Exhibit 1.1
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XXXXX.XXX INTERNATIONAL, LTD.
(an exempted company limited by shares
under the laws of the Cayman Islands)
- American Depositary Shares
each representing two Ordinary Shares
U.S. UNDERWRITING AGREEMENT
Dated: -, 2003
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TABLE OF CONTENTS
PAGE
SECTION 1. Representations and Warranties..........................................4
(a) Representations and Warranties by the Company...........................4
(b) Representations and Warranties by the Selling Shareholders.............16
(c) Officer's Certificates.................................................19
SECTION 2. Sale and Delivery to the U.S. Underwriters; Closing....................19
(a) Initial U.S. Securities................................................19
(b) Option U.S. Securities.................................................19
(c) Denominations; Registration; Delivery of ADRs..........................20
(d) Time and Date of Deliveries and Payments...............................20
SECTION 3. Covenants of the Company...............................................20
(a) Compliance with Securities Regulations and Commission Requests.........20
(b) Filing of Amendments...................................................21
(c) Delivery of Registration Statements....................................21
(d) Delivery of Prospectuses...............................................21
(e) Continued Compliance with Securities Laws..............................21
(f) Blue Sky Qualifications................................................22
(g) Rule 158...............................................................22
(h) Use of Proceeds........................................................22
(i) Compliance with Rule 463...............................................22
(j) Listing................................................................22
(k) Restriction on Sale of Securities......................................23
(l) Other Documents........................................................23
(m) Reporting Requirements.................................................23
(n) Submission of Documents................................................23
(o) Investment Company Act.................................................23
(p) Stabilization and Manipulation.........................................23
(q) Deposit of Ordinary Shares.............................................23
(r) Annual Reports.........................................................24
(s) Shareholder Reports and Statements.....................................24
(t) Liabilities and Agreements Prior to the Closing Time...................24
(u) Cayman Islands Matters.................................................24
(v) Deposit Agreement......................................................24
(w) Regulation S...........................................................24
SECTION 4. Payment of Expenses....................................................24
(a) Expenses...............................................................24
(b) Expenses of the Selling Shareholders...................................25
(c) Termination of Agreement...............................................25
SECTION 5. Conditions of the U.S. Underwriters' Obligations.......................25
(a) Effectiveness of Registration Statement................................25
(b) Opinion of Cayman Islands Counsel for Company..........................26
(c) Opinion of United States Counsel for Company...........................26
(d) Opinion of Special PRC Counsel for Company.............................26
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(e) Opinion of Special Hong Kong Counsel for Company.......................26
(f) Opinion of Counsels for certain Selling Shareholders...................26
(g) Opinion of United States Counsel for Underwriters......................26
(h) Opinion of Special PRC Counsel for Underwriters........................
(i) Opinion of Counsel for Depositary......................................27
(j) Officers' Certificate..................................................27
(k) Certificate of the Chairman............................................27
(l) Certificate of Selling Shareholders....................................27
(m) Accountant's Comfort Letter............................................27
(n) Bring-down Comfort Letter..............................................28
(o) Approval of Listing....................................................28
(p) No Objection by NASD...................................................28
(q) Lock-up Agreement......................................................28
(r) Purchase of Initial International Securities...........................28
(s) Conditions to Purchase of Option U.S. Securities.......................28
(t) Additional Documents...................................................30
(u) Termination of Agreement...............................................30
SECTION 6. Indemnification........................................................30
(a) Indemnification of the U.S. Underwriters...............................30
(b) Indemnification of the Company, Directors and Officers and Selling
Shareholders...........................................................31
(c) Actions against Parties; Notification..................................32
(d) Settlement without Consent if Failure to Reimburse.....................32
SECTION 7. Contribution...........................................................33
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.........34
SECTION 9. Termination of Agreement...............................................34
(a) Termination; General...................................................34
(b) Liabilities............................................................35
SECTION 10. Default by One or More of the Underwriters.............................35
SECTION 11. Default by one or more of the Selling Shareholders or the Company......36
(a) Default by Selling Shareholders........................................36
(b) Default by Company.....................................................36
SECTION 12. Waiver of Immunities...................................................36
SECTION 13. Consent to Jurisdiction; Appointment of Agent for Service of Process...37
(a) Consent to Jurisdiction................................................37
(b) Appointment of Agent for Service of Process............................37
SECTION 14. Judgment Currency......................................................38
SECTION 15. Notices................................................................38
SECTION 16. Parties................................................................38
SECTION 17. Governing Law and Time.................................................39
SECTION 18. Effect of Headings.....................................................39
SECTION 19. Counterparts...........................................................39
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SCHEDULES
Schedule A List of U.S. Underwriters ........................................Sch A-1
Schedule B List of Company and Selling Shareholders..........................Sch B-1
Schedule C Offering Price....................................................Sch C-1
Schedule D List of Persons and Entities Subject to Lock-up...................Sch D-1
Schedule E List of Selling Shareholders that Provide an Opinion of Counsel...Sch E-1
Schedule F Notice Addresses of Selling Shareholders..........................Sch F-1
EXHIBITS
Exhibit A Form of Opinion of Company's Cayman Islands Counsel to be
Delivered Pursuant to Section 5(b)....................................A-1
Exhibit B Form of Opinion of Company's U.S. Counsel to be Delivered
Pursuant to Section 5(c)..............................................B-1
Exhibit C Form of Opinion of Company's People's Republic of China
Counsel to be Delivered Pursuant to Section 5(d)......................C-1
Exhibit D Form of Opinion of Company's Hong Kong Counsel to be
Delivered Pursuant to Section 5(e)....................................D-1
Exhibit E Form of Opinions of Counsels to Institutional Selling Shareholders
to be delivered Pursuant to Section 5(f)..............................E-1
Exhibit F Form of Opinion of U.S. counsel to the Depositary to be
Delivered Pursuant to Section 5(i)....................................F-1
Exhibit G Form of Lock-up Letter Pursuant to Section 5(q).......................G-1
ANNEX A
Form of Accountants' Comfort Letter Pursuant to Section 5(m).................Annex A-1
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XXXXX.XXX INTERNATIONAL, LTD.
(an exempted company limited by shares
under the laws of the Cayman Islands)
- American Depositary Shares
each representing two Ordinary Shares
U.S. UNDERWRITING AGREEMENT
---------------------------
-, 2003
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
as U.S. Representative of the several U.S. Underwriters
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Xxxxx.xxx International, Ltd., an exempted company limited by shares under
the laws of the Cayman Islands (the "Company"), and the persons listed in
Schedule B hereto (the "Selling Shareholders") confirm their respective
agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx") and each of the other underwriters named in
Schedule A hereto (collectively, the "U.S. Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof) for whom Xxxxxxx Xxxxx is acting as representative (in such capacity,
the "U.S. Representative"), with respect to the issue and sale by the Company
and the sale by the Selling Shareholders, and the purchase by the U.S.
Underwriters, acting severally and not jointly, of the respective numbers of
American Depositary Shares ("ADSs"), each ADS representing two ordinary shares,
par value $0.01 per share, of the Company ("Ordinary Shares"), set forth in
Schedules A and B hereto, and with respect to the grant by the Selling
Shareholders to the U.S. Underwriters, acting severally and not jointly, of the
option described in Section 2(b) hereof for the U.S. Underwriters to purchase
all or any part of - additional ADSs, to cover over-allotments, if any. The
aforesaid - ADSs (the "Initial U.S. Securities") to be purchased by the U.S.
Underwriters and all or any part of the - ADSs subject to the option described
in Section 2(b) hereof (the "Option U.S. Securities") are hereinafter called,
collectively, the "U.S. Securities". The offer of the U.S. Securities by the
U.S. Underwriters is hereinafter called the "U.S. Offering".
The Ordinary Shares to be represented by ADSs are to be deposited pursuant
to a deposit agreement (the "Deposit Agreement"), among the Company, The Bank of
New York, as depositary (the "Depositary"), and the holders from time to time of
the American Depositary Receipts ("ADRs") to be issued under the Deposit
Agreement and evidencing the ADSs.
It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "International Purchase Agreement")
providing for the offering pursuant to Regulation S under the Securities Act of
1933, as amended (the "1933 Act"), by the Company
and the Selling Shareholders of an aggregate of - ADSs, (the "Initial
International Securities") through arrangements with certain underwriters
outside the United States and Canada (the "International Underwriters") for whom
Xxxxxxx Xxxxx Far East Limited is acting as representative (the "International
Representative") and the grant by the Selling Shareholders to the International
Underwriters, acting severally and not jointly, of an option to purchase all or
any part of the International Underwriters' pro rata portion of up to -
additional ADSs, to cover over-allotments, if any (the "Option International
Securities" and together with the Option U.S. Securities, the "Option
Securities"). It is understood that the aggregate Option Securities shall not
exceed - ADSs. The Initial International Securities and the Option International
Securities are hereinafter called the "International Securities". It is
understood that the Company and the Selling Shareholders are not obligated to
sell, and the U.S. Underwriters are not obligated to purchase, any Initial
Securities unless all of the International Securities are contemporaneously
purchased by the International Underwriters.
The U.S. Underwriters and the International Underwriters are hereinafter
collectively called the "Underwriters"; the Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities"; and the U.S. Securities and the International Securities
are hereinafter collectively called the "Securities". The U.S. Offering and the
International Offering are hereinafter collectively called the "Offerings". This
Agreement (sometimes referred to herein as the "U.S. Underwriting Agreement" in
this Agreement) and the International Purchase Agreement are hereinafter
collectively called the "Purchase Agreements". Unless the context otherwise
requires, references to the "Securities" herein shall constitute references both
to the Ordinary Shares and to the ADSs (and to the Ordinary Shares represented
by such ADSs). All references to "US dollars" or "$" herein are to United States
dollars.
The Underwriters will concurrently enter into an agreement among syndicates
of even date herewith (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters under the direction
of Xxxxxxx Xxxxx (in such capacity, the "Global Coordinator").
The Company understands that the U.S. Underwriters propose to make a public
offering of the U.S. Securities as soon as the U.S. Representative deems
advisable after this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form F-1 (No. 333-110455) covering the
registration of the U.S. Securities under the 1933 Act, including the related
preliminary U.S. prospectus. Such registration statement also relates to the
International Securities that are being registered solely for the purpose of
their re-sale in the United States in such transactions as require registration
under the 1933 Act. Promptly after execution and delivery of this Agreement, the
Company will either (i) prepare and file a U.S. prospectus in accordance with
the provisions of Rule 430A ("Rule 430A") of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") and paragraph (b) of
Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the Company has
elected to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare
and file a term sheet (a "Term Sheet") in accordance with the provisions of Rule
434 and Rule 424(b). Two forms of prospectus are to be used in connection
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with the offering and sale of the Securities: one relating to the U.S.
Securities (the "Form of U.S. Prospectus") and one relating to the offering and
sale of the International Securities (the "Form of International Prospectus").
The Form of U.S. Prospectus may also be used in connection with re-sales of
International Securities in the United States to the extent that any such
transactions would not otherwise be exempt from registration under the 1933 Act.
The Form of International Prospectus is identical to the Form of U.S.
Prospectus, except for the front cover and back cover pages. The information
included in the Form of U.S. Prospectus or in any such Term Sheet, as the case
may be, that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective (A) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (B) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information". Each Form of U.S. Prospectus used before
such registration statement became effective, and any prospectus that omitted,
as applicable, the Rule 430A Information or the Rule 434 Information, that was
used after such effectiveness and prior to the execution and delivery of this
Agreement and each Form of International Prospectus used prior to the execution
and delivery of this Agreement is called a "preliminary prospectus". Such
registration statement, including the exhibits thereto and schedules thereto, if
any, at the time it became effective and including the Rule 430A Information and
the Rule 434 Information, as applicable, is herein called the "Registration
Statement". Any registration statement filed pursuant to Rule 462(b) of the 1933
Act Regulations is herein referred to as the "Rule 462(b) Registration
Statement", and after such filing the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. The final Form of U.S.
Prospectus and the final Form of International Prospectus, in the forms first
furnished to the Underwriters for use in connection with the Offerings are
herein called the "U.S. Prospectus" and the "International Prospectus",
respectively. The U.S. Prospectus and the International Prospectus are referred
to collectively as the "Prospectuses". If Rule 434 is relied on, the term "U.S.
Prospectus" shall refer to the preliminary U.S. Prospectus dated November 25,
2003 together with the Term Sheet and all references in this Agreement to the
date of such Prospectus shall mean the date of the Term Sheet.
