EXHIBIT 1.1
FOCUS MEDIA HOLDING LIMITED
AMERICAN DEPOSITARY SHARES
REPRESENTING
ORDINARY SHARES
(PAR VALUE US$0.00005 PER SHARE)
UNDERWRITING AGREEMENT
, 2006
Xxxxxxx Xxxxx (Asia) L.L.C.,
68th Floor, Xxxxxx Kong Center,
0 Xxxxx'x Xxxx Xxxxxxx,
Xxxx Xxxx.
Credit Suisse Securities (USA) LLC,
Eleven Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000-0000.
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 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 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 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 herein 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").
Two forms of prospectus may be used in connection with the offering and
sale of ADSs contemplated by the foregoing, one relating to the ADSs offered or
sold within the United States (the "U.S. Prospectus") and one relating to the
ADSs offered or sold outside the United States (the "International Prospectus").
The U.S. Prospectus will be identical to the International Prospectus except for
certain substitute pages, and copies of these prospectuses have been provided to
you. References herein to any "Prospectus" or "Preliminary Prospectus" (each as
defined below), whether as amended or supplemented, shall include both the U.S.
Prospectus and the International Prospectus.
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 defined
in Section 1(a)(iv) 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
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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 Xxxxxxx Sachs (Asia) L.L.C. and
Credit Suisse Securities (USA) LLC expressly for use therein;
(iii) For the purposes of this agreement, the "Applicable Time" is 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, 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
Xxxxxxx Xxxxx (Asia) L.L.C. and Credit Suisse Securities (USA) LLC 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 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 Xxxxxxx Sachs
(Asia) L.L.C. and Credit Suisse Securities (USA) LLC 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
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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 Xxxxxxx Xxxxx (Asia) L.L.C. and Credit Suisse
Securities (USA) LLC 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) Defeng Information & Technology (Shanghai) Co., Ltd., a PRC wholly-foreign
owned enterprise ("Defeng shanghai") (iv) New Focus Media Technology (Shanghai)
Co., Ltd., a PRC wholly-foreign owned enterprise ("New Focus Media Technology");
(v) Focus Media Digital Information Technology (Shanghai) Co., Ltd., a PRC
company ("Focus Media Digital"), (vi) 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 and InfoAchieve Limited each a British Virgin Islands company
(collectively, the "Company Subsidiaries"), (vii) Shanghai Focus Media
Advertising Agency Co. Ltd. ("Focus Media Advertising Agency"), Shanghai New
Perfect
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Media Advertisement Co., Ltd. ("New Perfect Media") and Shanghai New Focus Media
Advertisement Co., Ltd. ("New Focus Media"), each a PRC company, and (viii)
Shanghai Focus Media Advertisement Co., Ltd., a PRC company ("Focus Media
Advertisement"), its branches in Beijing, Shenzhen, Guangzhou and Wenzhou
(collectively, the "Focus Media Advertisement Branches") and the other PRC
subsidiaries of Focus Media Advertisement listed in Schedule IV hereto
(collectively, the "Focus Media Advertisement Subsidiaries"), and (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 Guangzhou Shiji Shenghou
Advertisement Co., Ltd. ("Guangzhou 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"). The entities listed in
clauses (A)(i) to (viii) above are collectively referred to as the "Focus Media
Entities", and the entities listed in clauses (B)(i) to (iv) above are
collectively referred to as the "Framedia Entities". None of (a) the Company,
(b) the Focus Media Entities or (c) the Framedia Entities [(each of (b) and (c),
a "Key Entity")], has 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 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
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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 (i) any of the Key
Entities or (ii) 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"), 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 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
to which they are a party, and has authorized, executed and delivered each of
the Placement 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. Each of the
Placement 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 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,
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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 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 is in breach or default in the performance or
observance of any of the terms or provisions of the Placement Agreements. None
of the parties to any of the Placement Agreements has sent or received any
communication regarding termination of, or intention not to renew, any of the
Placement 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 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 and none of the Company or the Company Subsidiaries is a
party to any Placement Agreements;
(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
7
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each of the Disclosed Contracts is in full force and
effect and none of the parties to any of the Disclosed Contracts is in breach or
default in the performance or observance of any of the terms or provisions of
the Disclosed Contracts. Neither the Company nor any of the Group Entities has
sent or received any communication regarding termination of, or intention not to
renew, any of the Disclosed Contracts, and no such termination or non-renewal
has been threatened by the Company or, to the best knowledge of the Company and
the Controlling Person, any other party to any Disclosed Contract;
(xii) The Company has been duly organized and is validly existing as a
company in good standing under the laws of the Cayman Islands, with legal right,
power and authority (corporate and other) to own, lease and operate its
properties and conduct its business as described in the Pricing Prospectus and
the Prospectus, and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification, except where the failure to be so qualified in
any such jurisdiction would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect; and each of the Group Entities has
been duly organized and is validly existing in good standing under the laws of
its jurisdiction of organization, with legal right, power and authority
(corporate and other) to own, lease and operate its properties and conduct its
