Exhibit 1.1
Draft of February 1, 2000
_______________ Shares
AsiaInfo Holdings, Inc.
Common Stock of par value $0.01 per share
UNDERWRITING AGREEMENT
__________, 2000
_____________, 2000
Xxxxxx Xxxxxxx & Co. Incorporated
Deutsche Bank Securities Inc.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
AsiaInfo Holdings, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the several Underwriters named in Schedule I
hereto (the "Underwriters") _______________ shares of its common stock of par
value $0.01 per share (the "Firm Shares"). The Company also proposes to issue
and sell to the several Underwriters not more than an additional ______________
shares of its common stock of $0.01 per share (the "Additional Shares") if and
to the extent that you, as managers of the offering, shall have determined to
exercise, on behalf of the Underwriters, the right to purchase such shares of
common stock granted to the Underwriters in Section 2 hereof. The Firm Shares
and the Additional Shares are hereinafter collectively referred to as the
"Shares." The shares of the common stock of par value $0.01 per share of the
Company to be outstanding after giving effect to the sales contemplated hereby
are hereinafter referred to as the "Common Stock."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to the
Shares. The registration statement as amended at the time it becomes effective,
including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the "Securities Act"), is hereinafter
referred to as the "Registration Statement"; the prospectus in the form first
used to confirm sales of Shares is hereinafter referred to as the "Prospectus."
If the Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the Securities
Act (the "Rule 462 Registration Statement"), then any reference herein to the
term "Registration Statement" shall be deemed to include such Rule 462
Registration Statement.
Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx Xxxxxxx") and its
affiliates have agreed to reserve a portion of the Shares to be purchased by it
under this Agreement for sale to the Company's directors, officers, employees
and business associates and other parties related to the Company (collectively,
"Participants"), as set forth in the Prospectus under the heading "Underwriters"
(the "Directed Share Program"). The Shares to be sold by Xxxxxx Xxxxxxx
pursuant to the Directed Share Program are referred
to hereinafter as the "Directed Shares." Any Directed Shares not orally
confirmed for purchase by any Participants by the end of the business day on
which this Agreement is executed will be offered to the public by the
Underwriters as set forth in the Prospectus.
1. Representations and Warranties. The Company represents and warrants
to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) the Registration Statement and the Prospectus
comply and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iii) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations
and warranties set forth in this paragraph do not apply to statements or
omissions in the Registration Statement or the Prospectus based upon
information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(d) (i) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to
own its property and to conduct its business as described in the Prospectus
and is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its
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subsidiaries, taken as a whole, (ii) all of the issued shares of capital
stock of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned
directly by the Company, free and clear of all liens, encumbrances,
equities or claims, (iii) each of AsiaInfo Technologies (China) Co., Ltd.
("AsiaInfo Beijing") and Zhejiang AsiaInfo Telecommunication Technology
Co., Ltd. ("AsiaInfo Zhejiang") is a wholly owned subsidiary incorporated
in the People's Republic of China and is duly formed and validly existing
and not in default of any registration, filing or licensing requirements
under the Chinese law. Each of such subsidiaries has passed the joint
annual inspection conducted by the relevant authorities in China in 1999
for the year of 1998. The Company does not believe, and has no reason to
believe, that each of such subsidiaries will not pass the joint annual
inspection in 2000 for the year of 1999. None of the businesses,
activities, agreements or commitments of these subsidiaries, current or
past, is or has been unauthorized or exceeds the business scope of their
respective business licenses except to the extent failure to be so
authorized or to operate within the business scope of their respective
business licenses would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(e) This Agreement has been duly authorized, executed and delivered
by the Company.
(f) The authorized capital stock of the Company conforms to the
description thereof contained in the Prospectus.
(g) The shares of Common Stock outstanding prior to the issuance of
the Shares have been duly authorized and are validly issued, fully paid and
non-assessable.
