.
(vi) Execution of Registration Statements. The Registration Statements
have been duly executed by and on behalf of the Company.
(vii) Absence of Further Requirements. No authorizations, consents,
orders, permissions or approvals are required from any governmental or
judicial authorities or agencies or other official bodies in the Cayman
Islands and no notice to or other filing with or action by any Cayman
Islands governmental authority, judicial or regulatory body is required in
connection with:
(1) the execution and delivery of this Agreement and the Deposit
Agreement;
(2) the performance of any obligation under this Agreement and
the Deposit Agreement; and
(3) the payment of any amount under this Agreement and the
Deposit Agreement.
(viii) No Filing. It is not necessary to ensure the legality,
validity, enforceability or admissibility in evidence of this Agreement and
the Deposit Agreement that any document be filed, recorded or enrolled with
any governmental department, agency or other authority in the Cayman
Islands.
(ix) Accurate Description. The statements in the General Disclosure
Package as of the Applicable Time under "Risk Factors", "Dividend Policy",
"Management's Discussion and Analysis of Financial Condition and Results of
Operations", "Management", "Enforceability of Civil Liabilities",
"Description of Share Capital" and "Taxation--Cayman Islands Taxation" and
the statements in the Registration Statement under Part II, Item 6, insofar
as such statements constitute summaries of the legal matters, documents or
proceedings referred to therein, in each case to the extent, and only to
the extent, governed by the laws of the Cayman Islands, fairly present the
information and summarize the matters referred to therein.
(x) Absence of Stamp Duties. No stamp duties or other similar taxes or
charges are payable under the laws of the Cayman Islands in respect of:
(1) the execution or delivery of this Agreement and the Deposit
Agreement or the performance by any of the parties of their
respective obligations or enforcement of this Agreement and
the Deposit Agreement unless they are executed in or
thereafter brought within the jurisdiction of the Cayman
Islands (e.g. for the purposes of enforcement) in which case
stamp duty of CI$2.00 (US$2.44) for each of this Agreement
and the Deposit Agreement will be payable; or
(2) the issuance and sale of the Ordinary Shares by the Company
of its shares pursuant to the terms of this Agreement; or
(3) the entering of the Custodian as the registered holder of
the Ordinary Shares; or
(4) the issue to the Custodian on behalf of the Depositary of
the Shares against the issuance of ADSs for the account of
the Underwriters; or
(5) the sale and delivery outside of the Cayman Islands by the
Underwriters of the Offered Securities to the initial
purchasers thereof.
(xi) Absence of Other Taxes. There are currently no taxes or other
charges or deductions payable (by withholding or otherwise) to the Cayman
Islands government or any taxing authority thereof on or by virtue of:
(1) the execution, delivery, performance or enforcement of this
Agreement and the Deposit Agreement;
(2) any payment of any nature to be made by the Company under
this Agreement and the Deposit Agreement;
(3) the issuance and sale of the Ordinary Shares by the Company;
or
(4) the payment of dividends and other distributions declared
and payable on the Shares, and the payment of such dividends
and other distributions by the Depositary or its nominee to
holders of Offered Securities pursuant to the Deposit
Agreement.
(xii) No Income Taxes. The Cayman Islands currently have no income,
corporate or capital gains tax and no estate duty, inheritance tax or gift
tax.
(xiii) Choice of Laws. The Company can xxx and be sued in its own name
under the laws of the Cayman Islands. The choice of the laws of New York to
govern this Agreement and the Deposit Agreement will be upheld as a valid
choice of law under the laws of the Cayman Islands and the courts of the
Cayman Islands would uphold such choice of law in a suit on this Agreement
or the Deposit Agreement brought in the courts of the Cayman Islands,
assuming it is so pleaded. An action against the Company in the Cayman
Islands under this Agreement or the Deposit Agreement could be instituted
in the Grand Court, which has jurisdiction over the Company, without first
having to obtain a judgment in respect of this Agreement or the Deposit
Agreement in a court of New York or any other relevant jurisdiction. In the
event of any proceedings being brought in the Cayman Islands courts in
respect of a monetary obligation expressed to be payable in a currency
other than Cayman Islands dollars, a Cayman Islands court would give
judgment expressed as an order to pay such currency or its Cayman Islands
dollar equivalent at the time of payment or enforcement of the judgment.
(xiv) Submission to Jurisdiction. The submission to the jurisdiction
of the U.S. federal or state courts sitting in the Borough of Manhattan in
The City of New York, the appointment of CT Corporation System to accept
service of process in such jurisdiction and the waiver by the Company of
any objection to the venue of a proceeding in a New York court, pursuant to
this Agreement and the Deposit Agreement, is legal, valid and binding on
the Company.
(xv) Dividends. No approvals are currently required from any
governmental department, agency or other authority in the Cayman Islands in
order for the Company to pay dividends declared by the Company to the
holders of Ordinary Shares, including the Depositary.