business as described in the Pricing Prospectus and the Prospectus, and has been
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 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 Us, Focus Media
Advertisement, Focus Media Advertising Agency, Framedia Investment, Framedia
Advertisement, Guangdong Framedia and New Structure Advertisement" and "Our
Corporate Structure" in the Pricing Prospectus and the Prospectus and filed as
Exhibits [] through [] 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,
8
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, Xxxxx Xxx Xx, Xxx Xxx and Xxx Xxxx has
executed and delivered each of the Structure Agreements to which he is a party;
and each of the Structure Agreements to which he is a party constitutes a valid
and legally binding obligation of each of them enforceable in accordance with
its terms, subject as to enforceability to bankruptcy, insolvency,
reorganization and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
(xvi) The execution and delivery by each of the Company and the Group
Entities of, and the performance by each of them of its respective obligations
under, each of the Structure Agreements to which it is a party and the
consummation by them of the transactions and the occurrence of the events
contemplated therein will not: (A) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which any of the Company and the Group Entities, as applicable, is
bound or to which any of their properties or assets is bound or subject, except
where any such conflict, breach, violation or default would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect; (B)
result in any violation of the provisions of the respective articles of
association, business license, other constitutional documents (if any) or
permits of any of the Company and the Group Entities; or (C) result in any
violation of or penalty under any laws, regulations, rules, orders, decrees,
guidelines, judicial interpretations, notices or other legislation of the PRC;
(xvii) The execution and delivery by each of Xxxxx Xxxxxxx Xxxxx, Xxxxx
Xxx Xx, Xxx Xxx and Xxx Xxxx 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) the Technical Services Agreement, Cooperation
Agreement and 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", stamp duty on which the Company hereby
undertakes to cause to be paid when due; (ii) 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 caption
"Related Party Transactions - Agreements Among Us, Focus Media Technology, Focus
Media Digital, New Focus Media Advertisement, Focus Media Advertisements and Its
Subsidiaries", which upon the exercise of the call option described therein the
Company undertakes to file with the relevant PRC government authorities; (iii)
the Trademark License Agreement as described in the Pricing Prospectus under the
caption "Related Party Transactions - Agreements
9
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 (iv) the Equity Pledge 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 Advertisements and Its Subsidiaries",
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
10
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 Focus Media Hong Kong and
InfoAchieve, respectively, 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 registered capital of
Focus Media Digital has been fully paid and 90% of the equity interest of Focus
Media Digital is owned by Focus Media Technology and 10% of the equity interest
of Focus Media Digital is owned by Focus Media Advertisement, and except as
described in the Pricing Prospectus under the caption "Related Party
Transactions", such equity interest is owned by each of them free and clear of
all liens, encumbrances, equities or claims. Focus Media Advertisement owns the
equity interest of the Focus Media Advertisement Subsidiaries, Focus Media
Advertising Agency, New Focus Media, New Structure Advertisement, Framedia
Advertisement and Guangdong Framedia in the percentages set forth in Schedule IV
hereto , free and clear of all liens, encumbrances, equities or claims; Xxxxx
Xxxxxxx Xxxxx owns 85% of, and Xxxxx Xxx Xx owns 15% of the equity interest of
Focus Media Advertisement in each case 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";
(xxiii) 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;
11
(xxiv) 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;
(xxv) 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;
(xxvi) 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;
(xxvii) 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 of the Act, and such consents, approvals, authorizations, orders,
registrations, clearances and qualifications as may be necessary under state
securities or other blue sky laws;
(xxviii) 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;
(xxix) 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
12
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;
(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
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 deduction in the PRC, and without the necessity of obtaining any
Governmental Authorization in the PRC;
(xxxiii) 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,
13
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;
(xxxiv) 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;
(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 Cayman Islands, Hong Kong 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;
(xxxix) 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;
(xl) 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 and documents referred to therein, are accurate, complete
and fair in all material respects;
(xli) 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
14
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 by others;
(xlii) 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;
(xliii) 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");
(xliv) Each of this agreement and the Deposit Agreement is in proper form
to be enforceable in the Cayman Islands in accordance with its terms; to ensure
the legality, validity, enforceability or admissibility into evidence in the
Cayman Islands of this agreement or the Deposit Agreement, it is not necessary
that this agreement or the Deposit Agreement be filed or recorded with any court
or other authority in the Cayman Islands or that any stamp 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;
(xlv) 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;
(xlvi) 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
15
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";
(xlvii) The Company is not a Passive Foreign Investment Company ("PFIC")
within the meaning of Section 1297(a) of the United States Internal Revenue Code
of 1986, as amended, and is not likely to become a PFIC;
(xlviii) 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.
