Exhibit 1.1
FOCUS MEDIA HOLDING LIMITED
* AMERICAN DEPOSITARY SHARES
REPRESENTING
* ORDINARY SHARES
(PAR VALUE US$0.00005 PER SHARE)
UNDERWRITING AGREEMENT
* , 2006
Credit Suisse Securities (USA) LLC,
Eleven Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000-0000.
Xxxxxxx Xxxxx (Asia) L.L.C.,
68th Floor, Xxxxxx Kong Center,
0 Xxxxx'x Xxxx Xxxxxxx,
Xxxx Xxxx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated,
4 World Financial Center,
000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Citigroup Global Markets Inc.,
000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
As representatives of the several Underwriters
named in Schedule I hereto,
Ladies and Gentlemen:
Focus Media Holding Limited, a Cayman Islands company (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of * American Depositary Shares representing * Ordinary Shares, par
value US$0.00005 per share (the "Ordinary Shares"), of the Company and, at the
election of the Underwriters, up to * additional American Depositary Shares
representing * Ordinary Shares, and the shareholders of the Company named
in Schedule II hereto (the "Selling Shareholders") propose, subject to the terms
and conditions stated herein, to sell to the Underwriters an aggregate of *
American Depositary Shares representing * Ordinary Shares and, at the
election of the Underwriters, up to * additional American Depositary Shares
representing * Ordinary Shares. The aggregate of * American
Depositary Shares representing * Ordinary Shares to be sold by the Company and
the Selling Shareholders is herein called the "Firm ADSs", and the aggregate of
* American Depositary Shares representing * additional Ordinary Shares to be
sold by the Company and certain of the Selling Shareholders is herein called the
"Optional ADSs". The Firm ADSs, together with the Optional ADSs that the
Underwriters elect to purchase pursuant to Section 2 hereof, are herein
collectively called the "ADSs". The ADSs to be sold by the Selling Shareholders
are herein called the "Selling Shareholder ADSs". The Ordinary Shares
represented by the Firm ADSs are hereinafter called the "Firm Shares" and the
Ordinary Shares represented by the Optional ADSs are hereinafter called the
"Optional Shares" and the Firm Shares and the Optional Shares are hereinafter
collectively called the "Shares".
The ADSs are to be issued pursuant to a deposit agreement (the "Deposit
Agreement"), dated as of July 18, 2005, among the Company, Citibank, N.A., as
depositary (the "Depositary"), and holders from time to time of the American
Depositary Receipts (the "ADRs") issued by the Depositary and evidencing the
ADSs. Each ADS will initially represent the right to receive ten Ordinary Shares
deposited pursuant to the Deposit Agreement.
It is understood by all the parties that the Underwriters are offering
ADSs in the United States and internationally outside of the People's Republic
of China (the "PRC").
1. (a) Each of Xxxxx Xxxxxxx Xxxxx (the "Controlling Person") and the
Company jointly and severally represents and warrants to, and agrees with, each
of the Underwriters that:
(i) A registration statement on Form F-1 (File No. 333- * ) (the
"Initial Registration Statement") in respect of the Shares and the ADSs has been
filed with the Securities and Exchange Commission (the "Commission"); the
Initial Registration Statement and any post effective amendment thereto, each in
the form heretofore delivered to you, and, excluding exhibits thereto, to you
for each of the other Underwriters, have been declared effective by the
Commission in such form; other than a registration statement, if any, increasing
the size of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the U.S. Securities Act of 1933, as amended (the
"Act"), which became effective upon filing, no other document with respect to
the Initial Registration Statement has heretofore been filed with the
Commission; and no stop order suspending the effectiveness of the Initial
Registration Statement, any post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for that
purpose has been initiated or, to the best of the Company's knowledge,
threatened by the Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule 424(a) of
the rules and regulations of the Commission under the Act, is hereinafter called
a "Preliminary Prospectus"; the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto and including the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof and deemed by virtue of Rule 430A under the
Act to be part of the Initial Registration Statement at the time it was declared
effective, each as amended at the time such part of the Initial Registration
Statement became effective or such part of the Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, are hereinafter
collectively called the "Registration Statement"; the Preliminary Prospectus
relating to the ADSs that was included in the Registration Statement immediately
prior to the Applicable Time (as
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defined in Section 1(a)(iii) hereof) is hereinafter called the "Pricing
Prospectus"; such final prospectus, in the form first filed pursuant to Rule
424(b) under the Act, is hereinafter called the "Prospectus"; any reference to
any amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the date of
such Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated therein; and any "issuer free writing prospectus" as defined in
Rule 433 under the Act relating to the ADSs is hereinafter called an "Issuer
Free Writing Prospectus");
(ii) No order preventing or suspending the use of any Preliminary
Prospectus or any Issuer Free Writing Prospectus has been issued by the
Commission, and each Preliminary Prospectus, at the time of filing thereof,
conformed in all material respects to the requirements of the Act and the rules
and regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter through Credit Suisse Securities (USA)
LLC, Xxxxxxx Sachs (Asia) L.L.C., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated and Citigroup Global Markets Inc. (collectively, the
"Representatives") expressly for use therein;
(iii) For the purposes of this Agreement, the "Applicable Time" is 4:30
a.m. Eastern Time on the date of this Agreement; the Pricing Prospectus as
supplemented by the Issuer Free Writing Prospectuses and other documents listed
in Schedule III(a) hereto and such other information deemed incorporated therein
pursuant to Rule 430A under the Act, taken together (collectively, the "Pricing
Disclosure Package") as of the Applicable Time, did not include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading; and each Issuer Free Writing Prospectus listed
on Schedule III(a) or Schedule III(b) hereto does not conflict with the
information contained in the Registration Statement, the Pricing Prospectus or
the Prospectus and each such Issuer Free Writing Prospectus, as supplemented by
and taken together with the Pricing Disclosure Package as of the Applicable
Time, did not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to statements or
omissions made in an Issuer Free Writing Prospectus in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through the Representatives expressly for use therein;
(iv) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to each part of the Registration
Statement and any amendment thereto and as of the applicable filing date as to
the Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall
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not apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter through
the Representatives expressly for use therein;
(v) A registration statement on Form F-6 (File No. 333-126011) in
respect of the ADSs was filed with the Commission on July 11, 2005; such
registration statement in the form heretofore delivered to you and, excluding
exhibits, to you for each of the other Underwriters, has been declared effective
by the Commission in such form; no other document with respect to such
registration statement has heretofore been filed with the Commission; no stop
order suspending the effectiveness of such registration statement has been
issued and no proceeding for that purpose has been initiated or, to the best of
the Company's knowledge, threatened by the Commission (the various parts of such
registration statement, including all exhibits thereto, each as amended at the
time such part of the registration statement became effective, being hereinafter
called the "ADS Registration Statement"); and the ADS Registration Statement
when it became effective conformed, and any further amendments thereto will
conform, in all material respects to the requirements of the Act and the rules
and regulations of the Commission thereunder, and did not, as of the applicable
effective date, contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading;
(vi) A registration statement on Form 8-A (File No. 000-51387) in
respect of the registration of the Shares and the ADSs under the Exchange Act
was filed with the Commission on June 28, 2005; such registration statement in
the form heretofore delivered to you and, excluding exhibits, to you for each of
the other Underwriters, was declared effective by the Commission in such form;
no other document with respect to such registration statement has heretofore
been filed with the Commission; no stop order suspending the effectiveness of
such registration statement has been issued and no proceeding for that purpose
has been initiated or, to the best of the Company's knowledge, threatened by the
Commission (the various parts of such registration statement, including all
exhibits thereto, each as amended at the time such part of the registration
statement became effective, being hereinafter called the "Form 8-A Registration
Statement"); and the Form 8-A Registration Statement when it became effective
conformed, and any further amendments thereto, if any, will conform, in all
material respects to the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder, and did not and will not, as of the
applicable effective date, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Company by an Underwriter through the Representatives expressly for use therein;
(vii) The following entities constitute all of the entities held or
controlled directly or indirectly by the Company (collectively referred to
herein as the "Group Entities"): (A) (i) Focus Media (China) Holding Ltd, a Hong
Kong company ("Focus Media Hong Kong"), (ii) Focus Media Technology (Shanghai)
Co., Ltd., a PRC wholly-foreign owned enterprise ("Focus Media Technology"),
(iii) New Focus Media Technology (Shanghai) Co., Ltd., a PRC wholly-foreign
owned enterprise ("New Focus Media Technology"), (iv) Focus Media Digital
Information Technology (Shanghai) Co., Ltd., a PRC company ("Focus Media
Digital"), (v)
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Perfect Media Holding Ltd., Focus Media Dalian Holding Ltd, Focus Media Changsha
Holding Ltd., Focus Media Qingdao Holding Ltd., Sorfari Holdings Limited, Focus
Media Tianjin Limited, Capital Beyond Limited, Skyvantage Group Limited and
Billion Honest Group Limited, each a British Virgin Islands company
(collectively, the "Company Subsidiaries"), (vi) Shanghai Focus Media
Advertising Agency Co. Ltd. ("Focus Media Advertising Agency"), Shanghai New
Perfect Media Advertisement Co., Ltd. ("New Perfect Media"), Shanghai New Focus
Media Advertisement Co., Ltd. ("New Focus Media Advertisement") and Shenzhen
E-Time Commercial Consulting Co. Ltd. ("Shenzhen E-Time"), each a PRC company,
and (vii) Shanghai Focus Media Advertisement Co., Ltd., a PRC company ("Focus
Media Advertisement"), its branches in Beijing, Shenzhen, Guangzhou, Wenzhou,
Suzhou, Wuxi, Mianyang and Maoming (collectively, the "Focus Media Advertisement
Branches") and the other PRC subsidiaries of Focus Media Advertisement listed in
Schedule IV hereto, excluding Focus Media Digital, New Focus Media
Advertisement, New Structure Advertisement, Framedia Advertisement, Guangdong
Framedia and Focus Media Wireless (collectively, the "Focus Media Advertisement
Subsidiaries"), (B) (i) InfoAchieve Limited, a British Virgin Islands company
("InfoAchieve"), (ii) Shanghai Framedia Investment Consulting Co., Ltd., a PRC
wholly-foreign owned enterprise ("Framedia Investment"), (iii) Shanghai New
Structure Advertisement Co., Ltd. ("New Structure Advertisement") and Guangdong
Shiji Shenghou Advertisement Co., Ltd. ("Guangdong Framedia"), each a PRC
company, and (iv) Shanghai Framedia Advertisement Development Co., Ltd., a PRC
company, ("Framedia Advertisement") and its branches in Beijing, Guangzhou,
Shenzhen, Wuhan, Nanjing and Dongwan (collectively, the "Framedia Branches"),
(C) (i) Target Media Holdings Limited, a Cayman Islands company ("Target Media
Holdings"), (ii) Target Media Multi-Media Technology (Shanghai) Co., Ltd., a PRC
wholly-foreign owned enterprise ("Target Multi-Media"), and (iii) Shanghai
Target Media Co., Ltd., a PRC company ("Shanghai Target Media"), and its
subsidiaries, branches and representative offices, and (D) (i) Dotad Media
Holdings Limited, a British Virgin Islands company ("Dotad Holdings"), (ii)
Beijing Dotad Technology Co., Ltd. ("Dotad Technology") and (iii) Beijing Focus
Media Wireless Co., Ltd. ("Focus Media Wireless"). The Company and the Group
Entities taken as a whole have not sustained since the date of the latest
audited financial statements included in the Pricing Prospectus any material
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Pricing Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the Pricing
Prospectus, there has not been any change in the share capital, short term debt
or long term debt of the Company or any of the Group Entities or any material
adverse change or any development involving a prospective material adverse
change in or affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company and the Group
Entities otherwise than as set forth or contemplated in the Pricing Prospectus.
Shanghai On-Target Advertisement Communications Co., Ltd. has no operations,
assets or liabilities of any kind or nature. Other than the Group Entities, no
other subsidiary or entity affiliated with the Company or with the Controlling
Person is or would be if owned or controlled by the Company a "Significant
Subsidiary" as defined in Regulation S-X under the Act;
(viii) Neither the Company nor any of the Group Entities owns any real
property and each of the Company and the Group Entities has good and marketable
title to all personal property owned by it, in each case free and clear of all
liens, encumbrances and defects except
5
such as are described in the Pricing Prospectus or such as do not materially
affect the value of such property and do not interfere with the use made and
proposed to be made of such property by each of the Company and the Group
Entities; and any real property and buildings held under lease by each of the
Company and the Group Entities are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by each
of the Company and the Group Entities;
(ix) The description and information in the Pricing Prospectus and the
Prospectus under the caption "Business - Our Network" regarding the distribution
agreements is true and accurate in all material respects. Each of Focus Media
Advertisement, and to the best knowledge of the Company, the other parties to
the distribution agreements, has full power, authority and legal right to enter
into, execute, adopt, assume, issue, deliver and perform their respective
obligations under each of the distribution agreements to which they are a party,
and has authorized, executed and delivered each of the distribution agreements
to which they are a party, and such obligations constitute valid, legal and
binding obligations enforceable against each of them in accordance with the
terms of each of the distribution agreements. Focus Media Advertisement is the
only Group Entity to have entered into any of the distribution agreements. Each
of the distribution agreements is in proper legal form under PRC laws and
regulations for the enforcement thereof against each of the parties thereto in
the PRC without further action by any of them. The execution, delivery and
performance of each of the distribution agreements by the parties thereto did
not and will not (A) result in any violation of the business license, articles
of association, other constitutional documents (if any) or permits of Focus
Media Advertisement or, to the best knowledge of the Company, any of the other
parties thereto; (B) result in any violation of or penalty under any laws,
regulations, rules, orders, decrees, guidelines, judicial interpretations,
notices or other legislation of the PRC; or (C) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any other contract, license, indenture, mortgage, deed of trust,
loan agreement, note, lease or other agreement or instrument to which Focus
Media Advertisement is a party or by which Focus Media Advertisement is bound or
to which any of its property or assets is subject, except, in the case of
clauses (B) and (C), where any such conflict, breach, violation or default would
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on or affecting the general affairs, management, business,
financial position, shareholders' equity, results of operations or prospects of
the Company and the Group Entities taken as a whole (a "Material Adverse
Effect"). Each of the distribution agreements is in full force and effect and
none of Focus Media Advertisement or, to the best knowledge of the Company, the
other parties to any of the distribution agreements is in breach or default in
the performance or observance of any of the terms or provisions of the
distribution agreements. None of the parties to any of the distribution
agreements has sent or received any communication regarding termination of, or
intention not to perform its obligations under, any of the distribution
agreements, and no such termination or non-performance has been threatened by
any of the parties thereto;
(x) The description and information in the Pricing Prospectus and the
Prospectus regarding the display and poster frame placement agreements
(collectively, the "Placement Agreements") and the outdoor LED billboard lease
agreement (the "LED Lease Agreement"), is true and accurate in all material
respects. Each of the Group Entities, as applicable, and to the best knowledge
of the Company, the other parties to the Placement Agreements, the LED Lease
6
Agreement and the agreements with local branches of China Mobile Communications
Corporation ("China Mobile") and China United Communications Corporation ("China
Unicom") in connection with the mobile handset WAP-based advertising network
(collectively, the "WAP Agreements") has full power, authority and legal right
to enter into, execute, adopt, assume, issue, deliver and perform their
respective obligations under each of the Placement Agreements, the LED Lease
Agreement and the WAP Agreements to which they are a party, and has authorized,
executed and delivered each of the Placement Agreements, the LED Lease Agreement
and the WAP Agreements to which they are a party, and such obligations
constitute valid, legal and binding obligations enforceable against each of them
in accordance with the terms of each of the Placement Agreements, the LED Lease
Agreement and the WAP Agreements. Each of the Placement Agreements, the LED
Lease Agreement and the WAP Agreements is in proper legal form under PRC laws
and regulations for the enforcement thereof against each of the parties thereto
in the PRC without further action by any of them. The execution, delivery and
performance of each of the Placement Agreements, the LED Lease Agreement and the
WAP Agreements by the parties thereto did not and will not (A) result in any
violation of the business license, articles of association, other constitutional
documents (if any) or permits of the Group Entities or, to the best knowledge of
the Company, any of the other parties thereto; (B) result in any violation of or
penalty under any laws, regulations, rules, orders, decrees, guidelines,
judicial interpretations, notices or other legislation of the PRC, including
without limitation any applicable building or zoning ordinances, covenants, or
restrictions; or (C) conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any other contract,
license, indenture, mortgage, deed of trust, loan agreement, note, lease or
other agreement or instrument to which any of the Group Entities is a party or
by which any of the Group Entities is bound or to which any of their property or
assets is subject, except, in the case of clauses (B) and (C), where any such
conflict, breach, violation or default would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Each of the
Placement Agreements, the LED Lease Agreement and the WAP Agreements is in full
force and effect and none of the Group Entities which are a party or, to the
best knowledge of the Company, the other parties to any of the Placement
Agreements, the LED Lease Agreement and the WAP Agreements is in breach or
default in the performance or observance of any of the terms or provisions of
the Placement Agreements, the LED Lease Agreement and the WAP Agreements. None
of the parties to any of the Placement Agreements, the LED Lease Agreement and
the WAP Agreements has sent or received any communication regarding termination
of, or intention not to renew, any of the Placement Agreements, the LED Lease
Agreement and the WAP Agreements, and no such termination or non-renewal has
been threatened by any of the parties thereto, except where any such termination
or non-renewal would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each of Focus Media Advertisement,
the Focus Media Advertisement Subsidiaries, and the Focus Media Advertisement
Branches and the regional distributors has rights of access sufficient to
install, replace, upgrade, inspect, maintain, monitor and repair the flat-panel
television displays that are intended to be placed in the locations contemplated
by each of the Placement Agreements to which it is a party. Each of Framedia
Advertisement and the Framedia Branches and the regional distributors has rights
of access sufficient to install, replace, upgrade, inspect, maintain, monitor
and repair the advertising poster frames that are intended to be placed in the
locations contemplated by each of the Placement Agreements to which it is a
party. Focus Media Wireless operates a mobile handset WAP-based advertising
service over China Mobile and China Unicom's mobile telecommunication networks.
Focus Media Wireless may be
7
required by the PRC regulatory authorities to obtain a value-added
telecommunication service permit for its mobile handset WAP-based advertising
service and it has applied for such permit. To the best knowledge of the
Company, Yihukuan Media Co., Ltd. has rights of access sufficient to install,
replace, upgrade, inspect, maintain, monitor and repair the LED billboards that
are intended to be placed in the locations contemplated by the LED Lease
Agreement to which it is a party. Focus Media Advertisement, the Focus Media
Advertisement Subsidiaries, the Focus Media Advertisement Branches, Framedia
Advertisement, the Framedia Branches and the regional distributors are the only
Group Entities that have entered into any Placement Agreements, New Focus Media
Advertisement is the only Group Entity that has entered into the LED Lease
Agreement, and none of the Company or the Company Subsidiaries is a party to any
Placement Agreements or the LED Lease Agreement;
(xi) Each of the Company and the Group Entities has full power,
authority and legal right to enter into, execute, adopt, assume, issue, deliver
and perform their respective obligations under each of the contracts and
agreements referred to or described in, or filed as an exhibit to, the
Registration Statement to which it is a party (the "Disclosed Contracts"), and
has authorized, executed and delivered each of the Disclosed Contracts, and such
obligations constitute valid, legal and binding obligations enforceable against
each of them in accordance with the terms of each of the Disclosed Contracts.
