3,500,000 American Depositary Shares City Telecom (H.K.) Limited American Depositary Shares Representing 70,000,000 Ordinary Shares UNDERWRITING AGREEMENT
Exhibit 1.1
3,500,000 American Depositary Shares
City Telecom (H.K.) Limited
American Depositary Shares Representing 70,000,000 Ordinary Shares
April 23, 2010
Xxxxxxxxxxx & Co. Inc.
As Representative of the several
Underwriters named in Schedule I hereto
Underwriters named in Schedule I hereto
c/o Oppenheimer & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
City Telecom (H.K.) Limited (the “Company”), a company incorporated with limited liability
under the Companies Ordinance of the Hong Kong Special Administrative Region of the People’s
Republic of China (“Hong Kong”), proposes, subject to the terms and conditions contained herein, to
issue and sell to you and the other underwriters named on Schedule I to this Agreement (the
“Underwriters”), for whom you are acting as Representative (the “Representative”), an aggregate of
3,500,000 American Depositary Shares (“ADSs”) representing 70,000,000 shares (the “Firm ADSs”) of
the Company’s ordinary shares, HK$0.10 par value per share (the “Ordinary Shares”). The respective
amounts of the Firm ADSs to be purchased by each of the several Underwriters are set forth opposite
their names on Schedule I hereto. In addition, the Company proposes to grant to the Underwriters
an option to purchase up to an additional 525,000 ADSs representing 10,500,000 Ordinary Shares (the
“Option ADSs”) for the purpose of covering over-allotments in connection with the sale of the Firm
ADSs. The Firm ADSs and the Option ADSs are collectively called the “Offered ADSs.”
The Offered ADSs are to be issued pursuant to that certain deposit agreement dated as of
November 2, 1999 (the “Deposit Agreement”), among the Company, The Bank of New York Mellon
(formerly, “The Bank of New York”), as depositary (the “Depositary”), and the holders and
beneficial owners from time to time of ADSs issued thereunder. Each ADS will initially represent
the right to receive twenty Ordinary Shares deposited pursuant to the Deposit Agreement.
The Company has
prepared and filed in conformity with the requirements of the Securities Act
of 1933, as amended (the “Securities Act”), and the published rules and regulations
thereunder (the
“Rules”) adopted by the Securities and Exchange Commission (the “Commission”)
a registration
statement on Form F-3 (No. 333-164786), including a related prospectus dated
April 8, 2010 (the
“Base Prospectus”) relating to ordinary shares, debt securities (including convertible debt
securities), warrants to purchase debt or equity securities, rights to purchase ordinary shares, or
any combination of the above, separately or as units, of the Company that may be sold from time to
time by the Company in accordance with Rule 415 of the Securities Act, and such amendments thereof
as may have been required to the date of this Agreement. Copies of such Registration Statement
(including all amendments thereof and all documents deemed incorporated by reference therein) and
of the related Base Prospectus have heretofore been delivered by the Company or are otherwise
available to you.
The term “Registration Statement” as used in this Agreement means the registration statement,
including all exhibits, financial schedules and all documents and information deemed to be part of
the Registration Statement through incorporation by reference or otherwise, as amended from time to
time, including the information (if any) contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules and deemed to be part thereof at the time of
effectiveness pursuant to Rule 430A of the Rules.
If the Company has filed an abbreviated registration statement to register additional Offered
ADSs pursuant to Rule 462(b) under the Rules (the “462(b) Registration Statement”), then any
reference herein to the Registration Statement shall also be deemed to include such 462(b)
Registration Statement.
The term “Preliminary Prospectus” means the Base Prospectus, any preliminary prospectus
supplement used or filed with the Commission pursuant to Rule 424 of the Rules, in the form
provided to the Underwriters by the Company for use in connection with the offering of the Offered
ADSs. The term “Prospectus” means the Base Prospectus, any Preliminary Prospectus and any
amendments or further supplements to such prospectus, and including, without limitation, the final
prospectus supplement, filed pursuant to and within the limits described in Rule 424(b) with the
Commission in connection with the proposed sale of the Offered ADSs contemplated by this Agreement
through the date of such prospectus supplement.
The term “Effective Date” shall mean each date that the Registration Statement and any
post-effective amendment or amendments thereto became or become effective. Unless otherwise stated
herein, any reference herein to the Registration Statement, any Preliminary Prospectus, the
Statutory Prospectus (as hereinafter defined) and the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein, including pursuant to Item 6 of Form F-3
under the Securities Act, which were filed under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) on or before the date hereof or are so filed hereafter.
Any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the
Registration Statement, any Preliminary Prospectus, the Statutory Prospectus or the Prospectus
shall be deemed to refer to and include any such document filed or to be filed under the Exchange
Act after the date of the Registration Statement, any such Preliminary Prospectus, the Statutory
Prospectus or Prospectus, as the case may be, and deemed to be incorporated
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therein by reference. All references in this Agreement to the Registration Statement, any
Preliminary Prospectus or the Prospectus, or any amendments or supplements to any of the foregoing
shall include any copy thereof filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System (“XXXXX”).
The Company will prepare and file in conformity with the requirements of the Securities Act
and the Rules, an Issuer Free Writing Prospectus (as defined in Section 2(b)) to convey pricing and
other information not included in the Preliminary Prospectus.
The Company understands that the Underwriters propose to make a public offering of the Offered
ADSs, as set forth in and pursuant to the Statutory Prospectus (as hereinafter defined) and the
Prospectus, as soon after the Effective Date and the date of this Agreement as the Representative
deems advisable. The Company hereby confirms that the Underwriters and dealers have been
authorized to distribute or cause to be distributed each Preliminary Prospectus, and each Issuer
Free Writing Prospectus (as hereinafter defined) and are authorized to distribute the Prospectus
(as from time to time amended or supplemented if the Company furnishes amendments or supplements
thereto to the Underwriters).
1. Sale, Purchase, Delivery and Payment for the Offered ADSs. On the basis of the
representations, warranties and agreements contained in, and subject to the terms and conditions
of, this Agreement:
(a) The Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at a purchase price
of US$12.35 per ADS (the “Initial Price”), the number of Firm ADSs set forth opposite the name of
such Underwriter under the column “Number of Firm ADSs to be Purchased from the Company” on
Schedule I to this Agreement, subject to adjustment in accordance with Section 8 hereof.
(b) The Company hereby grants to the several Underwriters an option to purchase, severally and
not jointly, all or any part of the Option ADSs at the Initial Price. The number of Option ADSs to
be purchased by each Underwriter shall be the same percentage (adjusted by the Representative to
eliminate fractions) of the total number of Option ADSs to be purchased by the Underwriters as such
Underwriter is purchasing of the Firm ADSs. Such option may be exercised only to cover
over-allotments in the sales of the Firm ADSs by the Underwriters and may be exercised in whole or
in part at any time on or before 12:00 noon, New York City time, on the business day before the
Firm ADSs Closing Date (as defined below), and from time to time thereafter within 30 days after
the date of this Agreement, in each case upon written, facsimile or telegraphic notice, or verbal
or telephonic notice confirmed by written, facsimile or telegraphic notice, by the Representative
to the Company no later than 12:00 noon, New York City time, on the business day before the Firm
ADSs Closing Date or at least two business days before the Option ADSs Closing Date (as defined
below), as the case may be, setting forth the number of Option ADSs to be purchased and the time
and date (if other than the Firm ADSs Closing Date) of such purchase.
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(c) Payment of the purchase price for, and delivery of the American Depositary Receipts
(“ADRs”) evidencing the ADSs for, the Firm ADSs shall be made at the offices of
Xxxxxxxxxxx & Co. Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m., New York
City time, on the third business day following the date of this Agreement or at such time on such
other date, not later than ten (10) business days after the date of this Agreement, as shall be
agreed upon by the Company and the Representative (such time and date of delivery and payment are
called the “Firm ADSs Closing Date”). In addition, in the event that any or all of the Option ADSs
are purchased by the Underwriters, payment of the purchase price, and delivery of the ADRs, for
such Option ADSs shall be made at the above-mentioned offices, or at such other place as shall be
agreed upon by the Representative and the Company, on each date of delivery as specified in the
notice from the Representative to the Company (such time and date of delivery and payment are
called the “Option ADSs Closing Date”). The Firm ADSs Closing Date and any Option ADSs Closing
Date are called, individually, a “Closing Date” and, together, the “Closing Dates.”
(d) Payment shall be made to the Company by wire transfer of immediately available funds or by
certified or official bank check or checks payable in New York Clearing House (same day) funds
drawn to the order of the Company, against delivery of the respective ADRs to the Representative
for the respective accounts of the Underwriters through the facilities of the Depositary Trust
Company (“DTC”).
(e) The ADRs evidencing the Offered ADSs shall be registered in such names and shall be in
such denominations as the Representative shall request at least two full business days before the
Firm ADSs Closing Date or, in the case of Option ADSs, on the day of notice of exercise of the
option as described in Section 1(b) The Company will cause the ADRs representing the Offered ADSs
to be made available for checking and packaging, at such place as is designated by the
Representative, on the full business day before the Firm ADSs Closing Date (or the Option ADSs
Closing Date in the case of the Option ADSs).
2. Representations and Warranties of the Company. The Company represents and warrants
to each Underwriter as of the date hereof, as of the Firm ADSs Closing Date and as of each Option
ADSs Closing Date (if any), as follows:
(a) The Company meets the requirements for use of Form F-3 under the Securities Act including
the transaction requirements set forth in General Instruction 1.B.1 of such form. The Company filed
with the Commission the Registration Statement on such Form, including a Base Prospectus, for
registration under the Securities Act of the offering and sale of the Offered ADSs, and the Company
has prepared and used a Preliminary Prospectus in connection with the offer and sale of the Offered
ADSs. When the Registration Statement or any amendment thereof or supplement thereto was or is
declared effective and as of the date of the most recent Amendment to the Registration Statement,
it (i) complied or will comply, in all material respects, with the requirements of the Securities
Act and the Rules and the Exchange Act and the rules and regulations of the Commission thereunder
and (ii) did not or will not, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the statements therein
not misleading. When any Preliminary Prospectus or Prospectus was first filed with the Commission
(whether filed as part of the Registration Statement or any amendment thereto or pursuant to Rule
424 of the Rules) and when any amendment thereof or supplement thereto was first filed with the
Commission, such Preliminary Prospectus or Prospectus as amended or supplemented complied in all
material
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respects with the applicable provisions of the Securities Act and the Rules and did not or
will not, contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements therein not misleading.
If applicable, each Preliminary Prospectus and the Prospectus delivered to the Underwriters for use
in connection with this offering was identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent permitted by Regulation S-T.
Notwithstanding the foregoing, none of the representations and warranties in this paragraph 2(a)
shall apply to statements in, or omissions from, the Registration Statement, any Preliminary
Prospectus or the Prospectus made in reliance upon, and in conformity with, information herein or
otherwise furnished in writing by the Representative on behalf of the several Underwriters
specifically for use in the Registration Statement, any Preliminary Prospectus or the Prospectus.
With respect to the preceding sentence, the Company acknowledges that the only information
furnished in writing by the Representative for use in the Registration Statement, any Preliminary
Prospectus or the Prospectus is the second sentence of the first paragraph, the statements
concerning the names of the several Underwriters contained in the second paragraph, the concession
and reallowance figures contained in the fourth paragraph and the statements concerning possible
stabilization measures contained in the eleventh paragraph under the caption “Underwriting” in the
Prospectus (collectively, the “Underwriting Information”).