(xlix) 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;
(l) 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;
(li) 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
16
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;
(lii) 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;
(liii) 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;
(liv) 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;
(lv) 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;
(lvi) 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
17
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");
(lvii) 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;
(lviii) 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;
(lix) 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 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;
(lx) 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;
(lxi) Except as set forth in the Pricing Prospectus, or this agreement,
all amounts payable by the Company in respect of the ADRs evidencing the ADSs or
the underlying Shares
18
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
direct business in the Cayman Islands, if any, 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;
(lxii) All returns, reports or filings which ought to have been made by or
in respect of the Company and the Group Entities for all taxation purposes and
any related assessments, charges, levies, fines or penalties 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;
(lxiii) Each of Focus Media Digital, Focus Media Advertising Agency, New
Perfect Media, and New Focus Media 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 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 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 might not qualify for,
or be in compliance with the requirements for, their Tax Exemptions;
19
(lxiv) 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, the Company has not, directly or indirectly, including through any of
the Group Entities: (A) extended credit, arranged to extend credit, or renewed
any extension of credit, in the form of a personal loan, to or for any director
or executive officer of the Company, or to or for any family member or affiliate
of any director or executive officer of the Company; or (B) made any material
modification, including any renewal thereof, to any term of any personal loan to
any director or executive officer of the Company, or any family member or
affiliate of any director or executive officer, which loan was outstanding on
December 31, 2004;
(lxv) 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,
that the Company reasonably believes such operating data and statistics are true
and accurate and such operating data and statistics fairly reflect the
information presented;
(lxvi) 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;
(lxvii) 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;
(lxviii) The description and information in the Pricing Prospectus and the
Prospectus under the captions "Prospectus Summary - Recent Developments", "Risk
Factors - Risk Relevant to Our Recent Acquisitions", "Management's Discussion
and Analysis of Financial Condition and Results of Operations - Acquisitions",
and "Recent Developments - Our Recent Acquisition of Framedia" and Recent
Developments - Our Proposed Acquisition of Target Media" 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
20
party, and such obligations constitute valid, legal and binding obligations
enforceable against each of them in accordance with the terms of each of the
Acquisition Agreements. Each of the Acquisition Agreements is in proper legal
form under relevant laws and regulations for the enforcement thereof against
each of the parties thereto without further action by any of them. The
execution, delivery and performance of each of the Acquisition Agreements by the
parties thereto, and the consummation of the transactions contemplated
thereunder (taken individually or together as a whole), did not and will not (A)
result in any violation of the business license, articles of association, other
constitutional documents (if any) or permits of any of the parties thereto; (B)
result in any violation of or penalty under any laws, regulations, rules,
orders, decrees, guidelines, judicial interpretations, notices or other
legislation of the PRC; or (C) conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, any other
contract, license, indenture, mortgage, deed of trust, loan agreement, note,
lease or other agreement or instrument to which any of them is a party or by
which any of them is bound or to which any of their property or assets is
subject, except, in the case of clauses (B) and (C), where any such breach,
violation or default would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Except as described in the Pricing
Prospectus, all of the parties to the Acquisition Agreements have fully
performed all of their obligations under each of the Acquisition Agreements to
which they are a party and all the transactions contemplated under each of the
Acquisition Agreements have been consummated in accordance with the terms
thereof, including without limitation registration with the relevant PRC
governmental authorities necessary to make the Acquisitions effective under PRC
laws and regulations. In each Acquisition involving the acquisition of entities
located both in and outside of China, prior to the time each such Acquisition
was contemplated, each of the related entities had in place legally binding and
effective agreements (the "Control Agreements") sufficient for the entity
located in China to be considered a "variable interest entity" of the entity
located outside China as defined in FIN 46 issued by the Financial Accounting
Standards Board in 2003, and the execution, delivery and performance of each of
the Control Agreements by the parties thereto did not and will not (A) result in
any violation of the business license, articles of association, other
constitutional documents (if any) or permits of any of the parties thereto; (B)
result in any violation of or penalty under any laws, regulations, rules,
orders, decrees, guidelines, judicial interpretations, notices or other
legislation of the PRC; or (C) conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, any other
contract, license, indenture, mortgage, deed of trust, loan agreement, note,
lease or other agreement or instrument to which any of them is a party or by
which any of them is bound or to which any of their property or assets is
subject, except, in the case of clauses (B) and (C), where any such breach,
violation or default would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. To the best knowledge of the Company
and the Controlling Person, there is no reason that either the structure of the
Acquisitions as 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;
(lxix) 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
21
Pricing Prospectus, under the laws and regulations of the PRC, the courts of the
PRC recognize and give effect to the choice of law provisions set forth in
Section 18 hereof and enforce judgments of U.S. courts obtained against the
Company to enforce this agreement provided that the judgment: (A) is not
obtained by fraud; (B) is final and conclusive; (C) in the opinion of the
relevant PRC court after the review of such judgment pursuant to international
treaties concluded or acceded to by the PRC or in accordance with the Civil
Procedure Law of the PRC, does not contradict the basic principles of PRC law;
(D) in the opinion of the relevant PRC court after its review of such judgment
pursuant to international treaties concluded or acceded to by the PRC or in
accordance with the principle of reciprocity, or otherwise in accordance with
the Civil Procedure Law of the PRC, does not violate state sovereignty, security
or public interest and (E) is for a definite sum of money;
(lxx) 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;
(lxxi) Each of Xxxxx Xxxxxxx Xxxxx, Xxxxx Xxx Xx, Xxx Xxx and Xxx Xxxx 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;
(lxxii) 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" and "Related Party Transactions - Agreements
Among, Focus Media Advertisement, Focus Media Advertising Agency, Framedia
Investment, Framedia Advertisement, Guangdong Framedia and New Structure
Advertisement" are true, accurate and complete in all material respects;
(lxxiii) 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;
(lxxiv) 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
22
have entered into any transactions that may compete with the Company and the
Group Entities or are otherwise involved in the businesses of the Company and
the Group Entities as described in the Pricing Prospectus and the Prospectus,
except for (i) ownership, directly or indirectly, by the Controlling Person of
equity securities (or securities convertible or exchangeable into or exercisable
for such equity securities) in Allyes Information Technology Company Limited
solely for passive investment purposes, and (ii) ownership, directly or
indirectly, by the unrelated third party minority equity interest holders (that
are not nominee holders holding on behalf of any of the Group Entities) of the
remaining equity interests of the Focus Media Advertisement Subsidiaries as
described in the Pricing Prospectus under the caption "Our Corporate Structure -
Subsidiaries of Focus Media Advertisement," 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;
(lxxv) 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;
(lxxvi) 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;
(lxxvii) 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;
(lxxviii) 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;
(lxxx) 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;
(lxxxi) 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
23
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; and
(lxxxii) 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 of 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
24
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 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
25
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 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
26
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;
(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 Cayman Islands, Hong Kong 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-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof);
(xiv) 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 (except such
income taxes as may be imposed by the Cayman Islands or the PRC on payments
hereunder to the Underwriter whose net income is subject to tax by the Cayman
Islands or the PRC or withholding, if any, with respect to any such income tax)
or any authority thereof or therein except as described in the Pricing
Prospectus 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;
27
(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 like payment in connection with the
offer and sale of the Shares and the ADSs to be sold by such Selling
Shareholder;
(xvii) The Shares held in custody for such Selling Shareholder by Citibank
Hong Kong as custodian for the Depositary 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 relevant custodial arrangements; and
(xix) Each of the Selling Shareholders, or their direct or indirect owners
or controlling persons, that is a PRC resident or PRC citizen has taken all
reasonable steps 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.