(h) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, the issuance of such Shares will not
be subject to any preemptive or similar rights and will conform in all
material respects to the description of the Shares contained in the
Prospectus.
(i) No stamp or other issuance or transfer taxes or duties and no
capital gains, income, withholding or other taxes are payable by or on
behalf of the Underwriters to the government of the People's Republic of
China or any political subdivision or taxing authority thereof or therein
in connection with (i) the issuance and sale of Shares by the Company to
the Underwriters in accordance with this Agreement, (ii) the delivery of
the Shares to or for the respective accounts of the Underwriters in the
manner contemplated in this Agreement or (iii) the resale and delivery by
the Underwriters of the Shares to the initial purchasers thereof as
contemplated in the Prospectus.
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(j) Except as described in the Part II of the Registration Statement,
the Company has not sold or issued any shares of the Common Stock during
the six-month period preceding the date of the Registration Statement,
including any sales pursuant to Rule 144A under, or Regulations D or S of,
the Securities Act.
(k) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement will not contravene
any provision of applicable law (including any law or regulation of the
People's Republic of China) or the certificate of incorporation or by-laws
of the Company or any agreement or other instrument binding upon the
Company or any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or
any subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, except
such as may be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Shares. No consent,
approval, authorization or order of, or qualification with, any foreign
governmental body or agency including those of the government of the
People's Republic of China is required for the performance by the Company
of its obligations under this Agreement.
(l) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from that
set forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement).
(m) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is
subject that are required to be described in the Registration Statement or
the Prospectus and that are not so described or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(n) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in
all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(o) The industry, statistical and market-related data included in the
Prospectus and the Registration Statement, as of its date, to the best
knowledge of
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the Company, are true and accurate in all material respects and are based
on or derived from sources that the Company reasonably believes to be
reliable and accurate.
(p) Except as disclosed in the Prospectus, no relationship, direct or
indirect, exists between or among any of the Company or its subsidiaries on
the one hand, and the directors, officers, stockholders, customers or
suppliers of any of the Company or its subsidiaries on the other hand, that
is required by the Securities Act and rules and regulations thereunder to
be described in the Prospectus.
(q) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) the Company and
its subsidiaries have not incurred any material liability or obligation,
direct or contingent, nor entered into any material transaction not in the
ordinary course of business, (ii) the Company has not purchased any of its
outstanding share capital, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock and (iii) there
has not been any material change in the share capital, short-term debt or
long-term debt of the Company and its subsidiaries, except in each case as
described in the Prospectus.
(r) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described
in the Prospectus, will not be an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
(s) The Company and its subsidiaries (i) are in compliance with any
and all applicable laws and regulations of the jurisdiction in which they
operate (including the People's Republic of China) relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), (ii) have received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not, singly or in
the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(t) There are no costs or liabilities associated with Environmental
Laws (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 approval, any related
constraints on operating activities and any potential liabilities to third
parties) which would, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
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(u) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act with
respect to any securities of the Company or to require the Company to
include such securities with the Shares registered pursuant to the
Registration Statement, except such as are subject to a lock-up agreement
substantially in the form of Exhibit A hereto entered into by such person
with the Underwriters.
(v) The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of consolidated financial statements of the Company and
its subsidiaries in conformity with generally accepted accounting
principles in the United States, 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 existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(w) The Company has reviewed its operations and that of its
subsidiaries to evaluate the extent to which the business or operations of
the Company or any of its subsidiaries were or will be affected by the Year
2000 Problem (that is, any significant risk that computer hardware or
software applications used by the Company and its subsidiaries will not, in
the case of dates or time periods occurring after December 31, 1999,
function at least as effectively as in the case of dates or time periods
occurring prior to January 1, 2000); as a result of such review, (i) the
Company has no reason to believe, and does not believe, that (A) there are
any issues related to the Company's preparedness to address the Year 2000
Problem that are of a character required to be described or referred to in
the Registration Statement or Prospectus which have not been accurately
described in the Registration Statement or Prospectus and (B) the Year 2000
Problem has had or will have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, or result in any material
loss or interference with the business or operations of the Company and its
subsidiaries, taken as a whole and (ii) the Company reasonably believes,
after due inquiry, that the suppliers, vendors, customers or other material
third parties used or served by the Company and such subsidiaries are
addressing or will address the Year 2000 Problem in a timely manner, except
to the extent that a failure to address the Year 2000 Problem by any
supplier, vendor, customer or material third party would not have a
material adverse effect on the condition, financial or otherwise, or on the
earnings, business or operations of the Company and its subsidiaries, taken
as a whole.