(b) As of the Applicable Time (as hereinafter defined), neither (i) the price to the public
and the number of ADSs offered and sold, as indicated on the cover page of the Prospectus and the
Statutory Prospectus (as hereinafter defined), all considered together (collectively, the “General
Disclosure Package”), nor (ii) any individual Issuer Free Writing Prospectus when considered
together with the General Disclosure Package, included any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply to statements in or
omissions from the General Disclosure Package or any Issuer Free Writing Prospectus made in
reliance upon and in conformity with the Underwriter Information.
Each Issuer Free Writing Prospectus (as hereinafter defined), including any electronic road
show (including without limitation any “bona fide electronic road show” as defined in Rule
433(h)(5) under the Securities Act) (each, a “Road Show”) (i) is identified in Schedule II hereto
and (iii) complied when issued, and complies, in all material respects with the requirements of the
Securities Act and the Rules and the Exchange Act and the rules and regulations of the Commission
thereunder.
As used in this Section and elsewhere in this Agreement:
“Applicable Time” means 7:55 am (Eastern time) on the date of this Underwriting Agreement.
“Statutory Prospectus” as of any time means the Preliminary Prospectus relating to the
Offered ADSs that is included in the Registration Statement immediately prior to the
Applicable Time, including any document incorporated by reference therein and any prospectus
supplement deemed to be a part thereof.
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“Issuer Free Writing Prospectus” means each “issuer free writing prospectus” (as defined in
Rule 433 of the Rules) prepared by or on behalf of the Company or used or referred to by the
Company in connection with the offering of the Offered ADSs, including, without limitation,
each Road Show.
(c) The Registration Statement is effective under the Securities Act and no stop order
preventing or suspending the effectiveness of the Registration Statement or suspending or
preventing the use of any Preliminary Prospectus, the Prospectus or any “free writing prospectus”,
as defined in Rule 405 under the Rules, has been issued by the Commission and no proceedings for
that purpose have been instituted or are threatened under the Securities Act. Any required filing
of any Preliminary Prospectus and/or the Prospectus and any supplement thereto pursuant to Rule
424(b) of the Rules has been or will be made in the manner and within the time period required by
such Rule 424(b). Any material required to be filed by the Company pursuant to Rule 433(d) or Rule
163(b)(2) of the Rules has been or will be made in the manner and within the time period required
by such Rules.
(d) The documents incorporated by reference in the Registration Statement, any Preliminary
Prospectus and the Prospectus, at the time they became effective or were filed with the Commission,
as the case may be, complied in all material respects with the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and
none of such documents contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading, and any further
documents so filed and incorporated by reference in the Registration Statement, any Preliminary
Prospectus and the Prospectus, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder and will 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 light of the
circumstances under which they are made, not misleading.
(e) Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Offered ADSs or until any earlier date
that the Company notified or notifies the Representative as described in the next sentence, did
not, does not and will not include any information that conflicted, conflicts or will conflict with
the information contained in the Registration Statement, including any document incorporated by
reference therein and any prospectus supplement deemed to be a part thereof that has not been
superseded or modified, the Statutory Prospectus or the Prospectus.
If at any time following issuance of an Issuer Free Writing Prospectus there occurred or
occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted
or would conflict with the information contained in the Registration Statement, the Statutory
Prospectus or the Prospectus or included or would include an untrue statement of a material fact or
omitted or would omit to state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances prevailing at the subsequent
time, not misleading, the Company has promptly notified or will promptly notify the Representative
and has promptly amended or will promptly amend or supplement, at its own
expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue
statement or omission.
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(f) The financial statements of the Company (including all notes and schedules thereto)
included in the Registration Statement, the Statutory Prospectus and the Prospectus present fairly
the financial position of the Company and its consolidated subsidiaries at the dates indicated and
the income statements, statements of changes in equity and cash flow statements of the Company and
its consolidated subsidiaries for the periods specified; and such financial statements and related
schedules and notes thereto, and the unaudited financial information filed with the Commission,
have been prepared in conformity with International Financial Reporting Standards, consistently
applied throughout the periods involved. No other financial statements are required to be included
in the Registration Statement, the Statutory Prospectus or the Prospectus. The summary and selected
financial data included in the Statutory Prospectus and Prospectus present fairly the information
shown therein as at the respective dates and for the respective periods specified and have been
presented on a basis consistent with the consolidated financial statements set forth in the
Prospectus and other financial information.
(g) KPMG (the “Auditor”), whose reports are filed with the Commission as a part of the
Registration Statement, are and, during the periods covered by their reports, were (i) independent
public accountants as required by the Securities Act and the Rules, (ii) in compliance with the
applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation
S-X, and (iii) a registered public accounting firm as defined by the Public Company Accounting
Oversight Board whose registration has not been suspended or revoked and who has not requested such
registration to be withdrawn.
(h) The Company does not own or control, directly or indirectly, any corporation, association
or entity other than those listed in Schedule III hereto.
(i) The Company and each of its subsidiaries, including each entity (corporation, partnership,
joint venture, association or other business organization) controlled directly or indirectly by the
Company (each, a “subsidiary”), is duly organized, validly existing and in good standing (to the
extent the concept of good standing is applicable in the relevant jurisdiction) under the laws of
their respective jurisdictions of incorporation or organization and each such entity has all
requisite power and authority to carry on its business as is currently being conducted as described
in the Statutory Prospectus and the Prospectus, and to own, lease and operate its properties. All
of the issued shares of capital stock of, or other ownership interests in, each subsidiary have
been duly and validly authorized and issued and are fully paid and non-assessable and are owned,
directly or indirectly, by the Company, free and clear of any lien, charge, mortgage, pledge,
security interest, claim, limitation on voting rights, equity, trust or other encumbrance,
preferential arrangement, defect or restriction of any kind whatsoever. The Company and each of its
subsidiaries is duly qualified to do business and is in good standing (to the extent the concept of
good standing is applicable in the relevant jurisdiction) as a foreign corporation in each
jurisdiction in which the nature of the business conducted by it or location of the assets or
properties owned, leased or licensed by it requires such qualification, except for such
jurisdictions where the failure to so qualify individually or in the aggregate would not have a
material adverse effect on the assets, properties, condition, financial or otherwise, or in the
results of operations, business affairs or business prospects of the Company and its subsidiaries
considered as a whole (a “Material Adverse Effect”); and to the Company’s knowledge, no
proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing, or
seeking to revoke, limit or curtail, such power and authority or qualification.
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(j) The Registration Statement initially became effective within three years of the date
hereof. If, immediately prior to the third anniversary of the initial effective date of the
Registration Statement, any of the Offered ADSs remain unsold by the Underwriters, the Company
will, prior to that third anniversary file, if it has not already done so, a new shelf registration
statement relating to the Offered ADSs, in a form satisfactory to the Representative, will use its
best efforts to cause such registration statement to be declared effective within 180 days after
that third anniversary, and will take all other action necessary or appropriate to permit the
public offering and sale of the Offered ADSs to continue as contemplated in the expired
Registration Statement. References herein to the registration statement relating to the Offered
ADSs shall include such new shelf registration statement.
(k) The Company and each of its subsidiaries has all requisite corporate power and authority,
and all necessary authorizations, approvals, consents, orders, licenses, certificates and permits
of and from all governmental or regulatory bodies or any other person or entity (collectively, the
“Permits”), to own, lease and license its assets and properties and conduct its business, all of
which are valid and in full force and effect, except where the lack of such Permits, individually
or in the aggregate, would not have a Material Adverse Effect. The Company and each of its
subsidiaries has fulfilled and performed in all material respects all of its obligations with
respect to such Permits and no event has occurred that allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other material impairment of the
rights of the Company thereunder. Except as may be required under the Securities Act and state and
foreign Blue Sky laws, no other Permits are required to enter into, deliver and perform this
Agreement or the Deposit Agreement and to issue and sell the Offered ADSs.
(l) (i) 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) of the
Rules) of the Offered ADSs and (ii) at the date hereof, the Company was not and is not an
“ineligible issuer,” as defined in Rule 405 of the Rules, including (but not limited to) the
Company or any other subsidiary in the preceding three years not having been convicted of a felony
or misdemeanor or having been made the subject of a judicial or administrative decree or order as
described in Rule 405 of the Rules.
(m) The Company and each of its subsidiaries owns or possesses legally enforceable rights to
use all patents, patent rights, inventions, trademarks, trademark applications, trade names,
service marks, copyrights, copyright applications, licenses, know-how and other similar rights and
proprietary knowledge (collectively, “Intangibles”) necessary for the conduct of its business.
Neither the Company nor any of its subsidiaries has received any notice of, or is not aware of, any
infringement of or conflict with asserted rights of others with respect to any Intangibles.
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(n) The Company and each of its subsidiaries has good and marketable title to all real
property, and good and marketable title to all other property owned by it, in each case free and
clear of all liens, encumbrances, claims, security interests and defects, except such as do
not materially affect the value of such property and do not materially interfere with the use made
or proposed to be made of such property by the Company and its subsidiaries. All property held
under lease by the Company and its subsidiaries is held by them under valid, existing and
enforceable leases, free and clear of all liens, encumbrances, claims, security interests and
defects, except such as are not material and do not materially interfere with the use made or
proposed to be made of such property by the Company and its subsidiaries.
(o) Subsequent to the respective dates as of which information is given in the Registration
Statement, the Statutory Prospectus and the Prospectus, (i) there has not been any event which
could have a Material Adverse Effect; (ii) neither the Company nor any of its subsidiaries has
sustained any loss or interference with its assets, businesses or properties (whether owned or
leased) from fire, explosion, earthquake, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or any court or legislative or other governmental action,
order or decree which would have a Material Adverse Effect; and (iii) since the date of the latest
balance sheet included in the Registration Statement and the Prospectus, neither the Company nor
its subsidiaries has (A) issued any securities or incurred any liability or obligation, direct or
contingent, for borrowed money, except as otherwise stated in the Registration Statement, the
Statutory Prospectus and the Prospectus or except for such liabilities or obligations incurred in
the ordinary course of business, (B) entered into any transaction not in the ordinary course of
business or (C) except for regular dividends on the Ordinary Shares in amounts per share that are
consistent with past practice, declared or paid any dividend or made any distribution on any of its
securities or redeemed, purchased or otherwise acquired or agreed to redeem, purchase or otherwise
acquire any of its securities.
(p) Except for the entities incorporated in the People’s Republic of China (“PRC”) as listed
on Schedule IV (each a “PRC Entity”) and any of the subsidiaries incorporated in the PRC, the
Company has no direct or indirect subsidiaries or any other entity over which it has direct or
indirect effective control incorporated or operating in the PRC. Each PRC Entity has been duly
organized and validly exists as a corporation, partnership or limited liability company in good
standing under the laws of the PRC. The liability of the Company in respect of equity interests
held in each PRC Entity is limited to its investment therein. Each PRC Entity’s business license is
in full force and effect. Each of the PRC Entities (i) has all requisite power and authority to
carry on its business as is currently being conducted and as described in the Registration
Statement, the Statutory Prospectus or the Prospectus, and to own, lease and operate its respective
properties, and (ii) is duly qualified to do business as a foreign corporation, partnership or
limited liability company in each jurisdiction in which the character or location of its properties
(owned, leased or licensed) or the nature or conduct of its business makes such qualification
necessary, except, in each case, as disclosed in the Registration Statement, the Statutory
Prospectus and the Prospectus or for those failures to be so qualified which (individually or in
the aggregate) could not reasonably be expected to have a Material Adverse Effect. The Articles of
Association of each PRC Entity comply with the requirements of applicable PRC law, including the
PRC Company Law, and are in full force and effect.