(xvi) Enforcement of Judgments. Although there is no statutory
enforcement in the Cayman Islands of judgments obtained in New York, the
courts of the Cayman Islands will recognize and enforce a judgment of a
foreign court of competent jurisdiction in respect of any legal suit or
proceeding arising out of or relating to any of the
Agreements without retrial on the merits based on the principle that a
judgment of a competent foreign court imposes upon the judgment debtor an
obligation to pay the sum for which judgment has been given provided that
such judgment is final and conclusive, for a liquidated sum, not in respect
of taxes or a fine or penalty, is not inconsistent with a Cayman Islands
judgment in respect of the same matter, and was not obtained in a manner
and is not of a kind the enforcement of which is contrary to the public
policy of the Cayman Islands. A Cayman Islands court may stay proceedings
if concurrent proceedings are being brought elsewhere. A foreign judgment
may be final and conclusive even if subject to appeal. However, if
appealable, a Cayman Islands court may stay enforcement until such appeal
has been heard.
(xvii) No Actions Against the Company. Based solely on our inspection
of the Register of Writs and Other Originating Process in the Grand Court
of the Cayman Islands from the date of incorporation of the Company, there
were no actions or petitions pending against the Company in the courts of
the Cayman Islands as at close of business in the Cayman Islands on
[______] August 2007. A search at the Companies Registry in the Cayman
Islands would not reveal any order or resolution for the winding up of the
Company because under Cayman Islands law the records kept by the Registrar
of Companies are not documents of public record. The enquiries referred to
above which we have made at the Grand Court of the Cayman Islands have
revealed no record of the presentation of any winding up petition in
respect of the Company. We assume that there has been no change in this
position since the date on which the enquiries were made.
(xviii) Exchange Control Regulation. There is no exchange control
legislation under Cayman Islands law and accordingly there are no exchange
control regulations imposed under Cayman Islands law.
(xix) No Sovereign Immunity. The Company is not entitled to any
immunity under the laws of the Cayman Islands whether characterized as
sovereign immunity or otherwise for any legal proceedings in the Cayman
Islands to enforce or to collect upon this Agreement or the Deposit
Agreement and the Company is subject to civil and commercial law with
respect to its obligations under this Agreement and the Deposit Agreement,
which obligations constitute private and commercial acts rather than
governmental or public acts.
(xx) Form of Agreements. So far as the law of the Cayman Islands is
concerned, each of this Agreement and the Deposit Agreement is in proper
form under the laws of the Cayman Islands for the enforcement thereof
against the Company, subject in so far as such enforcement may be limited
as more particularly set forth below.
(xxi) No Third Party Interests. We have reviewed the register of
members of the Company. As of the date hereof there are no entries or
notations indicating any third party interests, including any security
interest, on the register of members of the Company.
(xxii) No Deemed Residency. The Underwriters will not be treated as
resident, domiciled or carrying on or transacting business or subject to
taxation in the Cayman Islands or in violation of any law thereof solely by
reason of the negotiation, preparation or execution or delivery of this
Agreement or the entering into of or the exercise of their rights or the
performance of their obligations under this Agreement.
(xxiii) No Licensing Requirements. The Underwriters will not be
required to be licensed, qualified or otherwise entitled to carry on
business in the Cayman Islands in order to enforce their rights under, or
as a consequence of the execution, delivery and performance of this
Agreement or the Deposit Agreement.
(xxiv) Accurate Summary of Documents. The summaries of the Memorandum
and Articles of Association of the Company and of relevant Cayman Islands
company law contained in the General Disclosure Package as of the
Applicable Time are true, accurate and complete in the context in which
they appear.
(xxv) Forms of Certificates. The form of certificate used to evidence
the Shares complies in all material respects with applicable statutory
requirements of the Cayman Islands and the Company's Memorandum and
Articles of Association.
(xxvi) No Restrictions on Dividends. There are no restrictions under
Cayman Islands law which would prevent the Company from paying dividends to
shareholders in U.S. Dollars or any other currency, nor is it necessary
under the laws of the Cayman Islands that any of the Agreements or any
document relating thereto be registered or recorded in any public office or
elsewhere in the Cayman Islands in order for the Company to pay dividends
to shareholders in U.S. Dollars or any other currency.
ANNEX 4
FORM OF OPINION OF XXXXXX & CALDER, BVI COUNSEL TO THE COMPANY
(i) Good Standing. Each Company is a limited liability company
registered under the BVI Business Companies Act, 2004 (the "ACT"), in good
standing at the Registry of Corporate Affairs and validly existing under
the laws of the British Virgin Islands, and possesses the capacity to xxx
and be sued in its own name.
(ii) No Actions Against the Company. Based solely on our inspection of
the High Court Registry from the date of incorporation of each Company
there were no actions or petitions pending against the Company in the High
Court of the British Virgin Islands as at close of business in the British
Virgin Islands on [_____] August 2007.
(iii) No Order or Resolutions. On the basis of our searches conducted
at the Registry of Corporate Affairs and at the High Court Registry on
[_____] August 2007, no currently valid order or resolution for the
winding-up of the Company and no current notice of appointment of a
receiver over the Company, or any of its assets, appears on the records
maintained in respect of each Company. It should however be noted that it
is not a requirement that notice of appointment of a receiver be registered
with the Registry of Corporate Affairs or the High Court Registry or any
other public body in the British Virgin Islands.
