Exhibit 1.1
FOCUS MEDIA HOLDING LIMITED
AMERICAN DEPOSITARY SHARES
REPRESENTING
ORDINARY SHARES
(PAR VALUE US$0.00005 PER SHARE)
UNDERWRITING AGREEMENT
[_____], 2007
Citigroup Global Markets Inc.,
000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Credit Suisse Securities (USA) LLC,
Eleven Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 3629.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated,
4 World Financial Center,
000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
As representatives of the several Underwriters
named in Schedule I hereto,
Ladies and Gentlemen:
Focus Media Holding Limited, a Cayman Islands company (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
5,000,000 American Depositary Shares representing 25,000,000 Ordinary Shares,
par value US$0.00005 per share (the "Ordinary Shares"), of the Company and the
shareholders of the Company named in Schedule II (the "Selling Shareholders")
hereto propose, subject to the terms and conditions stated herein, to sell to
the Underwriters an aggregate of 8,720,873 American Depositary Shares
representing 43,604,365 Ordinary Shares and the Company proposes, subject to the
terms and conditions stated herein, to sell to the Underwriters, at the election
of the Underwriters, up to 2,000,000 American Depositary Shares representing
10,000,000 Ordinary Shares. The aggregate of 13,720,873 American Depositary
Shares representing 68,604,365 Ordinary Shares to be sold by the Company and the
Selling Shareholders, as applicable, are herein called the "Firm ADSs", and the
aggregate of 2,000,000 American Depositary Shares
representing 10,000,000 additional Ordinary Shares to be sold by the Company are
herein called the "Optional ADSs". The Firm ADSs, together with the Optional
ADSs that the Underwriters elect to purchase pursuant to Section 2 hereof, are
herein collectively called the "ADSs". The ADSs to be sold by the Selling
Shareholders are herein called the "Selling Shareholder ADSs". The Ordinary
Shares represented by the Firm ADSs are hereinafter called the "Firm Shares" and
the Ordinary Shares represented by the Optional ADSs are hereinafter called the
"Optional Shares" and the Firm Shares and the Optional Shares are hereinafter
collectively called the "Shares".
The ADSs are to be issued pursuant to an amended and restated deposit
agreement (the "Deposit Agreement"), dated as of April 9, 2007, among the
Company, Citibank, N.A., as depositary (the "Depositary"), and holders and
beneficial owners of ADSs issued by the Depositary thereunder. Each ADS will
initially represent the right to receive five Ordinary Shares deposited pursuant
to the Deposit Agreement.
It is understood by all the parties that the Underwriters are offering ADSs
in the United States and internationally outside of the People's Republic of
China (the "PRC").
1. (a) Each of Xxxxx Xxxxxxx Xxxxx (the "Controlling Person") and the
Company jointly and severally represents and warrants to, and agrees with, each
of the Underwriters that:
(i) A registration statement on Form F-1 (File No. 333-146913) (the
"Initial Registration Statement") in respect of the Shares and the ADSs has been
filed with the Securities and Exchange Commission (the "Commission"); the
Initial Registration Statement and any post effective amendment thereto, each in
the form heretofore delivered to you, and, excluding exhibits thereto, to you,
have been declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a "Rule
462(b) Registration Statement"), filed pursuant to Rule 462(b) under the U.S.
Securities Act of 1933, as amended (the "Act"), which became effective upon
filing, no other document with respect to the Initial Registration Statement has
heretofore been filed with the Commission; and no stop order suspending the
effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or, to the best of
the Company's knowledge, threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement, is hereinafter called
a "Preliminary Prospectus"); the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto and including the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof and deemed by virtue of Rule 430A under the
Act to be part of the Initial Registration Statement at the time it was declared
effective, each as amended at the time such part of the Initial Registration
Statement became effective or such part of the Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, are hereinafter
collectively called the "Registration Statement"; the Preliminary Prospectus
relating to the ADSs that was included in the Registration Statement immediately
prior to the Applicable Time (as defined in Section 1(a)(iii) hereof) is
hereinafter called the "Pricing Prospectus"; the form of the final prospectus
relating to the Shares and the ADSs filed with the Commission pursuant to Rule
424(b) under the Act in accordance with Section 5(a)(ii) hereof, is hereinafter
called the "Prospectus"; such final prospectus, in the form first filed pursuant
to Rule 424(b) under the Act, is hereinafter called the "Prospectus"; any
reference to any amendment or supplement to any Preliminary
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Prospectus or the Prospectus shall be deemed to refer to and include any
documents filed after the date of such Preliminary Prospectus or Prospectus, as
the case may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated therein; and any "issuer free writing
prospectus" as defined in Rule 433 under the Act relating to the ADSs is
hereinafter called an "Issuer Free Writing Prospectus";
(ii) No order preventing or suspending the use of any Preliminary
Prospectus or any Issuer Free Writing Prospectus has been issued by the
Commission, and each Preliminary Prospectus, at the time of filing thereof,
conformed in all material respects to the requirements of the Act and the rules
and regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter through Citigroup Global Markets Inc.,
Credit Suisse Securities (USA) LLC and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated (collectively, the "Representatives") expressly for use therein;
(iii) For the purposes of this Agreement, the "Applicable Time" is 5:00
p.m. (Eastern Standard Time) on the date of this Agreement. The Pricing
Prospectus, as of the Applicable Time, did not include any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; and each Issuer Free Writing Prospectus listed on Schedule
III(a) hereto does not conflict with the information contained in the
Registration Statement, the Pricing Prospectus or the Prospectus and each such
Issuer Free Writing Prospectus, as supplemented by and taken together with the
Pricing Prospectus as of the Applicable Time, did not include any untrue
statement of a material fact or omit 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; provided, however, that this
representation and warranty shall not apply to statements or omissions made in
an Issuer Free Writing Prospectus in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through the
Representatives expressly for use therein;
(iv) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement and the
Prospectus will conform, in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to each part of the Registration
Statement and as of the applicable filing date as to the Prospectus and any
amendment or supplement thereto, contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Company by an Underwriter through the Representatives expressly for use therein;
(v) A registration statement on Form F-6 (File No. 333-141820) in respect
of the ADSs was filed with the Commission on July 11, 2005; such registration
statement in the form heretofore delivered to you and, excluding exhibits, to
you for each of the other Underwriters, has been declared effective by the
Commission in such form; no other document with respect to such registration
statement has heretofore been filed with the
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Commission; no stop order suspending the effectiveness of such registration
statement has been issued and no proceeding for that purpose has been initiated
or, to the best of the Company's knowledge, threatened by the Commission (the
various parts of such registration statement, including all exhibits thereto,
each as amended at the time such part of the registration statement became
effective, being hereinafter called the "ADS Registration Statement"); and the
ADS Registration Statement when it became effective conformed, and any further
amendments thereto will conform, in all material respects to the requirements of
the Act and the rules and regulations of the Commission thereunder, and did not,
as of the applicable effective date, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading;
(vi) A registration statement on Form 8-A (File No. 000-51387) in respect
of the registration of the Shares and the ADSs under the Exchange Act was filed
with the Commission on June 28, 2005; such registration statement in the form
heretofore delivered to you and, excluding exhibits, to you for each of the
other Underwriters, was declared effective by the Commission in such form; no
other document with respect to such registration statement has heretofore been
filed with the Commission; no stop order suspending the effectiveness of such
registration statement has been issued and no proceeding for that purpose has
been initiated or, to the best of the Company's knowledge, threatened by the
Commission (the various parts of such registration statement, including all
exhibits thereto, each as amended at the time such part of the registration
statement became effective, being hereinafter called the "Form 8-A Registration
Statement"); and the Form 8-A Registration Statement when it became effective
conformed, and any further amendments thereto, if any, will conform, in all
material respects to the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder, and did not and will not, as of the
applicable effective date, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Company by an Underwriter through the Representatives expressly for use therein;
(vii) The following entities constitute all of the entities held or
controlled directly or indirectly by the Company (collectively referred to
herein as the "Group Entities"): (A) (i) Focus Media (China) Holding Ltd, a Hong
Kong company ("Focus Media Hong Kong"), (ii) Focus Media Technology (Shanghai)
Co., Ltd., a PRC wholly-foreign owned enterprise ("Focus Media Technology"),
(iii) New Focus Media Technology (Shanghai) Co., Ltd., a PRC wholly-foreign
owned enterprise ("New Focus Media Technology"), (iv) Focus Media Digital
Information Technology (Shanghai) Co., Ltd., a PRC company ("Focus Media
Digital"), (v) Perfect Media Holding Ltd., Focus Media Dalian Holding Ltd, Focus
Media Changsha Holding Ltd., Focus Media Qingdao Holding Ltd., Sorfari Holdings
Limited, Focus Media Tianjin Limited, Capital Beyond Limited, Skyvantage Group
Limited, Billion Honest Group Limited and Pinone Advertisement Co. Ltd.
("Pinone"), each a British Virgin Islands company (collectively, the "Company
Subsidiaries"), (vi) Shanghai Focus Media Advertising Agency Co. Ltd. ("Focus
Media Advertising Agency"), Shanghai New Perfect Media Advertisement Co., Ltd.
("New Perfect Media"), Shanghai New Focus Media Advertisement Co., Ltd. ("New
Focus Media Advertisement"), Shenzhen E-Time Commercial Consulting Co. Ltd.
("Shenzhen E-Time") and Shanghai Focus Media Defeng Advertisement Co., Ltd.
("Focus Media Defeng"), each a PRC company, and (vii) Shanghai Focus Media
Advertisement Co., Ltd., a PRC company ("Focus Media Advertisement"), its
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branches in Beijing, Shenzhen, Guangzhou, Wenzhou, Suzhou, Wuxi, Mianyang and
Maoming (collectively, the "Focus Media Advertisement Branches") and the other
PRC subsidiaries of Focus Media Advertisement listed in Schedule IV hereto,
excluding Focus Media Digital, New Focus Media Advertisement, New Structure
Advertisement, Framedia Advertisement, Guangdong Framedia and Focus Media
Wireless (collectively, the "Focus Media Advertisement Subsidiaries"), (B) (i)
InfoAchieve Limited, a British Virgin Islands company ("InfoAchieve"), (ii)
Shanghai Framedia Investment Consulting Co., Ltd., a PRC wholly-foreign owned
enterprise ("Framedia Investment"), (iii) Shanghai New Structure Advertisement
Co., Ltd. ("New Structure Advertisement") and Guangdong Shiji Shenghou
Advertisement Co., Ltd. ("Guangdong Framedia"), each a PRC company, and (iv)
Shanghai Framedia Advertisement Development Co., Ltd., a PRC company, ("Framedia
Advertisement") and its branches in Beijing, Guangzhou, Shenzhen, Wuhan, Nanjing
and Dongwan (collectively, the "Framedia Branches"), (C) (i) Target Media
Holdings Limited, a Cayman Islands company ("Target Media Holdings"), (ii)
Target Media Multi-Media Technology (Shanghai) Co., Ltd., a PRC wholly-foreign
owned enterprise ("Target Multi-Media"), and (iii) Shanghai Target Media Co.,
Ltd., a PRC company ("Shanghai Target Media"), and its subsidiaries, branches
and representative offices, (D) (i) Dotad Media Holdings Limited, a British
Virgin Islands company ("Dotad Holdings"), (ii) Beijing Dotad Technology Co.,
Ltd. ("Dotad Technology") and (iii) Beijing Focus Media Wireless Co., Ltd.
("Focus Media Wireless"), and (E) (i) Appreciate Capital Ltd. ("ACL"), a British
Virgin Islands company, (ii) Beijing Jingrongtian Technology Co., Ltd. ("Beijing
ACL"), a PRC wholly-foreign owned enterprise, and (iii) Beijing Yangshi Sanwei
Advertisement Co., Ltd. ("Beijing Sanwei") and Shenzhen Yangshi Sanwei
Advertisement Co., Ltd. ("Shenzhen Sanwei"), each a PRC company. The Company and
the Group Entities taken as a whole have not sustained since the date of the
latest audited financial statements in the Pricing Prospectus any material loss
or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Pricing Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the Pricing
Prospectus, there has not been any change in the share capital, short term debt
or long term debt of the Company or any material adverse change or any
development involving a prospective material adverse change in or affecting the
general affairs, management, financial position, shareholders' equity or results
of operations of the Company and the Group Entities taken as a whole otherwise
than as set forth or contemplated in the Pricing Prospectus. Other than the
Group Entities, no other subsidiary or entity affiliated with the Company or
with the Controlling Person is or would be if owned or controlled by the Company
a "Significant Subsidiary" as defined in Regulation S-X under the Act;
(viii) Neither the Company nor any of the Group Entities owns any real
property and each of the Company and the Group Entities has good and marketable
title to all personal property owned by it, in each case free and clear of all
liens, encumbrances and defects except such as are described in the Pricing
Prospectus or such as do not materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property by each
of the Company and the Group Entities; and any real property and buildings held
under lease by each of the Company and the Group Entities are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by each of the Company and the Group Entities;
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(ix) The description and information in the Pricing Prospectus and the
Prospectus regarding the distribution agreements is true and accurate in all
material respects. Each of Focus Media Advertisement and Focus Media Defeng, and
to the best knowledge of the Company, the other parties to the distribution
agreements, has full power, authority and legal right to enter into, execute,
adopt, assume, issue, deliver and perform their respective obligations under
each of the distribution agreements to which they are a party, and has
authorized, executed and delivered each of the distribution agreements to which
they are a party, and such obligations constitute valid, legal and binding
obligations enforceable against each of them in accordance with the terms of
each of the distribution agreements. Focus Media Advertisement and Focus Media
Defeng are the only Group Entities to have entered into any of the distribution
agreements. Each of the distribution agreements is in proper legal form under
PRC laws and regulations for the enforcement thereof against each of the parties
thereto in the PRC without further action by any of them. The execution,
delivery and performance of each of the distribution agreements by the parties
thereto did not and will not (A) result in any violation of the business
license, articles of association, other constitutional documents (if any) or
permits of Focus Media Advertisement or Focus Media Defeng or, to the best
knowledge of the Company, any of the other parties thereto; (B) result in any
violation of or penalty under any laws, regulations, rules, orders, decrees,
guidelines, judicial interpretations, notices or other legislation of the PRC;
or (C) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any other contract, license,
indenture, mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument to which Focus Media Advertisement or Focus Media Defeng
is a party or by which Focus Media Advertisement or Focus Media Defeng is bound
or to which any of its property or assets is subject, except, in the case of
clauses (B) and (C), where any such conflict, breach, violation or default would
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on or affecting the general affairs, management, business,
financial position, shareholders' equity, results of operations or prospects of
the Company and the Group Entities taken as a whole (a "Material Adverse
Effect"). Each of the distribution agreements is in full force and effect and
none of Focus Media Advertisement or Focus Media Defeng or, to the best
knowledge of the Company, the other parties to any of the distribution
agreements is in breach or default in the performance or observance of any of
the terms or provisions of the distribution agreements, except where such breach
or default would not, individually or in the aggregate, be reasonably expected
to have a Material Adverse Effect. To the best knowledge of the Company, none of
the parties to any of the distribution agreements has sent or received any
communication regarding termination of, or intention not to perform its
obligations under, any of the distribution agreements, and no such termination
or non-performance has been threatened by any of the parties thereto;
(x) The description and information in the Pricing Prospectus and the
Prospectus regarding the display and poster frame placement agreements
(collectively, the "Placement Agreements") and the outdoor LED billboard lease
agreement (the "LED Lease Agreement"), is true and accurate in all material
respects. Each of the Group Entities, as applicable, and to the best knowledge
of the Company, the other parties to the Placement Agreements, the LED Lease
Agreement and the agreements with local branches of China Mobile Communications
Corporation ("China Mobile") and China United Communications Corporation ("China
Unicom") in connection with the mobile handset WAP-based advertising network
(collectively, the "WAP Agreements") has full power, authority and legal right
to enter into, execute, adopt, assume, issue, deliver and perform their
respective obligations under each of the Placement Agreements, the LED Lease
Agreement and the
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WAP Agreements to which they are a party, and has authorized, executed and
delivered each of the Placement Agreements, the LED Lease Agreement and the WAP
Agreements to which they are a party, and such obligations constitute valid,
legal and binding obligations enforceable against each of them in accordance
with the terms of each of the Placement Agreements, the LED Lease Agreement and
the WAP Agreements. Each of the Placement Agreements, the LED Lease Agreement
and the WAP Agreements is in proper legal form under PRC laws and regulations
for the enforcement thereof against each of the parties thereto in the PRC
without further action by any of them. The execution, delivery and performance
of each of the Placement Agreements, the LED Lease Agreement and the WAP
Agreements by the parties thereto did not and will not (A) result in any
violation of the business license, articles of association, other constitutional
documents (if any) or permits of the Group Entities or, to the best knowledge of
the Company, any of the other parties thereto; (B) result in any violation of or
penalty under any laws, regulations, rules, orders, decrees, guidelines,
judicial interpretations, notices or other legislation of the PRC, including
without limitation any applicable building or zoning ordinances, covenants, or
restrictions; or (C) conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any other contract,
license, indenture, mortgage, deed of trust, loan agreement, note, lease or
other agreement or instrument to which any of the Group Entities is a party or
by which any of the Group Entities is bound or to which any of their property or
assets is subject, except, in the case of clauses (B) and (C), where any such
conflict, breach, violation or default would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Each of the
Placement Agreements, the LED Lease Agreement and the WAP Agreements is in full
force and effect and none of the Group Entities which are a party or, to the
best knowledge of the Company, the other parties to any of the Placement
Agreements, the LED Lease Agreement and the WAP Agreements is in breach or
default in the performance or observance of any of the terms or provisions of
the Placement Agreements, the LED Lease Agreement and the WAP Agreements, except
where such breach or default would not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect. To the best knowledge of
the Company, none of the parties to any of the Placement Agreements, the LED
Lease Agreement and the WAP Agreements has sent or received any communication
regarding termination of, or intention not to renew, any of the Placement
Agreements, the LED Lease Agreement and the WAP Agreements, and no such
termination or non-renewal has been threatened by any of the parties thereto,
except where any such termination or non-renewal would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. Each of
Focus Media Advertisement, Focus Media Defeng, the Focus Media Advertisement
Subsidiaries, and the Focus Media Advertisement Branches and the regional
distributors has rights of access sufficient to install, replace, upgrade,
inspect, maintain, monitor and repair the flat-panel television displays that
are intended to be placed in the locations contemplated by each of the Placement
Agreements to which it is a party. Each of Framedia Advertisement and the
Framedia Branches and the regional distributors has rights of access sufficient
to install, replace, upgrade, inspect, maintain, monitor and repair the
advertising poster frames that are intended to be placed in the locations
contemplated by each of the Placement Agreements to which it is a party, except
where the lack of such rights would not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect. Focus Media Wireless
operates a mobile handset WAP-based advertising service over China Mobile and
China Unicom's mobile telecommunication networks. Focus Media Wireless may be
required by the PRC regulatory authorities to obtain a value-added
telecommunication service permit for its mobile handset WAP-based advertising
service and it has applied for such permit. To the best knowledge of the
Company, Yihukuan Media Co., Ltd. has rights of access sufficient to
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install, replace, upgrade, inspect, maintain, monitor and repair the LED
billboards that are intended to be placed in the locations contemplated by the
LED Lease Agreement to which it is a party. Focus Media Advertisement, Focus
Media Defeng, the Focus Media Advertisement Subsidiaries, the Focus Media
Advertisement Branches, Framedia Advertisement, the Framedia Branches and the
regional distributors are the only Group Entities that have entered into any
Placement Agreements, New Focus Media Advertisement is the only Group Entity
that has entered into the LED Lease Agreement, and none of the Company or the
Company Subsidiaries is a party to any Placement Agreements or the LED Lease
Agreement;
(xi) Each of the Company and the Group Entities has full power, authority
and legal right to enter into, execute, adopt, assume, issue, deliver and
perform their respective obligations under each of the contracts and agreements
referred to or described in, or filed as an exhibit to, the Registration
Statement to which it is a party (the "Disclosed Contracts"), and has
authorized, executed and delivered each of the Disclosed Contracts, and such
obligations constitute valid, legal and binding obligations enforceable against
each of them in accordance with the terms of each of the Disclosed Contracts.