Each of the Disclosed Contracts is in proper legal form under relevant laws for
the enforcement thereof against each of the parties thereto without further
action by any of them. The execution, delivery and performance of each of the
Disclosed Contracts by the parties thereto did not and will not (A) result in
any violation of the business license, articles of association, other
constitutional documents (if any) or permits of any of the parties thereto; (B)
result in any violation of or penalty under any laws, regulations, rules,
orders, decrees, guidelines, judicial interpretations, notices or other
legislation of the PRC or any other jurisdiction ; or (C) conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any other contract, license, indenture, mortgage,
deed of trust, loan agreement, note, lease or other agreement or instrument to
which any of them is a party or by which any of them is bound or to which any of
their property or assets is subject, except, in the case of clauses (B) and (C),
where any such conflict, breach, violation or default would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect. Each
of the Disclosed Contracts is in full force and effect and none of the parties
to any of the Disclosed Contracts is in breach or default in the performance or
observance of any of the terms or provisions of the Disclosed Contracts. Neither
the Company nor any of the Group Entities has sent or received any communication
regarding termination of, or intention not to renew, any of the Disclosed
Contracts, and no such termination or non-renewal has been threatened by the
Company or, to the best knowledge of the Company and the Controlling Person, any
other party to any Disclosed Contract;
(xii) The Company has been duly organized and is validly existing as a
company in good standing under the laws of the Cayman Islands, with legal right,
power and authority (corporate and other) to own, lease and operate its
properties and conduct its business as described in the Pricing Prospectus and
the Prospectus, and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification, except where the failure to be so qualified in
any such jurisdiction would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect; and
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each of the Group Entities has been duly organized and is validly existing in
good standing under the laws of its jurisdiction of organization, with legal
right, power and authority (corporate and other) to own, lease and operate its
properties and conduct its business as described in the Pricing Prospectus and
the Prospectus, and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such jurisdiction;
and each of the business licenses and articles of association of each of the
Group Entities formed under the laws and regulations of the PRC is in full force
and effect under, and in compliance with, PRC law;
(xiii) Except for Focus Media Hong Kong, none of the Group Entities
owns or leases properties or conducts any business outside of the PRC; none of
the Group Entities needs to be duly qualified as a foreign corporation for the
transaction of business under the laws of any jurisdiction in which it is not
now so qualified;
(xiv) Each of the Company and the Group Entities, as applicable, has
the legal right, power and authority (corporate and other) to enter into and
perform its obligations under each of the agreements which have been executed by
the parties thereto and are described under the captions "Related Party
Transactions - Agreements Among Focus Media Technology, Focus Media Digital, New
Focus Media Advertisement, Focus Media Advertisement and Its Subsidiaries",
"Related Party Transactions - Agreements Among Focus Media Advertisement, Focus
Media Advertising Agency, Framedia Investment, Framedia Advertisement, Guangdong
Framedia and New Structure Advertisement", "Related Party Transactions -
Agreements Among Focus Media Advertisement, Focus Media Advertising Agency,
Focus Media Wireless and Dotad Technology" and "Our Corporate Structure" in the
Pricing Prospectus and the Prospectus and filed as Exhibits 10.2 through 10.22,
10.42 through 10.48 and 10.52 through 10.57 to the Registration Statement
(collectively, the "Structure Agreements") to which it is a party and has taken
all necessary corporate action to authorize the execution, delivery and
performance of, and has authorized, executed and delivered, each of the
Structure Agreements to which it is a party; and each of the Structure
Agreements to which each of the Company and the Group Entities, as applicable,
is a party constitutes a valid and legally binding obligation of each of them
enforceable in accordance with its terms, subject, as to enforceability, to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles;
(xv) Each of Xxxxx Xxxxxxx Xxxxx and Xxxxx Xxx Xx has executed and
delivered each of the Structure Agreements to which he is a party; and each of
the Structure Agreements to which he is a party constitutes a valid and legally
binding obligation of each of them enforceable in accordance with its terms,
subject as to enforceability to bankruptcy, insolvency, reorganization and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles;
(xvi) The execution and delivery by each of the Company and the Group
Entities of, and the performance by each of them of its respective obligations
under, each of the Structure Agreements to which it is a party and the
consummation by them of the transactions and the occurrence of the events
contemplated therein will not: (A) conflict with or result in a breach or
9
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which any of the Company and the Group Entities, as applicable, is
bound or to which any of their properties or assets is bound or subject, except
where any such conflict, breach, violation or default would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect; (B)
result in any violation of the provisions of the respective articles of
association, business license, other constitutional documents (if any) or
permits of any of the Company and the Group Entities; or (C) result in any
violation of or penalty under any laws, regulations, rules, orders, decrees,
guidelines, judicial interpretations, notices or other legislation of the PRC;
(xvii) The execution and delivery by each of Xxxxx Xxxxxxx Xxxxx and
Xxxxx Xxx Xx of, and the performance by each of them of his obligations under,
each of the Structure Agreements to which each of them is a party and the
consummation by them of the transactions contemplated therein will not: (A)
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which he is a party or
by which he is bound or to which any of his properties or assets is bound or
subject; or (B) result in any violation of or penalty under any laws,
regulations, rules, orders, decrees, guidelines, judicial interpretations,
notices or other legislation of the PRC;
(xviii) Each of the Structure Agreements is in proper legal form under
the laws and regulations of the PRC for the enforcement thereof against each of
the parties thereto in the PRC without further action by any of them; and to
ensure the legality, validity, enforceability or admissibility in evidence of
each of the Structure Agreements in the PRC, it is not necessary that any such
document be filed or recorded with any court or other authority in the PRC or
that any stamp or similar tax be paid on or in respect of any of the Structure
Agreements (except for (i) an equity purchase agreement to be entered into for
the exercise of the call option as set forth under the Call Option Agreement as
described in the Pricing Prospectus under the captions "Related Party
Transactions - Agreements Among Us, Focus Media Technology, Focus Media Digital,
New Focus Media Advertisement, Focus Media Advertisements and its Subsidiaries",
and Equity Pledge Agreement as described in the Pricing Prospectus under the
caption "Related Party Transactions - Agreements Among Focus Media
Advertisement, Focus Media Advertising Agency, Framedia Investment, Framedia
Advertisement, Guangdong Framedia and New Structure Advertisement", which upon
the exercise of the call option described therein the Company undertakes to file
with the relevant PRC government authorities; (ii) the Trademark License
Agreement as described in the Pricing Prospectus under the caption "Related
Party Transactions - Agreements Among Us, Focus Media Technology, Focus Media
Digital, New Focus Media Advertisement, Focus Media Advertisement and Its
Subsidiaries", which the Company undertakes to file with the relevant PRC
government authorities within three months of the date of the public
announcement of the registration of the registered trademarks described therein;
or (iii) the Equity Pledge Agreements as described in the Pricing Prospectus
under the captions "Related Party Transactions - Agreements Among Us, Focus
Media Technology, Focus Media Digital, New Focus Media Advertisement, Focus
Media Advertisements and its Subsidiaries", "Related Party Transactions -
Agreements Among Focus Media Advertisement, Focus Media Advertising Agency,
Framedia Investment, Framedia Advertisement, Guangdong Framedia and New
Structure Advertisement" and "Related Party Transactions - Agreements Among
Focus Media Advertisement, Focus Media Advertising Agency, Focus Media Wireless
10
and Dotad Technology", which the Company undertakes to file with the relevant
PRC government authorities upon the assignment of the pledged equity as the
result of the exercise by the pledgees of the right described therein);
(xix) Except as disclosed in the Pricing Prospectus, the Company and
each of the Group Entities has all necessary licenses, franchises, concessions,
consents, authorizations, approvals, orders, certificates and permits of and
from, and has made all declarations and filings with, all governmental agencies
to own, lease, license and use its properties, assets and conduct its business
in the manner described in the Pricing Prospectus except where the lack of such
licenses, franchises, concessions, consents, authorizations, approvals, orders,
certificates and permits would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect; and such licenses, consents,
authorizations, approvals, orders, certificates or permits contain no materially
burdensome restrictions or conditions not described in the Pricing Prospectus
except where any such restrictions or conditions would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. Except
as described in the Pricing Prospectus, none of the Company or any of the Group
Entities has any reason to believe that any regulatory body is considering
modifying, suspending or revoking any such licenses, consents, authorizations,
approvals, orders, certificates or permits and the Company and each of the Group
Entities is in compliance with the provisions of all such licenses, consents,
authorizations, approvals, orders, certificates or permits in all material
respects;
(xx) Except as disclosed in the Pricing Prospectus, none of the Company
or any of the Group Entities is (A) in violation of any laws, regulations,
rules, orders, decrees, guidelines, judicial interpretations, notices or other
legislation of the PRC; (B) in breach of or in default under any approval,
consent, waiver, authorization, exemption, permission, endorsement or license
granted by any court or governmental agency or body of any stock exchange
authorities ("Governmental Agency") in the PRC; (C) in violation of its
constituent documents, business license, articles of association or permits; or
(D) in breach or default in the performance or observance of any obligation,
agreement, covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound, except, in the case
of clauses (A), (B) and (D), where any such violation would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect;
(xxi) The Company has an authorized and paid-in capitalization as set
forth in the Pricing Prospectus, and all of the issued shares of capital stock
of the Company have been duly and validly authorized and issued, and are fully
paid and non-assessable and conform to the description of the Ordinary Shares
contained in the Pricing Prospectus and Prospectus; and all of the equity
interests of each of the Group Entities has been duly and validly authorized and
issued, and are fully paid and non-assessable; all of the share capital of each
of Focus Media Hong Kong, InfoAchieve and Dotad Holdings is owned by the
Company, free and clear of all liens, encumbrances, equities or claims; all of
the equity interest of each of Focus Media Technology and New Focus Media
Technology is owned by Focus Media Hong Kong, free and clear of all liens,
encumbrances, equities or claims; all of the equity interest of Framedia
Investment is owned by InfoAchieve, free and clear of all liens, encumbrances,
equities or claims; all of the equity interest of Dotad Technology is owned by
Dotad Holdings, free and clear of all liens, encumbrances, equities or claims;
all of the registered capital of Focus Media Digital has been
11
fully paid and 90% of the equity interest of Focus Media Digital is owned by
Focus Media Technology and 10% of the equity interest of Focus Media Digital is
owned by Focus Media Advertisement, and except as described in the Pricing
Prospectus under the caption "Related Party Transactions", such equity interest
is owned by each of them free and clear of all liens, encumbrances, equities or
claims; all of the registered capital of New Focus Media Advertisement has been
fully paid and 90% of the equity interest of New Focus Media Advertisement is
owned by Focus Media Digital and 10% of the equity interest of New Focus Media
Advertisement is owned by Focus Media Advertisement, and except as described in
the Pricing Prospectus under the caption "Related Party Transactions", such
equity interest is owned by each of them free and clear of all liens,
encumbrances, equities or claims. Focus Media Advertisement owns the equity
interest of the Focus Media Advertisement Subsidiaries, Focus Media Advertising
Agency, Focus Media Digital, New Focus Media Advertisement, New Structure
Advertisement, Framedia Advertisement, Guangdong Framedia and Focus Media
Wireless in the percentages set forth in Schedule IV hereto, free and clear of
all liens, encumbrances, equities or claims, except as described in the Pricing
Prospectus; Focus Media Advertising Agency owns 10% of the equity interest of
New Structure Advertisement, Framedia Advertisement and Guangdong Framedia, free
and clear of all liens, encumbrances, equities or claims, except as described in
the Pricing Prospectus; Xxxxx Xxxxxxx Xxxxx owns 85% of, and Xxxxx Xxx Xx owns
15% of the equity interest of Focus Media Advertisement free and clear of all
liens, encumbrances, equities or claims, except as set forth in the Pricing
Prospectus; the holders of outstanding shares of capital stock of the Company
are not entitled to preemptive or other rights to acquire the Shares or the
ADSs; there are no outstanding securities convertible into or exchangeable for,
or warrants, rights or options to purchase from the Company, or obligations of
the Company to issue, the Ordinary Shares or any other class of capital stock of
the Company except as set forth in the Pricing Prospectus under the captions
"Capitalization" and "Management - Share Option Plan"; the Shares, when issued
and delivered against payment therefore, may be freely deposited by the Company
and the Selling Shareholders with the Depositary against issuance of ADRs
evidencing ADSs; the ADSs, when issued and delivered against payment therefore,
will be freely transferable by the Company and the Selling Shareholders to or
for the account of the several Underwriters and (to the extent described in the
Pricing Prospectus and the Prospectus) the initial purchasers thereof; and there
are no restrictions on subsequent transfers of the ADSs under the laws of the
Cayman Islands, the PRC or the United States except as described in the Pricing
Prospectus under the captions "Description of Share Capital" and "Description of
American Depositary Shares";
(xxii) The unissued Shares to be issued underlying the ADSs to be sold
by the Company to the Underwriters hereunder have been duly and validly
authorized and, when issued and delivered against payment therefor as provided
herein, will be duly and validly issued and fully paid and non-assessable and
will conform in all material respects to the description of the Ordinary Shares
contained in the Prospectus. Apart from the Ordinary Shares, there are no other
classes or series of shares of capital stock (or securities convertible,
exchangeable or exercisable for shares of capital stock) of the Company; except
as disclosed in the Pricing Prospectus, there are no outstanding options,
warrants, rights (including without limitation special voting rights, veto
rights, minority shareholder or equity interest holder rights, preemptive rights
or rights of first refusal), proxy or shareholder agreements, or contracts,
agreements or understandings of any kind for the purchase or acquisition from
the Company or any of the Group Entities of any of their shares, equity
interests or other securities;
12
(xxiii) Except as disclosed in the Pricing Prospectus, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Act with respect to, or to list on any U.S. or non-U.S.
securities exchange or inter-dealer quotation system, any securities of the
Company owned or to be owned by such person or to require the Company to include
such securities in the securities registered pursuant to the Registration
Statement, the ADS Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Company under the Act
or being listed on any U.S. or non-U.S. securities exchange or inter-dealer
quotation system;
(xxiv) This Agreement has been duly authorized, executed and delivered
by the Company and the Controlling Person, and constitutes a valid and legally
binding agreement of the Company and the Controlling Person, enforceable in
accordance with its terms, subject, as to enforceability, to bankruptcy,
insolvency, reorganization and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles;
(xxv) The Deposit Agreement has been duly authorized, executed and
delivered by the Company and the Depositary, and constitutes a valid and legally
binding agreement of the Company enforceable in accordance with its terms,
subject, as to enforceability, to bankruptcy, insolvency, reorganization and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles; upon issuance by the Depositary of ADRs
evidencing ADSs and the deposit of Shares in respect thereof in accordance with
the provisions of the Deposit Agreement, such ADRs will be duly and validly
issued and the persons in whose names the ADRs are registered will be entitled
to the rights specified therein and in the Deposit Agreement; and the Deposit
Agreement and the ADRs conform in all material respects to the descriptions
thereof contained in the Pricing Prospectus and Prospectus;
(xxvi) No consents, approvals, authorizations, orders, registrations,
clearances or qualifications of or with any Governmental Agency having
jurisdiction over the Company or any of the Group Entities or any of their
respective properties or any stock exchange authorities (hereinafter referred to
as "Governmental Authorizations") are required for the deposit of Shares, and
the issuance of ADSs in respect thereof and for the execution and delivery by
the Company of this Agreement to be duly and validly authorized except for the
registration of the Shares and the ADSs under the Act, any filings required
under Rule 424 under the Act, and such consents, approvals, authorizations,
orders, registrations, clearances and qualifications as may be necessary under
state securities or other blue sky laws;
(xxvii) Except as disclosed in the Pricing Prospectus, all dividends
and other distributions declared and payable on the shares of capital stock of
the Company may under the current laws and regulations of the Cayman Islands be
paid to the Depositary, and all such dividends and other distributions will not
be subject to withholding or other taxes under the laws and regulations of the
Cayman Islands and are otherwise free and clear of any other tax, withholding or
deduction in the Cayman Islands and without the necessity of obtaining any
Governmental Authorization in the Cayman Islands;
(xxviii) Except as disclosed in the Pricing Prospectus, all dividends
and other distributions declared and payable on the shares of capital stock of
Focus Media Hong Kong may
13
under the current laws and regulations of Hong Kong be paid to the Company, and
all such dividends and other distributions will not be subject to withholding or
other taxes under the laws and regulations of Hong Kong and are otherwise free
and clear of any other tax, withholding or deduction in Hong Kong and without
the necessity of obtaining any Governmental Authorization in Hong Kong;
(xxix) Except as disclosed in the Pricing Prospectus, all dividends and
other distributions declared and payable on the shares of capital stock of
InfoAchieve and Dotad Holdings may under the current laws and regulations of the
British Virgin Islands be paid to the Company, and all such dividends and other
distributions will not be subject to withholding or other taxes under the laws
and regulations of the British Virgin Islands and are otherwise free and clear
of any other tax, withholding or deduction in the British Virgin Islands and
without the necessity of obtaining any Governmental Authorization in the British
Virgin Islands;
(xxx) Except as disclosed in the Pricing Prospectus, all dividends and
other distributions declared and payable on the shares of capital stock of Focus
Media Technology and New Focus Media Technology may under the current laws and
regulations of the PRC be paid to Focus Media Hong Kong in Renminbi that may be
converted into U.S. dollars and freely transferred out of the PRC, and except as
disclosed in the Pricing Prospectus, all such dividends and other distributions
will not be subject to withholding or other taxes under the laws and regulations
of the PRC and are otherwise free and clear of any other tax, withholding or
deduction in the PRC, and without the necessity of obtaining any Governmental
Authorization in the PRC;
(xxxi) Except as disclosed in the Pricing Prospectus, all dividends and
other distributions declared and payable on the shares of capital stock of Focus
Media Digital may under the current laws and regulations of the PRC be paid to
Focus Media Technology, and all such dividends and other distributions will not
be subject to withholding or other taxes under the laws and regulations of the
PRC and are otherwise free and clear of any other tax, withholding or deduction
in the PRC, and without the necessity of obtaining any Governmental
Authorization in the PRC;
(xxxii) Except as disclosed in the Pricing Prospectus, all dividends
and other distributions declared and payable on the shares of capital stock of
New Focus Media Advertisement may under the current laws and regulations of the
PRC be paid to Focus Media Digital, and all such dividends and other
distributions will not be subject to withholding or other taxes under the laws
and regulations of the PRC and are otherwise free and clear of any other tax,
withholding or deduction in the PRC, and without the necessity of obtaining any
Governmental Authorization in the PRC;
(xxxiii) Except as disclosed in the Pricing Prospectus, all dividends
and other distributions declared and payable on the shares of capital stock of
Framedia Investment may under the current laws and regulations of the PRC be
paid to InfoAchieve in Renminbi that may be converted into U.S. dollars and
freely transferred out of the PRC, and all such dividends and other
distributions will not be subject to withholding or other taxes under the laws
and regulations of the PRC and are otherwise free and clear of any other tax,
withholding or
14
deduction in the PRC, and without the necessity of obtaining any Governmental
Authorization in the PRC;
(xxxiv) Except as disclosed in the Pricing Prospectus, all dividends
and other distributions declared and payable on the shares of capital stock of
Dotad Technology may under the current laws and regulations of the PRC be paid
to Dotad Holdings in Renminbi that may be converted into U.S. dollars and freely
transferred out of the PRC, and all such dividends and other distributions will
not be subject to withholding or other taxes under the laws and regulations of
the PRC and are otherwise free and clear of any other tax, withholding or
deduction in the PRC, and without the necessity of obtaining any Governmental
Authorization in the PRC;
(xxxv) The issue and sale of the Shares to be sold by the Company
hereunder and the deposit of the Shares being deposited with the Depositary
against issuance of the ADRs evidencing the ADSs and the compliance by the
Company with all of the provisions of this Agreement and the Deposit Agreement
and the consummation of the transactions herein and therein contemplated will
not (A) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of the Group Entities is a party or by which the Company or any of the Group
Entities is bound or to which any of the property or assets of the Company or
any of the Group Entities is subject, except where any such breach or violation
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; nor (B) will such action result in any violation of the
provisions of the constituent documents of the Company or any of the Group
Entities or any statute or any order, rule or regulation of any Governmental
Agency having jurisdiction over the Company or any of the Group Entities or any
of their properties or assets; and no consent, approval, authorization, order,
registration or qualification of or with any such Governmental Agency is
required for the issue and sale of the Shares or the ADSs, for the deposit of
the Shares being deposited with the Depositary against issuance of ADRs
evidencing the ADSs to be delivered or the consummation by the Company of the
transactions contemplated by this Agreement and the Deposit Agreement, except
(A) the registration under the Act of the Shares and the ADSs, (B) such
Governmental Authorizations as have been duly obtained and are in full force and
effect and copies of which have been furnished to you and (C) such Governmental
Authorizations as may be required under state securities or blue sky laws or any
laws of jurisdictions outside the Cayman Islands and the United States in
connection with the purchase and distribution of the Shares and ADSs by or for
the respective accounts of the several Underwriters;
(xxxvi) The ADSs have been approved for quotation on the National
Association of Securities Dealers Automated Quotations National Market System
("Nasdaq National Market"), subject to official notice of issuance, and apart
from the ADSs, the other American depositary shares representing ordinary shares
of the Company are validly maintained for quotation on the Nasdaq National
Market;
(xxxvii) None of the Company or any of the Group Entities is engaged in
any trading activities involving commodity contracts or other trading contracts
which are not currently traded on a securities or commodities exchange and for
which the market value cannot be determined;
15
(xxxviii) Except as set forth in the Pricing Prospectus, no stamp or
other issuance or transfer taxes or duties and no capital gains, income,
withholding or other taxes are payable by or on behalf of the Underwriters to
the government of the Xxxxxx Xxxxxxx, xxx Xxxxxxx Xxxxxx Xxxxxxx, Xxxx Xxxx or
the PRC, or any political subdivision or taxing authority thereof or therein, in
connection with: (A) the deposit with the Depositary of the Shares by the
Company against the issuance of ADRs evidencing the ADSs, (B) the sale and
delivery by the Company of the Shares and the ADSs to or for the respective
accounts of the several Underwriters or (C) the sale and delivery by the
Underwriters of the Shares and the ADSs to the initial purchasers thereof;
(xix) None of the Underwriters will be deemed to be resident,
domiciled, carrying on business or subject to taxation in the Xxxxxx Xxxxxxx,
xxx Xxxxxxx Xxxxxx Xxxxxxx, Xxxx Xxxx or the PRC solely by reason of its
execution, delivery, performance or enforcement of, or the consummation of any
transaction contemplated by, this Agreement, the Deposit Agreement or any other
document furnished hereunder or thereunder;
(xl) Neither the Company nor any of the Group Entities has taken,
directly or indirectly, any action which was designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares and the ADSs;
(xli) The statements set forth in the Pricing Prospectus and the
Prospectus under the captions "Description of Share Capital" and "Description of
American Depositary Shares", insofar as they purport to constitute a summary of
the terms of the Ordinary Shares and the ADSs, respectively, and under the
captions "Taxation" and "Underwriting", insofar as they purport to describe the
provisions of the laws, legal conclusions with respect thereto and documents
referred to therein, are accurate, complete and fair in all material respects;
(xlii) Except as set forth in the Pricing Prospectus, there are no
legal, arbitration or governmental proceedings pending to which the Company or
any of the Group Entities is a party or of which any property of the Company or
any of the Group Entities is the subject (A) which, if determined adversely to
the Company or any of the Group Entities, would individually or in the aggregate
have a Material Adverse Effect; or (B) that are required to be described in the
Registration Statement or the Prospectus and are not so described; and, to the
best knowledge of the Company and the Controlling Person, no such proceedings
are threatened or contemplated by any Governmental Agency or others;
(xliii) The statements set forth in the Pricing Prospectus and the
Prospectus under the caption "Business - Legal Proceedings" are true, accurate
and complete in all material respects;
(xliv) The Company is not and, after giving effect to the offering and
sale of the Shares and the ADSs and the application of proceeds thereof, will
not be an "investment company", as such term is defined in the U.S. Investment
Company Act of 1940, as amended (the "Investment Company Act");
(xlv) Each of this Agreement and the Deposit Agreement is in proper
form to be enforceable in the Cayman Islands in accordance with its terms; to
ensure the legality, validity, enforceability or admissibility into evidence in
the Cayman Islands of this Agreement or the
16
Deposit Agreement, it is not necessary that this Agreement or the Deposit
Agreement be filed or recorded with any court or other authority in the Cayman
Islands or that any stamp, documentary, registration, notary, excise or similar
tax in the Cayman Islands be paid on or in respect of this Agreement, the
Deposit Agreement or any other documents to be furnished hereunder;
(xlvi) The Registration Statement, the Prospectus and the ADS
Registration Statement and the filing of the Registration Statement, the
Prospectus and the ADS Registration Statement with the Commission have been duly
authorized by and on behalf of the Company, and the Registration Statement and
the ADS Registration Statement have been duly executed pursuant to such
authorization by and on behalf of the Company;
(xlvii) Each of the Company and the Group Entities own, possess,
license or have other rights to use the patents and patent applications,
copyrights, trademarks, service marks, trade names, Internet domain names,
technology, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary rights) and other intellectual property necessary or
used in any material respect to conduct their business in the manner in which it
is being conducted and in the manner in which it is contemplated as set forth in
the Pricing Prospectus and the Prospectus (collectively, the "Intellectual
Property"); none of the material copyrights owned or licensed by the Company or
any of the Group Entities is unenforceable or invalid; except as disclosed in
the Pricing Prospectus, neither the Company nor any of the Group Entities has
