AGRIA CORPORATION
17,150,000 AMERICAN DEPOSITARY SHARES
EACH REPRESENTING TWO ORDINARY SHARES, PAR VALUE US$0.0000001 PER ORDINARY SHARE
UNDERWRITING AGREEMENT
[Date], 2007
CREDIT SUISSE SECURITIES (USA) LLC
Eleven Madison Avenue,
New York, N.Y. 10010-3629
As Representative of the Several Underwriters
Dear Sirs:
1. Introductory. Agria Corporation., a company incorporated in the Cayman
Islands (the "COMPANY"), agrees with the several underwriters named in Schedule
B hereto (the "UNDERWRITERS") to issue and sell to the several Underwriters
12,000,000 American depositary shares ("ADSS"), each ADS representing two
ordinary shares of the Company at par value US$0.0000001 per share (the
"ORDINARY SHARES"), and Brothers Capital Limited, a shareholder of the Company
listed in Schedule A hereto (the "SELLING SHAREHOLDER") agrees severally and not
jointly to sell to the Underwriters an aggregate of 5,150,000 ADSs (the ADSs
being sold by the Company and the Selling Shareholder are hereafter referred to
as the "FIRM SECURITIES"). The Company also agrees to issue and sell to the
Underwriters, at the option of the Underwriters, an aggregate of not more than
2,572,500 additional ADSs (such additional ADSs being sold by the Company are
hereafter referred to as the "OPTIONAL SECURITIES"), as set forth below. The
Firm Securities and the Optional Securities, including in each case, the
underlying Ordinary Shares, are hereinafter collectively called the "OFFERED
SECURITIES". As part of the offering contemplated by this Agreement, Credit
Suisse Securities (USA) LLC (the "DESIGNATED UNDERWRITER") has agreed to reserve
out of the Firm Securities purchased by it under this Agreement, up to 1,300,000
ADSs, for sale to the Company's directors, officers, employees and other parties
associated with the Company (collectively, "PARTICIPANTS"), as set forth in the
Final Prospectus (as defined herein) under the heading "Underwriting" (the
"DIRECTED SHARE PROGRAM"). The Firm Securities to be sold by the Designated
Underwriter pursuant to the Directed Share Program (the "DIRECTED SHARES") will
be sold by the Designated Underwriter pursuant to this Agreement at the public
offering price. Any Directed Shares not subscribed for by the end of the
business day on which this Agreement is executed will be offered to the public
by the Underwriters as set forth in the Final Prospectus.
The ADSs included in the Offered Securities purchased by the Underwriters
will be evidenced by American depositary receipts ("ADRS") to be issued pursuant
to a deposit agreement dated as of [-], 2007 (the "DEPOSIT AGREEMENT"), to be
entered into among the Company, The Bank of New York, as depositary (the
"DEPOSITARY"), and all holders from time to time of the ADRs. Credit Suisse
Securities (USA) LLC shall act as the representative (the "REPRESENTATIVE") of
the Underwriters.
2. Representations and Warranties of the Company and the Selling
Shareholder. (a) The
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Company represents and warrants to, and agrees with, the several Underwriters
that:
(i) Filing and Effectiveness of Registration Statement; Certain
Defined Terms. The Company has filed with the Commission (as defined
below) a registration statement on Form F-1 (No. 333-146785) covering the
registration of the Offered Securities under the Act (as defined below),
including a related preliminary prospectus or prospectuses. At any
particular time, this initial registration statement, in the form then on
file with the Commission, including all information contained in the
registration statement (if any) pursuant to Rule 462(b) and then deemed to
be a part of the initial registration statement, and all 430A Information
and all 430C Information, that in any case has not then been superseded or
modified, shall be referred to as the "INITIAL REGISTRATION STATEMENT".
The Company may also have filed, or may file with the Commission, a Rule
462(b) registration statement covering the registration of the Offered
Securities. At any particular time, this Rule 462(b) registration
statement, in the form then on file with the Commission, including the
contents of the Initial Registration Statement incorporated by reference
therein and including all 430A Information and all 430C Information, that
in any case has not then been superseded or modified, shall be referred to
as the "ADDITIONAL REGISTRATION STATEMENT". A registration statement on
Form F-6 (No.333-146906) relating to the ADSs has been filed with the
Commission and has become effective; no stop order suspending the
effectiveness of the ADS Registration Statement (as defined below) is in
effect, and no proceedings for such purpose are pending before or, to the
knowledge of the Company, threatened by the Commission (such registration
statement on Form F-6, including all exhibits thereto, as amended at the
time such registration statement becomes effective, being hereinafter
called the "ADS REGISTRATION STATEMENT").
As of the time of execution and delivery of this Agreement, the
Initial Registration Statement has been declared effective under the Act
and is not proposed to be amended. Any Additional Registration Statement
has or will become effective upon filing with the Commission pursuant to
Rule 462(b) and is not proposed to be amended. The Offered Securities all
have been or will be duly registered under the Act pursuant to the Initial
Registration Statement, and, if applicable, the Additional Registration
Statement.
For purposes of this Agreement:
"430A INFORMATION", with respect to any registration statement,
means information included in a prospectus and retroactively deemed to be
a part of such registration statement pursuant to Rule 430A(b).
"430C INFORMATION", with respect to any registration statement,
means information included in a prospectus then deemed to be a part of
such registration statement pursuant to Rule 430C.
"ACT" means the Securities Act of 1933, as amended.
"APPLICABLE TIME" means :00 [A.M./P.M.] (Eastern time) on the date
of this Agreement.
"CLOSING DATE" has the meaning defined in Section 3 hereof.
"COMMISSION" means the Securities and Exchange Commission.
"EFFECTIVE TIME" with respect to the Initial Registration Statement
or, if filed prior to the execution and delivery of this Agreement, the
Additional Registration Statement means the date and time as of which such
Registration Statement was declared effective by the Commission or has
become effective upon filing pursuant to Rule 462(c). If an Additional
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Registration Statement has not been filed prior to the execution and
delivery of this Agreement but the Company has advised the Representative
that it proposes to file one, "EFFECTIVE TIME" with respect to such
Additional Registration Statement means the date and time as of which such
Registration Statement is filed and becomes effective pursuant to Rule
462(b).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FINAL PROSPECTUS" means the Statutory Prospectus that discloses the
public offering price, other 430A Information and other final terms of the
Offered Securities and otherwise satisfies Section 10(a) of the Act.
"GENERAL USE ISSUER FREE WRITING PROSPECTUS" means any Issuer Free
Writing Prospectus that is intended for general distribution to
prospective investors, as evidenced by its being so specified in Schedule
C to this Agreement.
"ISSUER FREE WRITING PROSPECTUS" means any "issuer free writing
prospectus", as defined in Rule 433, relating to the Offered Securities in
the form filed or required to be filed with the Commission or, if not
required to be filed, in the form retained in the Company's records
pursuant to Rule 433(g).
"LIMITED USE ISSUER FREE WRITING PROSPECTUS" means any Issuer Free
Writing Prospectus that is not a General Use Issuer Free Writing
Prospectus.