Each of the Disclosed Contracts is in proper legal form under relevant laws for
the enforcement thereof against each of the parties thereto without further
action by any of them. The execution, delivery and performance of each of the
Disclosed Contracts by the parties thereto did not and will not (A) result in
any violation of the business license, articles of association, other
constitutional documents (if any) or permits of any of the parties thereto; (B)
result in any violation of or penalty under any laws, regulations, rules,
orders, decrees, guidelines, judicial interpretations, notices or other
legislation of the PRC or any other jurisdiction; or (C) conflict with or result
in a breach or violation of any of the terms or provisions of, or constitute a
default under, any other contract, license, indenture, mortgage, deed of trust,
loan agreement, note, 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 their
property or assets is subject, except, in the case of clauses (B) and (C), where
any such conflict, breach, violation or default would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. Each of
the Disclosed Contracts is in full force and effect and none of the parties to
any of the Disclosed Contracts is in breach or default in the performance or
observance of any of the terms or provisions of the Disclosed Contracts. Neither
the Company nor any of the Group Entities has sent or received any communication
regarding termination of, or intention not to renew, any of the Disclosed
Contracts, and no such termination or non-renewal has been threatened by the
Company or, to the best knowledge of the Company and the Controlling Person, any
other party to any Disclosed Contract;
(xii) The Company has been duly organized and is validly existing as a
company in good standing under the laws of the Cayman Islands, with legal right,
power and authority (corporate and other) to own, lease and operate its
properties and conduct its business as described in the Pricing Prospectus and
the Prospectus, and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification, except where the failure to be so qualified in
any such jurisdiction would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect; and each of the Group Entities has
been duly organized and is validly existing in good standing under the laws of
its jurisdiction of organization, with legal right, power and authority
(corporate and other) to own, lease and operate its properties and conduct its
business as described in the Pricing Prospectus and the Prospectus, and has been
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duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns or
leases properties or conducts any business so as to require such qualification,
or is subject to no material liability or disability by reason of the failure to
be so qualified in any such jurisdiction; and each of the business licenses and
articles of association of each of the Group Entities formed under the laws and
regulations of the PRC is in full force and effect under, and in compliance
with, PRC law;
(xiii) Except for Focus Media Hong Kong, none of the Group Entities owns or
leases properties or conducts any business outside of the PRC; none of the Group
Entities needs to be duly qualified as a foreign corporation for the transaction
of business under the laws of any jurisdiction in which it is not now so
qualified;
(xiv) Each of the Company and the Group Entities, as applicable, has the
legal right, power and authority (corporate and other) to enter into and perform
its obligations under each of the agreements which have been executed by the
parties thereto and are described in the Pricing Prospectus and the Prospectus
under the captions "Related Party Transactions - Agreements Among Us, Our
Subsidiaries, Our PRC Operating Affiliates and Their Shareholders and
Subsidiaries, "Related Party Transactions - Other Related Party Transactions"
and "Our Corporate Structure" in the Pricing Prospectus and the Prospectus and
filed as Exhibits 10.1 through 10.91 to the Registration Statement
(collectively, the "Structure Agreements") to which it is a party and has taken
all necessary corporate action to authorize the execution, delivery and
performance of, and has authorized, executed and delivered, each of the
Structure Agreements to which it is a party; and each of the Structure
Agreements to which each of the Company and the Group Entities, as applicable,
is a party constitutes a valid and legally binding obligation of each of them
enforceable in accordance with its terms, subject, as to enforceability, to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles;
(xv) Each entity or PRC citizen that is a nominee shareholder of our PRC
Operating Affiliates (the "PRC Nominee Shareholders") has executed and delivered
each of the Structure Agreements to which he is a party; and each of the
Structure Agreements to which he is a party constitutes a valid and legally
binding obligation of each of them enforceable in accordance with its terms,
subject as to enforceability to bankruptcy, insolvency, reorganization and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles;
(xvi) The execution and delivery by each of the Company and the Group
Entities of, and the performance by each of them of its respective obligations
under, each of the Structure Agreements to which it is a party and the
consummation by them of the transactions and the occurrence of the events
contemplated therein will not: (A) 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 to which any of the Company and the Group Entities, as applicable, is
bound or to which any of their properties or assets is bound or subject, except
where any such conflict, breach, violation or default would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect; (B)
result in any violation of the provisions of the respective articles of
association, business license, other constitutional documents (if any) or
permits of any of the Company and the Group Entities; or (C) result in any
violation of or penalty under any laws, regulations, rules, orders, decrees,
guidelines, judicial interpretations, notices or other legislation of the PRC;
9
(xvii) The execution and delivery by each of PRC Nominee Shareholder of,
and the performance by each of them of his or its obligations under, each of the
Structure Agreements to which each of them is a party and the consummation by
them of the transactions contemplated therein will not: (A) 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 to which he or it is a party or by
which he is bound or to which any of his properties or assets is bound or
subject; or (B) result in any violation of or penalty under any laws,
regulations, rules, orders, decrees, guidelines, judicial interpretations,
notices or other legislation of the PRC;
(xviii) Each of the Structure Agreements is in proper legal form under the
laws and regulations of the PRC for the enforcement thereof against each of the
parties thereto in the PRC without further action by any of them; and to ensure
the legality, validity, enforceability or admissibility in evidence of each of
the Structure Agreements 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 of the Structure Agreements
except as disclosed in the Pricing Prospectus and the Prospectus, which the
Company undertakes to file with the relevant PRC government authorities upon the
assignment of the pledged equity as the result of the exercise by the pledgees
of the right described therein);
(xix) Except as disclosed in the Pricing Prospectus, the Company and each
of the Group Entities has all necessary licenses, franchises, concessions,
consents, authorizations, approvals, orders, certificates and permits of and
from, and has made all declarations and filings with, all governmental agencies
to own, lease, license and use its properties, assets and conduct its business
in the manner described in the Pricing Prospectus except where the lack of such
licenses, franchises, concessions, consents, authorizations, approvals, orders,
certificates and permits would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect; and such licenses, consents,
authorizations, approvals, orders, certificates or permits contain no materially
burdensome restrictions or conditions not described in the Pricing Prospectus
except where any such restrictions or conditions would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. Except
as described in the Pricing Prospectus, none of the Company or any of the Group
Entities 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 the Company and each of the Group
Entities is in compliance with the provisions of all such licenses, consents,
authorizations, approvals, orders, certificates or permits in all material
respects;
(xx) Except as disclosed in the Pricing Prospectus, none of the Company or
any of the Group Entities is (A) in violation of any laws, regulations, rules,
orders, decrees, guidelines, judicial interpretations, notices or other
legislation of the PRC; (B) in breach of or in default under any approval,
consent, waiver, authorization, exemption, permission, endorsement or license
granted by any court or governmental agency or body of any stock exchange
authorities ("Governmental Agency") in the PRC; (C) in violation of its
constituent documents, business license, articles of association or permits; or
(D) in breach or default in the performance or observance of any obligation,
agreement, covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound, except, in the case
of clauses (A), (B) and (D), where any such violation would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect;
10
(xxi) The Company has an authorized and paid-in capitalization as set forth
in the Pricing Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, and are fully paid and
non-assessable and conform to the description of the Ordinary Shares contained
in the Pricing Prospectus; and all of the equity interests of each of the Group
Entities has been duly and validly authorized and issued, and are fully paid and
non-assessable; all of the share capital of each of Focus Media Hong Kong,
InfoAchieve, Dotad Holdings, Allyes Information Technology and Pinone and 70% of
the equity interest of ACL is owned by the Company, free and clear of all liens,
encumbrances, equities or claims; all of the equity interest of each of Focus
Media Technology and New Focus Media Technology is owned by Focus Media Hong
Kong, free and clear of all liens, encumbrances, equities or claims; all of the
equity interest of Framedia Investment is owned by InfoAchieve, free and clear
of all liens, encumbrances, equities or claims; all of the equity interest of
Dotad Technology is owned by Dotad Holdings, free and clear of all liens,
encumbrances, equities or claims; all of the registered capital of Beijing ACL
has been fully paid and all of the equity interest in Beijing ACL is owned by
ACL, free and clear of all liens, encumbrances, equities or claims; all of the
registered capital of Focus Media Digital has been fully paid and 90% of the
equity interest of Focus Media Digital is owned by Focus Media Technology and
10% of the equity interest of Focus Media Digital is owned by Focus Media
Advertisement, and except as described in the Pricing Prospectus under the
caption "Related Party Transactions", such equity interest is owned by each of
them free and clear of all liens, encumbrances, equities or claims; all of the
registered capital of New Focus Media Advertisement has been fully paid and 90%
of the equity interest of New Focus Media Advertisement is owned by Focus Media
Digital and 10% of the equity interest of New Focus Media Advertisement is owned
by Focus Media Advertisement, and except as described in the Pricing Prospectus
under the caption "Related Party Transactions", such equity interest is owned by
each of them free and clear of all liens, encumbrances, equities or claims; and
all of the registered capital of Focus Media Defeng has been fully paid and 90%
of the equity interest in Focus Media Defeng is owned by Focus Media Digital and
10% of the equity interest in Focus Media Defeng is owned by Focus Media
Advertising Agency, such equity interest is owned by each of them free and clear
of all liens, encumbrances, equities or claims. Focus Media Advertisement owns
the equity interest of its Subsidiaries in the percentages set forth in Schedule
IV hereto, free and clear of all liens, encumbrances, equities or claims, except
as described in the Pricing Prospectus; each PRC Operating Affiliate is in each
case wholly owned by two PRC Nominee Shareholders, each of which is either (i) a
PRC citizen designated by us or (ii) a PRC entity wholly owned by our
subsidiaries; there are no outstanding securities convertible into or
exchangeable for, or warrants, rights or options to purchase from the Company,
or obligations of the Company to issue, the Ordinary Shares or any other class
of capital stock of the Company except as set forth in the Pricing Prospectus;
the Shares may be freely deposited by the Company and the Selling Shareholders
with Custodian for the Depositary against issuance of the ADSs; the ADSs, when
issued and delivered against payment therefore, will be freely transferable by
the Company and the Selling Shareholders to or for the account of the several
Underwriters and (to the extent described in the Pricing Prospectus and the
Prospectus) the initial purchasers thereof; and there are no restrictions on
subsequent transfers of the ADSs under the laws of the Cayman Islands, the PRC
or the United States except as described in the Pricing Prospectus under the
captions "Description of Share Capital" and "Description of American Depositary
Shares";
(xxii) The unissued Shares to be issued underlying the ADSs to be sold by
the Company to the Underwriters hereunder have been duly and validly authorized
and, when
11
issued and delivered against payment therefor as provided herein, will be duly
and validly issued and fully paid and non-assessable and will conform in all
material respects to the description of the Ordinary Shares contained in the
Prospectus. Apart from the Ordinary Shares, there are no other classes or series
of shares of capital stock (or securities convertible, exchangeable or
exercisable for shares of capital stock) of the Company; except as disclosed in
the Pricing Prospectus, there are no outstanding options, warrants, rights
(including without limitation special voting rights, veto rights, minority
shareholder or equity interest holder rights, preemptive rights or rights of
first refusal), proxy or shareholder agreements, or contracts, agreements or
understandings of any kind for the purchase or acquisition from the Company or
any of the Group Entities of any of their shares, equity interests or other
securities;
(xxiii) Except as disclosed in the Pricing Prospectus, 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, or to list on any U.S. or non-U.S.
securities exchange or inter-dealer quotation system, 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 the Registration
Statement, the ADS Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Company under the Act
or being listed on any U.S. or non-U.S. securities exchange or inter-dealer
quotation system;
(xxiv) This Agreement has been duly authorized, executed and delivered by
the Company and the Controlling Person, and constitutes a valid and legally
binding agreement of the Company and the Controlling Person, enforceable in
accordance with its terms, subject, as to enforceability, to bankruptcy,
insolvency, reorganization and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles;
(xxv) The Deposit Agreement has been duly authorized, executed and
delivered by the Company and the Depositary, and constitutes a valid and legally
binding agreement of the Company enforceable in accordance with its terms,
subject, as to enforceability, to bankruptcy, insolvency, reorganization and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles; upon issuance by the Depositary of the ADSs
and the deposit of Shares in respect thereof in accordance with the provisions
of the Deposit Agreement, such ADSs will be duly and validly issued and the
persons in whose names the ADSs are registered will be entitled to the rights
specified therein and in the Deposit Agreement; and the Deposit Agreement and
the ADSs conform in all material respects to the descriptions thereof contained
in the Pricing Prospectus and Prospectus;
(xxvi) No consents, approvals, authorizations, orders, registrations,
clearances or qualifications of or with any Governmental Agency having
jurisdiction over the Company or any of the Group Entities or any of their
respective properties or any stock exchange authorities (hereinafter referred to
as "Governmental Authorizations") are required for the deposit of Shares, and
the issuance of ADSs in respect thereof and for the execution and delivery by
the Company of this Agreement to be duly and validly authorized except for the
registration of the Shares and the ADSs under the Act, any filings required
under Rule 424 under the Act, and such consents, approvals, authorizations,
orders, registrations, clearances and qualifications as may be necessary under
state securities or other blue sky laws;
(xxvii) Except as disclosed in the Pricing Prospectus, all dividends and
other distributions declared and payable on the shares of capital stock of the
Company and each
12
Overseas Subsidiary, PRC Subsidiary and PRC Operating Affiliate may under the
current laws and regulations of its respective jurisdiction of incorporation, as
applicable, be paid to their respective shareholders in foreign currency that
may be converted, in the case of the Company, into U.S. dollars and, in the case
of the PRC Subsidiaries and PRC Operating Affiliates, freely transferred out of
the PRC, and except as disclosed in the Pricing Prospectus, all such dividends
and other distributions will not be subject to withholding or other taxes under
the laws and regulations of the PRC, the Cayman Islands, the British Virgin
Islands or Hong Kong, as applicable, and are otherwise free and clear of any
other tax, withholding or deduction in the its jurisdiction of incorporation, as
applicable, and without the necessity of obtaining any Governmental
Authorization in its jurisdiction of incorporation, as applicable;
(xxviii) The issue and sale of the Shares to be sold by the Company
hereunder and the deposit of the Shares being deposited with the Depositary
against issuance of the ADSs and the compliance by the Company with all of the
provisions of this Agreement and the Deposit Agreement and the consummation of
the transactions herein and therein contemplated will not (A) 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 to which the Company or any of the
Group Entities is a party or by which the Company or any of the Group Entities
is bound or to which any of the property or assets of the Company or any of the
Group Entities is subject, except where any such breach or violation would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; nor (B) will such action result in any violation of the
provisions of the constituent documents of the Company or any of the Group
Entities or any statute or any order, rule or regulation of any Governmental
Agency having jurisdiction over the Company or any of the Group Entities or any
of their properties or assets; and no consent, approval, authorization, order,
registration or qualification of or with any such Governmental Agency is
required for the issue and sale of the Shares or the ADSs, for the deposit of
the Shares being deposited with the Depositary against issuance of the ADSs to
be delivered or the consummation by the Company of the transactions contemplated
by this Agreement and the Deposit Agreement, except (A) the registration under
the Act of the Shares and the ADSs, (B) such Governmental Authorizations as have
been duly obtained and are in full force and effect and copies of which have
been furnished to you and (C) such Governmental Authorizations as may be
required under state securities or blue sky laws or any laws of jurisdictions
outside the Cayman Islands and the United States in connection with the purchase
and distribution of the Shares and ADSs by or for the respective accounts of the
Underwriters;
(xxix) The ADSs have been approved for listing on the National Association
of Securities Dealers Automated Quotations Global Market System ("Nasdaq Global
Market"), subject to official notice of issuance, and apart from the ADSs, the
other American depositary shares representing ordinary shares of the Company are
validly maintained for listing on the Nasdaq Global Market;
(xxx) None of the Company or any of the Group Entities 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;
(xxxi) Except as set forth in the Pricing Prospectus, 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 Underwriters to the government
of the Cayman Islands, or any political
13
subdivision or taxing authority thereof or therein, in connection with: (A) the
deposit with the Depositary of the Shares by the Company against the issuance of
the ADSs, (B) the sale and delivery by the Company of the Shares and the ADSs to
or for the respective accounts of the several Underwriters or (C) the sale and
delivery by the Underwriters of the Shares and the ADSs to the initial
purchasers thereof;
(xxxii) None of the Underwriters will be deemed to be resident, domiciled,
carrying on business or subject to taxation in the Cayman Islands solely by
reason of its execution, delivery, performance or enforcement of, or the
consummation of any transaction contemplated by, this Agreement, the Deposit
Agreement or any other document furnished hereunder or thereunder;
(xxxiii) Neither the Company nor any of the Group Entities has taken,
directly or indirectly, any action which was designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares and the ADSs;
(xxxiv) The statements set forth in the Pricing Prospectus and the
Prospectus under the captions "Description of Share Capital" and "Description of
American Depositary Shares", insofar as they purport to constitute a summary of
the terms of the Ordinary Shares and the ADSs, respectively;
(xxxv) Except as set forth in the Pricing Prospectus, there are no legal,
arbitration or governmental proceedings pending to which the Company or any of
the Group Entities is a party or of which any property of the Company or any of
the Group Entities is the subject (A) which, if determined adversely to the
Company or any of the Group Entities, would individually or in the aggregate
have a Material Adverse Effect; or (B) that are required to be described in the
Registration Statement or the Prospectus and are not so described; and, to the
best knowledge of the Company and the Controlling Person, no such proceedings
are threatened or contemplated by any Governmental Agency or others;
(xxxvi) The statements set forth in the Pricing Prospectus and the
Prospectus under the caption "Business - Legal Proceedings" are true, accurate
and complete in all material respects;
(xxxvii) The Company is not and, after giving effect to the offering and
sale of the Shares and the ADSs and the application of proceeds thereof, will
not be an "investment company", as such term is defined in the U.S. Investment
Company Act of 1940, as amended (the "Investment Company Act");
(xxxviii) Each of this Agreement and the Deposit Agreement is in proper
form to be enforceable in the Cayman Islands in accordance with its terms; to
ensure the legality, validity, enforceability or admissibility into evidence in
the Cayman Islands of this Agreement or the Deposit Agreement, it is not
necessary that this Agreement or the Deposit Agreement be filed or recorded with
any court or other authority in the Cayman Islands or that any stamp,
documentary, registration, notary, excise or similar tax in the Cayman Islands
be paid on or in respect of this Agreement, the Deposit Agreement or any other
documents to be furnished hereunder;
(xxxix) The Registration Statement, the Prospectus and the ADS Registration
Statement and the filing of the Registration Statement, the Prospectus and the
ADS
14
Registration Statement with the Commission have been duly authorized by and on
behalf of the Company, and the Registration Statement and the ADS Registration
Statement have been duly executed pursuant to such authorization by and on
behalf of the Company;
(xl) Except as disclosed in the Pricing Prospectus and the Prospectus, each
of the Company and the Group Entities own, possess, license or have other rights
to use the patents and patent applications, copyrights, trademarks, service
marks, trade names, Internet domain names, technology, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary rights) and other
intellectual property necessary or used in any material respect to conduct their
business in the manner in which it is being conducted and in the manner in which
it is contemplated as set forth in the Pricing Prospectus and the Prospectus
(collectively, the "Intellectual Property"); to the knowledge of the Company,
none of the material copyrights owned or licensed by the Company or any of the
Group Entities is unenforceable or invalid; except as disclosed in the Pricing
Prospectus, neither the Company nor any of the Group Entities has received any
notice of violation or conflict with (and none of the Company or any of the
Group Entities knows of any basis for violation or conflict with) rights of
others with respect to the Intellectual Property that, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect;
except as disclosed in the Pricing Prospectus, there are no pending or to the
best of the Company's knowledge, threatened actions, suits, proceedings or
claims by others that allege the Company or any of the Group Entities is
infringing any patent, trade secret, trade xxxx, service xxxx, copyright or
other intellectual property or proprietary right that, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect; and
the discoveries, inventions, products or processes of the Company and the Group
Entities referenced in the Pricing Prospectus and the Prospectus do not, to the
best knowledge of the Company and the Controlling Person, violate or conflict
with any intellectual property or proprietary right of any third person, or any
discovery, invention, product or process that is the subject of a patent
application filed by any third person; the Company and the Group Entities are
not in breach of, and have complied in all material respects with all terms of,
any license or other agreement relating to the Intellectual Property; to the
extent the Intellectual Property is sublicensed to the Company or any of the
Group Entities by a third party, such sublicensed rights shall continue in full
force and effect if the principal third party license terminates for any reason;
and there are no contracts or other documents material to the Intellectual
Property other than those described in the Pricing Prospectus. All trademarks
related to the brand name Focus Media are held by Focus Media Technology and
validly licensed to the PRC Operating Subsidiaries under the caption "Related
Party Transactions";
(xli) The Company was not for 2006, and does not expect to be for 2007, 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 does
not expect to become a PFIC in the future;
(xlii) At the earliest time after the filing of the Registration Statement
that the Company or another offering participant made a bona fide offer (within
the meaning of Rule 164(h)(2) under the Act) of the Shares or the ADSs, the
Company was not an "ineligible issuer" as defined in Rule 405 under the Act;
(xliii) Deloitte Touche Tohmatsu CPA Ltd., who have certified certain
consolidated financial statements of the Company, are the independent public
accountants of the Company as required by the Act and the Exchange Act and the
rules and regulations of the Commission thereunder;
15
(xliv) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that: (A) transactions are executed
in accordance with management's general or specific authorizations; (B)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles in the
United States ("US GAAP"); (C) access to assets is permitted only in accordance
with management's general or specific authorization; (D) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate actions are taken with respect to any differences; and
(E) each of the Company and the Group Entities has made and kept books, records
and accounts which, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of assets of such entity and provide a sufficient
basis for the preparation of financial statements in accordance with US GAAP;
(xlv) Except as disclosed in the Pricing Prospectus and the Prospectus, the
Company maintains a system of internal control over financial reporting (as such
term is defined in Rule 13a-15(f) of the Exchange Act) that complies with the
requirements of the Exchange Act and has been designed by the Company's
principal executive officer and principal financial officer, or under their
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. Since the
date of the latest audited financial statements in the Pricing Prospectus there
has been no change in the Company's internal control over financial reporting,
and, except as disclosed in the Pricing Prospectus, the Company's independent
accountants have not notified the Company of any "significant deficiency" (as
that term is defined under standards established by the Public Company
Accounting Oversight Board (United States) in the Company's internal accounting
controls, or other weaknesses or deficiencies in the design or operation of the
Company's internal accounting controls, that has materially affected, or is
reasonably likely to materially affect, the Company's internal control over
financial reporting, or could adversely affect the Company's ability to record,
process, summarize and report financial data consistent with the assertions of
the Company's management in the financial statements. The Company maintains
disclosure controls and procedures (as such term is defined in Rule 13a-15(e) of
the Exchange Act) that comply with the requirements of the Exchange Act, such
disclosure controls and procedures have been designed to ensure that material
information relating to the Company and the Group Entities is made known to the
Company's principal executive officer and principal financial officer by others
within those entities. Such disclosure controls and procedures are effective;
(xlvi) Except as set forth in the Pricing 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 of the Group Entities, or to any
other person;
(xlvii) No material labor dispute, work stoppage, slow down, strike or
other conflict with the employees of the Company or any of the Group Entities
exists or, to the best knowledge of the Company and the Controlling Person, is
threatened or contemplated;
(xlviii) The section entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Critical Accounting Policies" in
the Pricing Prospectus and the Prospectus accurately and fully describes in all
material respects: (A) accounting policies which the Company believes are the
most important in the portrayal of the Company's financial condition and results
of operations and which require management's most difficult, subjective or
complex judgments ("Critical Accounting Policies"); (B)
16
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 the
Company's board of directors and management have reviewed and agreed with the
selection, application and disclosure of Critical Accounting Policies and have
consulted with its legal advisers and independent accountants with regard to
such disclosure; true and complete copies of all reports, letters or notices
delivered to the Company by the Company's independent accountants regarding the
Company's internal accounting controls have been delivered to the
Representatives;
(xlix) Since the date of the latest audited financial statements in the
Pricing Prospectus, none of the Company or any of the Group Entities has: (A)
entered into or assumed any contract, (B) incurred or agreed to incur any
liability (including any contingent liability) or other obligation, (C) acquired
or disposed of or agreed to acquire or dispose of any business or any other
asset or (D) assumed or acquired or agreed to assume or acquire any liabilities
(including contingent liabilities) that would be material to the Company or the
Group Entities, and that are not otherwise described in the Pricing Prospectus;
(l) The section entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital Resources" in the
Pricing Prospectus and the Prospectus accurately and fully describes all
material trends, demands, commitments, events, uncertainties and risks, and the
potential effects thereof, that the Company believes would materially affect
liquidity and are reasonably likely to occur; none of the Company nor any of the
Group Entities is a party to or subject to, any off-balance sheet transactions,
arrangements, and obligations, including, without limitation, relationships with
unconsolidated entities that are contractually limited to narrow activities that
facilitate the transfer of or access to assets by the Company or the Group
Entities, such as structured finance entities and special purpose entities
(collectively, "off-balance sheet arrangements");
(li) Except as set forth in the Pricing Prospectus, none of the Company or
any of the Group Entities is engaged in any transactions that are material (or
that would otherwise require disclosure pursuant to Item 404 of Regulation S-K
under the Act) with its directors, officers, management, shareholders, or any
other person, including persons formerly holding such positions, on terms that
are not available from unrelated third parties on an arm's-length basis;
(lii) No holder of any of the Shares or the ADSs after the consummation of
the transactions contemplated by this Agreement or the Deposit Agreement is or
will be subject to any liability in respect of any liability of the Company by
virtue only of its holding of any such Shares or ADSs; except as set forth in
the Pricing Prospectus, there are no limitations on the rights of holders of the
Shares or the ADSs to hold, vote or transfer their securities;
(liii) The audited and unaudited consolidated financial statements (and the
notes and schedules thereto) of the Company, Alleys Information Technology
Company Limited, InfoAchieve, and Target Media Holdings Limited and its
subsidiaries in the Pricing Prospectus and the Prospectus (including without
limitation interim financial statements) present fairly the consolidated
financial position of the respective entities as of the dates specified and the
consolidated results of operations and changes in consolidated financial
position of the respective entities for the periods specified, and such
financial statements have been prepared in conformity with US GAAP applied on a
consistent basis throughout the periods presented (other than as described