received any notice of violation or conflict with (and none of the Company or
any of the Group Entities knows of any basis for violation or conflict with)
rights of others with respect to the Intellectual Property that, individually or
in the aggregate, would reasonably be expected to have a Material Adverse
Effect; except as disclosed in the Pricing Prospectus, there are no pending or
to the best of the Company's knowledge, threatened actions, suits, proceedings
or claims by others that allege the Company or any of the Group Entities is
infringing any patent, trade secret, trade xxxx, service xxxx, copyright or
other intellectual property or proprietary right that, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect; and
the discoveries, inventions, products or processes of the Company and the Group
Entities referenced in the Pricing Prospectus and the Prospectus do not, to the
best knowledge of the Company and the Controlling Person, violate or conflict
with any intellectual property or proprietary right of any third person, or any
discovery, invention, product or process that is the subject of a patent
application filed by any third person; the Company and the Group Entities are
not in breach of, and have complied in all material respects with all terms of,
any license or other agreement relating to the Intellectual Property; to the
extent the Intellectual Property is sublicensed to the Company or any of the
Group Entities by a third party, such sublicensed rights shall continue in full
force and effect if the principal third party license terminates for any reason;
and there are no contracts or other documents material to the Intellectual
Property other than those described in the Pricing Prospectus. All trademarks
related to the brand name Focus Media are held by Focus Media Technology and
validly licensed to Focus Media Digital, Focus Media Advertising, and the Focus
Media Advertising Subsidiaries pursuant to the Trademark License Agreement
described in the Pricing Prospectus under the caption "Related Party
Transactions". Three trademarks related to the brand name "Framedia" are held by
Framedia Advertisement;
(xlviii) The Company was not for 2005, and does not expect to be for
2006, a Passive Foreign Investment Company ("PFIC") within the meaning of
Section 1297(a) of the United
17
States Internal Revenue Code of 1986, as amended, and does not expect to become
a PFIC in the future;
(l) At the time of filing the Initial Registration Statement the
Company was not and is not an "ineligible issuer," as defined under Rule 405
under the Act;
(li) Deloitte Touche Tohmatsu CPA Ltd., who have certified certain
consolidated financial statements of the Company, are the independent public
accountants of the Company as required by the Act and the Exchange Act and the
rules and regulations of the Commission thereunder;
(lii) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that: (A) transactions are executed
in accordance with management's general or specific authorizations; (B)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles in the
United States ("US GAAP"); (C) access to assets is permitted only in accordance
with management's general or specific authorization; (D) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate actions are taken with respect to any differences; and
(E) each of the Company and the Group Entities has made and kept books, records
and accounts which, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of assets of such entity and provide a sufficient
basis for the preparation of financial statements in accordance with US GAAP;
(liii) The Company maintains a system of internal control over
financial reporting (as such term is defined in Rule 13a-15(f) of the Exchange
Act) that complies with the requirements of the Exchange Act and has been
designed by the Company's principal executive officer and principal financial
officer, or under their supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles. Since the date of the latest audited financial statements
included in the Pricing Prospectus there has been no change in the Company's
internal control over financial reporting, and, except as disclosed in the
Pricing Prospectus, the Company's independent accountants have not notified the
Company of any "reportable conditions" (as that term is defined under standards
established by the American Institute of Certified Public Accountants) in the
Company's internal accounting controls, or other weaknesses or deficiencies in
the design or operation of the Company's internal accounting controls, that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting, or could adversely affect the
Company's ability to record, process, summarize and report financial data
consistent with the assertions of the Company's management in the financial
statements. The Company maintains disclosure controls and procedures (as such
term is defined in Rule 13a-15(e) of the Exchange Act) that comply with the
requirements of the Exchange Act, such disclosure controls and procedures have
been designed to ensure that material information relating to the Company and
the Group Entities is made known to the Company's principal executive officer
and principal financial officer by others within those entities. Such disclosure
controls and procedures are effective;
18
(liv) Except as set forth in the Pricing Prospectus, the Company has no
obligation to provide retirement, death or disability benefits to any of the
present or past employees of the Company or any of the Group Entities, or to any
other person;
(lv) No material labor dispute, work stoppage, slow down, strike or
other conflict with the employees of the Company or any of the Group Entities
exists or, to the best knowledge of the Company and the Controlling Person, is
threatened or contemplated;
(lvi) The section entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Critical Accounting Policies" in
the Pricing Prospectus and the Prospectus accurately and fully describes in all
material respects: (A) accounting policies which the Company believes are the
most important in the portrayal of the Company's financial condition and results
of operations and which require management's most difficult, subjective or
complex judgments ("Critical Accounting Policies"); (B) judgments and
uncertainties affecting the application of Critical Accounting Policies; and (C)
the likelihood that materially different amounts would be reported under
different conditions or using different assumptions; and the Company's board of
directors and management have reviewed and agreed with the selection,
application and disclosure of Critical Accounting Policies and have consulted
with its legal advisers and independent accountants with regard to such
disclosure; true and complete copies of all reports, letters or notices
delivered to the Company by the Company's independent accountants regarding the
Company's internal accounting controls have been delivered to the
representatives of the Underwriters;
(lvii) Since the date of the latest audited financial statements
included in the Pricing Prospectus, none of the Company or any of the Group
Entities has: (A) entered into or assumed any contract, (B) incurred or agreed
to incur any liability (including any contingent liability) or other obligation,
(C) acquired or disposed of or agreed to acquire or dispose of any business or
any other asset or (D) assumed or acquired or agreed to assume or acquire any
liabilities (including contingent liabilities) that would be material to the
Company or the Group Entities, and that are not otherwise described in the
Pricing Prospectus;
(lviii) The section entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Liquidity and Capital Resources"
in the Pricing Prospectus and the Prospectus accurately and fully describes all
material trends, demands, commitments, events, uncertainties and risks, and the
potential effects thereof, that the Company believes would materially affect
liquidity and are reasonably likely to occur; none of the Company nor any of the
Group Entities is a party to or subject to, any off-balance sheet transactions,
arrangements, and obligations, including, without limitation, relationships with
unconsolidated entities that are contractually limited to narrow activities that
facilitate the transfer of or access to assets by the Company or the Group
Entities, such as structured finance entities and special purpose entities
(collectively, "off-balance sheet arrangements");
(lix) Except as set forth in the Pricing Prospectus, none of the
Company or any of the Group Entities is engaged in any transactions that are
material (or that would otherwise require disclosure pursuant to Item 404 of
Regulation S-K under the Act) with its directors, officers, management,
shareholders, or any other person, including persons formerly holding such
positions, on terms that are not available from unrelated third parties on an
arm's-length basis;
19
(lx) No holder of any of the Shares or the ADSs after the consummation
of the transactions contemplated by this Agreement or the Deposit Agreement is
or will be subject to any liability in respect of any liability of the Company
by virtue only of its holding of any such Shares or ADSs; except as set forth in
the Pricing Prospectus, there are no limitations on the rights of holders of the
Shares or the ADSs to hold, vote or transfer their securities;
(lxi) The audited and unaudited consolidated financial statements (and
the notes and schedules thereto) of the Company, Perfect Media Holding Limited,
Focus Media Changsha Holding Ltd., Focus Media Qingdao Holding Ltd., Focus Media
Dalian Holding Ltd., Capital Beyond Limited, InfoAchieve, and Target Media
Holdings Limited and its subsidiaries included in the Pricing Prospectus and the
Prospectus (including without limitation interim financial statements) present
fairly the consolidated financial position of the respective entities as of the
dates specified and the consolidated results of operations and changes in
consolidated financial position of the respective entities for the periods
specified, and such financial statements have been prepared in conformity with
US GAAP applied on a consistent basis throughout the periods presented (other
than as described therein); and the summary and selected consolidated financial
data and other unaudited financial information contained in the Pricing
Prospectus and the Prospectus (including without limitation unaudited yearly and
interim financial statements and unaudited quarterly financial information
included in the Pricing Prospectus and the Prospectus) present fairly the
information shown therein and have been compiled on a basis consistent with that
of the audited consolidated financial statements included therein subject, in
the case of unaudited interim financial information, to ordinary year-end
adjustments consistent with past practice, and the assumptions used in preparing
the pro forma financial statements included in the Pricing Prospectus and the
Prospectus as of the dates specified provide a reasonable basis for presenting
the significant effects directly attributable to the transactions or events
described therein, the related pro forma adjustments give appropriate effect to
those assumptions, and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical financial
statement amounts;
(lxii) Under the laws of the Cayman Islands, each holder of ADRs
evidencing ADSs issued pursuant to the Deposit Agreement shall be entitled,
subject to the Deposit Agreement, to seek enforcement of its rights through the
Depositary or its nominee registered as representative of the holders of the
ADRs in a direct suit, action or proceeding against the Company;
(lxiii) Except as set forth in the Pricing Prospectus, or this
Agreement, all amounts payable by the Company to the Underwriters hereunder or
in respect of the ADRs evidencing the ADSs or the underlying Shares shall be
made free and clear of and without deduction for or on account of any taxes
imposed, assessed or levied by the Cayman Islands or any authority thereof or
therein (except such income taxes as may otherwise be imposed by the Cayman
Islands on payments hereunder to any Underwriter whose net income is otherwise
subject to tax or withholding by the Cayman Islands by virtue of its conducting
any direct business in the Cayman Islands unrelated to any transaction
contemplated hereunder with respect to any such income tax) nor are any taxes
imposed in the Cayman Islands on, or by virtue of the execution or delivery of,
such documents;
(lxiv) Except where any conflict, breach, violation, failure or breach
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, all
20
returns, reports or filings which ought to have been made by or in respect of
the Company and the Group Entities for all taxation purposes have been made and
all such returns are up to date, true, correct and on a proper basis, and are
not the subject of any dispute with the relevant revenue or other appropriate
authorities; each of the Company and the Group Entities has paid all taxes
required to be paid by them and any related assessments, charges, levies, fines
or penalties; there is no tax deficiency, assessment, charge, levy, fine or
penalty against the Company or the Group Entities as to which a reserve would be
required to be established under US GAAP which has not been so reserved or which
is required to be disclosed in the Pricing Prospectus and the Prospectus which
has not been so disclosed and there are no facts or circumstances in existence
which would be expected to give rise to any such deficiency, assessment, charge,
levy, fine or penalty; all local and national PRC governmental tax holidays,
exemptions, waivers, financial subsidies, and other local and national PRC tax
relief, concessions and preferential treatment enjoyed by the Company or any of
the Group Entities are valid, binding and enforceable and do not violate any
laws, regulations, rules, orders, decrees, guidelines, judicial interpretations,
notices or other legislation of the PRC; none of the Company or any of the Group
Entities has received notice of any tax deficiency with respect to the Company
or any of the Group Entities; and none of the Company, the Controlling Person or
the Group Entities, to the best knowledge of the Company and the Controlling
Person, is aware of any tax deficiency or representation of the facts on any tax
return made by the Company or any of the Group Entities individually or
collectively that would be expected to be challenged or asserted against the
Company or any of the Group Entities or any of their respective properties or
assets;
(lxv) Each of Focus Media Digital, Focus Media Advertising Agency, New
Perfect Media, and New Focus Media Advertisement is, and has since its inception
been, in compliance with all requirements under all applicable PRC laws and
regulations to qualify for their exemptions from enterprise income tax in 2004,
2005, 2006 and/or 2007 (the "Tax Exemptions") as described in the Pricing
Prospectus and the Prospectus under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Taxation", and the
actual operations and business activities of each of Focus Media Digital and
Focus Media Advertising Agency are sufficient to meet the qualifications for
their Tax Exemptions. No submissions made to any PRC government authority in
connection with obtaining their Tax Exemptions contained any misstatement or
omission that would have affected the granting of their Tax Exemptions. None of
Focus Media Digital, Focus Media Advertising Agency, New Perfect Media or New
Focus Media Advertisement has received notice of any deficiency in their
respective applications for their Tax Exemptions, and none of the Company or the
Controlling Person is aware, to their best knowledge, of any reason why any of
Focus Media Digital, Focus Media Advertising Agency, New Perfect Media or New
Focus Media Advertisement might not qualify for, or be in compliance with the
requirements for, their Tax Exemptions;
(lxvi) The Company has provided you true, correct, and complete copies
of all documentation pertaining to any extension of credit in the form of a
personal loan made, directly or indirectly, by the Company or any of the Group
Entities to any director or executive officer of the Company; and since December
31, 2004, except as disclosed in the Pricing Prospectus and the Prospectus under
the caption "Related Party Transactions - Other Related Party Transactions -
Loans to Xxxxx Xxxxxxx Xxxxx and Xxxxx Xxx Xx", the Company has not, directly or
indirectly, including through any of the Group Entities: (A) extended credit,
arranged to extend credit, or renewed any extension of credit, in the form of a
personal loan, to or for any director or
21
executive officer of the Company, or to or for any family member or affiliate of
any director or executive officer of the Company; or (B) made any material
modification, including any renewal thereof, to any term of any personal loan to
any director or executive officer of the Company, or any family member or
affiliate of any director or executive officer, which loan was outstanding on
December 31, 2004;
(lxvii) Any statistical or market-related data, or any other operating
data or statistics provided by third parties, included in the Pricing Prospectus
and the Prospectus are based on or derived from sources that the Company
reasonably believes to be reliable and accurate, and the Company has obtained
the written consent for the use of such data from such sources to the extent
required; and all the operating data and statistics contained in the Pricing
Prospectus and the Prospectus that are generated or supplied by the Company or
members of its management are derived from the books and records of account of
the Company, and the Company reasonably believes such operating data and
statistics are true and accurate and such operating data and statistics fairly
reflect the information presented;
(lxviii) The application of the net proceeds from the offering of ADSs,
as described in the Pricing Prospectus and the Prospectus, will not contravene
any provision of any applicable laws or the constitutive documents of the
Company or any of the Group Entities or contravene the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust, loan
agreement, note, lease or other agreement or instrument binding upon the Company
or any of the Group Entities or any Governmental Authorization applicable to the
Company or any of the Group Entities;
(lxix) There are no contracts, agreements or understandings between the
Company and any person that would give rise to a claim against the Company or
any Underwriter for a brokerage commission, finder's fee or other like payment
in connection with the issuance and sale of the ADSs;
(lxx) The description and information in the Pricing Prospectus and the
Prospectus under the captions "Prospectus Summary - Recent Developments",
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Acquisitions", and "Our Recent Significant Acquisitions" regarding
the acquisitions described therein (the "Acquisitions") is true and accurate in
all material respects and nothing has been omitted from such description which
would make the same misleading in any material respect. Each of the parties to
any agreements entered into in connection with the Acquisitions (collectively,
the "Acquisition Agreements") has full power, authority and legal right to enter
into, execute, adopt, assume, issue, deliver and perform its respective
obligations under each of the Acquisition Agreements to which they are a party,
and has authorized, executed and delivered each of the Acquisition Agreements to
which they are a party, and such obligations constitute valid, legal and binding
obligations enforceable against each of them in accordance with the terms of
each of the Acquisition Agreements. Each of the Acquisition Agreements is in
proper legal form under relevant laws and regulations for the enforcement
thereof against each of the parties thereto without further action by any of
them. The execution, delivery and performance of each of the Acquisition
Agreements by the parties thereto, and the consummation of the transactions
contemplated thereunder (taken individually or together as a whole), did not and
will not (A) result in any violation of the business license, articles of
association, other constitutional
22
documents (if any) or permits of any of the parties thereto; (B) result in any
violation of or penalty under any laws, regulations, rules, orders, decrees,
guidelines, judicial interpretations, notices or other legislation of the PRC;
or (C) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any other contract, license,
indenture, mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument to which any of them is a party or by which any of them
is bound or to which any of their property or assets is subject, except, in the
case of clauses (B) and (C), where any such breach, violation or default would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Except as described in the Pricing Prospectus, all of the
parties to the Acquisition Agreements have fully performed all of their
obligations under each of the Acquisition Agreements to which they are a party
and all the transactions contemplated under each of the Acquisition Agreements
have been consummated in accordance with the terms thereof, including without
limitation registration with the relevant PRC governmental authorities necessary
to make the Acquisitions effective under PRC laws and regulations. In each
Acquisition involving the acquisition of entities located both in and outside of
China, prior to the time each such Acquisition was contemplated, each of the
related entities had in place legally binding and effective agreements (the
"Control Agreements") sufficient for the entity located in China to be
considered a "variable interest entity" of the entity located outside China as
defined in FIN 46 issued by the Financial Accounting Standards Board in 2003,
and the execution, delivery and performance of each of the Control Agreements by
the parties thereto did not and will not (A) result in any violation of the
business license, articles of association, other constitutional documents (if
any) or permits of any of the parties thereto; (B) result in any violation of or
penalty under any laws, regulations, rules, orders, decrees, guidelines,
judicial interpretations, notices or other legislation of the PRC; or (C)
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any other contract, license,
indenture, mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument to which any of them is a party or by which any of them
is bound or to which any of their property or assets is subject, except, in the
case of clauses (B) and (C), where any such breach, violation or default would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. To the best knowledge of the Company and the Controlling Person,
there is no reason that either the structure of the Acquisitions as contemplated
under the Acquisition Agreements or the structures contemplated under the
Control Agreements, might be subject to challenge by the relevant PRC
governmental authorities under any laws, regulations, rules, orders, decrees,
guidelines, judicial interpretations, notices or other legislation of the PRC;
(lxxi) Under the laws of the Cayman Islands, the courts of the Cayman
Islands recognize and give effect to the choice of law provisions set forth in
Section 18 hereof and enforce judgments of U.S. courts obtained against the
Company to enforce this Agreement; subject to the conditions described under the
caption "Enforcement of Civil Liabilities" in the Pricing Prospectus, under the
laws and regulations of the PRC, the courts of the PRC recognize and give effect
to the choice of law provisions set forth in Section 18 hereof and enforce
judgments of U.S. courts obtained against the Company to enforce this Agreement
provided that the judgment: (A) is not obtained by fraud; (B) is final and
conclusive; (C) in the opinion of the relevant PRC court after the review of
such judgment pursuant to international treaties concluded or acceded to by the
PRC or in accordance with the Civil Procedure Law of the PRC, does not
contradict the basic principles of PRC law; (D) in the opinion of the relevant
PRC court after its review of such judgment pursuant to international treaties
concluded or acceded to by the PRC or
23
in accordance with the principle of reciprocity, or otherwise in accordance with
the Civil Procedure Law of the PRC, does not violate state sovereignty, security
or public interest and (E) is for a definite sum of money;
(lxxii) To the best of the Company's knowledge, none of the Company or
any of the Group Entities, nor any director, officer, agent, employee or other
person associated with or acting on behalf of the Company or any of the Group
Entities, has used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expenses relating to a political activity, made
any direct or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or made or received any
bribe, rebate, payoff, influence payment, kickback or other unlawful payment; or
made or received any unlawful payment that is of a character required to be
disclosed in the Registration Statement, the Pricing Prospectus or the
Prospectus;
(lxxiii) Each of Xxxxx Xxxxxxx Xxxxx and Xxxxx Xxx Xx is a citizen of
the PRC, excluding Taiwan, The Hong Kong Special Administrative Region and The
Macau Special Administrative Region, and no application is pending in any other
jurisdiction by him or on his behalf for naturalization or citizenship;
(lxxiv) The descriptions of the events and transactions set forth in
the Pricing Prospectus and the Prospectus under the captions "Our Corporate
Structure", "Related Party Transactions - Agreements Among Us, Focus Media
Technology, Focus Media Digital, New Focus Media Advertisement, Focus Media
Advertisement and its Subsidiaries", "Related Party Transactions - Agreements
Among, Focus Media Advertisement, Focus Media Advertising Agency, Framedia
Investment, Framedia Advertisement, Guangdong Framedia and New Structure
Advertisement" and "Related Party Transactions - Agreements Among Focus Media
Advertisement, Focus Media Advertising Agency, Focus Media Wireless and Dotad
Technology" are true, accurate and complete in all material respects;
(lxxv) All consents, approvals, authorizations, orders, registrations
and qualifications, if any, required in connection with the Structure Agreements
have been made or unconditionally obtained in writing, and no such consent,
approval, authorization, order, registration or qualification has been withdrawn
or is subject to any condition precedent which has not been fulfilled or
performed;
(lxxvi) None of the Company nor any of the Group Entities and the
businesses or entities operated or owned by the Company and the Group Entities,
nor any of their respective officers, directors or senior management (as defined
under Section F of Form 20-F), key management personnel (as defined under Item
7.B of Form 20-F), or, to the best knowledge of the Company, the Company's
agents or employees, directly or indirectly, own any interest in any entity, or
have entered into any transactions that may compete with the Company and the
Group Entities or are otherwise involved in the businesses of the Company and
the Group Entities as described in the Pricing Prospectus and the Prospectus,
except for (i) ownership, directly or indirectly, by the Controlling Person of
equity securities (or securities convertible or exchangeable into or exercisable
for such equity securities) in Allyes Information Technology Company Limited
solely for passive investment purposes, and (ii) ownership, directly or
indirectly, by the unrelated
24
third party minority equity interest holders (that are not nominee holders
holding on behalf of any of the Group Entities) of the remaining equity
interests of the Focus Media Advertisement Subsidiaries as described in the
Pricing Prospectus under the caption "Our Corporate Structure", and for which
the Company has no knowledge of any such persons or entities owning any direct
or indirect interest in, or having any other involvement in, any business that
competes with the Company or the Group Entities;
(lxxvii) Each of the Company and the Group Entities are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they
are engaged; neither the Company nor any of the Group Entities has been refused
any insurance coverage sought or applied for and neither the Company nor any of
the Group Entities has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue their
respective businesses at a cost that would not have a Material Adverse Effect;
(lxxviii) The Company is in full compliance with all applicable
obligations and duties imposed on it by the United States Xxxxxxxx-Xxxxx Act of
2002, and has timely made all required disclosures and filings required thereby
with the Commission;
(lxxix) There are no contracts, documents, arrangements or
understandings that are required to be described in the Registration Statement,
the ADS Registration Statement, the Pricing Prospectus or the Prospectus or to
be filed as exhibits thereto that have not been so described and filed as
required;
(lxxx) The Company is, and upon giving effect to the offering and sale
of the Shares and the ADSs will still be, a foreign private issuer within the
meaning of Rule 405 under the Act;
(lxxxi) Except as disclosed in the Pricing Prospectus, to the best
knowledge of the Company and the Controlling Person after due inquiry, there are
no affiliations or associations between any member of the NASD and any of the
officers or directors of the Company or the Group Entities, or holders of 5% or
greater of the securities of the Company;
(lxxxii) The (A) irrevocable submission of each of the Company, the
Controlling Person, and the Selling Shareholders to the jurisdiction of any
state or federal court located in the Borough of Manhattan, The City of New
York, New York (each a "New York Court"), (B) waiver by each of the Company and
the Selling Shareholders of any objection to the venue of a proceeding in a New
York Court, (C) waiver and agreement not to plead an inconvenient forum, (D)
waiver of sovereign immunity, and (E) agreement of each of the Company and the
Selling Shareholders that the Underwriting Agreement and the Deposit Agreement
shall be construed in accordance with and governed by the laws of the State of
New York, in each case is legal, valid and binding under PRC law and will be
respected by the government of the PRC and any political subdivision or
authority thereof or therein; service of process duly effected in the manner set
forth in the Underwriting Agreement and the Deposit Agreement will be effective,
insofar as PRC law is concerned, to confer valid personal jurisdiction over each
of the Company and the Selling Shareholders; and any judgment obtained in a New
York Court arising out of or in relation to the obligations of each of the
Company and the Selling Shareholders under the
25
Underwriting Agreement and the Deposit Agreement will be recognized by the
Government of the PRC and any political subdivision or authority thereof or
therein subject to the conditions described under the caption "Enforceability of
Civil Liabilities" in the Pricing Prospectus; and
(lxxxiii) Each of the Company and the Controlling Person has taken, or
is in the process of taking, all reasonable steps to comply with, and to ensure
compliance by all of the Company's shareholders, option holders, directors and
officers who are PRC residents or PRC citizens with, any applicable rules and
regulations of the State Administration of Foreign Exchange (the "SAFE Rules and
Regulations"), including without limitation, requiring each shareholder, option
holder, director and officer that is, or is directly or indirectly owned or
controlled by, a PRC resident or PRC citizen to complete any registration and
other procedures required under applicable SAFE Rules and Regulations, and to
irrevocably authorize the Controlling Person in writing, in accordance with
applicable SAFE Rules and Regulations, to handle any registrations and other
procedures required under applicable SAFE Rules and Regulations on their behalf.