The Initial Registration Statement and the Additional Registration
Statement are referred to collectively as the "REGISTRATION STATEMENTS"
and individually as a "REGISTRATION STATEMENT." A "REGISTRATION STATEMENT"
with reference to a particular time means the Initial Registration
Statement and any Additional Registration Statement as of such time. A
"REGISTRATION STATEMENT" without reference to a time means such
Registration Statement as of its Effective Time. For purposes of the
foregoing definitions, 430A Information with respect to a Registration
Statement shall be considered to be included in such Registration
Statement as of the time specified in Rule 430A.
"RULES AND REGULATIONS" means the rules and regulations of the
Commission.
"SECURITIES LAWS" means, collectively, the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of
2002 ("▇▇▇▇▇▇▇▇-▇▇▇▇▇"), the Act, the Exchange Act, the Rules and
Regulations, the auditing principles, rules, standards and practices
applicable to auditors of "issuers" (as defined in ▇▇▇▇▇▇▇▇-▇▇▇▇▇)
promulgated or approved by the Public Company Accounting Oversight Board
and the rules of The New York Stock Exchange ("EXCHANGE RULES").
"STATUTORY PROSPECTUS" with reference to a particular time means the
prospectus included in a Registration Statement immediately prior to that
time, including any 430A Information or 430C Information with respect to
such Registration Statement. For purposes of the foregoing definition,
430A Information shall be considered to be included in the Statutory
Prospectus as of the actual time that form of prospectus is filed with the
Commission pursuant to Rule 424(b) or Rule 462(c) and not retroactively.
Unless otherwise specified, a reference to a "RULE" is to the
indicated rule under the Act.
(ii) Compliance with Securities Act Requirements. (x) (A) At their
respective Effective Times, (B) on the date of this Agreement and (C) on
each Closing Date, each of the Initial Registration Statement and the
Additional Registration Statement (if any) conformed and will conform in
all material respects to the requirements of the Act and the Rules and
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Regulations, and did not and will not include any 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 not misleading, (y) on
its date, at the time of filing of the Final Prospectus pursuant to Rule
424(b) or (if no such filing is required) at the Effective Time of the
Additional Registration Statement in which the Final Prospectus is
included, and on each Closing Date, the Final Prospectus will conform in
all material respects to the requirements of the Act and the Rules and
Regulations and will not include any 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 not misleading, and (z) on the
date of this Agreement, at their respective Effective Times or issue dates
and on each Closing Date, each Registration Statement, the Final
Prospectus, any Statutory Prospectus, any prospectus wrapper and any
Issuer Free Writing Prospectus complied or comply, and such documents and
any further amendments or supplements thereto will comply, with any
applicable laws or regulations of foreign jurisdictions in which the Final
Prospectus, any Statutory Prospectus, any prospectus wrapper or any Issuer
Free Writing Prospectus, as amended or supplemented, if applicable, are
distributed in connection with the Directed Share Program. The preceding
sentence does not apply to statements in or omissions from any such
document based upon written information furnished to the Company by any
Underwriter through the Representative specifically for use therein, it
being understood and agreed that the only such information is that
described as such in Section 8(c) hereof.
(iii) Ineligible Issuer Status. At the time of the initial filing of
the Initial Registration Statement and at the date of this Agreement, the
Company was not and is not an "ineligible issuer," as defined in Rule 405,
including (A) the Company or any other subsidiary in the preceding three
years not having been convicted of a felony or misdemeanor or having been
made the subject of a judicial or administrative decree or order as
described in Rule 405 and (B) the Company in the preceding three years not
having been the subject of a bankruptcy petition or insolvency or similar
proceeding, not having had a registration statement be the subject of a
proceeding under Section 8 of the Act and not being the subject of a
proceeding under Section 8A of the Act in connection with the offering of
the Offered Securities, all as described in Rule 405.
(iv) General Disclosure Package. As of the Applicable Time, neither
(A) the General Use Issuer Free Writing Prospectus(es) issued at or prior
to the Applicable Time, the preliminary prospectus, dated [DATE], 2007
(which is the most recent Statutory Prospectus distributed to investors
generally) and the other information, if any, stated in Schedule C to this
Agreement to be included in the General Disclosure Package, all considered
together (collectively, the "GENERAL DISCLOSURE PACKAGE"), nor (B) any
individual Limited Use Issuer Free Writing Prospectus, when considered
together with the General Disclosure Package, included any untrue
statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The preceding
sentence does not apply to statements in or omissions from any Statutory
Prospectus or any Issuer Free Writing Prospectus in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through the Representative specifically for use therein, it
being understood and agreed that the only such information furnished by
any Underwriter consists of the information described as such in Section
8(c) hereof.
(v) Issuer Free Writing Prospectuses. Each Issuer Free Writing
Prospectus, as of its issue date and at all subsequent times through the
completion of the public offer and sale of the Offered Securities or until
any earlier date that the Company notified or notifies the Representative
as described in the next sentence, did not, does not and will not include
any information that conflicted, conflicts or will conflict with the
information then contained in the
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Registration Statement. If at any time following issuance of an Issuer
Free Writing Prospectus there occurred or occurs an event or development
as a result of which such Issuer Free Writing Prospectus conflicted or
would conflict with the information then contained in the Registration
Statement or as a result of which such Issuer Free Writing Prospectus, if
republished immediately following such event or development, would include
an untrue statement of a material fact or omitted or would omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, (A)
the Company has promptly notified or will promptly notify the
Representative and (B) the Company has promptly amended or will promptly
amend or supplement such Issuer Free Writing Prospectus to eliminate or
correct such conflict, untrue statement or omission.
(vi) Good Standing of the Company. The Company has been duly
incorporated and is existing and in good standing under the laws of the
Cayman Islands, with power and authority (corporate and other) to own its
properties and conduct its business as described in the General Disclosure
Package; and the Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires
such qualification.
(vii) Subsidiaries. Schedule D sets forth a complete, true and
correct list of each subsidiary (as defined in Rule 405 of the Act) of the
Company and its jurisdiction of incorporation (each, a "SUBSIDIARY" and
collectively, the "SUBSIDIARIES"). For avoidance of doubt, for all
purposes under this Agreement, Primalights III Agriculture Development
Co., Ltd. ("P3A") shall be deemed to be a "Subsidiary." Each Subsidiary of
the Company has been duly incorporated and is existing and in good
standing under the laws of the jurisdiction of its incorporation, with
power and authority (corporate and other) to own its properties and
conduct its business as described in the General Disclosure Package; and
each Subsidiary of the Company is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in which
its ownership or lease of property or the conduct of its business requires
such qualification; all of the issued and outstanding capital stock of
each Subsidiary of the Company has been duly authorized and validly issued
and is fully paid and non-assessable; the capital stock of each Subsidiary
is owned by the Company, directly or through Subsidiaries, free from all
liens, encumbrances and defects, except the capital stock of P3A, which is
owned as disclosed in the General Disclosure Package, free and clear from
all liens, encumbrances and defects other than those disclosed in the
General Disclosure Package.