(iv) No Encumbrance. Our search at the Registry of Corporate Affairs
did not reveal the existence of a Register of Mortgages, Charges and other
Encumbrances. A Register of Mortgages, Charges and other Encumbrances may,
however, be maintained at the Company's registered office without a copy
necessarily being filed at the Registry of Corporate Affairs. However, we
refer you to the Registered Agent's Certificate (copies of which are
attached as annexure) which states that the Company does not maintain a
Register of Mortgage, Charges and other Encumbrances at the Company's
registered office.
(v) Shareholding. According to the Registered Agent's Certificate, the
share(s) in each Company is registered in the name of E-House (China)
Holdings Limited (the "ISSUER"), with the details of shareholdings as set
out in the attached schedules.
(vi) No Violation. Each Company has the necessary corporate power and
authority to own, use, lease and operate its properties and assets and
conduct its business in accordance with its memorandum and articles of
association.
(vii) No Exchange Control. There is no exchange control legislation
under British Virgin Islands law and accordingly there is no exchange
control regulations imposed under British Virgin Islands law.
(viii) Disclosure. With respect of information about each Company
disclosed in the prospectus and the offering circular of the Issuer, they
are true, accurate and complete in the context in which they appear.
(ix) Absence of Other Taxes. There are currently no taxes or other
charges or deductions payable by (withholding or otherwise) to the British
Virgin Islands government or any taxing thereof on or by virtue of the
payment of dividends and other distributions declared and payable to the
shareholders of each of the Company.
(x) No Income Taxes. The British Virgin Islands currently have no
income, corporate or capital gains tax and no estate duty inheritance tax
or gift tax.
(xi) No Restrictions on Dividends. There are no restrictions or
required approvals under British Virgin Islands law which would prevent
each Company from paying dividends to its shareholders in U.S. Dollars or
any other currency.
ANNEX 5
FORM OF OPINION OF XXX XXX LAW FIRM, PRC COUNSEL TO THE COMPANY
(i) Good Standing of PRC Subsidiaries. Each of the PRC Subsidiaries
listed in annex to this opinion has been duly organized and is validly
existing as a wholly foreign owned enterprise with limited liability or as
a domestic company, as the case may be, with full legal person status and
in good standing under the PRC laws and its business license is in full
force and effect; each of Shanghai Real Estate Consultancy and Sales
(Group) Ltd. ("SHANGHAI CONSULTANCY AND SALES"), Shanghai Cityrehouse Real
Estate Agency Co., Ltd. ("SHANGHAI CITYREHOUSE") and Shanghai CRIC
Information Technology Co., Ltd. ("SHANGHAI CRIC") has been duly qualified
as a foreign invested enterprise under the PRC laws; the equity interest of
Shanghai Consultancy and Sales is wholly owned directly or beneficially by
E-House Real Estate Ltd., a company incorporated under the laws of the
British Virgin Islands ("BVI E-HOUSE"), which is wholly owned directly or
beneficially by the Company; the equity interest of Shanghai Cityrehouse is
wholly owned directly or beneficially by E-House & Cityrehouse Real Estate
Development Limited, a company incorporated under the laws of the British
Virgin Islands ("BVI CITYREHOUSE"), whose 85% equity interest is indirectly
owned by the Company and 15% directly owned by Home Advisor Properties
Ltd., a company incorporated under the laws of the British Virgin Islands;
the equity interest of Shanghai CRIC is wholly owned directly or
beneficially by CRIC (China) Information Technology Co., Ltd., a company
incorporated under the laws of the British Virgin Islands ("BVI CRIC"),
which is wholly owned directly or beneficially by the Company. To the best
of our knowledge after due inquiries, such equity interests as each
described in the preceding paragraph are free and clear of all liens,
encumbrances, equities or claims; the Articles of Association of each PRC
Subsidiary, the business license and other constituent documents of each
PRC Subsidiary comply with the requirements of applicable PRC laws and are
in full force and effect.
(ii) Subsidiaries. Each of the PRC Subsidiaries has full legal right,
power and authority (corporate and other) to own, use, lease and operate
its assets and to conduct its business in the manner presently conducted
and as described in the General Disclosure Package as of the Applicable
Time and is duly qualified to transact business and is in good standing in
each jurisdiction in which it owns or uses or leases properties, conducts
any business or in which such qualification is required. The PRC
Subsidiaries have all material necessary licenses, consents,
authorizations, approvals, orders, certificates and permits of and from,
and has made all declarations and filings (collectively, "GOVERNMENTAL
AUTHORIZATIONS") with any governmental or regulatory agency or any court in
the PRC ("GOVERNMENTAL AGENCIES") to own, lease, license and use its
properties, assets and conduct its business in the manner described in the
General Disclosure Package as of the Applicable Time and such licenses,
consents, authorizations, approvals, orders, certificates or permits
contain no materially burdensome restrictions. No PRC Subsidiary has any
reason to believe that any regulatory body is considering modifying,
suspending or revoking any such licenses, consents, authorizations,
approvals, orders, certificates or permits, and each of the PRC
Subsidiaries is in compliance with the provisions of all such licenses,
consents, authorizations, approvals, orders, certificates or permits in all
material respects.