(b) Each of the Selling Shareholders severally and not jointly
represents and warrants to, and agrees with, each of the Underwriters that:
(i) Such Selling Shareholder that is not an individual has been duly
organized, is validly existing, and is in good standing in its jurisdiction of
organization;
(ii) No consents, approvals, authorizations, orders, registrations,
clearances or qualifications of or with any Governmental Agency having
jurisdiction over such Selling Shareholder or any of its respective properties
or any stock exchange authorities are required for the deposit of the Shares
being deposited with the Depositary by such Selling Shareholder against issuance
of the ADRs evidencing the ADSs to be delivered at each Time of Delivery (as
defined in Section 4 hereof), for the sale and delivery of the ADSs to be sold
by such Selling Shareholder hereunder and for the execution and delivery by such
Selling Shareholder of this Agreement, and for the sale and delivery of the ADSs
to be sold by such Selling Shareholder hereunder, except for the registration of
the Shares under the Act, and any filings required under Rule 424 under the Act;
and such Selling Shareholder has full legal right, power and authority
(corporate and other) to enter into this Agreement, and to sell, assign,
transfer and deliver the ADSs to be sold by such Selling Shareholder hereunder;
(iii) The sale of the ADSs to be sold by such Selling Shareholder
hereunder, the deposit of such Selling Shareholder's Shares with the Depositary
against issuance of the ADRs evidencing the ADSs to be delivered at each Time of
Delivery and the compliance by such Selling Shareholder with all of the
provisions of this Agreement and the Deposit Agreement and the consummation of
the transactions herein and therein contemplated will not (A) conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any statute, indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which such Selling
Shareholder is a party or by which such Selling Shareholder is bound, or to
which any of the property or assets of such Selling Shareholder is subject, (B)
result in any violation of the provisions of the constituent documents of such
Selling Shareholder if such Selling Shareholder is a legal entity or (C) result
in a violation of any statute or any order, rule or regulation of any
Governmental Agency having jurisdiction over such Selling Shareholder or the
property of such Selling Shareholder, except, in the case of clauses (A) and
(C), any such
26
conflicts, breaches, violations or defaults as would not reasonably be expected
to materially impair the ability of such Selling Shareholder to consummate such
transactions in accordance with such agreements;
(iv) Such Selling Shareholder has, and immediately prior to each Time
of Delivery such Selling Shareholder will have, good and marketable title to the
Shares to be represented by the ADSs to be sold by such Selling Shareholder
hereunder, free and clear of all liens, encumbrances, equities or claims; and,
upon delivery of the ADSs representing such Shares against payment therefor
pursuant hereto, good and marketable title to such ADSs, free and clear of all
liens, encumbrances, equities or claims, will pass to the several Underwriters;
(v) Such Selling Shareholder has duly authorized, executed and
delivered, in the form heretofore furnished to the Underwriters, an irrevocable
Power of Attorney (the "Power of Attorney") appointing Xxxxx Xxxxxxx Xxxxx and
Xxxxx Xxx Xx as attorneys-in-fact (collectively, the "Attorneys" and
individually, an "Attorney") and a custody agreement (the "Custody Agreement")
between such Selling Shareholder and the Company, as the custodian (the
"Custodian"); each of such Selling Shareholder's Power of Attorney and Custody
Agreement constitutes a valid and binding obligation on the part of such Selling
Shareholder, enforceable in accordance with its terms, subject as to
enforceability to bankruptcy, insolvency, reorganization and similar laws of
general applicability relating to or affecting creditors rights generally and to
general principles of equity; the performance of the Power of Attorney and the
Custody Agreement and the consummation of the transactions contemplated
thereunder will not result in a breach or violation of any of the terms and
provisions of or constitute a default under any bond, debenture, note or other
evidence of indebtedness, or under any lease, contract, indenture, mortgage,
deed of trust, loan agreement, joint venture or other agreement or instrument to
which such Selling Shareholder is a party or by which such Selling Shareholder,
or any Selling Shareholder ADSs may be bound or, to such Selling Shareholders'
knowledge after due inquiry, result in any violation of any law, order, rule,
regulation, writ, injunction, judgment or decree of any Governmental Agency or
body, domestic or foreign, having jurisdiction over such Selling Shareholder or
over the properties of such Selling Shareholder; and each of such Selling
Shareholder's Attorneys, acting alone, is authorized to execute and deliver this
Agreement and the certificate referred to in Section 8(s) hereof on behalf of
such Selling Shareholder, to determine the purchase price to be paid by the
several Underwriters to such Selling Shareholder as provided in Section 2
hereof, to authorize the delivery of the Selling Shareholder ADSs under this
Agreement and to duly endorse (in blank or otherwise) a stock power with respect
thereto, to accept payment therefor, and otherwise to act on behalf of such
Selling Shareholder in connection with this Agreement;
(vi) No consent, approval, authorization or order is required to be
obtained by such Selling Shareholder for the execution and delivery by such
Selling Shareholder of the Power of Attorney and the Custody Agreement, the
execution and delivery by or on behalf of such Selling Shareholder of this
Agreement and the sale and delivery of such Selling Shareholder's Shares under
this Agreement other than, at the time of the execution hereof (if the
Registration Statement has not yet been declared effective by the Commission),
the issuance of the order of the Commission declaring the Registration Statement
effective and such consents, approvals, authorizations or orders as may be
necessary under state or other securities or blue sky laws and such other
approvals as have been obtained and are in full force and effect; and such
Selling
27
Shareholder has full legal right, power and authority to enter into and perform
its obligations under this Agreement and such Power of Attorney and Custody
Agreement, and to sell, assign, transfer and deliver the Selling Shareholder
ADSs to be sold by such Selling Shareholder under this Agreement;
(vii) A stock power duly endorsed in blank by such Selling Shareholder,
has been placed in custody with the Custodian for the purpose of effecting
delivery hereunder of such Selling Shareholder's Shares underlying the ADSs to
be sold under this Agreement, subject to the terms of the Custody Agreement;
(viii) The Shares held in custody for such Selling Shareholder by the
Custodian are subject to the interests of the Underwriters hereunder; the
arrangements made by such Selling Shareholder for such custody are to that
extent irrevocable; the obligations of such Selling Shareholder hereunder shall
not be terminated by operation of law, whether by the death or incapacity of any
individual Selling Shareholder or, in the case of an estate or trust, by the
death or incapacity of any executor or trustee or the termination of such estate
or trust, or in the case of a partnership or corporation, by the dissolution of
such partnership or corporation, or by the occurrence of any other event; and if
any individual Selling Shareholder or any such executor or trustee should die or
become incapacitated, or if any such estate or trust should be terminated, or if
any such partnership or corporation should be dissolved, or if any other such
event should occur, before the delivery of the Shares hereunder, the Shares
shall be delivered by or on behalf of such Selling Shareholder in accordance
with the terms and conditions of this Agreement and the Custody Agreement;
(ix) Neither such Selling Shareholder nor any of its affiliates over
which such Selling Shareholder can exercise control, nor any person acting on
its or their behalf has taken or will take, directly or indirectly, any action
which is designed to or which has constituted or which might reasonably be
expected to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares or the
ADSs;
(x) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Pricing Prospectus, the
Prospectus or any amendment or supplement thereto are made in reliance upon and
in conformity with written information furnished to the Company by such Selling
Shareholder expressly for use therein, such Preliminary Prospectus, Pricing
Prospectus and the Registration Statement did, and the Prospectus and any
further amendments or supplements to the Registration Statement and the
Prospectus, when they become effective or are filed with the Commission, as the
case may be, do not and will not, as of the applicable effective date as to each
part of the Registration Statement and any amendment thereto and as of the
applicable filing date as to the Prospectus and any amendment or supplement
thereto, contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made in the case of
any Preliminary Prospectus, Prospectus, Pricing Prospectus or Issuer Free
Writing Prospectus or any amendment or supplement thereto, made, in reliance
upon and in conformity with such written information furnished to the Company by
such Selling Shareholder expressly for use therein, not misleading;
28
(xi) The ADSs delivered at each Time of Delivery by such Selling
Shareholder will be freely transferable by such Selling Shareholder to or for
the respective accounts of the several Underwriters and (to the extent described
in the Prospectus) to the initial purchasers thereof; and there are no
restrictions on subsequent transfers of the Shares or ADSs under the laws of the
Cayman Islands, the PRC or the United States except as described in the Pricing
Prospectus under the captions "Description of Share Capital" or "Description of
American Depositary Shares";
(xii) Except as set forth in the Pricing Prospectus, no stamp or other
issuance or transfer taxes or duties and no capital gains, income, withholding
or other taxes are payable by or on behalf of the Underwriters to the government
of the Xxxxxx Xxxxxxx, xxx Xxxxxxx Xxxxxx Xxxxxxx, Xxxx Xxxx or the PRC, or any
political subdivision or taxing authority thereof or therein, in connection with
(A) the deposit with the Depositary of the Shares by such Selling Shareholder
against the issuance of ADRs evidencing the ADSs, (B) the sale and delivery by
such Selling Shareholder of the Shares and the ADSs to or for the respective
accounts of the Underwriters or (C) the sale and delivery by the Underwriters of
the Shares and the ADSs to the initial purchasers thereof;
(xiii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal Responsibility
Act of 1982 with respect to the transactions herein contemplated, such Selling
Shareholder will deliver to you prior to or at the First Time of Delivery (as
hereinafter defined) a properly completed and executed United States Treasury
Department Form W-BEN (or other applicable form or statement specified by
Treasury Department regulations in lieu thereof);
(xiv) Except as described in the Pricing Prospectus, all amounts
payable by such Selling Shareholder under this Agreement shall be made free and
clear of and without deduction for or on account of any taxes imposed, assessed
or levied by the Cayman Islands or the PRC or any authority thereof or therein
(except such income taxes as may otherwise be imposed by the Cayman Islands or
the PRC on payments hereunder to any Underwriter whose net income is otherwise
subject to tax or withholding by the Cayman Islands or the PRC by virtue of its
conducting any direct business in the Cayman Islands or the PRC unrelated to any
transaction contemplated hereunder with respect to any such income tax) nor are
any taxes imposed in the Cayman Islands or the PRC on, or by virtue of the
execution or delivery of, such documents;
(xv) This Agreement has been duly authorized, executed and delivered by
such Selling Shareholder, and is enforceable against such Selling Shareholder in
accordance with its terms; and to ensure the legality, validity, enforceability
or admissibility into evidence in the Cayman Islands or the PRC of this
Agreement, it is not necessary that this Agreement be filed or recorded with any
court or other authority in the Cayman Islands or the PRC or that any stamp or
similar tax in the Cayman Islands or the PRC be paid on or in respect of this
Agreement or any other documents to be furnished hereunder;
(xvi) Other than this Agreement, there are no contracts, agreements or
understandings between such Selling Shareholder and any person that would give
rise to a valid claim against such Selling Shareholder or any Underwriter for a
brokerage commission, finder's fee or other
29
like payment in connection with the offer and sale of the Shares and the ADSs to
be sold by such Selling Shareholder; and
(xvii) Each of the Selling Shareholders, or their direct or indirect
owners or controlling persons, that is a PRC resident or PRC citizen is in
compliance with any applicable SAFE Rules and Regulations, including without
limitation, having completed or being in the process of completing any
registration and other procedures required under applicable SAFE Rules and
Regulations, and irrevocably authorizing the Controlling Person in writing, in
accordance with applicable SAFE Rules and Regulations, to handle any
registrations and other procedures required under applicable SAFE Rules and
Regulations on their behalf.
2. Subject to the terms and conditions herein set forth, (a) the
Company and each of the Selling Shareholders agree, severally and not jointly,
to sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company and each of the Selling
Shareholders, at a purchase price per ADS of US$ * , the number of Firm ADSs
(to be adjusted by you so as to eliminate fractional shares) determined by
multiplying the aggregate number of Firm ADSs to be sold by the Company and each
of the Selling Shareholders as set forth opposite their respective names in
Schedule II hereto by a fraction, the numerator of which is the aggregate number
of Firm ADSs to be purchased by such Underwriter as set forth opposite the name
of such Underwriter in Schedule I hereto and the denominator of which is the
aggregate number of Firm ADSs to be purchased by all of the Underwriters from
the Company and all of the Selling Shareholders hereunder and (b) in the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional ADSs as provided below, each of the Company and the Selling
Shareholders agrees, severally and not jointly, to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from each of the Company and the Selling Shareholders, at the purchase
price per ADS set forth in clause (a) of this Section 2, that portion of the
number of Optional ADSs as to which such election shall have been exercised (to
be adjusted by you so as to eliminate fractional shares), determined by
multiplying such number of Optional ADSs by a fraction, the numerator of which
is the maximum number of Optional ADSs which such Underwriter is entitled to
purchase as set forth opposite the name of such Underwriter in Schedule I hereto
and the denominator of which is the maximum number of Optional ADSs that all of
the Underwriters are entitled to purchase hereunder.
The Company and each Selling Shareholder, as and to the extent
indicated in Schedule II hereto, hereby grant, severally and not jointly, to the
Underwriters the right to purchase at their election up to * Optional ADSs,
at the purchase price per ADS set forth in the paragraph above. Any such
election to purchase Optional ADSs shall be made in accordance with a letter
agreement among the Representatives and the Attorneys setting forth the amount
of Optional ADSs to be purchased by the Underwriters from the Company and each
Selling Shareholder. Any such election to purchase Optional ADSs may be
exercised only by written notice from you to the Company and the Attorneys,
given within a period of 30 calendar days after the date of this Agreement and
setting forth the aggregate number of Optional ADSs to be purchased and the date
on which such Optional ADSs are to be delivered, as determined by you but in no
event earlier than the First Time of Delivery (as defined in Section 4 hereof)
or, unless you, the Company and the Attorneys otherwise agree in writing,
earlier than two or later than ten business days after the date of such notice.
30
3. Upon the authorization by you of the release of the Firm ADSs, the
several Underwriters propose to offer the Firm ADSs for sale upon the terms and
conditions set forth in the Prospectus.
4. (a) The ADSs to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as the Representatives may request upon at least forty-eight hours' notice
to the Company and the Selling Shareholders prior to a Time of Delivery (as
defined below) (the "Notification Time"), shall be delivered by or on behalf of
the Company and the Selling Shareholders to the Representatives through the
facilities of The Depository Trust Company ("DTC"), for the account of such
Underwriter, against payment by or on behalf of such Underwriter of the purchase
price therefor by wire transfer of Federal (same-day) funds to the accounts
specified by the Company and the Selling Shareholders to the Representatives at
least forty-eight hours in advance of such Time of Delivery. The Company will
cause the certificates representing the ADSs to be made available for checking
at least twenty-four hours prior to the Time of Delivery (as defined below) with
respect thereto at the office of DTC or its designated custodian (the
"Designated Office").
The time and date of such delivery and payment shall be, with respect
to the Firm ADSs, 9:30 a.m., New York City time, on * , 2006 or such other
time and date as the Representatives and the Company may agree upon in writing,
and, with respect to the Optional ADSs, 9:30 a.m., New York City time, on the
date specified by the Representatives in the written notice given by the
Representatives of the Underwriters' election to purchase such Optional ADSs, or
such other time and date as the Representatives and the Company may agree upon
in writing. Such time and date for delivery of the Firm ADSs is herein called
the "First Time of Delivery", such time and date for delivery of the Optional
ADSs, if not the First Time of Delivery, is herein called the "Second Time of
Delivery", and each such time and date for delivery is herein called a "Time of
Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 8 hereof, including the
cross-receipt for the ADSs and any additional documents requested by the
Underwriters pursuant to Section 8(s) hereof, will be delivered at the offices
of Debevoise & Xxxxxxxx LLP, 13/F Entertainment Building, 00 Xxxxx'x Xxxx
Xxxxxxx, Xxxx Xxxx S.A.R. (the "Closing Location"), and the ADSs will be
delivered as specified in Section (a) above, all at such Time of Delivery. A
meeting will be held at the Closing Location at 6 p.m., Hong Kong time, on the
New York Business Day (as defined herein) next preceding such Time of Delivery,
at which meeting the final drafts of the documents to be delivered pursuant to
the preceding sentence will be available for review by the parties hereto. For
the purposes of this Section 4, "New York Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.
5. (a) The Company agrees with each of the Underwriters:
(i) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
31
amendment or any supplement to the Registration Statement or the Prospectus
which shall be disapproved by you promptly after reasonable notice thereof; to
advise you, promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes effective or
any amendment or supplement to the Prospectus has been filed and to furnish you
with copies thereof; to file promptly all materials required to be filed by the
Company with the Commission pursuant to Rule 433(d) under the Act; to file
promptly all reports required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), or 15(d) of the Exchange Act subsequent to the
date of the Prospectus and for so long as the delivery of a prospectus (or in
lieu thereof, the notice referred to in Rule 173(a) under the Act) is required
in connection with the offering or sale of the ADSs; to advise you, promptly
after it receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any Preliminary
Prospectus or other prospectus in respect of the ADSs, of the suspension of the
qualification of the ADSs for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information; and, in the event of
the issuance of any stop order or of any order preventing or suspending the use
of any Preliminary Prospectus or other prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the withdrawal of such
order;
(ii) Promptly from time to time to take such action as you may
reasonably request to qualify the ADSs for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the ADSs; provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise
subject;
(iii) Prior to 10:00 a.m., New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to furnish
the Underwriters with written and electronic copies of the Prospectus in New
York City in such quantities as you may reasonably request, and, if the delivery
of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under
the Act) is required at any time prior to the expiration of nine months after
the time of issue of the Prospectus in connection with the offering or sale of
the ADSs and if at such time any events shall have occurred as a result of which
the Prospectus as then amended or supplemented would include an untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made when such Prospectus (or in lieu thereof, the notice referred to in Rule
173(a) under the Act) is delivered, not misleading, or, if for any other reason
it shall be necessary during such same period to amend or supplement the
Prospectus in order to comply with the Act or the Exchange Act, to notify you
and upon your request to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many written and
electronic copies as you may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such statement
or omission or effect such compliance, and in case any Underwriter is required
to deliver a Prospectus (or in lieu thereof, the notice referred to in Rule
173(a) under the Act) in connection with sales of any of the ADSs
32
at any time nine months or more after the time of issue of the Prospectus, upon
your request but at the expense of such Underwriter, to prepare and deliver to
such Underwriter as many written and electronic copies as you may request of an
amended or supplemented Prospectus complying with Section 10(a)(3) of the Act;
(iv) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), a
consolidated earnings statement of the Company and the Group Entities (which
need not be audited) complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including, at the option of the
Company, Rule 158);
(v) During the period beginning from the date hereof and continuing to
and including the date 90 days after the date of the Prospectus (the "Lock-up
Period"), not to, without the prior permission of each of Credit Suisse
Securities (USA) LLC and Xxxxxxx Sachs (Asia) L.L.C., offer, sell, contract to
sell, pledge, grant any option to purchase, make any short sale or otherwise
dispose of, directly or indirectly, or file with the Commission a registration
statement under the Act with respect to, (A) any ADSs or Ordinary Shares or any
securities of the Company represented by the ADSs, or any securities of the
Company substantially similar to the ADSs or Ordinary Shares, including but not
limited to any options or warrants to purchase or any securities that are
convertible into or exchangeable for, or that represent the right to receive,
ADSs or Ordinary Shares or any such substantially similar securities; and (B)
any shares or equity interests in the Company's subsidiaries or controlled
affiliates or depositary shares or depositary receipts representing such shares
or equity interests, including but not limited to securities that are
convertible into or exchangeable for or that represent the right to receive such
shares or equity interests or such depositary shares or receipts, or any such
substantially similar securities, whether now owned or hereinafter acquired (of
record, beneficially or otherwise, including as a custodian)(the securities
covered by the foregoing clauses (A) and (B), collectively, are referred to as
the "Lock-up Securities"); except that the foregoing restrictions shall not
apply to (1) the ADSs and the Ordinary Shares underlying such ADSs, (2) the
issuance of Ordinary Shares in connection with bona fide strategic acquisitions
by the Company not to exceed 25 million Ordinary Shares in the aggregate, (3)
grants of options pursuant to the Company's employee stock option plans, (4) any
Ordinary Shares to be issued by the Company upon the exercise of any options
described in clause (3) above issued as of March 31, 2006; provided however,
that if (1) during the last 17 days of the Lock-up Period, the Company releases
earnings results or announces material news or a material event or (2) prior to
the expiration of the Lock-up Period, the Company announces that it will release
earnings results during the 15-day period following the last day of the Lock-Up
Period, then in each case the Lock-Up Period will be automatically extended
until the expiration of the 18-day period beginning on the date of release of
the earnings results or the announcement of the material news or material event,
as applicable unless Credit Suisse Securities (USA) LLC and Xxxxxxx Xxxxx (Asia)
L.L.C. waive, in writing, such extension. The Company will provide Credit Suisse
Securities (USA) LLC and Xxxxxxx Sachs (Asia) L.L.C. and each holder of ADSs
subject to the Lock-Up Period with prior notice of any such announcement that
gives rise to an extension of the Lock-Up Period;
33
(vi) To furnish to its shareholders within such time period required by
the Exchange Act after the end of each fiscal year an annual report (in English)
(including a consolidated balance sheet and consolidated statements of income,
shareholders' equity and cash flows of the Company certified by independent
public accountants and prepared in conformity with US GAAP and, as soon as
practicable after the end of each of the first three quarters of each fiscal
year prepared in accordance with US GAAP (beginning with the fiscal quarter
ending after the effective date of the Registration Statement), to make
available to its shareholders consolidated summary financial information of the
Company and the Group Entities for such quarter in reasonable detail;
(vii) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to shareholders, and to deliver to
you (A) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any securities exchange
on which any class of securities of the Company is listed; and (B) such
additional information concerning the business and financial condition of the
Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company are consolidated in reports furnished to its shareholders generally or
to the Commission), provided that this obligation will be deemed to have been
satisfied where any such reports or communications have been publicly filed on
XXXXX;
(viii) To use the net proceeds received by it from the sale of the ADSs
pursuant to this Agreement in the manner specified in the Prospectus under the
caption "Use of Proceeds";
(ix) Prior to each Time of Delivery to deposit the Ordinary Shares with
the Depositary in accordance with the provisions of the Deposit Agreement and
otherwise to comply with the Deposit Agreement so that ADRs evidencing ADSs will
be executed (and, if applicable, countersigned) and issued by the Depositary
against receipt of such Ordinary Shares and delivered to the Underwriters at
such Time of Delivery;
(x) Not to (and to cause the Group Entities not to) take, directly or
indirectly, any action which is designed to or which constitutes or which might
reasonably be expected to cause or result in stabilization or manipulation of
the price of any security of the Company or facilitate the sale or resale of the
Shares and the ADSs;
(xi) To use its best efforts to include and maintain for quotation the
ADSs on the Nasdaq National Market, and apart from the ADSs, to use best efforts
to maintain for quotation the American depositary shares representing ordinary
shares of the Company currently being traded on the Nasdaq National Market;
(xii) To file with the Nasdaq National Market all documents and notices
required by the Nasdaq National Market of companies that are traded on the
Nasdaq National Market and quotations for which are reported by the Nasdaq
National Market;
(xiii) To file with the Commission such information on Form 20-F as may
be required by Rule 463 under the Act;
34
(xiv) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the date of this Agreement,
and the Company shall at the time of filing either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Act;
(xv) Upon request of any Underwriter, to furnish, or cause to be
furnished, to such Underwriter an electronic version of the Company's
trademarks, service marks and corporate logo for use on the website, if any,
operated by such Underwriter for the purpose of facilitating the offering of the
Shares (the "License"); provided, however, that the License shall be used solely
for the purpose described above, is granted without any fee and may not be
assigned or transferred;
(xvi) To indemnify and hold each Underwriter harmless against any
documentary, stamp or similar issuance or transfer taxes, duties or fees and any
transaction levies, commissions or brokerage charges, including any interest and
penalties, which are or may be required to be paid in connection with the
creation, allotment, issuance, offer and distribution of the Shares and ADSs to
be sold by the Company and the execution and delivery of this Agreement and the
Deposit Agreement;
(xvii) The Company, during the period when any Prospectus is required
to be delivered under the Act or the Exchange Act, will file all documents
required to be filed with the Commission pursuant to the Act or the Exchange Act
within the time periods required therein;
(xviii) Between the date hereof and the Time of Delivery (both dates
inclusive), the Company will not, without the prior approval of the
representatives for the Underwriters (such approval not to be unreasonably
withheld), make any official announcement which would have an adverse effect on
the marketability of the ADSs;
(xix) The Company will take such steps as shall be necessary to ensure
that, prior to the expiration of one year after the Time of Delivery, it shall
not be required to be registered as an "investment company" under the Investment
Company Act;
(xx) The Company shall comply with the SAFE Rules and Regulations, and
shall use best efforts to cause its directors, officers, option holders and
shareholders that are, or that are directly or indirectly owned or controlled
by, PRC residents or PRC citizens, to comply with the SAFE Rules and Regulations
applicable to them in connection with the Company, including without limitation,
requiring each shareholder, option holder, director and officer that is, or is
directly or indirectly owned or controlled by, a PRC resident or PRC citizen to
complete any registration and other procedures required under applicable SAFE
Rules and Regulations, and to irrevocably authorize the Controlling Person in
writing, in accordance with applicable SAFE Rules and Regulations, to handle any
registrations and other procedures required under applicable SAFE Rules and
Regulations on their behalf; and
(xxi) In the event that any Selling Shareholder breaches its commitment
to sell ADSs pursuant to the terms of this Underwriting Agreement, the Company
will sell to the Underwriters
35
additional ADSs in the same number as the ADSs committed to be sold by such
Selling Shareholder pursuant the terms of this Underwriting Agreement but not
sold by such Selling Shareholder.