(viii) Offered Securities. The Offered Securities and all other
outstanding shares of capital stock of the Company have been duly
authorized; the authorized equity capitalization of the Company is as set
forth in the General Disclosure Package; all outstanding shares of capital
stock of the Company are, and, when the Offered Securities have been
delivered and paid for in accordance with this Agreement on each Closing
Date, such Offered Securities will have been, validly issued, fully paid
and non-assessable, will conform to the information in the General
Disclosure Package and to the description of such Offered Securities
contained in the Final Prospectus; the shareholders of the Company have no
preemptive rights with respect to the Securities; and none of the
outstanding shares of capital stock of the Company have been issued in
violation of any preemptive or similar rights of any security holder. The
Offered Securities and the underlying Ordinary Shares to be sold by the
Company, when issued and delivered against payment heretofore pursuant to
this Agreement, will not be subject to any security interest, other
encumbrance or adverse claims, and will have been issued in compliance
with all federal and state securities laws and not issued in violation of
any preemptive right, resale right, right of first refusal or similar
right; upon payment of the purchase price in accordance with this
Agreement at each Closing Date, the Depositary or its nominee, as the
registered holder of the Ordinary Shares represented by the Offered
Securities, will be, subject to the terms of the
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Deposit Agreement, entitled to all the rights of a shareholder conferred
by the Memorandum and Articles of Association of the Company; except as
disclosed in the General Disclosure Package as of the Applicable Time and
subject to the terms and provisions of the Deposit Agreement, there are no
restrictions on transfers of Ordinary Shares represented by the Offered
Securities or the Offered Securities under the laws of the Cayman Islands
or the United States, as the case may be; the Ordinary Shares represented
by the Offered Securities may be freely deposited by the Company with the
Depositary or its nominee against issuance of ADRs evidencing the Offered
Securities as contemplated by the Deposit Agreement.
(ix) No Finder's Fee. There are no contracts, agreements or
understandings between the Company and any person that would give rise to
a valid claim against the Company or any Underwriter for a brokerage
commission, finder's fee or other like payment in connection with this
offering.
(x) Registration Rights. Except as disclosed in the General
Disclosure Package, 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 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 a Registration Statement or in any
securities being registered pursuant to any other registration statement
filed by the Company under the Act (collectively, "REGISTRATION RIGHTS"),
and any person to whom the Company has granted registration rights has
agreed not to exercise such rights until after the expiration of the
Lock-Up Period referred to in Section 5(l) hereof.
(xi) Listing. The Offered Securities have been approved for listing
on The New York Stock Exchange subject to notice of issuance.
(xii) Absence of Further Requirements. No consent, approval,
authorization, or order of, or filing or registration with, any person
(including any governmental agency or body or any court) is required to be
obtained or made by the Company for the consummation of the transactions
contemplated by the Deposit Agreement and this Agreement in connection
with the sale of the Offered Securities, except such as have been
obtained, or made and such as may be required under state securities laws.
No authorization, consent, approval, license, qualification or order of,
or filing or registration with any person (including any governmental
agency or body of any court) in any foreign jurisdiction is required for
the consummation of the transactions contemplated by this Agreement in
connection with the offering, issuance and sale of the Directed Shares
under the laws and regulations of such jurisdiction except such as have
been obtained or made.
(xiii) Title to Property. Except as disclosed in the General
Disclosure Package, the Company and its Subsidiaries have good and
marketable title to all real properties and all other properties and
assets owned by them, in each case free from liens, charge, encumbrances
and defects that would materially affect the value thereof or materially
interfere with the use made or to be made thereof by them, and, except as
disclosed in the General Disclosure Package, the Company and its
Subsidiaries hold any leased real or personal property under valid and
enforceable leases with no terms or provisions that would materially
interfere with the use made or to be made thereof by them.
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(xiv) Absence of Defaults and Conflicts Resulting from Transaction.
The execution, delivery and performance of this Agreement and the Deposit
Agreement and the consummation of the transactions contemplated herein and
therein and the issuance and sale of the Offered Securities, including the
deposit of the Ordinary Shares represented by the ADSs with the Depositary
and the issuance of the ADRs evidencing the ADSs and the listing of the
Offered Securities on The New York Stock Exchange, do not and will not
result in a breach or violation of any of the terms and provisions of, or
constitute a default or a Debt Repayment Triggering Event (as defined
below) under, or result in the imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
Subsidiaries pursuant to, the charter or by-laws of the Company or any of
its Subsidiaries, any statute, rule, regulation or order of any
governmental agency or body or any court, domestic or foreign, having
jurisdiction over the Company or any of its Subsidiaries or any of their
properties, or any agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound or to which any of the properties of the Company or
any of its Subsidiaries is subject; a "DEBT REPAYMENT TRIGGERING EVENT"
means any event or condition that gives, or with the giving of notice or
lapse of time would give, the holder of any note, debenture, or other
evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Company or any of its Subsidiaries.
(xv) Absence of Existing Defaults and Conflicts. Neither the Company
nor any of its Subsidiaries is in violation of its respective charter or
by-laws or in default (or with the giving of notice or lapse of time would
be in default) under any existing obligation, agreement, covenant or
condition contained in any indenture, loan agreement, mortgage, 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 the properties of any of them is
subject, except such defaults that would not, individually or in the
aggregate, result in a material adverse effect on the condition (financial
or otherwise), results of operations, business, properties or prospects of
the Company and its Subsidiaries taken as a whole ("MATERIAL ADVERSE
EFFECT").
(xvi) Validity of Contracts. Except as disclosed in the General
Disclosure Package, no consent, approval, authorization, or order of, or
filing or registration with, any person (including any governmental agency
or body or any court) is required for the validity, enforceability or
effectiveness of any customer agreement, indenture, loan agreement,
mortgage, lease or other agreement or instrument to which the Company or
any of its Subsidiaries is a party or by which any of them is bound or to
which any of the properties of any of them is subject, including, without
limitation each of the contracts filed as exhibits to the Registration
Statement, (collectively, the "COMPANY CONTRACTS") other than those
consents, approvals, authorizations, orders, filings or registrations the
failure to obtain which would not individually or in the aggregate, result
in a Material Adverse Effect; and neither the Company nor any of its
Subsidiaries, nor to the best of the Company's knowledge, any other party
to any Company Contracts, is in violation or breach of any PRC national,
provincial, municipal or other local law, regulation, statute, rule or
order, which violation or breach could invalidate, impair or result in any
fine, penalty or government sanction with regard to any Company Contracts,
except as disclosed in the General Disclosure Package or such violations
or breaches that would not, individually or in the aggregate, result in a
Material Adverse Effect. Each of contracts and agreements among
Aero-Biotech Science & Technology Co., Ltd., a Subsidiary of the Company
("AGRIA CHINA"), P3A and P3A's shareholders through which the Company
effectively controls P3A has been filed as an exhibit to the Registration
Statement (the "P3A CONTRACTS"), and other than the P3A Contracts, there
are no contracts, arrangements or agreements that exist or are
contemplated relating to the control of P3A. Each of the P3A Contracts has
been duly and validly authorized, executed and delivered by each party
thereto and are valid and binding obligations of each party thereto,
enforceable in accordance with their respective terms.
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(xvii) Authorization of this Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(xviii) Authorization of the Deposit Agreement. The Deposit
Agreement has been duly authorized, executed and delivered by the Company
and, assuming due authorization, execution and delivery by the Depositary,
constitutes a legal, valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity; upon due issuance by the Depositary of ADRs
evidencing ADSs against the deposit of the Ordinary Shares in respect
thereof in accordance with the Deposit Agreement, such ADRs will be duly
and validly issued and the holders thereof 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 General Disclosure Package as of the Applicable Time.