therein); and the summary and selected consolidated financial data and other
unaudited financial information in the Pricing
17
Prospectus and the Prospectus (including without limitation unaudited yearly and
interim financial statements and unaudited quarterly financial information in
the Pricing Prospectus and the Prospectus) present fairly the information shown
therein and have been compiled on a basis consistent with that of the audited
consolidated financial statements included therein subject, in the case of
unaudited interim financial information, to ordinary year-end adjustments
consistent with past practice, and the assumptions used in preparing the pro
forma financial statements in the Pricing Prospectus and the Prospectus as of
the dates specified provide a reasonable basis for presenting the significant
effects directly attributable to the transactions or events described therein,
the related pro forma adjustments give appropriate effect to those assumptions,
and the pro forma columns therein reflect the proper application of those
adjustments to the corresponding historical financial statement amounts;
(liv) Under the laws of the Cayman Islands, each holder of ADSs issued
pursuant to the Deposit Agreement shall be entitled, subject to the Deposit
Agreement, to seek enforcement of its rights through the Depositary or its
nominee registered as representative of the holders of the ADSs in a direct
suit, action or proceeding against the Company;
(lv) Except as set forth in the Pricing Prospectus, or this Agreement, all
amounts payable by the Company to the Underwriters hereunder or in respect of
the ADSs or the underlying Shares shall be made free and clear of and without
deduction for or on account of any taxes imposed, assessed or levied by the
Cayman Islands or any authority thereof or therein (except such income taxes as
may otherwise be imposed by the Cayman Islands on payments hereunder to any
Underwriter whose net income is otherwise subject to tax or withholding by the
Cayman Islands by virtue of its conducting any direct business in the Cayman
Islands unrelated to any transaction contemplated hereunder with respect to any
such income tax) nor are any taxes imposed in the Cayman Islands on, or by
virtue of the execution or delivery of, such documents;
(lvi) Except where any conflict, breach, violation, failure or breach would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, all returns, reports or filings which ought to have been made by
or in respect of the Company and the Group Entities for all taxation purposes
have been made and all such returns are up to date, true, correct and on a
proper basis, and are not the subject of any dispute with the relevant revenue
or other appropriate authorities; each of the Company and the Group Entities has
paid all taxes required to be paid by them and any related assessments, charges,
levies, fines or penalties; there is no tax deficiency, assessment, charge,
levy, fine or penalty against the Company or the Group Entities as to which a
reserve would be required to be established under US GAAP which has not been so
reserved or which is required to be disclosed in the Pricing Prospectus and the
Prospectus which has not been so disclosed and there are no facts or
circumstances in existence which would be expected to give rise to any such
deficiency, assessment, charge, levy, fine or penalty; all local and national
PRC governmental tax holidays, exemptions, waivers, financial subsidies, and
other local and national PRC tax relief, concessions and preferential treatment
enjoyed by the Company or any of the Group Entities are valid, binding and
enforceable and do not violate any laws, regulations, rules, orders, decrees,
guidelines, judicial interpretations, notices or other legislation of the PRC;
none of the Company or any of the Group Entities has received notice of any tax
deficiency with respect to the Company or any of the Group Entities; and none of
the Company, the Controlling Person or the Group Entities, to the best knowledge
of the Company and the Controlling Person, is aware of any tax deficiency or
representation of the facts on any tax return made by the Company or any of the
Group Entities individually or
18
collectively that would be expected to be challenged or asserted against the
Company or any of the Group Entities or any of their respective properties or
assets other than which would not have a Material Adverse Effect;
(lvii) Each of Focus Media Digital, Focus Media Advertising Agency, New
Perfect Media, and New Focus Media Advertisement is, and has since its inception
been, in compliance with all requirements under all applicable PRC laws and
regulations to qualify for their exemptions from enterprise income tax in 2004,
2005, 2006 and/or 2007 (the "Tax Exemptions") as described in the Pricing
Prospectus and the Prospectus under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Taxation", and the
actual operations and business activities of each of Focus Media Digital and
Focus Media Advertising Agency are sufficient to meet the qualifications for
their Tax Exemptions. No submissions made to any PRC government authority in
connection with obtaining their Tax Exemptions contained any misstatement or
omission that would have affected the granting of their Tax Exemptions. None of
Focus Media Digital, Focus Media Advertising Agency, New Perfect Media or New
Focus Media Advertisement has received notice of any deficiency in their
respective applications for their Tax Exemptions, and neither the Company nor
the Controlling Person is aware, to its or his best knowledge, is not aware of
any reason why any of Focus Media Digital, Focus Media Advertising Agency, New
Perfect Media or New Focus Media Advertisement might not qualify for, or be in
compliance with the requirements for, their Tax Exemptions;
(lviii) The Company has provided you true, correct, and complete copies of
all documentation pertaining to any extension of credit in the form of a
personal loan made, directly or indirectly, by the Company or any of the Group
Entities to any director or executive officer of the Company; and since December
31, 2006, except as disclosed in the Pricing Prospectus and the Prospectus under
the caption "Related Party Transactions - Other Related Party Transactions -
Loans to Shareholders of Our PRC Operating Affiliates", the Company has not,
directly or indirectly, including through any of the Group Entities: (A)
extended credit, arranged to extend credit, or renewed any extension of credit,
in the form of a personal loan, to or for any director or executive officer of
the Company, or to or for any family member or affiliate of any director or
executive officer of the Company; or (B) made any material modification,
including any renewal thereof, to any term of any personal loan to any director
or executive officer of the Company, or any family member or affiliate of any
director or executive officer, which loan was outstanding on December 31, 2006;
(lix) Any statistical or market-related data, or any other operating data
or statistics provided by third parties in the Pricing Prospectus and the
Prospectus are based on or derived from sources that the Company reasonably
believes to be reliable and accurate, and the Company has obtained the written
consent for the use of such data from such sources to the extent required; and
all the operating data and statistics contained in the Pricing Prospectus and
the Prospectus that are generated or supplied by the Company or members of its
management are derived from the books and records of account of the Company, and
the Company reasonably believes such operating data and statistics are true and
accurate and such operating data and statistics fairly reflect the information
presented;
(lx) There are no contracts, agreements or understandings between the
Company and any person that would give rise to a claim against the Company or
any Underwriter for a brokerage commission, finder's fee or other like payment
in connection with the issuance and sale of the ADSs;
19
(lxi) The description and information in the Pricing Prospectus and the
Prospectus under the captions "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Acquisitions" and "Our Recent Significant
Acquisitions" regarding the acquisitions described therein (the "Acquisitions")
is true and accurate in all material respects and nothing has been omitted from
such description which would make the same misleading in any material respect.
Each of the parties to any agreements entered into in connection with the
Acquisitions (collectively, the "Acquisition Agreements") has full power,
authority and legal right to enter into, execute, adopt, assume, issue, deliver
and perform its respective obligations under each of the Acquisition Agreements
to which they are a party, and has authorized, executed and delivered each of
the Acquisition Agreements to which they are a party, and such obligations
constitute valid, legal and binding obligations enforceable against each of them
in accordance with the terms of each of the Acquisition Agreements. Each of the
Acquisition Agreements is in proper legal form under relevant laws and
regulations for the enforcement thereof against each of the parties thereto
without further action by any of them. The execution, delivery and performance
of each of the Acquisition Agreements by the parties thereto, and the
consummation of the transactions contemplated thereunder (taken individually or
together as a whole), did not and will not (A) result in any violation of the
business license, articles of association, other constitutional documents (if
any) or permits of any of the parties thereto; (B) result in any violation of or
penalty under any laws, regulations, rules, orders, decrees, guidelines,
judicial interpretations, notices or other legislation of the PRC; or (C)
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any other contract, license,
indenture, mortgage, deed of trust, loan agreement, note, 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 their property or assets is subject, except, in the
case of clauses (B) and (C), where any such breach, violation or default would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Except as described in the Pricing Prospectus, all of the
parties to the Acquisition Agreements have fully performed all of their
obligations under each of the Acquisition Agreements to which they are a party
and all the transactions contemplated under each of the Acquisition Agreements
have been consummated in accordance with the terms thereof, including without
limitation registration with the relevant PRC governmental authorities necessary
to make the Acquisitions effective under PRC laws and regulations. In each
Acquisition involving the acquisition of entities located both in and outside of
China, prior to the time each such Acquisition was contemplated, each of the
related entities had in place legally binding and effective agreements (the
"Control Agreements") sufficient for the entity located in China to be
considered a "variable interest entity" of the entity located outside China as
defined in FIN 46 issued by the Financial Accounting Standards Board in 2003,
and the execution, delivery and performance of each of the Control Agreements by
the parties thereto did not and will not (A) result in any violation of the
business license, articles of association, other constitutional documents (if
any) or permits of any of the parties thereto; (B) result in any violation of or
penalty under any laws, regulations, rules, orders, decrees, guidelines,
judicial interpretations, notices or other legislation of the PRC; or (C)
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any other contract, license,
indenture, mortgage, deed of trust, loan agreement, note, 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 their property or assets is subject, except, in the
case of clauses (B) and (C), where any such breach, violation or default would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. To the best knowledge of the Company and the Controlling Person,
there is no reason that either the structure of the Acquisitions as
20
contemplated under the Acquisition Agreements or the structures contemplated
under the Control Agreements, might be subject to challenge by the relevant PRC
governmental authorities under any laws, regulations, rules, orders, decrees,
guidelines, judicial interpretations, notices or other legislation of the PRC;
(lxii) Under the laws of the Cayman Islands, the courts of the Cayman
Islands recognize and give effect to the choice of law provisions set forth in
Section 18 hereof and enforce judgments of U.S. courts obtained against the
Company to enforce this Agreement; subject to the conditions described under the
caption "Enforcement of Civil Liabilities" in the Pricing Prospectus, under the
laws and regulations of the PRC, the courts of the PRC recognize and give effect
to the choice of law provisions set forth in Section 18 hereof and enforce
judgments of U.S. courts obtained against the Company to enforce this Agreement
provided that the judgment: (A) is not obtained by fraud; (B) is final and
conclusive; (C) in the opinion of the relevant PRC court after the review of
such judgment pursuant to international treaties concluded or acceded to by the
PRC or in accordance with the Civil Procedure Law of the PRC, does not
contradict the basic principles of PRC law; (D) in the opinion of the relevant
PRC court after its review of such judgment pursuant to international treaties
concluded or acceded to by the PRC or in accordance with the principle of
reciprocity, or otherwise in accordance with the Civil Procedure Law of the PRC,
does not violate state sovereignty, security or public interest and (E) is for a
definite sum of money;
(lxiii) To the best of the Company's knowledge, none of the Company or any
of the Group Entities, nor any director, officer, agent, employee or other
person associated with or acting on behalf of the Company or any of the Group
Entities, has used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expenses relating to a political activity, made
any direct or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or made or received any
bribe, rebate, payoff, influence payment, kickback or other unlawful payment; or
made or received any unlawful payment that is of a character required to be
disclosed in the Registration Statement, the Pricing Prospectus or the
Prospectus;
(lxxiii) Each PRC Nominee Shareholder that is a natural person is a citizen
of the PRC, excluding Taiwan, The Hong Kong Special Administrative Region and
The Macau Special Administrative Region, and no application is pending in any
other jurisdiction by him or on his behalf for naturalization or citizenship;
(lxiv) The descriptions of the events and transactions set forth in the
Pricing Prospectus and the Prospectus under the captions "Our Corporate
Structure", "Related Party Transactions - Agreements Among Us, Our
Wholly-Foreign Owned Subsidiaries, Our PRC Operating Affiliates and Their
Subsidiaries and Shareholders" are true, accurate and complete in all material
respects;
(lxv) All consents, approvals, authorizations, orders, registrations and
qualifications, if any, required in connection with the Structure Agreements
have been made or unconditionally obtained in writing, and no such consent,
approval, authorization, order, registration or qualification has been withdrawn
or is subject to any condition precedent which has not been fulfilled or
performed;
(lxvi) None of the Company nor any of the Group Entities and the businesses
or entities operated or owned by the Company and the Group Entities, nor any of
their
21
respective officers, directors or senior management (as defined under Section F
of Form 20-F), key management personnel (as defined under Item 7.B of Form
20-F), or, to the best knowledge of the Company, the Company's agents or
employees, directly or indirectly, own any interest in any entity, or have
entered into any transactions that may compete with the Company and the Group
Entities or are otherwise involved in the businesses of the Company and the
Group Entities as described in the Pricing Prospectus and the Prospectus, except
for (i) ownership, directly or indirectly, by the Controlling Person of equity
securities (or securities convertible or exchangeable into or exercisable for
such equity securities) in Allyes Information Technology Company Limited solely
for passive investment purposes, and (ii) ownership, directly or indirectly, by
the unrelated third party minority equity interest holders (that are not nominee
holders holding on behalf of any of the Group Entities) of the remaining equity
interests of the Focus Media Advertisement Subsidiaries as described in the
Pricing Prospectus under the caption "Our Corporate Structure", and for which
the Company has no knowledge of any such persons or entities owning any direct
or indirect interest in, or having any other involvement in, any business that
competes with the Company or the Group Entities;
(lxvii) Each of the Company and the Group Entities are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; neither the Company nor any of the Group Entities has been refused any
insurance coverage sought or applied for and neither the Company nor any of the
Group Entities has any reason to believe that it will not be able to renew any
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue their
respective businesses at a cost that would not have a Material Adverse Effect;
(lxviii) The Company is in full compliance with all applicable obligations
and duties imposed on it by the United States Xxxxxxxx-Xxxxx Act of 2002, and
has timely made all required disclosures and filings required thereby with the
Commission;
(lxix) There are no contracts, documents, arrangements or understandings
that are required to be described in the Registration Statement, the ADS
Registration Statement, the Pricing Prospectus or the Prospectus or to be filed
as exhibits thereto that have not been so described and filed as required;
(lxx) The Company is, and upon giving effect to the offering and sale of
the Shares and the ADSs will still be, a foreign private issuer within the
meaning of Rule 405 under the Act;
(lxxi) Except as disclosed in the Pricing Prospectus, to the best knowledge
of the Company and the Controlling Person after due inquiry, there are no
affiliations or associations between any member of the FINRA and any of the
officers or directors of the Company or the Group Entities, or holders of 5% or
greater of the securities of the Company;
(lxxii) The (A) irrevocable submission of each of the Company and the
Controlling Person to the jurisdiction of any state or federal court located in
the Borough of Manhattan, The City of New York, New York (each a "New York
Court"), (B) waiver by each of the Company of any objection to the venue of a
proceeding in a New York Court, (C) waiver and agreement not to plead an
inconvenient forum, (D) waiver of sovereign immunity, and (E) agreement of each
of the Company that the Underwriting Agreement and the Deposit Agreement shall
be construed in accordance with and governed by the laws of the State of
22
New York, in each case is legal, valid and binding under PRC law and will be
respected by the government of the PRC and any political subdivision or
authority thereof or therein; service of process duly effected in the manner set
forth in the Underwriting Agreement and the Deposit Agreement will be effective,
insofar as PRC law is concerned, to confer valid personal jurisdiction over each
of the Company; and any judgment obtained in a New York Court arising out of or
in relation to the obligations of each of the Company under the Underwriting
Agreement and the Deposit Agreement will be recognized by the Government of the
PRC and any political subdivision or authority thereof or therein subject to the
conditions described under the caption "Enforceability of Civil Liabilities" in
the Pricing Prospectus;
(lxxiii) Each of the Company and the Controlling Person has taken, or is in
the process of taking, all reasonable steps to comply with, and to ensure
compliance by all of the Company's shareholders, option holders, directors and
officers 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, option
holder, director and officer 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, and to
irrevocably authorize the Controlling Person in writing, in accordance with
applicable SAFE Rules and Regulations, to handle any registrations and other
procedures required under applicable SAFE Rules and Regulations on their behalf;
and
(lxxiv) The application of the net proceeds from the offering of ADSs, as
described in the Pricing Prospectus and the Prospectus, will not contravene any
provision of any applicable laws or the constitutive documents of the Company or
any of the Group Entities 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 the Company
or any of the Group Entities or any Governmental Authorization applicable to the
Company or any of the Group Entities.
(b) Each of the Selling Shareholders severally and not jointly represents
and warrants to, and agrees with, each of the Underwriters that:
(i) Such Selling Shareholder that is not an individual has been duly
organized, is validly existing, and is in good standing (where applicable), in
its jurisdiction of organization;
(ii) No consents, approvals, authorizations, orders, registrations,
clearances or qualifications of or with any Governmental Agency having
jurisdiction over such Selling Shareholder or any of its respective properties
or any stock exchange authorities are required for the deposit of the Shares
being deposited with the Depositary by such Selling Shareholder against issuance
of the ADSs to be delivered at the Time of Delivery (as defined in Section 4
hereof), for the sale and delivery of the ADSs to be sold by such Selling
Shareholder hereunder and for the execution and delivery by such Selling
Shareholder of this Agreement, the Power of Attorney (as defined below) and the
Custody Agreement (as defined below), except for such consents, approvals,
authorizations, orders, registrations, clearances or qualifications (A) as have
been obtained or made prior to the date hereof and are in full force and effect,
(B) required for the registration of the Shares under the Act, and any filings
required under Rule 424 under the Act and (C) as may be required under any state
securities or blue sky laws; and such Selling Shareholder has full legal right,
power and authority
23
(corporate and other) to enter into and perform its obligations under this
Agreement, the Power of Attorney and the Custody Agreement, and to sell, assign,
transfer and deliver the ADSs to be sold by such Selling Shareholder hereunder;
(iii) The sale of the ADSs to be sold by such Selling Shareholder
hereunder, the deposit of such Selling Shareholder's Shares with the Depositary
against issuance of the ADSs to be delivered at the Time of Delivery and the
compliance by such Selling Shareholder with all of the provisions of this
Agreement, the Deposit Agreement, the Power of Attorney and the Custody
Agreement and the consummation of the transactions herein and therein
contemplated will not (A) conflict with or result in a breach or violation of
any of the terms and provisions of, or constitute a default under, (i) the
constituent documents of such Selling Shareholder if such Selling Shareholder is
a legal entity, (ii) any bond, debenture, note or other evidence of
indebtedness, lease, contract, indenture, mortgage, deed of trust, loan
agreement, joint venture or other agreement or instrument to which such Selling
Shareholder is a party or by which such Selling Shareholder may be bound, or to
which any of the property or assets of such Selling Shareholder is subject or
(B) to such Selling Shareholder's knowledge after due inquiry, result in any
violation of any law, order, rule, statute, regulation, writ, injunction,
judgment or decree of any Governmental Agency or body, domestic or foreign,
having jurisdiction over such Selling Shareholder or over the properties of such
Selling Shareholder, except, with respect to clause A(ii), any such conflict,
breach, violation or default as would not, individually or in the aggregate,
materially impair with the consummation of any transaction contemplated
hereunder or encumber or otherwise adversely affect the prospective rights of
the Underwriters, and subsequent transferees, in and to the ADSs to be sold by
such Selling Shareholder pursuant hereto;
(iv) Such Selling Shareholder has, and immediately prior to the Time of
Delivery such Selling Shareholder will have, good and marketable title to the
Shares to be represented by the ADSs to be sold by such Selling Shareholder
hereunder, free and clear of all liens, encumbrances, equities or claims; and,
upon delivery of the ADSs representing such Shares against payment therefor
pursuant hereto, good and marketable title to such ADSs, free and clear of all
liens, encumbrances, equities or claims, will pass to the several Underwriters;
(v) Such Selling Shareholder has duly authorized, executed and delivered,
in the form heretofore furnished to the Underwriters, an irrevocable Power of
Attorney (the "Power of Attorney") appointing one or more attorneys-in-fact
(collectively, the "Attorneys" and individually, an "Attorney") and a custody
agreement (the "Custody Agreement") between such Selling Shareholder and the
Company, as the custodian (the "Custodian"); each of such Selling Shareholder's
Power of Attorney and Custody Agreement constitutes a valid and binding
obligation on the part of such Selling Shareholder, enforceable in accordance
with its terms, subject as to enforceability to bankruptcy, insolvency,
reorganization and similar laws of general applicability relating to or
affecting creditors rights generally and to general principles of equity; and
each of such Selling Shareholder's Attorneys, acting alone, is authorized to
execute and deliver this Agreement and the certificate referred to in Section
8(s) hereof on behalf of such Selling Shareholder, to determine the purchase
price to be paid by the several Underwriters to such Selling Shareholder as
provided in Section 2 hereof, to authorize the delivery of the Selling
Shareholder ADSs under this Agreement and to duly endorse (in blank or
otherwise) a stock power with respect thereto, to accept payment therefor, and
otherwise to act on behalf of such Selling Shareholder in connection with this
Agreement;
24
(vi) A stock power duly endorsed in blank by such Selling Shareholder, has
been placed in custody with the Custodian for the purpose of effecting delivery
hereunder of such Selling Shareholder's Shares underlying the ADSs to be sold
under this Agreement, subject to the terms of the Custody Agreement;
(vii) The Shares held in custody for such Selling Shareholder by the
Custodian are subject to the interests of the Underwriters hereunder; the
arrangements made by such Selling Shareholder for such custody are to that
extent irrevocable; the obligations of such Selling Shareholder hereunder shall
not be terminated by operation of law, whether by the death or incapacity of any
individual Selling Shareholder or, in the case of an estate or trust, by the
death or incapacity of any executor or trustee or the termination of such estate
or trust, or in the case of a partnership or corporation, by the dissolution of
such partnership or corporation or by the occurrence of any other event; and if
any individual Selling Shareholder or any such executor or trustee should die or
become incapacitated, or if any such estate or trust should be terminated, or if
any such partnership or corporation should be dissolved, or if any other such
event should occur, before the delivery of the Shares hereunder, the Shares
shall be delivered by or on behalf of such Selling Shareholder in accordance
with the terms and conditions of this Agreement and the Custody Agreement;
(viii) Neither such Selling Shareholder nor any of its affiliates over
which such Selling Shareholder can exercise control, nor any person acting on
its or their behalf has taken or will take, directly or indirectly, any action
which is designed to or which has constituted or which might reasonably be
expected to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares or the
ADSs;
(ix) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Pricing Prospectus, the
Prospectus or any amendment or supplement thereto are made in reliance upon and
in conformity with written information furnished to the Company and the
Underwriters by such Selling Shareholder expressly for use therein, such
Preliminary Prospectus, Pricing Prospectus and the Registration Statement did,
and the Prospectus and any further amendments or supplements to the Registration
Statement and the Prospectus, when they become effective or are filed with the
Commission, as the case may be, do not and will not, as of the applicable
effective date as to each part of the Registration Statement and any amendment
thereto and as of the applicable filing date as to the Prospectus and any
amendment or supplement thereto, contain an 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, in light of the circumstances under which they were
made in the case of any Preliminary Prospectus, the Prospectus, the Pricing
Prospectus or any Issuer Free Writing Prospectus or any amendment or supplement
thereto, made, in reliance upon and in conformity with such written information
furnished to the Company by such Selling Shareholder expressly for use therein,
not misleading;
(x) The ADSs delivered at each Time of Delivery by such Selling Shareholder
will be freely transferable by such Selling Shareholder to or for the respective
accounts of the Underwriters and (to the extent described in the Prospectus) to
the initial purchasers thereof; and there are no restrictions on subsequent
transfers of the Shares or ADSs under the laws of the Cayman Islands, the PRC or
the United States except as described in the Pricing Prospectus under the
captions "Description of Share Capital" or "Description of American Depositary
Shares";
25
(xi) Except as set forth in the Pricing Prospectus, 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 Underwriters to the government
of the Xxxxxx Xxxxxxx, xxx Xxxxxxx Xxxxxx Xxxxxxx, Xxxx Xxxx or the PRC, or any
political subdivision or taxing authority thereof or therein, in connection with
(A) the deposit with the Depositary of the Shares by such Selling Shareholder
against the issuance of the ADSs to be delivered at each Time of Delivery, (B)
the sale and delivery by such Selling Shareholder of the Shares and the ADSs to
or for the respective accounts of the Underwriters, (C) the sale and delivery by
the Underwriters of the Shares and the ADSs to the initial purchasers thereof or
(D) this Agreement or any other documents to be furnished hereunder;
(xii) In order to document the Underwriters' compliance with the reporting
and withholding provisions of the Tax Equity and Fiscal Responsibility Act of
1982 with respect to the transactions herein contemplated, such Selling
Shareholder will deliver to you prior to or at the First Time of Delivery (as
hereinafter defined) a properly completed and executed United States Treasury
Department Form W-8BEN (or other applicable form or statement specified by
Treasury Department regulations in lieu thereof);
(xiii) Except as described in the Pricing Prospectus, all amounts payable
by such Selling Shareholder under this Agreement shall be made free and clear of
and without deduction for or on account of any taxes imposed, assessed or levied
by the Cayman Islands or the PRC or any authority thereof or therein (except
such income taxes as may otherwise be imposed by the Cayman Islands or the PRC
on payments hereunder to any Underwriter whose net income is otherwise subject
to tax or withholding by the Cayman Islands or the PRC by virtue of its
conducting any direct business in the Cayman Islands or the PRC unrelated to any
transaction contemplated hereunder with respect to any such income tax) nor are
any taxes imposed in the Cayman Islands or the PRC on, or by virtue of the
execution or delivery of, such documents;
(xiv) This Agreement has been duly authorized, executed and delivered by
such Selling Shareholder, and is enforceable against such Selling Shareholder in
accordance with its terms; and to ensure the legality, validity, enforceability
or admissibility into evidence in the Cayman Islands or the PRC of this
Agreement, it is not necessary that this Agreement be filed or recorded with any
court or other authority in the Cayman Islands or the PRC or that any stamp or
similar tax in the Cayman Islands or the PRC be paid on or in respect of this
Agreement or any other documents to be furnished hereunder;
(xv) Other than this Agreement, 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 the
offer and sale of the Shares and the ADSs to be sold by such Selling
Shareholder;
(xvi) Each of the Selling Shareholders and/or its direct or indirect owners
or controlling persons, that is a PRC resident or PRC citizen is in compliance
with any applicable SAFE Rules and Regulations, including without limitation,
having completed or being in the process of completing any registration and
other procedures required under applicable SAFE Rules and Regulations, and
irrevocably authorizing the Controlling Person in writing, in accordance with
applicable SAFE Rules and Regulations, to handle any registrations and other
procedures required under applicable SAFE Rules and Regulations on their behalf;
and
26
(xvii) The (A) irrevocable submission of each of such Selling Shareholder
to the jurisdiction of any New York Court, (B) waiver by such Selling
Shareholder of any objection to the venue of a proceeding in a New York Court,
(C) waiver and agreement not to plead an inconvenient forum, (D) waiver of
sovereign immunity, and (E) agreement of such Selling Shareholder that the
Underwriting Agreement and the Deposit Agreement shall be construed in
accordance with and governed by the laws of the State of New York, in each case
is legal, valid and binding under PRC law and will be respected by the
government of the PRC and any political subdivision or authority thereof or
therein; service of process duly effected in the manner set forth in the
Underwriting Agreement and the Deposit Agreement will be effective, insofar as
PRC law is concerned, to confer valid personal jurisdiction over such Selling
Shareholder; and any judgment obtained in a New York Court arising out of or in
relation to the obligations of such Selling Shareholder under the Underwriting
Agreement and the Deposit Agreement will be recognized by the Government of the
PRC and any political subdivision or authority thereof or therein subject to the
conditions described under the caption "Enforceability of Civil Liabilities" in
the Pricing Prospectus;
(xviii) Such Selling Shareholder is not prompted by any material,
non-public information concerning the Company or its subsidiaries to sell its
Shares pursuant to this Agreement.