(b) Each of the Selling Shareholders agrees with each of the
Underwriters:
(i) During the Lock-up Period, not to, without the prior permission of
each of the Representatives, offer, sell, contract to sell, pledge, grant any
option to purchase, make any short sale or otherwise dispose of, directly or
indirectly, or cause the Company to file with the Commission a registration
statement under the Act with respect to, (A) any ADSs or Ordinary Shares or any
securities of the Company represented by the ADSs, or any securities of the
Company substantially similar to the ADSs or Ordinary Shares, including but not
limited to any options or warrants to purchase or any securities that are
convertible into or exchangeable for, or that represent the right to receive,
ADSs or Ordinary Shares or any such substantially similar securities; and (B)
any shares or equity interests in the Company's subsidiaries or controlled
affiliates or depositary shares or depositary receipts representing such shares
or equity interests, including but not limited to securities that are
convertible into or exchangeable for or that represent the right to receive such
shares or equity interests or such depositary shares or receipts, or any such
substantially similar securities, whether now owned or hereinafter acquired,
owned directly or indirectly by the Selling Shareholder (including holding as a
custodian), or with respect to which the undersigned has beneficial ownership
under the rules and regulations of the Commission, except that the foregoing
restrictions shall not apply to a bona fide gift by an individual to a donee or
a transfer by an entity to an affiliate that does not involve a disposition for
value, provided that such donee or affiliate agrees to be bound in writing by
the restrictions set forth herein until the expiration of the Lock-up Period;
provided however, that if (1) during the last 17 days of the Lock-up Period, the
Company releases earnings results or announces material news or a material event
or (2) prior to the expiration of the Lock-up Period, the Company announces that
it will release earnings results during the 15-day period following the last day
of the Lock-Up Period, then in each case the Lock-Up Period will be
automatically extended until the expiration of the 18-day period beginning on
the date of release of the earnings results or the announcement of the material
news or material event, as applicable unless the Representatives jointly waive,
in writing, such extension. The Company will provide each of the Representatives
and any co-managers and each holder of ADSs subject to the Lock-Up Period with
prior notice of any such announcement that gives rise to an extension of the
Lock-Up Period. Notwithstanding anything herein to the contrary, Xxxxxxx, Xxxxx
& Co., Xxxxxxx Sachs Execution & Clearing, L.P. and their respective affiliates
may engage in brokerage, investment advisory, investment company, financial
advisory, anti-raid advisory, merger advisory, financing, asset management,
trading, market making, arbitrage and other similar activities conducted in the
ordinary course of its and its affiliates' business;
(ii) Prior to each Time of Delivery, to deposit, or cause to be
deposited on their behalf pursuant to the Custody Agreement, Ordinary Shares
with the Depositary in accordance with the provisions of the Deposit Agreement
and otherwise to comply with the Deposit Agreement so that ADRs evidencing ADSs
will be executed (and, if applicable, countersigned) and issued by the
Depositary against receipt of such Ordinary Shares and delivered to the
Underwriters at such Time of Delivery;
36
(iii) Not to (and to cause its affiliates over which it can exercise
control not to) take, directly or indirectly, any action which is designed to or
which constitutes or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company or
facilitate the sale or resale of the Shares or the ADSs;
(iv) To deliver to the representatives of the Underwriters prior to or
at the Time of Delivery a properly completed and executed United States Treasury
Department Form W-8BEN (or other applicable form or statement specified by the
Treasury Department regulations in lieu thereof) in order to facilitate the
Underwriters' documentation of their compliance with the reporting and
withholding provisions of the Tax Equity and Fiscal Responsibility Act of 1982
with respect to the transactions herein contemplated;
(v) To indemnify and hold each Underwriter harmless against any
documentary, stamp or similar issuance or transfer taxes, duties or fees and any
transaction levies, commissions or brokerage charges, including any interest and
penalties, which are or may be required to be paid in connection with the
creation, allotment, issuance, offer and distribution of the Shares and ADSs to
be sold by the Selling Shareholder and the execution and delivery of this
Agreement; provided, however, that the Selling Shareholder shall not be
responsible for any such taxes, duties, fees, levies or charges that arise as a
result of the distribution of the Shares and ADSs by any Underwriters in a
manner other than that as is customary in such transactions; and
(vi) Each of the Selling Shareholders, or their direct or indirect
owners or controlling persons, that is a PRC resident or PRC citizen will use
its best efforts to comply with any applicable SAFE Rules and Regulations,
including without limitation, completing any registration and other procedures
required under applicable SAFE Rules and Regulations, and irrevocably
authorizing the Controlling Person in writing, in accordance with applicable
SAFE Rules and Regulations, to handle any registrations and other procedures
required under applicable SAFE Rules and Regulations on their behalf.
6. (a) The Company represents and agrees that, without the prior
consent of each of the Representatives, it has not made and will not make any
offer relating to the Shares and the ADSs that would constitute a "free writing
prospectus" as defined in Rule 405 under the Act; each Underwriter represents
and agrees that, without the prior consent of the Company and each of the
Representatives, it has not made and will not make any offer relating to the
Shares and the ADSs that would constitute a free writing prospectus required to
be filed by the Company with the Commission; any such free writing prospectus
the use of which has been consented to by the Company and each of the
Representatives is listed on Schedule III(a) or Schedule III(b) hereto;
(b) The Company has complied and will comply with the requirements of
Rule 433 under the Act applicable to any Issuer Free Writing Prospectus,
including timely filing with the Commission or retention where required and
legending; the Company represents that it has satisfied and agrees that it will
satisfy the conditions under Rule 433 under the Act to avoid a requirement to
file with the Commission any electronic road show;
(c) The Company agrees that if at any time following issuance of an
Issuer Free Writing Prospectus any event occurred or occurs as a result of which
such Issuer Free Writing Prospectus would conflict with the information in the
Registration Statement, the Pricing
37
Prospectus or the Prospectus or would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances then prevailing, not
misleading, the Company will give prompt notice thereof to each of the
Representatives and, if requested by any of the Representatives, will prepare
and furnish without charge to each Underwriter an Issuer Free Writing Prospectus
or other document which will correct such conflict, statement or omission;
provided, however, that this representation and warranty shall not apply to any
statements or omissions in an Issuer Free Writing Prospectus made in reliance
upon and in conformity with information furnished in writing to the Company by
an underwriter through the Representatives expressly for use therein.
7. (a) The Company covenants and agrees with the several Underwriters that (A)
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's accountants and U.S., XXX, Xxxxxx
Xxxxxxx, Xxxxxxx Xxxxxx Xxxxxxx, Xxxx Xxxx and other legal counsel of the
Company in connection with the registration of the Shares and the ADSs under the
Act and all other expenses in connection with the preparation, printing,
reproduction and filing of the Registration Statement, the ADS Registration
Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus and
the Prospectus and amendments and supplements to any of the foregoing and the
mailing and delivering of copies thereof to the Underwriters and dealers; (ii)
the cost of printing or producing any Agreement among Underwriters, this
Agreement, the Deposit Agreement, closing documents (including any compilations
thereof) and any other documents in connection with the offering, purchase, sale
and delivery of the ADSs; (iii) subject to the provisions of paragraph (b)
below, all expenses in connection with the qualification of the shares and the
ADSs for offering and sale under state securities laws as provided in Section 5
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with any blue sky survey;
(iv) all NASD fees and all fees and expenses in connection with applying to
include the ADSs for quotation on the Nasdaq National Market; and (v) the road
show expenses, including travel, accommodation and meal expenses, incurred by
the Company's management and other staff, and expenses for organized luncheons
and investor meetings during the road show; (B) the Company will pay or cause to
be paid: (i) all expenses and taxes arising as a result of the deposit by the
Company and each of the Selling Shareholders of the Shares with the Depositary
and the issuance and delivery of the ADRs evidencing ADSs in exchange therefor
by the Depositary, of the sale and delivery of the ADSs and the Shares by the
Company to or for the account of the Underwriters and of the sale and delivery
of the ADSs and the Shares by the Underwriters to each other and to the initial
purchasers thereof in the manner contemplated under this Agreement, including,
in any such case, any Cayman Islands income, capital gains, withholding,
transfer or other tax asserted against an Underwriter by reason of the purchase
and sale of an ADS or a Share pursuant to this Agreement; (ii) the fees and
expenses (including fees and disbursements of counsel), if any, of the
Depositary and any custodian appointed under the Deposit Agreement, other than
the fees and expenses to be paid by holders of ADRs (other than the Underwriters
in connection with the initial purchase of ADSs); (iii) the fees and expenses of
the Authorized Agent (as defined in Section 16 hereof); (iv) the cost of
preparing the ADRs; (v) the cost and charges of any transfer agent or registrar;
(vi) all other costs and expenses incident to the performance of the Company's
obligations hereunder which are not otherwise specifically provided for in this
Section (provided that, prior to incurring any such costs and expenses, the
Underwriters shall inform the Company of such costs and expenses); and (vii) all
stamp duty, documentary, registration, excise, notary or other taxes imposed on
any of the Underwriters by
38
virtue of the execution, delivery, performance or enforcement of, or the
consummation of any transaction contemplated by, this Agreement, the Deposit
Agreement or any other document furnished hereunder or thereunder (other than
any income or withholding taxes imposed by a taxing jurisdiction by virtue of
such underwriter's conducting direct business in such taxing jurisdiction
unrelated to any transaction contemplated hereunder) and (C) each Selling
Shareholder will pay or cause to be paid all costs and expenses incident to the
performance of such Selling Shareholder's obligations hereunder which are not
otherwise specifically provided for in this Section, including (1) any fees and
expenses of counsel for such Selling Shareholder and (2) all expenses and taxes
incident to the sale and delivery of the ADSs and the Shares to be sold by such
Selling Shareholder hereunder; (b) the Underwriters covenant and agree with the
Company that the Underwriters will pay or cause to be paid the fees,
disbursements and expenses of the Underwriters' U.S. and PRC legal counsels and
other advisors in connection with the registration of the Shares and the ADSs
under the Act and all road show expenses except those to be paid by the Company
under paragraph (a)(A)(v) above. It is understood, that the Company shall bear,
and the Selling Shareholders shall not be required to pay or to reimburse the
Company for, the cost of any other matters not directly relating to the sale and
purchase of the ADSs pursuant to this Agreement.
8. The obligations of the Underwriters hereunder, as to the ADSs to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company, the Controlling Person, and the Selling Shareholders herein are, at
and as of such Time of Delivery, true and correct, the condition that the
Company and the Selling Shareholders shall have performed all of its and their
respective obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) under the Act within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance with
Section 5(a) hereof; all material required to be filed by the Company pursuant
to Rule 433(d) under the Act shall have been filed with the Commission within
the applicable time period prescribed for such filing by Rule 433 under the Act;
if the Company has elected to rely upon Rule 462(b) under the Act, the Rule
462(b) Registration Statement shall have become effective by 10:00 p.m.,
Washington, D.C. time, on the date of this Agreement; no stop order suspending
the effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; no stop order suspending or preventing the use of
the Prospectus or any Issuer Free Writing Prospectus shall have been initiated
or threatened by the Commission; and all requests for additional information on
the part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Debevoise & Xxxxxxxx LLP, United States counsel for the
Underwriters, shall have furnished to you such written opinion or opinions,
dated such Time of Delivery, in form and substance satisfactory to you, and such
counsel shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Commerce & Finance Law Offices, PRC counsel for the Underwriters,
shall have furnished to you such written opinion or opinions, dated such Time of
Delivery, in form and
39
substance satisfactory to you, with respect to the matters covered in paragraphs
(i) through (iv) and (vi) through (xviii) of subsection (e) below (but limited
to the Structure Agreements) as well as such other related matters as you may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(d) Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, United States counsel for the
Company and the Selling Shareholders, shall have furnished to you their written
opinion, dated such Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) This Agreement has been duly executed and delivered by the Company,
by the Controlling Person and by or on behalf of each of the Selling
Shareholders in accordance with the law of the State of New York;
(ii) The Deposit Agreement has been duly executed and delivered by the
Company in accordance with the law of the State of New York and, assuming that
the Deposit Agreement is the valid and legally binding obligation of the
Depositary, constitutes a valid and legally binding obligation of the Company
enforceable against the Company in accordance with its terms;
(iii) Assuming due authorization, execution, issuance and delivery by
the Depositary of ADRs evidencing the ADSs against the deposit of the Shares in
accordance with the provisions of the Deposit Agreement and payment therefor in
accordance with this Agreement, such ADRs will be duly and validly issued, and
persons in whose names such ADRs are registered will be entitled to the rights
specified therein and in the Deposit Agreement;
(iv) Upon payment for and transfer of the ADSs representing the Shares
to be sold by the Selling Shareholders in accordance with this Agreement, the
Underwriters will acquire a security entitlement with respect to such ADSs and
no action based on an adverse claim may be asserted against the Underwriters;
(v) The Power of Attorney and the Custody Agreement with respect to
each Selling Shareholder have been duly executed and delivered by such Selling
Shareholder in accordance with the law of the State of New York;
(vi) Assuming the validity of such actions under Cayman Islands law,
under the law of the State of New York relating to personal jurisdiction, each
of the Company, the Controlling Person and the Selling Shareholders has,
pursuant to this Agreement, validly and irrevocably submitted to the personal
jurisdiction of the New York State or U.S. federal courts located in the Borough
of Manhattan, The City of New York, New York in any action arising out of or
relating to this Agreement, has, to the extent permitted by applicable law,
validly and irrevocably waived any objection to the venue of a proceeding in any
such court, and has validly and irrevocably appointed CT Corporation System,
currently located at 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its
authorized service of process agent for the purposes described in this
Agreement, and service of process effected on such agent will be effective to
confer in the manner set forth in this Agreement and will be effective to confer
valid personal jurisdiction over the Company, the Controlling Person and the
Selling Shareholders;
40
(vii) Assuming the validity of such actions under Cayman Islands law,
under the law of the State of New York relating to personal jurisdiction, the
Company has, pursuant to the Deposit Agreement, validly and irrevocably
submitted to the personal jurisdiction of the New York State or U.S. federal
courts located in the Borough of Manhattan, The City of New York, New York in
any action or proceeding arising out of or relating to the Deposit Agreement,
and has validly and irrevocably appointed CT Corporation System, currently
located at 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its authorized
service of process agent for the purposes described in the Deposit Agreement;
and service of process effected in the manner set forth in Section 7.6 of the
Deposit Agreement will be effective to confer valid personal jurisdiction over
the Company in connection with any such action or proceeding;
(viii) The statements made in the Prospectus under the caption
"Description of American Depositary Shares", insofar as they purport to
constitute summaries of certain provisions of the ADSs, the ADRs and the Deposit
Agreement, constitute accurate summaries of such provisions in all material
respects;
(ix) The statements made in the Prospectus under the caption "Shares
Eligible for Future Sale", insofar as they purport to describe certain
provisions of U.S. federal securities laws and regulations and certain
provisions of the lock-up agreements, shareholders agreement and share option
plan referred to therein, are accurate summaries of such provisions in all
material respects;
(x) The statements made in the Prospectus under the caption "Taxation -
United States Federal Income Taxation", insofar as they purport to constitute
summaries of matters of U.S. federal tax law and regulations or legal
conclusions with respect thereto, constitute accurate summaries of the matters
described therein in all material respects;
(xi) The statements made in the Prospectus under the caption
"Underwriting", insofar as they purport to constitute summaries of certain
provisions of the Underwriting Agreement, constitute accurate summaries of such
provisions in all material respects;
(xii) The issuance by the Company of the Shares to be represented by
the ADSs, deposit of the Shares and the issuance of the ADRs pursuant to the
Deposit Agreement, the sale of the ADSs and the execution, delivery and
performance by the Company of the Deposit Agreement, this Agreement and the
Custody Agreements will not (A) violate, breach, or result in a default under,
any agreement or other instrument governed by the law of the State of New York
of the Company or any of the subsidiaries that has been filed as an exhibit to
the Registration Statement, or (B) violate any U.S. federal or New York state
statute or any rule or regulation that has been issued pursuant to any such U.S.
federal or New York state statute or, to our knowledge, any order of any U.S.
federal or New York state governmental agency or body having jurisdiction over
the Company;
(xiii) The deposit of the Shares and the issuance of the ADRs pursuant
to the Deposit Agreement, the sale of the ADSs and the execution, delivery and
performance by the Controlling Person and by the Selling Shareholders of the
Powers of Attorney, this Agreement and the Custody Agreements will not (A)
violate, breach, or result in a default under, any agreement or other instrument
governed by the law of the State of New York of any Selling Shareholder that
41
has been filed as an exhibit to the Registration Statement or (B) violate any
U.S. federal or New York state statute or any rule or regulation that has been
issued pursuant to any such U.S. federal or New York state statute or, to our
knowledge, any order of any U.S. federal or New York state governmental agency
or body having jurisdiction over the Controlling Person or any Selling
Shareholder;
(xiv) No consent, approval, authorization, order, registration or
qualification of or with any U.S. federal or New York governmental agency or
body, or to our knowledge, any U.S. federal or New York court is required for
the issuance by the Company of the Shares to be represented by the ADSs, the
deposit of the Shares and the issuance of the ADRs pursuant to the Deposit
Agreement, the sale of the ADSs and the compliance by the Company with the
provisions of the Deposit Agreement and this Agreement, except for the
registration under the Securities Act and the Securities Exchange Act of the
Shares and the ADSs, and such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the ADSs by the Underwriters;
(xv) No consent, approval, authorization, order, registration or
qualification of or with any U.S. federal or New York governmental agency or
body, or to our knowledge, any U.S. federal or New York court is required for
the deposit of the Shares and the issuance of the ADRs pursuant to the Deposit
Agreement, the sale of the ADSs and the compliance by the Controlling Person and
by the Selling Shareholders with the provisions of this Agreement and the
Custody Agreements and the Powers of Attorney, except for the registration under
the Securities Act and the Exchange Act of the Shares and the ADSs, and such
consents, approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the purchase
and distribution of the ADSs by the Underwriters;
(xvi) The Registration Statement has become effective under the
Securities Act; the Prospectus was filed pursuant to Rule 424(b) of the rules
and regulations of the Commission under the Securities Act; and, to our
knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued or proceeding for that purpose has been instituted or
threatened by the Commission;
(xvii) The Company is not an "investment company" within the meaning
of, and subject to regulation under, the U.S. Investment Company Act of 1940, as
amended; and
(xviii) Although such counsel does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement, the Pricing Prospectus or the Prospectus, except for
those referred to in the opinion in subsection (x) of this Section 8(d), such
counsel has no reason to believe (a) that the Registration Statement or the ADS
Registration Statement, as of their respective effective dates, or any further
amendment thereto made by the Company prior to such Time of Delivery (other than
the financial statements and related schedules therein, as to which such counsel
need express no opinion), contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; (b) that the Pricing Disclosure
Package, as of the Applicable Time when considered together with and as
supplemented by the statements under the caption "Description of Securities" in
the Prospectus, contained any untrue
42
statement of a material fact or omitted to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; (c) that, as of its date, the Prospectus
or any further amendment or supplement thereto made by the Company prior to such
Time of Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; (d) that, as of such Time of Delivery, the
Registration Statement or the ADS Registration Statement, or any further
amendment thereto made by the Company prior to such Time of Delivery (other than
the financial statements and related schedules therein, as to which such counsel
need express no opinion), contains an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; or (e) that, as of such Time of
Delivery, the Prospectus or any further amendment or supplement thereto made by
the Company prior to such Time of Delivery (other than the financial statements
and related schedules therein, as to which such counsel need express no opinion)
contains an untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction outside the United States;
(e) Global Law Office, PRC counsel for the Company and the Selling
Shareholders, shall have furnished to you such written opinion or opinions,
dated such Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) Each of Focus Media Technology, New Focus Media Technology,
Framedia Investment and Dotad Technology (collectively, the "PRC WOFEs") has
been duly organized and is validly existing as a wholly foreign owned enterprise
with legal person status and limited liability under all applicable laws,
regulations, rules, orders, decrees, guidelines, judicial interpretations and
other legislation of the PRC, including tax laws and regulations, in effect as
of the date of this Agreement (collectively "PRC Law") and its business license
and articles of association are in full force and effect under, and in
compliance with PRC Law. All of the registered capital of each of New Focus
Media Technology, Framedia Investment and Dotad Technology has been fully paid;
US$23 million of the registered capital of Focus Media Technology has been paid
with US$15 million to be paid up before February 26, 2007. All the equity
interest of each of Focus Media Technology and New Focus Media Technology is
owned by Focus Media Hong Kong, and all the equity interest of Framedia
Investment and Dotad Technology is owned by InfoAchieve and Dotad Holdings,
respectively, in each case, to the best of such counsel's knowledge after due
inquiry, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or other third party right (collectively, "Encumbrances");
(ii) Each of Focus Media Advertisement, Focus Media Advertising Agency,
Focus Media Digital, the Focus Media Advertisement Subsidiaries, New Perfect
Media, New Focus Media Advertisement, Framedia Advertisement, New Structure
Advertisement, Guangdong Framedia, Shenzhen E-Time and Focus Media Wireless
(collectively and together with the PRC WOFEs, the "PRC Group Entities"), has
been duly organized and is validly existing as a limited
43
liability company under PRC Law and its business license and articles of
association are in full force and effect under, and in compliance with, PRC Law.
All of the registered capital of Focus Media Advertisement has been fully paid;
85% of the equity interest of Focus Media Advertisement is owned by Xxxxx
Xxxxxxx Xxxxx and 15% of the equity interest of Focus Media Advertisement is
owned by Xxxxx Xxx Xx, in each case, to the best of such counsel's knowledge
after due inquiry, free and clear of any Encumbrances except as described in the
Pricing Disclosure Package as of the Applicable Time. Each of Xxxxx Xxxxxxx
Xxxxx and Xxxxx Xxx Xx is a PRC citizen. All of the registered capital of each
of Framedia Advertisement, New Structure Advertisement, Guangdong Framedia and
Focus Media Wireless has been fully paid; 90% of the equity interest of each of
Framedia Advertisement, New Structure Advertisement, Guangdong Framedia and
Focus Media Wireless is owned by Focus Media Advertisement and 10% of the equity
interest of each of Framedia Advertisement, New Structure Advertisement,
Guangdong Framedia and Focus Media Wireless is owned by Focus Media Advertising
Agency, in each case, to the best of such counsel's knowledge after due inquiry,
free and clear of any Encumbrances except as described in the Pricing Disclosure
Package as of the Applicable Time. Each of the Focus Media Advertisement
Branches and Framedia Branches has been duly established and is validly existing
with its business license in full force and effect under PRC Law. All of the
registered capital of Focus Media Advertising Agency has been fully paid and 90%
of the equity interest of Focus Media Advertising Agency is owned by Focus Media
Advertisement and 10% of the equity interest of Focus Media Advertising Agency
is owned by Xxxxx Xxx Xx, in each case, to the best of such counsel's knowledge
after due inquiry, free and clear of any Encumbrances except as described in the
Pricing Disclosure Package as of the Applicable Time. All of the registered
capital of each of Focus Media Digital and New Focus Media Advertisement has
been fully paid and 90% of the equity interest of each of Focus Media Digital
and New Focus Media Advertisement is owned by Focus Media Technology and 10% of
the equity interest of each of Focus Media Digital and New Focus Media
Advertisement is owned by Focus Media Advertisement, in each case, to the best
of such counsel's knowledge after due inquiry, free and clear of any
Encumbrances except as described in the Pricing Disclosure Package as of the
Applicable Time. All of the registered capital of each of the Focus Media
Advertisement Subsidiaries has been fully paid, and all the equity interests in
the Focus Media Advertisement Subsidiaries are owned by Focus Media
Advertisement in the percentages set forth in the Pricing Disclosure Package as
of the Applicable Time and, to the best of such counsel's knowledge after due
inquiry, such equity interests are owned by Focus Media Advertisement free and
clear of any Encumbrances, except as described in the Pricing Disclosure Package
as of the Applicable Time. All of the registered capital of Shenzhen E-Time has
been fully paid; 70% of the equity interest of Shenzhen E-Time is owned by Xxxxx
Xxxxxxx Xxxxx and 30% of the equity interest of Shenzhen E-Time is owned by
Xxxxx Xxx Xx, in each case, to the best of such counsel's knowledge after due
inquiry, free and clear of any Encumbrances except as described in the Pricing
Disclosure Package as of the Applicable Time.