(xix) Possession of Licenses and Permits. The Company and its
Subsidiaries possess, and are in compliance with the terms of, all
adequate certificates, authorizations, franchises, licenses and permits
("LICENSES") necessary or material to the conduct of the business now
conducted or proposed in the General Disclosure Package to be conducted by
them, except for such failure to possess or comply that would not
individually or in the aggregate have a Material Adverse Effect, and have
not received any notice of proceedings relating to the revocation or
modification of any Licenses that, if determined adversely to the Company
or any of its Subsidiaries, would individually or in the aggregate have a
Material Adverse Effect.
(xx) Absence of Labor Dispute. No labor dispute with the employees
of the Company or any of its Subsidiaries exists or, to the knowledge of
the Company, is imminent that could have a Material Adverse Effect.
(xxi) Possession of Intellectual Property. Each of the Company and
its Subsidiaries own, possess or can acquire on reasonable terms
sufficient trademarks, trade names, patent rights, copyrights, domain
names, licenses, approvals (including, without limitation, approvals of
proprietary corn seed varieties), trade secrets, inventions, technology,
know-how and other intellectual property and similar rights, including
registrations and applications for registration thereof (collectively,
"INTELLECTUAL PROPERTY RIGHTS") necessary or material to the conduct of
the business now conducted or proposed in the General Disclosure Package
to be conducted by them, and the expected expiration of any such
Intellectual Property Rights would not, individually or in the aggregate,
have a Material Adverse Effect. Except as disclosed in the General
Disclosure Package, (A) there are no rights of third parties to any of the
Intellectual Property Rights owned by the Company or its Subsidiaries; (B)
there is no material infringement, misappropriation, breach, default or
other violation, or the occurrence of any event that with notice or the
passage of time would constitute any of the foregoing, by the Company, its
Subsidiaries or third parties of any of the Intellectual Property Rights
of the Company or its Subsidiaries; (C) there is no pending or, to the
best knowledge of the Company after due inquiry, threatened action, suit,
proceeding or claim by others challenging the Company's or any
Subsidiary's rights in or to, or the violation of any of the terms of, any
of their Intellectual Property Rights, and the Company is unaware of any
facts which would form a reasonable basis for any such claim; (D) there is
no pending or, to the best knowledge of the Company after due inquiry,
threatened action, suit, proceeding or claim by others challenging the
validity, enforceability or scope of any such Intellectual Property
Rights, and the Company is unaware of any facts which would form a
reasonable basis for any such claim; (E) there is no
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pending or, to the best knowledge of the Company after due inquiry,
threatened action, suit, proceeding or claim by others that the Company or
any Subsidiary infringes, misappropriates or otherwise violates or
conflicts with any Intellectual Property Rights or other proprietary
rights of others and the Company is unaware of any other fact which would
form a reasonable basis for any such claim; and (F) none of the
Intellectual Property Rights used by the Company or its Subsidiaries in
their businesses has been obtained or is being used by the Company or its
Subsidiaries in violation of any contractual obligation binding on the
Company, any of its Subsidiaries in violation of the rights of any
persons, except in each case covered by clauses (A) - (F) such as would
not, if determined adversely to the Company or any of its Subsidiaries,
individually or in the aggregate, have a Material Adverse Effect.
(xxii) Environmental Laws. Except as disclosed in the General
Disclosure Package, neither the Company nor any of its Subsidiaries is in
violation of any statute, any rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to
the use, disposal or release of hazardous or toxic substances or relating
to the protection or restoration of the environment or human exposure to
hazardous or toxic substances (collectively, "ENVIRONMENTAL LAWS"), owns
or operates any real property contaminated with any substance that is
subject to any environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any
claim relating to any environmental laws, which violation, contamination,
liability or claim would individually or in the aggregate have Material
Adverse Effect; and the Company is not aware of any pending investigation
which might lead to such a claim.
(xxiii) Accurate Disclosure. The statements in the General
Disclosure Package and the Final Prospectus under the headings "Prospectus
Summary", "Risk Factors", "Use of Proceeds", "Dividend Policy",
"Enforceability of Civil Liabilities", "Business", "Regulation",
"Management", "Related Party Transactions", "Description of Share
Capital", "Description of American Depositary Shares", "Shares Eligible
for Future Sale", "Taxation" and "Underwriting", insofar as such
statements summarize legal matters, agreements, documents or proceedings
discussed therein, are accurate and fair summaries of such legal matters,
agreements, documents or proceedings and present the information required
to be shown.
(xxiv) Absence of Manipulation. The Company has not taken, directly
or indirectly, any action that is designed to or that has constituted or
that would reasonably be expected to cause or result in the stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Offered Securities.
(xxv) Statistical and Market-Related Data. Any third-party
statistical and market-related data included in a Registration Statement,
a Statutory Prospectus or the General Disclosure Package are based on or
derived from sources that the Company believes to be reliable and
accurate.
(xxvi) Internal Controls and Compliance with ▇▇▇▇▇▇▇▇-▇▇▇▇▇. Except
as set forth in the General Disclosure Package, the Company, its
Subsidiaries and the Company's Board of Directors (the "BOARD") are in
compliance with ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and all applicable Exchange Rules. Except
as set forth in the General Disclosure Package, the Company maintains a
system of internal controls, including, but not limited to, disclosure
controls and procedures, internal controls over accounting matters and
financial reporting, an internal audit function and legal and regulatory
compliance controls (collectively, "INTERNAL CONTROLS") that comply with
the Securities Laws and are sufficient to provide reasonable assurances
that (A) transactions are
9
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 the generally
accepted accounting principles in the United States and to maintain
accountability for assets, (C) access to assets is permitted only in
accordance with management's general or specific authorization, and (D)
the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Internal Controls are, or upon
consummation of the offering of the Offered Securities will be, overseen
by the Audit Committee (the "AUDIT COMMITTEE") of the Board in accordance
with Exchange Rules. Except as disclosed in the General Disclosure
Package, the Company has not publicly disclosed or reported to the Audit
Committee or the Board, and within the next 135 days, the Company does not
reasonably expect to publicly disclose or report to the Audit Committee or
the Board, a significant deficiency, material weakness, change in Internal
Controls or fraud involving management or other employees who have a
significant role in Internal Controls (each, an "INTERNAL CONTROL EVENT"),
any violation of, or failure to comply with, the Securities Laws, or any
matter which, if determined adversely, would have a Material Adverse
Effect.
(xxvii) Absence of Accounting Issues. A member of the Audit
Committee has confirmed to the Chief Executive Officer, Chief Financial
Officer or General Counsel that, except as disclosed in the General
Disclosure Package, the Audit Committee is not reviewing or investigating,
and neither the Company's independent auditors nor its internal auditors
have recommended that the Audit Committee review or investigate, (A)
adding to, deleting, changing the application of, or changing the
Company's disclosure with respect to, any of the Company's material
accounting policies; (B) any matter which could result in a restatement of
the Company's financial statements for any annual or interim period during
the current or prior three fiscal years; or (C) any Internal Control
Event.