(iii) Corporate Structure. The entering into, and the consummation of
the transactions contemplated in the relevant documents described in the
Registration Statement and the General Disclosure Package under
"Summary--Corporate Structure and History" as of the Applicable Time
constitute legal, valid and binding obligations of all the parties therein,
enforceable against all the parties therein, in accordance with their
terms; all necessary steps for transactions contemplated in the
restructuring documents have being taken and all consents required from
respective parties have been obtained
and are in full force and effect; all governmental approvals, consents,
registrations, filings and all necessary steps required in the PRC for the
transactions contemplated therein have been obtained, made and taken and
are in full force and effect.
(iv) Capitalization. All of the equity interests in each PRC
Subsidiary have been duly authorized and validly issued, are fully paid and
non-assessable and are legally owned by the Company through its non-PRC
Subsidiaries, free and clear of all liens, charges, restrictions upon
voting or transfer or any other encumbrances, equities or claims; each of
the PRC Subsidiaries has obtained all approvals, authorizations, consents
and orders, and has made all filings, which are required under PRC laws and
regulations for the ownership interest by the Company of its equity
interest in each PRC Subsidiary through its non-PRC Subsidiaries; there are
no outstanding rights, warrants or options to acquire, or instruments
convertible into or exchangeable for, nor any agreements or other
obligations to issue or other rights to convert any obligation into, any
equity interest in any of the PRC Subsidiaries by the Company indirectly.
(v) Use of Proceeds. The application of the net proceeds to be
received by the Company from the Offering as contemplated by the General
Disclosure Package as of the Applicable Time, will not contravene any
provision of applicable PRC laws and regulations, or the Articles of
Association, other constitutive documents or the business license or other
constitutive documents of any PRC Subsidiary or contravene the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement, note, lease or other agreement or instrument
binding upon any PRC Subsidiary, or any judgment, order or decree of any
Governmental Agency in the PRC.
(vi) Title to Property and Leased Assets. Each PRC Subsidiary has
valid title to all of its properties and assets, in each case, free and
clear of all liens, charges, encumbrances, equities, claims, defects,
options or restrictions; each lease agreement to which such PRC Subsidiary
is a party is legally executed; certain lease agreement to which such PRC
Subsidiary is a party is registered with the local housing bureau in
accordance with PRC laws, except to the extent the failure to register
would not have a Material Adverse Effect (shall mean any event, occurrence,
fact, condition, change or development that has had a material adverse
effect on the operations, results of operations, financial condition,
assets or liabilities of PRC Subsidiaries, either individually or taken as
a whole); the leasehold interests of each PRC Subsidiary are fully
protected by the terms of the lease agreements in material respects, which
are valid, binding and enforceable in accordance with their respective
terms under PRC law; and neither the Company nor any PRC Subsidiary owns,
operates, manages or has any other right or interest in any other material
real property of any kind.
(vii) Guarantees. There are no outstanding guarantees or contingent
payment obligations of any PRC Subsidiary in respect of indebtedness of
third parties except as disclosed in the General Disclosure Package as of
the Applicable Time.
(viii) No Violation. To the best of our knowledge, except to
registration of lease agreement as described in the "Title to Property and
Leased Assets" part of this legal opinion and as described in the General
Disclosure Package as of the Applicable Time, none of the PRC Subsidiaries
is in breach or violation of or in default, as the case may be, under (A)
its articles of association, business licenses or any other constituent
documents, (B) any material obligation, indenture, mortgage, deed of trust,
bank loan or credit agreement or other evidence of indebtedness governed by
PRC laws, (C) any material obligation, license, lease, contract or other
agreement or instrument governed by PRC laws to which the Company or any of
the subsidiaries is a party or by which any of them or any of their
respective properties may be bound or affected, except for such breach or
violation or default that, as the case may be, would not reasonably be
expected to have a Material Adverse Effect, or (D) the material aspect of
any law, regulation or
rule of the PRC, or any decree, judgment or order of any court in the PRC,
applicable to the Company or any of its subsidiaries (nor has any event
occurred which with notice, lapse of time, or both would result in any
breach of, or constitute a default under or give the holder of any
indebtedness (or a person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a part of such
indebtedness under).
(ix) No Proceedings. To the best of our knowledge after due inquiries,
there are no legal, governmental, administrative or arbitrative proceedings
before any court of the PRC or before or by any Governmental Agency pending
or threatened against, or involving the properties or business of, the
Company or any PRC Subsidiary or to which any of the properties of any PRC
Subsidiary is subject which would reasonably be expected to individually or
in the aggregate have a Material Adverse Effect.