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(q) There is no document, contract or other agreement required to be described in the
Registration Statement, the Statutory Prospectus or the Prospectus or to be filed as an exhibit to
the Registration Statement which is not described or filed as required by the Securities Act or
Rules. Each description of a contract, document or other agreement in the Registration
Statement, the Statutory Prospectus or the Prospectus accurately reflects in all respects the terms
of the underlying contract, document or other agreement. Each contract, document or other
agreement described in the Registration Statement, the Statutory Prospectus or the Prospectus or
listed in the Exhibits to the Registration Statement or incorporated by reference is in full force
and effect and is valid and enforceable by and against the Company or its subsidiary, as the case
may be, in accordance with its terms. Neither the Company nor any of its subsidiaries, if a
subsidiary is a party, nor to the Company’s knowledge, any other party is in default in the
observance or performance of any term or obligation to be performed by it under any such agreement,
and no event has occurred which with notice or lapse of time or both would constitute such a
default, in any such case which default or event, individually or in the aggregate, would have a
Material Adverse Effect. No default exists, and no event has occurred which with notice or lapse
of time or both would constitute a default, in the due performance and observance of any term,
covenant or condition, by the Company or its subsidiary, if a subsidiary is a party thereto, of any
other agreement or instrument to which the Company or any of its subsidiaries is a party or by
which the Company or its properties or business or a subsidiary or its properties or business may
be bound or affected which default or event, individually or in the aggregate, would have a
Material Adverse Effect.
(r) The statistical and market related data included in the Registration Statement, the
Statutory Prospectus or the Prospectus are based on or derived from sources that the Company
believes to be reliable and accurate.
(s) Neither the Company nor any subsidiary (i) is in violation of its certificate or articles
of incorporation, by-laws, certificate of formation, limited liability company agreement,
partnership agreement or other organizational documents, (ii) is in default under, and no event has
occurred which, with notice or lapse of time, or both, would constitute a default under, or result
in the creation or imposition of any lien, charge, mortgage, pledge, security interest, claim,
limitation on voting rights, equity, trust or other encumbrance, preferential arrangement, defect
or restriction of any kind whatsoever, upon, any property or assets of the Company or any
subsidiary pursuant to, any bond, debenture, note, indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party or by which it is bound or to
which any of its properties or assets is subject or (iii) is in violation of any statute, law,
rule, regulation, ordinance, directive, judgment, decree or order of any judicial, regulatory or
other legal or governmental agency or body, foreign or domestic, except (in the case of clauses
(ii) and (iii) above) for violations or defaults that could not (individually or in the aggregate)
reasonably be expected to have a Material Adverse Effect.
(t) This Agreement has been duly authorized, executed and delivered by the Company.
(u) Neither the execution, delivery and performance of this Agreement or the Deposit Agreement
by the Company nor the consummation of any of the transactions contemplated hereby or thereby
(including, without limitation, the issuance and sale by the Company of the Offered ADSs) will give
rise to a right to terminate or accelerate the due date of any payment due under, or conflict with
or result in the breach of any term or provision of, or constitute a default (or an event which
with notice or lapse of time or both would constitute a default) under,
-10-
or require any consent or waiver under, or result in the execution or imposition of any lien,
charge or encumbrance upon any properties or assets of the Company or its subsidiaries pursuant to
the terms of, any indenture, mortgage, deed of trust or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which either the Company or its subsidiaries or
any of their properties or businesses is bound, or any franchise, license, permit, judgment,
decree, order, statute, rule or regulation applicable to the Company or any of its subsidiaries or
violate any provision of the charter or by-laws of the Company or any of its subsidiaries, except
for such consents or waivers which have already been obtained and are in full force and effect.
(v) Each of this Agreement and the Deposit Agreement is in proper form to be enforceable
against the Company in accordance with its terms, except as rights to indemnity hereunder and
thereunder may be limited by federal or state securities laws and except as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity; to ensure the legality,
enforceability or admissibility into evidence in Hong Kong of this Agreement or the Deposit
Agreement, its is not necessary that this Agreement or the Deposit Agreement be filed or recorded
with any court or other authority in Hong Kong or that any stamp or similar tax in Hong Kong be
paid on or in respect of this Agreement, the Deposit Agreement or any other documents to be
furnished hereunder.
(w) Each holder of ADRs evidencing 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 ADRs in a direct suit,
action or proceeding against the Company.
(x) The Company has authorized and outstanding capital stock as set forth under the caption
“Capitalization” in the Statutory Prospectus and the Prospectus. The ADRs evidencing the Offered
ADSs are in due and proper legal form and have been duly authorized for issuance by the Company.
All of the issued and outstanding Ordinary Shares have been duly and validly issued and are fully
paid. There are no statutory preemptive or other similar rights to subscribe for or to purchase or
acquire any Ordinary Shares of the Company or any of its subsidiaries or any such rights pursuant
to its Memorandum and Articles of Association or by-laws or any agreement or instrument to or by
which the Company or any of its subsidiaries is a party or bound. The Offered ADSs, when issued
and sold pursuant to this Agreement, will be duly and validly issued and fully paid and none of
them will be issued in violation of any preemptive or other similar right. Except as disclosed in
the Registration Statement, the Statutory Prospectus and the Prospectus, there is no outstanding
option, warrant or other right calling for the issuance of, and there is no commitment, plan or
arrangement to issue, any ADSs or share of the Company or any of its subsidiaries or any security
convertible into, or exercisable or exchangeable for, such ADS or shares. The exercise price of
each option to acquire Ordinary Shares (each, a “Company Option”) is no less than the fair market
value of one Ordinary Share as determined on the date of grant of such Company Option. All grants
of Company Options were validly issued and properly approved by the Board of Directors of the
Company in material compliance with all applicable laws and the terms of the plans under which such
Company Options were issued and were recorded on the Company Financial Statements, in accordance
with International Financial Reporting Standards, and no such grants involved any “back dating”,
-11-
“forward dating,” “spring loading” or similar practices with respect to the effective date of
grant. The Ordinary Shares and the ADSs conform in all material respects to all statements in
relation thereto contained in the Registration Statement and the Statutory Prospectus and the
Prospectus. All outstanding shares of capital stock of each of the Company’s subsidiaries have
been duly authorized and validly issued, and are fully paid and are owned directly by the Company
or by another wholly-owned subsidiary of the Company free and clear of any security interests,
liens, encumbrances, equities or claims, other than those described in the Statutory Prospectus and
the Prospectus.
(y) The Offered ADSs are freely transferrable to and for the account of the several
Underwriters; there are no restrictions on subsequent transfer of the Offered ADSs under the laws
of the United States or Hong Kong, except as described in the Registration Statement, the Statutory
Prospectus and the Prospectus. No holder of Offered ADSs is or will be subject to personal
liability solely by reason of being such a holder.
(z) The Ordinary Shares underlying the Offered ADSs to be purchased by the Underwriters have
been duly authorized and, when issued and delivered in accordance with the terms of this Agreement,
will be validly issued and fully paid, and the issuance of such Ordinary Shares will not be subject
to any preemptive or similar rights. The Ordinary Shares may be freely deposited by the Company
with the Depositary or its nominee against issuance of ADRs evidencing the ADSs as contemplated by
the Deposit Agreement.
(aa) Upon the due issuance by the Depositary of ADRs representing the ADSs against deposit of
Ordinary Shares in accordance with the provisions of the Deposit Agreement, such ADRs will be duly
and validly issued and persons in whose names such ADRs are registered will be entitled to the
rights of registered holders of ADRs specified therein and in the Deposit Agreement.
(bb) No holder of any security of the Company has any right, which has not been waived, to
have any security owned by such holder included in the Registration Statement or to demand
registration of any security owned by such holder for a period of 90 days after the date of this
Agreement. Each director and executive officer of the Company and each shareholder of the Company
listed on Schedule V hereto has delivered to the Representative his enforceable written lock-up
agreement in the form attached to this Agreement as Schedule VI hereto (“Lock-Up Agreement”).
(cc) There are no legal or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its subsidiaries could individually
or in the aggregate have a Material Adverse Effect; and, to the knowledge of the Company, no such
proceedings are threatened or contemplated by governmental authorities or threatened by others.
(dd) All necessary corporate action has been duly and validly taken by the Company to
authorize the execution, delivery and performance of this Agreement and the issuance and sale of
the Offered ADSs by the Company.
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(ee) All necessary corporate actions have been duly and validly taken by the Company to
authorize the execution, delivery and performance of the Deposit Agreement by the Company. The
Deposit Agreement has been duly and validly authorized, executed and delivered by the Company and
will constitute a legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement
of creditors’ rights generally and by general equitable principles.
(ff) Neither the Company nor any of its subsidiaries is involved in any labor dispute nor, to
the knowledge of the Company, is any such dispute threatened, which dispute would have a Material
Adverse Effect. The Company is not aware of any existing or imminent labor disturbance by the
employees of any of its principal suppliers or contractors which would have a Material Adverse
Effect. The Company is not aware of any threatened or pending litigation between the Company or its
subsidiaries and any of its executive officers which, if adversely determined, could have a
Material Adverse Effect and has no reason to believe that such officers will not remain in the
employment of the Company.
(gg) No transaction has occurred between or among the Company and any of its officers or
directors, shareholders or any affiliate or affiliates of any such officer or director or
shareholder that is required to be described in and is not described in the Registration Statement,
the Statutory Prospectus and the Prospectus.
(hh) The Company has not taken, nor will it take, directly or indirectly, any action designed
to or which might reasonably be expected to cause or result in, or which has constituted or which
might reasonably be expected to constitute, the stabilization or manipulation of the price of the
Ordinary Share or any security of the Company to facilitate the sale or resale of any of the
Offered ADSs.
(ii) The Company and each of its subsidiaries has filed all Federal, state, local and foreign
tax returns which are required to be filed through the date hereof, which returns are true and
correct in all material respects or has received timely extensions thereof, and has paid all taxes
shown on such returns and all assessments received by it to the extent that the same are material
and have become due. There are no tax audits or investigations pending, which if adversely
determined would have a Material Adverse Effect; nor are there any material proposed additional tax
assessments against the Company or any of its subsidiaries.
(jj) The ADSs have been duly authorized for listing on the National Association of Securities
Dealers Automated Quotation (“NASDAQ”) Global Market. The Offered ADSs have been duly authorized
for listing on the NASDAQ Global Market, subject to official notice of issuance. The Ordinary
Shares have been duly authorized for listing on the Hong Kong Stock Exchange (the “HKSE”).
(kk) The Company has taken no action designed to, or likely to have the effect of, terminating
the registration of the ADSs under the Exchange Act, the listing of ADSs on the NASDAQ Global
Market or the listing of the Ordinary Shares on the HKSE, nor has the Company received any
notification that the Commission, the NASDAQ Global Market or the HKSE is contemplating terminating
such registration or listing.
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(ll) The books, records and accounts of the Company and its subsidiaries accurately and fairly
reflect, the transactions in, and dispositions of, the assets of, and the results of operations of,
the Company and its subsidiaries. The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in accordance with
International Financial Reporting Standards and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific authorization and (iv)
the recorded accountability for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(mm) The Company has established and maintains disclosure controls and procedures (as such
term is defined in Rule 13a-15 under the Exchange Act), which: (i) are designed to ensure that
material information relating to the Company is made known to the Company’s principal executive
officer and its principal financial officer by others within the Company, particularly during the
periods in which the periodic reports required under the Exchange Act are required to be prepared;
(ii) provide for the periodic evaluation of the effectiveness of such disclosure controls and
procedures at the end of the periods in which the periodic reports are required to be prepared; and
(iii) are effective in all material respects to perform the functions for which they were
established.