The Company and the Depositary have prepared and filed with the Commission
a registration statement on Form F-6 (No. 333-110459) and a related prospectus,
which may be in the form of the ADR certificate, for the registration under the
1933 Act of the ADSs evidenced by ADRs, have filed such amendments thereto and
such amended preliminary prospectuses as may have been required to the date
hereof, and will file such additional amendments thereto and such amended
prospectuses as may hereafter be required. The registration statement on Form
F-6 for the registration of the ADSs evidenced by ADRs, as amended at the time
it becomes effective (including by the filing of any post-effective amendments
thereto), and the prospectus included therein, as then amended, are hereinafter
called the "ADR Registration Statement" and the "ADR Prospectus", respectively.
The Company has prepared and filed with the Commission a registration
statement on Form 8-A (No. 000-50483) for the registration under the United
States Securities and Exchange Act of 1934, as amended (the "1934 Act"), of the
Ordinary Shares and the ADSs. The various parts of such registration statement
on Form 8-A for the registration of the Ordinary Shares and ADSs, including all
exhibits thereto, each as amended at the time such part of the registration
statement became effective, are hereinafter called the "Form 8-A Registration
Statement."
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SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to each U.S. Underwriter as of the date hereof, as of the Closing
Time referred to in Section 2(d) hereof, and as of each Time of Delivery (if
any) referred to in Section 2(d) hereof, and agrees with each U.S. Underwriter,
as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement, any Rule 462(b) Registration Statement, the ADR
Registration Statement and the Form 8-A Registration Statement has become
effective under the 1933 Act or 1934 Act, as applicable, and no stop order
suspending the effectiveness of the Registration Statement, any Rule 462(b)
Registration Statement, the ADR Registration Statement or the Form 8-A
Registration Statement has been issued under the 1933 Act or 1934 Act, as
applicable, and no proceedings for that purpose have been instituted or are
pending or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for additional
information received by the Company has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any Option U.S. Securities are
purchased, at the relevant Time of Delivery), the Registration Statement,
the Rule 462(b) Registration Statement and any amendments and supplements
thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and did not 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 not misleading. Neither the Prospectuses nor any
amendments or supplements thereto at the time the Prospectuses or any
amendments or supplements thereto were issued and at the Closing Time (and,
if any Option U.S. Securities are purchased, at the relevant Time of
Delivery), included or will include an untrue statement of a material fact
or omitted or will omit to state a material fact necessary in order to make
the statements therein not misleading. If Rule 434 is used, the Company
will comply with the requirements of Rule 434 and the U.S. Prospectus shall
not be "materially different", as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time it became
effective. The representations and warranties in this subsection shall not
apply to statements in or omissions from the Registration Statement or the
U.S. Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any U.S. Underwriter through the
U.S. Representative, or by any International Underwriter through the
International Representative, expressly for use in the Registration
Statement or the Prospectuses (or any amendments or supplements thereto).
Each preliminary U.S. prospectus and the U.S. prospectus filed as part
of the Registration Statement or as part of any amendment thereto, or filed
pursuant to Rule 424 under the 1933 Act, complied when such registration
statement became effective in all material respects with the 1933 Act and
the 1933 Act Regulations and each preliminary prospectus and the
Prospectuses delivered to the Underwriters for use in connection with the
U.S. Offering was identical to the electronically transmitted copies
thereof filed with
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the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
At the time the ADR Registration Statement became effective and at the
Closing Time (and, if any Option U.S. Securities are purchased, at the
relevant Time of Delivery), the ADR Registration Statement complied and
will comply in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations and did not 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 not
misleading. The ADR Prospectus, at the time the ADR Prospectus or any
amendment or supplement thereto was issued and at the Closing Time (and, if
any Option U.S. Securities are purchased, at the relevant Time of
Delivery), did not and will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
At the time the Form 8-A Registration Statement became effective and
at the Closing Time (and, if any Option U.S. Securities are purchased, at
the relevant Time of Delivery), the Form 8-A Registration Statement
complied and will comply in all material respects with the requirements of
the 1934 Act and the rules and regulations of the Commission under the 1934
Act (the "1934 Act Regulations") and did not 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 not
misleading.
Notwithstanding the foregoing, this representation and warranty shall
not apply to statements in or omissions from the Registration Statement,
any Rule 462(b) Registration Statement, the ADR Registration Statement or
the Form 8-A Registration Statement made in reliance upon and in conformity
with information furnished to the Company in writing by any U.S.
Underwriter through the U.S. Representative expressly for use in any such
Registration Statement.
(ii) Independent Accountants. PricewaterhouseCoopers, who certified
the financial statements and supporting schedules included in the
Registration Statement, are independent public accountants as required by
the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statements. The financial statements included in the
Registration Statement and the Prospectuses, together with the related
schedules and notes, present fairly in all material respects the financial
position of the Company and its consolidated Subsidiaries (as defined in
Section 1(a)(vi) below) at the dates indicated and the statement of
operations, shareholders' equity and cash flows of the Company and its
consolidated Subsidiaries for the periods specified; said financial
statements have been prepared in conformity with accounting principals
generally accepted in the United States ("US GAAP") applied on a consistent
basis throughout the periods involved. The supporting schedules, if any,
included in the Registration Statement present fairly in all material
respects in accordance with US GAAP the information required to be stated
therein. The selected financial data and the summary financial information
included in the Prospectuses present fairly in all material respects the
information shown therein and have been compiled on a basis consistent with
that of the audited financial statements
5
included in the Registration Statement. The pro forma financial statements
and the related notes thereto included in the Registration Statement and
the Prospectuses present fairly in all material respects the information
shown therein, have been prepared in accordance with the Commission's rules
and guidelines with respect to pro forma financial statements and have been
properly compiled on the bases described therein, and the assumptions used
in the preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and circumstances
referred to therein.
(iv) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectuses, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and the
Subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a "Material Adverse Effect"), (B) there have
been no transactions entered into by the Company or any of the
Subsidiaries, other than those in the ordinary course of business, that are
material with respect to the Company and the Subsidiaries considered as one
enterprise, and (C) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(v) Organization of the Company. The Company has been duly organized
and is validly existing under the laws of the Cayman Islands, and has the
legal right, power and authority (corporate and other) to own, lease and
operate its properties and to conduct its business as described in the
Prospectuses and to enter into and perform its obligations under the
Purchase Agreements and the Deposit Agreement (together, the "Principal
Agreements"), and is duly qualified to transact business in any
jurisdiction in which it owns or leases any properties or conducts any
business except where the failure to so qualify would not result in a
Material Adverse Effect. The Memorandum of Association and Articles of
Association of the Company (the "Articles of Association") comply with the
requirements of Cayman Islands law and are in full force and effect.
(vi) Organization of Subsidiaries. Each of Xxxxx.xxx (Hong Kong)
Limited ("Xxxxx.xxx Hong Kong"), Ctrip Computer Technology (Shanghai) Co.,
Ltd. ("Ctrip Computer Technology") and Ctrip Travel Information Technology
(Shanghai) Co., Ltd. ("Ctrip Travel Information"), which constitute all
subsidiaries of the Company within the meaning of Rule 1-02 of Regulation
S-X under the 1933 Act (together with the VIEs (as defined below in Section
1(a)(vii)), the "Subsidiaries") has been duly organized and is validly
existing under the laws of the jurisdiction of its incorporation or
formation, and has legal right, power and authority to own, lease and
operate its properties, if any, and to conduct its business as described in
the Prospectuses and is duly qualified to transact business in any
jurisdiction in which it owns or leases any properties or conducts any
business except where the failure to so qualify would not result in a
Material Adverse Effect; except as otherwise disclosed in the Registration
Statement, all of the issued and outstanding capital stock or equity
interest of each such Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company
(except for the VIEs), directly or through Subsidiaries, free and clear of
any
6
security interest, mortgage, pledge, lien, encumbrance, claim or equity;
and none of the outstanding shares of capital stock or equity interest of
any Subsidiary was issued in violation of the preemptive or similar rights
of any securityholder of such Subsidiary.
(vii) Organization of VIEs. Except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock or
equity interest of each of Shanghai Ctrip Commerce Co., Ltd., Shanghai
Huacheng Southwest Travel Agency Co., Ltd., Beijing Chenhao Xinye
Air-Ticketing Co., Ltd., Guangzhou Guangcheng Commercial Service Co., Ltd.
and Shanghai Cuiming Internation Travel Agency Co., Ltd. (the "VIEs")
(which constitute all entities, excluding Subsidiaries, that are
consolidated in the Company's financial statements included in the
Registration Statement and the Prospectuses) has been duly authorized and
validly issued, and is owned by Xxx Xxx, Qi Ji or Xxxx Xxxxxx Zheng, as the
case may be, in the amount set forth in the "Related Party Transactions"
section of the Prospectuses, directly, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity other than
as set forth in the Prospectuses.
(viii) Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectuses in the column
entitled "Actual" under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to the Purchase Agreements or pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectuses and except for the conversion of all of the Company's
preferred shares immediately prior to the Closing Time). The shares of
issued and outstanding capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable the
holders of outstanding shares of the Company have irrecovably waived any
entitlement to pre-emptive or other rights to acquire the Ordinary Shares
in connection with the Offerings; none of the outstanding shares of capital
stock of the Company was issued in violation of the preemptive or other
similar rights of any securityholder of the Company. Except as otherwise
disclosed in the Prospectuses, there are no outstanding securities
convertible into or exchangeable for, or warrants or rights to purchase
from the Company Ordinary Shares or any other shares of capital stock of
the Company or any of the Subsidiaries nor are there any obligations of the
Company to allot, issue or transfer, the Securities; the Initial U.S.
Securities and the Initial International Securities are freely transferable
by the Company to or for the account of the Underwriters and the Global
Coordinator and (to the extent described in the Prospectuses) the initial
purchasers thereof; and there are no restrictions on subsequent transfers
of the Securities under the laws of the Cayman Islands or the United
States.
(ix) Authorization of Purchase Agreements. Each of the Purchase
Agreements has been duly authorized, executed and delivered by the Company.
(x) Authorization of Deposit Agreement. The Deposit Agreement has been
duly authorized, executed and delivered by the Company and, assuming due
authorization, execution and delivery by the Depositary, constitutes a
valid and legally binding obligation of the Company, enforceable in
accordance with its terms, subject as to enforcement to bankruptcy,
insolvency, reorganization and other laws of general
7
applicability relating to or affecting creditors' rights generally and to
general equity principles.
(xi) Authorization of Structuring Documents. Each of the Structuring
Documents (as defined below in Section 1(a)(xx)) has been duly authorized,
executed and delivered by the Company, the Subsidiaries, Qi Ji, Xxx Xxx or
Xxxx Xxxxxx Zheng, as the case may be, and, assuming due authorization,
execution and delivery by any other party thereto, constitutes a valid and
legally binding obligation of the Company, the Subsidiaries, Qi Ji, Xxx Xxx
or Xxxx Xxxxxx Zheng, as the case may be, enforceable in accordance with
its terms, subject as to enforcement to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights generally and to general equity principles.
(xii) Validity of ADRs. Upon the due issuance by the Depositary of
ADRs evidencing the ADSs against the deposit of the Ordinary Shares in
accordance with the provisions of the Deposit Agreement, such ADRs will be
duly and validly issued under the Deposit Agreement and persons in whose
names such ADRs are registered will be entitled to the rights of registered
holders of ADRs evidencing the ADSs specified therein and in the Deposit
Agreement.
(xiii) Validity of Preferred Shares. All the outstanding shares of
Series A Preferred Shares, Series B Preferred Shares and Series C Preferred
Shares of the Company (collectively, the "Preferred Shares") have been duly
authorized and validly issued and are fully paid and non-assessable and
conform to the descriptions thereof contained in the Prospectuses in all
material respects; all the Ordinary Shares issuable upon the mandatory
conversion of the Preferred Share as described in the Prospectuses have
been duly authorized; and, prior to or concurrently with the Closing, all
the Preferred Shares will be converted into Ordinary Shares of the Company
and all such Ordinary Shares will be validly issued and fully paid and
nonassessable.