(x) As at the date hereof, no Year 2000 Problem has occurred that has
had or could reasonably be expected to have a material adverse effect on
the condition,
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financial or otherwise, or on the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, or any material loss or
interference with the business or operations of the Company and its
subsidiaries, taken as whole; nothing has come to the attention of the
Company or any of its subsidiaries that any of the suppliers, vendors,
customers or other material third parties has experienced any Year 2000
Problem that has had or could reasonably be expected to have a material
adverse effect on the condition, financial or otherwise, or on the
earnings, business or operations of the Company and its subsidiaries, taken
as a whole.
(y) The Company and its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which they
are engaged; neither the Company nor any of its subsidiaries has been
refused any insurance coverage sought or applied for; and neither the
Company nor any of its subsidiaries 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 their respective businesses at a cost that would
not have a material adverse effect on the Company and its subsidiaries,
taken as a whole, except as described in the Prospectus.
(z) The Company and its subsidiaries own or possess, or can acquire
on reasonable terms, all material patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names currently
employed by them in connection with or reasonably necessary to conduct the
business now operated by them, and none of the foregoing intellectual
property rights of the Company or its subsidiaries breaches or is in
conflict with asserted rights of others; neither the Company nor any of its
subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a material adverse affect on the Company and
its subsidiaries, taken as a whole.
(aa) The Company and its subsidiaries have good and marketable title
to all property owned by them which is material to the business of the
Company and its subsidiaries, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or
such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held
under lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of
such property and buildings by the Company and its subsidiaries, in each
case except as described in the Prospectus.
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(ab) Neither the Company nor any of its subsidiaries or any officer,
director, employee or agent thereof or any stockholder thereof acting on
behalf of the Company or any of its subsidiaries has done any act or
authorized, directed or participated in any act, in violation of any
provision of the United States Foreign Corrupt Practices Act of 1977, as
amended, applicable to such entity or person.
(ac) The balance sheets, statements of income, of retained earnings
and of cash flows and the related notes thereto of the Company included in
the Registration Statement present fairly the financial position of the
Company on a consolidated basis as of the dates indicated and the results
of operations, retained earnings and cash flows for the periods specified,
(i) such financial statements have been prepared in accordance with
generally accepted accounting principles in the United States and (ii)
Deloitte Touche Tohmatsu, who certified the audited financial statements of
the Company included in the Registration Statement, are independent
auditors with respect to the Company under the Securities Act and the
applicable published rules and regulations of the Commission thereunder.
(ad) No material labor dispute with the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company, is
imminent; and the Company is not aware of any existing, threatened or
imminent labor disturbance by the employees of any of its principal
hardware and software suppliers, manufacturers or contractors that could
have a material adverse effect on the Company and its subsidiaries, taken
as a whole.
(ae) The Company has disclosed to the Underwriters copies of (i) all
minutes and agenda of the Company and each of its subsidiaries' Board of
Directors meetings for the last five years and (ii) all existing minutes
and agenda of stockholders' meetings of the Company for the last five
years.
(af) The Company has complied with all provisions of Section 517.075,
Florida Statutes relating to doing business with the Government of Cuba or
with any person or affiliate located in Cuba.