(nn) Based on the evaluation of its disclosure controls and procedures, the Company is not
aware of (i) any material weakness or significant deficiency in the design or operation of internal
controls which could adversely affect the Company’s ability to record, process, summarize and
report financial data or any material weaknesses in internal controls; (ii) any matter which could
result in a restatement of the Company’s financial statements for any annual or interim period
during the current fiscal year or prior fiscal years; or (iii) any fraud, whether or not material,
that involves management or other employees who have a role in the Company’s internal controls.
(oo) There are no outstanding loans, advances (except normal advances for business expenses in
the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit
of any of the directors or officers of the Company or any of their respective family members. The
Company has not, in violation of the Xxxxxxxx-Xxxxx Act of 2002 (the “Xxxxxxxx-Xxxxx Act”),
directly or indirectly, including through a subsidiary, extended or maintained credit, arranged for
the extension of credit, or renewed an extension of credit, in the form of a personal loan to or
for any director or officer of the Company and there is and has been no failure on the part of the
Company or any material failure on the part of its directors or officers, in their capacities as
such, to comply with any other provision of the Xxxxxxxx-Xxxxx Act.
(pp) Except as described in the Registration Statement, the Statutory Prospectus and the
Prospectus and as preapproved in accordance with the requirements set forth in Section 10A of the
Exchange Act, the Auditor has not been engaged by the Company to perform any “prohibited
activities” (as defined in Section 10A of the Exchange Act).
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(qq) Except as described in the Registration Statement, the Statutory Prospectus and the
Prospectus, there are no material off-balance sheet arrangements (as defined in Item 303 of
Regulation S-K) that have or are reasonably likely to have a material current or future effect on
the Company’s financial condition, revenues or expenses, changes in financial condition, results of
operations, liquidity, capital expenditures or capital resources.
(rr) The Company’s Board of Directors has validly appointed an audit committee whose
composition satisfies the requirements of Rule 5605 of the NASDAQ Global Market and the Board of
Directors and/or the audit committee has adopted a charter that satisfies the requirements of Rule
5605 of the NASDAQ Global Market. The audit committee has reviewed the adequacy of its charter
within the past twelve months.
(ss) The Company is actively taking steps to ensure that it will be in compliance with all
other applicable provisions of the Xxxxxxxx-Xxxxx Act, any related rules and regulations
promulgated by the Commission and corporate governance requirements under applicable NASDAQ
regulations upon the effectiveness of such provisions and has no reason to believe that it will not
be able to comply with such provisions at the time of effectiveness. There is and has been no
failure on the part of the Company or any of its directors or officers, in their capacities as
such, to comply with any provision of the Xxxxxxxx-Xxxxx Act, including, without limitation,
Section 402 related to loans and Sections 302 and 906 related to certifications.
(tt) The Company and its subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are customary in the businesses
in which they are engaged or propose to engage after giving effect to the transactions described in
the Statutory Prospectus and the Prospectus; all policies of insurance and fidelity or surety bonds
insuring the Company or any of its subsidiaries or the Company’s or its subsidiaries’ respective
businesses, assets, employees, officers and directors are in full force and effect; the Company and
each of its subsidiaries are in compliance with the terms of such policies and instruments in all
material respects; and neither the Company nor any subsidiary of the Company has any reason to
believe that it will not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary to continue its
business at a cost that is not materially greater than the current cost. Neither the Company nor
any of its subsidiaries has been denied any insurance coverage which it has sought or for which it
has applied.
(uu) Each approval, consent, order, authorization, designation, declaration or filing of, by
or with any regulatory, administrative or other governmental body necessary in connection with the
execution and delivery by the Company of this Agreement and the Deposit Agreement and the
consummation of the transactions herein and therein contemplated required to be obtained or
performed by the Company (except such additional steps as may be required by the Financial Industry
Regulatory Authority (“FINRA”) or may be necessary to qualify the Offered ADSs for public offering
by the Underwriters under the state securities or Blue Sky laws) has been obtained or made and is
in full force and effect.
(vv) The PRC regulation “Provisions Regarding Mergers and Acquisitions of Domestic Enterprises
by Foreign Investors” does not require an application to be submitted to
the China Securities Regulatory Commission for the approval of the transactions contemplated
by this Agreement.
-15-
(ww) There are no affiliations or associations between any member of FINRA and any of the
Company’s officers, directors who are also officers or employees of the Company or, to the best of
the knowledge of the Company, any director that is not an officer or employee of the Company or any
five percent or greater shareholder of the Company, except as set forth in the Registration
Statement, the Statutory Prospectus and the Prospectus, or otherwise disclosed in writing to the
Representative. All of the information provided to the Underwriters or to counsel for the
Underwriters by the Company, its officers and directors, and holders of any securities (debt or
equity) or options to acquire any securities of the Company in connection with letters, filings or
other supplemental information provided to FINRA pursuant to FINRA Rule 5110 and 5190 and NASD
Conduct Rule 2720 is true, complete and correct.
(xx) Except as disclosed in the Registration Statement, the Statutory Prospectus and the
Prospectus, there are no contracts, agreements or understandings between the Company and any person
that would give rise to a valid claim against the Company or any Underwriter for a brokerage
commission, finder’s fee or other like payment in connection with the transactions contemplated by
this Agreement and the Deposit Agreement or any arrangements, agreements, understandings, payments
or issuance with respect to the Company or any of its officers, directors, shareholders, partners,
employees, subsidiaries or affiliates that may affect the Underwriters’ compensation as determined
by FINRA.
(yy) The Company does not expect to be a Passive Foreign Investment Company (“PFIC”) within
the meaning of Section 1297(a) of the United States Internal Revenue Code of 1986, as amended, and
the regulations and published interpretations thereunder for the fiscal year ending August 31,
2010, and has no plan or intention to conduct its business in a manner that would be reasonably
expected to result in the Company becoming a PFIC in the future under current laws and regulations.
(zz) (i) Each of the Company and each of its subsidiaries is in compliance in all material
respects with all rules, laws and regulations relating to the use, treatment, storage and disposal
of toxic substances and protection of health or the environment (“Environmental Laws”) which are
applicable to its business; (ii) neither the Company nor its subsidiaries has received any notice
from any governmental authority or third party of an asserted claim under Environmental Laws; (iii)
each of the Company and each of its subsidiaries has received all permits, licenses or other
approvals required of it under applicable Environmental Laws to conduct its business and is in
compliance with all terms and conditions of any such permit, license or approval; and (iv) to the
Company’s knowledge, no facts currently exist that will require the Company or any of its
subsidiaries to make future material capital expenditures to comply with Environmental Laws.
(aaa) In the ordinary course of its business, the Company periodically reviews the effect of
Environmental Laws on the business, operations and properties of the Company and its subsidiaries,
in the course of which the Company identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws, or any permit, license or
-16-
approval, any related constraints on operating activities and any potential liabilities to
third parties). On the basis of such review, the Company has reasonably concluded that such
associated costs and liabilities would not, singly or in the aggregate, have a Material Adverse
Effect.
(bbb) The Company is not and, after giving effect to the offering and sale of the Offered ADSs
and the application of proceeds thereof as described in the Statutory Prospectus and the
Prospectus, will not be an “investment company” within the meaning of the Investment Company Act of
1940, as amended (the “Investment Company Act”).
(ccc) The Company or any other person associated with or acting on behalf of the Company
including, without limitation, any director, officer, agent or employee of the Company or its
subsidiaries, has not, directly or indirectly, while acting on behalf of the Company or its
subsidiaries (i) used any corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; (ii) made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic political parties or campaigns
from corporate funds; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended; or (iv) made any other unlawful payment.
(ddd) The operations of the Company and its subsidiaries are and have been conducted at all
times in compliance with applicable financial recordkeeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes
of all jurisdictions, the rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the Company or any of
it subsidiaries with respect to the Money Laundering Laws is pending, or to the best of the
Company’s knowledge, threatened.
(eee) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company,
any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is
currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the
U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds
of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by OFAC.
(fff) Except as described in the Statutory Prospectus and the Prospectus, the Company has not
sold or issued any ADSs or Ordinary Shares during the six-month period preceding the date of the
Prospectus, including any sales pursuant to Rule 144A under, or Regulations D or S of, the
Securities Act, other than shares issued pursuant to employee benefit plans, qualified stock
options plans or other employee compensation plans or pursuant to outstanding options, rights or
warrants.
-17-
(ggg) None of the Company or its subsidiaries nor any of their properties, assets or revenues
are entitled to any right of immunity on the grounds of sovereignty from any legal
action, suit or proceeding, from set-off or counterclaim, from the jurisdiction of any court,
from service of process, from attachment prior to or in aid of execution of judgment or from other
legal process or proceeding for the giving of any relief or for the enforcement of any judgment.
(hhh) Except as disclosed in the Registration Statement, the Statutory Prospectus and the
Prospectus, there are no outstanding guarantees or other contingent obligations of the Company or
any of its subsidiaries that could reasonably be expected to have a Material Adverse Effect.
(iii) Except to the extent described in the Registration Statement, the Statutory Prospectus
and the Prospectus, and to the best of the Company’s knowledge, all dividends and other
distributions declared and payable on the equity interests of the Company and its subsidiaries may
under current laws and regulations of Hong Kong be converted into foreign currency that may be
freely transferred out of Hong Kong, and all such dividends and other distributions will not be
subject to withholding or other taxes under the laws and regulations of Hong Kong and are otherwise
free and clear of any other tax, withholding or deduction in Hong Kong without the necessity of
obtaining governmental authorization in Hong Kong.
(jjj) The Company and its subsidiaries have taken all reasonable steps to comply with any
applicable rules and regulations of the State Administration of Foreign Exchange (the “SAFE Rules
and Regulations”).
(kkk) The choice of laws of the State of New York as the governing law of this Agreement is a
valid choice of law under the laws of Hong Kong and will be honored by courts in Hong Kong. The
Company has the power to submit, and pursuant to Section 9 of this Agreement, has legally, validly,
effectively and irrevocably submitted, to the personal jurisdiction of each United States federal
court and New York state court located in the Borough of Manhattan, in The City of New York, New
York, U.S.A. (each, a “New York Court”), and the Company has the power to designate, appoint and
authorize, and pursuant to Section 9 of this Agreement, has legally, validly, effectively and
irrevocably designated, appointed an authorized agent for service of process in any action arising
out of or relating to this Agreement, or the Offered ADSs in any New York Court, and service of
process effected on such authorized agent will be effective to confer valid personal jurisdiction
over the Company as provided in Section 9 hereof.
(lll) Neither the Company nor any of its subsidiaries, nor any of their respective properties,
assets or revenues has any right of immunity from any legal action, suit or proceeding, from the
giving of any relief in any such legal action, suit or proceeding, from set-off or counterclaim,
from the jurisdiction of any court, from service of process, attachment upon or prior to judgment,
or attachment in aid of execution of judgment, or from execution of a judgment, or from other legal
process or proceeding for the giving of any relief or for the enforcement of a judgment, with
respect to its obligations, liabilities or any other matter under or arising out of or in
connection with this Agreement. Each of the Company and its subsidiaries waives or will waive such
right to the extent permitted by law and has consented to such relief and enforcement as provided
in Section 9 of this Agreement. The irrevocable and unconditional waiver and agreement of the
Company in this Agreement not to plead or claim any such
immunity in any legal action, suit or proceeding based on this Agreement is valid and binding
under the laws of Hong Kong and the United States.
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(mmm) The Company is a “foreign private issuer” within the meaning of Rule 405 under the
Securities Act.