(xiv) No Limitation on Vote, Transfer and Payment of Dividends. Except
as set forth in the Amended and Restated Articles of Association of the
Company (the "Articles of Association"), the Deposit Agreement or the
Prospectuses, there are no limitations on the rights of holders of Ordinary
Shares, ADSs or ADRs evidencing the ADSs to hold or vote or transfer their
respective securities, and no approvals are currently required in the
Cayman Islands in order for the Company to pay dividends declared by the
Company to the holders of Ordinary Shares, including the Depositary and,
except as disclosed in the Prospectuses, no such dividends or other
distributions will be subject to withholding or other taxes under the laws
and regulations of the Cayman Islands and may be so paid without the
necessity of obtaining any Governmental License (as defined in Section
1(a)(xxvi)) in the Cayman Islands.
(xv) Authorization and Description of Securities. The Securities to be
purchased by the U.S. Underwriters and the International Underwriters from
the Company have been duly authorized for issuance and sale to the U.S.
Underwriters pursuant to this Agreement and to the International
Underwriters pursuant to the International Purchase Agreement,
respectively, and, when issued and paid for in
8
accordance with this Agreement and the International Purchase Agreement, as
the case may be, and, in the case of the ADSs, the Deposit Agreement, will
be validly issued, fully paid and non-assessable and will be issued free
and clear of all liens, encumbrances, equities or claims; the Ordinary
Shares, the ADRs and the ADSs shall carry the rights and obligations
described in the Prospectuses, including statements under the captions
"Description of Share Capital" and "Description of American Depositary
Shares" and such descriptions conform in all material respects to the
rights set forth in the instruments defining the same; except as disclosed
in the Prospectuses or the Registration Statement, no holder of the
Securities is or will be subject to personal liability by reason of being
such a holder; and the issuance of the Securities is not subject to the
preemptive or other similar rights of any securityholder of the Company.
(xvi) Arrangements with Directors, Executive Officers and Affiliates.
Except as disclosed in the Prospectuses, no material indebtedness (actual
or contingent) and no material contract or arrangement is outstanding
between the Company and any director or executive officer of the Company or
any person connected with such director or executive officer (including
his/her spouse, infant children, any company or undertaking in which he/she
holds a controlling interest). There are no relationships or transactions
between the Company on the one hand and its affiliates, officers and
directors or their shareholders, customers or suppliers on the other hand
which, although required to be disclosed, are not disclosed in the
Prospectuses.
(xvii) PRC Citizenship. Each of Messrs. Qi Ji, Xxx Xxx and Xxxx Xxxxxx
Xxxxx is a citizen of the People's Republic of China, excluding Taiwan,
Hong Kong SAR and Macau SAR, and no application is pending in any other
jurisdiction by him or on his behalf for naturalization or citizenship
thereof.
(xviii) Absence of Labor Dispute. No labor dispute with the employees
of the Company or any Subsidiary exists or, to the knowledge of the
Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any
Subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, may reasonably be expected to result in a Material
Adverse Effect.
(xix) Absence of Further Requirements for the Offering. No filing
with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
or any stock exchange authority is necessary or required for the
performance by the Company or any of the Subsidiaries of its or their
obligations under any of the Principal Agreements in connection with the
offering, issuance or sale of the Securities under the Principal Agreements
or the consummation of the transactions contemplated by any of the
Principal Agreements, except such as have been already filed, obtained or
as may be required under the 1933 Act or the 0000 Xxx Xxxxxxxxxxx xxx
Xxxxxx Xxxxxx federal and state, local or other securities or blue sky
laws.
(xx) Absence of Further Requirements for the Structuring. All
consents, approvals, authorizations, orders, registrations and
qualifications required (i) for the
9
operations of any of the VIEs, and (ii) in connection with the spin off of
Home Inns & Hotels Management (Hong Kong) Limited ("Home Inns") and the
distribution of all ordinary shares of Home Inns then held by the Company
to the Company's then-existing shareholders (all transactions contemplated
in (i) and (ii) above are hereinafter referred to as the "Structuring") and
the execution, delivery and performance of the documents in connection
therewith (the "Structuring Documents") have been made or unconditionally
obtained in writing and no such consent, approval, authorization, order,
registration or qualification has been withdrawn or is subject to any
condition precedent which has not been fulfilled or performed.
(xxi) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any
Subsidiary, or challenging the effectiveness of the Structuring, that is
required to be disclosed in the Registration Statement (other than as
disclosed therein), or that might reasonably be expected to result in a
Material Adverse Effect, or that might reasonably be expected to materially
and adversely affect the properties or assets thereof or the consummation
of the transactions contemplated in this Agreement, the International
Purchase Agreement, the Deposit Agreement and the Structuring Documents or
the performance by the Company of its obligations hereunder or thereunder;
the aggregate of all pending legal or governmental proceedings to which the
Company or any Subsidiary is a party or of which any of their respective
property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental to
the business, could not reasonably be expected to result in a Material
Adverse Effect.
(xxii) Absence of Defaults and Conflicts. Neither the Company nor any
of the Subsidiaries is in violation of its respective charter of by-laws or
other constituent or organizational documents or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which the Company or any of the Subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or assets of
the Company or any Subsidiary is subject (collectively, "Agreements and
Instruments") except for such defaults that would not result in a Material
Adverse Effect; and the execution, delivery and performance of each of the
Principal Agreements and the Structuring Documents and the consummation of
the transactions contemplated in each of the Principal Agreements, the
Registration Statement (including the issuance and sale of the Securities
and the use of the proceeds from the sale of the Securities as described in
the Prospectuses under the caption "Use of Proceeds") and the Structuring
Documents, and compliance by the Company or any Subsidiary with its or
their obligations under each of the Principal Agreements and the
Structuring Documents have been duly authorized by all necessary corporate
action and received all approvals from any governmental or regulatory body
and the sanction or consent of its shareholders and do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of
10
the Company or any Subsidiary pursuant to, the Agreements and Instruments
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not result in a Material Adverse Effect), nor will
such action result in any violation of the provisions of the charter or
by-laws or other constituent or organizational documents or business
license or other organizational document of the Company or any Subsidiary
or any applicable treaty, law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any Subsidiary
or any of their assets, properties or operations. As used herein, a
"Repayment Event" means any event or condition that gives the holder of any
note, debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any
Subsidiary.
(xxiii) Accuracy of Exhibits. There are no contracts or documents that
are required to be described in the Registration Statement or the
Prospectuses or to be filed as exhibits thereto that have not been so
described and filed as required.
(xxiv) Possession of Intellectual Property. The Company and the
Subsidiaries own or possess or otherwise have the legal right to use, or
can acquire on reasonable terms, adequate licenses, copyrights, know-how
(including trade secrets and other proprietary or confidential information,
systems or procedures), trademarks, service marks, trade names (including
the "Ctrip" and "Xxxxx.xxx" names and logos) or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and neither the Company nor any of the Subsidiaries
has received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property which infringement or conflict (if the subject of an unfavorable
decision, ruling or finding) would result in a Material Adverse Effect or
of any facts or circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of the Company or any of the
Subsidiaries therein.
(xxv) Dividends. The Subsidiaries are not currently prohibited,
directly or indirectly, from paying any dividends or other distributions to
the Company or Xxxxx.xxx Hong Kong, as applicable, from making any other
distribution on the Subsidiaries' equity interest, or from transferring any
of the Subsidiaries' property or assets to the Company or Xxxxx.xxx Hong
Kong, as applicable, except as described in or contemplated by the
Prospectuses; all dividends and other distributions declared and payable
upon the equity interests in Ctrip Computer Technology and Ctrip Travel
Information to Xxxxx.xxx Hong Kong may be converted into foreign currency
that may be freely transferred out of the PRC, and all such dividends and
other distributions are not and, except as disclosed in the Registration
Statements and the Prospectuses, will not be subject to withholding or
other taxes under the current laws and regulations of the People's Republic
of China (the "PRC") and, except as disclosed in the Registration
Statements and the Prospectuses, are otherwise free and clear of any other
tax, withholding or deduction in the PRC, in each case without the
necessity of obtaining any governmental or regulatory authorization in the
PRC, except such as have been obtained;
11
(xxvi) Possession of Licenses and Permits. The Company and the
Subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by, and have
made all declarations and filings with, the appropriate national, local or
other regulatory agencies or bodies required for the authorization,
execution and delivery by the Company or the relevant Subsidiary, as the
case may be, of any of the Principal Agreements or Structuring Documents or
necessary to conduct the business now operated by them, with such
exceptions as would not have a Material Adverse Effect; the Company and the
Subsidiaries are in compliance in all material respects with the terms and
conditions of all such Governmental Licenses; all of the Governmental
Licenses are valid and in full force and effect; none of the Governmental
Licenses contains any materially burdensome restrictions or conditions not
described in the Prospectuses; and neither the Company nor any of the
Subsidiaries has received any notice of proceedings relating to the
revocation or modification (and which modification would reasonably be
expected to have a Material Adverse Effect) of any such Governmental
Licenses or has any reason to believe that any such Governmental License
will be revoked, modified (and which modification would reasonably be
expected to have a Material Adverse Effect) or suspended.
(xxvii) Title to Property. The Company and the Subsidiaries have good
and marketable title to all real property owned by the Company and the
Subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectuses or (b) do not, singly or in the aggregate,
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 or any of
the Subsidiaries; and all of the leases and subleases material to the
business of the Company and the Subsidiaries, considered as one enterprise,
and under which the Company or any of the Subsidiaries holds properties
described in the Prospectuses, are in full force and effect, and neither
the Company nor any Subsidiary has any notice of any material claim of any
sort that has been asserted by anyone adverse to the rights of the Company
or any Subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such Subsidiary to
the continued possession of the leased or subleased premises under any such
lease or sublease.
(xxviii) Compliance with Cuba Act. The Company has complied with, and
is and will be in compliance with, the provisions of that certain Florida
act relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(xxix) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectuses
will not be, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
(xxx) PFIC Status. Based on the projected composition of the Company's
income and valuation of its assets, including goodwill, the Company does
not expect to be a passive foreign investment company, as defined in
Section 1296(a) of the United
12
States Internal Revenue Code of 1986, as amended (the "Code"), in 2003 and
does not expect to become a passive foreign investment company in the
future.
(xxxi) Registration Rights. Except as described in the Prospectuses,
there are no persons with registration rights or other similar rights to
have any securities registered pursuant to the Registration Statement or
otherwise registered by the Company under the 1933 Act.
(xxxii) Tax Returns. The Company and the Subsidiaries have filed all
material tax returns required to have been filed by them or have duly
requested extensions thereof and all such returns are up to date, correct,
and on a proper basis and have paid all material taxes required to be paid
by them and any related assessments, charges, levies, fines or penalties,
except for any such taxes, assessments, charges, levies, fines or penalties
that are being contested in good faith and by appropriate proceedings; and
there is no known proposed tax deficiency, assessment, charge, levy, fine
or penalty against it as to which a reserve would be required to be
established under US GAAP which has not been so reserved or which is
required to be disclosed in the Prospectuses which has not been so
disclosed and so far as the Company is aware, there are no facts or
circumstances in existence which would reasonably be expected to give rise
to any such deficiency, assessment, charge, levy, fine or penalty.
(xxxiii) Accounting Procedures. Each of the Company and the
Subsidiaries (A) makes, keeps and prepares books, records and accounts
which fairly reflect transactions and dispositions of its assets and (B)
has devised and maintained a system of internal and accounting controls
which 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
financial statements in conformity with U.S. GAAP and to maintain asset
accountability; (iii) accountability of assets is maintained, including
regular reconciliations with existing assets and taking of appropriate
action with respect to any differences; (iv) access to its assets is
permitted only in accordance with management's general or specific
authorizations; and (v) financial reports are prepared on a timely basis
based on the transactions recorded pursuant to clause (ii) above under US
GAAP. These reports provide the basis for the preparation of the Company's
consolidated financial statements under US GAAP and have been maintained in
compliance with applicable laws.
(xxxiv) MD&A Description. The section entitled "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
in the Prospectuses accurately and fully describes (A) accounting policies
that the Company believes are the most important in the portrayal of the
Company's financial condition and results of operations and that require
management's most difficult, subjective or complex judgments ("critical
accounting policies"); (B) judgments and uncertainties affecting the
application of critical accounting policies; and (C) the likelihood that
materially different amounts would be reported under different conditions
or using different assumptions and an explanation thereof.
13
(xxxv) Management Review. The Company's management have reviewed and
agreed with the selection, application and disclosure of critical
accounting policies and have consulted with its legal advisers and
independent accountants with regards to such disclosure.