(ag) The Directed Share Program, when instituted and administered in
accordance with its terms, including the distribution of the Prospectus and
any preliminary prospectus to Participants and all communications and
dealings by the Company, its officers, directors, employees and affiliates
and any person acting on its or their behalf in connection with the
Directed Share Program, do not and will not contravene applicable laws and
regulations of the People's Republic of China. No consent, approval,
authorization or order of, or qualification with, any governmental body or
agency of the People's Republic of China, other than those obtained, is
required in connection with the offering or sale of the Directed Shares
pursuant to the Directed Share Program.
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(ah) Neither the Company nor any of its officers, directors,
employees or affiliates or any person acting on its or their behalf has (i)
offered or sold, or caused Xxxxxx Xxxxxxx to offer or sell, Shares to any
person who is not qualified to purchase such Shares pursuant to the
Directed Share Program under the laws and regulations of the People's
Republic of China or (ii) otherwise engaged in any other action in
connection with the Directed Share Program that could reasonably be
construed to be in contravention of the laws or regulations of the People's
Republic of China.
(ai) The Company has not offered, or caused Xxxxxx Xxxxxxx or its
affiliates to offer, Shares to any person pursuant to the Directed Share
Program with the intent to unlawfully influence (i) a customer or supplier
of the Company to alter the customer's or supplier's level or type of
business with the Company, or (ii) a trade journalist or publication to
write or publish favorable information about the Company or its products.
2. Agreements to Sell and Purchase. The Company hereby agrees to sell to
the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective numbers of Firm Shares set forth in Schedule I hereto
opposite its name at $______ a share (the "Purchase Price").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters the Additional Shares, and the Underwriters shall have a
one-time right to purchase, severally and not jointly, up to _______________
Additional Shares at the Purchase Price. If you, on behalf of the Underwriters,
elect to exercise such option, you shall so notify the Company in writing not
later than 30 days after the date of this Agreement, which notice shall specify
the number of Additional Shares to be purchased by the Underwriters and the date
on which such shares are to be purchased. Such date may be the same as the
Closing Date (as defined below) but not earlier than the Closing Date nor later
than ten business days after the date of such notice. Additional Shares may be
purchased as provided in Section 4 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each Underwriter agrees, severally and
not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Additional Shares to be purchased as the
number of Firm Shares set forth in Schedule I hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
The Company hereby agrees that, without the prior written consent of
Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not (and will not publicly
announce any intention to), during the period beginning on the date hereof and
ending 180 days after the date of the Prospectus, (i) offer, pledge, sell,
contract to sell, sell any option or
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contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into, or exercisable or exchangeable for shares of Common Stock, or (ii) enter
into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of shares of Common Stock,
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of shares of Common Stock or such other securities, in cash
or otherwise. The foregoing sentence shall not apply to (A) the Shares to be
sold hereunder or (B) the conversion of outstanding preferred stock into shares
of Common Stock as part of the closing of this offering, or (C) the issuance by
the Company of shares of Common Stock upon the exercise of an option or warrant
or the conversion of a security outstanding on the date hereof of which the
Underwriters have been advised in writing prior to the date hereof provided that
the Company has determined in good faith, and, to the Company's knowledge, after
due inquiry, that the person to whom such shares are issued, will not offer,
sell, contract to sell or otherwise dispose of such shares in contravention of
any lock-up agreement between such person and the Underwriters.
3. Terms of Public Offering. The Company is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Company is further
advised by you that the Shares are to be offered to the public initially at
$_____________ a share (the "Public Offering Price") and to certain dealers
selected by you at a price that represents a concession not in excess of $______
a share under the Public Offering Price, and that any Underwriter may allow, and
such dealers may reallow, a concession, not in excess of $_____ a share, to any
Underwriter or to certain other dealers.
4. Payment and Delivery. Payment for the Firm Shares shall be made to
the Company in Federal or other funds immediately available in New York City
against delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on [ ], 2000, or at
such other time on the same or such other date, not later than [ ], 2000
as shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "Closing Date".