(iii) Except as described in the Pricing Disclosure Package as of the
Applicable Time, each of the PRC Group Entities has full legal right, authority,
power and all necessary approvals, consents, waivers, sanctions, certificates,
authorizations, filings, disclosures, registrations, exemptions, permissions,
endorsements, annual inspections, qualifications, permits and licenses required
by any court, tribunal or any other judicial or arbitral body in the PRC, or any
body exercising, or entitled to exercise, any administrative, judicial,
legislative, police, regulatory, or taxing authority or power of similar nature
in the PRC ("Approvals") pursuant to any PRC Law
44
to own, sell, lease license and use its properties and assets and conduct its
business in the manner described in the Pricing Disclosure Package as of the
Applicable Time, none of the approvals contains any materially burdensome
restrictions or conditions not described in the Pricing Disclosure Package as of
the Applicable Time, and each of the PRC Group Entities is in compliance with
the provisions of such Approvals in all material respects. Except as described
in the Pricing Disclosure Package as of the Applicable Time, such counsel is not
aware, after due inquiry, of anything that will cause such counsel to reasonably
believe that any national, provincial or local governmental, regulatory or
administrative authority, agency or commission in the PRC, or any court,
tribunal or any other judicial or arbitral body in the PRC, or any body
exercising, or entitled to exercise, any administrative, judicial, legislative,
police, regulatory, or taxing authority or power of similar nature in the PRC
("PRC Authorities") are considering modifying, suspending, revoking or not
renewing any such Approvals;
(iv) Except as described in the Pricing Disclosure Package as of the
Applicable Time, to the best of such counsel's knowledge after due inquiry, none
of the PRC Group Entities is (A) in violation of any PRC Law; (B) in violation
of its business license, articles of association, other constitutional documents
(if any) or Approvals; (C) in breach or default in the performance or observance
of any of the terms or provisions of the Acquisition Agreements, distribution
agreements and Structure Agreements (collectively, the "Covered Agreements") to
which it is a party; or (D) apart from the Covered Agreements to which it is a
party, in breach or default in the performance or observance of any of the terms
or provisions of any contract, license, indenture, mortgage, deed of trust, loan
agreement, note, lease or other agreement or instrument to which it is a party
or by which it or any of its properties may be bound, except for such violation,
breach or default under clauses (A) and (D) which would not, individually or in
the aggregate, have a Material Adverse Effect on the general affairs,
management, shareholders' equity, results of operations or position, financial
or otherwise, of the PRC Group Entities;
(v) In the course of such counsel's representation of the Company,
nothing has come to such counsel's attention that would lead such counsel to
reasonably believe (A) that the description of the Placement Agreements, the LED
Lease Agreement and the WAP Agreements in the Pricing Prospectus under the
caption "Business" is not true, complete and accurate in all material respects,
or (B) that any of the Placement Agreements, the LED Lease Agreement or the WAP
Agreements would be unenforceable under PRC Law, provided that the Underwriters
understand that such counsel's opinion in this paragraph is based solely on such
counsel's review of what such counsel believes, based upon such counsel's due
inquiry with the Company, is a representative sample of the Placement Agreements
and that such counsel has not performed any comprehensive review of all of the
Placement Agreements;
(vi) Each of the PRC Group Entities, Xxxxx Xxxxxxx Xxxxx and Xxxxx Xxx
Xx has full power, authority and legal right to enter into, execute, adopt,
assume, issue, deliver and perform their respective obligations under each of
the Covered Agreements to which it or he is a party, and has authorized,
executed and delivered each of the Covered Agreements to which it or he is a
party, and such obligations constitute valid, legal and binding obligations
enforceable against each of them in accordance with the terms of each of the
Covered Agreements, except as described in the Pricing Disclosure Package as of
the Applicable Time. Each of the Covered Agreements that is governed by PRC Law
is in proper legal form under PRC Law for the
45
enforcement thereof against each of the PRC Group Entities, Xxxxx Xxxxxxx Xxxxx
and Xxxxx Xxx Xx, as the case may be, in the PRC without further action by any
of them;
(vii) The execution, delivery and performance of each of the Covered
Agreements by the parties thereto, and the consummation of the transactions
contemplated thereunder, will not (A) result in any violation of the business
license, articles of association, other constitutional documents (if any) or
Approvals of any of the PRC Group Entities; (B) result in any violation of or
penalty under any PRC Law; or (C) to the best of such counsel's knowledge after
due inquiry conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any other contract, license,
indenture, mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument to which any of them is a party or by which any of them
is bound or to which any of their property or assets is subject, except for such
violation, breach or default under clauses (B) and (C) which would not,
individually or in the aggregate, have a Material Adverse Effect on the general
affairs, management, shareholders' equity, results of operations or position,
financial or otherwise, of the PRC Group Entities;
(viii) The description of the corporate structure of the PRC Group
Entities and the Covered Agreements set forth in the Pricing Prospectus under
the captions "Our Corporate Structure" and "Related Party Transactions --
Agreements Among Us, Focus Media Technology, Focus Media Digital, New Focus
Media Advertisement, Focus Media Advertisement and its Subsidiaries", "Related
Party Transactions - Agreements Among Focus Media Advertisement, Focus Media
Advertising Agency, Focus Media Wireless and Dotad Technology" and "Our
Corporate Structure" are true and accurate in all material respects and nothing
has been omitted from such description which would make the same misleading in
any materials respect. No Approvals are required under any PRC Law in connection
with the Covered Agreements or the performance of the terms thereof (except for
the filing of the trademark license agreement and approval and filing
requirements under the call option agreements and equity pledge agreements
described in the Pricing Prospectus under the caption "Related Party
Transactions"), and no stamp duty or similar tax is required to be paid in
connection with the Covered Agreements;
(ix) None of the PRC Group Entities is entitled to any immunity from
any legal proceedings or process or from enforcement, execution or attachment in
respect of their obligations in the transactions contemplated under any of the
Covered Agreements;
(x) Except as described in the Pricing Disclosure Package as of the
Applicable Time, to the best of such counsel's knowledge after due inquiry,
there are no legal, arbitration or governmental proceedings pending, threatened
or contemplated in the PRC by or against any of the PRC Group Entities, or to
which the property of any of them may be subject, which, if determined adversely
against any of the PRC Group Entities, would individually or in the aggregate
have a Material Adverse Effect on the PRC Group Entities;
(xi) The statements in the Pricing Prospectus under the captions
"Prospectus Summary", "Risk Factors", "Our Corporate Structure", "Management's
Discussion and Analysis of Financial Condition and Results of Operations",
"Industry", "Business", "Our Recent Significant Acquisitions", "Regulation of
Our Industry", "Management", "Related Party Transactions", "Taxation" and
"Enforcement of Civil Liabilities", to the extent such statements relate to
matters of PRC Law or legal conclusions with respect thereto, are true and
accurate in
46
all material respects, and nothing has been omitted from such statements which
would make the same misleading in any material respect;
(xii) The choice of PRC Law as the governing law in any of the Covered
Agreements that by their terms are governed by PRC Law is a valid choice of
governing law and will be binding on the parties to the relevant Covered
Agreement;
(xiii) All dividends declared and payable upon the equity interests in
each of Focus Media Technology, Framedia Investment and Dotad Technology may
under PRC Law be paid to Focus Media Hong Kong, InfoAchieve and Dotad Holdings,
respectively, in Renminbi that may be converted into U.S. dollars and freely
transferred out of the PRC, and all such dividends are not and, except as
disclosed in the Pricing Disclosure Package as of the Applicable Time, will not
be subject to withholding or other taxes under PRC Law and, except as disclosed
in the Pricing Disclosure Package as of the Applicable Time, are otherwise free
and clear of any other tax, withholding or deduction in the PRC, and without the
necessity of obtaining any authorization from PRC Authorities;
(xiv) No stamp or other issuance or transfer taxes or duties and no
capital gains, income, withholding or other taxes are payable by or on behalf of
the Underwriters to the government of the PRC and any political subdivision or
authority thereof or therein in connection with (A) the deposit with the
Depositary of Shares against the issuance of ADRs evidencing the ADSs, (B) the
sale and delivery by the Company and the Selling Shareholders of the ADSs and
the Shares to or for the respective accounts of the Underwriters or (C) the sale
and delivery outside PRC by the Underwriters of the ADSs and the Shares to the
initial purchasers thereof in the manner contemplated herein;
(xv) The Underwriters will not be deemed to be resident, domiciled,
carrying on business or subject to taxation in the PRC solely by reason of its
execution, delivery, performance or enforcement of, or the consummation of any
transaction contemplated by, this Agreement, the Deposit Agreement or any other
document furnished hereunder or thereunder;
(xvi) The (A) irrevocable submission of each of the Company and the
Selling Shareholders to the jurisdiction of any New York Court, (B) waiver by
each of the Company and the Selling Shareholders of any objection to the venue
of a proceeding in a New York Court, (C) waiver and agreement not to plead an
inconvenient forum, (D) waiver of sovereign immunity, and (E) agreement of each
of the Company and the Selling Shareholders that the Underwriting Agreement and
the Deposit Agreement shall be construed in accordance with and governed by the
laws of the State of New York, in each case is legal, valid and binding under
PRC Law and will be respected by the government of the PRC and any political
subdivision or authority thereof or therein; service of process duly effected in
the manner set forth in the Underwriting Agreement and the Deposit Agreement
will be effective, insofar as PRC Law is concerned, to confer valid personal
jurisdiction over each of the Company and the Selling Shareholders; and any
judgment obtained in a New York Court arising out of or in relation to the
obligations of each of the Company and the Selling Shareholders under the
Underwriting Agreement and the Deposit Agreement will be recognized by the
government of the PRC and any political subdivision or authority thereof or
therein subject to the conditions described under the caption "Enforceability of
Civil Liabilities" in the Pricing Prospectus;
47
(xvii) The indemnification and contribution provisions set forth in
Section 9 hereof and Section 5.8 of the Deposit Agreement do not contravene PRC
Law;
(xviii) The (A) issue and sale of the Shares and the ADSs being
delivered at such Time of Delivery, (B) deposit of the Shares with the
Depositary against issuance of the ADRs evidencing the ADSs to be delivered at
such Time of Delivery, (C) compliance by the Company with all of the provisions
of the Underwriting Agreement and the Deposit Agreement, (D) compliance by each
of the Selling Shareholders with all of the provisions of the Underwriting
Agreement, and (E) consummation of the transactions contemplated under the
Underwriting Agreement, in each case will not result in any violation of or
penalty under any PRC Law, or result in any violation or breach of the business
license, articles of association or other constitutional or organizational
documents of the PRC Group Entities, or conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any contract, license, indenture, mortgage, deed of trust, loan agreement, note,
lease or other agreement or instrument to which any of the PRC Group Entities is
a party or by which any of the PRC Group Entities is bound or to which any of
the property or assets of any of the PRC Group Entities is subject;
(xix) Except as disclosed in the Pricing Disclosure Package as of the
Applicable Time, no approval is required for the issue and sale of the Shares
and the ADSs, the deposit of the Shares with the Depositary against issuance of
the ADRs evidencing the ADSs to be delivered at such Time of Delivery or the
consummation of the transactions contemplated by the Underwriting Agreement and
the Deposit Agreement. In giving such opinion, such counsel may state that (A)
with respect to all matters of United States federal and New York law they have
relied upon the opinions of United States counsel for the Company delivered
pursuant to paragraph (d) of this Section 8, (B) with respect to all matters of
Cayman Islands and British Virgin Islands law they have relied upon the opinions
of Cayman Islands and British Virgin Islands counsel for the Company and the
Selling Shareholders delivered pursuant to paragraph (f) of this Section 8 and
(C) with respect to all matters of Hong Kong law they have relied upon the
opinions of Hong Kong counsel for the Company delivered pursuant to paragraph
(g) of this Section 8; and
(xx) Although they do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement, the Pricing Disclosure Package as of the Applicable Time or the
Prospectus (except as otherwise specifically stated in opinion (viii) and
opinion (xi) above), they have no reason to believe (A) that, as of its
effective date, the Registration Statement or any further amendment thereto made
by the Company prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel need express
no opinion) contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading; (B) that the Pricing Disclosure Package, as
of the Applicable Time (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion), contained
any untrue statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; (C) that, as of its
date, the Prospectus or any further amendment or supplement thereto made by the
Company prior to such Time of Delivery (other than the financial statements and
related schedules therein, as to which such counsel need
48
express no opinion) contained an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; (D) that, as of
such Time of Delivery, the Registration Statement, or any further amendment
thereto made by the Company prior to such Time of Delivery (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion), contains an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; or (E) that, as of such Time of
Delivery, the Prospectus or any further amendment or supplement thereto made by
the Company prior to such Time of Delivery (other than the financial statements
and related schedules therein, as to which such counsel need express no opinion)
contains an untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.;
(f) Xxxxxxx Xxxx & Xxxxxxx, Cayman Islands and British Virgin Islands
counsel for the Company and each of the Selling Shareholders that is an entity
formed under the laws of either the Cayman Islands or the British Virgin Islands
(the "Covered Selling Shareholders"), shall have furnished to you their written
opinion, dated such Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) The Company has been duly organized and is validly existing as a
company in good standing under the laws of the Cayman Islands with legal right,
power and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus;
(ii) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
(including the Shares being delivered at such Time of Delivery) have been duly
and validly authorized and issued and are fully paid and non-assessable; the
holders of outstanding shares of capital stock of the Company are not entitled
to preemptive or other rights to acquire the ADSs to be deposited by the Company
and the Selling Shareholders or to be purchased from the Company and the Selling
Shareholders under this Agreement which have not been complied with; the Shares
to be deposited by the Company and the Selling Shareholders may be freely
deposited by the Company with the Depositary against issuance of ADRs evidencing
ADSs; the ADSs and the Shares to be sold by the Company and the Selling
Shareholders are freely transferable by the Company to or for the account of the
several Underwriters in the manner contemplated herein;
(iii) Each of InfoAchieve and Dotad Holdings has been duly organized
and is validly existing as a company in good standing under the laws of the
British Virgin Islands with legal right, power and authority (corporate and
other) to own its properties and conduct its business as described in the
Prospectus; based solely on a review of a certified true copy of the register of
members of each of InfoAchieve and Dotad, all of the issued shares of each of
InfoAchieve and Dotad have been duly and validly authorized and issued, are
fully paid and non-assessable and are owned by the Company free and clear of any
Encumbrances;
(iv) Each of the Covered Selling Shareholders that is a company,
partnership or other business entity has been duly organized and is validly
existing in good standing in either the Cayman Islands or the British Virgin
Islands, as applicable;
49
(v) To the best of such counsel's knowledge, after having conducted a
search of the register of writs and other originating processes, and except as
set forth in the Prospectus, there are no legal, arbitration or governmental
proceedings pending to which the Company or any of the Covered Selling
Shareholders is a party or of which any property of the Company or any of the
Covered Selling Shareholders is the subject which, if determined adversely to
the Company or any of the Covered Selling Shareholders, would individually or in
the aggregate have a Material Adverse Effect on the current or future
consolidated financial position, shareholders' equity or results of operations
of the Company and the Group Entities or on the ability of the Covered Selling
Shareholders to convey good and marketable title to the Shares and ADSs held by
them free and clear of any liens, encumbrances, equities or claims; and, to the
best of such counsel's knowledge, no such proceedings are threatened or
contemplated by any Governmental Agency or by others;
(vi) This Agreement has been duly authorized, executed and delivered by
the Company and by an Attorney on behalf of each of the Covered Selling
Shareholders and constitutes a valid and legally binding agreement of the
Company and the Covered Selling Shareholders enforceable in accordance with its
terms, subject, as to enforceability, to bankruptcy, insolvency, reorganization
and similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles;
(vii) Each of the Power of Attorney and the Custody Agreement has been
duly authorized, executed and delivered by the Company and the Covered Selling
Shareholders and constitutes a valid and legally binding obligation of the
Company and the Covered Selling Shareholders enforceable in accordance with its
terms, subject as to enforceability, to bankruptcy, insolvency, reorganization
and similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles;
(viii) Each of this Agreement, the Deposit Agreement and the Custody
Agreement is in proper form to be enforceable in the Cayman Islands in
accordance with its terms; to ensure the legality, validity, enforceability or
admissibility into evidence in the Cayman Islands of this Agreement, the Deposit
Agreement or the Custody Agreement, it is not necessary that this Agreement, the
Deposit Agreement or the Custody Agreement be filed or recorded with any court
or other authority in the Cayman Islands or that any stamp or similar tax in the
Cayman Islands be paid on or in respect of this Agreement, the Deposit
Agreement, the Custody Agreement or any other documents to be furnished
hereunder or thereunder;
(ix) The issue and sale of the Shares and the ADSs being delivered at
such Time of Delivery and the deposit of the Shares with the Depositary against
issuance of the ADSs evidencing the ADRs to be delivered at such Time of
Delivery and the compliance by the Company with all of the provisions of this
Agreement, and the Deposit Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company is a party or by which the
Company is bound or to which any of the property or assets of the Company is
subject, nor will such action result in any violation of the provisions of the
constituent documents of the Company or any statute or any
50
order, rule or regulation known to such counsel of any Governmental Agency
having jurisdiction over the Company or its respective properties;
(x) The sale of the ADSs to be sold by the Covered Selling Shareholders
hereunder and the compliance by the Covered Selling Shareholders with all of the
provisions of this Agreement and the consummation of the transactions herein
contemplated will not conflict with or result in a breach or violation of any
terms or provisions of, or constitute a default under, any statute, indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument known
to such counsel to which a Covered Selling Shareholder is a party or by which a
Covered Selling Shareholder is bound, or to which any of the property or assets
of a Covered Selling Shareholder is subject, nor will such action result in any
violation of the provisions of the constituent documents of a Covered Selling
Shareholder or any order, rule or regulation known to such counsel of any court
or governmental agency or body having jurisdiction over a Covered Selling
Shareholder or the property of a Covered Selling Shareholder;
(xi) No Governmental Authorization of or with any Governmental Agency
in the Cayman Islands is required for the issue and sale of the Shares and the
ADSs, the deposit of the Shares with the Depositary against issuance of the ADSs
evidencing the ADRs to be delivered at such Time of Delivery or the consummation
of the transactions contemplated by this Agreement and the Deposit Agreement;
(xii) Immediately prior to such Time of Delivery each Covered Selling
Shareholder had good and marketable title to the ADSs to be sold at such Time of
Delivery by such Covered Selling Shareholder under this Agreement, free and
clear of all liens, encumbrances, equities or claims, and legal right, power and
authority (corporate and other) to sell, assign, transfer and deliver the ADSs
to be sold by such Covered Selling Shareholder hereunder and thereunder; and,
upon delivery of the ADSs representing such Shares and payment therefore
pursuant to this Agreement, good and marketable title to such ADSs, free and
clear of all liens, encumbrances, equities or claims, will pass to the several
Underwriters;
(xiii) The statements set forth in the Prospectus under the caption
"Description of Share Capital", insofar as they purport to constitute a summary
of the terms of the Ordinary Shares are accurate, complete and fair;
(xiv) The opinions of such counsel set forth in the Prospectus under
the caption "Taxation - Cayman Islands Taxation" are confirmed as of such Time
of Delivery;
(xv) No stamp or other issuance or transfer taxes or duties and no
capital gains, income, withholding or other taxes are payable by or on behalf of
the Underwriters to the Cayman Islands or to any political subdivision or taxing
authority thereof or therein in connection with (A) the deposit with the
Depositary of Shares by the Company and the Covered Selling Shareholders against
the issuance of ADRs evidencing the ADSs, (B) the sale and delivery by the
Company of the ADSs and the Shares to or for the respective accounts of the
Underwriters or (C) the sale and delivery outside the Cayman Islands by the
Underwriters of the ADSs and the Shares to the initial purchasers thereof in the
manner contemplated herein;
51
(xvi) The Underwriters will not be deemed to be resident, domiciled,
carrying on business or subject to taxation in the Cayman Islands or the British
Virgin Islands solely by reason of its execution, delivery, performance or
enforcement of, or the consummation of any transaction contemplated by, this
Agreement;
(xvii) Insofar as matters of the Cayman Islands law are concerned, the
Registration Statement and the filing of the Registration Statement with the
Commission have been duly authorized by and on behalf of the Company; and the
Registration Statement has been duly executed pursuant to such authorization by
and on behalf of the Company;
(xviii) The Company's agreement, and the Covered Selling Shareholder's
agreement, to the choice of law provisions set forth in Section 18 hereof will
be recognized by the courts of the Cayman Islands or the British Virgin Islands,
as applicable; the Company and the Covered Selling Shareholders can xxx and be
sued in their own names under the laws of the Cayman Islands or the British
Virgin Islands, as applicable; the irrevocable submission of the Company and the
Covered Selling Shareholders to the exclusive jurisdiction of a New York Court,
the waiver by the Company and the Covered Selling Shareholders of any objection
to the venue of a proceeding of a New York Court and the agreement of the
Company and the Covered Selling Shareholders that this Agreement shall be
governed by and construed in accordance with the laws of the State of New York
are legal, valid and binding; service of process effected in the manner set
forth in Section 15 hereof will be effective, insofar as the law of the Cayman
Islands is concerned, to confer valid personal jurisdiction over the Company and
the Covered Selling Shareholders; and judgment obtained in a New York Court
arising out of or in relation to the obligations of the Company or a Covered
Selling Shareholder under this Agreement would be enforceable or such Covered
Selling Shareholder, respectively, in the courts of the Cayman Islands or the
British Virgin Islands, as applicable;
(xix) The indemnification and contribution provisions set forth in
Section 9 hereof and Section 5.8 of the Deposit Agreement do not contravene the
public policy or laws of the Cayman Islands or the British Virgin Islands;
(xx) All dividends and other distributions declared and payable on the
shares of capital stock of the Company may under the current laws and
regulations of the Cayman Islands be paid to the Depositary and freely
transferred out of the Cayman Islands, and all such dividends and other
distributions will not be subject to withholding or other taxes under the laws
and regulations of Cayman Islands and are otherwise free and clear of any other
tax, withholding or deduction in the Cayman Islands and without the necessity of
obtaining any Governmental Authorization in the Cayman Islands;
(xxi) The Company is not in violation of its constituent documents or
in default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any license, indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument to which
it is a party or by which it or any of its properties may be bound;
In giving such opinion, such counsel may state that (A) with respect to
all matters of United States federal and New York law they have relied upon the
opinions of United States
52
counsel for the Company delivered pursuant to paragraph (d) of this Section 8,
(B) with respect to all matters of PRC law they have relied upon the opinions of
PRC counsel for the Company delivered pursuant to paragraph (e) of this Section
8 and (C) with respect to all matters of Hong Kong law they have relied upon the
opinions of Hong Kong counsel for the Company delivered pursuant to paragraph
(g) of this Section 8. In addition, in rendering the opinion in subparagraph
(xii) such counsel may rely upon a certificate of the Covered Selling
Shareholders in respect of matters of fact as to ownership of and liens,
encumbrances, equities or claims on, the Shares or ADSs sold by the Covered
Selling Shareholders; provided that such counsel shall state that they believe
that both you and they are justified in relying upon such certificate;
(g) Pun & Associates, Hong Kong counsel for the Company shall have
furnished to you their written opinion, dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that: (A) Focus Media Hong Kong has
been duly organized and is validly existing in good standing under the laws of
Hong Kong with legal right, power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, (B) all of
Focus Media Hong Kong's share capital has been duly and validly issued, are
fully paid and non-assessable, and are owned directly by the Company, free and
clear of all liens, encumbrances, equities or claims, and (C) Focus Media Hong
Kong is not in violation of its constituent documents or in default in the
performance or observance of any material obligation, agreement, covenant or
condition contained in any license, indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party or by
which it or any of its properties may be bound;
In giving such opinion, such counsel may state that (A) with respect to
all matters of United States federal and New York law they have relied upon the
opinions of United States counsel for the Company delivered pursuant to
paragraph (d) of this Section 8, (B) with respect to all matters of PRC law they
have relied upon the opinions of PRC counsel for the Company delivered pursuant
to paragraph (e) of this Section 8 and (C) with respect to all matters of Cayman
Islands and British Virgin Islands law they have relied upon the opinions of
Cayman Islands and British Virgin Islands counsel for the Company delivered
pursuant to paragraph (f) of this Section 8;
(h) You shall have received one or more opinions, as contemplated in
the Power of Attorney dated as of the time of purchase or such additional time
of purchase, as the case may be, of counsel for each Selling Shareholder
addressed to you, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the other
Underwriters in form and substance satisfactory to you, stating that:
(i) Each of the Selling Shareholders that is a company, partnership or
other business entity has been duly organized and is validly existing in good
standing in its jurisdiction of organization;
(ii) Immediately prior to the Time of Delivery, the Selling Shareholder
had good and marketable title to the Ordinary Shares delivered by the Selling
Shareholder to the Depositary in accordance with the Deposit Agreement, free and
clear of all liens, encumbrances, equities or claims; the Selling Shareholder
had full right, power and authority to sell, assign, transfer and deliver the
Selling Shareholder ADSs delivered by the Selling Shareholder at the time of
53
purchase and such additional time of purchase hereunder and the Selling
Shareholder ADSs received by the Depositary were free and clear of all liens,