(xxxvi) Liquidity and Capital Resources. The section entitled
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources" in the Prospectuses accurately
and fully describes: (A) all material trends, demands, commitments, events,
uncertainties and risks, and the potential effects thereof, that the
Company believes would materially affect liquidity and are reasonably
likely to occur, and (B) neither the Company nor any Subsidiary is engaged
in any transactions with, or have any obligations to, its unconsolidated
entities (if any) that are contractually limited to narrow activities that
facilitate the transfer of or access to assets by the Company or such
Subsidiary, including, without limitation, structured finance entities and
special purpose entities, or otherwise engage in, or have any obligations
under, any off-balance sheet transactions or arrangements. As used herein
in this Section 1(a)(xxxvii), the phrase "reasonably likely" refers to a
disclosure threshold lower than "more likely than not."
(xxxvii) Certain Trading Activities. Except as set forth in the
Prospectus, the Company is not engaged in any trading activities involving
commodity contracts or other trading contracts that are not currently
traded on a securities or commodities exchange and for which the market
value cannot be determined.
(xxxviii) Stamp Duty; Transfer Tax. Except as disclosed in the
Prospectuses, under the laws and regulations of the Cayman Islands, no
transaction, stamp, capital or other issuance, registration or transfer
taxes or duties are payable in the Cayman Islands by or on behalf of the
U.S. Underwriters to any Cayman Islands taxing authority in connection with
(A) the issuance, sale and delivery by the Company to or for the account of
the U.S. Underwriters of the Securities or (B) the initial sale and
delivery by the U.S. Underwriters of the Securities to purchasers thereof,
(C) the holding or transfer of the Securities outside the Cayman Islands,
(D) the deposit of the Ordinary Shares with the Custodian and the issuance
and delivery of the ADRs, or (E) the execution and delivery of any
Principal Agreement.
(xxxix) Accuracy of Information. There are no legal or governmental
proceedings, statutes, contracts or documents that are required to be
described in the Registration Statement or the Prospectuses which have not
been so described. The description in the Registration Statement and the
Prospectuses of statutes, legal and governmental proceedings and contracts
and other documents is accurate and presents the information required to be
shown in all material respects. The Prospectuses will contain, when issued,
all information and particulars required to comply with all statutory and
other provisions (including, without limitation, the relevant laws and
regulations of Cayman Islands and the PRC) so far as applicable in each
relevant Prospectus, which is or might reasonably be considered to be
material for disclosure to a potential subscriber, investor, underwriter or
sub-underwriter of the Securities or for the purpose of making an informed
assessment of the assets and liabilities, financial position, and profits
and losses of the Company and
14
the Subsidiaries including, but without prejudice to the generality of the
foregoing, any special trade factors or risks known to the Company and the
Subsidiaries or any of their directors and/or executive officers and which
would reasonably be expected to have a Material Adverse Effect. All
material information which ought to have been supplied or disclosed by the
Company and its directors and/or executive officers to the Underwriters,
the Global Coordinator, PricewaterhouseCoopers or the legal or other
professional advisers to the Underwriters or the Company for the purposes
of or in the course of preparation of the Prospectuses or the Registration
Statement has been supplied or disclosed by the Company and its directors
and executive officers and nothing has occurred since the date the same was
supplied or disclosed which requires the same to be amended or updated in
any material respect.
(xl) Insurance. The business, undertakings, properties and assets of
Ctrip Computer Technology are adequately insured against all such risks as
are normally insured by persons carrying on similar businesses in Shanghai,
China as those carried on by Ctrip Computer Technology, and such insurances
include all the insurances which Ctrip Computer Technology is required
under terms of any lease or any contract in respect of any of its
properties to undertake and such insurances are in full force and effect
and, so far as the Company is aware, there are no circumstances which would
reasonably be expected to render any of such insurances void or voidable
and there is no material insurance claim made by or against Ctrip Computer
Technology, pending, threatened or outstanding and so far as the Company is
aware, no facts or circumstances exist which would reasonably be expected
to give rise to any such claim and all due premiums in respect thereof have
(if due) been paid.
(xli) Choice of Law; Consent to Jurisdiction; Appointment of Agent for
Service of Process. The choice of the laws of the State of New York as the
governing law of this Agreement and the International Purchase Agreement is
a valid choice of law under the laws of the Cayman Islands and will be
honored by courts in the Cayman Islands. The Company has the power to
submit, and pursuant to Section 13 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 empower,
and pursuant to Section 13 of this Agreement, has legally, validly,
effectively and irrevocably designated, appointed and empowered, the
Authorized Agent (as defined in Section 13 hereof) for service of process
in any action arising out of or relating to this Agreement or the
Securities 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 13 hereof.
(xlii) Waiver of Immunity. Neither the Company, any of the
Subsidiaries nor any of its or their properties, assets or revenues has any
right of immunity under Cayman Islands or New York law, from any legal
action, suit or proceeding, from the giving of any relief in any such legal
action, suit or proceeding, from set-off or counterclaim, from the
jurisdiction of any Cayman Islands, New York or U.S. federal court, from
service of process, attachment upon or prior to judgment, or attachment in
aid of execution of
15
judgment, or from execution of a judgment, or other legal process or
proceeding for the giving of any relief or for the enforcement of a
judgment, in any such court, with respect to its obligations, liabilities
or any other matter under or arising out of or in connection with this
Agreement or the International Purchase Agreement; and, to the extent that
the Company, any of the Subsidiaries or any of its or their properties,
assets or revenues may have or may hereafter become entitled to any such
right of immunity in any such court in which proceedings may at any time be
commenced, each of the Company and the Subsidiaries waives or will waive
such right to the extent permitted by law and has consented to such relief
and enforcement as provided in Section 12 of this Agreement.
(xliii) Enforceability of New York Judgment. Any final judgment for a
fixed or readily calculable sum of money rendered by a New York Court
having jurisdiction under its own domestic laws in respect of any suit,
action or proceeding against the Company based upon this Agreement and the
other Principal Agreements would be declared enforceable against the
Company by Cayman Islands courts without re-examining the merits of the
case under the common law doctrine of obligation; provided that (i)
adequate service of process has been effected and the defendant has had a
reasonable opportunity to be heard, (ii) such judgments or the enforcement
thereof are not contrary to the law, public policy, security or sovereignty
of the Cayman Islands, (iii) such judgments were not obtained by fraudulent
means and do not conflict with any other valid judgment in the same matter
between the same parties, and (iv) an action between the same parties in
the same matter is not pending in any Cayman Islands court at the time the
lawsuit is instituted in the foreign court.
(xliv) Listing. The Securities have been authorized for quotation,
subject to official notice of issuance, on the Nasdaq National Market
("NASDAQ"), under the symbol "CTRP".
(xlv) Stabilization and Manipulation. Neither the Company or any of
its affiliates has taken, directly or indirectly, any action that is
designed to or that constitutes or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of any
security of the Company.
(xlvi) Foreign Corrupt Practices. Neither the Company nor, to the
Company's knowledge, any director, officer, agent, employee or other person
associated with or acting on behalf of the Company is using any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expenses; is making any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; or is in
violation of any provision of the United States Foreign Corrupt Practices
Act of 1977; or is making any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment.
(b) Representations and Warranties by the Selling Shareholders. Each
Selling Shareholder severally represents and warrants to each U.S. Underwriter
as of the date hereof, as of the Closing Time, and, if the Selling Shareholder
is selling Option Securities on a Date of Delivery, as of each such Date of
Delivery, and agrees with each U.S. Underwriter, as follows:
16
(i) Accurate Disclosure. Such Selling Shareholder has reviewed and is
familiar with the Registration Statement and the Prospectuses and neither
the Prospectuses nor any amendments or supplements thereto includes any
untrue statement of a material fact relating to such Selling Shareholder or
omits to state a material fact relating to such Selling Shareholder
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; such Selling
Shareholder is not prompted to sell the Securities to be sold by such
Selling Shareholder hereunder by any information concerning the Company or
any Subsidiary, which is not set forth in the Prospectuses.
(ii) Authorization of Agreements. Each Selling Shareholder has the
full right, power and authority to enter into this Agreement and a Power of
Attorney and Custody Agreement (the "Power of Attorney and Custody
Agreement") with the Company and the Global Coordinator, respectively, and
to sell, transfer and deliver the Securities to be sold by such Selling
Shareholder hereunder. The execution and delivery of this Agreement and the
Power of Attorney and Custody Agreement and the sale and delivery of the
Securities to be sold by such Selling Shareholder and the consummation of
the transactions contemplated herein and compliance by such Selling
Shareholder with its obligations hereunder have been duly authorized by the
Selling Shareholder and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default under, or result in the creation or imposition of any
tax, lien, charge or encumbrance upon the Securities to be sold by such
Selling Shareholder or any property or assets of such Selling Shareholder
pursuant to any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, license, lease or other agreement or instrument to
which such Selling Shareholder is a party or by which such Selling
Shareholder may be bound, or to which any of the property or assets of the
Selling Shareholder is subject, nor will such action result in any
violation of the provisions of the charter or by-laws or other
organizational instrument of the Selling Shareholder, if applicable, or any
applicable treaty, law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Selling Shareholder or any of its
properties.
(iii) Good and Marketable Title. Such Selling Shareholder has and will
at the Closing Time and, if any Option Securities are purchased, on the
Date of Delivery have good and marketable title to the Securities to be
sold by such Selling Shareholder hereunder, free and clear of any security
interest, mortgage, pledge, lien, charge, claim, equity or encumbrance of
any kind, other than pursuant to this Agreement; and upon delivery of such
Securities and payment of the purchase price therefor as herein
contemplated, assuming each such U.S. Underwriter has no notice of any
adverse claim, each of the U.S. Underwriters will receive good and
marketable title to the Securities purchased by it from such Selling
Shareholder, free and clear of any security interest, mortgage, pledge,
lien, charge, claim, equity or encumbrance of any kind.
(iv) Absence of Defaults and Conflicts. The execution, delivery and
performance of each of the Principal Agreements to which such Selling
Shareholder is a party and the consummation of the transactions
contemplated in each of the
17
Principal Agreements, the Registration Statement and the Structuring
Documents have been duly authorized by all necessary corporate action by
such Selling Shareholder, to the extent applicable, and received all
approvals from any governmental or regulatory body and the sanction or
consent of its shareholders, to the extent applicable, and do not and will
not, whether with or without the giving of notice or passage of time or
both, result in any violation of the provisions of its charter or by-laws
or business license or other organizational document of such Selling
Shareholder, to the extent applicable, or any applicable treaty, law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over such Selling Shareholder or any of its assets,
properties or operations.
(v) Due Execution of Power of Attorney and Custody Agreement. Such
Selling Shareholder has duly executed and delivered, in the form heretofore
furnished to the U.S. Representative, the Power of Attorney and Custody
Agreement with the Company as attorney-in-fact (the "Attorney-in-Fact") and
the Global Coordinator, as custodian (the "Custodian"); the Custodian is
authorized to deliver the Securities to be sold by such Selling Shareholder
hereunder and to accept payment therefor; and the Attorney-in-Fact is
authorized to execute and deliver this Agreement and the certificate
referred to in Section 5(l) or that may be required pursuant to Section(s)
5(s) and 5(t) on behalf of such Selling Shareholder, to sell, assign and
transfer to the U.S. Underwriters the Securities to be sold by such Selling
Shareholder hereunder, to determine the purchase price to be paid by the
U.S. Underwriters to such Selling Shareholder, as provided in Section 2(a)
hereof, to authorize the delivery of the Securities to be sold by such
Selling Shareholder hereunder, to accept payment therefor, and otherwise to
act on behalf of such Selling Shareholder in connection with this
Agreement.
(vi) Absence of Manipulation. Such Selling Shareholder has not taken,
and will not take, directly or indirectly, any action that is designed to
or which has constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(vii) Absence of Further Requirements. No filing with, or consent,
approval, authorization, order, registration, qualification or decree of,
any court or governmental authority or agency, domestic or foreign, is
necessary or required for the performance by each Selling Shareholder of
its obligations hereunder or in the Power of Attorney and Custody
Agreement, or in connection with the sale and delivery of the Securities
hereunder or the consummation of the transactions contemplated by this
Agreement, except such as may have previously been made or obtained or as
may be required under the 1933 Act or the 1933 Act Regulations or state
securities laws.
(viii) Certificates Suitable for Transfer. Certificates for all of the
Securities to be sold by such Selling Shareholder pursuant to this
Agreement, in suitable form for transfer by delivery or accompanied by duly
executed instruments of transfer or assignment in blank with signatures
guaranteed, have been placed in custody with the Custodian with irrevocable
conditional instructions to deliver such Securities to the U.S.