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 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 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
28
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.
Each Selling Shareholder, as and to the extent indicated in Schedule II
hereto, hereby grants, 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, for the sole purpose of covering sales of ADSs
in excess of the number of Firm ADSs. Any such election to purchase Optional
ADSs shall be made in proportion to the maximum number of Optional ADSs to be
sold by each Selling Shareholder as set forth in Schedule II hereto initially
with respect to the Optional ADSs to be sold by them among the Selling
Shareholders in proportion to the maximum number of Optional ADSs to be sold by
each Selling Shareholder as set forth in Schedule II hereto. Any such election
to purchase Optional ADSs may be exercised only by written notice from you to
the Company, 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 Selling
Shareholders otherwise agree in writing, earlier than two or later than ten
business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm ADSs, the
several Underwriters propose to offer the Firm ADSs for sale upon the terms and
conditions set forth in the Prospectus.
4. (a) The ADSs to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Xxxxxxx Xxxxx (Asia) L.L.C. 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 Xxxxxxx Sachs (Asia)
L.L.C. 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 Xxxxxxx
Xxxxx (Asia) L.L.C. 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 Xxxxxxx Sachs (Asia) L.L.C. 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 Xxxxxxx Xxxxx (Asia) L.L.C. in the written notice given
by Xxxxxxx Sachs (Asia) L.L.C. of the Underwriters' election to purchase such
Optional ADSs, or such other time and date as Xxxxxxx Xxxxx (Asia) L.L.C. 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".
29
(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 O'Melveny & Xxxxx,
31st Floor, XXX Xxxxx, 0 Xxxxxxxxx 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 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;
30
(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 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 of the final Prospectus
covering the public offering of the ADSs (the "Final Prospectus") and continuing
to and including the date 90 days after the date of the final Prospectus (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: (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 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 filing of a Form S-8
by the
31
Company with the Commission, (3) the issuance of the Company's ordinary shares
in connection with (i) the acquisition of Infoachieve, (ii) the acquisition of
Target Media, or (iii) bona fide strategic acquisitions by the Company not to
exceed 2 million of the Company's ordinary shares, in the aggregate, (4) grants
of options pursuant to the Company's employee stock option plans or in
connection with the acquisition of Target Media, (5) any of the Company's
ordinary shares to be issued by the Company upon the exercise of any options
described in clause (4) above issued as of September 30, 2005; 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 waive, in writing, such extension. The
Company will provide 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;
(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 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;
32
(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;
(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;
33
(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 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 period beginning from immediately prior to the printing of
the Preliminary Prospectus (the "Lock-up Start Date") and continuing to and
including the date 90 days after the date of the final Prospectus, so long as
the date of the Pricing Prospectus is on or before the date that is 21 days
after the Lock-up Start Date (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: (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 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) 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
34
earnings results or the announcement of the material news or material event, as
applicable unless the representatives waive, in writing, such extension. The
Company will provide 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;
(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;
(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 Xxxxxxx Xxxxx (Asia) L.L.C., 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 Xxxxxxx Sachs
(Asia) L.L.C., 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
35
Company with the Commission; any such free writing prospectus the use of which
has been consented to by the Company and Xxxxxxx Xxxxx (Asia) L.L.C. 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 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 Xxxxxxx Sachs (Asia) L.L.C. and, if requested by Xxxxxxx Xxxxx
(Asia) L.L.C., 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 Xxxxxxx Sachs
(Asia) L.L.C. and Credit Suisse Securities (USA) LLC expressly for use therein.
7. 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., PRC, Cayman Islands, British
Virgin Islands, Hong Kong and other legal counsel 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) 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 to the Company, 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
36
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 the 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;
and (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; and (C) such 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 (i) any fees and expenses of counsel for
such Selling Shareholder and (ii) all expenses and taxes incident to the sale
and delivery of the ADSs to be sold by such Selling Shareholder to the
Underwriters hereunder. 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. It is understood, however,
that, except as provided in this Section, and Sections 9 and 12 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Shares by them, and
any advertising expenses connected with any offers they may make
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) O'Melveny & Xxxxx 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
37
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) Xxxxxxx Xxxx & Co., PRC counsel for the Underwriters, shall have
furnished to you such written opinion or opinions, dated such Time of Delivery,
in form and substance satisfactory to you, with respect to the matters covered
in paragraphs (i) through (iv) and (vi) through (xviii) of subsection (e) below
(but limited to the Structure Agreements) as well as such other related matters
as you may reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass upon such
matters;
(d) Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, United States counsel for the Company
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 each of the
Company, the Controlling Person and the Selling Shareholders;
(ii) The Deposit Agreement has been duly executed and delivered by the
Company and, assuming due authorization, execution and delivery of the Deposit
Agreement by the Depositary and that each of the Depositary and the Company has
full power, authority and legal right to enter into and perform its obligations
thereunder, constitutes a valid and legally binding obligation 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 generally and to general principles
of equity; and the statements set forth under the heading "Description of
American Depositary Shares" in the Prospectus, insofar as such statements
purport to summarize certain provisions of the Deposit Agreement, fairly
summarize, in all material respects, such provisions;
(iii) Upon due issuance by the Depositary of the ADRs evidencing ADSs
being delivered at such Time of Delivery against the deposit of Shares to be
deposited by each of the Company and the Selling Shareholders in respect thereof
in accordance with the provisions of the Deposit Agreement, such ADRs with
respect to such Shares will be duly and validly issued and the person in whose
name the ADRs are registered will be entitled to the rights specified therein
and in the Deposit Agreement, and when issued by the Depositary and paid for by
the Underwriters will be fully paid and non-assessable;
(iv) Upon payment of the purchase price for the ADSs to the Selling
Shareholders by the Underwriters and the delivery by the Selling Shareholders to
DTC or its agent of the ADSs registered in the name of Cede & Co. or such other
nominee designated by DTC, both as provided for herein, and the crediting of the
ADSs to the Underwriters' accounts with DTC, the Underwriters will acquire a
valid "security entitlement" (within the meaning of Section 8-501 of the Uniform
Commercial Code as in effect in the State of New York (the "UCC")) to the ADSs,
and no action based on an "adverse claim" (as defined in Section 8-102 of the
Code) may be asserted against the Underwriters with respect to such security
entitlement (assuming that the Underwriters are without notice of any such
adverse claim).