(nnn) Under the laws of Hong Kong, the courts of Hong Kong will recognize and give effect to
the choice of law provisions set forth herein. Enforcement of judgments of United States courts in
Hong Kong is subject to the discretion of the Hong Kong courts. A party entitled to the benefit of
monetary judgments of United States courts obtained against the Company in connection with this
Agreement may seek enforcement of such judgments in Hong Kong by an action at common law, provided
all the applicable Hong Kong common law and procedural requirements for such an action are met and
no grounds exist which will cause such judgments to be impeached or rendered unenforceable by the
courts of Hong Kong. Hong Kong courts will generally not enforce non-monetary judgments of foreign
courts.
(ooo) None of the Company, its directors or its officers has distributed nor will
distribute prior to the later of (i) the Firm ADSs Closing Date, or the Option ADSs Closing Date,
and (ii) completion of the distribution of the Offered ADSs, any offering material in connection
with the offering and sale of the Offered ADSs other than any Preliminary Prospectus, the
Prospectus, the Registration Statement and other materials, if any, permitted by the Securities Act
and consistent with Section 4(d) below.
(ppp) Any certificate signed by any officer of the Company and delivered to the Representative
or to counsel for the Underwriters shall be deemed to be a representation and warranty by the
Company to each Underwriter as to the matters covered thereby.
(qqq) The Company acknowledges that the Underwriters and, for purposes of the opinions to be
delivered pursuant to Section 3 hereof, counsel to the Company and counsel to the Underwriters,
will rely upon the accuracy and truthfulness of the foregoing representations and hereby consents
to such reliance.
3. Conditions of the Underwriters’ Obligations. The obligations of the Underwriters
under this Agreement are several and not joint. The respective obligations of the Underwriters to
purchase the Offered ADSs are subject to each of the following terms and conditions:
(a) Notification that the Registration Statement has become effective shall have been received
by the Representative and the Prospectus shall have been timely filed with the Commission in
accordance with Section 4(a) of this Agreement and any material required to be filed by the Company
pursuant to Rule 433(d) of the Rules shall have been timely filed with the Commission in accordance
with such rule.
(b) No order preventing or suspending the use of any Preliminary Prospectus, the Prospectus or
any “free writing prospectus” (as defined in Rule 405 of the Rules), shall have been or shall be in
effect and no order suspending the effectiveness of the Registration Statement shall be in effect
and no proceedings for such purpose shall be pending before or threatened by the Commission, and
any requests for additional information on the part of the Commission (to
-19-
be included in the Registration Statement or the Prospectus or otherwise) shall have been
complied with to the satisfaction of the Commission and the Representative. If the Company has
elected to rely upon Rule 430A, Rule 430A information previously omitted from the effective
Registration Statement pursuant to Rule 430A shall have been transmitted to the Commission for
filing pursuant to Rule 424(b) within the prescribed time period and the Company shall have
provided evidence satisfactory to the Underwriters of such timely filing, or a post-effective
amendment providing such information shall have been promptly filed and declared effective in
accordance with the requirements of Rule 430A.
(c) The representations and warranties of the Company contained in this Agreement and in the
certificates delivered pursuant to Section 3(d) shall be true and correct when made and on and as
of each Closing Date as if made on such date. The Company shall have performed all covenants and
agreements and satisfied all the conditions contained in this Agreement required to be performed or
satisfied by them at or before such Closing Date.
(d) The Representative shall have received on each Closing Date a certificate, addressed to
the Representative and dated as of such Closing Date, of the chief executive or chief operating
officer and the chief financial officer or chief accounting officer of the Company to the effect
that: (i) the representations, warranties and agreements of the Company in this Agreement were true
and correct when made and are true and correct as of such Closing Date; (ii) the Company has
performed all covenants and agreements and satisfied all conditions contained herein; (iii) they
have carefully examined the Registration Statement, the Prospectus, the General Disclosure Package,
and any individual Issuer Free Writing Prospectus and, in their opinion (A) as of the Effective
Date the Registration Statement and Prospectus did not include, and as of the Applicable Time,
neither (1) the General Disclosure Package, nor (2) any individual Issuer Free Writing Prospectus,
when considered together with the General Disclosure Package, included, any untrue statement of a
material fact and did not omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they were made, not
misleading, and (B) since the Effective Date no event has occurred which should have been set forth
in a supplement or otherwise required an amendment to the Registration Statement, the Statutory
Prospectus or the Prospectus; and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and, to their knowledge, no proceedings for that purpose
have been instituted or are pending under the Securities Act.
(e) The Representative shall have received: (i) simultaneously with the execution of this
Agreement a signed letter from the Auditor addressed to the Representative and dated the date of
this Agreement, in form and substance reasonably satisfactory to the Representative, containing
statements and information of the type ordinarily included in accountants’ “comfort letters” to
underwriters with respect to the financial statements and certain financial information contained
in the Registration Statement and the General Disclosure Package, and (ii) on each Closing Date, a
signed letter from the Auditor addressed to the Representative and dated the date of such Closing
Date(s), in form and substance reasonably satisfactory to the Representative containing statements
and information of the type ordinarily included in accountants’ “comfort letters” to underwriters
with respect to the financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
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(f) The Representative shall have received on each Closing Date from Xxxxx Day, United States
counsel for the Company, an opinion and negative assurances, addressed to the Representative and
dated such Closing Date, in a form acceptable to the Representative.
(g) The Representative shall have received on each Closing Date from Xxxxx Day, Hong Kong
counsel for the Company, an opinion, addressed to the Representative and dated such Closing Date,
in a form acceptable to the Representative.
(h) The Representative shall have received on each Closing Date from Schinders Law, PRC
counsel for the Underwriters, an opinion, addressed to the Representative and dated such Closing
Date, in a form acceptable to the Representative.
(i) The Representative shall have received on each Closing Date from DLA Piper Asia LLP,
counsel for the Representative, an opinion and negative assurances, addressed to the Representative
and dated such Closing Date, in a form agreed upon by the Representative and DLA Piper Asia LLP.
(j) The Representative shall have received on each Closing Date from Xxxxx, Xxxxxx & Xxxxxx,
LLP, counsel for the Depositary, an opinion, addressed to the Representative and dated such Closing
Date, to the effect that:
(i) The Deposit Agreement has been duly authorized, executed and delivered by
the Depositary and assuming due authorization, execution and delivery thereof by the
Company, constitutes a legal, valid and binding instrument enforceable against the
Depositary in accordance with its terms except to the extent that (A) enforcement
thereof may be limited by (1) bankruptcy, reorganization, insolvency (including,
without limitation, all laws relating to fraudulent transfer), moratorium or other
laws now or hereafter in effect relating to or affecting creditors’ rights generally
and (2) general principles of equity (regardless of whether enforceability is
considered in a proceeding in law or in equity), and (B) rights to indemnity and
contribution thereunder may be limited by United States federal or state securities
laws or public policy; the statements in the Prospectus under the heading
“Description of American Depositary Shares,” insofar as such statements purport to
describe the Depositary and summarize certain provisions of the Deposit Agreement,
the ADSs and the ADRs, are fair and accurate.
(ii) The Depositary has full power and authority and legal right to execute and
deliver the Deposit Agreement and to perform its obligations thereunder.
(iii) The ADRs and the ADSs evidenced thereby, when issued by the Depositary
against deposit of Ordinary Shares in accordance with the terms and conditions of
the Deposit Agreement and the ADR Registration Statement (defined below) will be
duly and validly issued and will entitle the holders and beneficial owners thereof
to the rights specified therein and in the Deposit Agreement.
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(iv) The registration statement on Form F-6 (File No. 333-11028) of the Company
(the “ADR Registration Statement”) is effective under the Securities Act and, to the
knowledge of such counsel, no stop order suspending the effectiveness of the ADR
Registration Statement has been issued, no proceedings for that purpose have been
instituted or threatened, and the ADR Registration Statement, and each amendment (if
any) comply as to form in all material respects with the applicable requirements of
the Securities Act and the Rules.
(k) All proceedings taken in connection with the sale of the Firm ADSs and the Option ADSs as
herein contemplated shall be reasonably satisfactory in form and substance to the Representative,
and their counsel.
(l) The Representative shall have received copies of the Lock-up Agreements executed by each
entity or person listed on Schedule V hereto.
(m) The Offered ADSs shall have been approved for listing on the NASDAQ Global Market, subject
only to official notice of issuance.
(n) The Company and the Depositary shall have executed and delivered any necessary amendments
to the Deposit Agreement in form and substance satisfactory to the Representative and the Deposit
Agreement shall be in full force and effect.
(o) The Representative shall be reasonably satisfied that since the respective dates as of
which information is given in the Registration Statement, the Statutory Prospectus, the General
Disclosure Package and the Prospectus, (i) there shall not have been any material change in the
capital stock of the Company or any material change in the indebtedness (other than in the ordinary
course of business) of the Company, (ii) except as set forth or contemplated by the Registration
Statement, the Statutory Prospectus, the General Disclosure Package or the Prospectus, no material
oral or written agreement or other transaction shall have been entered into by the Company that is
not in the ordinary course of business or that could reasonably be expected to result in a material
reduction in the future earnings of the Company, (iii) no loss or damage (whether or not insured)
to the property of the Company shall have been sustained that had or could reasonably be expected
to have a Material Adverse Effect, (iv) no legal or governmental action, suit or proceeding
affecting the Company or any of its properties that is material to the Company or that affects or
could reasonably be expected to affect the transactions contemplated by this Agreement shall have
been instituted or threatened and (v) there shall not have been any material change in the assets,
properties, condition (financial or otherwise), or in the results of operations, business affairs
or business prospects of the Company or its subsidiaries considered as a whole that makes it
impractical or inadvisable in the Representatives judgment to proceed with the purchase or offering
of the Offered ADSs as contemplated hereby.
(p) On or before the Firm ADSs Closing Date, FINRA shall have, pursuant to the “Same-Day
Clearance Option,” automatically issued a “conditional no-objections” opinion with respect to the
Base Prospectus and a “no objections” opinion with respect to the final Prospectus, which opinions
may be subject to further review and verification by FINRA.
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(q) FINRA shall have raised no objection with respect to the fairness and reasonableness of
the underwriting terms and agreements in connection with the offering of the Offered ADSs.
(r) The Company shall have furnished or caused to be furnished to the Representative such
further certificates or documents as the Representative shall have reasonably requested.
4. Covenants and other Agreements of the Company and the Underwriters.
(a) The Company covenants and agrees as follows:
(i) The Company will use its best efforts to cause the Registration Statement,
if not effective at the time of execution of this Agreement, and any amendments
thereto, to become effective as promptly as possible. The Company shall prepare the
Prospectus in a form approved by the Representative and file such Prospectus
pursuant to Rule 424(b) under the Securities Act not later than the Commission’s
close of business on the second business day following the execution and delivery of
this Agreement, or, if applicable, such earlier time as may be required by the
Rules. The Company will file with the Commission all Issuer Free Writing
Prospectuses in the time and manner required under Rules 433(d) or 163(b)(2), as the
case may be.
(ii) The Company shall promptly advise the Representative in writing (A) when
any post-effective amendment to the Registration Statement shall have become
effective or any supplement to the Prospectus shall have been filed, (B) of any
request by the Commission for any amendment of the Registration Statement or the
Prospectus or for any additional information, (C) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any preliminary prospectus or any
“free writing prospectus,” as defined in Rule 405 of the Rules, or the institution
or threatening of any proceeding for that purpose and (D) of the receipt by the
Company of any notification with respect to the suspension of the qualification of
the Offered ADSs for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. The Company shall not file any amendment of the
Registration Statement or supplement to the Prospectus or any document incorporated
by reference in the Registration Statement or any Issuer Free Writing Prospectus
unless the Company has furnished the Representative a copy for its review prior to
filing and shall not file any such proposed amendment or supplement to which the
Representative reasonably object. The Company shall use its best efforts to prevent
the issuance of any such stop order and, if issued, to obtain as soon as possible
the withdrawal thereof.