Underwriters pursuant to this Agreement.
18
(ix) No Association with NASD. Except as disclosed in the Registration
Statement, neither such Selling Shareholder nor any of his, her or its
affiliates directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, or has any
other association with (within the meaning of Article I, Section 1(dd) of
the By-laws of the National Association of Securities Dealers, Inc.), any
member firm of the National Association of Securities Dealers, Inc.
(c) Officer's Certificates. Any certificate signed by any officer of the
Company or any of the Subsidiaries delivered to the Global Coordinator, the U.S.
Representative or to counsel for the U.S. Underwriters shall be deemed a
representation and warranty by the Company to the U.S. Underwriters as to the
matters covered thereby; and any certificate signed by or on behalf of a Selling
Shareholder as such and delivered to the Global Coordinator, the U.S.
Representative or to counsel for the U.S. Underwriters shall be deemed a
representation and warranty by such Selling Shareholder to the U.S. Underwriters
as to the matters covered thereby.
SECTION 2. Sale and Delivery to the U.S. Underwriters; Closing.
(a) Initial U.S. Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company and each Selling Shareholder, severally and not jointly,
agree to sell to each U.S. Underwriter, severally and not jointly, and each U.S.
Underwriter, severally and not jointly, agrees to purchase from the Company and
each Selling Shareholder, at the price per ADS set forth in Schedule C, that
proportion of the number of Initial U.S. Securities set forth in Schedule B
opposite the name of the Company or each Selling Shareholder, as the case may
be, which the number of Initial U.S. Securities set forth in Schedule A opposite
the name of such U.S. Underwriter, plus any additional number of Initial U.S.
Securities which such U.S. Underwriter may become obligated to purchase pursuant
to the provisions of Section 10 hereof, bears to the total number of Initial
U.S. Securities, subject, in each case, to such adjustments among the U.S.
Underwriters as the U.S. Representative in its sole discretion shall make to
eliminate any sales or purchases of fractional securities.
(b) Option U.S. Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Selling Shareholders, acting severally and not
jointly, hereby grant an option to the U.S. Underwriters, severally and not
jointly, to purchase up to an additional - ADSs at the same price per ADS set
forth in Schedule C less an amount per Ordinary Share represented by such ADSs
equal to any dividends or distributions declared by the Company and payable on
the Initial U.S. Securities but not payable on the Option U.S. Securities. The
option hereby granted will expire 30 calendar days after the date of the
Prospectuses and may be exercised from time to time only for the purpose of
covering over-allotments by written notice from the Global Coordinator to the
Company, and setting forth the aggregate number of Option U.S. Securities to be
purchased and the date on which such Option U.S. Securities are to be delivered,
as determined by the Global Coordinator but in no event earlier than the Closing
Time or, unless the Global Coordinator and the Company otherwise agree in
writing, not earlier than two or later than ten business days after the date of
such notice. The Global Coordinator may reallocate Option Securities between and
among the syndicates of the Offerings in accordance with the Intersyndicate
Agreement. If the option is exercised as to all or any portion of the Option
U.S. Securities, each of the U.S.
19
Underwriters, acting severally and not jointly, will purchase that proportion of
the total number of Option U.S. Securities then being purchased which the number
of Initial U.S. Securities set forth in Schedule A opposite the name of such
U.S. Underwriter bears to the total number of Initial U.S. Securities, subject
in each case to (A) any reallocation that the Global Coordinator may make with
respect to Option Securities among syndicates of the Offerings and (B) such
adjustments among the U.S. Underwriters as the U.S. Representative in its sole
discretion shall make to eliminate any sales or purchases of fractional shares.
(c) Denominations; Registration; Delivery of ADRs. ADRs evidencing the U.S.
Securities purchased by the U.S. Underwriters hereunder shall be delivered by
the Company to the U.S. Representative through the facilities of The Depository
Trust Company, New York, New York ("DTC"), for the respective accounts of the
U.S. Underwriters, against payment for the Securities by or on behalf of such
U.S. Underwriters to the Company and Selling Shareholders of the purchase price
therefor by wire transfer through the Federal Wire System in New York in U.S.
dollars in immediately available funds to an account designated by the Company.
(d) Time and Date of Deliveries and Payments. The time and date of delivery
of and payment for the Initial U.S. Securities shall be 9:30 a.m., New York City
time on -, 2003 (unless postponed in accordance with the provisions of Section
10), or such other time not later than ten business days after such date as the
Global Coordinator and the Company may agree upon in writing (such time and date
of payment and delivery being herein called the "Closing Time"). The time and
date of delivery and payment with respect to the Option U.S. Securities shall be
9:30 a.m., New York City time on the date specified by the Global Coordinator in
a written notice given by the Global Coordinator of an election by the U.S.
Underwriters' to purchase such Option U.S. Securities, or such other time and
date as the Global Coordinator and the Company may agree upon in writing. Any
such time and date for delivery of and payment for the Option U.S. Securities,
if not the Closing Time, is herein called a "Time of Delivery".
The documents to be delivered at the Closing Time by or on behalf of the
parties hereto pursuant to Section 5 hereof, including any additional documents
reasonably requested by the U.S. Underwriters pursuant to Section 5(t) hereof,
will be delivered at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, 7th Floor,
Asia Pacific Finance Tower, Three Garden Road, Central, Hong Kong at 8:00 a.m.,
Hong Kong time, on the day of the Closing Time.
SECTION 3. Covenants of the Company. The Company covenants with each U.S.
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
or Rule 434, as applicable, and will notify the U.S. Representative immediately,
and confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement, to the ADR Registration Statement or to the Form 8-A
Registration Statement shall become effective, or any supplement to the
Prospectuses or any amended Prospectuses shall have been filed, (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement, to the ADR
Registration Statement or to the Form 8-A Registration Statement or any
amendment or supplement to the Prospectuses or for additional
20
information, and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement, the ADR Registration
Statement or the Form 8-A Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, or of
the initiation or threatening of any proceedings for any of such purposes of
which the Company is aware. The Company will promptly effect the filings
necessary pursuant to Rule 424(b) and will take such steps as it deems necessary
to ascertain promptly whether the form of prospectus transmitted for filing
under Rule 424(b) was received for filing by the Commission and, in the event
that it was not, it will promptly file such prospectus. The Company will use its
best efforts to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the U.S. Representative
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), to the ADR Registration
Statement or the Form 8-A Registration Statement, any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectuses,
whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the
U.S. Representative with copies of any such documents a reasonable amount of
time prior to such proposed filing or use, as the case may be, and will not file
or use any such document to which the U.S. Representative or counsel for the
U.S. Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished or will
deliver to the U.S. Representative and counsel for the U.S. Underwriters,
without charge, signed copies of the Registration Statement, the ADR
Registration Statement and the Form 8-A Registration Statement as originally
filed and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the U.S. Representative,
without charge, a conformed copy of the Registration Statement, the ADR
Registration Statement and the Form 8-A Registration Statement as originally
filed and of each amendment thereto (without exhibits) for each of the U.S.
Underwriters.
(d) Delivery of Prospectuses. The Company has delivered to each U.S.
Underwriter, without charge, as many copies of each preliminary prospectus as
each U.S. Underwriter reasonably requested, and the Company hereby consents to
the use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each U.S. Underwriter, without charge, during the period when the
U.S. Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
such number of copies of the U.S. Prospectus (as amended or supplemented) as
each U.S. Underwriter may reasonably request.
(e) Continued Compliance with Securities Laws. The Company will comply with
the 1933 Act and the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations, the rules and regulations of the NASD and the NASDAQ so as to
permit the completion of the distribution of the U.S. Securities as contemplated
in this Agreement and the other Principal Agreements and in the U.S. Prospectus.
If at any time when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel for
the U.S. Underwriters or for the
21
Company, to amend the Registration Statement, the ADR Registration Statement,
the Form 8-A Registration Statement or amend or supplement the U.S. Prospectus
in order that the U.S. Prospectus will not include any untrue statements of a
material fact or omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the circumstances, existing at
the time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration Statement,
the ADR Registration Statement, the Form 8-A Registration Statement or amend or
supplement any Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, or the 1934 Act or the 1934 Act Regulations,
the Company will promptly prepare and file with the Commission, subject to
Section 3(b), such amendment or supplement as may be necessary to correct such
statement or omission or to make the Registration Statement, the ADR
Registration Statement, the Form 8-A Registration Statement or the U.S.
Prospectus comply with such requirements, and the Company will furnish to the
U.S. Underwriters such number of copies of such amendment or supplement as the
U.S. Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the U.S. Underwriters, to qualify the Securities for offering
and sale under the applicable securities laws of such states and other
jurisdictions of the United States as the Global Coordinator may reasonably
designate and to maintain such qualifications in effect for as long as may be
necessary to complete the distribution of the Securities, which period shall in
no event extend for more than one year from the later of the effective date of
the U.S. Registration Statement and any Rule 462(b) Registration Statement;
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such statements and
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for as long as may be necessary to complete the
distribution of the Securities, which period shall in no event extend for more
than one year from the effective date of the U.S. Registration Statement and any
Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Prospectuses
under "Use of Proceeds".
(i) Compliance with Rule 463. The Company will file with the Commission
such reports on Form SR as may be required pursuant to Rule 463 of the 1933 Act
Regulations.
(j) Listing. The Company will use its best efforts to effect and maintain
the quotation of the ADSs on the NASDAQ and will file with the NASDAQ all
documents and notices required by the NASDAQ of companies that are traded on the
NASDAQ and quotations for which are reported by the NASDAQ.
22
(k) Restriction on Sale of Securities. During a period of six (6) months
from the date of this Agreement, the Company shall not, without the prior
written consent of Xxxxxxx Xxxxx, (i) directly or indirectly, dispose of
(including without limitation, issue, agree to issue, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of, directly or indirectly), any Ordinary Shares or ADSs or
any security that constitutes the right to receive Ordinary Shares or ADSs or
any securities convertible into or exercisable or exchangeable for or repayable
with Ordinary Shares or ADSs or file any registration statement under the 1933
Act with respect to any of the foregoing or (ii) enter into any swap agreement
or any other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequences of ownership of the Ordinary
Shares or ADSs, whether any such swap agreement or other agreement or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Ordinary Shares or ADSs or such other securities, in cash or otherwise. The
foregoing shall not apply to (A) the Ordinary Shares or ADSs to be sold
hereunder or under the International Purchase Agreement, (B) any issuance of
Ordinary Shares or ADSs by the Company upon exercise of any options to purchase
Ordinary Shares granted pursuant to a duly adopted stock option plan of the
Company, provided that such options shall not be exercisable during such six (6)
month period, and (C) transactions by the Company with the prior written consent
of the Global Coordinator, which consent shall not be unreasonably withheld.
(l) Other Documents. The Company will furnish to the Depositary and to
holders of ADRs, directly or through the Depositary, such reports, documents and
other information described in the Prospectuses under the caption "Description
of American Depositary Shares" in accordance with the procedures stated
thereunder.
(m) Reporting Requirements. The Company, during the period when any
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(n) Submission of Documents. The Company agrees to file with the NASD, the
NASDAQ, the Commission and any other governmental or regulatory agency,
authority or instrumentality in the Cayman Islands, the United States, the
People's Republic of China and Hong Kong, as may be required, such reports,
documents, agreements and other information which the Company may from time to
time be required to file, including those relating to the implementation and
payment of dividends or other distributions on the Securities.
(o) Investment Company Act. The Company will not be or become, within one
year of the Closing Time, an "investment company" as defined in the 1940 Act.
(p) Stabilization and Manipulation. The Company agrees not to (and to use
its best efforts to cause its affiliates not to) take, directly or indirectly,
any action which is designed to or which constitutes or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of any
security of the Company.
(q) Deposit of Ordinary Shares. Prior to the Closing Time and each Time of
Delivery, the Company will deposit or cause to be deposited Ordinary Shares with
the Depositary in
23
accordance with the provisions of the Deposit Agreement so that the ADRs
evidencing the ADSs to be delivered by such party to the U.S. Underwriters at
such Closing Time or Time of Delivery are executed, countersigned and issued by
the Depositary against receipt of such Ordinary Shares and delivered to the U.S.
Underwriters at such Closing Time or Time of Delivery.