(xxviii) Litigation. Except as disclosed in the General Disclosure
Package, there are no pending actions, suits or proceedings (including, to
the Company's knowledge after due inquiry, any inquiries or investigations
by any court or governmental agency or body, domestic or foreign) against
or affecting the Company, any of its Subsidiaries or any of their
respective properties that, if determined adversely to the Company or any
of its Subsidiaries, would individually or in the aggregate have a
Material Adverse Effect, or would materially and adversely affect the
ability of the Company to perform its obligations under this Agreement, or
which are otherwise material in the context of the sale of the Offered
Securities; and to the Company's knowledge after due inquiry, no such
actions, suits or proceedings (including any inquiries or investigations
by any court or governmental agency or body, domestic or foreign) are
threatened or contemplated.
(xxix) Independence of Auditors. Ernst & Young Hua Ming is an
independent registered public accounting firm with respect to the Company
and its Subsidiaries within the meaning of the Act and the applicable
rules and regulations thereunder adopted by the Commission and the U.S.
Public Company Accounting Oversight Board.
(xxx) Financial Statements. The financial statements included in
each Registration Statement and the General Disclosure Package present
fairly the financial position of the Company and its consolidated
subsidiaries as of the dates shown and their results of operations and
cash flows for the periods shown, and such financial statements have been
prepared in conformity with the generally accepted accounting principles
in the United States applied on a consistent basis; the schedules included
in each Registration Statement present fairly the information required to
be stated therein; and the assumptions used in preparing the pro forma
10
financial statements included in each Registration Statement and the
General Disclosure Package 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.
(xxxi) No Material Adverse Change in Business. Except as disclosed
in the General Disclosure Package, since the end of the period covered by
the latest audited financial statements included in the General Disclosure
Package (A) there has been no change, nor any development or event
involving a prospective change, in the condition (financial or otherwise),
results of operations, business, properties or prospects of the Company
and its Subsidiaries, taken as a whole, that would have a Material Adverse
Effect, (B) except as disclosed in or contemplated by the General
Disclosure Package, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock
and (C) except as disclosed in or contemplated by the General Disclosure
Package, there has been no material adverse change in the capital stock,
short-term indebtedness, long-term indebtedness, net current assets or net
assets of the Company and its Subsidiaries.
(xxxii) Investment Company Act. The Company is not and, after giving
effect to the offering and sale of the Offered Securities and the
application of the proceeds thereof as described in the General Disclosure
Package, will not be an "investment company" as defined in the Investment
Company Act of 1940 (the "INVESTMENT COMPANY ACT").
(xxxiii) PFIC Status. The Company was not a "passive foreign
investment company" ("PFIC") as defined in Section 1297 of the United
States Internal Revenue Code of 1986, as amended (the "CODE"), for its
most recently completed taxable year and, based on the Company's current
projected income, assets and activities, the Company does not expect to be
classified as a PFIC for any subsequent taxable year.
(xxxiv) Payments in Foreign Currency. Except as disclosed in the
General Disclosure Package, under current laws and regulations of the
Cayman Islands, the British Virgin Islands, Hong Kong, the PRC and any
political subdivision thereof, all dividends and other distributions
declared and payable on the Offered Securities may be paid by the Company
to the holder thereof in United States dollars and freely transferred out
of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ and the PRC
and all such payments made to holders thereof or therein who are
non-residents of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
or the PRC will not be subject to income, withholding or other taxes under
laws and regulations of the Cayman Islands, the British Virgin Islands,
Hong Kong, the PRC or any political subdivision or taxing authority
thereof or therein and will otherwise be free and clear of any other tax,
duty, withholding or deduction in the Cayman Islands, the British Virgin
Islands, Hong Kong, the PRC or any political subdivision or taxing
authority thereof or therein and without the necessity of obtaining any
governmental authorization in the Cayman Islands, the British Virgin
Islands, Hong Kong, the PRC or any political subdivision or taxing
authority thereof or therein.
(xxxv) Absence of Unlawful Influence. The Company has not offered or
sold, or caused the Underwriters to offer or sell, any Offered Securities
to any person pursuant to the Directed Share Program with the specific
intent to unlawfully influence (A) a customer or supplier of the Company
to alter the customer's or supplier's level or type of business with the
Company or (B) a trade journalist or publication to write or publish
favorable information about the Company or its products.
11
(xxxvi) Insurance. The Company and its Subsidiaries are insured by
insurers with appropriately rated claims paying abilities against such
losses and risks and in such amounts as are prudent and customary for the
businesses in which they are engaged; all policies of insurance insuring
the Company or any of its Subsidiaries or their respective businesses,
assets, employees, officers and directors are in full force and effect;
the Company and its Subsidiaries are in compliance with the terms of such
policies and instruments in all material respects; and there are no claims
by the Company or any of its Subsidiaries under any such policy or
instrument as to which any insurance company is denying liability or
defending under a reservation of rights clause; neither the Company nor
any such Subsidiary has been refused any insurance coverage sought or
applied for; neither the Company nor any such Subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost
that would not have a Material Adverse Effect, except as set forth in the
General Disclosure Package and the Company will obtain directors' and
officers' insurance in such amounts as is customary for an initial public
offering.
(xxxvii) Compliance with Certain Laws and Regulations. Each of the
Company, its Subsidiaries and any of their respective officers and
executive directors, and, to the knowledge of the Company, each of its
affiliates, supervisors, managers, agents, or employees, has not violated,
its participation in the offering will not violate, and it has instituted
and maintains policies and procedures designed to ensure continued
compliance with each of the following laws: (A) anti-bribery laws,
including but not limited to, any applicable law, rule, or regulation of
any locality, including but not limited to any law, rule, or regulation
promulgated to implement the OECD Convention on Combating Bribery of
Foreign Public Officials in International Business Transactions, signed
December 17, 1997, including the U.S. Foreign Corrupt Practices Act of
1977 or any other law, rule or regulation of similar purpose and scope
under U.S federal, the Cayman Islands, the British Virgin Islands, PRC or
Hong Kong law, (B) anti-money laundering laws, including but not limited
to, applicable federal, state, international, foreign or other laws,
regulations or government guidance regarding anti-money laundering,
including, without limitation, Title 18 U.S. Code sections 1956 and 1957,
the Patriot Act, the Bank Secrecy Act, and international anti-money
laundering principals or procedures by an intergovernmental group or
organization, such as the Financial Action Task Force on Money Laundering,
of which the United States is a member and with which designation the
United States representative to the group or organization continues to
concur, all as amended, and any Executive order, directive, or regulation
pursuant to the authority of any of the foregoing, or any orders or
licenses issued thereunder or (C) laws and regulations imposing U.S.
economic sanctions measures, including, but not limited to, the
International Emergency Economic Powers Act, the Trading with the Enemy
Act, the United Nations Participation Act, and the Syria Accountability
and Lebanese Sovereignty Act, all as amended, and any Executive Order,
directive, or regulation pursuant to the authority of any of the
foregoing, including the regulations of the United States Treasury
Department set forth under 31 CFR, Subtitle B, Chapter V, as amended, or
any orders or licenses issued thereunder. Neither the Company nor any of
its Subsidiaries does business with the government of Cuba or with any
person or affiliate located in Cuba within the meaning of Section 517.075,
Florida Statutes and the Company agrees to comply with such Section if,
prior to the completion of the distribution of the Offered Securities, it
commences doing such business. None of the Company, any of its
Subsidiaries or, to the knowledge of the Company, any director, officer,
agent, employee or affiliate of the Company or any of its Subsidiaries, is
currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Department of the Treasury ("OFAC").