encumbrances, equities or claims; and the several Underwriters have acquired
good and marketable title to the Selling Shareholder ADSs purchased by them at
such time of purchase and additional time of purchase hereunder, free and clear
of all liens, encumbrances, equities or claims;
(iii) No consent, approval, authorization or order of, or filing with,
any governmental agency or body or any court is required to be obtained or made
by the Selling Shareholder for the consummation of the transactions contemplated
by the Custody Agreement and this Agreement in connection with the sale of the
Selling Shareholder ADSs, except such as have been obtained and made under the
Act and the Exchange Act and such as may be required under state or foreign
securities or blue sky laws;
(iv) The sale of the ADSs to be sold by the Selling Shareholder
hereunder and the execution, delivery and performance of the Custody Agreement
and this Agreement and the consummation of the transactions therein and herein
contemplated will not conflict with or result in a breach or violation of any
terms or provisions of, or constitute a default under, any statute, indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument known
to such counsel to which the Selling Shareholder is a party or by which the
Selling Shareholder is bound, or to which any of the property or assets of the
Selling Shareholder is subject, nor result in a material breach or violation of
any of the terms and provisions of, or constitute a default under, any statute,
any rule, regulation or order of any governmental agency or body or any court
having jurisdiction over the Selling Shareholder or any of his/her/its
properties or any agreement or instrument to which the Selling Shareholder is a
party or by which the Selling Shareholder is bound or to which any of the
properties of the Selling Shareholder is subject, or the charter, by-laws or
other constitutional documents of any Selling Shareholder which is a business
entity;
(v) Each of the Power of Attorney and related Custody Agreement with
respect to each Selling Shareholder has been duly authorized, executed and
delivered by the Selling Shareholder and constitutes a valid and legally binding
obligation of the Selling Shareholder enforceable in accordance with their
terms, subject as to enforceability, to bankruptcy, insolvency, reorganization
and similar laws of general applicability relating to or affecting creditors
rights generally and to general equity principles;
(vi) Such Selling Shareholder's agreement to the choice of law
provisions set forth in Section 18 hereof will be recognized by the courts of
the relevant domicile or jurisdiction of organization; such Selling Shareholder
can xxx and be sued in its own name under the laws of the relevant domicile or
jurisdiction of organization; the irrevocable submission of such Selling
Shareholder to the exclusive jurisdiction of a New York Court, the waiver by
such Selling Shareholder of any objection to the venue of a proceeding of a New
York Court and the agreement of such Selling Shareholder that this Agreement of
such Selling Shareholder shall be governed by and construed in accordance with
the laws of the State of New York are legal, valid and binding; service of
process effected in the manner set forth in Section 15 hereof will be effective,
insofar as the laws of the relevant domicile or jurisdiction of organization are
concerned, to confer valid personal jurisdiction over such Selling Shareholder;
and judgment obtained in a New York Court arising out of or in relation to the
obligations of such Selling
54
Shareholder under this Agreement would be enforceable against such Selling
Shareholder in the courts of the relevant domicile or jurisdiction of
organization; and
(vii) This Agreement has been duly authorized, executed and delivered
by or on behalf of the Selling Shareholder;
(i) Patterson, Belknap, Xxxx & Xxxxx LLP, counsel for the Depositary,
shall have furnished to you their written opinion, dated such Time of Delivery,
in form and substance satisfactory to you, to the effect that:
(i) The Deposit Agreement has been duly authorized, executed and
delivered by the Depositary and constitutes a valid and legally binding
obligation of the Depositary, enforceable in accordance with its terms, subject,
as to enforceability, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or similar laws of general applicability relating to
or affecting creditors' rights and to general principles of equity;
(ii) The ADRs issued under and in accordance with the provisions of the
Deposit Agreement to evidence the ADSs will entitle the holders thereof to the
rights specified therein and in the Deposit Agreement, assuming that (A) the
Shares represented by the ADSs, which are in turn evidenced by the ADRs, have
been duly authorized and validly issued and are fully paid and non-assessable
and that any preemptive rights with respect to such Shares have been validly
waived and exercised and (B) such Shares have been duly deposited with Citibank,
N.A., as Custodian (as defined in the Deposit Agreement), in each case under and
in accordance with all applicable laws and regulations;
(iii) Upon issuance by the Depositary of ADRs evidencing ADSs against
the deposit of Shares in respect thereof in accordance with the provisions of
the Deposit Agreement, such ADRs will be duly and validly issued and the persons
in whose name the ADRs are registered will be entitled to the rights specified
therein and in the Deposit Agreement; and
(iv) The ADS Registration Statement has been filed and the Commission
has declared the ADS Registration Statement effective and, to the best of such
counsel's knowledge, no stop order suspending the effectiveness of the ADS
Registration Statement or any part thereof has been issued and no proceedings
for that purpose have been instituted or are pending or contemplated under the
Act, and the ADS Registration Statement, and each amendment thereof, as of their
respective effective dates, complied as to form in all material respects with
the requirements of the Act and the rules and regulations of the Commission
thereunder;
(j) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of any
post effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, Deloitte Touche
Tohmatsu CPA Ltd. shall have furnished to you a letter or letters, dated the
respective dates of delivery thereof, in form and substance satisfactory to you,
to the effect set forth in Annex I hereto (the executed copy of the letter
delivered prior to the execution of this Agreement is attached as Annex I (A)
hereto and a draft of the form of letter to be delivered on the effective date
of any post-effective amendment to the Registration Statement and as of each
Time of Delivery is attached as Annex I (B) hereto);
55
(k) (A) None of the Company or any of the Group Entities shall have
sustained since the date of the latest audited financial statements included in
the Pricing Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Pricing Prospectus and (B) since the
respective dates as of which information is given in the Pricing Prospectus
there shall not have been any change in the capital stock, short-term debt or
long term debt of the Company or any of the Group Entities or any change, or any
development involving a prospective change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of operations of
the Company and the Group Entities, otherwise than as set forth or contemplated
in the Pricing Prospectus, the effect of which, in any such case described in
clause (A) or (B), is in the judgment of the Representatives so material and
adverse as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares and the ADSs being delivered at such Time
of Delivery on the terms and in the manner contemplated in the Prospectus;
(l) On or after the Applicable Time (A) no downgrading shall have
occurred in the rating accorded to any of the Company's debt securities, if any,
by any "nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act, and (B)
no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of any
of the Company's debt securities;
(m) On or after the Applicable Time, there shall not have occurred any
of the following: (A) a suspension or material limitation in trading in
securities generally on the Nasdaq National Market, the New York Stock Exchange
or the London Stock Exchange, (B) a suspension or material limitation in trading
in the Company's securities on the Nasdaq National Market, (C) a general
moratorium on commercial banking activities in New York, London, the PRC or the
Cayman Islands declared by the relevant authorities, or a material disruption in
commercial banking or securities settlement or clearance services in the United
States, the United Kingdom, the PRC or the Cayman Islands, (D) a change or
development involving a prospective change in taxation affecting the Company,
any of the Group Entities or the Shares or the ADSs or the transfer thereof, (E)
the outbreak or escalation of hostilities involving the United States, the
United Kingdom the PRC or the Cayman Islands or the declaration by the United
States, the United Kingdom, the PRC or the Cayman Islands of a national
emergency or war or (F) the occurrence of any other calamity or crisis or any
change in financial, political or economic conditions or currency exchange rates
or controls in the United States, the United Kingdom, the PRC, the Cayman
Islands or elsewhere, if the effect of any such event specified in clause (E) or
(F) in the judgment of the Representatives makes it impracticable or inadvisable
to proceed with the public offering or the delivery of the Shares and the ADSs
being delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(n) The ADSs to be sold by the Company and the Selling Shareholders at
such Time of Delivery shall have been duly included for quotation on the Nasdaq
National Market;
(p) The Depositary shall have furnished or caused to be furnished to
you at such Time of Delivery certificates satisfactory to you evidencing the
deposit with it of the Shares being so
56
deposited against issuance of ADRs evidencing the ADSs to be delivered by the
Company and the Selling Shareholders at such Time of Delivery, and the
execution, countersignature (if applicable), issuance and delivery of ADRs
evidencing such ADSs pursuant to the Deposit Agreement;
(q) Each party set forth in Annex II attached hereto shall have entered
into an agreement in the form of Annex III hereto;
(r) The Company shall have complied with the provisions of Section
5(a)(iii) hereof with respect to the furnishing of Prospectuses on the New York
Business Day next succeeding the date of this Agreement;
(s) The Company shall have furnished or caused to be furnished to you
at such Time of Delivery certificates of Xxxxx Xxxxxxx Xxxxx and officers of the
Company, respectively, reasonably satisfactory to you as to the accuracy of the
representations and warranties of the Company and the Controlling Person,
respectively, herein at and as of such Time of Delivery, as to the performance
by the Company and the Controlling Person of all of their respective obligations
hereunder to be performed at or prior to such Time of Delivery, and as to such
other matters as you may reasonably request, and the Company shall have
furnished or caused to be furnished certificates as to the matters set forth in
subsections (a) and (k) of this Section, and as to such other matters as you may
reasonably request; and each Selling Shareholder shall have furnished or caused
to be furnished to you at such Time of Delivery a certificate reasonably
satisfactory to you as to the accuracy of the representations and warranties of
such Selling Shareholder at and as of such Time of Delivery and as to the
performance by such Selling Shareholder of its obligations hereunder to be
performed at or prior to such Time of Delivery;
(t) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any federal, state or
foreign governmental or regulatory authority that would, as of the Time of
Delivery, prevent the issuance of the Shares, the deposit of such Shares with
the Depositary against issuance of the ADRs evidencing the ADSs or the sale of
such ADSs; and no injunction or order of any federal, state or foreign court
shall have been issued that would, as of the Time of Delivery, prevent the
issuance of the Shares, the deposit of such Shares with the Depositary against
issuance of the ADRs evidencing the ADSs or the sale of such ADSs; and
(u) All opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
9. (a) The Company and the Controlling Person, severally and not
jointly, will indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, the ADS Registration Statement, any
Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any
amendment or supplement thereto, or any Issuer Free
57
Writing Prospectus or any "issuer information" filed or required to be filed
pursuant to Rule 433(d) under the Act, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company and the Controlling Person shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, the ADS Registration Statement, any
Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any
amendment or supplement thereto, or any Issuer Free Writing Prospectus, in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives expressly for use
therein, and provided further, that the aggregate liability of the Controlling
Person pursuant to this subsection (a) shall not exceed the product of (i) the
number of ADSs sold by the Controlling Person, including any Optional ADSs, and
(ii) the public offering price per ADSs as set forth on the cover page of the
Pricing Prospectus;
(b) Each of the Selling Shareholders, severally and not jointly, will
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, the ADS Registration Statement, any Preliminary
Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or
supplement thereto, or any Issuer Free Writing Prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such action or claim as such expenses are incurred in each case to
the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, the ADS Registration Statement, any Preliminary Prospectus, the
Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or
any Issuer Free Writing Prospectus, in reliance upon and in conformity with
written information furnished to the Company or such Underwriter by such Selling
Shareholder expressly for use therein; provided, however, that the liability of
each Selling Shareholder pursuant to this subsection (b) shall not exceed the
product of (i) the number of ADSs sold by such Selling Shareholder, including
any Optional ADSs, and (ii) the public offering price per ADSs as set forth on
the cover page of the Pricing Prospectus, less underwriting discount per ADS as
set forth on the cover page of the Pricing Prospectus;
(c) Each Underwriter will indemnify and hold harmless the Company, the
Controlling Person and each Selling Shareholder against any losses, claims,
damages or liabilities to which the Company, such Controlling Person or such
Selling Shareholder may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement, the ADS Registration
Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus,
or any
58
amendment or supplement thereto, or any Issuer Free Writing Prospectus, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, the ADS Registration Statement,
any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any
amendment or supplement thereto, or any Issuer Free Writing Prospectus, in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives expressly for use
therein; and will reimburse the Company, each Controlling Person and each
Selling Shareholder for any legal or other expenses reasonably incurred by the
Company, the Controlling Person or such Selling Shareholder in connection with
investigating or defending any such action or claim as such expenses are
incurred;
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (which shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the relevant indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim against such indemnified party in respect
of which indemnification or contribution may be sought hereunder (whether or not
the indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (A) includes an unconditional
release of such indemnified party from all liability arising out of such action
or claim and (B) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party from
whom such consent is required hereunder but has not been obtained;
(e) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company, the Controlling Person and the
Selling Shareholders on the one hand and the Underwriters on the other from the
offering of the ADSs. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party
59
failed to give the notice required under subsection (d) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company, the Controlling
Person and the Selling Shareholders on the one hand and the Underwriters on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company, the Controlling Person and the Selling Shareholders on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering of the ADSs purchased
under this Agreement (before deducting expenses) received by the Company, the
Controlling Person and the Selling Shareholders bear to the total underwriting
discounts and commissions received by the Underwriters with respect to the ADSs
purchased under this Agreement, in each case as set forth in the table on the
cover page of the Pricing Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, the Controlling Person or the
Selling Shareholders on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Controlling
Person, each of the Selling Shareholders and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this subsection (e)
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (e). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (e) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (e), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the ADSs underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (e) to
contribute are several in proportion to their respective underwriting
obligations and not joint. Further notwithstanding the provisions of this
subsection (e), no Selling Shareholder shall be required to contribute any
amount in excess of the product of (i) the number of ADSs sold by such Selling
Shareholder, including any Optional ADSs, and (ii) the public offering price per
ADS as set forth on the cover page of the Pricing Prospectus, less the
underwriting discount per ADS as set forth on the cover page of the Pricing
Prospectus; and
(f) The obligations of the Company, the Controlling Person and the
Selling Shareholders under this Section 9 shall be in addition to any liability
which the Company and the respective Controlling Person and Selling Shareholders
may otherwise have and shall extend, upon the same terms and conditions, to the
respective affiliates of each Underwriter and to each person, if any, who
controls any Underwriter within the meaning of the Act and each broker-dealer
affiliate of any Underwriter; and the obligations of the Underwriters under this
Section 9
60
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company (including any person who, with his or her
consent, is named in the Registration Statement as about to become a director of
the Company) and any Selling Shareholder and to each person, if any, who
controls the Company or any Selling Shareholder within the meaning of the Act;
10. (a) If any Underwriter shall default in its obligation to purchase
the ADSs which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such ADSs on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such ADSs, then the Company and the Selling Shareholders shall be entitled to a
further period of thirty-six hours within which to procure another party or
other parties satisfactory to you to purchase such ADSs on such terms. In the
event that, within the respective prescribed periods, you notify the Company and
the Selling Shareholders that you have so arranged for the purchase of such
ADSs, or the Company and the Selling Shareholders notify you that they have so
arranged for the purchase of such ADSs, you or the Company and the Selling
Shareholders shall have the right to postpone such Time of Delivery for a period
of not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in your opinion may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such ADSs;
(b) If, after giving effect to any arrangements for the purchase of the
ADSs of a defaulting Underwriter or Underwriters by you and the Company and the
Selling Shareholders as provided in subsection (a) above, the aggregate number
of such ADSs which remains unpurchased does not exceed one eleventh of the
aggregate number of all of the ADSs to be purchased at such Time of Delivery,
then the Company and the Selling Shareholders shall have the right to require
each non-defaulting Underwriter to purchase the number of ADSs which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of ADSs which such Underwriter agreed to purchase
hereunder) of the ADSs of such defaulting Underwriter or Underwriters for which
such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default; and
(c) If, after giving effect to any arrangements for the purchase of the
ADSs of a defaulting Underwriter or Underwriters by you or the Company and the
Selling Shareholders as provided in subsection (a) above, the aggregate number
of such ADSs which remains unpurchased exceeds one-eleventh of the aggregate
number of all of the ADSs to be purchased at such Time of Delivery, or if the
Company and the Selling Shareholders shall not exercise the right described in
subsection (b) above to require non defaulting Underwriters to purchase ADSs of
a defaulting Underwriter or Underwriters, then this Agreement (or, with respect
to the Second Time of Delivery, the obligations of the Underwriters to purchase,
and of the Company and the Selling Shareholders to sell, the Optional ADSs)
shall thereupon terminate, without liability on the part of any non defaulting
Underwriter or the Company or the Selling Shareholders, except
61
for the expenses to be borne by the Company and the Selling Shareholders and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 9 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
11. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Controlling Person, the Selling
Shareholders and the several Underwriters, as set forth in this Agreement or
made by or on behalf of them, respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any investigation (or any
statement as to the results thereof) made by or on behalf of any Underwriter or
any controlling person of any Underwriter, or the Company, or any of the Selling
Shareholders, or any officer or director or controlling person of the Company,
or any controlling person of any Selling Shareholder, and shall survive delivery
of and payment for the ADSs.
12. If this Agreement shall be terminated pursuant to Section 10
hereof, neither the Company, the Controlling Person, nor the Selling
Shareholders shall then be under any liability to any Underwriter except as
provided in Sections 6 and 9 hereof; but, if for any other reason any ADSs are
not delivered by or on behalf of the Company and the Selling Shareholders as
provided herein, the Company will reimburse the Underwriters through you for all
out of pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the ADSs not so delivered,
but the Company and the Selling Shareholders shall then be under no further
liability to any Underwriter in respect of the ADSs not so delivered except as
provided in Sections 6 and 9 hereof.
13. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by the Representatives as the representatives of the
several Underwriters.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives of the Underwriters (A)
Citigroup Global Markets Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
facsimile number: * , attention: * , (B) Credit Suisse Securities (USA)
LLC, Eleven Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, facsimile number:
(000) 000-0000, attention: Transactions Advisory Group, (C) c/o Goldman Xxxxx
(Asia) L.L.C., 68th Floor, Xxxxxx Kong Center, 0 Xxxxx'x Xxxx Xxxxxxx, Xxxx
Xxxx, facsimile number: (000) 0000-0000, attention: Special Execution Group and
(D) Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, 4 World Financial
Center, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, facsimile number: * ,
attention: * ; if to the Controlling Person or any Selling Shareholder shall
be delivered or sent by mail, telex or facsimile transmission to counsel for
such Controlling Person or Selling Shareholder at its address set forth in
Schedule II hereto; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Chief Executive Officer; provided, however,
that any notice to an Underwriter pursuant to Section 9(d) hereof shall be
delivered or sent by mail, telex or facsimile transmission to such Underwriter
at its address set forth in its Underwriters' Questionnaire or telex
constituting such Questionnaire, which address will be
62
supplied to the Company or the Selling Shareholders by you upon request. Any
such statements, requests, notices or agreements shall take effect upon receipt
thereof.
14. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company, the Controlling Person and the
Selling Shareholders and, to the extent provided in Sections 9 and 11 hereof,
the officers and directors of the Company and each person who controls the
Company, any Selling Shareholder or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the ADSs from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
15. Each of the parties hereto irrevocably (A) agrees that any legal
suit, action or proceeding against the Company, the Controlling Person or the
Selling Shareholder brought by any Underwriter or by any person who controls any
Underwriter arising out of or based upon this Agreement or the transactions
contemplated hereby may be instituted in any New York Court, (B) waives, to the
fullest extent it may effectively do so, any objection which it may now or
hereafter have to the laying of venue of any such proceeding and (C) submits to
the exclusive jurisdiction of such courts in any such suit, action or
proceeding. Each of the Company, the Controlling Person and the Selling
Shareholders has appointed CT Corporation System, 000 Xxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, as its authorized agent (the "Authorized Agent") upon whom process may
be served in any such action arising out of or based on this Agreement or the
transactions contemplated hereby which may be instituted in any New York Court
by any Underwriter or by any person who controls any Underwriter, expressly
consents to the jurisdiction of any such court in respect of any such action,
and waives any other requirements of or objections to personal jurisdiction with
respect thereto. Such appointment shall be irrevocable. Each of the Company, the
Controlling Person and the Selling Shareholders represents and warrants that the
Authorized Agent has agreed to act as such agent for service of process and
agrees to take any and all action, including the filing of any and all documents
and instruments, that may be necessary to continue such appointment in full
force and effect as aforesaid. Service of process upon the Authorized Agent and
written notice of such service to the Company shall be deemed, in every respect,
effective service of process upon the Company, the Controlling Person and the
Selling Shareholders as the case may be.
16. In respect of any judgment or order given or made for any amount
due hereunder that is expressed and paid in a currency (the "judgment currency")
other than United States dollars, the Company, the Controlling Person and the
Selling Shareholders, as the case may be, will indemnify each Underwriter
against any loss incurred by such Underwriter as a result of any variation as
between (A) the rate of exchange at which the United States dollar amount is
converted into the judgment currency for the purpose of such judgment or order
and (B) the rate of exchange at which an Underwriter is able to purchase United
States dollars with the amount of the judgment currency actually received by
such Underwriter. The foregoing indemnity shall constitute a separate and
independent obligation of the Company, the Controlling Person and the Selling
Shareholders and shall continue in full force and effect notwithstanding any
such judgment or order as aforesaid. The term "rate of exchange" shall include
any premiums and costs of exchange payable in connection with the purchase of or
conversion into United States dollars.
63
17. Time shall be of the essence in this Agreement.
18. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
19. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
20. Notwithstanding anything herein to the contrary, the Company is
authorized to disclose to any persons the U.S. federal and state income tax
treatment and tax structure of the potential transaction and all materials of
any kind (including tax opinions and other tax analyses) provided to the Company
relating to that treatment and structure, without the Underwriters imposing any
limitation of any kind. However, any information relating to the tax treatment
and tax structure shall remain confidential (and the foregoing sentence shall
not apply) to the extent necessary to enable any person to comply with
securities laws. For this purpose, "tax structure" is limited to any facts that
may be relevant to that treatment.
21. This Agreement constitutes the entire agreement among the parties
and supersedes all prior agreements and understandings, oral or written, with
respect to the matters set forth herein.
22. The Company acknowledges and agrees that (i) the purchase and sale
of the ADSs pursuant to this Agreement is an arm's-length commercial transaction
between the Company, on the one hand, and the several Underwriters, on the
other, (ii) in connection therewith each Underwriter is acting solely as a
principal and not the agent or fiduciary of the Company, and (iii) no
Underwriter has assumed an advisory or fiduciary responsibility in favor of the
Company with respect to the offering contemplated hereby or the process leading
thereto (irrespective of whether such Underwriter has advised or is currently
advising the Company on other matters) or any other obligation to the Company
except the obligations expressly set forth in this Agreement and (iv) the
Company has consulted its own legal and financial advisors to the extent it
deemed appropriate. The Company agrees that it will not claim that the
Underwriters, or any of them has rendered advisory services of any nature or
respect, or owes a fiduciary duty to the Company, in connection with such
transaction or the process leading thereto.
23. The Company and each of the Underwriters hereby irrevocably waives,
to the fullest extent permitted by applicable law, any and all right to trial by
jury in any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
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If the foregoing is in accordance with your understanding, please sign
and return to us five counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters, the
Company, the Controlling Person and each of the Selling Shareholders. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement among
Underwriters, the form of which shall be submitted to the Company, the
Controlling Person and the Selling Shareholders for examination upon request,
but without warranty on your part as to the authority of the signers thereof.