2. Subject to the terms and conditions herein set forth, (a) the Company
and each of the Selling Shareholders agree, severally and not jointly, to sell
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company and each of the Selling Shareholders,
at a purchase price per ADS of US$[_______], the number of Firm ADSs (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
the aggregate number of Firm ADSs to be sold by the Company and each of the
Selling Shareholders as set forth opposite their respective names in Schedule II
hereto by a fraction, the numerator of which is the aggregate number of Firm
ADSs to be purchased by such Underwriter as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the aggregate
number of Firm ADSs to be purchased by all of the Underwriters from the Company
and all of the Selling Shareholders hereunder and (b) in the event and to the
extent that the Underwriters shall exercise the election to purchase Optional
ADSs as provided below, the Company agrees, to sell to each of the Underwriters,
and each of the Underwriters agrees, severally and not jointly, to purchase from
the Company, at the purchase price per ADS set forth in clause (a) of this
Section 2, that portion of the number of Optional ADSs as to which such election
shall have been exercised (to be adjusted by you so as to eliminate fractional
shares), determined by multiplying such number of Optional ADSs by a fraction,
the numerator of which is the maximum number of Optional ADSs which such
Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the maximum
number of Optional ADSs that all of the Underwriters are entitled to purchase
hereunder.
The Company, as and to the extent indicated in Schedule II hereto, hereby
grants to the Underwriters the right to purchase at their election up to
2,000,000 Optional ADSs, at the purchase price per ADS set forth in the
paragraph above. Any such election to purchase Optional ADSs shall be made in
accordance with a letter agreement among the Representatives and the Company
setting forth the amount of Optional ADSs to be purchased by the Underwriters
from the Company. Any such election to purchase Optional ADSs may be exercised
only by written notice from you to the Attorneys, given within a period of 30
calendar days after the date of this Agreement and setting forth the aggregate
number of Optional ADSs to be purchased and the date on which such Optional ADSs
are to be
27
delivered, as determined by you but in no event earlier than the First Time of
Delivery (as defined in Section 4 hereof) or, unless you, the Company and the
Attorneys otherwise agree in writing, earlier than two or later than ten
business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm ADSs, the
several Underwriters propose to offer the Firm ADSs for sale upon the terms and
conditions set forth in the Prospectus.
4. (a) The ADSs to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as the Representatives may request upon at least forty-eight hours' notice
to the Company and the relevant Selling Shareholders prior to a Time of Delivery
(as defined below) (the "Notification Time"), shall be delivered by or on behalf
of the Company and the Selling Shareholders to the Representatives through the
facilities of The Depository Trust Company ("DTC"), for the account of such
Underwriter, against payment by or on behalf of such Underwriter of the purchase
price therefor by wire transfer of Federal (same-day) funds to the accounts
specified by the Company and the Selling Shareholders to the Representatives at
least forty-eight hours in advance of such Time of Delivery. The Company will
cause the certificates representing the ADSs to be made available for checking
at least twenty-four hours prior to the Time of Delivery (as defined below) with
respect thereto at the office of DTC or its designated custodian (the
"Designated Office").
The time and date of such delivery and payment shall be, with respect to
the Firm ADSs, 9:30 a.m., Eastern Standard Time, on [__________], 2007 or such
other time and date as the Representatives and the Company may agree upon in
writing, and, with respect to the Optional ADSs, 9:30 a.m., Eastern Standard
Time, on the date specified by the Representatives in the written notice given
by the Representatives of the Underwriters' election to purchase such Optional
ADSs, or such other time and date as the Representatives and the Attorneys may
agree upon in writing. Such time and date for delivery of the Firm ADSs is
herein called the "First Time of Delivery", such time and date for delivery of
the Optional ADSs, if not the First Time of Delivery, is herein called the
"Second Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 8 hereof, including the cross-receipt
for the ADSs and any additional documents requested by the Underwriters pursuant
to Section 8(s) hereof, will be delivered at the offices of Debevoise & Xxxxxxxx
LLP, 13/F Entertainment Building, 00 Xxxxx'x Xxxx Xxxxxxx, Xxxx Xxxx S.A.R. (the
"Closing Location"), and the ADSs will be delivered as specified in Section (a)
above, all at such Time of Delivery. A meeting will be held at the Closing
Location at 6 p.m., Hong Kong time, on the New York Business Day (as defined
herein) next preceding such Time of Delivery, at which meeting the final drafts
of the documents to be delivered pursuant to the preceding sentence will be
available for review by the parties hereto. For the purposes of this Section 4,
"New York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to close.
5. (a) The Company agrees with each of the Underwriters:
(i) To prepare the Prospectus in a form approved by you and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's
close of
28
business on the second business day following the execution and delivery of this
Agreement; to make no further amendment or any supplement to the Registration
Statement or the Prospectus prior to the Time of Delivery which shall be
disapproved by you promptly after reasonable notice thereof; to advise you,
promptly after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any amendment or
supplement to the Prospectus has been filed and to furnish you with copies
thereof; to file promptly all materials required to be filed by the Company with
the Commission pursuant to Rule 433(d) under the Act; to file promptly all
reports required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c), or 15(d) of the Exchange Act subsequent to the date of the
Prospectus and for so long as the delivery of a prospectus (or in lieu thereof,
the notice referred to in Rule 173(a) under the Act) is required in connection
with the offering or sale of the ADSs; to advise you, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or other
prospectus in respect of the ADSs, of any notice of objection of the Commission
to the use of the Registration Statement or any post-effective amendment thereto
pursuant to Rule 401(g)(2) under the Act, of the suspension of the qualification
of the ADSs for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statement or
the Prospectus or for additional information; and, in the event of the issuance
of any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or other prospectus or suspending any such qualification,
promptly to use its best efforts to obtain the withdrawal of such order; and in
the event of any such issuance of a notice of objection, promptly to take such
steps including, without limitation, amending the Registration Statement or
filing a new registration statement, at its own expense, as may be necessary to
permit offers and sales of the Shares and the ADSs by the Underwriters
(references herein to the Registration Statement shall include any such
amendment or new registration statement);
(ii) If required by Rule 430B(h) under the Act, to prepare a form of
prospectus in a form approved by you and to file such form of prospectus
pursuant to Rule 424(b) under the Act not later than may be required by Rule
424(b) under the Act; and to make no further amendment or supplement to such
form of prospectus which shall be disapproved by you promptly after reasonable
notice thereof;
(iii) Promptly from time to time to take such action as you may reasonably
request to qualify the ADSs for offering and sale under the securities laws of
such jurisdictions as you may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of the ADSs; provided
that in connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in any
jurisdiction or to subject itself to taxation in respect of doing business in
any jurisdiction in which it is not otherwise subject;
(iv) Prior to 10:00 a.m., Eastern Standard Time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to furnish
the Underwriters with written and electronic copies of the Prospectus in New
York City in such quantities as you may reasonably request, and, if the delivery
of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under
the Act) is required at any time prior to the expiration of nine months after
the time of issue of the Prospectus in connection with the offering or sale of
the ADSs and if at such time any events shall have occurred as a result of which
the Prospectus as then amended or supplemented would include an untrue statement
of a material fact or
29
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when such
Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the
Act) is delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus in order
to comply with the Act or the Exchange Act, to notify you and upon your request
to file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many written and electronic
copies as you may from time to time reasonably request of an amended Prospectus
or a supplement to the Prospectus which will correct such statement or omission
or effect such compliance, and in case any Underwriter is required to deliver a
Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the
Act) in connection with sales of any of the ADSs at any time nine months or more
after the time of issue of the Prospectus, upon your request but at the expense
of such Underwriter, to prepare and deliver to such Underwriter as many written
and electronic copies as you may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(v) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), a
consolidated earnings statement of the Company and the Group Entities (which
need not be audited) complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including, at the option of the
Company, Rule 158);
(vi) To furnish to its shareholders within such time period required by the
Exchange Act after the end of each fiscal year an annual report (in English)
(including a consolidated balance sheet and consolidated statements of income,
shareholders' equity and cash flows of the Company certified by independent
public accountants and prepared in conformity with US GAAP and, as soon as
practicable after the end of each of the first three quarters of each fiscal
year prepared in accordance with US GAAP (beginning with the fiscal quarter
ending after the effective date of the Registration Statement), to make
available to its shareholders consolidated summary financial information of the
Company and the Group Entities for such quarter in reasonable detail;
(vii) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to shareholders, and to deliver to
you (A) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any securities exchange
on which any class of securities of the Company is listed; and (B) such
additional information concerning the business and financial condition of the
Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company are consolidated in reports furnished to its shareholders generally or
to the Commission), provided that this obligation will be deemed to have been
satisfied where any such reports or communications have been publicly filed on
XXXXX;
(viii) Not to (and to cause the Group Entities not to) take, directly or
indirectly, any action which is designed to or which constitutes or which might
reasonably be expected to cause or result in stabilization or manipulation of
the price of any security of the Company or facilitate the sale or resale of the
Shares and the ADSs;
30
(ix) To pay the required Commission filing fees relating to the Shares and
ADSs within the time required by Rule 456(b)(1) under the Act and otherwise in
accordance with Rules 456(b) and 457(r) under the Act;
(x) To use its best efforts to include and maintain for quotation the ADSs
on the Nasdaq Global Market, and apart from the ADSs, to use best efforts to
maintain for quotation the American depositary shares representing ordinary
shares of the Company currently being traded on the Nasdaq Global Market;
(xi) To file with the Nasdaq Global Market all documents and notices
required by the Nasdaq Global Market of companies that are traded on the Nasdaq
Global Market and quotations for which are reported by the Nasdaq Global Market;
(xii) To file with the Commission such information on Form 20-F as may be
required by Rule 463 under the Act;
(xiii) Upon request of any Underwriter, to furnish, or cause to be
furnished, to such Underwriter an electronic version of the Company's
trademarks, service marks and corporate logo for use on the website, if any,
operated by such Underwriter for the purpose of facilitating the offering of the
Shares (the "License"); provided, however, that the License shall be used solely
for the purpose described above, is granted without any fee and may not be
assigned or transferred;
(xiv) To indemnify and hold each Underwriter harmless against any
documentary, stamp or similar issuance or transfer taxes, duties or fees and any
transaction levies, commissions or brokerage charges, including any interest and
penalties, which are or may be required to be paid in connection with the
creation, allotment, issuance, offer and distribution of the Shares and ADSs to
be sold by the Company and the execution and delivery of this Agreement and the
Deposit Agreement;
(xv) The Company, during the period when any Prospectus is required to be
delivered under the Act or the Exchange Act, will file all documents required to
be filed with the Commission pursuant to the Act or the Exchange Act within the
time periods required therein;
(xvi) Between the date hereof and the Time of Delivery (both dates
inclusive), the Company will not, without the prior approval of the
Representatives (such approval not to be unreasonably withheld), make any
official announcement which would have an adverse effect on the marketability of
the ADSs;
(xvii) The Company will take such steps as shall be necessary to ensure
that, prior to the expiration of one year after the Time of Delivery, it shall
not be required to be registered as an "investment company" under the Investment
Company Act;
(xviii) The Company shall comply with the SAFE Rules and Regulations, and
shall use best efforts to cause its directors, officers, 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,
requiring each shareholder, option holder, director and officer that is, or is
directly or indirectly owned or controlled by, a PRC resident or PRC citizen to
31
complete any registration and other procedures required under applicable SAFE
Rules and Regulations;
[(xix) In the event that any Selling Shareholder breaches its commitment to
sell ADSs pursuant to the terms of this Underwriting Agreement, the Company will
sell to the Underwriters additional ADSs in the same number as the ADSs
committed to be sold by such Selling Shareholder pursuant the terms of this
Underwriting Agreement but not sold by such Selling Shareholder;]
[(xx) During the period beginning from the date hereof and continuing to
and including the date 90 days after the date of the Pricing Prospectus (the
"Lock-up Period"), not to, without the prior permission of Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated, offer, sell, announce the intention to
sell, contract to sell, pledge, grant any option to purchase, make any short
sale or otherwise dispose of, directly or indirectly, or cause the Company to
file with the Commission a registration statement under the Act with respect to,
(A) any ADSs or Ordinary Shares or any securities of the Company represented by
the ADSs, or any securities of the Company substantially similar to the ADSs or
Ordinary Shares, including but not limited to any options or warrants to
purchase or any securities that are convertible into or exchangeable for, or
that represent the right to receive, ADSs or Ordinary Shares or any such
substantially similar securities; and (B) any shares or equity interests in the
Company's subsidiaries or controlled affiliates or depositary shares or
depositary receipts representing such shares or equity interests, including by
not limited to securities that are convertible into or exchangeable for or that
represent the right to receive such shares or equity interests or such
depositary shares or receipts, or any such substantially similar securities,
whether now owned or hereinafter acquired (of record, beneficially or otherwise,
including as a custodian) (the securities covered by the foregoing clauses (A)
and (B), collectively, are referred to as the "Lock-up Securities"; except that
the foregoing restrictions shall not apply to (1) the ADSs and the Ordinary
Shares underlying such ADSs, (2) the issuance of Ordinary Shares in connection
with bona fide strategic acquisitions by the Company not to exceed 32.0 million
Ordinary Shares in the aggregate, (3) grants of options pursuant to the
Company's employee stock option plans, and (4) any Ordinary Shares to be issued
by the Company upon the exercise of any options described in clause (3) above;
provided however, that if (x) during the last 17 days of the Lock-up Period, the
Company releases earnings results or announces material news or a material event
or (y) prior to the expiration of the Lock-up Period, the Company announces that
it will release earnings results during the 15-day period following the last day
of the Lock-up Period, then in each case the Lock-up Period will be
automatically extended until the expiration of the 18-day period beginning on
the date of release of the earnings results or the announcement of the material
news or material event, as applicable unless the Representative waives, in
writing, such extension; and provided further that, if the Company issues ADSs
pursuant to (2) above, the Lock-Up Period will be automatically extended until
the expiration of the remainder of 90-day lock-up period. The Company will
provide Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and each holder of
ADSs subject to the Lock-up Period with prior notice of any such announcement
that gives rise to an extension of the Lock-up Period;]
(xxi) To use the net proceeds received by it from the sale of the ADSs
pursuant to this Agreement in the manner specified in the Prospectus under the
caption "Use of Proceeds"; and
(xxii) Prior to each Time of Delivery to deposit the Ordinary Shares with
the Depositary in accordance with the provisions of the Deposit Agreement and
otherwise to
32
comply with the Deposit Agreement so that the ADSs will be executed (and, if
applicable, countersigned) and issued by the Depositary against receipt of such
Ordinary Shares and delivered to the Underwriters at such Time of Delivery.
(b) Each of the Selling Shareholders agrees with each of the Underwriters:
(i) Prior to the Time of Delivery applicable to such Selling Shareholder,
to deposit, or cause to be deposited on its behalf pursuant to the Custody
Agreement, Ordinary Shares with the Depositary in accordance with the provisions
of the Deposit Agreement and otherwise to comply with the Deposit Agreement so
that the ADSs will be executed (and, if applicable, countersigned) and issued by
the Depositary against receipt of such Ordinary Shares and delivered to the
Underwriters at such Time of Delivery;
(ii) Not to (and to cause its affiliates over which it can exercise control
not to) take, directly or indirectly, any action which is designed to or which
constitutes or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company or
facilitate the sale or resale of the Shares or the ADSs;
(iii) To deliver to the Representatives prior to or at the First Time of
Delivery a properly completed and executed United States Treasury Department
Form W-8BEN (or other applicable form or statement specified by the Treasury
Department regulations in lieu thereof) in order to facilitate the Underwriters'
documentation of their compliance with the reporting and withholding provisions
of the Tax Equity and Fiscal Responsibility Act of 1982 with respect to the
transactions herein contemplated;
(iv) To indemnify and hold each Underwriter harmless against any
documentary, stamp or similar issuance or transfer taxes, duties or fees and any
transaction levies, commissions or brokerage charges, including any interest and
penalties, which are or may be required to be paid in connection with the
creation, allotment, issuance, offer and distribution of the Shares and ADSs to
be sold by such Selling Shareholder and the execution and delivery of this
Agreement; provided, however, that such Selling Shareholder shall not be
responsible for any such taxes, duties, fees, levies or charges that arise as a
result of the distribution of the Shares and ADSs by any Underwriters in a
manner other than that as is customary in such transactions or that relate to
the ADSs to be sold by the other Selling Shareholders; and
(v) Each of the Selling Shareholders and/or its direct or indirect owners
or controlling persons, that is a PRC resident or PRC citizen will use its best
efforts to comply with any applicable SAFE Rules and Regulations, including
without limitation, completing any registration and other procedures required
under applicable SAFE Rules and Regulations, and irrevocably authorizing the
Controlling Person in writing, in accordance with applicable SAFE Rules and
Regulations, to handle any registrations and other procedures required under
applicable SAFE Rules and Regulations on their behalf.