(x) Dividends. All dividends and other distributions declared and
payable on BVI E-House's equity interest in Shanghai Consultancy and Sales,
BVI Cityrehouse's equity interest in Shanghai Cityrehouse and BVI CRIC's
equity interest in Shanghai CRIC in Renminbi may under the current laws and
regulations of PRC be payable in foreign currency and may be freely
transferred out of the PRC, and except as disclosed in the General
Disclosure Package as of the Applicable Time, all such dividends will not
be subject to withholding or other taxes under the laws and regulations of
PRC and are otherwise free and clear of any other tax, withholding or
deduction in the PRC and may be paid without the necessity of obtaining any
Government Authorizations from any Governmental Agencies in the PRC.
(xi) PRC Law. All matters of PRC laws and practice relating to the
Company, each PRC Subsidiary and their respective businesses and other
statements with respect to or involving PRC laws set forth in the General
Disclosure Package as of the Applicable Time are correctly set forth
therein, and nothing has been omitted from such statements which would make
the same misleading in any material respect.
(xii) Material Contracts. Each of the material contracts governed by
PRC laws and listed in Schedule F of the Underwriting Agreement (the
"MATERIAL CONTRACTS") has been duly authorized, executed and delivered by
the relevant PRC Subsidiary, and each such PRC Subsidiary has, to the
extent applicable, taken all necessary corporate actions to authorize the
performance thereof; each such PRC Subsidiary had the corporate power and
capacity to enter into and to perform its obligations under such Material
Contract; each of the Material Contracts to which the Company or a PRC
Subsidiary is a party constitutes a legal, valid and binding obligation of
the Company or such PRC Subsidiary, enforceable against the Company or such
PRC Subsidiary in accordance with its terms; to the extent applicable, such
Material Contract has been properly transferred, amended or assigned such
that the Company is the obligor and beneficiary under such Material
Contract and such transfers, amendments or assignments were duly
authorized, executed and delivered by the parties to the applicable
Material Contract; all Governmental Authorizations required in the PRC for
such transfers, amendments or assignments, to the extent applicable, have
been duly obtained and are in full force and effect; and all necessary
steps for such transfers, amendments or assignments have been taken and all
consents required from all counter parties to such Material Contract have
been duly obtained and are in full force and effect.
(xiii) Trademarks. Each PRC Subsidiary owns or otherwise has the legal
right to use, or to acquire on reasonable terms, trademarks, service marks
and trade names currently employed by it in connection with the business
currently operated by it; to the best of our knowledge after due inquiries,
no PRC Subsidiary has received any notice of infringement of or conflict
with asserted rights of others with respect to any of
the foregoing which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in any Material
Adverse Effect.
(xiv) Intellectual Property. To the best of our knowledge and except
as described in the General Disclosure Package as of the Applicable Time,
none of the PRC Subsidiaries possess any other registered intellectual
property, and each of the PRC Subsidiaries possesses valid licenses in full
force and effect or otherwise has the legal right to use, or to acquire on
reasonable terms, all material patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names currently
employed by them in the ordinary course of business, and none of the PRC
Subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing.
(xv) No Violation. The execution and delivery by the Company and Mr.
Xxx Xxxx of, and the performance by the Company and Mr. Xxx Xxxx of its or
his obligations under, this Agreement and the Deposit Agreement and the
consummation by the Company and Mr. Xxx Xxxx of the transactions
contemplated herein and, in the case of the Company, therein, and the
conduct of the business and operations of the Company and its subsidiaries
as described in the General Disclosure Package as of the Applicable Time,
including the issue and sale of the Ordinary Shares and the Offered ADSs
under this Agreement and the Deposit Agreement, and the compliance by the
Company and Mr. Xxx Xxxx with all of the provisions of this Agreement and,
in the case of the Company, the Deposit Agreement (A) do not and will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument governed by the
PRC laws and regulations and to which any PRC Subsidiary is a party or by
which any such PRC Subsidiary is bound or to which any of the properties or
assets of a PRC Subsidiary is bound or to which any of the properties or
assets of any PRC Subsidiary is subject, except for such conflict, breach,
violation or default that would not reasonably be expected to have a
Material Adverse Effect, (B) do not and will not result in any violation of
the provisions of the articles of association, business licenses or any
other constituent documents of any PRC Subsidiary, (C) do not and will not
result in any violation of any provision of PRC laws or statute or any PRC
regulations and (D) do not and will not result in a violation of any order,
rule or regulation of any governmental or regulatory agency or any court in
the PRC.
(xvi) Absence of Further Action. Except as disclosed in the General
Disclosure Package as of the Applicable Time, no Governmental
Authorizations from any Governmental Agency is required for (A) the issue
and sale of the Offered Securities and the Ordinary Shares represented
thereof at such Closing Date to be sold by the Company under this
Agreement, (B) the deposit of the Ordinary Shares represented by the
Offered Securities with the Depositary or its nominee, and (C) the
consummation by the Company and the Depositary of the transactions
contemplated by this Agreement and the Deposit Agreement, as applicable.