38
(v) Under the laws of the State of New York relating to personal
jurisdiction, the Company has, pursuant to Section 15 of this agreement and
Section 7.6 of the Deposit Agreement, validly and irrevocably submitted to the
personal jurisdiction of any New York Court in any action arising out of or
relating to this agreement or the Deposit Agreement or the transactions
contemplated hereby or thereby, has 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 as its authorized agent for the purpose
described in Section 15 hereof and Section 7.6 of the Deposit Agreement; and
service of process effected on such agent in the manner set forth in Section 15
hereof and Section 7.6 of the Deposit Agreement will be effective to confer
valid personal jurisdiction over the Company;
(vi) Under the laws of the State of New York relating to personal
jurisdiction, each of the Controlling Person and Selling Shareholders has,
pursuant to Section 15 of this agreement, validly and irrevocably submitted to
the personal jurisdiction of any New York Court in any action arising out of or
relating to this agreement or the transactions contemplated hereby, has 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 as its
authorized agent for the purpose described in Section 15 hereof; and service of
process effected on such agent in the manner set forth in Section 15 hereof will
be effective to confer valid personal jurisdiction over such Controlling Person
or Selling Shareholder;
(vii) To the best of such counsel's knowledge and except as set forth in
the Pricing Prospectus, there are no legal 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 which, if
determined adversely to the Company or any of the Group Entities, 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, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by any Governmental Agency or by
others;
(viii) 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 ADRs evidencing ADSs to be delivered at such Time of Delivery,
the compliance by the Company with all of the provisions of this agreement and
the Deposit Agreement, the compliance by each of the Selling Shareholders with
all of the provisions of this 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, any of the
Group Entities or such Selling Shareholder is a party or by which the Company,
any of the Group Entities or such Selling Shareholder is bound or to which any
of the property or assets of the Company, any of the Group Entities or such
Selling Shareholder is subject, nor will such action result in any violation of
the provisions of the constituent documents of the Company, any of the Group
Entities or such Selling Shareholder or any statute or any order, rule or
regulation known to such counsel of any United States Federal or New York
Governmental Agency having jurisdiction over the Company, any of the Group
Entities or such Selling Shareholder or any of their properties;
39
(ix) No Governmental Authorization of the United States or the State of
New York 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,
except the registration under the 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;
(x) The statements set forth in the Pricing Prospectus and the Prospectus
under the caption "Description of American Depositary Shares", insofar as they
purport to constitute a summary of the terms of the Deposit Agreement and the
ADSs, and under the captions "Taxation - United States Federal Income Taxation",
"Shares Eligible for Future Sale" and "Underwriting", insofar as they purport to
describe the provisions of the laws and documents referred to therein, are
accurate, complete and fair;
(xi) The Company is not an "investment company", as such term is defined
in the Investment Company Act;
(xiii) The Registration Statement has become effective under the Act and
the Prospectus was filed on , 2006 pursuant to Rule 424(b) of the rules and
regulations of the Commission under the Act; and no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceeding
for that purpose has been instituted or threatened by the Commission;
(xiv) The Registration Statement, the ADS Registration Statement, the
Pricing Prospectus and the Prospectus and any further amendments and supplements
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) comply as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and the rules and
regulations thereunder;
(xv) Such counsel does not know of any amendment to the Registration
Statement required to be filed or of any contracts or other documents of a
character required to be filed as an exhibit to the Registration Statement or
required to be described in the Registration Statement or the Prospectus which
are not filed or described as required; and
(xvi) 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
40
statements under the caption "Description of Securities" in the Prospectus,
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; (c) that, as of
its date, the Prospectus or any further amendment or supplement thereto made by
the Company prior to such Time of Delivery (other than the financial statements
and related schedules therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; (d) that, as of such Time of
Delivery, the Registration Statement or 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) Fangda Partners, 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 and Framedia Investment 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, each of Focus Media Technology and Framedia Investment
has been duly qualified as a foreign invested enterprise. All of the registered
capital of each of Focus Media Technology and Framedia Investment has been fully
paid and all the equity interest of each of Focus Media Technology and Framedia
Investment is owned by Focus Media Hong Kong and InfoAchieve, respectively, and,
to the best of such counsel's knowledge after due inquiry, such equity interests
are owned by Focus Media Hong Kong free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or other third party right
(collectively, "Encumbrances"). Focus Media Technology's investment in Focus
Media Digital does not exceed 50%, in the aggregate, of Focus Media Technology's
actual total net assets as defined by the PRC Company Law and relevant
regulations under PRC Law;
(ii) Each of Focus Media Advertisement, Focus Media Advertising Agency,
Focus Media Digital, the Focus Media Advertisement Subsidiaries, New Perfect
Media, New Focus Media, and Framedia Advertisement (collectively, the "PRC Group
Entities"), has been duly
41
organized and is validly existing as a limited liability company under PRC Law
and its business license and articles of association are in full force and
effect under, and in compliance with, PRC Law. All of the registered capital of
Focus Media Advertisement and Framedia Advertisement has been fully paid and 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 and 90% of the equity interest of Framedia Advertisement is owned
by Focus Media Advertisement and 10% of the equity interest of Framedia
Advertisement is owned by Focus Media Advertising Agency and, to the best of
such counsel's knowledge after due inquiry, such equity interests are owned by
each of Xxxxx Xxxxxxx Xxxxx and Xxxxx Xxx Xx free and clear of any Encumbrances
except as described in the Prospectus. Each of Xxxxx Xxxxxxx Xxxxx and Xxxxx Xxx
Xx is a PRC citizen. 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. Focus Media Advertisement's