33
6. (a) The Company represents and agrees that, without the prior consent of
each of the Representatives, it has not made and will not make any offer
relating to the Shares and the ADSs that would constitute a "free writing
prospectus" as defined in Rule 405 under the Act; each Selling Shareholder
represents and agrees that, without the prior consent of each of the
Representatives and the Company, it has not made and will not make any offer
relating to the Shares and the ADSs that would constitute a "free writing
prospectus"; each Underwriter represents and agrees that, without the prior
consent of the Company and each of the Representatives, it has not made and will
not make any offer relating to the Shares and the ADSs that would constitute a
free writing prospectus required to be filed by the Company with the Commission;
any such free writing prospectus the use of which has been consented to by the
Company and each of the Representatives is listed on Schedule III(a) hereto;
(b) The Company has complied and will comply with the requirements of Rule
433 under the Act applicable to any Issuer Free Writing Prospectus, including
timely filing with the Commission or retention where required and legending; the
Company represents that it has satisfied and agrees that it will satisfy the
conditions under Rule 433 under the Act to avoid a requirement to file with the
Commission any electronic road show;
(c) The Company agrees that if at any time following issuance of an Issuer
Free Writing Prospectus any event occurred or occurs as a result of which such
Issuer Free Writing Prospectus would conflict with the information in the
Registration Statement, the Pricing Prospectus or the Prospectus or would
include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in light of the
circumstances then prevailing, not misleading, the Company will give prompt
notice thereof to each of the Representatives and, if requested by any of the
Representatives, will prepare and furnish without charge to each Underwriter an
Issuer Free Writing Prospectus or other document which will correct such
conflict, statement or omission; provided, however, that this representation and
warranty shall not apply to any statements or omissions in an Issuer Free
Writing Prospectus made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through the
Representatives expressly for use therein.
7. (a) The Company covenants and agrees with the several Underwriters that
(A) the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's accountants and U.S., XXX, Xxxxxx
Xxxxxxx, Xxxxxxx Xxxxxx Xxxxxxx, Xxxx Xxxx and other legal counsel of the
Company in connection with the registration of the Shares and the ADSs under the
Act; (ii) all expenses and taxes arising as a result of the deposit by the
Company and each of the Selling Shareholders of the Shares with the Depositary
and the issuance and delivery of the ADSs in exchange therefor by the
Depositary, of the sale and delivery of the ADSs and the Shares by the Company
and the Selling Shareholders to or for the account of the Underwriters and of
the sale and delivery of the ADSs and the Shares by the Underwriters to each
other and to the initial purchasers thereof in the manner contemplated under
this Agreement, including, in any such case, any Cayman Islands income, capital
gains, withholding, transfer or other tax asserted against an Underwriter by
reason of the purchase and sale of an ADS or a Share pursuant to this Agreement;
(iii) the fees and expenses (including fees and disbursements of counsel), if
any, of the Depositary and any custodian appointed under the Deposit Agreement,
other than the fees and expenses to be paid by holders of ADSs (other than the
Underwriters in connection with the initial purchase of ADSs); and (B) each
Selling Shareholder will pay or cause to be paid at the Time of Delivery
applicable to such Selling Shareholder all costs and expenses incident to the
performance of such Selling Shareholder's obligations hereunder which are
34
not otherwise specifically provided for in this Section, including (1) the fees,
expenses and disbursements of counsel for such Selling Shareholders and (2) all
expenses and taxes incident to the sale and delivery of the ADSs and the Shares
to be sold by such Selling Shareholder hereunder.
(b) The Underwriters covenant and agree with the Company that the
Underwriters will pay or cause to be paid (as described in further detail below)
the following: (A)(i) the fees, disbursements and expenses of the Underwriters'
U.S. and PRC legal counsels and other advisors in connection with the
registration of the Shares and the ADSs under the Act and all other expenses in
connection with the preparation, printing, reproduction and filing of the
Registration Statement, the ADS Registration Statement, any Preliminary
Prospectus, any Issuer Free Writing Prospectus and the Prospectus and amendments
and supplements to any of the foregoing and the mailing and delivering of copies
thereof to the dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, the Deposit Agreement, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the ADSs; (iii) subject to the
provisions of paragraph (B) above, all expenses in connection with the
qualification of the shares and the ADSs for offering and sale under state
securities laws as provided in Section 5 hereof, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with any blue sky survey; (iv) all fees and
expenses in connection with applying to include the ADSs for quotation on the
Nasdaq Global Market; and (v) the road show expenses, including travel,
accommodation and meal expenses, incurred by the Company's management and other
staff, and expenses for organized luncheons and investor meetings during the
road show; (B) the Underwriters will pay or cause to be paid: (i) the fees and
expenses of the Authorized Agent (as defined in Section 16 hereof); (ii) the
cost and charges of any transfer agent or registrar; (iii) all other costs and
expenses incident to the performance of the Company's obligations hereunder
which are not otherwise specifically provided for in this Section (including the
fees in relation to the Financial Industry Regulatory Authority filing); and
(iv) all stamp duty, documentary, registration, excise, notary or other taxes
imposed on any of the Underwriters by virtue of the execution, delivery,
performance or enforcement of this Agreement, the Deposit Agreement or any other
document furnished hereunder or thereunder (other than any income or withholding
taxes imposed by a taxing jurisdiction by virtue of such Underwriter conducting
direct business in such taxing jurisdiction unrelated to any transaction
contemplated hereunder).
8. The obligations of the Underwriters hereunder, (i) as to the Firm ADSs
to be delivered at the First Time of Delivery, shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of the Company, the Controlling Person, and the Selling Shareholders
herein are, at and as of such Time of Delivery, true and correct, and the
condition that the Company and the Selling Shareholders shall have performed all
of its and their respective obligations hereunder theretofore to be performed,
and (ii) as to the Optional ADSs to be delivered at a Time of Delivery, shall be
subject, in their discretion, to the condition that all representations and
warranties and other statements of the Company and the Controlling Person herein
are, at and as of such Time of Delivery, true and correct, and the condition
that the Company shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) under the Act within the applicable time period prescribed for such
filing by the rules
35
and regulations under the Act and in accordance with Section 5(a) hereof; all
material required to be filed by the Company pursuant to Rule 433(d) under the
Act shall have been filed with the Commission within the applicable time period
prescribed for such filings by Rule 433 under the Act; no stop order suspending
the effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission and no notice of objection of the Commission to the
use of the Registration Statement or any post-effective amendment thereto
pursuant to Rule 401(g)(2) under the Act shall have been received; no stop order
suspending or preventing the use of the Prospectus or any Issuer Free Writing
Prospectus shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission shall have
been complied with to your reasonable satisfaction;
(b) Debevoise & Xxxxxxxx LLP, United States counsel for the Underwriters,
shall have furnished to you such written opinion or opinions, dated such Time of
Delivery, in form and substance satisfactory to you, and such counsel shall have
received such papers and information as they may reasonably request to enable
them to pass upon such matters;
(c) Commerce & Finance Law Offices, PRC counsel for the Underwriters, shall
have furnished to you such written opinion or opinions, dated such Time of
Delivery, in form and substance satisfactory to you, with respect to the matters
covered in paragraphs (i) through (iv) and (vi) through (xviii) of subsection
(e) below (but limited to the Structure Agreements) as well as such other
related matters as you may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to enable
them to pass upon such matters;
(d) Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, United States counsel for the Company,
shall have furnished to you their written opinion, dated such Time of Delivery,
in form and substance satisfactory to you, to the effect that:
(i) This Agreement has been duly executed and delivered by the Company and
by the Controlling Person in accordance with the law of the State of New York;
(ii) The Deposit Agreement has been duly executed and delivered by the
Company in accordance with the law of the State of New York and, assuming that
the Deposit Agreement is the valid and legally binding obligation of the
Depositary, constitutes a valid and legally binding obligation of the Company
enforceable against the Company in accordance with its terms;
(iii) Assuming due authorization, execution, issuance and delivery by the
Depositary of the ADSs against the deposit of the Shares in accordance with the
provisions of the Deposit Agreement and payment therefor in accordance with this
Agreement, such ADSs will be duly and validly issued, and persons in whose names
such ADSs are registered will be entitled to the rights specified therein and in
the Deposit Agreement;
(iv) Assuming the validity of such actions under Cayman Islands law, under
the law of the State of New York relating to personal jurisdiction, each of the
Company and the Controlling Person has, pursuant to this Agreement, validly and
irrevocably submitted to the personal jurisdiction of the New York State or U.S.
federal courts located in the Borough of Manhattan, The City of New York, New
York in any action arising out of or relating to this Agreement, has, to the
extent permitted by applicable law, validly and irrevocably waived any objection
to the venue of a proceeding in any such court, and has validly and irrevocably
36
appointed CT Corporation System, currently located at 000 Xxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, as its authorized service of process agent for the
purposes described in this Agreement, and service of process effected on such
agent will be effective to confer in the manner set forth in this Agreement and
will be effective to confer valid personal jurisdiction over the Company, the
Controlling Person and the Selling Shareholders;
(v) Assuming the validity of such actions under Cayman Islands law, under
the law of the State of New York relating to personal jurisdiction, the Company
has, pursuant to the Deposit Agreement, validly and irrevocably submitted to the
personal jurisdiction of the New York State or U.S. federal courts located in
the Borough of Manhattan, The City of New York, New York in any action or
proceeding arising out of or relating to the Deposit Agreement, and has validly
and irrevocably appointed CT Corporation System, currently located at 000 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its authorized service of process agent for
the purposes described in the Deposit Agreement; and service of process effected
in the manner set forth in Section 7.6 of the Deposit Agreement will be
effective to confer valid personal jurisdiction over the Company in connection
with any such action or proceeding;
(vi) The statements made in the Pricing Prospectus under the caption
"Description of American Depositary Shares", insofar as they purport to
constitute summaries of certain provisions of the ADSs and the Deposit
Agreement, constitute accurate summaries of such provisions in all material
respects;
(vii) The statements made in the Pricing Prospectus under the caption
"Taxation - United States Federal Income Taxation", insofar as they purport to
constitute summaries of matters of U.S. federal tax law and regulations or legal
conclusions with respect thereto, constitute accurate summaries of the matters
described therein in all material respects;
(viii) The statements made in the Prospectus under the caption
"Underwriting", insofar as they purport to constitute summaries of certain
provisions of the Underwriting Agreement, constitute accurate summaries of such
provisions in all material respects;
(ix) The issuance by the Company of the Shares to be represented by the
ADSs, deposit of the Shares and the issuance of the ADSs pursuant to the Deposit
Agreement, the sale of the ADSs and the execution, delivery and performance by
the Company of the Deposit Agreement, this Agreement and the Custody Agreements
will not (A) violate, breach, or result in a default under, any agreement or
other instrument governed by the law of the State of New York of the Company or
any of the subsidiaries that has been filed as an exhibit to the Registration
Statement, or (B) violate any U.S. federal or New York state statute or any rule
or regulation that has been issued pursuant to any such U.S. federal or New York
state statute or, to our knowledge, any order of any U.S. federal or New York
state governmental agency or body having jurisdiction over the Company;
(x) The deposit of the Shares and the issuance of the ADSs pursuant to the
Deposit Agreement, the sale of the ADSs and the execution, delivery and
performance by the Controlling Person of this Agreement will not violate any
U.S. federal or New York state statute or any rule or regulation that has been
issued pursuant to any such U.S. federal or New York state statute or, to our
knowledge, any order of any U.S. federal or New York state governmental agency
or body having jurisdiction over the Controlling Person;
37
(xi) No consent, approval, authorization, order, registration or
qualification of or with any U.S. federal or New York governmental agency or
body, or to our knowledge, any U.S. federal or New York court is required for
the issuance by the Company of the Shares to be represented by the ADSs, the
deposit of the Shares and the issuance of the ADSs pursuant to the Deposit
Agreement, the sale of the ADSs and the compliance by the Company with the
provisions of the Deposit Agreement and this Agreement, except for the
registration under the Act and the Exchange Act of the Shares and the ADSs, and
such consents, approvals, authorizations, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the ADSs by the Underwriters;
(xii) No consent, approval, authorization, order, registration or
qualification of or with any U.S. federal or New York governmental agency or
body, or to our knowledge, any U.S. federal or New York court is required for
the deposit of the Shares and the issuance of the ADSs pursuant to the Deposit
Agreement, the sale of the ADSs and the compliance by the Controlling Person
with the provisions of this Agreement, except for the registration under the Act
and the Exchange Act of the Shares and the ADSs, and such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the ADSs by the Underwriters;
(xiii) The Registration Statement has become effective under the Act; the
Prospectus was filed pursuant to Rule 424(b) of the rules and regulations of the
Commission under the Act; and, to our knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued or proceeding for
that purpose has been instituted or threatened by the Commission;
(xiv) The Company is not an "investment company" within the meaning of, and
subject to regulation under, the U.S. Investment Company Act of 1940, as
amended;
(xv) The Registration Statement, the Pricing Prospectus and any further
amendments and supplements thereto, as applicable, made by the Company prior to
such Time of Delivery (other than the financial statements, related schedules
therein or other financial data, as to which such counsel need express no
opinion) comply as to form in all material respects with the requirements of the
Act and/or the Exchange Act, as applicable, and the rules and regulations
thereunder; although such counsel does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement, the Pricing Prospectus or the Prospectus, except for
those referred to in the opinion in subsections (viii) to (x) of this Section
8(d), nothing has come to such counsel's attention that causes such counsel to
believe that (a) the Registration Statement, or the ADS Registration Statement,
as of their respective effective or filing dates, or any further amendment
thereto made by the Company prior to such Time of Delivery, as of the effective
or filing date of any such amendment, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; (b) the Pricing
Prospectus, as of the Applicable Time, when considered together with the number
of shares and price to the public set forth on the cover page of the supplement
to the Pricing Prospectus, as of the Applicable Time, contained any untrue
statement of a material fact or omitted 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; or (c) as of its date or as of such Time
of Delivery, the Prospectus, or any further amendment or supplement thereto made
by the Company prior to such Time of Delivery contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
38
circumstances under which they were made, not misleading, except that such
counsel need not express any belief in any of clauses (a), (b) or (c) above with
respect to the financial statements, financial statement schedules or other
financial data contained in or omitted from the Registration Statement, the
Pricing Prospectus or the Prospectus.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction outside the United States;
(e) Global Law Office, PRC counsel for the Company and the Selling
Shareholders, shall have furnished to you such written opinion or opinions,
dated such Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) Each of Focus Media Technology, New Focus Media Technology, Framedia
Investment, Dotad Technology and Beijing ACL (collectively, the "PRC WOFEs") has
been duly organized and is validly existing as a wholly foreign owned enterprise
with legal person status and limited liability under all applicable laws,
regulations, rules, orders, decrees, guidelines, judicial interpretations and
other legislation of the PRC, including tax laws and regulations, in effect as
of the date of this Agreement (collectively "PRC Law") and its business license
and articles of association are in full force and effect under, and in
compliance with PRC Law. All of the registered capital of each of Focus Media
Technology, New Focus Media Technology, Framedia Investment, Dotad Technology
and Beijing ACL has been fully paid. All the equity interest of each of Focus
Media Technology and New Focus Media Technology is owned by Focus Media Hong
Kong, and all the equity interest of Framedia Investment and Dotad Technology is
owned by InfoAchieve and Dotad Holdings, respectively, in each case, to the best
of such counsel's knowledge after due inquiry, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or other third party right
(collectively, "Encumbrances"). All of equity interest of Beijing ACL is owned
by ACL to the best of such counsel's knowledge after due inquiry, free and clear
of any Encumbrance;
(ii) Each of Focus Media Advertisement, Focus Media Advertising Agency,
Focus Media Digital, the Focus Media Advertisement Subsidiaries, New Perfect
Media, New Focus Media Advertisement, Framedia Advertisement, New Structure
Advertisement, Guangdong Framedia, Shenzhen E-Time, Focus Media Wireless,
Beijing ACL, Focus Media Defeng, Shanghai Sanwei and Shenzhen Sanwei
(collectively and together with the PRC WOFEs, the "PRC Group Entities"), has
been duly organized and is validly existing as a limited liability company under
PRC Law and its business license and articles of association are in full force
and effect under, and in compliance with, PRC Law. All of the registered capital
of Focus Media Advertisement has been fully paid; 85% of the equity interest of
Focus Media Advertisement is owned by Xxxxx Xxxxxxx Xxxxx and 15% of the equity
interest of Focus Media Advertisement is owned by Xxxxx Xxx Xx, in each case, to
the best of such counsel's knowledge after due inquiry, free and clear of any
Encumbrances except as described in the Pricing Prospectus as of the Applicable
Time. Each of Xxxxx Xxxxxxx Xxxxx and Xxxxx Xxx Xx is a PRC citizen. All of the
registered capital of each of Framedia Advertisement, New Structure
Advertisement, Guangdong Framedia and Focus Media Wireless has been fully paid;
90% of the equity interest of each of Framedia Advertisement, New Structure
Advertisement, Guangdong Framedia and Focus Media Wireless is owned by Focus
Media Advertisement and 10% of the equity interest of each of Framedia
Advertisement, New Structure Advertisement, Guangdong Framedia and Focus Media
Wireless is owned by Focus Media Advertising Agency, in each case, to the best
of such counsel's knowledge after due
39
inquiry, free and clear of any Encumbrances except as described in the Pricing
Prospectus as of the Applicable Time. Each of the Focus Media Advertisement
Branches and Framedia Branches has been duly established and is validly existing
with its business license in full force and effect under PRC Law. All of the
registered capital of Focus Media Advertising Agency has been fully paid and 90%
of the equity interest of Focus Media Advertising Agency is owned by Focus Media
Advertisement and 10% of the equity interest of Focus Media Advertising Agency
is owned by Xxxxx Xxx Xx, in each case, to the best of such counsel's knowledge
after due inquiry, free and clear of any Encumbrances except as described in the
Pricing Prospectus as of the Applicable Time. All of the registered capital of
each of Focus Media Digital and New Focus Media Advertisement has been fully
paid, 90% of the equity interest of Focus Media Digital is owned by Focus Media
Technology and 10% of the equity interest of Focus Media Digital is owned by
Focus Media Advertisement, and 90% of the equity interest of New Focus Media
Advertisement is owned by Focus Media Digital and 10% of the equity interest of
New Focus Media Advertisement is owned by Focus Media Advertisement, in each
case, to the best of such counsel's knowledge after due inquiry, free and clear
of any Encumbrances except as described in the Pricing Prospectus as of the
Applicable Time. All of the registered capital of each of the Focus Media
Advertisement Subsidiaries has been fully paid, and all the equity interests in
the Focus Media Advertisement Subsidiaries are owned by Focus Media
Advertisement in the percentages set forth in Schedule IV hereto as of the
Applicable Time and, to the best of such counsel's knowledge after due inquiry,
such equity interests are owned by Focus Media Advertisement free and clear of
any Encumbrances, except as described in the Pricing Prospectus as of the
Applicable Time. All of the registered capital of Shenzhen E-Time has been fully
paid; 70% of the equity interest of Shenzhen E-Time is owned by JJ Media
Investment Holding Limited and 30% of the equity interest of Shenzhen E-Time is
owned by Xxxxx Xxx Xx, in each case, to the best of such counsel's knowledge
after due inquiry, free and clear of any Encumbrances except as described in the
Pricing Prospectus as of the Applicable Time. All of the registered capital of
Focus Media Defeng has been fully paid, 90% of the equity interest of Focus
Media Defeng is owned by Focus Media Digital and 10% of the equity interest of
Focus Media Defeng is owned by Focus Media Advertising Agency, in each case, to
the best of our knowledge after due inquiry, free and clear of any Encumbrances
except as described in the Pricing Prospectus as of the Applicable Time;
(iii) Except as described in the Pricing Prospectus as of the Applicable
Time, each of the PRC Group Entities has full legal right, authority, power and
all necessary approvals, consents, waivers, sanctions, certificates,
authorizations, filings, disclosures, registrations, exemptions, permissions,
endorsements, annual inspections, qualifications, permits and licenses required
by any court, tribunal or any other judicial or arbitral body in the PRC, or any
body exercising, or entitled to exercise, any administrative, judicial,
legislative, police, regulatory, or taxing authority or power of similar nature
in the PRC ("Approvals") pursuant to any PRC Law to own, sell, lease license and
use its properties and assets and conduct its business in the manner described
in the Pricing Prospectus as of the Applicable Time, none of the approvals
contains any materially burdensome restrictions or conditions not described in
the Pricing Prospectus as of the Applicable Time, and each of the PRC Group
Entities is in compliance with the provisions of such Approvals in all material
respects. Except as described in the Pricing Prospectus as of the Applicable
Time, such counsel is not aware, after due inquiry, of anything that will cause
such counsel to reasonably believe that any national, provincial or local
governmental, regulatory or administrative authority, agency or commission in
the PRC, or any court, tribunal or any other judicial or arbitral body in the
PRC, or any body exercising, or entitled to exercise, any administrative,
judicial, legislative,
40
police, regulatory, or taxing authority or power of similar nature in the PRC
("PRC Authorities") are considering modifying, suspending, revoking or not
renewing any such Approvals;
(iv) Except as described in the Pricing Prospectus as of the Applicable
Time, to the best of such counsel's knowledge after due inquiry, none of the PRC
Group Entities is (A) in violation of any PRC Law; (B) in violation of its
business license, articles of association, other constitutional documents (if
any) or Approvals; (C) in breach or default in the performance or observance of
any of the terms or provisions of the Acquisition Agreements, distribution
agreements and Structure Agreements (collectively, the "Covered Agreements") to
which it is a party; or (D) apart from the Covered Agreements to which it is a
party, in breach or default in the performance or observance of any of the terms
or provisions of any contract, license, indenture, mortgage, deed of trust, loan
agreement, note, lease or other agreement or instrument to which it is a party
or by which it or any of its properties may be bound, except for such violation,
breach or default under clauses (A) and (D) which would not, individually or in
the aggregate, have a Material Adverse Effect on the general affairs,
management, shareholders' equity, results of operations or position, financial
or otherwise, of the PRC Group Entities;
(v) In the course of such counsel's representation of the Company, nothing
has come to such counsel's attention that would lead such counsel to reasonably
believe (A) that the description of the Placement Agreements, the LED Lease
Agreement and the WAP Agreements in the Pricing Prospectus is not true, complete
and accurate in all material respects, or (B) that any of the Placement