Very truly yours,
Focus Media Holding Limited
By:______________________
Name: Xxxxx Xxxxxxx Xxxxx
Title: Chairman and Chief Executive Officer
Xxxxx Xxxxxxx Xxxxx, the Controlling Person
_________________________
[UNDERWRITING AGREEMENT SIGNATURE PAGE]
Selling Shareholders (as listed below)
JJ Media Investment Holding Limited
3i Group plc
3i Asia Pacific Technology L.P.
3i Asia Pacific 2004-2006 X.X.
Xxxxxx Xxxxxx Jurvetson ePlanet Ventures X.X.
Xxxxxx Xxxxxx Jurvetson ePlanet Ventures Gmbh&Xx.XX
Xxxxxx Xxxxxx Jurvetson ePlanet Ventures
Partners Fund, LLC GS Focus Holdings Limited
Hannibal International Limited International
Network Capital Global Fund International
Network Capital Global Investment Limited
KTB/UCI China Ventures I Limited Milestone
Digital Media Holding Limited Multimedia
Park Venture Capital Limited SB China
Holdings Pte. Ltd.
Springboard-Xxxxxx Technology Fund Pte Ltd.
Springboard-Xxxxxx Technology Fund (Cayman) Ltd.
United Capital Investment China Venture II Limited
United China Investment Limited
Venture TDF Technology Fund III L.P.
Victory Venture Capital Limited
By:______________________
Name: Xxxxx Xxxxxxx Xxxxx
Title: Attorney-In-Fact of the Selling Shareholders
By:______________________
Name: Xxxxx Xxx Xx
Title: Attorney-In-Fact of the Selling Shareholders
[UNDERWRITING AGREEMENT SIGNATURE PAGE]
Accepted as of the date hereof
on behalf of each of the Underwriters
Credit Suisse Securities (USA) LLC
By: ____________________
Name:
Title:
Xxxxxxx Sachs (Asia) L.L.C.
By: ____________________
Name:
Title:
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
By: ____________________
Name:
Title:
Citigroup Global Markets Inc.
By: ____________________
Name:
Title:
[UNDERWRITING AGREEMENT SIGNATURE PAGE]
SCHEDULE I
NUMBER OF OPTIONAL
ADSS
TOTAL NUMBER OF TO BE
FIRM PURCHASED IF
ADSS MAXIMUM OPTION
Underwriter TO BE PURCHASED EXERCISED
----------------------- -----------------------------
Credit Suisse Securities (USA) LLC...........................
Xxxxxxx Sachs (Asia) L.L.C...................................
----------------------- -----------------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated...........
----------------------- -----------------------------
----------------------- -----------------------------
Citigroup Global Markets Inc.................................
Xxxxxx Brothers Inc..........................................
----------------------- -----------------------------
Xxxxx Xxxxxxx & Co...........................................
----------------------- -----------------------------
TOTAL........................................................
======================= =============================
SCHEDULE II
NUMBER OF OPTIONAL
TOTAL NUMBER OF ADSS
FIRM TO BE
ADSS SOLD IF MAXIMUM
TO BE SOLD OPTION EXERCISED
---------------------- ---------------------
The Company
---------------------- ---------------------
The Selling Shareholders:
JJ Media Investment Holding Limited
---------------------- ---------------------
3i Group plc
---------------------- ---------------------
3i Asia Pacific Technology L.P.
---------------------- ---------------------
3i Asia Pacific 2004-2006 L.P.
---------------------- ---------------------
Xxxxxx Xxxxxx Jurvetson ePlanet Ventures L.P.
---------------------- ---------------------
Xxxxxx Xxxxxx Jurvetson ePlanet Ventures Gmbh&Xx.XX
---------------------- ---------------------
Xxxxxx Xxxxxx Jurvetson ePlanet Ventures Partners Fund,
LLC
---------------------- ---------------------
GS Focus Holdings Limited
---------------------- ---------------------
Hannibal International Limited
---------------------- ---------------------
International Network Capital Global Fund
---------------------- ---------------------
International Network Capital Global Investment Limited
---------------------- ---------------------
KTB/UCI China Ventures I Limited
---------------------- ---------------------
Milestone Digital Media Holding Limited
---------------------- ---------------------
Multimedia Park Venture Capital Limited
---------------------- ---------------------
SB China Holdings Pte. Ltd.
---------------------- ---------------------
Springboard-Xxxxxx Technology Fund Pte Ltd.
---------------------- ---------------------
Springboard-Xxxxxx Technology Fund (Cayman) Ltd.
---------------------- ---------------------
United Capital Investment China Venture II Limited
---------------------- ---------------------
United China Investment Limited
---------------------- ---------------------
Venture TDF Technology Fund III L.P.
---------------------- ---------------------
Victory Venture Capital Limited
---------------------- ---------------------
TOTAL........................................................
====================== =====================
SCHEDULE III
(a) Materials other than the Pricing Prospectus that comprise the Pricing
Disclosure Package:
[NONE]
(b) Issuer Free Writing Prospectuses not included in the Pricing Disclosure
Package:
[NONE]
(c) Additional Documents Incorporated by Reference:
[NONE]
SCHEDULE IV
List of Focus Media Advertisement Subsidiaries:
Name of subsidiary Percentage acquired
---------------------------------------------------------------------------------------- -------------------
Chongqing Geyang Focus Media Culture and Communication Co., Ltd. 60.0%
Zhejiang Ruihong Focus Media Advertising Communications Co., Ltd. 80.0%
Qingdao Focus Media Advertisement Co., Ltd. 90.0%
Changsha Focus Media Shiji Advertisement Co., Ltd. 90.0%
Dalian Focus Media Advertising Co., Ltd. 90.0%
Shanghai On-Target Advertisement Co., Ltd. 60.0%
Sichuan Focus Media Advertising Communications Co., Ltd. 90.0%
Yunnan Focus Media Advertising Co., Ltd. 89.5%
Nanjing Focus Media Advertising Co., Ltd. 90.0%
Wuhan Geshi Focus Media Advertising Co., Ltd. 75.0%
Shanghai Perfect Media Advertising Agency Co., Ltd. 90.0%
Shanghai Qianjian Advertising Co., Ltd. 90.0%
Guangzhou Fuke Advertising Co. Ltd. 90.0%
Zhuhai Focus Media Culture and Communication Co. Ltd. 90.0%
Hebei Focus Media Advertising Co. Ltd. 90.0%
Tianjin Focus Tongsheng Advertising Co. Ltd. 80.0%
Xiamen Focus Media Advertising Co. Ltd. 90.0%
Xi'an Focus Media Advertising & Information Co. Ltd. 70.0%
Shenyang Focus Media Advertising Co., Ltd. 70.0%
Shenzhen Bianjie Commercial Location Advertising Company 99.0%
Hefei Fukesi Advertising Co. Ltd. 90.0%
Fuzhou Fukesi Culture and Communication Co. Ltd. 70.0%
Jinan Focus Media Advertisement Co., Ltd. 80.0%
Shanghai Focus Media Advertising Agency Co., Ltd. 90.0%
Shanghai Framedia Advertising Development Co., Ltd. 90.0%
Shanghai New Structure Advertisement Co., Ltd. 90.0%
Guangdong Shiji Shenghuo Advertisement Co. Ltd. 90.0%
Beijing Focus Media Wireless Co., Ltd. 90.0%
Focus Media Digital Information Technology (Shanghai) Co., Ltd. 10.0%
Shanghai New Focus Media Advertisement Co., Ltd. 10.0%
Guanzhou Feisha Advertisement Co., Ltd. 90.0%
Shanghai Jiefang Focus Media Advertisement Co., Ltd. 60.0%
Dongguan Focus Media Advertisement Co., Ltd. 50.0%
ANNEX I
FORM OF DESCRIPTION OF COMFORT LETTER
Pursuant to Section 8(j) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and the Subsidiaries within the meaning of the Act and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary financial
information and schedules (and, if applicable, financial forecasts and/or pro
forma financial information) examined by them and included in the Prospectus or
the Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published rules
and regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of Certified
Public Accountants of the unaudited consolidated interim financial statements,
selected financial data, pro forma financial information, financial forecasts
and/or condensed financial statements derived from audited financial statements
of the Company for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been separately furnished to the
representatives of the Underwriters (the "Representatives");
(iii) They have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited condensed
consolidated statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus as indicated in their
reports thereon copies of which have been separately furnished to the
Representatives; and on the basis of specified procedures including inquiries of
officials of the Company who have responsibility for financial and accounting
matters regarding whether the unaudited condensed consolidated financial
statements referred to in paragraph (vi)(a)(i) below comply as to form in all
material respects with the applicable accounting requirements of the Act and the
related published rules and regulations, nothing came to their attention that
caused them to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations;
(iv) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the basis of
limited procedures specified in such letter nothing came to their attention as a
result of the foregoing procedures that caused them to believe that this
information does not conform in all material respects with the disclosure
requirements of Items 8 and 11 of Form 20-F and of Regulation S-K;
(v) On the basis of limited procedures, not constituting an examination in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial
statements and other information referred to below, a reading of the latest
available interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries since the
date of the latest audited financial statements included in the Prospectus,
inquiries of officials of the Company and its subsidiaries responsible for
financial and accounting matters and such other inquiries and procedures as may
be specified in such letter, nothing came to their attention that caused them to
believe that:
(a) (i) the unaudited consolidated statements of operations,
consolidated balance sheets, consolidated statements of shareholders'
equity and consolidated statements of cash flows included in the
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published
rules and regulations, or (ii) any material modifications should be
made to the unaudited condensed consolidated statements of operations,
consolidated balance sheets, consolidated statements of shareholders'
equity and consolidated statements of cash flows included in the
Prospectus for them to be in conformity with generally accepted
accounting principles;
(b) any other unaudited statement of operations data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and items
were not determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated financial
statements included in the Prospectus;
(c) the unaudited financial statements which were not included in the
Prospectus but from which were derived any unaudited condensed
financial statements referred to in clause (a) and any unaudited income
statement data and balance sheet items included in the Prospectus and
referred to in clause (b) were not determined on a basis substantially
consistent with the basis for the audited consolidated financial
statements included in the Prospectus;
(d) any unaudited pro forma consolidated condensed financial statements
included in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the
published rules and regulations thereunder or the pro forma adjustments
have not been properly applied to the historical amounts in the
compilation of those statements;
(e) as of a specified date not more than five days prior to the date of
such letter, there have been any changes in the consolidated capital
stock (other than issuances of capital stock upon exercise of options
and stock appreciation rights, upon earn-outs of performance shares and
upon conversions of convertible securities, in each case which were
outstanding on the date of the latest financial statements included in
the Prospectus) or any increase in the consolidated long-term debt of
the Company and its subsidiaries, or any decreases in consolidated net
current assets or Shareholders' equity or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in
A-I-2
each case as compared with amounts shown in the latest balance sheet
included in the Prospectus, except in each case for changes, increases
or decreases which the Prospectus discloses have occurred or may occur
or which are described in such letter; and
(f) for the period from the date of the latest financial statements
included in the Prospectus to the specified date referred to in clause
(e) there were any decreases in consolidated net revenues or operating
profit or the total or per share amounts of consolidated net income or
other items specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as compared with
the comparable period of the preceding year and with any other period
of corresponding length specified by the Representatives, except in
each case for decreases or increases which the Prospectus discloses
have occurred or may occur or which are described in such letter; and
(vi) In addition to the examination referred to in their report(s) included in
the Prospectus and the limited procedures, inspection of minute books, inquiries
and other procedures referred to in paragraph (iii) above, they have carried out
certain specified procedures, not constituting an examination in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Representatives, which
are derived from the general accounting records of the Company and the
Subsidiaries, which appear in the Prospectus, or in Part II of, or in exhibits
and schedules to, the Registration Statement specified by the Representatives,
and have compared certain of such amounts, percentages and financial information
with the accounting records of the Company and the Subsidiaries and have found
them to be in agreement.
A-I-3
ANNEX I (A)
EXECUTED COMFORT LETTER DELIVERED PRIOR TO EXECUTION OF THIS AGREEMENT
ATTACHED
ANNEX I (B)
FORM OF COMFORT LETTER TO BE DELIVERED ON THE EFFECTIVE DATE OF ANY
POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT AND AS OF
EACH TIME OF DELIVERY
Pursuant to Section 8(j) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary financial
information and schedules (and, if applicable, financial forecasts and/or pro
forma financial information) examined by them and included or incorporated by
reference in the Registration Statement or the Prospectus comply as to form in
all material respects with the applicable accounting requirements of the Act or
the Exchange Act, as applicable, and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance with
standards established by the American Institute of Certified Public Accountants
of the consolidated interim financial statements, selected financial data, pro
forma financial information, financial forecasts and/or condensed financial
statements derived from audited financial statements of the Company for the
periods specified in such letter, as indicated in their reports thereon, copies
of which have been separately furnished to the representatives of the
Underwriters (the "Representatives");
(iii) They have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited condensed
consolidated statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus and/or included in the
Company's Current Report on Form 6-K incorporated by reference into the
Prospectus as indicated in their reports thereon copies of which have been
separately furnished to the Representatives; and on the basis of specified
procedures including inquiries of officials of the Company who have
responsibility for financial and accounting matters regarding whether the
unaudited condensed consolidated financial statements referred to in paragraph
(vi)(A)(i) below comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations, nothing came to their attention that caused them to believe that
the unaudited condensed consolidated financial statements do not comply as to
form in all material respects with the applicable accounting requirements of the
Act and the related published rules and regulations;
(iv) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the basis of
limited procedures specified in such letter nothing came to their attention as a
result of the foregoing procedures that caused them to believe that this
information does not conform in all material respects with the disclosure
requirements of Items 8 and 11 of Form 20-F and of Regulation S-K;
(v) On the basis of limited procedures, not constituting an examination in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements and other information referred to below, a
reading of the latest available interim financial statements of the Company and
its subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements included
or incorporated by reference in the Prospectus, inquiries of officials of the
Company and its subsidiaries responsible for financial and accounting matters
and such other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus and/or included or incorporated by reference in an interim report on
Form 6-K incorporated by reference in the Prospectus do not comply as to form in
all material respects with the applicable accounting requirements of the
Exchange Act and the related published rules and regulations, or (ii) any
material modifications should be made to the unaudited condensed consolidated
statements of income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus or included in an interim report on Form
6-K incorporated by reference in the Prospectus, for them to be in conformity
with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet items included
in the Prospectus do not agree with the corresponding items in the unaudited
consolidated financial statements from which such data and items were derived,
and any such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding amounts in the
audited consolidated financial statements included or incorporated by reference
in the Company's Annual Report on Form 20-F for the most recent fiscal year;
(C) the unaudited financial statements which were not included in the Prospectus
but from which were derived the unaudited condensed financial statements
referred to in clause (A) and any unaudited income statement data and balance
sheet items included in the Prospectus and referred to in clause (B) were not
determined on a basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the Company's
Annual Report on Form 20-F for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial statements included
or incorporated by reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the Act and the
published rules and regulations thereunder or the pro forma adjustments have not
been properly applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to the date of such
letter, there have been any changes in the consolidated capital stock (other
than issuances of capital stock upon exercise of options and stock appreciation
rights, upon earn outs of performance shares and upon conversions of convertible
securities, in each case which were outstanding on the date of the latest
balance sheet included or incorporated by reference in the Prospectus) or any
increase in the consolidated long term debt of the Company and its subsidiaries,
or any decreases in consolidated net current assets or stockholders' equity or
other items specified by the
A-I(B)-2
Representatives, or any increases in any items specified by the Representatives,
in each case as compared with amounts shown in the latest balance sheet included
or incorporated by reference in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have occurred or may occur
or which are described in such letter; and
(F) for the period from the date of the latest financial statements included or
incorporated by reference in the Prospectus to the specified date referred to in
clause (E) there were any decreases in consolidated net revenues or operating
profit or the total or per share amounts of consolidated net income or other
items specified by the Representatives, or any increases in any items specified
by the Representatives, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length specified
by the Representatives, except in each case for increases or decreases which the
Prospectus discloses have occurred or may occur or which are described in such
letter; and
(vi) In addition to the examination referred to in their report(s) included or
incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (vi) above, they have carried out certain specified
procedures, not constituting an examination in accordance with generally
accepted auditing standards, with respect to certain amounts, percentages and
financial information specified by the Representatives which are derived from
the general accounting records of the Company and its subsidiaries, which appear
in the Prospectus (excluding documents incorporated by reference) or in Part II
of, or in exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the Prospectus
specified by the Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records of the Company
and its subsidiaries and have found them to be in agreement.
A-I(B)-3
ANNEX II
SELLING SHAREHOLDERS TO EXECUTE LOCK-UP AGREEMENTS
JJ Media Investment Holding Limited
3i Group plc
3i Asia Pacific Technology L.P.
3i Asia Pacific 2004-2006 X.X.
Xxxxxx Xxxxxx Jurvetson ePlanet Ventures X.X.
Xxxxxx Xxxxxx Jurvetson ePlanet Ventures Gmbh&Xx.XX
Xxxxxx Xxxxxx Jurvetson ePlanet Ventures Partners Fund, LLC
GS Focus Holdings Limited
Hannibal International Limited
International Network Capital Global Fund
International Network Capital Global Investment Limited
KTB/UCI China Ventures I Limited
Multimedia Park Venture Capital Limited
Milestone Digital Media Holding Limited
SB China Holdings Pte. Ltd.
Springboard-Xxxxxx Technology Fund Pte Ltd.
Springboard-Xxxxxx Technology Fund (Cayman) Ltd.
United Capital Investment China Venture II Limited
United China Investment Limited
Venture TDF Technology Fund III L.P.
Victory Venture Capital Limited
ANNEX III
FORM OF SELLING SHAREHOLDER LOCK-UP AGREEMENT
_____________, 2006
Citigroup Global Markets Inc.,
000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Credit Suisse Securities (USA) LLC,
Eleven Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000-0000.
Xxxxxxx Sachs (Asia) L.L.C.,
68th Floor, Xxxxxx Kong Center,
0 Xxxxx'x Xxxx Xxxxxxx,
Xxxx Xxxx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated,
4 World Financial Center,
000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
As representatives of the several Underwriters
named in Schedule I to the Underwriting Agreement
Re: Focus Media Holding Limited -- Lock-up Agreement
Ladies and Gentlemen:
The undersigned understands that you, as representatives (collectively,
the "REPRESENTATIVES") propose to enter into an underwriting agreement on behalf
of the several Underwriters named in Schedule I to such agreement (collectively,
the "UNDERWRITERS"), to be dated as of _____________, 2006 (the "UNDERWRITING
Agreement") with Focus Media Holding Limited, a Cayman Islands company (the
"COMPANY"), and those selling shareholders named in the Underwriting Agreement
(collectively, the "SELLING SHAREHOLDERS"), providing for a public offering of
American Depositary Shares ("ADSS") representing Ordinary Shares of the Company,
par value US$0.00005 per share (the "ORDINARY SHARES"), pursuant to a
Registration Statement on Form F-1 (File No. 333-__________) and a Registration
Statement on Form F-6 (File No. 333-___________) filed with the U.S. Securities
and Exchange Commission (the "SEC").
A-III-3
In consideration of the agreement by the Underwriters to offer and sell
the ADSs, and of other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the undersigned agrees that,
without your prior permission, during the period beginning from the date hereof
and continuing to and including the date 90 days after the date of the final
Prospectus (the "LOCK-UP PERIOD"), not to offer, sell, contract to sell, pledge,
grant any option to purchase, make any short sale or otherwise dispose of,
directly or indirectly, or cause the Company to file with the SEC a registration
statement under the Securities Act of 1933, as amended (the "ACT") with respect
to, (A) any ADSs or Ordinary Shares or any securities of the Company represented
by the ADSs, or any securities of the Company substantially similar to the ADSs
or Ordinary Shares, including but not limited to any options or warrants to
purchase, or any securities that are convertible into or exchangeable for, or
that represent the right to receive, ADSs or Ordinary Shares or any such
substantially similar securities; and (B) any shares or equity interests in the
Company's subsidiaries or controlled affiliates or depositary shares or
depositary receipts representing such shares or equity interests, including but
not limited to securities that are convertible into or exchangeable for or that
represent the right to receive such shares or equity interests or such
depositary shares or receipts, or any such substantially similar securities,
whether now owned or hereinafter acquired, owned directly or indirectly by the
undersigned (including holding as a custodian), or with respect to which the
undersigned has beneficial ownership under the rules and regulations of the SEC
(collectively the "UNDERSIGNED'S SECURITIES"); except that the foregoing
restrictions shall not apply to (x) a bona fide gift by an individual to a donee
or (y) transfer by an entity to an affiliate that does not involve a disposition
for value, provided that each such donee or affiliate agrees to be bound in
writing by the restrictions set forth herein until the expiration of the Lock-up
Period; provided however, that if (1) during the last 17 days of the Lock-up
Period, the Company releases earnings results or announces material news or a
material event or (2) prior to the expiration of the Lock-Up Period, the Company
announces that it will release earnings results during the 15-day period
following the last day of the Lock-Up Period, then in each case the Lock-Up
Period will be automatically extended until the expiration of the 18-day period
beginning on the date of release of the earnings results or the announcement of
the material news or material event, as applicable, unless the Representatives
jointly waive, in writing, such extension. The Company will provide each of the
Representatives and any co-managers and each holder of ADSs subject to the
Lock-Up Period with prior notice of any such announcement that gives rise to an
extension of the Lock-Up Period.
The foregoing restriction is expressly agreed to preclude the
undersigned from engaging in any hedging, swap or other transaction or
arrangement which is designed to or which reasonably could be expected to lead
to or result in a sale or disposition of the Undersigned's Securities even if
such Securities would be disposed of by someone other than the undersigned, or
transfers, in whole or in part, any of the economic consequences of ownership of
the Undersigned's Securities, whether any of these transactions are to be
settled by delivery of the Undersigned's Securities or other securities, in cash
or otherwise. Such prohibited hedging or other transactions would include
without limitation any short sale or any purchase, sale or grant of any right
(including without limitation any put or call option) with respect to any of the
Undersigned's Securities or with respect to any security that includes, relates
to, or derives any significant part of its value from such Securities. In
addition, the undersigned agrees not to publicly disclose the intention to make
any offer, sale, pledge, disposition or filing, without the prior written
consent of the Representatives.
The undersigned understands that the Company, the Selling Shareholders
and the Underwriters are relying upon this Lock-up Agreement in proceeding
toward consummation of the offering. The undersigned further understands that
this Lock-up Agreement is irrevocable and shall be binding upon the
undersigned's heirs, legal representatives, successors, and assigns. The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent and registrar against the transfer of the
Undersigned's Securities except in compliance with the foregoing restrictions.
Notwithstanding anything herein to the contrary, Xxxxxxx, Xxxxx & Co.,
Xxxxxxx Sachs Execution & Clearing, L.P. and their respective affiliates may
engage in brokerage, investment advisory, investment company, financial
advisory, anti-raid advisory, merger advisory, financing, asset management,
trading, market making, arbitrage and other similar activities conducted in the
ordinary course of its and its affiliates' business.
This Lock-up Agreement shall terminate upon the expiration of the
Lock-up Period or in the event that there is no delivery of, and payment for,
the ADSs pursuant to the Underwriting Agreement, upon three days' prior written
notice of such non-delivery and non-payment given by the undersigned to you.
Notwithstanding the foregoing, any prior lock-up agreement entered into
by the undersigned with respect to the Company's initial public offering remains
in full effect except as superseded by the terms of this lock-up agreement.
During the Lock-Up Period, the terms of this agreement prevail in any conflict
with any prior lock-up agreement. Upon termination, cancellation or waiver of
this lock-up agreement, the terms of any prior lock-up agreement remain in full
effect.
[Signature page follows.]
Very truly yours,
______________________
A-IIII-4