(xvii) Absence of Reporting Obligations. There are no reporting
obligations under PRC laws on non-PRC holders of the Offered Securities or
the Ordinary Shares.
(xviii) No Deemed Residence. As a matter of PRC laws, no holder of the
Offered Securities or Ordinary Shares who is not a PRC resident will be
subject to any personal liability, or be subject to a requirement to be
licensed or otherwise qualified to do business or be deemed domiciled or
resident in the PRC, by virtue only of holding such Offered Securities or
Ordinary Shares. There are no limitations under PRC laws on the rights of
holders of the Offered Securities or Ordinary Shares who are not PRC
residents to hold, vote or transfer their securities nor are there any
statutory pre-emptive rights or transfer restrictions applicable to the
Ordinary Shares.
(xix) Accurate Description of Law and Documents. The statements set
forth in the General Disclosure Package as of the Applicable Time under the
captions "Prospectus Summary," "Risk Factors," "Dividend Policy,"
"Enforceability of Civil Liabilities," "Corporate Structure," "Business,"
"Regulations," "Related Party Transactions," "Management," "Description of
Share Capital" and "Taxation," insofar as such statements describe or
summarize PRC legal or regulatory matters, or documents, agreements or
proceedings governed by PRC laws, are true and accurate, and fairly present
or fairly summarize the material respects of PRC legal and regulatory
matters, documents, agreements or proceedings referred to therein; and such
statements did not contain and will not contain an untrue statement of a
material fact, and did not omit and will not omit to state any material
fact necessary to make the statements, in light of the circumstances under
which they were made, not misleading.
(xx) Submission to Jurisdiction. The submission of the Company and Mr.
Xxx Xxxx to the non-exclusive jurisdiction of the New York Courts, the
waiver by the Company and Mr. Xxx Xxxx of any objection to the venue of a
proceeding in a New York Court, the waiver and agreement of the Company and
Mr. Xxx Xxxx not to plead an inconvenient forum, and the agreement of the
Company that this Agreement and the Deposit Agreement be construed in
accordance with and governed by the laws of the State of New York will be
recognized by PRC courts; service of process effected in the manner set
forth in this Agreement will be effective to confer jurisdiction over the
subsidiaries, assets and property of the Company and Mr. Xxx Xxxx in the
PRC, subject to compliance with relevant civil procedural requirements
(which do not involve a re-examination of the merits of the claim) in the
PRC; and any judgment obtained in a New York Court arising out of or in
relation to the obligations of the Company and Mr. Xxx Xxxx under this
Agreement and, in the case of the Company, the Deposit Agreement will be
recognized by PRC courts, subject to compliance with relevant civil
procedural requirements (which do not involve a re-examination of the
merits of the claim) in the PRC.
(xxi) Validity of Indemnification Provisions. The indemnification and
contribution provisions set forth in this Agreement and the Deposit
Agreement do not contravene the PRC laws, and insofar as matters of PRC
laws are concerned, constitute the legal, valid and binding obligations of
the Company and, in the case of the Underwriting Agreement, Mr. Xxx Xxxx,
enforceable in accordance with the terms therein, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights; assuming
due authorization, execution and delivery by each party thereto, each of
this Agreement and the Deposit Agreement is in proper legal form under PRC
laws for the enforcement thereof against the Company and, in the case of
the Underwriting Agreement, Mr. Xxx Xxxx, subject to compliance with
relevant civil procedural requirements; and to ensure the legality,
validity, enforceability or admissibility in evidence of this Agreement and
the Deposit Agreement in the PRC, it is not necessary that any such
document be filed or recorded with any court or other authority in the PRC
or that any stamp or similar tax be paid on or in respect of any such
document.
(xxii) No Stamp Tax. No stamp or other issuance or transfer taxes or
duties and no capital gains, income, withholding or other taxes are payable
by or on behalf of the Company, any of its subsidiaries, any Underwriter or
the Depositary to the PRC government or any political subdivision or taxing
authority thereof or therein in connection with (A) the creation, issuance,
sale and delivery of the Offered Securities and Ordinary Shares, (B) the
deposit with the Depositary of Ordinary Shares by the Company pursuant to
the Deposit Agreement against issuances of the Offered Securities, (C) the
sale and delivery by the Company of the Offered Securities to or for the
accounts of the Underwriters in the manner contemplated in this Agreement
and the Deposit Agreement, (D) the execution, delivery and performance of
this Agreement and the Deposit Agreement by the Company, or (E) the sale
and delivery by the Underwriters of the Offered Securities to the initial
purchasers thereof in the manner contemplated in the General Disclosure
Package as of the Applicable Time.
(xxiii) No Licensing Requirement. The entry into, and performance or
enforcement of this Agreement and the Deposit Agreement in accordance with
its respective terms will not subject any of the Underwriters or the
Depositary to any requirement to be licensed or otherwise qualified to do
business in the PRC, nor will any Underwriter or the Depositary be deemed
to be resident, domiciled, carrying on business through an establishment or
place in the PRC or in breach of any laws or regulations in the PRC by
reason of entry into, performance or enforcement of this Agreement and the
Deposit Agreement.