Agreements, the LED Lease Agreement or the WAP Agreements would be unenforceable
under PRC Law, provided that the Underwriters understand that such counsel's
opinion in this paragraph is based solely on such counsel's review of what such
counsel believes, based upon such counsel's due inquiry with the Company, is a
representative sample of the Placement Agreements and that such counsel has not
performed any comprehensive review of all of the Placement Agreements;
(vi) Each of the PRC Group Entities and PRC Nominee Shareholders has full
power, authority and legal right to enter into, execute, adopt, assume, issue,
deliver and perform their respective obligations under each of the Covered
Agreements to which it or he is a party, and has authorized, executed and
delivered each of the Covered Agreements to which it or he is a party, and such
obligations constitute valid, legal and binding obligations enforceable against
each of them in accordance with the terms of each of the Covered Agreements,
except as described in the Pricing Prospectus as of the Applicable Time. Each of
the Covered Agreements that is governed by PRC Law is in proper legal form under
PRC Law for the enforcement thereof against each of the PRC Group Entities and
PRC Nominee Shareholders, as the case may be, in the PRC without further action
by any of them;
(vii) The execution, delivery and performance of each of the Covered
Agreements by the parties thereto, and the consummation of the transactions
contemplated thereunder, will not (A) result in any violation of the business
license, articles of association, other constitutional documents (if any) or
Approvals of any of the PRC Group Entities; (B) result in any violation of or
penalty under any PRC Law; or (C) to the best of such counsel's knowledge after
due inquiry conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any other contract, license,
indenture, mortgage, deed of trust, loan agreement, note, 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 their property or assets is subject, except for such
violation, breach or default under clauses (B) and (C) which would
41
not, individually or in the aggregate, have a Material Adverse Effect on the
general affairs, management, shareholders' equity, results of operations or
position, financial or otherwise, of the PRC Group Entities;
(viii) The description of the corporate structure of the PRC Group Entities
and the Covered Agreements set forth in the Pricing Prospectus under the
captions "Our Corporate Structure" and "Related Party Transactions - Agreements
Among Us, Our Wholly-Foreign Owned Subsidiaries, Our PRC Operating Affiliates,
Their Shareholders and Subsidiaries" are true and accurate in all material
respects and nothing has been omitted from such description which would make the
same misleading in any materials respect. No Approvals are required under any
PRC Law in connection with the Covered Agreements or the performance of the
terms thereof (except for the filing of the trademark license agreement and
approval and filing requirements under the call option agreements and equity
pledge agreements described in the Pricing Prospectus under the caption "Related
Party Transactions"), and no stamp duty or similar tax is required to be paid in
connection with the Covered Agreements;
(ix) None of the PRC Group Entities is entitled to any immunity from any
legal proceedings or process or from enforcement, execution or attachment in
respect of their obligations in the transactions contemplated under any of the
Covered Agreements;
(x) Except as described in the Pricing Prospectus as of the Applicable
Time, to the best of such counsel's knowledge after due inquiry, there are no
legal, arbitration or governmental proceedings pending, threatened or
contemplated in the PRC by or against any of the PRC Group Entities, or to which
the property of any of them may be subject, which, if determined adversely
against any of the PRC Group Entities, would individually or in the aggregate
have a Material Adverse Effect on the PRC Group Entities;
(xi) The statements in the Pricing Prospectus under the captions "Summary",
"Risk Factors", "Our Corporate Structure", Management's Discussion and Analysis
of Financial Condition and Results of Operations", "Industry", "Business", Our
Recent Significant Acquisitions", "Regulation of Our Industry", "Management",
"Related Party Transactions", "Taxation" and "Enforcement of Civil Liabilities",
to the extent such statements relate to matters of PRC Law or legal conclusions
with respect thereto, are true and accurate in all material respects, and
nothing has been omitted from such statements which would make the same
misleading in any material respect;
(xii) The choice of PRC Law as the governing law in any of the Covered
Agreements that by their terms are governed by PRC Law is a valid choice of
governing law and will be binding on the parties to the relevant Covered
Agreement;
(xiii) Except as disclosed in the Pricing Prospectus as of the Applicable
Time, all dividends declared and payable upon the equity interests in each of
Focus Media Technology, Framedia Investment, Dotad Technology and Beijing ACL
may under PRC Law be paid to Focus Media Hong Kong, InfoAchieve, Dotad Holdings
and ACL, respectively, in Renminbi that may be converted into U.S. dollars and
freely transferred out of the PRC, and all such dividends are not and, except as
disclosed in the Pricing Prospectus as of the Applicable Time, will not be
subject to withholding or other taxes under PRC Law and, except as disclosed in
the Pricing Prospectus as of the Applicable Time, are otherwise free and clear
of any other tax, withholding or deduction in the PRC, and without the necessity
of obtaining any authorization from PRC Authorities;
42
(xiv) 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
Underwriters to the government of the PRC and any political subdivision or
authority thereof or therein in connection with (A) the deposit with the
Depositary of Shares against the issuance of the ADSs, (B) the sale and delivery
by the Company and the Selling Shareholders of the ADSs and the Shares to or for
the respective accounts of the Underwriters or (C) the sale and delivery outside
PRC by the Underwriters of the ADSs and the Shares to the initial purchasers
thereof in the manner contemplated herein;
(xv) The Underwriters will not be deemed to be resident, domiciled,
carrying on business or subject to taxation in the PRC solely by reason of its
execution, delivery, performance or enforcement of, or the consummation of any
transaction contemplated by, this Agreement, the Deposit Agreement or any other
document furnished hereunder or thereunder;
(xvi) The (A) irrevocable submission of each of the Company and the Selling
Shareholders to the jurisdiction of any New York Court, (B) waiver by each of
the Company and the Selling Shareholders of any objection to the venue of a
proceeding in a New York Court, (C) waiver and agreement not to plead an
inconvenient forum, (D) waiver of sovereign immunity, and (E) agreement of each
of the Company and the Selling Shareholders that the Underwriting Agreement and
the Deposit Agreement shall be construed in accordance with and governed by the
laws of the State of New York, in each case is legal, valid and binding under
PRC Law and will be respected by the government of the PRC and any political
subdivision or authority thereof or therein; service of process duly effected in
the manner set forth in the Underwriting Agreement and the Deposit Agreement
will be effective, insofar as PRC Law is concerned, to confer valid personal
jurisdiction over each of the Company and the Selling Shareholders; and any
judgment obtained in a New York Court arising out of or in relation to the
obligations of each of the Company and the Selling Shareholders under the
Underwriting Agreement and the Deposit Agreement will be recognized by the
government of the PRC and any political subdivision or authority thereof or
therein subject to the conditions described under the caption "Enforceability of
Civil Liabilities" in the Pricing Prospectus;
(xvii) The indemnification and contribution provisions set forth in Section
9 hereof and Section 5.8 of the Deposit Agreement do not contravene PRC Law;
(xviii) The (A) issue and sale of the Shares and the ADSs being delivered
at the Time of Delivery, (B) deposit of the Shares with the Depositary against
issuance of the ADSs to be delivered at such Time of Delivery, (C) compliance by
the Company with all of the provisions of the Underwriting Agreement and the
Deposit Agreement, (D) compliance by each of the Selling Shareholders with all
of the provisions of the Underwriting Agreement, and (E) consummation of the
transactions contemplated under the Underwriting Agreement, in each case will
not (i) result in any violation of or penalty under any PRC Law, or (ii) result
in any violation or breach of the business license, articles of association or
other constitutional or organizational documents of the PRC Group Entities, or
(iii) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any contract, license, indenture,
mortgage, deed of trust, loan agreement, note, lease or other agreement or
instrument to which any of the PRC Group Entities is a party or by which any of
the PRC Group Entities is bound or to which any of the property or assets of any
of the PRC Group Entities is subject, except for such violation, breach or
default under clauses (i) and (iii) which would not, individually or in the
aggregate, have a material adverse effect on
43
the general affairs, management, shareholders' equity, results of operations or
position, financial or otherwise, of the PRC Group Entities and which would not
prevent the transactions in clauses (A), (B), (C), (D) and (E) of this paragraph
from occurring;
(xix) Except as disclosed in the Pricing Prospectus as of the Applicable
Time, no approval is required for the issue and sale of the Shares and the ADSs,
the deposit of the Shares with the Depositary against issuance of the ADSs to be
delivered at such Time of Delivery or the consummation of the transactions
contemplated by the Underwriting Agreement and the Deposit Agreement; and
(xx) Although they do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement, the Pricing Prospectus as of the Applicable Time or the Prospectus
(except as otherwise specifically stated in opinion (viii) and opinion (xi)
above), they have no reason to believe (A) that, as of its effective date, the
Registration Statement or any further amendment thereto made by the Company
prior to such Time of Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion) contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; (B) that the Pricing Prospectus, as of the Applicable Time (other
than the financial statements and related schedules therein, as to which such
counsel need express no opinion), 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; (C) that, as of its date, the Prospectus or any further
amendment or supplement thereto made by the Company prior to such Time of
Delivery (other than the financial statements and related schedules therein, as
to which such counsel need express no opinion) contained an untrue statement of
a material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; (D) that, as of such Time of Delivery, the Registration
Statement, or any further amendment thereto made by the Company prior to such
Time of Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion), contains an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; or
(E) that, as of such Time of Delivery, the Prospectus or any further amendment
or supplement thereto made by the Company prior to such Time of Delivery (other
than the financial statements and related schedules therein, as to which such
counsel need express no opinion) contains an untrue statement of a material fact
or omits to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
(f) Xxxxxxx Xxxx & Xxxxxxx, Cayman Islands and British Virgin Islands
counsel for the Company and each of the Selling Shareholders that is an entity
formed under the laws of either the Cayman Islands or the British Virgin Islands
(the "Covered Selling Shareholders"), shall have furnished to you their written
opinion, dated such Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) The Company has been duly organized and is validly existing as a
company in good standing under the laws of the Cayman Islands with legal right,
power and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus;
44
(ii) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
(including the Shares being delivered at such Time of Delivery) have been duly
and validly authorized and issued and are fully paid and non-assessable; the
holders of outstanding shares of capital stock of the Company are not entitled
to pre-emptive or other rights to acquire the ADSs to be deposited by the
Company and the Selling Shareholders or to be purchased from the Company and the
Selling Shareholders under this Agreement which have not been complied with; the
Shares to be deposited by the Company and the Selling Shareholders may be freely
deposited with the Depositary against issuance of the ADSs; the ADSs and the
Shares to be sold by the Company and the Selling Shareholders are freely
transferable to or for the account of the several Underwriters in the manner
contemplated herein;
(iii) Each of InfoAchieve, Dotad Holdings, Pinone and ACL has been duly
organized and is validly existing as a company in good standing under the laws
of the British Virgin Islands with legal right, power and authority (corporate
and other) to own its properties and conduct its business as described in the
Prospectus; based solely on a review of a certified true copy of the register of
members of each of InfoAchieve, Dotad, Pinone and ACL and a certified true copy
of the register of mortgages and charges of the Company, all of the issued
shares of each of InfoAchieve, Dotad, Pinone and ACL have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned by the
Company free and clear of any Encumbrances;
(iv) Each of the Covered Selling Shareholders that is a company,
partnership or other business entity has been duly organized and is validly
existing in good standing in either the Cayman Islands or in the British Virgin
Islands, as applicable;
(v) To the best of such counsel's knowledge, after having conducted a
search of the register of writs and other originating processes, and except as
set forth in the Prospectus, there are no legal, arbitration or governmental
proceedings pending to which the Company or any of the Covered Selling
Shareholders is a party or of which any property of the Company or any of the
Covered Selling Shareholders is the subject which, if determined adversely to
the Company or any of the Covered Selling Shareholders, would individually or in
the aggregate have a Material Adverse Effect on the current or future
consolidated financial position, shareholders' equity or results of operations
of the Company and the Group Entities or on the ability of the Covered Selling
Shareholders to convey good and marketable title to the Shares and ADSs held by
them free and clear of any liens, encumbrances, equities or claims; and, to the
best of such counsel's knowledge, no such proceedings are threatened or
contemplated by any Governmental Agency or by others;
(vi) This Agreement has been duly authorized, executed and delivered by the
Company and by an Attorney on behalf of each of the Covered Selling Shareholders
and constitutes a valid and legally binding agreement of the Company and the
Covered Selling Shareholders enforceable in accordance with its terms, subject,
as to enforceability, to bankruptcy, insolvency, reorganization and similar laws
of general applicability relating to or affecting creditors' rights and to
general equity principles;
(vii) Each of the Power of Attorney and the Custody Agreement has been duly
authorized, executed and delivered by the Company and the Covered Selling
Shareholders and constitutes a valid and legally binding obligation of the
Company and the Covered Selling Shareholders enforceable in accordance with its
terms, subject as to enforceability, to
45
bankruptcy, insolvency, reorganization and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles;
(viii) Each of this Agreement, the Deposit Agreement and the Custody
Agreement is in proper form to be enforceable in the Cayman Islands in
accordance with its terms; to ensure the legality, validity, enforceability or
admissibility into evidence in the Cayman Islands of this Agreement, the Deposit
Agreement or the Custody Agreement, it is not necessary that this Agreement, the
Deposit Agreement or the Custody Agreement be filed or recorded with any court
or other authority in the Cayman Islands or that any stamp or similar tax in the
Cayman Islands be paid on or in respect of this Agreement, the Deposit
Agreement, the Custody Agreement or any other documents to be furnished
hereunder or thereunder;
(ix) The issue and sale of the Shares and the ADSs being delivered at such
Time of Delivery and the deposit of the Shares with the Depositary against
issuance of the ADSs to be delivered at such Time of Delivery and the compliance
by the Company with all of the provisions of this Agreement, and the Deposit
Agreement and the consummation of the transactions herein and therein
contemplated 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 known
to such counsel to which the Company is a party or by which the Company is bound
or to which any of the property or assets of the Company is subject, nor will
such action result in any violation of the provisions of the constituent
documents of the Company or any statute or any order, rule or regulation known
to such counsel of any Governmental Agency having jurisdiction over the Company
or its respective properties;
(x) The sale of the ADSs to be sold by the Covered Selling Shareholders
hereunder and the compliance by the Covered Selling Shareholders with all of the
provisions of this Agreement and the consummation of the transactions herein
contemplated will not conflict with or result in a breach or violation of any
terms or provisions of, or constitute a default under, any statute, indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument known
to such counsel to which a Covered Selling Shareholder is a party or by which a
Covered Selling Shareholder is bound, or to which any of the property or assets
of a Covered Selling Shareholder is subject, nor will such action result in any
violation of the provisions of the constituent documents of a Covered Selling
Shareholder or any order, rule or regulation known to such counsel of any court
or governmental agency or body having jurisdiction over a Covered Selling
Shareholder or the property of a Covered Selling Shareholder;
(xi) No Governmental Authorization of or with any Governmental Agency in
the Cayman Islands is required for the issue and sale of the Shares and the
ADSs, the deposit of the Shares with the Depositary against issuance of the ADSs
to be delivered at the Time of Delivery or the consummation of the transactions
contemplated by this Agreement and the Deposit Agreement;
(xii) Immediately prior to such Time of Delivery, each Covered Selling
Shareholder had good and marketable title to the ADSs to be sold at such Time of
Delivery by such Covered Selling Shareholder under this Agreement, free and
clear of all liens, encumbrances, equities or claims, and legal right, power and
authority (corporate and other) to sell, assign, transfer and deliver the ADSs
to be sold by such Covered Selling Shareholder hereunder and thereunder; and,
upon delivery of the ADSs representing such Shares and
46
payment therefore pursuant to this Agreement, good and marketable title to such
ADSs, free and clear of all liens, encumbrances, equities or claims, will pass
to the several Underwriters;
(xiii) The statements set forth in the Prospectus under the caption
"Description of Share Capital", insofar as they purport to constitute a summary
of the terms of the Ordinary Shares are accurate, complete and fair;
(xiv) The opinions of such counsel set forth in the Prospectus under the
caption "Taxation - Cayman Islands Taxation" are confirmed as of such Time of
Delivery;
(xv) 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
Underwriters to the Cayman Islands or to any political subdivision or taxing
authority thereof or therein in connection with (A) the deposit with the
Depositary of Shares by the Company and the Covered Selling Shareholders against
the issuance of the ADSs, (B) the sale and delivery by the Company and each
Covered Selling Shareholder of the ADSs and the Shares to or for the respective
accounts of the Underwriters or (C) the sale and delivery outside the Cayman
Islands by the Underwriters of the ADSs and the Shares to the initial purchasers
thereof in the manner contemplated herein;
(xvi) The Underwriters will not be deemed to be resident, domiciled,
carrying on business or subject to taxation in the Cayman Islands or the British
Virgin Islands solely by reason of its execution, delivery, performance or
enforcement of, or the consummation of any transaction contemplated by, this
Agreement;
(xvii) Insofar as matters of the Cayman Islands law are concerned, the
Registration Statement and the filing of the Registration Statement with the
Commission have been duly authorized by and on behalf of the Company; and the
Registration Statement has been duly executed pursuant to such authorization by
and on behalf of the Company;
(xviii) The Company's agreement, and the Covered Selling Shareholder's
agreement, to the choice of law provisions set forth in Section 18 hereof will
be recognized by the courts of the Cayman Islands or the British Virgin Islands,
as applicable; the Company and the Covered Selling Shareholders can xxx and be
sued in their own names under the laws of the Cayman Islands or the British
Virgin Islands, as applicable; the irrevocable submission of the Company and the
Covered Selling Shareholders to the exclusive jurisdiction of a New York Court,
the waiver by the Company and the Covered Selling Shareholders of any objection
to the venue of a proceeding of a New York Court and the agreement of the
Company and the Covered Selling Shareholders that this Agreement shall be
governed by and construed in accordance with the laws of the State of New York
are legal, valid and binding; service of process effected in the manner set
forth in Section 15 hereof will be effective, insofar as the law of the Cayman
Islands or the British Virgin Islands, as applicable, is concerned, to confer
valid personal jurisdiction over the Company and the Covered Selling
Shareholders; and judgment obtained in a New York Court arising out of or in
relation to the obligations of the Company or a Covered Selling Shareholder
under this Agreement would be enforceable against the Company or each Covered
Selling Shareholder, respectively, in the courts of the Cayman Islands or the
British Virgin Islands, as applicable;
(xix) The indemnification and contribution provisions set forth in Section
9 hereof and Section 5.8 of the Deposit Agreement do not contravene the public
policy or laws of the Cayman Islands or the British Virgin Islands;
47
(xx) All dividends and other distributions declared and payable on the
shares of capital stock of the Company may under the current laws and
regulations of the Cayman Islands be paid to the Depositary and freely
transferred out of the Cayman Islands, and all such dividends and other
distributions will not be subject to withholding or other taxes under the laws
and regulations of Cayman Islands and are otherwise free and clear of any other
tax, withholding or deduction in the Cayman Islands and without the necessity of
obtaining any Governmental Authorization in the Cayman Islands; and
(xxi) The Company is not in violation of its constituent documents or in
default in the performance or observance of any material obligation, agreement,
covenant or condition contained in any license, indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound.
In giving such opinion, such counsel may state that (A) with respect to all
matters of United States federal and New York law, they have relied upon the
opinions of United States counsel for the Company delivered pursuant to
paragraph (d) of this Section 8, (B) with respect to all matters of PRC law,
they have relied upon the opinions of PRC counsel for the Company delivered
pursuant to paragraph (e) of this Section 8 and (C) with respect to all matters
of Hong Kong law, they have relied upon the opinions of Hong Kong counsel for
the Company delivered pursuant to paragraph (g) of this Section 8. In addition,
in rendering the opinion in subparagraph (xii), such counsel may rely upon a
certificate of the Covered Selling Shareholders in respect of matters of fact as
to ownership of and liens, encumbrances, equities or claims on, the Shares or
ADSs sold by the Covered Selling Shareholders; provided that such counsel shall
state that they believe that both you and they are justified in relying upon
such certificate;
(g) Pun & Associates, Hong Kong counsel for the Company shall have
furnished to you their written opinion, dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that: (A) Focus Media Hong Kong has
been duly organized and is validly existing in good standing under the laws of
Hong Kong with legal right, power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, (B) all of
Focus Media Hong Kong's share capital has been duly and validly issued, are
fully paid and non-assessable, and are owned directly by the Company, free and
clear of all liens, encumbrances, equities or claims, and (C) Focus Media Hong
Kong is not in violation of its constituent documents or in default in the
performance or observance of any material obligation, agreement, covenant or
condition contained in any license, indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party or by
which it or any of its properties may be bound;
In giving such opinion, such counsel may state that (A) with respect to all
matters of United States federal and New York law, they have relied upon the
opinions of United States counsel for the Company delivered pursuant to
paragraph (d) of this Section 8, (B) with respect to all matters of PRC law,
they have relied upon the opinions of PRC counsel for the Company delivered
pursuant to paragraph (e) of this Section 8 and (C) with respect to all matters
of Cayman Islands and British Virgin Islands law, they have relied upon the
opinions of Cayman Islands and British Virgin Islands counsel for the Company
delivered pursuant to paragraph (f) of this Section 8;
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(h) You shall have received the written opinion of Xxxxxxx Xxxxxxx &
Xxxxxxxx LLP, special United States counsel to the Selling Shareholders,
addressed to you, and dated the First Time of Delivery, in form and substance
satisfactory to you, stating that:
(i) The Underwriting Agreement has been duly executed and delivered by the
Selling Shareholders in accordance with the law of the State of New York;
(ii) Upon payment for and transfer of the ADSs representing the Shares to
be sold by the Selling Shareholders in accordance with the Underwriting
Agreement, the Underwriters will acquire a security entitlement with respect to
such ADSs and no action based on an adverse claim may be asserted against the
Underwriters;
(iii) The Power of Attorney and the Custody Agreement with respect to each
Selling Shareholder have been duly executed and delivered by such Selling
Shareholder in accordance with the law of the State of New York;
(iv) Assuming the validity of such actions under Cayman Islands law under
the law of the State of New York relating to personal jurisdiction, the Selling
Shareholders have, pursuant to the Underwriting Agreement, validly and
irrevocably submitted to the personal jurisdiction of the New York State or U.S.