(r) Annual Reports. The Company agrees to furnish to its shareholders as
soon as practicable after the end of each fiscal year an annual report in
English, including a review of operations and audited consolidated financial
statements and a report thereon prepared by the Company's independent
accountants in accordance with US GAAP of net income (loss), shareholders'
equity and, as necessary, other selected balance sheet and statement of
operations items in such financial statements.
(s) Liabilities and Agreements Prior to the Closing Time. The Company
agrees that except as disclosed in the Prospectuses and except for those which
are not material to the Company, prior to the Closing Time, it will not incur
any liabilities or enter into any material agreements (except in the ordinary
course of its business) without the prior written consent of the U.S.
Representative.
(t) Cayman Islands Matters. The Company agrees that (A) it will not attempt
to avoid any judgment obtained by it or denied to it in a court of competent
jurisdiction outside the Cayman Islands; (B) following the consummation of the
Offerings, it will use its best efforts to obtain and maintain all approvals
required in the Cayman Islands to pay and remit outside the Cayman Islands all
dividends declared by the Company and payable on the Ordinary Shares; and (C) it
will use its best efforts to obtain and maintain all approvals required in the
Cayman Islands for the Company to acquire sufficient foreign exchange for the
payment of dividends and all other relevant purposes.
(u) Deposit Agreement. The Company agrees to abide by the covenants set
forth in the Deposit Agreement.
(v) Regulation S. None of the Company, any of its affiliates or any person
acting on its or their behalf will engage in any directed selling efforts (as
that term is defined in Regulation S under the 1933 Act ("Regulation S")) with
respect to the Ordinary Shares or the ADSs in the International Offering and the
Company, its affiliates and each person acting on its or their behalf will
comply with the offering restrictions requirement of Regulation S.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the preparation, printing
and filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, of the ADR
Registration Statement and of each amendment thereto and of the Form 8-A
Registration Statement and of each amendment thereto,
24
(ii) the preparation, issuance and delivery of the certificates for the
Securities to the Underwriters, including any stock or other transfer taxes and
any stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriters and the transfer of the Securities between the
U.S. Underwriters and the International Underwriters, (iii) the delivery of the
Ordinary Shares represented by the ADSs to the Depositary, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors, (v) the
fees and disbursements of the Underwriters' counsel, (vi) the qualification of
the U.S. Securities under securities laws in accordance with the provisions of
Section 3(f) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, subject to a maximum amount of US$10,000, (vii) the printing and
delivery to the Underwriters of copies of the Registration Statement, the ADR
Registration Statement and the Form 8-A Registration Statement as originally
filed with the Commission and of each amendment thereto, each preliminary
prospectus, any Term Sheets and of the Prospectuses and any amendments or
supplements thereto, (viii) the fees and expenses of the Depositary, any
transfer agent or registrar, and each custodian, if any, for the Securities,
(ix) the fees and expenses incurred in connection with the roadshow, (x) the
fees and expenses incurred in connection with the quotation of the ADSs on
NASDAQ, (xi) the filing fees incident to the review by the NASD of the terms of
the sale of the Securities, (xii) the filing, registration and clearance with
the NASD in connection with the offering of the Securities, and (xiii) the costs
and expenses of the Underwriters, up to US$200,000; provided, however, that the
Underwriters will bear their own costs and expenses up to US$50,000.
(b) Expenses of the Selling Shareholders. The Selling Shareholders,
severally and not jointly, will pay all expenses incident to the performance of
their respective obligations under, and the consummation of the transactions
contemplated by this Agreement, including (i) any stamp duties, capital duties
and stock transfer taxes, if any, payable upon the sale of the Securities to the
Underwriters and the transfer of the Securities between the U.S. Underwriters
and the International Underwriters, and (ii) the fees and disbursements of their
respective counsel and accountants.
(c) Termination of Agreement. If this Agreement is terminated by the U.S.
Representative in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the U.S. Underwriters for all out-of-pocket
accountable expenses actually incurred, including the reasonable fees and
disbursements of counsel for the U.S. Underwriters.
SECTION 5. Conditions of the U.S. Underwriters' Obligations. The
obligations of the several U.S. Underwriters hereunder, as to the ADSs to be
delivered at the Closing Time and each Time of Delivery, are subject to the
accuracy of the representations and warranties of the Company and the Selling
Shareholders contained in Section 1 hereof or in certificates of any officer of
the Company or any Subsidiary or on behalf of any Selling Shareholder delivered
pursuant to the provisions hereof, to the performance by the Company of its
covenants and other obligations hereunder, and to the following further
conditions.
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, the ADR Registration Statement
and the Form 8-A
25
Registration Statement, has become effective and at such Time of Delivery no
stop order suspending the effectiveness of the Registration Statement, the ADR
Registration Statement or the Form 8-A Registration Statement shall have been
issued under the 1933 Act or the 1934 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the U.S. Underwriters. A prospectus containing the
Rule 430A Information shall have been filed with the Commission in accordance
with Rule 424(b) (or a post-effective amendment providing such information shall
have been filed and declared effective in accordance with the requirements of
Rule 430A) or, if the Company has elected to rely upon Rule 434, a Term Sheet
shall have been filed with the Commission in accordance with Rule 424(b).
(b) Opinion of Cayman Islands Counsel for Company. At Closing Time, the
U.S. Representative shall have received the favorable opinion, dated as of such
Closing Time, of Xxxxxx and Xxxxxx Asia, Cayman Islands counsel for the Company,
in form and substance satisfactory to counsel for the U.S. Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters, to the effect set forth in Exhibit A hereto and to such further
effect as counsel for the U.S. Underwriters may reasonably request.
(c) Opinion of Special United States Counsel for Company. At Closing Time,
the U.S. Representative shall have received the favorable opinion, dated as of
such Closing Time, of Xxxxxx & Xxxxxxx LLP, special United States counsel for
the Company, in form and substance satisfactory to counsel for the U.S.
Underwriters, together with signed or reproduced copies of such opinion for each
of the other Underwriters, to the effect set forth in Exhibit B hereto and to
such further effect as counsel for the U.S. Underwriters may reasonably request.
(d) Opinion of Special PRC Counsel for Company. At Closing Time, the U.S.
Representative shall have received the favorable opinion, dated as of such
Closing Time, of Commerce & Finance Law Office, special People's Republic of
China counsel for the Company, in form and substance satisfactory to counsel for
the U.S. Underwriters, together with signed or reproduced copies of such letter
for each of the other Underwriters, to the effect set forth in Exhibit C hereto
and to such further effect as counsel for the U.S. Underwriters may reasonably
request.
(e) Opinion of Special Hong Kong Counsel for Company. At Closing Time, the
U.S. Representative shall have received the favorable opinion, dated as of such
Closing Time, of Xxxxxxxx Xxxxxxxx Xxxx, special Hong Kong counsel for the
Company, in form and substance satisfactory to counsel for the U.S.
Underwriters, together with signed or reproduced copies of such letter for each
of the other Underwriters, to the effect set forth in Exhibit D hereto and to
such further effect as counsel for the U.S. Underwriters may reasonably request.
(f) Opinions of Counsels for certain Selling Shareholders. At Closing Time,
the U.S. Representative shall have received the favorable opinions, dated as of
such Closing Time, of counsels for the Selling Shareholders whose names are
listed on Schedule E hereto, respectively, in form and substance satisfactory to
counsel for the U.S. Underwriters, together with signed or reproduced copies of
such letter for each of the other Underwriters, to the effect set forth in
Exhibit E hereto and to such further effect as counsel for the U.S. Underwriters
may reasonably request.
26
(g) Opinion of United States Counsel for Underwriters. At Closing Time, the
U.S. Representative shall have received the favorable opinion, dated as of such
Closing Time, of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, United States counsel for the
U.S. Underwriters, in form and substance satisfactory to the U.S.
Representative, together with signed or reproduced copies of such letter for
each of the other Underwriters.
(h) Opinion of Special PRC Counsel for Underwriters. At Closing Time, the
U.S. Representative shall have received the favorable opinion, dated as of such
Closing Time, of Jingtian & Gongcheng, special PRC counsel for the U.S.
Underwriters, in form and substance satisfactory to the U.S. Representative,
together with signed or reproduced copies of such letter for each of the other
Underwriters.
(i) Opinion of Counsel for Depositary. At Closing Time, the U.S.
Representative shall have received the favorable opinion, dated as of such
Closing Time, of Xxxxx, Xxxxxx & Xxxxxx, LLP, counsel for the Depositary, in
form and substance satisfactory to counsel for the U.S. Underwriters, together
with signed or reproduced copies of such letter for each of the other U.S.
Underwriters to the effect set forth in Exhibit F hereto and to such further
effect as counsel for the U.S. Underwriters may reasonably request.
(j) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectuses, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and the Subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the U.S.
Representative shall have received a certificate of the chief executive officer
and chief financial officer of the Company, dated as of the Closing Time, to the
effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct with
the same force and effect as though expressly made at and as of such Closing
Time, (iii) the Company has complied with all agreements and satisfied all
conditions contained herein on its part to be performed or satisfied at or prior
to the Closing Time, and (iv) no stop order suspending the effectiveness of the
Registration Statement, the ADR Registration Statement or the Form 8-A
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are pending or are contemplated by the Commission.
(k) Certificate of the Chairman. At Closing Time, the U.S. Representative
shall have received a certificate from the Company's Chairman, dated as of the
Closing Time, as to such matters as the U.S. Representative may reasonably
request.
(l) Certificate of Selling Shareholders. At Closing Time, the U.S.
Representative shall have received a certificate of an Attorney-in-Fact on
behalf of each Selling Shareholder, dated as of the Closing Time, to the effect
that (i) the representations and warranties in Section 1(b) hereof are true and
correct with the same force and effect as though expressly made at and as of
such Closing Time, and (ii) each Selling Shareholder has complied with all
agreements and satisfied all conditions contained herein on its part to be
performed or satisfied at or prior to the Closing Time.
27
(m) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the U.S. Representative shall have received from
PricewaterhouseCoopers a letter dated such date, in form and substance
satisfactory to the U.S. Representative, together with signed or reproduced
copies of such letter for each of the other U.S. Underwriters 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
Prospectuses.
(n) Bring-down Comfort Letter. At Closing Time, the U.S. Representative
shall have received from PricewaterhouseCoopers a letter, dated as of such
Closing Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (m) of this section, except that the specified
date referred to shall be a date not more than five business days prior to such
Closing Time.
(o) Approval of Listing. At Closing Time, the ADSs shall have been approved
for inclusion in the NASDAQ, subject only to official notice of issuance.
(p) No Objection by NASD. At or prior to Closing Time, the NASD shall have
confirmed that it has not raised any objection with respect to the fairness and
reasonableness of the underwriting terms and arrangements.
(q) Lock-up Agreement. At the date of this Agreement, the U.S.
Representative shall have received a lock-up agreement substantially in the form
of Exhibit G hereto duly signed by the persons and entities listed on Schedule D
hereto.
(r) Purchase of Initial International Securities. Contemporaneously with
the purchase by the U.S. Underwriters of the Initial U.S. Securities under this
Agreement, the International Underwriters shall have purchased the Initial
International Securities under the International Purchase Agreement.
(s) Conditions to Purchase of Option U.S. Securities. In the event that the
U.S. Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the Option U.S. Securities, the representations
and warranties of the Company and the Selling Shareholders contained herein and
the statements in any certificates furnished by the Company, any Subsidiary and
the Selling Shareholders hereunder shall be true and correct as of each Time of
Delivery and, at the relevant Time of Delivery, the U.S. Representative shall
have received:
(i) Officers' Certificate. A certificate, dated such Time of Delivery,
of the chief executive officer or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time pursuant to
Section 5(j) hereof remains true and correct as of such Time of Delivery.
(ii) Certificate of Chairman. A certificate, dated such Time of
Delivery, of a Chairman of the Company confirming that the certificate
delivered at the Closing Time pursuant to Section 5(k) hereof remains true
and correct as of such Time of Delivery.
(iii) Certificate of Selling Shareholders. A certificate, dated such
Time of Delivery, of an Attorney-in-Fact on behalf of each Selling
Shareholder confirming that
28
the certificate delivered at the Closing Time pursuant to Section 5(l)
hereof remains true and correct as of such Time of Delivery.
(iv) Opinion of Cayman Islands Counsel for Company. The favorable
opinion of Xxxxxx and Calder Asia, Cayman Islands counsel for the Company,
in form and substance satisfactory to counsel for the U.S. Underwriters,
dated such Time of Delivery, relating to the Option U.S. Securities to be
purchased on such Time of Delivery and otherwise to the same effect as the
opinion required by Section 5(b) hereof.