(xxiv) No PRC Liability of Depositary. The Depositary will not (absent
negligence, bad faith or breach of contract and general principle of
agency) be subject to any potential liability under PRC laws for taking any
action contemplated in the Deposit Agreement.
(xxv) No Sovereign Immunity. Under the PRC laws, none of the Company
or its subsidiaries, or any of their respective properties, assets or
revenues, is entitled to any right of immunity on the grounds of
sovereignty or otherwise from any legal action, suit or proceeding, set-off
or counterclaim, the jurisdiction of any court in the PRC, service of
process, attachment prior to or in aid of execution of judgment, or other
legal process or proceeding for the granting of any relief or the
enforcement of any judgment.
(xxvi) SAFE Compliance. The Company has completed relevant
registration and other procedures required under the applicable SAFE Rules
and Regulations; to the best of our knowledge after due inquiry, each of
the founders of the Company who are PRC citizens and residents, including
shareholders of the Company that are indirectly owned or controlled by PRC
citizens and residents (including Xxx Xxxx, Xxxxxx Xxxxx, Xxx Xx, Xxxx
Xxxx, Xxxxxxx Xxxx and Xxxxxxx Xxxx), has completed relevant registration
and other procedures required under applicable SAFE Rules and Regulations,
except that the amending of certain applicable registrations are in the
process including the registration of management and the third party's
shareholding, only can be registered after the Offering.
(xxvii) Compliance with PRC Law. Each of the Company and the PRC
Subsidiaries is currently in compliance with all applicable PRC laws and
regulations in material respect as disclosed in the General Disclosure
Package as of the Applicable Time. The issuance, sale and delivery of the
Offered Securities by the Company as described in the General Disclosure
Package as of the Applicable Time will not conflict with or result in a
breach or violation of the provisions of any applicable PRC laws and
regulations.
(xxviii) Disclosure. Each of the Registration Statement and the Final
Prospectus, and each amendment or supplement thereto, as of their
respective effective or issue dates, complied as to form in all material
aspects with the requirements of the PRC laws and regulations; we have no
reason to believe that any part of a Registration Statement or any
amendment thereto (other than the financial statements and related
schedules therein to which we express no opinion) or that the Final
Prospectus or any amendment or supplement thereto, as of its effective date
or as of such Closing Date, contained any untrue statement of a material
fact or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading (other than the
financial statements and related schedules therein to which we express no
opinion), as of its issue date or as of such Closing Date, contained any
untrue statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; we have no reason
to believe that the General Disclosure Package (other than the financial
statements and related schedules therein to which we express no opinion),
as of the Applicable Time or as of such Closing Date, contained any untrue
statement of a
material fact or omitted to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(xxix) The PRC individual, Mr. Xxx Xxxx, has full legal right, power
to enter into, execute and deliver the Underwriting Agreement to which he
is a party. The Underwriting Agreement constitutes the legal, valid and
binding obligations of Mr. Xxx Xxxx in accordance with the terms thereof.
The execution of Underwriting Agreement by Mr. Xxx Xxxx will not conflict
with or result in a breach or violation of the provisions of any applicable
PRC laws and regulations.
ANNEX 6
FORM OF OPINION OF SELLING SHAREHOLDER'S COUNSEL
(i) Good Standing. The Company is a limited liability company duly
incorporated under the British Virgin Islands Business Companies Act, 2004,
in good standing at the Registry of Corporate Affairs and validly existing
under the laws of the British Virgin Islands, and possesses the capacity to
xxx and be sued in its own name.
(ii) Authority. The Company is a limited liability company duly
incorporated under the British Virgin Islands Business Companies Act, 2004,
in good standing at the Registry of Corporate Affairs and validly existing
under the laws of the British Virgin Islands, and possesses the capacity to
xxx and be sued in its own name.
(iii) No Violation. The execution and delivery of this Agreement and
the Custody Agreement (together, the "TRANSACTION DOCUMENTS") and the Power
of Attorney and the performance by the Company of its obligations
thereunder do not conflict with or result in a breach of any of the terms
or provisions of the Memorandum and Articles of Association of the Company
or any law, public rule or regulation applicable to the Company in the
British Virgin Islands currently in force and does not conflict with or
result in a breach or constitute a default under any existing rule,
regulation, order or decree of any governmental authority or agency or
official body of the British Virgin Islands.
(iv) Authorization of Agreements. The execution, delivery and
performance of the Transaction Documents and the Power of Attorney have
been authorised by and on behalf of the Company.
(v) Execution of Agreements. Assuming the Power of Attorney and the
Custody Agreement have been delivered by a director of the Company as the
authorised signatory, and the Underwriting Agreement has been delivered by
an Attorney-in-Fact (as hereinafter defined) under the relevant Power of
Attorney, the Transaction Documents and the Power of Attorney have been
duly executed and delivered on behalf of the Company and the Power of
Attorney constitutes and the Transaction Documents will constitute the
legal, valid and binding obligations of the Company enforceable in
accordance with their terms.