Payment for any Additional Shares shall be made to the Company in
Federal or other funds immediately available in New York City against delivery
of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 2 or at such other time on the same or on such other
date, in any event not later than [ ], 2000 as shall be designated
in writing by you. The time and date of such payment are hereinafter referred to
as the "Option Closing Date".
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall
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request in writing not later than one full business day prior to the Closing
Date or the Option Closing Date, as the case may be. The certificates evidencing
the Firm Shares and Additional Shares shall be delivered to you on the Closing
Date or the Option Closing Date, as the case may be, for the respective accounts
of the several Underwriters, with any transfer taxes payable in connection with
the transfer of the Shares to the Underwriters duly paid, against payment of the
Purchase Price therefor.
5. Conditions to the Underwriters' Obligations. The obligations of the
Company to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become
effective not later than 4:30 p.m. (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company
and its subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement) that, in your judgment, is
material and adverse and that makes it, in your judgment,
impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus; and
(ii) the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
the Company, to the effect set forth in Section 5(a)(i) and (ii) above and
to the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date.
The officer signing and delivering such certificate may rely upon the
best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxxxx Chance Xxxxxx & Xxxxx LLP, special United States
counsel for the Company, dated the Closing Date, to the effect that:
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(i) the Company has been duly incorporated, is validly existing as
a corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus
and is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole;
(ii) the authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus;
(iii) the shares of Common Stock outstanding prior to the issuance
of the Shares have been duly authorized and are validly issued, fully
paid and non-assessable;
(iv) the Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of the
Shares will not be subject to any preemptive or similar rights;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of applicable law or the certificate
of incorporation or by-laws of the Company or, to the best of such
counsel's knowledge, any agreement or other instrument binding upon
the Company or any of its subsidiaries that is material to the Company
and its subsidiaries, taken as a whole, or, to the best of such
counsel's knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company or any
subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for
the performance by the Company of its obligations under this
Agreement, except such as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and sale
of the Shares;
(vii) the statements (A) in the Prospectus under the captions
"Management - Stock Incentive Plans", "Taxation - United States
Federal Income Taxation," "Description of Capital Stock", "Shares
Eligible for Future Sale", and "Underwriters" and (B) in the
Registration Statement in Items 14 and 15, in each case insofar as
such statements constitute summaries of the legal matters, documents
or proceedings referred to
12
xxxxxxx, fairly present the information called for with respect to
such legal matters, documents and proceedings and fairly summarize the
matters referred to therein;
(viii) after due inquiry, such counsel does not know of any legal
or governmental proceedings pending or threatened to which the Company
or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject that
are required to be described in the Registration Statement or the
Prospectus and are not so described or of any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not described or filed as
required;
(ix) the Company is not and, after giving effect to the offering
and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as
such term is defined in the Investment Company Act of 1940, as
amended;
(x) such counsel (A) is of the opinion that the Registration
Statement and Prospectus (except for financial statements and
schedules and other financial and statistical data included therein as
to which such counsel need not express any opinion) comply as to form
in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder, (B) has no reason
to believe that (except for financial statements and schedules and
other financial and statistical data as to which such counsel need not
express any belief) the Registration Statement and the prospectus
included therein at the time the Registration Statement became
effective contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading and (C) has no reason to
believe that (except for financial statements and schedules and other
financial and statistical data as to which such counsel need not
express any belief) the Prospectus contains any untrue statement of a
material fact or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(d) The Underwriters shall have received on the Closing Date an
opinion of Haiwen & Partners, Chinese counsel for the Company, dated the
Closing Date, to the effect that:
(i) Each of AsiaInfo Beijing and AsiaInfo Zhejiang is duly
formed and validly existing and not in default of any registration,
filing or licensing requirements under the Chinese law. Each of such
subsidiaries has passed the joint annual inspection conducted by the
relevant
13
authorities in China in 1999 for the year of 1998. None of the
businesses, activities, agreements or commitments of these
subsidiaries, current or past, is or has been unauthorized or exceeds
the business scope of their respective business licenses.