12
(xxxviii) Filing of Tax Returns. Each of the Company and its
Subsidiaries has filed on a timely basis all necessary tax returns,
reports and filings (except in any case in which the failure to file on a
timely basis would not have a Material Adverse Effect), and all such
returns, reports or filings are true, correct and complete in all material
respects, and are not the subject of any pending, or to the Company's
knowledge, threatened disputes with revenue or other authorities; and to
the Company's knowledge, there are no circumstances giving rise to, or
which could give rise to, such disputes. None of the Company or its
Subsidiaries is delinquent in the payment of any taxes due thereunder or
has any knowledge of any tax deficiency which might be assessed against
any of them, which, if so assessed, would have a Material Adverse Effect.
(xxxix) No Undisclosed Relationships. There are no material
relationships (direct or indirect) or transactions between or among the
Company or any of its Subsidiaries, on one hand, and their respective
directors, officers, shareholders, other affiliates, or any affiliates or
members of the immediate families of such persons, on the other hand, that
are required to be disclosed in the General Disclosure Package but are not
so disclosed.
(xl) Foreign Private Issuer. The Company is a "foreign private
issuer" within the meaning of Rule 405 under the Act.
(xli) No Transaction or Other Taxes. Except as disclosed in the
General Disclosure Package as of the Applicable Time, no transaction,
stamp, capital or other issuance, registration, transaction, transfer or
withholding taxes or duties are payable in the PRC and the Cayman Islands
by or on behalf of the Underwriters to any PRC or Cayman Islands taxing
authority in connection with (A) the issuance, sale and delivery of the
Ordinary Shares represented by the Offered Securities by the Company, the
issuance of the Offered Securities by the Depositary, and the delivery of
the Offered Securities to or for the account of the Underwriters, (B) the
purchase from the Company and the initial sale and delivery by the
Underwriters of the Offered Securities to purchasers thereof, (C) the
deposit of the Ordinary Shares with the Depositary and the Custodian (as
defined in the Deposit Agreement) and the issuance and delivery of the
ADRs evidencing the Offered Securities or (D) the execution and delivery
of this Agreement or the Deposit Agreement.
(xlii) Proper Form of Agreements. This Agreement and the Deposit
Agreement are in proper form under the laws of the Cayman Islands for the
enforcement thereof against the Company in accordance with the laws of the
Cayman Islands and to ensure the legality, validity, enforceability or
admissibility into evidence in the Cayman Islands of this Agreement and
the Deposit Agreement; it is not necessary that this Agreement, the
Deposit Agreement, the prospectus or any other document be filed or
recorded with any court or other authority in the Cayman Islands or that
any Cayman Islands stamp duty or similar tax be paid on or in respect of
this Agreement, the Deposit Agreement or any other document to be
furnished hereunder or thereunder.
(xliii) Validity of Choice of Law. The choice of laws of the State
of New York as the governing law of this Agreement and the Deposit
Agreement is a valid choice of law under the laws of the Cayman Islands
and the PRC and will be honored by courts in the Cayman Islands, and, to
the extent permitted under the PRC civil law and rules of civil
procedures, will be honored by the courts in the PRC. The Company has the
power to submit, and pursuant to Section 16 of this Agreement and Section
7.06 of the Deposit Agreement, has legally, validly, effectively and
irrevocably submitted, to the personal jurisdiction of each United States
federal court and New York state court located in the Borough of
Manhattan, in The City of ▇▇▇ ▇▇▇▇,
▇▇
▇▇▇ ▇▇▇▇, ▇.▇.▇. (each, a "NEW YORK COURT"), and the Company has the power
to designate, appoint and authorize, and pursuant to Section 16 of this
Agreement and Section 7.06 of the Deposit Agreement, has legally, validly,
effectively and irrevocably designated, appointed Law Debenture, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ as our authorized agent for
service of process in any action arising out of or relating to this
Agreement, the Deposit Agreement or the Offered Securities in any New York
Court, and service of process effected on such authorized agent will be
effective to confer valid personal jurisdiction over the Company as
provided in Section 16 hereof.
(xliv) No Immunity. Neither the Company, nor any of its Subsidiaries
nor any of their respective properties, assets or revenues has any right
of immunity under Cayman Islands, PRC or New York law, from any legal
action, suit or proceeding, from the giving of any relief in any such
legal action, suit or proceeding, from set-off or counterclaim, from the
jurisdiction of any Cayman Islands, PRC, New York or U.S. federal court,
from service of process, attachment upon or prior to judgment, or
attachment in aid of execution of judgment, or from execution of a
judgment, or other legal process or proceeding for the giving of any
relief or for the enforcement of a judgment, in any such court, with
respect to its obligations, liabilities or any other matter under or
arising out of or in connection with this Agreement or the Deposit
Agreement; and, to the extent that the Company, or any of its Subsidiaries
or any of their respective properties, assets or revenues may have or may
hereafter become entitled to any such right of immunity in any such court
in which proceedings may at any time be commenced, each of the Company and
its Subsidiaries waives or will waive such right to the extent permitted
by law and has consented to such relief and enforcement as provided in
Section 16 of this Agreement.
(xlv) Enforcement of Judgment. Any final judgment for a fixed sum of
money rendered by a New York Court having jurisdiction under its own
domestic laws in respect of any suit, action or proceeding against the
Company based upon this Agreement and the Deposit Agreement would be
recognized and enforced against the Company by Cayman Islands courts
without re-examining the merits of the case under the common law doctrine
of obligation; provided that (A) adequate service of process has been
effected and the defendant has had a reasonable opportunity to be heard,
(B) such judgments or the enforcement thereof are not contrary to the law,
public policy, security or sovereignty of the Cayman Islands, (C) such
judgments were not obtained by fraudulent means and do not conflict with
any other valid judgment in the same matter between the same parties, and
(D) an action between the same parties in the same matter is not pending
in any Cayman Islands court at the time the lawsuit is instituted in the
foreign court; and it is not necessary that this Agreement, the Deposit
Agreement, the prospectus or any other document be filed or recorded with
any court or other authority in the Cayman Islands or the PRC.
(xlvi) Registration Statement Exhibits. There are no legal or
governmental proceedings or contracts or other documents of a character
required to be described in the Registration Statement, the ADS
Registration Statement, any Additional Registration Statement or the most
recent preliminary prospectus or, in the case of documents, to be filed as
exhibits to the Registration Statement, that are not described and filed
as required. Neither the Company nor any of its Subsidiaries has knowledge
that any other party to any such contract, agreement or arrangement has
any intention not to render full performance in all material respects as
contemplated by the terms thereof.