(iii) If, at any time when a prospectus relating to the Offered ADSs (or, in
lieu thereof, the notice referred to in Rule 173(a) of the Rules) is required to be
delivered under the Securities Act and any event occurs as a result of which the
Prospectus as then amended or supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
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statements therein in the light of the circumstances under which they were made
not misleading, or if it shall be necessary to amend or supplement the Prospectus to
comply with the Securities Act or the Rules, the Company promptly shall prepare and
file with the Commission, subject to the second sentence of paragraph (ii) of this
Section 4(a), an amendment or supplement which shall correct such statement or
omission or an amendment which shall effect such compliance.
(iv) If at any time following issuance of an Issuer Free Writing Prospectus
there occurs an event or development as a result of which such Issuer Free Writing
Prospectus would conflict with the information contained in the Registration
Statement or would include an untrue statement of a material fact or would omit to
state a material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances prevailing at the
subsequent time, not misleading, the Company will promptly notify the Representative
and will promptly amend or supplement, at its own expense, such Issuer Free Writing
Prospectus to eliminate or correct such conflict, untrue statement or omission.
(v) The Company shall make generally available to its security holders and to
the Representative as soon as practicable, but not later than 45 days after the end
of the 12-month period beginning at the end of the fiscal quarter of the Company
during which the Effective Date occurs (or 90 days if such 12-month period coincides
with the Company’s fiscal year), an earnings statement (which need not be audited)
of the Company, covering such 12-month period, which shall satisfy the provisions of
Section 11(a) of the Securities Act or Rule 158 of the Rules.
(vi) The Company shall furnish to the Representative and counsel for the
Underwriters, without charge, signed copies of the Registration Statement (including
all exhibits thereto and amendments thereof) and to each other Underwriter a copy of
the Registration Statement (without exhibits thereto) and all amendments thereof
and, so long as delivery of a prospectus by an Underwriter or dealer may be required
by the Securities Act or the Rules, as many copies of any Preliminary Prospectus,
any Issuer Free Writing Prospectus and the Prospectus and any amendments thereof and
supplements thereto as the Representative may reasonably request. If applicable,
the copies of the Registration Statement, preliminary prospectus, any Issuer Free
Writing Prospectus and Prospectus and each amendment and supplement thereto
furnished to the Underwriters will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(vii) The Company shall cooperate with the Representative and their counsel in
endeavoring to qualify the Offered ADSs for offer and sale in connection with the
offering under the laws of such jurisdictions as the Representative may designate
and shall maintain such qualifications in effect so long as required for the
distribution of the Offered ADSs; provided, however, that
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the Company shall not be required in connection therewith, as a condition
thereof, to qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction or subject itself to taxation as doing
business in any jurisdiction.
(viii) The Company, during the period when the Prospectus (or in lieu thereof,
the notice referred to in Rule 173(a) of the Rules) is required to be delivered
under the Securities Act and the Rules or the Exchange Act, will file all reports
and other documents required to be filed with the Commission pursuant to Section 13,
14 or 15 of the Exchange Act within the time periods required by the Exchange Act
and the regulations promulgated thereunder.
(ix) Without the prior written consent of the Representative, for a period of
90 days after the date of this Agreement, the Company shall not issue, sell or
register with the Commission (other than on Form S-8 or on any successor form), or
otherwise dispose of, directly or indirectly, any equity securities of the Company
(or any securities convertible into, exercisable for or exchangeable for equity
securities of the Company), except for the issuance of the Offered ADSs pursuant to
the Registration Statement and the issuance of shares pursuant to the Company’s
existing employee share option scheme or founders share option scheme as described
in the Registration Statement and the Prospectus. In the event that during this
period, (A) any shares are issued pursuant to the Company’s existing share option
scheme or founders share option scheme that are exercisable during such 90 day
period or (B) any registration is effected on Form S-8 or on any successor form
relating to shares that are exercisable during such 90 period, the Company shall
obtain the written agreement of such grantee or purchaser or holder of such
registered securities that, for a period of 90 days after the date of this
Agreement, such person will not, without the prior written consent of the
Representative, offer for sale, sell, distribute, grant any option for the sale of,
or otherwise dispose of, directly or indirectly, or exercise any registration rights
with respect to, any ADSs or Ordinary Shares (or any securities convertible into,
exercisable for, or exchangeable for any ADSs or Ordinary Shares) owned by such
person. Notwithstanding the foregoing, (i) the Company represents and warrants that
each such grantee or purchaser or holder of such registered securities shall be
subject to similar lockup restrictions as set forth on Schedule VI attached hereto
and the Company shall enforce such rights and impose stop-transfer restrictions on
any such sale or other transfer or disposition of such shares until the end of the
applicable period and (ii) if (x) during the last 17 days of the 90 day period
described in this Section 4(a)(ix) the Company issues an earnings release or
material news or a material event relating to the Company occurs; or (y) prior to
the expiration of such 90 day period, the Company announces that it will release
earnings results during the 16 day period beginning on the last day of the 90 day
period; the restrictions imposed during the period set forth in this Section
4(a)(ix) shall continue to apply until the expiration of the 18-day period beginning
on the issuance of the earnings release or the occurrence of the material news or
material event; provided, however, that this sentence shall not apply if the
research published or distributed on the Company is compliant under Rule 139 of
the Securities Act and the Company’s securities are actively traded as defined
in Rule 101(c)(1) of Regulation M of the Exchange Act.
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(x) On or before completion of this offering, the Company shall make all
filings required under applicable securities laws and by the NASDAQ Global Market
and the HKSE (including any required registration under the Exchange Act).
(xi) Prior to the Closing Date, the Company will issue no press release or
other communications directly or indirectly and hold no press conference with
respect to the Company, the condition, financial or otherwise, or the earnings,
business affairs or business prospects of any of them, or the offering of the
Offered ADSs without the prior written consent of the Representative unless in the
judgment of the Company and its counsel, and after notification to the
Representative, such press release or communication is required by law.
(xii) The Company will apply the net proceeds from the offering of the Offered
ADSs in the manner set forth under “Use of Proceeds” in the Prospectus.
(xiii) The Company and its subsidiaries will comply with the SAFE Rules and
Regulations.
(xiv) The Company will at all times maintain transfer restrictions (including
the inclusion of legends in ADRs and certificates, as may be required) with respect
to the Company’s ADSs and Ordinary Shares which are subject to transfer restrictions
pursuant to this Agreement and the Lock-Up Agreements and shall ensure compliance
with such restrictions on transfer of restricted ADSs and Ordinary Shares. The
Company shall retain all ADRs and share certificates which are by their terms
subject to transfer restrictions until such time as such transfer restrictions are
no longer applicable to such securities.
(xv) The Company will use its best efforts to comply with the Sarbanes—Oxley
Act, and use its reasonable efforts to cause the Company’s directors and officers,
in their capacities as such, to comply with the Xxxxxxxx-Xxxxx Act.
(xvi) The Company will not directly or indirectly use the proceeds from the
sale of Offered ADSs hereunder, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person or entity, for the
purpose of financing the activities of any person currently subject to any U.S.
sanctions administered by OFAC.
(b) The Company agrees to pay, or reimburse if paid by the Representative, whether or not the
transactions contemplated hereby are consummated or this Agreement is terminated, all costs and
expenses incident to the public offering of the Offered ADSs and the performance of the obligations
of the Company under this Agreement and the Deposit Agreement including those relating to: (i) the
preparation, printing, reproduction filing and distribution of the Registration Statement including
all exhibits thereto, each Preliminary Prospectus, the
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Prospectus, any Issuer Free Writing Prospectus, all amendments and supplements thereto and any
document incorporated by reference therein, and the printing, filing and distribution of this
Agreement; (ii) the preparation and delivery of ADRs evidencing the Offered ADSs to the
Underwriters; (iii) the registration or qualification of the Offered ADSs for offer and sale under
the securities or Blue Sky laws of the various jurisdictions referred to in Section 4(a)(vii),
including the reasonable fees and disbursements of counsel for the Underwriters in connection with
such registration and qualification and the preparation, printing, distribution and shipment of
preliminary and supplementary Blue Sky memoranda; (iv) the furnishing (including costs of shipping
and mailing) to the Representative and to the Underwriters of copies of each Preliminary
Prospectus, the Prospectus and all amendments or supplements to the Prospectus, any Issuer Free
Writing Prospectus, and of the several documents required by this Section to be so furnished, as
may be reasonably requested for use in connection with the offering and sale of the Offered ADSs by
the Underwriters or by dealers to whom Offered ADSs may be sold; (v) the filing fees of FINRA in
connection with its review of the terms of the public offering and up to US$10,000 in reasonable
fees and disbursements of counsel for the Underwriters in connection with such review; (vi)
inclusion of the Offered ADSs for listing on the NASDAQ Global Market; (vii) all transfer taxes, if
any, with respect to the sale and delivery of the Offered ADSs by the Company to the Underwriters;
and (viii) the costs and charges of any transfer agent, registrar or depositary. Notwithstanding
the foregoing, in the event the transactions contemplated hereby are consummated, the
Representative and the co-managing underwriters (the “Co-Managers”), will pay to the Company an
aggregate of US$450,000 of the Company’s out-of-pocket accountable costs and expenses actually
incurred in connection with the transactions contemplated hereby, of which amounts US$374,985 shall
be paid by the Representative and US$75,015 shall be paid by the Co-Manager. In addition, subject
to the provisions of Section 7, the Underwriters agree to pay, whether or not the transactions
contemplated hereby are consummated or this Agreement is terminated, all costs and expenses
incident to the performance of the obligations of the Underwriters under this Agreement not payable
by the Company pursuant to the preceding sentence, including, without limitation, the fees and
disbursements of counsel for the Underwriters.
(c) The Company acknowledges and agrees that each of the Underwriters has acted and is acting
solely in the capacity of a principal in an arm’s length transaction between the Company, on the
one hand, and the Underwriters, on the other hand, with respect to the offering of Offered ADSs
contemplated hereby (including in connection with determining the terms of the offering) and not as
a financial advisor, agent or fiduciary to the Company or any other person. Additionally, the
Company acknowledges and agrees that the Underwriters have not and will not advise the Company or
any other person as to any legal, tax, investment, accounting or regulatory matters in any
jurisdiction. The Company has consulted with its own advisors concerning such matters and shall be
responsible for making its own independent investigation and appraisal of the transactions
contemplated hereby, and the Underwriters shall have no responsibility or liability to the Company
or any other person with respect thereto, whether arising prior to or after the date hereof. Any
review by the Underwriters of the Company, the transactions contemplated hereby or other matters
relating to such transactions have been and will be performed solely for the benefit of the
Underwriters and shall not be on behalf of the Company. The Company 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 or any other person in connection with any such transaction or
the process leading thereto.
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(d) The Company will prepare a final term sheet relating to the Offered ADSs, containing only
information that describes the final terms of the Offered ADSs and otherwise in a form consented to
by the Representative, and will file such final term sheet within the period required by Rule
433(d)(5)(ii) following the date such final terms have been established for all classes of the
offering of the Offered ADSs. Any such final term sheet shall be an Issuer Free Writing Prospectus
for purposes of this Agreement.