federal courts located in the Borough of Manhattan, The City of New York, New
York in any action arising out of or relating to the Underwriting Agreement,
has, to the extent permitted by applicable law, validly and irrevocably waived
any objection to the venue of a proceeding in any such court, and has validly
and irrevocably appointed CT Corporation System, currently located at 000 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its authorized service of process agent for
the purposes described in the Underwriting Agreement, and service of process
effected on such agent will be effective to confer in the manner set forth in
the Underwriting Agreement and will be effective to confer valid personal
jurisdiction over the Selling Shareholders;
(v) The deposit of the Shares and the issuance of the ADSs pursuant to the
Deposit Agreement, the sale of the ADSs and the execution, delivery and
performance by each Selling Shareholder of the Power of Attorney, the
Underwriting Agreement and the Custody Agreement will not (A) violate, breach,
or result in a default under, any agreement or other instrument governed by the
law of the State of New York of such Selling Shareholder that has been filed as
an exhibit to the Registration Statement or (B) violate any U.S. federal or New
York State statute or any rule or regulation that has been issued pursuant to
any such U.S. federal or New York State statute or, to our knowledge, any order
of any U.S. federal or New York State governmental agency or body having
jurisdiction over such Selling Shareholder;
(vi) No consent, approval, authorization, order, registration or
qualification of or with any US. federal or New York governmental agency or
body, or to our knowledge, any U.S. federal or New York court is required for
the deposit of the Shares and the issuance of the ADSs pursuant to the Deposit
Agreement, the sale of the ADSs and the compliance by each Selling Shareholder
with the provisions of the Underwriting Agreement and the Custody Agreement and
the Power of Attorney, except for the registration under the Securities Act and
the Exchange Act of the Shares and the ADSs, and such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the ADSs by the Underwriters;
49
(i) Patterson, Belknap, Xxxx & Xxxxx LLP, counsel for the Depositary, shall
have furnished to you their written opinion, dated such Time of Delivery, in
form and substance satisfactory to you, to the effect that:
(ii) The Deposit Agreement has been duly authorized, executed and delivered
by the Depositary and constitutes a valid and legally binding obligation of the
Depositary, enforceable in accordance with its terms, subject, as to
enforceability, to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or similar laws of general applicability relating to or affecting
creditors' rights and to general principles of equity;
(iii) The ADSs issued under and in accordance with the provisions of the
Deposit Agreement to evidence the ADSs will entitle the holders thereof to the
rights specified therein and in the Deposit Agreement, assuming that (A) the
Shares represented by the ADSs, have been duly authorized and validly issued and
are fully paid and non-assessable and that any preemptive rights with respect to
such Shares have been validly waived and exercised and (B) such Shares have been
duly deposited with Citibank, N.A., as Custodian (as defined in the Deposit
Agreement), in each case under and in accordance with all applicable laws and
regulations;
(iv) Upon issuance by the Depositary of the ADSs against the deposit of
Shares in respect thereof in accordance with the provisions of the Deposit
Agreement, such ADSs will be duly and validly issued and the persons in whose
name the ADSs are registered will be entitled to the rights specified therein
and in the Deposit Agreement; and
(v) The ADS Registration Statement has been filed and the Commission has
declared the ADS Registration Statement effective and, to the best of such
counsel's knowledge, no stop order suspending the effectiveness of the ADS
Registration Statement or any part thereof has been issued and no proceedings
for that purpose have been instituted or are pending or contemplated under the
Act, and the ADS Registration Statement, and each amendment thereof, as of their
respective effective dates, complied as to form in all material respects with
the requirements of the Act and the rules and regulations of the Commission
thereunder;
(j) On the date of the Prospectus at a time prior to the execution of this
Agreement, at 9:30 a.m., New York City time, on the effective date of any post
effective amendment to the Registration Statement filed subsequent to the date
of this Agreement and also at each Time of Delivery, Deloitte Touche Tohmatsu
CPA Ltd. shall have furnished to you a letter or letters, dated the respective
dates of delivery thereof, in form and substance satisfactory to you, to the
effect set forth in Annex I hereto (the executed copy of the letter delivered
prior to the execution of this Agreement is attached as Annex I (A) hereto and a
draft of the form of letter to be delivered on the effective date of any
post-effective amendment to the Registration Statement and as of each Time of
Delivery is attached as Annex I (B) hereto);
(k) (A) None of the Company or any of the Group Entities shall have
sustained since the date of the latest audited financial statements in the
Pricing Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Pricing Prospectus and (B) since the
respective dates as of which information is given in the Pricing Prospectus
there shall not have been any change in the capital stock, short-term debt or
long term debt of the Company
50
or any of the Group Entities or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Company and the
Group Entities, otherwise than as set forth or contemplated in the Pricing
Prospectus, the effect of which, in any such case described in clause (A) or
(B), is in the judgment of the Representatives so material and adverse as to
make it impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares and the ADSs being delivered at such Time of Delivery on
the terms and in the manner contemplated in the Prospectus;
(l) On or after the Applicable Time (A) no downgrading shall have occurred
in the rating accorded to any of the Company's debt securities, if any, by any
"nationally recognized statistical rating organization", as that term is defined
by the Commission for purposes of Rule 436(g)(2) under the Act, and (B) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities;
(m) On or after the Applicable Time, there shall not have occurred any of
the following: (A) a suspension or material limitation in trading in securities
generally on the Nasdaq Global Market, the New York Stock Exchange or the London
Stock Exchange, (B) a suspension or material limitation in trading in the
Company's securities on the Nasdaq Global Market, (C) a general moratorium on
commercial banking activities in New York, London, the PRC or the Cayman Islands
declared by the relevant authorities, or a material disruption in commercial
banking or securities settlement or clearance services in the United States, the
United Kingdom, the PRC or the Cayman Islands, (D) a change or development
involving a prospective change in taxation affecting the Company, any of the
Group Entities or the Shares or the ADSs or the transfer thereof, (E) the
outbreak or escalation of hostilities involving the United States, the United
Kingdom the PRC or the Cayman Islands or the declaration by the United States,
the United Kingdom, the PRC or the Cayman Islands of a national emergency or war
or (F) the occurrence of any other calamity or crisis or any change in
financial, political or economic conditions or currency exchange rates or
controls in the United States, the United Kingdom, the PRC, the Cayman Islands
or elsewhere, if the effect of any such event specified in clause (E) or (F) in
the judgment of the Representatives makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Shares and the ADSs
being delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(n) The ADSs to be sold by the Company and the Selling Shareholders at such
Time of Delivery shall have been duly included for listing on the Nasdaq Global
Market;
(p) The Depositary shall have furnished or caused to be furnished to you at
each Time of Delivery certificates satisfactory to you evidencing the deposit
with it of the Shares being so deposited against issuance of the ADSs to be
delivered by the Selling Shareholders at such Time of Delivery, and the
execution, countersignature (if applicable), issuance and delivery of such ADSs
pursuant to the Deposit Agreement;
(q) The Company shall have entered into an agreement in the form of Annex
II hereto;
(r) The Company shall have complied with the provisions of Section
5(a)(iii) hereof with respect to the furnishing of Prospectuses on the New York
Business Day next succeeding the date of this Agreement;
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(s) The Company has paid the required Commission filing fees relating to
the Shares and ADSs in such amount and within the time frame provided in the Act
and the Rule 456(b)(1) thereunder;
(t) The Company shall have furnished or caused to be furnished to you at
such Time of Delivery certificates of the officers of the Company, reasonably
satisfactory to you as to the accuracy of the representations and warranties of
the Company and the Controlling Person, respectively, herein at and as of such
Time of Delivery, as to the performance by the Company and the Controlling
Person of all of their respective obligations hereunder to be performed at or
prior to such Time of Delivery, and as to such other matters as you may
reasonably request, and the Company shall have furnished or caused to be
furnished certificates as to the matters set forth in subsections (a) and (k) of
this Section, and as to such other matters as you may reasonably request; and
each Selling Shareholder shall have furnished or caused to be furnished to you
at such Time of Delivery a certificate reasonably satisfactory to you as to the
accuracy of its representations and warranties at and as of such Time of
Delivery and as to the performance by such Selling Shareholder of its
obligations hereunder to be performed at or prior to such Time of Delivery;
(u) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any federal, state or
foreign governmental or regulatory authority that would, as of such Time of
Delivery, prevent the issuance of the Shares, the deposit of such Shares with
the Depositary against issuance of the ADSs or the sale of such ADSs; and no
injunction or order of any federal, state or foreign court shall have been
issued that would, as of such Time of Delivery, prevent the issuance of the
Shares, the deposit of such Shares with the Depositary against issuance of the
ADSs or the sale of such ADSs;
(v) The Company shall have caused to be furnished to you at or prior to the
First Time of Delivery, a certificate of the Chief Executive Officer and the
Chief Financial Officer of the Company relating to certain financial and
disclosure matters in form and substance reasonably satisfactory to counsel for
the Underwriters; and
(w) All opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
9. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, the ADS Registration
Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus,
or any amendment or supplement thereto, or any Issuer Free Writing Prospectus or
any "issuer information" filed or required to be filed pursuant to Rule 433(d)
under the Act, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the Company shall
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 or omission or alleged omission made in the
52
Registration Statement, the ADS Registration Statement, any Preliminary
Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or
supplement thereto, 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 expressly for use therein;
(b) Each of the Selling Shareholders, severally and not jointly, will
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, the ADS Registration Statement, any Preliminary
Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or
supplement thereto, or any Issuer Free Writing Prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such action or claim as such expenses are incurred 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 the Registration
Statement, the ADS Registration Statement, any Preliminary Prospectus, the
Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or
any Issuer Free Writing Prospectus, in reliance upon and in conformity with
written information furnished to the Company or such Underwriter by such Selling
Shareholder expressly for use therein; provided, however, that the liability of
each Selling Shareholder pursuant to this subsection (b) shall not exceed the
product of (i) the number of ADSs sold by such Selling Shareholder and (ii) the
public offering price per ADSs as set forth on the cover page of the Pricing
Prospectus, less underwriting discount per ADS as set forth on the cover page of
the Pricing Prospectus;
(c) Each Underwriter will indemnify and hold harmless the Company and each
Selling Shareholder against any losses, claims, damages or liabilities to which
the Company or such Selling Shareholder may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, any
Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any
amendment or supplement thereto, or any Issuer Free Writing Prospectus, or arise
out of or are based upon the omission or alleged omission to state therein 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 the Registration Statement, any Preliminary Prospectus, the
Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or
any Issuer Free Writing Prospectus, in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company and
each Selling Shareholder for any legal or other expenses reasonably incurred by
the Company or such Selling Shareholder in connection with investigating or
defending any such action or claim as such expenses are incurred;
(d) Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against an indemnifying
party under such subsection, notify
53
the indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under such subsection.
In case any such action shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (which 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 shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
relevant indemnified party, effect the settlement or compromise of, or consent
to the entry of any judgment with respect to, any pending or threatened action
or claim against such indemnified party in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim) unless such settlement,
compromise or judgment (A) includes an unconditional release of such indemnified
party from all liability arising out of such action or claim and (B) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party from whom such consent is required
hereunder but has not been obtained;
(e) If the indemnification provided for in this Section 9 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a), (b)
or (c) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Shareholders on the one hand and the
Underwriters on the other from the offering of the ADSs. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (d) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company 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 (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company 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 of the ADSs purchased under this
Agreement (before deducting expenses) received by the Company and the Selling
Shareholders bear to the total underwriting discounts and commissions received
by the Underwriters with respect to the ADSs purchased under this Agreement, in
each case as set forth in the table on the cover page of the Pricing Prospectus.
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 or the Selling Shareholders on the one hand or the
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, each of the Selling Shareholders and the Underwriters
54
agree that it would not be just and equitable if contributions pursuant to this
subsection (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 above in this subsection (e). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in 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 such action or claim.
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 ADSs 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. Further notwithstanding the provisions of this
subsection (e), no Selling Shareholder shall be required to contribute any
amount in excess of the product of (i) the number of ADSs sold by such Selling
Shareholder and (ii) the public offering price per ADS as set forth on the cover
page of the Pricing Prospectus, less the underwriting discount per ADS as set
forth on the cover page of the Pricing Prospectus; and
(f) The obligations of the Company and the Selling Shareholders under this
Section 9 shall be in addition to any liability which the Company and the
Selling Shareholders may otherwise have and shall extend, upon the same terms
and conditions, to the respective affiliates of each Underwriter and to each
person, if any, who controls any Underwriter within the meaning of the Act and
each broker-dealer affiliate of any Underwriter; and the obligations of the
Underwriters under this Section 9 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 officer and director of the Company (including any
person who, with his or her consent, is named in the Registration Statement as
about to become a director of the Company) and any Selling Shareholder and to
each person, if any, who controls the Company or any Selling Shareholder within
the meaning of the Act;
10. (a) If any Underwriter shall default in its obligation to purchase the
ADSs which it has agreed to purchase hereunder at a Time of Delivery, you may in
your discretion arrange for you or another party or other parties to purchase
such ADSs on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such ADSs,
then the Company and the applicable Selling Shareholders shall be entitled to a
further period of thirty-six hours within which to procure another party or
other parties satisfactory to you to purchase such ADSs on such terms. In the
event that, within the respective prescribed periods, you notify the Company and
the Selling Shareholders that you have so arranged for the purchase of such
ADSs, or the Company and the Selling Shareholders notify you that they have so
arranged for the purchase of such ADSs, you or the Company and the applicable
Selling Shareholders shall have the right to postpone such Time of Delivery for
a period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus, or in
any other documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in your opinion may thereby be made necessary. The term "Underwriter" as used in
55
this Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such ADSs;
(b) If, after giving effect to any arrangements for the purchase of the
ADSs of a defaulting Underwriter or Underwriters by you and the Company and the
applicable Selling Shareholders as provided in subsection (a) above, the
aggregate number of such ADSs which remains unpurchased does not exceed one
eleventh of the aggregate number of all of the ADSs to be purchased at such Time
of Delivery, then the Company and the applicable Selling Shareholders shall have
the right to require each non-defaulting Underwriter to purchase the number of
ADSs which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of ADSs which such Underwriter
agreed to purchase hereunder) of the ADSs of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default; and
(c) If, after giving effect to any arrangements for the purchase of the
ADSs of a defaulting Underwriter or Underwriters by you or the Company and the
applicable Selling Shareholders as provided in subsection (a) above, the
aggregate number of such ADSs which remains unpurchased exceeds one eleventh of
the aggregate number of all of the ADSs to be purchased at such Time of
Delivery, or if the Company and the applicable Selling Shareholders shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase ADSs of a defaulting Underwriter or Underwriters, then
this Agreement (or, with respect to the Second Time of Delivery, the obligations
of the Underwriters to purchase, and of the Company to sell, the Optional ADSs)
shall thereupon terminate, without liability on the part of any non-defaulting
Underwriter, the Company or the Selling Shareholders, except for the expenses to
be borne by the Company and the Selling Shareholders and the Underwriters as
provided in Section 6 hereof and the indemnity and contribution agreements in
Section 9 hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
11. The respective indemnities, agreements, representations, warranties and
other statements of the Company, the Controlling Person, the Selling
Shareholders and the Underwriters, as set forth in this Agreement or made by or
on behalf of them, respectively, pursuant to this Agreement, shall remain in
full force and effect, regardless of any investigation (or any statement as to
the results thereof) made by or on behalf of any Underwriter or any controlling
person of any Underwriter, the Company, or any of the Selling Shareholders, or
any officer or director or controlling person of the Company, or any controlling
person of any Selling Shareholder, and shall survive delivery of and payment for
the ADSs.
12. If this Agreement shall be terminated pursuant to Section 10 hereof,
none of the Company, the Controlling Person and the Selling Shareholders shall
then be under any liability to any Underwriter except as provided in Sections 6
and 9 hereof; but, if for any other reason any ADSs are not delivered by or on
behalf of the Company and the Selling Shareholders as provided herein, the
Company will reimburse the Underwriters through you for all out of pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the ADSs not so delivered, but the Company and
the Selling Shareholders shall then be under no further liability to any
Underwriter in respect of the ADSs not so delivered except as provided in
Sections 6 and 9 hereof.
56
13. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by the Representatives as the representatives of the
several Underwriters.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives of the Underwriters, (A)
Credit Suisse Securities (USA) LLC, Eleven Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000, facsimile number: (000) 000-0000, attention: Transactions Advisory
Group, (B) Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, 4 World Financial
Center, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, facsimile number: (212)
449-2785, attention: Equity Capital Markets Desk and (C) Citigroup Global
Markets Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, facsimile number:
(000) 000-0000, attention: General Counsel and; if to the Controlling Person or
any Selling Shareholder shall be delivered or sent by mail, telex or facsimile
transmission to counsel for the Controlling Person or Selling Shareholders at
its address set forth in Schedule II hereto; and if to the Company shall be
delivered or sent by mail, telex or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention: Chief Executive
Officer; provided, however, that any notice to an Underwriter pursuant to
Section 9(d) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire or telex constituting such Questionnaire, which address will be
supplied to the Company or the Selling Shareholders by you upon request. Any
such statements, requests, notices or agreements shall take effect upon receipt
thereof.
14. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company, the Controlling Person and the Selling
Shareholders and, to the extent provided in Sections 9 and 11 hereof, the
officers and directors of the Company and each person who controls the Company,
any Selling Shareholder or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the ADSs from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
15. Each of the parties hereto irrevocably (A) agrees that any legal suit,
action or proceeding against the Company, the Controlling Person or the Selling
Shareholders brought by any Underwriter or by any person who controls any
Underwriter arising out of or based upon this Agreement or the transactions
contemplated hereby may be instituted in any New York Court, (B) waives, to the
fullest extent it may effectively do so, any objection which it may now or
hereafter have to the laying of venue of any such proceeding and (C) submits to
the exclusive jurisdiction of such courts in any such suit, action or
proceeding. Each of the Company, the Controlling Person and the Selling
Shareholders has appointed CT Corporation System, 000 Xxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, as its authorized agent (the "Authorized Agent") upon whom process may
be served in any such action arising out of or based on this Agreement or the
transactions contemplated hereby which may be instituted in any New York Court
by any Underwriter or by any person who controls any Underwriter, expressly
consents to the jurisdiction of any such court in respect of any such action,
and waives any other requirements of or objections to personal jurisdiction with
respect thereto. Such appointment shall be irrevocable. Each of the Company, the
Controlling Person and the Selling Shareholders represents and warrants that the
Authorized Agent has agreed to act as such agent for service of process and
agrees to take any and all action, including the filing of
57
any and all documents and instruments, that may be necessary to continue such
appointment in full force and effect as aforesaid. Service of process upon the
Authorized Agent and written notice of such service to the Company, the
Controlling Person or the Selling Shareholders shall be deemed, in every
respect, effective service of process upon the Company, the Controlling Person
or the Selling Shareholders, as the case may be.
16. In respect of any judgment or order given or made for any amount due
hereunder that is expressed and paid in a currency (the "judgment currency")
other than United States dollars, the Company, the Controlling Person and the
Selling Shareholders, as the case may be, will indemnify each Underwriter
against any loss incurred by such Underwriter as a result of any variation as
between (A) the rate of exchange at which the United States dollar amount is
converted into the judgment currency for the purpose of such judgment or order
and (B) the rate of exchange at which an Underwriter is able to purchase United
States dollars with the amount of the judgment currency actually received by
such Underwriter. The foregoing indemnity shall constitute a separate and
independent obligation of the Company, the Controlling Person and the Selling
Shareholders and shall continue in full force and effect notwithstanding any
such judgment or order as aforesaid. The term "rate of exchange" shall include
any premiums and costs of exchange payable in connection with the purchase of or
conversion into United States dollars.
17. Time shall be of the essence in this Agreement.
18. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
19. This Agreement may be executed by any one or more of the parties hereto
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 instrument.
20. Notwithstanding anything herein to the contrary, the Company is
authorized to disclose to any persons the U.S. federal and state income tax
treatment and tax structure of the potential transaction and all materials of
any kind (including tax opinions and other tax analyses) provided to the Company
relating to that treatment and structure, without the Underwriters imposing any
limitation of any kind. However, any information relating to the tax treatment
and tax structure shall remain confidential (and the foregoing sentence shall
not apply) to the extent necessary to enable any person to comply with
securities laws. For this purpose, "tax structure" is limited to any facts that
may be relevant to that treatment.
21. This Agreement constitutes the entire agreement among the parties and
supersedes all prior agreements and understandings, oral or written, with
respect to the matters set forth herein.
22. Each of the Company, the Controlling Person and the Selling
Shareholders acknowledges and agrees that (i) the purchase and sale of the ADSs
pursuant to this Agreement is an arm's-length commercial transaction between the
Company and Selling Shareholders, on the one hand, and the several Underwriters,
on the other, (ii) in connection therewith each Underwriter is acting solely as
a principal and not the agent or fiduciary of the Company, the Controlling
Person or such Selling Shareholder, and (iii) no Underwriter has assumed an
advisory or fiduciary responsibility in favor of the Company with respect to the
offering contemplated hereby or the process leading thereto (irrespective of
whether such Underwriter has advised or is currently advising the Company or
such Selling Shareholder on
58
other matters) or any other obligation to the Company except the obligations
expressly set forth in this Agreement and (iv) each of the Company, the
Controlling Person and the Selling Shareholders has consulted its own legal and
financial advisors to the extent it deemed appropriate. Each of the Company, the
Controlling Person and the Selling Shareholders agrees that it will not claim
that the Underwriters, or any of them, has rendered advisory services of any
nature or respect, or owes a fiduciary duty to the Company, the Controlling
Person, or such Selling Shareholder, in connection with such transaction or the
process leading thereto.
23. Each of the Company, the Controlling Person, the Selling Shareholders
and the Underwriters hereby irrevocably waives, to the fullest extent permitted
by applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
59
If the foregoing is in accordance with your understanding, please sign and
return to us five counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement among each of the Underwriters, the Company, the
Controlling Person and each of the Selling Shareholders. It is understood that
your acceptance of this letter on behalf of each of the Underwriters is pursuant
to the authority set forth in a form of Agreement among Underwriters, the form
of which shall be submitted to the Company, the Controlling Person and the
Selling Shareholders for examination upon request, but without warranty on your
part as to the authority of the signers thereof.
Very truly yours,
Focus Media Holding Limited
By:
------------------------------------
Name: Xxxxx Xxxxxxx Xxxxx
Title: Chairman and Chief Executive
Officer
Xxxxx Xxxxxxx Xxxxx, the Controlling
Person
----------------------------------------
Selling Shareholders (as listed below)
Aura Investment Holdings Limited
Bai Yunhai
Captains Enterprises Ltd.
Dallsfield Ltd.
Xxx Xxxxxx
IDG-ACCEL China Growth Fund-A L.P.
IDG-ACCEL China Growth Fund L.P.
IDG-ACCEL China Investors L.P.
IDG Technology Venture Investments, LP
KingHill International Holding Co,
Limited
Latitude Holdings Group Limited
Li Junzhi
Xx Xx
Xx Xxx
LinkValue Ltd.
Magic Elite Group Ltd.
Xxxx Xxxxxxx Xxxx
Premacy Co. Limited
Sea Dragon Holding Company Ltd.
Sharvest Capital Limited
Smart Master International Limited
Techware Holding Company Ltd.
Total Team Investments Ltd.
Trans China Ltd.
Zhai Junni
Zhang Jun
Xxx Xxx
Zhou Dai
By:
------------------------------------
Name:
Title:
SCHEDULE I
TOTAL NUMBER OF
ADSS
Underwriter TO BE PURCHASED
----------- ---------------
Citigroup Global Markets Inc. [ ]
Credit Suisse Securities (USA) LLC [ ]
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated [ ]
---------------
TOTAL ........................................................ [ ]
===============
SCHEDULE II
TOTAL NUMBER OF
FIRM ADSS
Selling Shareholders TO BE SOLD
-------------------- ---------------
Aura Investment Holdings Limited 281,405
Trinity Xxxxxxxx, P.O. Box 4301, Road Town, Tortola, British
Virgin Islands
Bai Yunhai 880
23/F, Jing Au Center, Xx. 0 Xxxxx Xxxxx Xxxx Xxxx Xxxx, Xxxx
Xxxx Xxxxxxxx, Xxxxxxx, Xxxxx
Captains Enterprises Limited 51,930
Balizhuang Xili, Xxxx 00, Xx 000, Xxxxx Xxxxx, Xxxx Xxxx
Xxxxxxxx, Xxxxxxx 000000, Xxxxx
Xxx Xxxx 55,220
21/F, Cloud Nine Plaza, 1018 Changning Road, Changning
District, Shanghai 200042, P.R.China
Dallsfield Ltd. 1,500,000
17/F, Block C, SP Tower, Tsinghua Science Park, Haidian,
Beijing, P.R.China 100084
IDG-ACCEL China Growth Fund-A L.P 43,270
c/o IDGVC Venture Investment Consultancy (Beijing) Co., Ltd.