(xlvii) Management's Discussion and Analysis of Financial Condition
and Results of Operation. The section entitled "Management's Discussion
and Analysis of Financial
14
Condition and Results of Operations" in each Registration Statement, the
General Disclosure Package and the Final Prospectus accurately and fully
describes (A) accounting policies that the Company believes are the most
important in the portrayal of the Company's financial condition and
results of operations and that require management's most difficult,
subjective or complex judgments ("CRITICAL ACCOUNTING POLICIES"); (B)
judgments and uncertainties affecting the application of Critical
Accounting Policies; and (C) the likelihood that materially different
amounts would be reported under different conditions or using different
assumptions and an explanation thereof; and the Company's board of
directors and senior management have reviewed and agreed with the
selection, application and disclosure of the Critical Accounting Policies
as described in the each Registration Statement, the General Disclosure
Package and the Final Prospectus, and have consulted with its legal
advisers and independent accountants with regards to such disclosure. The
section entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in each Registration Statement, the
General Disclosure Package and the Final Prospectus also accurately and
fully describes (A) all material trends, demands, commitments, events,
uncertainties and risks that the Company believes would materially affect
liquidity and are reasonably likely to occur; and (B) all off-balance
sheet arrangements that have or are reasonably likely to have a current or
future material effect on the financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources of the Company and its Subsidiaries
taken as a whole; and except as otherwise disclosed in the Registration
Statements and the General Disclosure Package, there are no outstanding
guarantees or other contingent obligations of the Company or any
Subsidiary that could reasonably be expected to have a Material Adverse
Effect.
(xlviii) No Unapproved Marketing Documents. The Company has not
distributed and, prior to the later to occur of any delivery date and
completion of the distribution of the Offered Securities, will not
distribute any offering material in connection with the offering and sale
of the Offered Securities other than any preliminary prospectus, the
prospectus, any Issuer Free Writing Prospectus to which the Representative
has consented in accordance with this Agreement and any Issuer Free
Writing Prospectus set forth on Schedule C hereto.
(xlix) Employee Benefits. Except as set forth in the most recent
preliminary 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 Subsidiary, or to any other person; the
Company and its Subsidiaries are in compliance with all applicable laws
relating to employee benefits.
(l) No Broker-Dealer Affiliation. Except as set forth in the General
Disclosure Package, there are no affiliations or associations between any
member of the Financial Industry Regulatory Authority, Inc. (the "FINRA")
and any of the officers or directors of the Company or the Subsidiaries,
or holders of 5% or greater of the securities of the Company.
(li) SAFE Compliance. The Company has taken all reasonable steps to
comply with, and to ensure compliance by all of the Company's shareholders
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, taking reasonable
steps to require each shareholder 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.
15
(lii) No Trading. None of the Company or any of the Subsidiaries 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.
(liii) Compliance with Internal Policies. The sale of the Ordinary
Shares by the Selling Shareholder does not violate any of the Company's
internal policies regarding the sale of shares by its affiliates.
(liv) M&A Rules. The Company is aware of, and has been advised as
to, the content of the Rules on Mergers and Acquisitions of Domestic
Enterprises by Foreign Investors jointly promulgated by the Ministry of
Commerce, the State Assets Supervision and Administration Commission, the
State Tax Administration, the State Administration of Industry and
Commerce, the China Securities Regulatory Commission ("CSRC") and the
State Administration of Foreign Exchange of the PRC on August 8, 2006 (the
"M&A Rules"), in particular the relevant provisions thereof which purport
to require offshore special purpose vehicles formed for listing purposes
and controlled directly or indirectly by PRC companies or individuals, to
obtain the approval of the CSRC prior to the listing and trading of their
securities on stock exchange located outside of the PRC; the Company has
received legal advice specifically with respect to the M&A Rules from its
PRC counsel and the Company understands such legal advice; and the Company
has fully communicated such legal advice from its PRC counsel to each of
its directors that signed the Registration Statement and each such
director has confirmed that he or she understands such legal advice.
(lv) M&A Clarifications. The issuance and sale of the Shares and the
ADSs, the listing and trading of the ADSs on The New York Stock Exchange
and the consummation of the transactions contemplated by this Agreement
and the Deposit Agreement is not and will not be, as of the date hereof or
at each Closing Date, adversely affected by the M&A Rules or any official
clarifications, guidance, interpretations or implementation rules in
connection with or related to the M&A Rules, including the guidance and
notices issued by the CSRC on September 8, 2006 and September 21, 2006
(collectively, the "M&A RULES AND RELATED CLARIFICATIONS").
(lvi) Non-applicability of M&A Rules. As of the date of the most
recent Statutory Prospectus and as of the date here of, the M&A Rules did
not and do not require the Company to obtain the approval of the CSRC
prior to the issuance and sale of the Shares and the ADSs, the listing and
trading of the ADSs on The New York Stock Exchange, or the consummation of
the transactions contemplated by this Agreement, the Deposit Agreement and
the Power of Attorney (as defined below).
(lvii) Disclosure of M&A Rules. The statements relating to the M&A
Rules and Related Clarifications set forth in the Registration Statement
under the headings "Risk Factors" and "Regulation - New M&A Rules" are
fair and accurate summaries of the matters described therein, and nothing
has been omitted from such summaries which would make the same misleading
in any material respect.
(lviii) Representation of Officers. Any certificate signed by any
officer of the Company and delivered to the Representative or counsel for
the Underwriters as required or contemplated by this Agreement shall
constitute a representation and warranty hereunder by the Company, as to
matters covered thereby, to each Underwriter.
16
(b) The Selling Shareholder represents and warrants to, and agrees with,
the several Underwriters that:
(i) Title to Securities. Such Selling Shareholder has and on each
Closing Date hereinafter mentioned will have valid and unencumbered title
to the Offered Securities to be delivered by such Selling Shareholder on
such Closing Date and full right, power and authority to enter into this
Agreement and to sell, assign, transfer and deliver the Offered Securities
to be delivered by such Selling Shareholder on such Closing Date
hereunder; and upon the delivery of and payment for the Offered Securities
on each Closing Date hereunder the several Underwriters will acquire valid
and unencumbered title to the Offered Securities to be delivered by such
Selling Shareholder on such Closing Date.
(ii) Absence of Further Requirements. No consent, approval,
authorization or order of, or filing with, any person (including any
governmental agency or body or any court) is required to be obtained or
made by such Selling Shareholder for the consummation of the transactions
contemplated by the Custody Agreement (as defined below) or this Agreement
in connection with the offering and sale of the Offered Securities sold by
such Selling Shareholder, except such as have been obtained and made under
the Act and such as may be required under state securities laws.
(iii) Absence of Defaults and Conflicts Resulting from Transaction.
The execution, delivery and performance of the Custody Agreement or this
Agreement and the consummation of the transactions therein and herein
contemplated will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, or result in the
imposition of any lien, charge or encumbrance upon any property or assets
of such Selling Shareholder pursuant to, any statute, rule, regulation or
order of any governmental agency or body or any court having jurisdiction
over such Selling Shareholder or any properties or any agreement or
instrument to which such Selling Shareholder is a party or by which such
Selling Shareholder is bound or to which any of the properties of such
Selling Shareholder is subject, other than breaches, violations, defaults
or impositions that would not, individually or in the aggregate, result in
a material adverse effect on the condition (financial or otherwise),
results of operations, business, properties or prospects of such Selling
Shareholder or materially and adversely affect such Selling Shareholder's
ability to fulfill its obligations under Custody Agreement or this
Agreement or the consummation of the transactions therein and herein
contemplated, or the charter or by-laws of such Selling Shareholder that
is a corporation or the constituent documents of such Selling Shareholder
that is not a natural person or a corporation.