(e) The Company represents and agrees that, unless it obtains the prior consent of the
Representative, and each Underwriter represents and agrees that, unless it obtains the prior
consent of the Company and the Representative, it has not made and will not make any offer relating
to the Offered ADSs that would constitute an “issuer free writing prospectus,” as defined in Rule
433, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405,
required to be filed with the Commission. The Company has complied and will comply with the
requirements of Rule 433 under the Securities Act applicable to any Issuer Free Writing
Prospectus, including timely filing with the Commission where required, legending and record
keeping. The Company represents that is has satisfied and agrees that it will satisfy the
conditions set forth in Rule 433 of the Rules to avoid a requirement to file with the Commission
any Road Show. The Company consents to the use by any Underwriter of a free writing prospectus
that (a) is not an “issuer free writing prospectus” as defined in Rule 433, and (b) contains only
information describing the preliminary terms of the Offered ADSs or their offering.
5. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act against any and all losses, claims, damages and liabilities, joint or
several (including any reasonable investigation, legal and other expenses incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted),
to which they, or any of them, may become subject under the Securities Act, the Exchange Act or
other Federal or state law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus, the Registration
Statement, the Statutory Prospectus, the Prospectus, any Issuer Free Writing Prospectus or any
“issuer-information” filed or required to be filed pursuant to Rule 433(d) of the Rules, any
amendment thereof or supplement thereto, or in any Blue Sky application or other information or
other documents executed by the Company filed in any state or other jurisdiction to qualify any or
all of the Offered ADSs under the securities laws thereof (any such application, document or
information being hereinafter referred to as a “Blue Sky Application”) or arise out of or are based
upon any omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided, however, that such
indemnity shall not inure to the benefit of any Underwriter (or any person controlling such
Underwriter) on account of any losses, claims, damages or liabilities arising from the sale of the
Offered ADSs to any person by such Underwriter if such untrue statement or omission or alleged
untrue statement or omission was made in such preliminary prospectus, the Registration Statement,
the Prospectus, the Statutory Prospectus, any Issuer Free Writing Prospectus or such amendment or
supplement thereto, or in any Blue Sky Application in reliance upon and in
conformity with the Underwriter Information. This indemnity agreement will be in addition to
any liability which the Company may otherwise have.
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(b) Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the
Company, and each person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, each director of the Company, and each officer of
the Company who signs the Registration Statement, against any losses, claims, damages or
liabilities to which such party may become subject, under the Securities 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 any
preliminary prospectus, the Registration Statement, the Prospectus or the Statutory Prospectus, or
any amendment or supplement thereto, 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 any
Preliminary Prospectus, the Registration Statement, the Statutory Prospectus or the Prospectus or
any such amendment or supplement in reliance upon and in conformity with the Underwriter
Information; provided, however, that the obligation of each Underwriter to indemnify the Company
(including any controlling person, director or officer thereof) shall be limited to the amount of
the underwriting discount and commissions applicable to the Offered ADSs to be purchased by such
Underwriter hereunder.
(c) Any party that proposes to assert the right to be indemnified under this Section will,
promptly after receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim is to be made against an indemnifying party or parties under this
Section, notify each such indemnifying party of the commencement of such action, suit or
proceeding, enclosing a copy of all papers served. No indemnification provided for in Section 5(a)
or 5(b) shall be available to any party who shall fail to give notice as provided in this Section
5(c) if the party to whom notice was not given was unaware of the proceeding to which such notice
would have related and was prejudiced by the failure to give such notice but the omission so to
notify such indemnifying party of any such action, suit or proceeding shall not relieve it from any
liability that it may have to any indemnified party for contribution or otherwise than under this
Section. In case any such action, suit or proceeding 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 in, and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and the approval by the
indemnified party of such counsel, the indemnifying party shall not be liable to such indemnified
party for any legal or other expenses, except as provided below and except for the reasonable costs
of investigation subsequently incurred by such indemnified party in connection with the defense
thereof. The indemnified party shall have the right to employ its counsel in any such action, but
the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i)
the employment of counsel by such indemnified party has been authorized in writing by the
indemnifying parties, (ii) the indemnified party shall have been advised by counsel that there may
be one or more legal defenses available to it which are different from or in addition to those
available to the indemnifying party (in which case the
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indemnifying parties shall not have the right to direct the defense of such action on behalf
of the indemnified party) or (iii) the indemnifying parties shall not have employed counsel to
assume the defense of such action within a reasonable time after notice of the commencement
thereof, in each of which cases the fees and expenses of counsel shall be at the expense of the
indemnifying parties. An indemnifying party shall not be liable for any settlement of any action,
suit, and proceeding or claim effected without its written consent, which consent shall not be
unreasonably withheld or delayed.
6. Contribution. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 5(a) or 5(b) is due in
accordance with its terms but for any reason is unavailable to or insufficient to hold harmless an
indemnified party in respect to any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate losses, liabilities,
claims, damages and expenses (including any investigation, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding
or any claims asserted, but after deducting any contribution received by any person entitled
hereunder to contribution from any person who may be liable for contribution) incurred by such
indemnified party, as incurred, in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the other hand from the
offering of the Offered ADSs pursuant to this Agreement or, if such allocation is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the relative benefits
referred to above but also the relative fault of the Company on the one hand and the Underwriters
on the other hand in connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant equitable considerations.
The Company and the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 6 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. The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an indemnified party and referred to above
shall be deemed to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 6, no Underwriter (except as may be provided in the
Agreement Among Underwriters) shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Offered ADSs purchased by such
Underwriter. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 6, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act shall have the same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement, and each person, if
any, who controls the Company within the meaning of the Section 15 of the Securities Act or Section
20 of the Exchange Act, shall have the same rights to contribution as the Company. Any party
entitled to contribution will, promptly after receipt of notice of commencement of any action, suit
or proceeding against such party in respect of which a claim for contribution may be made against
another party or parties under this Section 6, notify such
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party or parties from whom contribution may be sought, but the omission so to notify such
party or parties from whom contribution may be sought shall not relieve the party or parties from
whom contribution may be sought from any other obligation it or they may have hereunder or
otherwise than under this Section 6. No party shall be liable for contribution with respect to any
action, suit, proceeding or claim settled without its written consent. The Underwriter’s
obligations to contribute pursuant to this Section 6 are several in proportion to their respective
underwriting commitments and not joint.
7. Termination.
(a) This Agreement may be terminated with respect to the Offered ADSs to be purchased on a
Closing Date by the Representative by notifying the Company at any time at or before a Closing Date
in the absolute discretion of the Representative if: (i) there has occurred any material adverse
change in the securities markets or any event, act or occurrence that has materially disrupted, or
in the opinion of the Representative, will in the future materially disrupt, the securities markets
or there shall be such a material adverse change in general financial, political or economic
conditions or the effect of international conditions on the financial markets in the United States
is such as to make it, in the judgment of the Representative, inadvisable or impracticable to
market the Offered ADSs or enforce contracts for the sale of the Offered ADSs; (ii) there has
occurred any outbreak or material escalation of hostilities or other calamity or crisis the effect
of which on the financial markets of Hong Kong or the United States is such as to make it, in the
judgment of the Representative, inadvisable or impracticable to market the Offered ADSs or enforce
contracts for the sale of the Offered ADSs; (iii) trading in the Offered ADSs or any securities of
the Company has been suspended or materially limited by the Commission or the HKSE or trading
generally on the HKSE, New York Stock Exchange, Inc., the NYSE Amex LLC or the NASDAQ Global Market
has been suspended or materially limited, or minimum or maximum ranges for prices for securities
shall have been fixed, or maximum ranges for prices for securities have been required, by any of
said exchanges or by such system or by order of the Commission, FINRA, or any other governmental or
regulatory authority; (iv) a banking moratorium has been declared by any Hong Kong, state or
Federal authority; or (v) in the judgment of the Representative, there has been, since the time of
execution of this Agreement or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the assets, properties, condition, financial or
otherwise, or in the results of operations, business affairs or business prospects of the Company
and its subsidiaries considered as a whole, whether or not arising in the ordinary course of
business.
(b) If this Agreement is terminated pursuant to any of its provisions, the Company shall not
be under any liability to any Underwriter, and no Underwriter shall be under any liability to the
Company, except that (y) if this Agreement is terminated by the Representative or the Underwriters
because of any failure, refusal or inability on the part of the Company to comply with the terms or
to fulfill any of the conditions of this Agreement, the Company will pay, or reimburse if paid by
the Underwriters, all of the Underwriters’ out-of-pocket accountable expenses (including the
reasonable fees and disbursements of their counsel) actually incurred by them in connection with
the proposed purchase and sale of the Offered ADSs, provided that except as provided in Section 5
and Section 6, such costs and expenses shall not exceed US$150,000, and (z) no Underwriter who
shall have failed or refused to purchase the Offered ADSs agreed to be purchased by it under this
Agreement, without some reason sufficient
hereunder to justify cancellation or termination of its obligations under this Agreement,
shall be relieved of liability to the Company or to the other Underwriters for damages occasioned
by its failure or refusal.
-31-
8. Substitution of Underwriters. If any Underwriter shall default in its obligation
to purchase on any Closing Date the Offered ADSs agreed to be purchased hereunder on such Closing
Date, the Representative shall have the right, within 36 hours thereafter, to make arrangements for
one or more of the non-defaulting Underwriters, or any other underwriters, to purchase such Offered
ADSs on the terms contained herein. If, however, the Representative shall not have completed such
arrangements within such 36-hour period, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties satisfactory to the
Underwriters to purchase such Offered ADSs on such terms. If, after giving effect to any
arrangements for the purchase of the Offered ADSs of a defaulting Underwriter or Underwriters by
the Representative and the Company as provided above, the aggregate number of Offered ADSs which
remains unpurchased on such Closing Date does not exceed one-eleventh of the aggregate number of
all the Offered ADSs that all the Underwriters are obligated to purchase on such date, then the
Company shall have the right to require each non-defaulting Underwriter to purchase the number of
Offered ADSs which such Underwriter agreed to purchase hereunder at such date and, in addition, to
require each non-defaulting Underwriter to purchase its pro rata share (based on the number of
Offered ADSs which such Underwriter agreed to purchase hereunder) of the Offered 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. In any such case,
either the Representative or the Company shall have the right to postpone the applicable Closing
Date for a period of not more than seven days in order to effect any necessary changes and
arrangements (including any necessary amendments or supplements to the Registration Statement or
Prospectus or any other documents), and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in the opinion of the Company and the Underwriters
and their counsel may thereby be made necessary.
If, after giving effect to any arrangements for the purchase of the Offered ADSs of a
defaulting Underwriter or Underwriters by the Representative and the Company as provided above, the
aggregate number of such Offered ADSs which remains unpurchased exceeds 10% of the aggregate number
of all the Offered ADSs to be purchased at such date, then this Agreement, or, with respect to a
Closing Date which occurs after the First Closing Date, the obligations of the Underwriters to
purchase and of the Company, as the case may be, to sell the Option ADSs to be purchased and sold
on such date, shall terminate, without liability on the part of any non-defaulting Underwriter to
the Company, and without liability on the part of the Company, except as provided in Sections
4(b), 5, 6 and 7. The provisions of this Section 8 shall not in any way affect the liability of
any defaulting Underwriter to the Company or the nondefaulting Underwriters arising out of such
default. The term “Underwriter” as used in this Agreement shall include any person substituted
under this Section 8 with like effect as if such person had originally been a party to this
Agreement with respect to such Offered ADSs.