(ii) all of the issued shares of capital stock of each of
AsiaInfo Beijing and AsiaInfo Zhejiang have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned
directly by the Company, free and clear of all liens, encumbrances,
equities or claims.
(iii) No consent, approval, authorization or order of, or
qualification with, any governmental body or agency of the government
of the People's Republic of China is required for the performance by
the Company of its obligations under this Agreement. No stamp or
other issuance or transfer taxes or duties and no capital gains,
income, withholding or other taxes are payable by or on behalf of the
Underwriters to the government of the People's Republic of China or
any political subdivision or taxing authority thereof or therein in
connection with (A) the issuance and sale of Shares by the Company to
the Underwriters in accordance with this Agreement, (B) the delivery
of the Shares to or for the respective accounts of the Underwriters in
the manner contemplated in this Agreement or (C) the resale and
delivery by the Underwriters of the Shares to the initial purchasers
thereof as contemplated in the Prospectus.
(iv) after due inquiry, such counsel does not know of any
Chinese legal or governmental proceedings pending or threatened to
which the Company or any of its subsidiaries is a party or to which
any of the properties of the Company or any of its subsidiaries is
subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are required
to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement that are not
described or filed as required;
(v) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene or result in a breach or violation of any
provision of applicable laws and regulations of the People's Republic
of China or the certificate of incorporation, by-laws or other
governing documents of each of AsiaInfo Beijing and AsiaInfo Zhejiang,
or, to the best of such counsel's knowledge, any agreement or other
instrument binding upon AsiaInfo Beijing or AsiaInfo Zhejiang that is
material to the Company and its subsidiaries, taken as a whole, or, to
the best of such counsel's knowledge, any judgment, order or decree of
any governmental body, agency or court of the People's Republic of
China having jurisdiction over the Company or any subsidiary;
14
(vi) Each of AsiaInfo Beijing and AsiaInfo Zhejiang is duly
licensed or authorized in the People's Republic of China to conduct
its business as currently conducted or as described in the Prospectus,
or is subject to no material liability or disability by reason of the
failure to be so licensed or authorized in the People's Republic of
China; and to the best of such counsel's knowledge, none of AsiaInfo
Beijing or AsiaInfo Zhejiang has received any notification from any
governmental body, agency or court in the People's Republic of China
to the effect that any additional authorization, approval, order,
consent, license, certificate, permit, registration or qualification
from such authorities is needed to be obtained by any of AsiaInfo
Beijing or AsiaInfo Zhejiang;
(vii) the statements in the Prospectus under the captions "Risk
Factors--Laws and regulations applicable to the Internet in China
remain unsettled and could have a material adverse effect on
Internet's growth and thereby have material adverse effect on our
business". "- We extend warranties to our network solutions customers
that expose us to potential liabilities", "- Our proprietary rights
may be inadequately protected and there is a risk of weak law
enforcement", "- Investors may not be able to enforce judgments by
United States courts against us", "- Political and economic policies
of the Chinese government could affect our business", "-
Uncertainties with respect to the Chinese legal system could adversely
affect us", "Business - Industry Background", "- Government
Regulation" and "- Intellectual Property" insofar as such statements
constitute summaries of the legal matters, documents or proceedings
referred to therein, to the extent, and only to the extent, governed
by the laws of the People's Republic of China, fairly present the
information called for with respect to such legal matters, documents
and proceedings and fairly summarize the matters referred to therein;
and
(viii) Such counsel is of the opinion that (A) the Directed Share
Program, when instituted and administered in accordance with its
terms, including the distribution of the prospectus and any
preliminary prospectus to Participants and all communications and
dealings by the Company, its officers, directors, employees and
affiliates and any person acting on its or their behalf in connection
with the Directed Share Program, do not and will not contravene the
applicable laws and regulations of the People's Republic of China, (B)
no consent, approval, authorization or order of, or qualification
with, any governmental body or agency in the People's Republic of
China, other than those obtained, is required in connection with the
offering of the Directed Shares pursuant to the Directed Share
Program, and (C) after due inquiry and to the best of such counsel's
knowledge, neither the Company nor any of its officers, directors,
employees or affiliates or any person acting on its or their behalf
has (i) offered or sold, or caused Xxxxxx Xxxxxxx to offer or sell,
Shares to any
15
person who is not qualified to purchase such Shares pursuant to the
Directed Share Program under the laws and regulations of the People's
Republic of China; or (ii) otherwise engaged in any other action in
connection with the Direct Share Program that could reasonably be
construed to be in contravention of the laws or regulations of the
People's Republic of China.