(vi) Absence of Further Action. No authorisations, consents,
approvals, licences, validations or exemptions are required by law from any
governmental authorities or agencies or other official bodies in the
British Virgin Islands in connection with:
(i) the creation, execution or delivery of the Transaction
Documents or the Power of Attorney by the Company;
(ii) subject to the payment of the appropriate nominal stamp
duty, enforcement of the Transaction Documents or the Power
of Attorney against the Company; or
(iii) the performance by the Company of its obligations under the
Transaction Documents or the Power of Attorney.
(vii) No Taxes. No taxes, fees or charges (other than nominal stamp
duty) are payable (either by direct assessment or withholding) to the
government or other taxing authority in the British Virgin Islands under
the laws of the British Virgin Islands in respect of:
(i) the execution or delivery of the Transaction Documents or
the Power of Attorney;
(ii) the enforcement of the Transaction Documents or the Power of
Attorney;
(iii) the performance of the Transaction Documents or the Power
of Attorney; and
(iv) payments made under, or pursuant to, the Transaction
Documents or the Power of Attorney.
The British Virgin Islands currently have no form of income, corporate or
capital gains tax and no estate duty, inheritance tax or gift tax.
(viii) Choice of Laws; Submission to Jurisdiction. The courts of the
British Virgin Islands will observe and give effect to the choice of New
York law as the governing law of the Transaction Documents and the Power of
Attorney. The submission by the Company to the non-exclusive jurisdiction
of the federal and state courts in New York City and the waiver of any
objection to venue in the Transaction Documents and the appointment of an
agent to accept service of process in such jurisdiction are legal, valid
and binding on the Company.
(ix) Power-of-Attorney. The Power of Attorney has been duly executed
by the Company and constitutes the persons therein named as the duly
appointed attorneys of the Company (the "ATTORNEYS-IN-FACT") with the
powers and authorities therein specified and, in particular, permitting the
Attorneys-in-Fact to bind the Company named therein on the terms set out in
the Power of Attorney.
(x) Enforcement of Judgments. Any final and conclusive monetary
judgment obtained against the Company in the courts of New York in respect
of the Transaction Documents, for a definite sum, may be treated by the
courts of the British Virgin Islands as a cause of action in itself so that
no retrial of the issues would be necessary provided that in respect of the
foreign judgment:
(i) the foreign court issuing the judgment had jurisdiction in
the matter and the Company either submitted to such
jurisdiction or was resident or carrying on business within
such jurisdiction and was duly served with process;
(ii) the judgment given by the foreign court was not in respect
of penalties, taxes, fines or similar fiscal or revenue
obligations of the Company;
(iii) in obtaining judgment there was no fraud on the part of the
person in whose favour judgment was given or on the part of
the court;
(iv) recognition or enforcement of the judgment in the British
Virgin Islands would not be contrary to public policy; and
(v) the proceedings pursuant to which judgment was obtained were
not contrary to natural justice.
(xi) No Filings. It is not necessary to ensure the legality, validity,
enforceability or admissibility in evidence of the Transaction Documents or
the Power of
Attorney that any document be filed, recorded or enrolled with any
governmental authority or agency or any official body in the British Virgin
Islands.
(xii) Encumbrances. Our search at the Registry of Corporate Affairs
did not reveal the existence of a Register of Charges. A Register of
Charges may, however, be maintained at the Company's registered office
without a copy necessarily being filed at the Registry of Corporate
Affairs. However, we refer you to the registered agent's certificate (a
copy of which is attached as Annex A) that states that the Company does not
maintain a Register of Charges at the Company's Registered Office.
(xiii) No Sovereign Immunity. Neither the Company nor its assets is
entitled to any immunity under the laws of the British Virgin Islands,
whether characterised as sovereign immunity or otherwise, for any legal
proceedings in the British Virgin Islands to enforce or collect upon the
Transaction Documents or the Power of Attorney.
ANNEX 7
FORM OF OPINION OF XXXXXXX, XXXXXXX & ASSOCIATES LLP, DEPOSITARY'S U.S. COUNSEL
(i) Authorization of Agreement. The Deposit Agreement has been duly
authorized, executed and delivered by the Depositary and constitutes a
valid and legally binding obligation of the Depositary and is enforceable
against the Depositary in accordance with its terms, except insofar as
enforceability may be limited by (a) applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other laws relating to
or affecting creditors' rights generally and (b) general principles of
equity (whether considered in an action at law or in equity)
(ii) Issuance of Securities. When ADRs evidencing ADSs are issued in
accordance with the Deposit Agreement against the deposit, pursuant to the
terms of the Deposit Agreement, of duly authorized, validly issued, fully
paid and nonassessable Shares of the Company, the preemptive rights, if
any, with respect to which have been validly waived or exercised, such ADRs
will be validly issued and will entitle the Holders to the rights specified
therein and in the Deposit Agreement; and
(iii) ADR Registration Statement. To our knowledge, no stop order
suspending the effectiveness of said Form F-6 has been issued and no
proceedings for that purpose have been instituted or are pending under the
Act.