-32-
9. Miscellaneous. The respective agreements, representations, warranties, indemnities
and other statements of the Company and the several Underwriters, as set forth in this Agreement or
made by or on behalf of them 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 the Company or any of their respective officers,
directors or controlling persons referred to in Sections 5 and 6 hereof, and shall survive delivery
of and payment for the Offered ADSs. In addition, the provisions of Sections 4(b), 5, 6 and 7
shall survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the Underwriters, the Company and their
respective successors and assigns, and, to the extent expressed herein, for the benefit of persons
controlling any of the Underwriters, or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or have any right under
or by virtue of this Agreement. The term “successors and assigns” shall not include any purchaser
of Offered ADSs from any Underwriter merely because of such purchase.
All notices and communications hereunder shall be in writing and mailed or delivered or by
telephone or telegraph if subsequently confirmed in writing, (a) if to the Representative, c/o
Oppenheimer & Co. Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention: Equity Capital
Markets, with a copy to Xxxxxxxxxxx & Co. Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel, and to DLA Piper Asia LLP, 17th Floor, Edinburgh Tower, The Landmark,
15 Queen’s Road Central, Hong Kong, Attention: Xxxx Xxxxxxxx and (b) if to the Company, to its
agent for service as such agent’s address appears on the cover page of the Registration Statement
with a copy to Xxxxx Day LLP, 29th Floor, Edinburgh Tower, The Landmark, 15 Queen’s Road Central,
Hong Kong, Attention: Xxxxxxx Xxxxxx.
This Agreement shall be governed by and construed in accordance with the laws of the State of
New York. The Company irrevocably (a) submits to the jurisdiction of any court of the Federal and
state courts in the Borough of Manhattan in The City of New York for the purpose of any suit,
action, or other proceeding arising out of this Agreement, or any of the agreements or transactions
contemplated by this Agreement, the Deposit Agreement, the Registration Statement and the
Prospectus (each, a “Proceeding”), (b) agrees that all claims in respect of any Proceeding may be
heard and determined in any such court, (c) waives, to the fullest extent permitted by law, any
immunity from jurisdiction of any such court or from any legal process therein, (d) agrees not to
commence any Proceeding other than in such courts, and (e) waives, to the fullest extent permitted
by law, any claim that such Proceeding is brought in an inconvenient forum. The Company hereby
irrevocably designates CT Corporation System Inc., 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 as
agent upon whom process against the Company may be served. EACH OF THE COMPANY (ON BEHALF OF ITSELF
AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND
CREDITORS) HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED
UPON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT, THE REGISTRATION STATEMENT, AND THE PROSPECTUS.
If for the purposes of obtaining judgment in any court it is necessary to convert a sum due
hereunder into any currency other than United States dollars, the parties hereto agree, to the
fullest extent permitted by law, that the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the relevant party or parties could purchase United
States dollars with such other currency in The City of New York on the business day preceding
-33-
that on which final judgment is given. The obligation of each party hereto with respect to any sum
due from it to any other party hereto or any person controlling any such other party shall,
notwithstanding any judgment in a currency other than United States dollars, not be discharged
until the first business day following receipt by such other party or controlling person of any sum
in such other currency, and only to the extent that such other party or controlling person may in
accordance with normal banking procedures purchase United States dollars with such other currency.
If the United States dollars so purchased are less than the sum originally due to such other party
or controlling person hereunder, the first-mentioned party agrees as a separate obligation and
notwithstanding any such judgment, to indemnify such other party or controlling person against such
loss. If the United States dollars so purchased are greater than the sum originally due to such
other party or controlling person hereunder, such other party or controlling person agrees to pay
to the first-mentioned party an amount equal to the excess of the United States dollars so
purchased over the sum originally due to such other party or controlling person hereunder.
All payments made by the Company under this Agreement will be made without withholding or
deduction for or on account of any present or future taxes, duties, assessments or governmental
charges of whatever nature imposed or levied by or on behalf of Hong Kong or any political
subdivision or any taxing authority thereof or therein unless the Company is or becomes required by
law to withhold or deduct such taxes, duties, assessments or other governmental charges. In such
event, the Company will pay such additional amounts as will result, after such withholding or
deduction, in the receipt by each Underwriter and each person controlling any Underwriter, as the
case may be, of the amounts that would otherwise have been receivable in respect thereof, except to
the extent such taxes, duties, assessments or other governmental charges are imposed or levied by
reason of such Underwriter’s or controlling person’s being connected with Hong Kong other than by
reason of its being an Underwriter or a person controlling any Underwriter under this Agreement.
-34-
This Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon the same
instrument.
Please confirm that the foregoing correctly sets forth the agreement among us.
| Very truly yours, CITY TELECOM (H.K.) LIMITED |
||||
| By | ||||
| Title: | ||||
| Confirmed: XXXXXXXXXXX & CO. INC. |
||||
| Acting severally on behalf of itself
and as representative of the several
Underwriters named in Schedule I annexed
hereto. By XXXXXXXXXXX & CO. INC. |
||||
| By | ||||
| Title: | ||||
SCHEDULE I
| Number of | ||||
| Firm ADSs to | ||||
| Name | Be Purchased | |||
Xxxxxxxxxxx & Co. Inc. |
2,916,550 | |||
Xxxx Capital Partners, LLC |
583,450 | |||
Total |
3,500,000 | |||
SCHEDULE II
Issuer Free Writing Prospectuses
The Hong Kong pricing announcement filed with the Commission as an Issuer Free Writing
Prospectus on April 23, 2010.
SCHEDULE III
Subsidiaries
City Telecom International Limited
Hong Kong Broadband Network Limited
Excel Billion Profits Limited
Hong Kong Television Network Limited
Hong Kong Broadband Television Company Limited
Hong Kong Broadband Phone Limited
Hong Kong Broadband Digital TV Limited
Hong Kong Broadband Network Limited
Excel Billion Profits Limited
Hong Kong Television Network Limited
Hong Kong Broadband Television Company Limited
Hong Kong Broadband Phone Limited
Hong Kong Broadband Digital TV Limited
Credibility Holdings Limited
IDD1600 Company Limited
CTI Marketing Company Limited
Global Courier Company Limited
CTI International Limited
BBTV Company Limited
IDD1600 Company Limited
CTI Marketing Company Limited
Global Courier Company Limited
CTI International Limited
BBTV Company Limited
Automedia Holdings Limited
City Telecom (U.S.A.) Inc.
City Telecom (Vancouver) Inc.
City Telecom (Toronto) Inc.
City Telecom (Canada) Incorporated
963673 Ontario Ltd.
City Telecom (B.C.) Inc.
City Telecom Inc.
City Telecom (U.S.A.) Inc.
City Telecom (Vancouver) Inc.
City Telecom (Toronto) Inc.
City Telecom (Canada) Incorporated
963673 Ontario Ltd.
City Telecom (B.C.) Inc.
City Telecom Inc.
Golden Trinity Holdings Limited
Warwick Gold Enterprises Limited
Attitude Holdings Limited
Warwick Gold Enterprises Limited
Attitude Holdings Limited
CTI Guangzhou Customer Services Co. Ltd.
SGBN Singapore Broadband Network Pte. Limited
SCHEDULE IV
PRC Entities
CTI Guangzhou Customer Services Co. Ltd.
SCHEDULE V
Lock-Up Signatories
XXXX Xxx Xxx, Xxxxx
XXXXXX Chi Kin, Xxxx
XXXXX Xxx Xxxxx, Xxxxxxx
XXX Ni Quiaque
Schedule VI
FORM OF LOCK-UP AGREEMENT
, 2010
Xxxxxxxxxxx & Co. Inc.
As Representative of the Several Underwriters
c/o Oppenheimer & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Public Offering of City Telecom (H.K.) Limited
Ladies and Gentlemen:
The undersigned, a holder of American Depositary Shares (“ADSs”) representing
shares (the “Firm ADSs”) of the Company’s ordinary shares, HK$0.10 par value per share
(the “Ordinary Shares”), of City Telecom (H.K.) Limited (the “Company”) understands that you, as
Representative of the several Underwriters, propose to enter into an Underwriting Agreement (the
“Underwriting Agreement”) with the Company, providing for the public offering (the “Public
Offering”) by the several Underwriters named in Schedule I to the Underwriting Agreement (the
“Underwriters”), of ADSs of the Company (the “Securities”). Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Underwriting Agreement.
In consideration of the Underwriters’ agreement to enter into the Underwriting Agreement and
to proceed with the Public Offering of the Securities, and for other good and valuable
consideration receipt of which is hereby acknowledged, the undersigned hereby agrees for the
benefit of the Company, you and the other Underwriters that, without the prior written consent of
Xxxxxxxxxxx & Co. Inc. on behalf of the Underwriters, the undersigned will not, during the period
ending 90 days (the “Lock-Up Period”) after the date of the prospectus relating to the Public
Offering (the “Prospectus”), directly or indirectly (1) offer, pledge, assign, encumber, announce
the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant to purchase, or otherwise
transfer or dispose of, any ADSs or Ordinary Shares or any securities convertible into or
exercisable or exchangeable for ADSs or Ordinary Shares owned either of record or beneficially (as
defined in the Securities Exchange Act of 1934, as amended) by the undersigned on the date hereof
or hereafter acquired or (2) enter into any swap or other agreement that transfers, in whole or in
part, any of the economic consequences of ownership of the ADSs or Ordinary Shares, whether any
such transaction described in clause (1) or (2) above is to be settled by delivery of ADSs,
Ordinary Shares or such other securities, in cash or otherwise, or
publicly announce an intention to do any of the foregoing. In addition, the undersigned agrees
that, without the prior written consent of Xxxxxxxxxxx & Co. Inc. on behalf of the Underwriters, it
will not, during the period ending 90 days after the date of the Prospectus, make any demand for or
exercise any right with respect to, the registration of any ADSs, Ordinary Shares or any security
convertible into or exercisable or exchangeable for ADSs or Ordinary Shares. The foregoing shall
not apply to (x) ADSs or Ordinary Shares to be transferred as a gift or gifts (provided that any
donee thereof agrees in writing to be bound by the terms hereof), (y) the sale of the Securities to
be sold pursuant to the Prospectus and (y) sales under any 10b-5 plan.
Notwithstanding the foregoing, if (x) during the last 17 days of the Lock-Up Period the
Company issues an earnings release, earnings guidance or material news or a material event relating
to the Company occurs; or (y) prior to the expiration of the Lock-Up Period, the Company announces
that it will release earnings results during the 16-day period beginning on the last day of the
90-day period; the restrictions imposed in this Letter Agreement shall continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings release, earnings
guidance or the occurrence of the material news or material event; provided, however, that this
sentence shall not apply if the research published or distributed on the Company is compliant under
Rule 139 of the Securities Act and the Company’s securities are actively traded as defined in Rule
101(c)(1) of Regulation M of the Exchange Act.
In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the
registration or transfer of the securities described herein, are hereby authorized to decline to
make any transfer of securities if such transfer would constitute a violation or breach of this
Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has full power and
authority to enter into this Letter Agreement. All authority herein conferred or agreed to be
conferred and any obligations of the undersigned shall be binding upon the successors, assigns,
heirs or personal representatives of the undersigned.
The undersigned understands that, if the Underwriting Agreement does not become effective, or
if the Underwriting Agreement (other than the provisions thereof which survive termination) shall
terminate or be terminated prior to payment for and delivery of the Ordinary Share to be sold
thereunder, the undersigned shall be released form all obligations under this Letter Agreement.
The undersigned, whether or not participating in the Offering, understands that the
Underwriters are entering into the Underwriting Agreement and proceeding with the Public Offering
in reliance upon this Letter Agreement.
This lock-up agreement shall be governed by and construed in accordance with the laws of the
State of New York, without regard to the conflict of laws principles thereof.
| Very truly yours, [STOCKHOLDER] |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