Rm. 000, Xxxxx X, XXXXX Xxxxx, 0 Xxxxxxxxxxxxx Xxx. Xxxxxxx,
Xxxxx
IDG Technology 6,499,089
c/o IDGVC Venture Investment Consultancy (Beijing) Co., Ltd.
Rm. 000, Xxxxx X, XXXXX Xxxxx, 0 Xxxxxxxxxxxxx Xxx. Xxxxxxx,
Xxxxx
Xxx Xxxxx 1,175
Xx. 0000, Xxxxx 0, Xxxxxxxxxxxxxxx Xxxxxxx, 00# Xxxxxxx
Xxxxxx, Xxxxxxxx Xxxxxxxx, Xxxxxxx, Xxxxx
Jinni Zhai 1,410
126-1-3 Beiqu, Xx. 00 Xxxxxxxxxxxxxx Xxxx, Xxxxxxx Xxxxxxxx,
Xxxxxxx, Xxxxx
Junzhi Li 1,610
17-114, Xx. 0 Xxx Xxxx, Xxxx Xxxx Xxxxxxxx, Xxxxxxx, Xxxxx
KingHill International Holding Co, Limited 273,075
X.X. Xxx 0000, Xxxx Xxxx, Xxxxxxx, Xxxxxxx Xxxxxx Xxxxxxx
Latitude Holdings Group Limited 84,295
Trinity Xxxxxxxx, XX Xxx 0000, Xxxx Xxxx, Xxxxxxx, Xxxxxxx
Xxxxxx Xxxxxxx
LinkValue Ltd. 552,285
X.X. Xxx 0000, Xxxx Xxxx, Xxxxxxx, Xxxxxxx Xxxxxx XxxxxxX
Lu Li 1,150
Xxxx 0X, 0xx Xxxxxxxx, XXX, Xxxxxxx Xxxxxxxx, Xxxxxxxx, Xxxxx
Magic Elite Group Ltd. 1,197,420
X.X. Xxx 0000, Xxxx Xxxx, Xxxxxxx, Xxxxxxx Xxxxxx Xxxxxxx
Xxxx Xxxxxxx Xxxx 51,815
x/x Xxxxx 0000X, 00/X, Xxx Xxxxxxxx, 00 Xxxxxxx Xxxxxx,
Xxxxxxx, Xxxx Xxxx
Premacy Co. Limited 213,285
Trinity Xxxxxxxx, P.O. Box 4301, Road Town, Tortola, British
Virgin Islands
Sea Dragon Holding Company Ltd. 190,120
Trinity Xxxxxxxx, X.X. Xxx 0000, Xxxx Xxxx, Xxxxxxx, Xxxxxxx
Xxxxxx Xxxxxxx
Sharvest Capital Limited 240,510
Kingston Xxxxxxxx, P.O. Box 173, Road Town, Tortola, British
Virgin Islands
Smart Master International Limited 51,815
Xxxx 0000, 00/X, Xxx Xxxxxxx Xxxxx, Xxxx Xxxx
Techware Holding Company Ltd. 320,680
X.X. Xxx 0000, Xxxx Xxxx, Xxxxxxx, Xxxxxxx Xxxxxx Xxxxxxx
Total Team Investments Ltd. 35,830,620
0xx Xxxxx, XXXXXXX, Xxxxx, 00 Xxxxxxxxxxxxx Xxxxxx, Xxxxxxx,
X.X.X. 000000
Trans China Ltd. 78,470
Bailizhuang Xili, Xxxx. 00, Xx. 000, Xxxxx Xxxxx, Xxxxxxxx
District, Beijing 100025, China
Xxx Xx 42,435
00xx Xxxxx, Xxxxxxxx 00, Xxxxx Xxxxx, 00 Xxxxxxx Xxxx,
Xxxxxxxx Xxxxxxxx, Xxxxxxx, Xxxxx
Xxxxxx Xxx 1,610
0-0-000 Xxxxxx Run Xxxx Xxxx Xxx Xxx Xxxxxx, Xxxxx Xxx
Xxxxxxxx, Xxxxxxx, Xxxxx
Xxx Xxx 35,830,620
x/x 0xx Xxxxx, XXXXXXX, Xxxxx, 00 Xxxxxxxxxxxxx Xxxxxx,
Xxxxxxx, X.X.X. 000000
----------
TOTAL......................................................... 83,396,194
==========
SCHEDULE III
(a) Issuer Free Writing Prospectuses:
NONE
(b) Additional Documents Incorporated by Reference:
NONE
SCHEDULE IV
List of Focus Media Advertisement Subsidiaries:
Percentage
Name of Subsidiary Acquired
------------------ ----------
Lanzhou Focus Media Advertisement Co., Ltd. 100%
[Guizhou Focus Media Advertisement Co., Ltd. 100%]
[Quanzhou New Land Culture and Communication Co., Ltd. 100%]
[Zhengzhou Focus Media Framedia Advertisement Co., Ltd. 100%]
Shenzhen Bianjie Building Advertisement Co. Ltd. 99%
Shanghai Fengjing Advertisement Co., Ltd 95%
Shanghai Target Media Co., Ltd. 90%
Beijing Focus Media Wireless Co., Ltd. 90%
Guangzhou Feisha Advertisement Co., Ltd. 90%
Shanghai Perfect Media Advertising Agency Co., Ltd 90%
Qingdao Focus Media Advertisement Co., Ltd. 90%
Changsha Focus Media Shiji Advertisement Co., Ltd. 90%
Hebei Focus Media Advertising Co. Ltd. 90%
Dalian Focus Media Advertising Co., Ltd. 90%
Nanjing Focus Media Advertising Co., Ltd. 90%
Sichuan Focus Media Advertising Communications Co., Ltd 90%
Shanghai Qianjian Advertising Co., Ltd 90%
Guangzhou Fuke Advertising Co., Ltd. 90%
Zhuhai Focus Media Culture Communication Co., Ltd. 90%
Hefei Fukesi Advertising Co., Ltd. 90%
Xiamen Focus Media Advertising Co., Ltd. 90%
Liaoning Framedia Advertisement Co., Ltd. 90%
Shijiazhuang Focus Media Huihuang Commercial Advertisement Co., Ltd. 90%
Dongguan Focus Media Advertisement Co., Ltd. 90%
Haerbin Focus Media Advertising Co., Ltd. 90%
Catch Stone Advertising (Beijing) Co., Ltd. 90%
Beijing Yitong Wireless Information Technology Co., Ltd. 90%
Shanghai Yuanchi Advertisement Co., Ltd. 90%
Shanghai Qianzhong Advertisement Co., Ltd. 90%
Shanghai Lizhu Advertisement Co., Ltd. 90%
Shanghai Honghao Advertisement Co., Ltd. 90%
Shanghai Yuanyuan Advertisement Co., Ltd. 90%
Shanghai Zhiyi Advertisement Co., Ltd. 90%
[Jilin Focus Media Advertisement Co., Ltd. 90%]
[Beijing Power Media Advertisement Co., Ltd. 90%]
[Beijing Tuojia Chengyuan Advertisement Co., Ltd. 90%]
Beiijing Xxxx Xxxxx Advertisement Co., Ltd. 90%
Jinan Framedia Advertisement Co., Ltd. 90%
[Taiyuan Framedia Juzhong Advertisement Co., Ltd. 90%]
Shanghai Typical Channel Advertisement Co., Ltd. 90%
[Tianjin Saige Advertisement Planning Co., Ltd. 90%]
[Hefei Tiandi Advertisement Co., Ltd. 90%]
Yunnan Focus Media Advertising Co., Ltd 89.5%
Zhengzhou Focus Media Advertisment Co., Ltd. 84%
Jinan Focus Media Advertising Co., Ltd. 80%
[Beijing Jiahua Hengshun Advertisment Co., Ltd. 80%]
[Beijing Jiahua Hengshun Media Advertisement Co., Ltd. 80%]
[Beijing Jiahua Zhongwang Media Advertisement Co., Ltd. 80%]
Tianjin Focus Media Tongsheng Advertising Co., Ltd. 80%
Zhejiang Ruihong Focus Media Advertising Communication Co., Ltd. 80%
Wuhan Xx Xxx Focus Media Advertising Co., Ltd. 75%
Dushi Caiping (Beijing) Advertisement Co., Ltd. 75%
Fuzhou Fukesi Culture Communication Co., Ltd. 70%
Xi'an Focus Media Advertising and Information Co., Ltd. 70%
Shenyang Focus Media Advertising Co., Ltd. 70%
Beijing Yangshi Sanwei Advertisement Co., Ltd. 70%
Beijing Chuangshi Qiji Advertisement Co., Ltd. 70%
Beijing Kudong Media Advertisement Co., Ltd. 70%
Shanghai Yuewei Computer Information Technology Co., Ltd. 70%
Guangzhou Hengxun Advertisement Co., Ltd. 63%
Chongqing Geyang Focus Media Culture Communication Co., Ltd. 60%
Shanghai Jiefang Focus Media Advertisement Co., Ltd. 60%
Shanghai On-Target Advertisement Co., Ltd. 60%
ANNEX I
FORM OF DESCRIPTION OF COMFORT LETTER
Pursuant to Section 8(j) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and the Subsidiaries within the meaning of the Act and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary financial
information and schedules (and, if applicable, financial forecasts and/or pro
forma financial information) examined by them and in the Prospectus or the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published rules
and regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of Certified
Public Accountants of the unaudited consolidated interim financial statements,
selected financial data, pro forma financial information, financial forecasts
and/or condensed financial statements derived from audited financial statements
of the Company for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been separately furnished to the
representative of the Underwriters (the "Representative");
(iii) They have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited condensed
consolidated statements of income, consolidated balance sheets and consolidated
statements of cash flows in the Prospectus as indicated in their reports thereon
copies of which have been separately furnished to the Representative; and on the
basis of specified procedures including inquiries of officials of the Company
who have responsibility for financial and accounting matters regarding whether
the unaudited condensed consolidated financial statements referred to in
paragraph (vi)(a)(i) below comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published rules
and regulations, nothing came to their attention that caused them to believe
that the unaudited condensed consolidated financial statements do not comply as
to form in all material respects with the applicable accounting requirements of
the Act and the related published rules and regulations;
(iv) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the basis of
limited procedures specified in such letter nothing came to their attention as a
result of the foregoing procedures that caused them to believe that this
information does not conform in all material respects with the disclosure
requirements of Items 8 and 11 of Form 20-F and of Regulation S-K;
(v) On the basis of limited procedures, not constituting an examination in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial
statements and other information referred to below, a reading of the latest
available interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries since the
date of the latest audited financial statements in the Prospectus, inquiries of
officials of the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be specified
in such letter, nothing came to their attention that caused them to believe
that:
(a) (i) the unaudited consolidated statements of operations, consolidated
balance sheets, consolidated statements of shareholders' equity and
consolidated statements of cash flows in the Prospectus do not comply as to
form in all material respects with the applicable accounting requirements
of the Act and the related published rules and regulations, or (ii) any
material modifications should be made to the unaudited condensed
consolidated statements of operations, consolidated balance sheets,
consolidated statements of shareholders' equity and consolidated statements
of cash flows in the Prospectus for them to be in conformity with generally
accepted accounting principles;
(b) any other unaudited statement of operations data and balance sheet
items in the Prospectus do not agree with the corresponding items in the
unaudited consolidated financial statements from which such data and items
were derived, and any such unaudited data and items were not determined on
a basis substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements in the Prospectus;
(c) the unaudited financial statements which were not in the Prospectus but
from which were derived any unaudited condensed financial statements
referred to in clause (a) and any unaudited income statement data and
balance sheet items in the Prospectus and referred to in clause (b) were
not determined on a basis substantially consistent with the basis for the
audited consolidated financial statements in the Prospectus;
(d) any unaudited pro forma consolidated condensed financial statements in
the Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those statements;
(e) as of a specified date not more than five days prior to the date of
such letter, there have been any changes in the consolidated capital stock
(other than issuances of capital stock upon exercise of options and stock
appreciation rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were outstanding
on the date of the latest financial statements in the Prospectus) or any
increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets or
shareholders' equity or other items specified by the Representative, or any
increases in any items specified by the Representative, in each case as
compared with amounts shown in the latest balance sheet included in the
Prospectus, except in each case for changes,
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increases or decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(f) for the period from the date of the latest financial statements
included in the Prospectus to the specified date referred to in clause (e)
there were any decreases in consolidated net revenues or operating profit
or the total or per share amounts of consolidated net income or other items
specified by the Representative, or any increases in any items specified by
the Representative, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Representative, except in each case for decreases or
increases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(vi) In addition to the examination referred to in their report(s) included in
the Prospectus and the limited procedures, inspection of minute books, inquiries
and other procedures referred to in paragraph (iii) above, they have carried out
certain specified procedures, not constituting an examination in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Representative, which are
derived from the general accounting records of the Company and the Subsidiaries,
which appear in the Prospectus, or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Representative, specified by the
Representative, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and the
Subsidiaries and have found them to be in agreement.
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ANNEX I (A)
EXECUTED COMFORT LETTER DELIVERED PRIOR TO EXECUTION OF THIS
AGREEMENT
[ATTACHED]
ANNEX I (B)
FORM OF COMFORT LETTER TO BE DELIVERED ON THE EFFECTIVE DATE OF
ANY POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT AND
AS OF EACH TIME OF DELIVERY
Pursuant to Section 8(j) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary financial
information and schedules (and, if applicable, financial forecasts and/or pro
forma financial information) examined by them and in the Registration Statement
or the Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act, as applicable, and the
related published rules and regulations thereunder; and, if applicable, they
have made a review in accordance with standards established by the American
Institute of Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited financial
statements of the Company for the periods specified in such letter, as indicated
in their reports thereon, copies of which have been separately furnished to the
representative of the Underwriters (the "Representative");
(iii) They have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited condensed
consolidated statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus as indicated in their
reports thereon copies of which have been separately furnished to the
Representative; and on the basis of specified procedures including inquiries of
officials of the Company who have responsibility for financial and accounting
matters regarding whether the unaudited condensed consolidated financial
statements referred to in paragraph (vi)(A)(i) below comply as to form in all
material respects with the applicable accounting requirements of the Act and the
related published rules and regulations, nothing came to their attention that
caused them to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations;
(iv) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the basis of
limited procedures specified in such letter nothing came to their attention as a
result of the foregoing procedures that caused them to believe that this
information does not conform in all material respects with the disclosure
requirements of Items 8 and 11 of Form 20-F and of Regulation S-K;
(v) On the basis of limited procedures, not constituting an examination in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements and other information referred to below, a
reading of the latest available interim financial statements of the Company and
its subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements in the
Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their attention
that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus do not comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act and the related published rules and
regulations, or (ii) any material modifications should be made to the unaudited
condensed consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus, for them to be
in conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet items included
in the Prospectus do not agree with the corresponding items in the unaudited
consolidated financial statements from which such data and items were derived,
and any such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding amounts in the
audited consolidated financial statements included or incorporated by reference
in the Company's Annual Report on Form 20-F for the most recent fiscal year;
(C) the unaudited financial statements which were not included in the Prospectus
but from which were derived the unaudited condensed financial statements
referred to in clause (A) and any unaudited income statement data and balance
sheet items included in the Prospectus and referred to in clause (B) were not
determined on a basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the Company's
Annual Report on Form 20-F for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial statements in the
Prospectus do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and regulations
thereunder or the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to the date of such
letter, there have been any changes in the consolidated capital stock (other
than issuances of capital stock upon exercise of options and stock appreciation
rights, upon earn outs of performance shares and upon conversions of convertible
securities, in each case which were outstanding on the date of the latest
balance sheet in the Prospectus) or any increase in the consolidated long term
debt of the Company and its subsidiaries, or any decreases in consolidated net
current assets or stockholders' equity or other items specified by the
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Representative, or any increases in any items specified by the Representative,
in each case as compared with amounts shown in the latest balance sheet in the
Prospectus, except in each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are described in such
letter; and
(F) for the period from the date of the latest financial statements in the
Prospectus to the specified date referred to in clause (E) there were any
decreases in consolidated net revenues or operating profit or the total or per
share amounts of consolidated net income or other items specified by the
Representative, or any increases in any items specified by the Representative,
in each case as compared with the comparable period of the preceding year and
with any other period of corresponding length specified by the Representative,
except in each case for increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such letter; and
(vi) In addition to the examination referred to in their report(s) in the
Prospectus and the limited procedures, inspection of minute books, inquiries and
other procedures referred to in paragraphs (iii) and (vi) above, they have
carried out certain specified procedures, not constituting an examination in
accordance with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the Representative
which are derived from the general accounting records of the Company and its
subsidiaries, which appear in the Prospectus or in Part II of, or in exhibits
and schedules to, the Registration Statement specified by the Representative,
and have compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and have found
them to be in agreement.
A-I(B)-3
ANNEX II
FORM OF COMPANY LOCK-UP AGREEMENT
[_____________], 2007
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
As representative of the Underwriters
named in Schedule I to the Underwriting Agreement
Re: Focus Media Holding Limited--Lock-up Agreement
Ladies and Gentlemen:
The undersigned understands that you, as representative (the
"REPRESENTATIVE") propose to enter into an underwriting agreement on behalf of
the Underwriters named in Schedule I to such agreement (collectively, the
"UNDERWRITERS"), to be dated as of [__________], 2007 (the "UNDERWRITING
AGREEMENT") with Focus Media Holding Limited, a Cayman Islands company (the
"COMPANY"), and those selling shareholders named in the Underwriting Agreement
(collectively, the "SELLING SHAREHOLDERS"), providing for a public offering of
American Depositary Shares ("ADSS") representing Ordinary Shares of the Company,
par value US$0.00005 per share (the "ORDINARY SHARES"), pursuant to a
Registration Statement on Form F-1 (File No. 333-146913) and a Registration
Statement on Form F-6 (File No. 333-141820) filed with the U.S. Securities and
Exchange Commission (the "SEC").
In consideration of the agreement by the Underwriters to offer and sell the
ADSs, and of other good and valuable consideration the receipt and sufficiency
of which is hereby acknowledged, the undersigned agrees that, without your prior
permission, during the period beginning from the date hereof and continuing to
and including the date 90 days after the date of the final Prospectus (the
"LOCK-UP PERIOD"), not to offer, sell, announce the intention to sell, contract
to sell, pledge, grant any option to purchase, make any short sale or otherwise
dispose of, directly or indirectly, or cause the Company to file with the SEC a
registration statement under the Securities Act of 1933, as amended (the "ACT")
with respect to, (A) any ADSs or Ordinary Shares or any securities of the
Company represented by the ADSs, or any securities of the Company substantially
similar to the ADSs or Ordinary Shares, including but not limited to any options
or warrants to purchase or any securities that are convertible into or
exchangeable for, or that represent the right to receive, ADSs or Ordinary
Shares or any such substantially similar securities; and (B) any shares or
equity interests in the Company's subsidiaries or controlled affiliates or
depositary shares or depositary receipts representing such shares or equity
interests, including by not limited to securities that are convertible into or
exchangeable for or that represent the right to receive such shares or equity
interests or such depositary shares or receipts, or any such substantially
similar securities, whether now owned or hereinafter acquired (of record,
beneficially or otherwise, including as a custodian) (the securities covered by
the foregoing clauses (A) and (B), collectively, are referred to as the "LOCK-UP
SECURITIES"; except that the foregoing restrictions shall not apply to (1) the
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ADSs and the Ordinary Shares underlying such ADSs, (2) the issuance of Ordinary
Shares in connection with bona fide strategic acquisitions by the Company not to
exceed 32.0 million Ordinary Shares in the aggregate, (3) grants of options
pursuant to the Company's employee stock option plans, and (4) any Ordinary
Shares to be issued by the Company upon the exercise of any options described in
clause (3) above; provided however, that if (x) during the last 17 days of the
Lock-up Period, the Company releases earnings results or announces material news
or a material event or (y) prior to the expiration of the Lock-up Period, the
Company announces that it will release earnings results during the 15-day period
following the last day of the Lock-up Period, then in each case the Lock-up
Period will be automatically extended until the expiration of the 18-day period
beginning on the date of release of the earnings results or the announcement of
the material news or material event, as applicable unless you waive, in writing,
such extension; and provided further that, if the Company issues ADSs pursuant
to (2) above, the Lock-Up Period will be automatically extended until the
expiration of the remainder of 90-day lock-up period. The Company will provide
you and each holder of ADSs subject to the Lock-up Period with prior notice of
any such announcement that gives rise to an extension of the Lock-up Period.
The foregoing restriction is expressly agreed to preclude the undersigned
from engaging in any hedging, swap or other transaction or arrangement which is
designed to or which reasonably could be expected to lead to or result in a sale
or disposition of the Undersigned's Securities even if such securities would be
disposed of by someone other than the undersigned, or transfers, in whole or in
part, any of the economic consequences of ownership of the Undersigned's
Securities, whether any of these transactions are to be settled by delivery of
the Undersigned's Securities or other securities, in cash or otherwise. Such
prohibited hedging or other transactions would include without limitation any
short sale or any purchase, sale or grant of any right (including without
limitation any put or call option) with respect to any of the Undersigned's
Securities or with respect to any security that includes, relates to, or derives
any significant part of its value from such securities. In addition, the
undersigned agrees not to publicly disclose the intention to make any offer,
sale, pledge, disposition or filing, without the prior written consent of the
Representative.
The undersigned understands that the Company, the Selling Shareholders and
the Underwriters are relying upon this Lock-up Agreement in proceeding toward
consummation of the offering. The undersigned further understands that this
Lock-up Agreement is irrevocable and shall be binding upon the undersigned's
heirs, legal representatives, successors, and assigns. The undersigned also
agrees and consents to the entry of stop transfer instructions with the
Company's transfer agent and registrar against the transfer of the Undersigned's
Securities except in compliance with the foregoing restrictions.
This Lock-up Agreement shall terminate upon the expiration of the Lock-up
Period or in the event that there is no delivery of, and payment for, the ADSs
pursuant to the Underwriting Agreement, upon three days' prior written notice of
such non-delivery and non-payment given by the undersigned to you.
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Notwithstanding the foregoing, any prior lock-up agreement entered into by
the undersigned remains in full effect except as superseded by the terms of this
lock-up agreement. During the Lock-Up Period, the terms of this agreement
prevail in any conflict with any prior lock-up agreement. Upon termination,
cancellation or waiver of this lock-up agreement, the terms of any prior lock-up
agreement remain in full effect.
Very truly yours,
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