(v) Opinion of Special United States Counsel for Company. The opinion
of Xxxxxx & Xxxxxxx LLP, special United States counsel for the Company, in
form and substance satisfactory to counsel for the U.S. Underwriters, dated
such Time of Delivery, relating to the Option U.S. Securities to be
purchased on such Time of Delivery and otherwise to the same effect as the
opinion required by Section 5(c) hereof.
(vi) Opinion of Special PRC Counsel for Company. The favorable opinion
of Commerce & Finance Law Office, special People's Republic of China
counsel for the Company, in form and substance satisfactory to counsel for
the U.S. Underwriters, dated such Time of Delivery, relating to the Option
U.S. Securities to be purchased on such Time of Delivery and otherwise to
the same effect as the opinion required by Section 5(d) hereof.
(vii) Opinion of Special Hong Kong Counsel for Company. The favorable
opinion of Xxxxxxxx Xxxxxxxx Xxxx, special Hong Kong counsel for the
Company, in form and substance satisfactory to counsel for the U.S.
Underwriters, dated such Time of Delivery, relating to the Option U.S.
Securities to be purchased on such Time of Delivery and otherwise to the
same effect as the opinion required by Section 5(e) hereof.
(viii) Opinions of Counsels for certain Selling Shareholders. The
favorable opinions of counsels for the Selling Shareholders whose names are
listed on Schedule E hereto, respectively, in form and substance
satisfactory to counsel for the U.S. Underwriters, dated such Time of
Delivery, relating to the Option U.S. Securities to be purchased on such
Time of Delivery and otherwise to the same effect as the opinion required
by Section 5(f) hereof.
(ix) Opinion of United States Counsel for Underwriters. The favorable
opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, United States counsel for the
U.S. Underwriters, in form and substance satisfactory to the U.S.
Underwriters, dated such Time of Delivery, relating to the Option U.S.
Securities to be purchased on such Time of Delivery and otherwise to the
same effect as the opinion required by Section 5(g) hereof.
(x) Opinion of Special PRC Counsel for Underwriters. The favorable
opinion of Jingtian & Gongcheng, special PRC counsel for the U.S.
Underwriters, in form and substance satisfactory to the U.S. Underwriters,
dated such Time of Delivery, relating to the Option U.S. Securities to be
purchased on such Time of Delivery and otherwise to the same effect as the
opinion required by Section 5(h) hereof.
(xi) Opinion of Counsel for Depositary. The favorable opinion of Xxxxx
Xxxxxx & Xxxxxx, LLP, counsel for the Depositary, in form and substance
satisfactory to
29
counsel for the U.S. Underwriters, dated such Time of Delivery, relating to
the Option U.S. Securities to be purchased on such Time of Delivery and
otherwise to the same effect as the opinion required by Section 5(i)
hereof.
(xii) Bring-down Comfort Letter. A letter from PricewaterhouseCoopers,
in form and substance satisfactory to the U.S. Representative and dated
such Time of Delivery, substantially in the same form and substance as the
letter furnished to the U.S. Underwriters pursuant to Section 5(m) hereof,
except that the "specified date" in the letter furnished pursuant to this
paragraph shall be a date not more than five business days prior to such
Time of Delivery.
(t) Additional Documents. At each Time of Delivery, counsel for the U.S.
Underwriters shall have been furnished with such documents and opinions as they
may reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company and the Selling Shareholders in connection with the
issuance and sale of the Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the U.S. Representative and counsel for
the U.S. Underwriters.
(u) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, the International Purchase Agreement, the Deposit Agreement, or, in
the case of any condition to the purchase of Option U.S. Securities at a Time of
Delivery which is after the Closing Time, the obligations of the U.S.
Underwriters to purchase the relevant Option U.S. Securities, may be terminated
by the U.S. Representative by notice to the Company at any time at or prior to
the Closing Time or such Time of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 6, 7, 8, 12, 13 and 14 shall
survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of the U.S. Underwriters. The Company agrees to
indemnify and hold harmless, jointly and severally with the Selling
Shareholders, and the Selling Shareholders agree to indemnify and hold harmless,
severally but not jointly with each other or the Company, each U.S. Underwriter
and each person, if any, who controls any U.S. Underwriter and their affiliates
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, the ADR Registration Statement or the
Form 8-A Registration Statement or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in any
preliminary prospectus or the U.S. Prospectus (or any amendment or
supplement thereto), or the omission or alleged
30
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Xxxxxxx Xxxxx), reasonably
incurred 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
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that each Selling Shareholder's indemnification obligations
under this Section 6 shall only apply to any and all loss, liability, claim,
damage and expenses whatsoever, arising out of or are based upon any untrue
statement or alleged untrue statement of a material fact relating to such
Selling Shareholder contained in the Registration Statement or the Prospectuses
or any amendment thereof or supplement thereto, or the omission or alleged
omission therefrom of a material fact relating to such Selling Shareholder
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; and
provided, further, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
U.S. Underwriter through the U.S. Representative expressly for use in the
Registration Statement, the ADR Registration Statement or the Form 8-A
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto);
provided, further, that this indemnity agreement shall not inure to the benefit
of any U.S. Underwriter or any person who controls such U.S. Underwriter on
account of any such loss, liability, claim, damage or expense arising out of any
such defect or alleged defect in any preliminary prospectus if a copy of the
U.S. Prospectus shall not have been given or sent by such U.S. Underwriter with
or prior to the written confirmation of the sale involved to the extent that (i)
the U.S. Prospectus would have cured such defect or alleged defect and (ii)
sufficient quantities of the U.S. Prospectus were timely made available to such
U.S. Underwriter; and provided, further, that notwithstanding the foregoing
provisions, the aggregate amount of each Selling Shareholder's indemnity
obligations under this Section 6 shall not exceed an amount equal to the net
cash proceeds (before deducting expenses) received by such Selling Shareholder
from the sale of Securities pursuant to this Agreement.
(b) Indemnification of the Company, Directors and Officers and Selling
Shareholders. Each U.S. Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, the ADR Registration Statement or the Form 8-A
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and
each Selling Shareholder against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement, the ADR
Registration Statement or the Form 8-A Registration Statement
31
(or any amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectuses
(or any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such U.S. Underwriter through
the U.S. Representative expressly for use in the Registration Statement, the ADR
Registration Statement and the Form 8-A Registration Statement (or any amendment
thereto) or such preliminary prospectus or the Prospectuses (or any amendment or
supplement thereto); provided, however, that notwithstanding the foregoing
provisions, the aggregate amount of each Underwriter's indemnity obligations
under this Section 6 shall not exceed an amount equal to the net cash proceeds
(before deducting expenses) received by such Underwriter in connection with the
Offering.
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. In addition, the indemnifying
party shall be entitled, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense of any claim or
action brought against an indemnified party with counsel reasonably satisfactory
to the indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or action,
the indemnifying party shall not be liable to the indemnified party under this
Section 6 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever in respect of which indemnification or contribution could be
sought under this Section 6 or Section 7 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of
32
the nature contemplated by Section 6(a)(ii) effected without its written consent
if (i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received respectively by the
Company, each of the Selling Shareholders and the U.S. Underwriters from the
offering of the U.S. Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company, each of the
Selling Shareholders and the U.S. Underwriters, respectively, 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 relative benefits received respectively by the Company, each of the
Selling Shareholders and the U.S. Underwriters in connection with the offering
of the U.S. Securities pursuant to this Agreement shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of the
U.S. Securities pursuant to this Agreement (before deducting expenses) received
by the Company and each of the Selling Shareholders and the total underwriting
discount received by the U.S. Underwriters, in each case as set forth on the
cover of the U.S. Prospectus, or, if Rule 434 is used, the corresponding
location on the Term Sheet, bear to the aggregate initial public offering price
of the Securities as set forth on such cover.
The relative fault of the Company, each of the Selling Shareholders and the
U.S. Underwriters, respectively, shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or each of the Selling Shareholders or by
the U.S. Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the U.S. Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section 7. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
7 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.
33
Notwithstanding the provisions of this Section 7, no U.S. Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the U.S. Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
U.S. Underwriter has otherwise been required to pay by reason of any such untrue
or alleged untrue statement or omission or alleged omission. Further, the
aggregate amount of each Selling Shareholder's contribution obligations under
this Section 7 shall not exceed the amount equal to the net proceeds (before
deducting expenses) received by such Selling Shareholder from the sale of
Securities pursuant to this Agreement.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls a U.S.
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such U.S.
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, the ADR Registration Statement and the Form
8-A Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Company. The U.S.
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial U.S. Securities set forth
opposite their respective names in Schedule A hereto and not joint.
The provisions of this Section shall not affect any agreement among the
Company and the Selling Shareholders with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of the Subsidiaries or the
Selling Shareholders submitted pursuant hereto shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any U.S. Underwriter or any controlling person, or by or on behalf of the
Company or the Selling Shareholders, and shall survive delivery of the U.S.
Securities to the U.S. Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The U.S. Representative may terminate this
Agreement, by notice to the Company for itself and on behalf of the Selling
Shareholders, at any time at or prior to the Closing Time (i) if there has been,
since the time of execution of this Agreement or since the respective dates as
of which information is given in the U.S. Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and the Subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, or
(ii) if there has occurred, after the date hereof and prior to the Closing Time,
any material adverse change in the financial markets in the Cayman Islands, the
United States, the People's Republic of China, Asian or international financial
markets, any outbreak of hostilities or escalation thereof or other calamity or
crisis or any change or development involving a prospective change in national
or international political, financial or economic conditions or currency
exchange rates or exchange controls, in each case the effect of which is such as
to make it, in the judgment of the U.S. Representative, impracticable to market
the U.S. Securities or to enforce contracts for the sale of the U.S. Securities,
or (iii) if trading in
34
any securities of the Company has been suspended or materially limited by the
Commission, NASDAQ, or if trading generally on the American Stock Exchange or
the New York Stock Exchange or in NASDAQ has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the NASD or any other governmental authority, or
a material disruption has occurred in commercial banking or securities
settlement or clearance services in the United States or with respect to
Clearstream or Euroclear systems in Europe, or (iv) if a banking moratorium has
been declared by Cayman Islands, People's Republic of China, U.S. federal or New
York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided, further, that Sections 1,
6, 7, 8, 12, 13 and 14 shall survive such termination and remain in full force
and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the U.S. Underwriters shall fail at the Closing Time or a Time of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the U.S. Representative shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting U.S. Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the U.S.
Representative shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the number
of Securities to be purchased on such date, each of the non-defaulting U.S.
Underwriters shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting U.S.
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Time of Delivery which occurs after the Closing Time, the obligation of the U.S.
Underwriters to purchase and of the Company to sell the Option U.S. Securities
to be purchased and sold on such Time of Delivery shall terminate without
liability on the part of any non-defaulting U.S. Underwriter.
No action taken pursuant to this Section shall relieve any defaulting U.S.
Underwriter from liability in respect of its default.
In the event of any such default that does not result in a termination of
this Agreement or, in the case of a Time of Delivery that is after the Closing
Time, that does not result in a termination of the obligation of the U.S.
Underwriters to purchase and the Selling Shareholder to sell the relevant Option
U.S. Securities, as the case may be, either the U.S. Representative or the
Company shall have the right to postpone the Closing Time or the relevant Time
of Delivery, as the case may be, for a period not exceeding seven days in order
to effect any required changes in the Registration Statement or Prospectuses or
in any other documents or arrangements. As used
35
herein, the term "U.S. Underwriters" includes any person substituted for a U.S.
Underwriter under this Section 10.
SECTION 11. Default by one or more of the Selling Shareholders or the
Company.
(a) Default by Selling Shareholders. If a Selling Shareholder shall fail at
Closing Time or at a Date of Delivery to sell and deliver the number of
Securities that such Selling Shareholder is obligated to sell hereunder, and the
remaining Selling Shareholders do not exercise the right hereby granted to
increase, pro rata or otherwise (subject to being exercised only by the
applicable Selling Shareholders and not by the Attorney-in-Fact designated by
the Selling Shareholders), the number of Securities to be sold by them hereunder
to the total number to be sold by all Selling Shareholders as set forth in
Schedule B hereto, then the U.S. Underwriters may, at option of the U.S.