(e) The Underwriters shall have received on the Closing Date an
opinion of Milbank Tweed Hadley & XxXxxx LLP, counsel for the Underwriters,
dated the Closing Date, covering the matters referred to in Sections
5(c)(iv), 5(c)(v), 5(c)(vii) (but only as to the statements in the
Prospectus under the captions "Underwriters" and "Description of Capital
Stock") and 5(c)(x) above.
(f) The Underwriters shall have received on the Closing Date an
opinion of Commerce & Finance Law Office, Chinese counsel for the
Underwriters, dated the Closing Date, covering the matters referred to in
Sections 5(d)(iii), 5(d)(iv), 5(d)(v), 5(d)(vi), 5(d)(vii), and 5(d)(viii)
above.
With respect to Section 5(c)(x) above, Xxxxxxxx Chance Xxxxxx & Xxxxx,
LLP, Haiwen & Partners, Milbank Tweed Hadley & XxXxxx, LLP, and Commerce &
Finance Law Office may state that their opinion and belief are based upon
their participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification, except as specified.
The opinion Xxxxxxxx Chance Xxxxxx & Xxxxx, LLP described in Section
5(c) above and Haiwen & Partners described in Section 5(d) above, shall be
rendered to the Underwriters at the request of the Company and shall so
state therein.
(g) The Underwriters shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to the Underwriters,
from Deloitte Touche Tohmatsu, independent auditors, 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; provided that the letter delivered on the Closing Date
shall use a "cut-off date" not earlier than the date hereof.
(h) The lock-up agreements between you and certain stockholders,
option holders, officers, directors and employees of the Company relating
to sales and certain other dispositions of shares of Common Stock or
options to purchase shares of Common Stock or certain other securities,
delivered to you on or before the date hereof, shall be in full force and
effect on the Closing Date.
16
(i) The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the delivery to you on the
Option Closing Date of such documents as you may reasonably request with
respect to the good standing of the Company, the due authorization and
issuance of the Additional Shares and other matters related to the issuance
of the Additional Shares including, but not limited to, updated comfort
letter and legal opinions, as provided for in Section 5(g), Sections 5(c),
5(d), 5(e) and 5(f), respectively, each dated the Option Closing Date.
(j) The Underwriters shall have received reimbursement of expenses of
counsel to the Underwriters as provided in 6(f), which may be deducted from
the proceeds of the Offering paid on the Closing Date.
(k) No order or notice, oral or written, from any governmental or
regulatory authority of the People's Republic of China has been received by
the Company to the effect that the offering contemplated by this Agreement,
if consummated, will contravene applicable laws or regulations of the
People's Republic of China.
(l) The Nasdaq Stock Market's National Market shall have approved the
Shares for inclusion, subject only to official notice of issuance and
evidence of satisfactory distribution.
6. Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, four signed copies of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and to furnish to you in New York City, without
charge, prior to 10:00 a.m. New York City time on the business day next
succeeding the date of this Agreement and during the period mentioned in
Section 6(c) below, as many copies of the Prospectus and any supplements
and amendments thereto or to the Registration Statement as you may
reasonably request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters
the Prospectus is required
17
by law to be delivered in connection with sales by an Underwriter or
dealer, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the Prospectus
is delivered to a purchaser, not misleading, or if, in the opinion of
counsel for the Underwriters, it is necessary to amend or supplement the
Prospectus to comply with applicable law, forthwith to prepare, file with
the Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the Company) to
which Shares may have been sold by you on behalf of the Underwriters and to
any other dealers upon request, either amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(e) To make generally available to the Company's security holders and
to you as soon as practicable an earning statement covering the twelve-
month period ending [March 31], 2001 that satisfies the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(f) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid
all expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
registration and delivery of the Shares under the Securities Act and all
other fees or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing
costs associated therewith, and the mailing and delivering of copies
thereof to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and delivery
of the Shares to the Underwriters, including any transfer or other taxes
payable thereon, (iii) the cost of printing or producing any Blue Sky or
Legal Investment memorandum in connection with the offer and sale of the
Shares under state securities laws and all fees and expenses in connection
with the qualification of the Shares for offer and sale under state
securities laws as provided in Section 6(d) hereof, including filing fees
and the reasonable fees, disbursements and expenses of counsel for the
Underwriters in connection with such qualification and in connection with
the Blue Sky or Legal Investment memorandum, (iv) all filing fees and the
reasonable fees, disbursements and expenses of counsel to the Underwriters
incurred in connection with the review and qualification of the offering of
the Shares by the National Association of Securities Dealers, Inc., (v) all
fees and expenses in connection with the
18
preparation and filing of the registration statement on Form 8-A relating
to the Common Stock and all costs and expenses incident to listing the
Shares on the Nasdaq National Market, (vi) the cost of printing
certificates representing the Shares, (vii) the costs and charges of any
transfer agent, registrar or depositary, (viii) the costs and expenses of
the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the Shares,
including, without limitation, expenses associated with the production of
road show slides and graphics, fees and expenses of any consultants engaged
in connection with the road show presentations with the prior approval of
the Company, travel and lodging expenses of the representatives and
officers of the Company and any such consultants, the cost of any aircraft
chartered in connection with the road show, and other reasonable fees and
expenses incurred by the Underwriters on behalf of the Company, (ix) all
fees, disbursements and expenses of counsel incurred by the Underwriters in
connection with the Directed Share Program and stamp duties, similar taxes
or duties or other taxes, if any, incurred by the Underwriters in
connection with the Directed Share Program, (x) fees, disbursements and
expenses incurred by counsel to the Underwriters in relation to purchases
of shares by financial or strategic investors in connection with the
Offering, and (xi) all other costs and expenses incident to the performance
of the obligations of the Company hereunder for which provision is not
otherwise made in this Section. It is understood, however, that except as
provided in this Section, Section 7 entitled "Indemnity and Contribution",
and the last paragraph of Section 10 below, the Underwriters will pay all
of their costs and expenses, including fees and disbursements of their
counsel, stock transfer taxes payable on resale of any of the Shares by
them and any advertising expenses connected with any offers they may make.
(g) To place stop transfer orders on any Shares (including Directed
Shares) subject to restrictions on sale, transfer, assignment, pledge or
hypothecation in accordance with lock-up agreements entered into between
each holder of such shares and the Underwriters.
(h) To comply with all applicable securities and other applicable
laws, rules and regulations in each jurisdiction in which the Directed
Shares are offered in connection with the Directed Share Program.
7. Indemnity and Contribution. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any omission
19
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 7(a) or 7(b), such person (the "indemnified party")
shall promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Xxxxxx Xxxxxxx, in the case of parties indemnified
pursuant to Section 7(a), and by the Company, in the case of parties indemnified
pursuant to Section 7(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if
20