investment in all of the Focus Media Advertisement Subsidiaries does not exceed
50%, in the aggregate, of Focus Media Advertisement's actual total net assets as
defined by the PRC Company Law and relevant regulations 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 and, to the best of such counsel's knowledge
after due inquiry, such equity interest is owned by each of Focus Media
Advertisement and Xxxxx Xxx Xx free and clear of any Encumbrances except as
described in the Prospectus. All of the registered capital of Focus Media
Digital has been fully paid and 90% of the equity interest of Focus Media
Digital is owned by Focus Media Technology and 10% of the equity interest of
Focus Media Digital is owned by Focus Media Advertisement and, to the best of
such counsel's knowledge after due inquiry, except as described in the
Prospectus, such equity interest is owned by each of them free and clear of any
Encumbrances. 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 is owned by Focus Media Advertisement
in the percentages set forth in the Prospectus under the caption "Our Corporate
Structure" 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 Prospectus.
(iii) Except as described in the Pricing Prospectus, each of the PRC Group
Entities has full legal right, authority, power and all necessary approvals,
consents, waivers, sanctions, certificates, authorizations, filings,
disclosures, registrations, exemptions, permissions, endorsements, annual
inspections, qualifications, permits and licenses required by any court,
tribunal or any other judicial or arbitral body in the PRC, or any body
exercising, or entitled to exercise, any administrative, judicial, legislative,
police, regulatory, or taxing authority or power of similar nature in the PRC
("Approvals") pursuant to any PRC Law to own, sell, lease license and use its
properties and assets and conduct its business in the manner described in the
Pricing Prospectus, none of the approvals contains any materially burdensome
restrictions or conditions not described in the Pricing Prospectus, 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 Pricing Prospectus,
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
42
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 Prospectus, 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 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 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 they are a party, and has authorized, executed and
delivered each of the Covered 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 Covered Agreements.
Each of the Covered Agreements that is governed by PRC Law is in proper legal
form under PRC Law for the enforcement thereof against each of the PRC Group
Entities, 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,
43
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"
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 technical services agreement 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 (except for the cooperation agreement, technical services agreement
and trademark license agreement described in the Pricing Prospectus under the
caption "Related Party Transactions", stamp duty on which each of the PRC Group
Entities has undertaken to pay when due);
(ix) None of the PRC Group Entities is entitled to any immunity from any
legal proceedings or process or from enforcement, execution or attachment in
respect of their obligations in the transactions contemplated under any of the
Covered Agreements;
(x) Except as described in the Pricing Prospectus, 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", "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, are true and accurate in
all material respects, and nothing has been omitted from such statements which
would make the same misleading in any material respect;
(xii) The choice of PRC Law as the governing law in any of the Covered
Agreements that by their terms are governed by PRC Law is a valid choice of
governing law and will be binding on the parties to the relevant Covered
Agreement;
(xiii) All dividends declared and payable upon the equity interests in
each of Focus Media Technology and Framedia Investment may under PRC Law be paid
to Focus Media Hong Kong and InfoAchieve, respectively, in Renminbi that may be
converted into U.S. dollars and freely transferred out of the PRC, and all such
dividends are not and, except as disclosed in the Pricing Prospectus, will not
be subject to withholding or other taxes under PRC Law and, except
44
as disclosed in the Pricing Prospectus, 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 (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;
(xvi) The indemnification and contribution provisions set forth in Section
9 hereof and Section 5.8 of the Deposit Agreement do not contravene PRC Law;
(xvii) 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;
45
(xviii) Except as disclosed in the Pricing Prospectus, 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
(xix) Although they do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus, they have no reason to believe 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 or 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 or 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
46
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 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;
(iv) 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;
(v) 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;
(vi) 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;
(vii) 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;
47
(viii) 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 order, rule or
regulation known to such counsel of any Governmental Agency having jurisdiction
over the Company or its respective properties;
(ix) 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;
(x) 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;
(xi) 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;
(xii) 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;
(xiii) 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;
48
(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 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;
(xv) 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;
(xvi) 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;
(xvii) 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;
(xviii) 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;
(xix) 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
49
agreement or instrument to which it is a party or by which it or any of its
properties may be bound;
In giving such opinion, such counsel may state that (A) with respect to
all matters of United States federal and New York law they have relied upon the
opinions of United States counsel for the Company delivered pursuant to
paragraph (d) of this Section 8, (B) with respect to all matters of PRC law they
have relied upon the opinions of PRC counsel for the Company delivered pursuant
to paragraph (e) of this Section 8 and (C) with respect to all matters of Hong
Kong law they have relied upon the opinions of Hong Kong counsel for the Company
delivered pursuant to paragraph (g) of this Section 8. In addition, in rendering
the opinion in subparagraph (xi) 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;
50
(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