Representative, by notice from the U.S. Representative to the Company and the
non-defaulting Selling Shareholders, either (a) terminate this Agreement without
any liability on the fault of any non-defaulting party except that the
provisions of Sections 1, 4, 6, 7, 8, 12, 13 and 14 shall remain in full force
and effect or (b) elect to purchase the Securities that the non-defaulting
Selling Shareholders and the Company have agreed to sell hereunder. No action
taken pursuant to this Section 11 shall relieve any Selling Shareholder so
defaulting from liability, if any, in respect of such default.
In the event of a default by any Selling Shareholder as referred to in
this Section 11, each of the U.S. Representative, the Company and the
non-defaulting Selling Shareholders shall have the right to postpone Closing
Time or Date of Delivery for a period not exceeding seven days in order to
effect any required change in the Registration Statement or Prospectuses or in
any other documents or arrangements.
(b) Default by Company. If the Company shall fail at Closing Time to sell
the number of Securities that it is obligated to sell hereunder, then this
Agreement shall terminate without any liability on the part of any nondefaulting
party; provided, however, that the provisions of Sections 1, 4, 6, 7, 8, 12, 13
and 14 shall remain in full force and effect. No action taken pursuant to this
Section shall relieve the Company from liability, if any, in respect of such
default.
SECTION 12. Waiver of Immunities. To the extent that the Company, the
Selling Shareholders or any of their respective properties, assets or revenues
may have or may hereafter become entitled to, or have attributed to the Company
or the Selling Shareholders, any right of immunity, on the grounds of
sovereignty or otherwise, from any legal action, suit or proceeding, from the
giving of any relief in any such legal action, suit or proceeding, from setoff
or counterclaim, from the jurisdiction of any Cayman Islands, New York or U.S.
federal court, from service of process, from attachment upon or prior to
judgment, from attachment in aid of execution of judgment, or from execution of
judgment, or other legal process or proceeding for the giving of any relief or
for the enforcement of any judgment, in any such court in which proceedings may
at any time be commenced, with respect to the obligations and liabilities of the
Company or the Selling Shareholders, or any other matter under or arising out of
or in connection with, the Principal Agreements or any of them, the Company and
the Selling Shareholders hereby irrevocably and unconditionally waive or will
waive such right to the extent permitted by law, and agree not to plead or
claim, any such immunity and consents to such relief and enforcement.
36
SECTION 13. Consent to Jurisdiction; Appointment of Agent for Service of
Process.
(a) Consent to Jurisdiction. The Company and the Selling Shareholders, by
their execution and delivery of this Agreement, hereby irrevocably consent and
submit to the nonexclusive jurisdiction of any New York Court in personam
generally and unconditionally in respect of any such suit or proceeding.
(b) Appointment of Agent for Service of Process. The Company and the
Selling Shareholders further, by their execution and delivery of this Agreement,
irrevocably designate, appoint and empower CT Corporation System, 000 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx as their designee, appointee and authorized agent
(the "Authorized Agent") to receive for and on their behalf service of any and
all legal process, summons, notices and documents that may be served in any
action, suit or proceeding brought against the Company or Selling Shareholders,
respectively, with respect to their obligations, liabilities or any other matter
arising out of or in connection with this Agreement or the International
Purchase Agreement and that may be made on the Authorized Agent in accordance
with legal procedures prescribed for such courts, and it being understood that
the designation and appointment of CT Corporation System as the Authorized Agent
shall become effective immediately without any further action on the part of the
Company or the Selling Shareholders. Each of the Company and the Selling
Shareholders represents to each Underwriter that it has notified CT Corporation
System of such designation and appointment and that CT Corporation System has
accepted the same. The Company and Selling Shareholders further agree that, to
the extent permitted by law, proper service of process upon CT Corporation
System (or its successors as agent for service of process) and written notice of
said service to the Company or Selling Shareholders pursuant to Section 15,
shall be deemed in every respect effective service of process upon the Company
or Selling Shareholders, respectively, in any such suit or proceeding. If for
any reason such designee, appointee and agent hereunder shall cease to be
available to act as such, the Company and Selling Shareholders agree to
designate a new designee, appointee and agent in The City of New York, New York
on the terms and for the purposes of this Section 13 reasonably satisfactory to
the U.S. Representative. The Company and Selling Shareholders further hereby
irrevocably consent and agree to the service of any and all legal process,
summons, notices and documents in any such action, suit or proceeding against
the Company or Selling Shareholders, respectively, by serving a copy thereof
upon the relevant agent for service of process referred to in this Section 13
(whether or not the appointment of such agent shall for any reason prove to be
ineffective or such agent shall accept or acknowledge such service) and by
mailing copies thereof by registered or certified air mail, postage prepaid, to
the Company or Selling Shareholders, respectively, at the addresses specified in
or designated pursuant to this Agreement. The Company and Selling Shareholders
agree that the failure of any such designee, appointee and agent to give any
notice of such service to them shall not impair or affect in any way the
validity of such service or any judgment rendered in any action or proceeding
based thereon. Nothing herein shall in any way be deemed to limit the ability of
the Underwriters and the other persons referred to in Sections 6 and 7 to serve
any such legal process, summons, notices and documents in any other manner
permitted by applicable law or to obtain jurisdiction over the Company or the
Selling Shareholders or bring actions, suits or proceedings against the Company
or Selling Shareholders in such other jurisdictions, and in such manner, as may
be permitted by applicable law. The Company and Selling Shareholders hereby
irrevocably and unconditionally waive, to the fullest extent permitted by law,
any objection that they may now or hereafter have to the laying of venue of any
of the aforesaid actions, suits or
37
proceedings arising out of or in connection with this Agreement or the
International Purchase Agreement brought in any New York Court and hereby
further irrevocably and unconditionally waive and agree not to plead or claim in
any such court that any such action, suit or proceeding brought in such court
has been brought in an inconvenient forum.
SECTION 14. Judgment Currency. The Company and the Selling Shareholders
agree to indemnify each U.S. Underwriter and each person, if any, who controls
such U.S. Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, and each U.S. Underwriter severally agrees to
indemnify the Company, its directors, each of its officers who signed the
Registration Statement, the ADR Registration Statement and the Form 8-A
Registration Statement, the Selling Shareholders and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act, against any loss incurred, as incurred, as a result of any
judgment being given in connection with this Agreement, the Prospectuses, the
Registration Statement, the ADR Registration Statement or the Form 8-A
Registration Statement for which indemnification is provided by such person
pursuant to Section 6 of this Agreement and any such judgment or order being
paid in a currency (the "Judgment Currency") other than US dollars as a result
of any variation as between (i) the spot rate of exchange in New York at which
the Judgment Currency would have been convertible into US dollars as of the date
such judgment or order is entered, and (ii) the spot rate of exchange at which
the indemnified party is first able to purchase US dollars with the amount of
the Judgment Currency actually received by the indemnified party. If,
alternatively, the indemnified party receives a profit as a result of such
currency conversion, it will return any such profits to the indemnifying party
(after taking into account any taxes or other costs arising in connection with
such conversion and repayment). The foregoing indemnity shall constitute a
separate and independent, several and not joint, obligation of the Company, the
Selling Shareholders and the U.S. Underwriters and shall continue in full force
and effect notwithstanding any such judgment or order as aforesaid. The term
"spot rate of exchange" shall include any premiums and costs of exchange payable
in connection with the purchase of, or conversion into, the relevant currency.
SECTION 15. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the U.S.
Underwriters shall be directed to the U.S. Representative care of Xxxxxxx Xxxxx
& Co., Xxxxxxx Xxxxx, Xxxxxx Xxxxxx & Xxxxx Incorporated, North Tower, World
Financial Center, New York, New York 10281-1201, attention of Equity Capital
Markets; notices to the Company shall be directed to it at Xxxxx.xxx (Hong Kong)
Limited, Xxxx 0000, Xxx Xxxxxxxx, 00 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxx Xxxx,
attention: Xxxx Xxxx; and notices to the Selling Shareholders shall be directed
at the Selling Shareholders' respective addresses set forth on Schedule F
hereto.
SECTION 16. Parties. This Agreement shall each inure to the benefit of and
be binding upon the U.S. Underwriters, the Company the Selling Shareholders and
their respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the U.S. Underwriters, the Company and the Selling Shareholders and their
respective successors and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or
38
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the U.S.
Underwriters, the Company and the Selling Shareholders and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any U.S. Underwriter shall be
deemed to be a successor by reason merely of such purchase.
SECTION 17. Governing Law and Time. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS MAY BE
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 18. Effect of Headings. The Section headings herein and the Table
of Contents are for convenience only and shall not affect the construction
hereof.
SECTION 19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all
counterparts shall together constitute one and the same Agreement.
39
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to each of the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the U.S. Underwriters, the Company and the Selling Shareholders in
accordance with its terms.
Very truly yours,
XXXXX.XXX INTERNATIONAL, LTD.
By:
--------------------------------
Name:
Title:
ATTORNEY-IN-FACT FOR SELLING
SHAREHOLDERS
By:
--------------------------------
Name:
As Attorney-in-Fact acting on
behalf of each of the Selling
Shareholders named in Schedule B
to this Agreement
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By:
-------------------------------------
Authorized Signatory
For themselves and as U.S. Representative of
the other U.S. Underwriters named in
Schedule A hereto
Schedule A
LIST OF U.S. UNDERWRITERS
Number of Initial U.S.
Securities
Name of U.S. Underwriter (in the form of ADSs)
------------------------ ----------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated.............................. -
U.S. Bancorp Xxxxx Xxxxxxx Inc. ...................... -
SoundView Technology Corporation...................... -
-----------
Total............................................ -
===========
Sch A-1
Schedule B
LIST OF COMPANY AND SELLING SHAREHOLDERS
Number of Initial U.S. Maximum Number of U.S. Option
Securities to be Sold Securities to Be Sold
--------------------- -----------------------------
Xxxxx.xxx International Ltd.
Xxxx Nanpeng Xxxx
Xxxxx Xxxxxxxxx Xxxxx
Qi Xx
Xxxxxx Xxxxxxx Xxxx
Xxx Xxx
Xxxxxxx Asia Venture Partners I, L.P.
CIPA Co-Investment, L.P.
IDG Technology Venture Investment, Inc.
IDG Technology Venture Investments, LP
S.I. Technology Venture Capital Limited
China Enterprise Investments No. 11 Limited
Ecity Investment Limited
Xxxx Xxxx Xx
Xxxx Tan
Ze Xxxxx Xxxx
Openventure Company Limited
Xi Xxxx Xxxx
Xx Xxx
Total........................
Sch B-1
Schedule C
OFFERING PRICE
XXXXX.XXX INTERNATIONAL, LTD.
- American Depositary Shares, each representing two Ordinary Shares
(Par Value $0.01 Per Ordinary Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $-.
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $-, being an amount equal to the initial public
offering price set forth above less $- per share; provided that the purchase
price per share for any Option Securities purchased upon the exercise of the
over-allotment option described in Section 2(b) shall be reduced by an amount
per share equal to any dividends or distributions declared by the Company and
payable on the Initial Securities but not payable on the Option Securities.
Sch C-1
Schedule D
LIST OF PERSONS AND ENTITIES SUBJECT TO LOCK-UP
Xxxx Nanpeng Xxxx
Xxxxx Xxxxxxxxx Xxxxx
Qi Xx
Xxxxxx Xxxxxxx Xxxx
Xxx Xxx
Xxxxxxx Xx
Xxxxxxx Asia Venture Partners I, L.P.
CIPA Co-Investment, L.P.
Tiger Technology Private Investment Partners, L.P.
Tiger Technology II, L.P.
IDG Technology Venture Investment, Inc.
IDG Technology Venture Investments, LP
S.I. Technology Venture Capital Limited
China Enterprise Investments No. 11 Limited
Ecity Investment Limited
Xxxx Xxxx Xx
Xxxx Tan
Ze Xxxxx Xxxx
Openventure Company Limited
Xi Xxxx Xxxx
Xx Xxx
Sch D-1
Schedule E
LIST OF SELLING SHAREHOLDERS THAT PROVIDE AN OPINION OF COUNSEL
Carlyle Asia Venture Partners I, L.P.
CIPA Co-Investment, L.P.
IDG Technology Venture Investment, Inc.
IDG Technology Venture Investments, LP
S.I. Technology Venture Capital Limited
China Enterprise Investments No. 11 Limited
Ecity Investment Limited
Openventure Company Limited
Sch E-1
Schedule F
NOTICE ADDRESSES OF SELLING SHAREHOLDERS
Sch F-1