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
51
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
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 & Xxxxxx 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
52
effect set forth in Annex I hereto (the executed copy of the letter delivered
prior to the execution of this agreement is attached as Annex I (A) hereto and a
draft of the form of letter to be delivered on the effective date of any
post-effective amendment to the Registration Statement and as of each Time of
Delivery is attached as Annex I (B) hereto);
(k) (A) None of the Company or any of the Group Entities shall have
sustained since the date of the latest audited financial statements 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 of the Underwriters
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 of the Underwriters 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;
53
(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 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 (each a "Lock-up 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,
54
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the ADS
Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or
the Prospectus, or any amendment or supplement thereto, or any Issuer Free
Writing Prospectus or any "issuer information" filed or required to be filed
pursuant to Rule 433(d) under the Act, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company 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 Xxxxxxx Xxxxx (Asia) L.L.C. and Credit Suisse
Securities (USA) LLC expressly for use therein, and provided further, that the
aggregate liability of the Controlling Person pursuant to this subsection (a)
shall not exceed an amount equal to the product of the number of ADSs sold by
such Controlling Person and the public offering price of the ADSs as set forth
in the 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 becomes 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, 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, 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 aggregate liability of
each Selling Shareholder pursuant to this subsection (b) shall not exceed an
amount equal to the product of the number of ADSs sold by such Selling
Shareholder and the public offering price of the ADSs as set forth in the
Prospectus;
(c) Each Underwriter will indemnify and hold harmless the Company, the
Controlling Person and each Selling Shareholder against any losses, claims,
damages or
55
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 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 Xxxxxxx Sachs (Asia) L.L.C. and Credit
Suisse Securities (USA) LLC 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
56
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 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 U.S. 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; 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-
57
dealer affiliate of any Underwriter; and the obligations of the Underwriters
under this Section 9 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company (including any person
who, with his or her consent, is named in the Registration Statement as about to
become a director of the Company) and any Selling Shareholder and to each
person, if any, who controls the Company or any Selling Shareholder within the
meaning of the Act;
10. (a) If any Underwriter shall default in its obligation to purchase the
ADSs which it has agreed to purchase hereunder at a Time of Delivery, you may in
your discretion arrange for you or another party or other parties to purchase
such ADSs on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such ADSs,
then the Company and the 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
58
the part of any non defaulting Underwriter or the Company or the Selling
Shareholders, except for the expenses to be borne by the Company and the Selling
Shareholders and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section 9 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
11. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Controlling Person, the Selling
Shareholders and the 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 and 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.
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) 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 (B) Credit Suisse Securities (USA) LLC, Eleven Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, facsimile number: (000) 000-0000,
attention: Transactions Advisory Group; 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
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.
59
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.
17. Time shall be of the essence in this agreement.
60
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.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
61
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 APTech Nominees Limited
3i Nominees Limited
Xxxxxx Xxxxxx Jurvetson ePlanet Ventures X.X.
Xxxxxx Xxxxxx Jurvetson ePlanet Ventures Gmbh&Xx.XX
Xxxxxx Xxxxxx Jurvetson ePlanet Ventures Partners Fund, LLC
CDH FM Limited
GS Focus Holding Limited
KTB/UCI China Ventures I Limited
Multimedia Park Venture Capital Limited.
SB China Holdings Pte. Ltd.
Smart Create Group Limited
Snow Hill Developments Limited
United Capital Investment China Venture II Limited
United China Investment Limited
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
Xxxxxxx Sachs (Asia) L.L.C.
By: ____________________
Name:
Title:
Credit Suisse Securities (USA) LLC
By: ____________________
Name:
Title:
[UNDERWRITING AGREEMENT SIGNATURE PAGE]
SCHEDULE I
NUMBER OF OPTIONAL
ADSS
TOTAL NUMBER OF TO BE
FIRM PURCHASED IF
ADSS MAXIMUM OPTION
TO BE PURCHASED EXERCISED
Underwriter --------------- ------------------
Xxxxxxx Xxxxx (Asia) L.L.C................
Credit Suisse Securities (USA) LLC........ --------------- ------------------
........................................... --------------- ------------------
........................................... --------------- ------------------
TOTAL..................................... =============== ==================
SCHEDULE II
NUMBER OF
OPTIONAL
ADSS
TOTAL NUMBER TO BE
OF SOLD IF
FIRM MAXIMUM
ADSS OPTION
TO BE SOLD EXERCISED
------------ ---------
The Company
------------ ---------
The Selling Shareholder:
JJ Media Investment Holding Limited ------------ ---------
GS Focus Holding Limited ------------ ---------
CDH FM 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 ------------ ---------
United China Investment Limited ------------ ---------
United Capital Investment China Venture II Limited ------------ ---------
Victory Venture Capital Limited ------------ ---------
SB China Holdings Pte. Ltd. ------------ ---------
Smart Create Group Limited ------------ ---------
KTB/UCI China Ventures I Limited ------------ ---------
Snow Hill Developments Limited ------------ ---------
Multimedia Park Venture Capital Limited ------------ ---------
TOTAL...................................................... ============ =========
SCHEDULE III
(a) Materials other than the Pricing Prospectus that comprise the Pricing
Disclosure Package:
NONE
(b) Issuer Free Writing Prospecutses not included in the Pricing Disclosure
Package:
NONE
(c) Additional Documents Incorporated by Reference:
NONE
SCHEDULE IV
List of Focus Media Advertisement Subsidiaries:
1. Chongqing Geyang Focus Media Culture & Broadcasting Co., Ltd.
2. Zhejiang Ruihong Focus Media Advertising Communications Co., Ltd.
3. Qingdao Fukesi Advertisement Co., Ltd.
4. Changsha Focus Media Shiji Advertisement Co., Ltd.
5. Dalian Focus Media Advertising Co., Ltd.
6. Shanghai On-Target Advertisement Co., Ltd.
7. Sichuan Focus Media Advertising Communications Co., Ltd.
8. Yunnan Focus Media Co., Ltd.
9. Nanjing Focus Media Advertising Co., Ltd.
10. Wuhan Geshi Focus Media Advertising Co., Ltd.,
11. Shanghai Perfect Media Advertising Agency Co., Ltd.
12. Shanghai Qianjian Advertising Co., Ltd.
13. Guangzhou Framedia Advertising Company Ltd.
14. Zhuhai Focus Media Culture and Communication Company Ltd.
15. Hebei Focus Media Advertising Company Ltd.
16. Tianjin Focus Tongsheng Advertising Company Ltd.
17. Xiamen Focus Media Advertising Company Ltd.
18. Xi'an Focus Media Advertising & Information Company Ltd.
19. Shenyang Focus Media Advertising Co., Ltd.
20. Shenzhen Bianjie Commercial Location Advertising Company
21. Hefei Fukesi Advertising Co. Ltd.
22. Fuzhou Fukesi Advertisement Co., Ltd.
23. Jinan Focus Media Advertisement Co., Ltd.
24. Shanghai Focus Media Advertising Agency Co., Ltd.
25. Shanghai Framedia Advertising Development Co., Ltd.
26. Shanghai New Structure Advertisement Co., Ltd.
27. [Guangdong Shiji Shenghuo Advertisement Co., Ltd.
28. Focus Media Digital Information Technology (Shanghai) Co., Ltd.
29. Shanghai New Focus Media Advertisement Co., Ltd.
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 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
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(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.
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ANNEX I (A)
EXECUTED COMFORT LETTER DELIVERED PRIOR TO EXECUTION OF THIS AGREEMENT
A-I-4
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;
A-I-5
(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-6
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-7
ANNEX II
PARTIES TO EXECUTE LOCK-UP AGREEMENT
Xxxxx Xxxxxxx Xxxxx
Xxxxx Xxx Xx
Fumin Xxxx
Xxxx Nanpeng Xxxx
Xxxxxxx Xxxx
Xxxxxx Mingdong Xx
Xxxxx Xxxxxxxx Xxxx
July Xxxxx Xxxx
Xxxxx Xxxx
Ergo Xxxxxxx Xxx
Acer Xxxxxx Xxxxx
Xxx Xxx
JJ Media Investment Holding Limited
3i Group plc
3i APTech Nominees Limited
3i Nominees Limited
Xxxxxx Xxxxxx Jurvetson ePlanet Ventures X.X.
Xxxxxx Xxxxxx Jurvetson ePlanet Ventures Gmbh&Xx.XX
Xxxxxx Xxxxxx Jurvetson ePlanet Ventures Partners Fund, LLC
CDH FM Limited
GS Focus Holding Limited
KTB/UCI China Ventures I Limited
Multimedia Park Venture Capital Limited.
SB China Holdings Pte. Ltd.
Snow Hill Developments Limited
United Capital Investment China Venture II Limited
United China Investment Limited
Victory Venture Capital Limited
United Capital Investment China Venture II Limited
United China Investment Limited
Victory Venture Capital Limited
A-I-8
ANNEX III
FORM OF LOCK-UP AGREEMENT
Focus Media Holding Limited
Lock-up Agreement
, 2006
Xxxxxxx Xxxxx (Asia) L.L.C.,
68th Floor, Xxxxxx Kong Center
0 Xxxxx'x Xxxx Xxxxxxx,
Xxxx Xxxx.
Credit Suisse Securities (USA) LLC,
Eleven Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000-0000.
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 (the "Underwriter") propose to enter
into an underwriting agreement, 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. 333-126011) to be filed with the U.S. Securities and
Exchange Commission (the "SEC").
In consideration of the agreement by the Underwriter to offer and sell the ADSs,
and of other good and valuable consideration the receipt and sufficiency of
which is hereby acknowledged,
A-I-9
the undersigned agrees that, without the prior permission of each of the
representatives, during the period beginning from the date immediately prior to
the printing of the Preliminary Prospectus (the "Lock-up Start Date"), and
continuing to and including the date 90 days after the date of the final
Prospectus, so long as the date of the Final Prospectus is on or before the date
that is 21 days after the Lock-up Start Date (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: (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 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) 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 waive, in writing, such extension. The
Company will provide 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 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.
The undersigned understands that the Company, the Selling Shareholders and
the Underwriter 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.
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.
A-I-10
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.
The Representatives, in connection with the Offering, will be entering
into lock-up agreements similar to this agreement with other Selling
Shareholders (any such agreement containing lock-up restrictions a "Lock-Up
Agreement":). In this regard, the Representatives acknowledge and agree that
they will not release any Selling Shareholder from any Lock-Up Agreement without
the written consent of each Selling Shareholder who has signed a Lock-Up
Agreement.
Very truly yours,
_________________________________
Exact Name of Shareholder
_________________________________
Authorized Signature
_________________________________
Title
A-I-11