(iv) Custody Agreement. The Power of Attorney (as defined below) and
related custody agreement (the "CUSTODY AGREEMENT") with respect to such
Selling Shareholder have been duly authorized, executed and delivered by
such Selling Shareholder and constitute valid and legally binding
obligations of such Selling Shareholder enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(v) Compliance with Securities Act Requirements. (x) (A) At their
respective Effective Times, (B) on the date of this Agreement and (C) on
each Closing Date, each of the
17
Initial Registration Statement and the Additional Registration Statement
(if any) conformed and will conform in all respects to the requirements of
the Act; (y) on its date, at the time of filing of the Final Prospectus
pursuant to Rule 424(b) or (if no such filing is required) at the
Effective Time of the Additional Registration Statement in which the Final
Prospectus is included, and on each Closing Date, the Final Prospectus
will conform in all respects to the requirements of the Act and the Rules
and Regulations and will not include any 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 not misleading; and (z) on the
date of this Agreement, at their respective Effective Times or issue dates
and on each Closing Date, each Registration Statement, the Final
Prospectus, any Statutory Prospectus and any prospectus wrapper complied
or comply, and such documents and any further amendments or supplements
thereto will comply, with any applicable laws or regulations of foreign
jurisdictions in which the Final Prospectus, any Statutory Prospectus or
any prospectus wrapper, as amended or supplemented, if applicable, are
distributed in connection with the Directed Share Program. The preceding
sentence does not apply to statements in or omissions from any such
document based upon written information furnished to the Company by any
Underwriter through the Representative specifically for use therein, it
being understood and agreed that the only such information is that
described as such in Section 8(c) hereof.
(vi) General Disclosure Package. As of the Applicable Time, neither
(A) the General Use Issuer Free Writing Prospectus(es) issued at or prior
to the Applicable Time, the preliminary prospectus, dated [DATE], 2007
(which is the most recent Statutory Prospectus distributed to investors
generally) and the other information, if any, stated in Schedule C to this
Agreement to be included in the General Disclosure Package, all considered
together (collectively, the "GENERAL DISCLOSURE PACKAGE"), nor (B) any
individual Limited Use Issuer Free Writing Prospectus, when considered
together with the General Disclosure Package, included any untrue
statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The preceding
sentence does not apply to statements in or omissions from any Statutory
Prospectus or any Issuer Free Writing Prospectus in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through the Representative specifically for use therein, it
being understood and agreed that the only such information furnished by
any Underwriter consists of the information described as such in Section
8(c) hereof.
(vii) No Undisclosed Material Information. The sale of the Offered
Securities by such Selling Shareholder pursuant to this Agreement is not
prompted by any material information concerning the Company or any of its
Subsidiaries that is not set forth the General Disclosure Package.
(viii) Power-of-Attorney. The power of attorney ("POWER OF
ATTORNEY"), appointing certain individuals named therein as such Selling
Shareholder's attorneys-in-fact (each, an "ATTORNEY-IN-FACT") relating to
the transactions contemplated hereby and by the prospectus, constitutes a
valid instrument granting the Attorneys-in-Fact named in such Power of
Attorney, the power and authority stated therein, and permits the
Attorneys-in-Fact, singly or collectively, to bind such Selling
Shareholder with respect to all matters granted, conferred and
contemplated in such Power of Attorney and such Power of Attorney has not
been revoked, cancelled or terminated at any time.
(ix) Validity of Agreements. Each of this Agreement, the Lock-up
Agreements, the Power of Attorney and the Custody Agreement in connection
with the offer and sale of the
18
Offered Securities contemplated herein has been duly authorized, executed
and delivered by such Selling Shareholder and constitutes a legal, valid
and binding obligation of such Selling Shareholder, enforceable against
such Selling Shareholder in accordance with its terms, subject, as to
enforceability, to laws of general applicability relating to or affecting
creditor's rights and to general equity principles.
(x) No Finder's Fee. 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 this offering.
(xi) Absence of Manipulation. Such Selling Shareholder has not
taken, directly or indirectly, any action that is designed to or that has
constituted or that would reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Offered Securities.
(xii) Security Interests. Upon payment for the Offered Securities
sold by such Selling Shareholder under this Agreement and the delivery by
such Selling Shareholder to DTC (as defined below) or its agent of the
Securities in book entry form to a securities account maintained by the
Representative at the DTC or its nominee, and payment therefor in
accordance with this Agreement, the Underwriters will acquire a securities
entitlement (within the meaning of Section 8-501 of the Uniform Commercial
Code (the "UCC")) with respect to such Offered Securities, and no action
based on an "adverse claim" (as defined in UCC Section 8-102) may be
asserted against the Underwriters with respect to such security
entitlement if, at such time, the Underwriters do not have notice of any
adverse claim within the meaning of UCC Section 8-105.
(xiii) Selling Shareholder Questionnaire. The questionnaire
containing certain information regarding the Selling Shareholder and the
election form which sets forth the number of Offered Securities such
Selling Shareholder has elected to sell in the Offering (the
"QUESTIONNAIRE AND ELECTION FORM"), completed by such Selling Shareholder
and submitted to the Company by facsimile on or before October 23, 2007
does not and as of each applicable Closing Date will not contain any
untrue statement of material fact nor does it omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading and such Selling Shareholder's election to sell the
number of Offered Securities indicated in the Election Form is valid and
binding on such Selling Shareholder.
(xiv) No FINRA Affiliations. Such Selling Shareholder has no
affiliations or associations with any member of the FINRA.
(xv) No Stamp or Transaction Taxes. No transaction, stamp, capital
or other issuance, registration, transaction, transfer or withholding
taxes or duties are payable by or on behalf of the Underwriters in
connection with (A) the sale and delivery of the Ordinary Shares
represented by the Offered Securities by such Selling Shareholder, the
issuance of such Offered Securities by the Depositary, and the delivery of
such Offered Securities to or for the account of the Underwriters, (B) the
purchase from such Selling Shareholder and the initial sale and delivery
by the Underwriters of the Offered Securities to purchasers thereof, (C)
the deposit by such Selling Shareholder of the Ordinary Shares with the
Depositary and the Custodian and the issuance and delivery of the ADRs
evidencing the Offered Securities, or (D) the execution and delivery of
this Agreement.
19
(xvi) No Other Marketing Documents. Such Selling Shareholder has not
distributed and will not distribute, prior to the later of the latest
Closing Date and the completion of the Underwriters' distribution of the
Shares, any offering material in connection with the offering and sale of
the Shares by such Selling Shareholder, including any free writing
prospectus.
(xvii) No Registration Rights. Other than as disclosed in the most
recent Preliminary Prospectus, such Selling Shareholder does not have any
registration or other similar rights to have any equity or debt securities
registered for sale by the Company under the Registration Statement or
included in this offering.
(xviii) No Pre-emptive Rights. Such Selling Shareholder does not
have, or has waived prior to the date hereof, any preemptive right,
co-sale right or right of first refusal or other similar right to purchase
any of the Ordinary Shares or the Offered Securities that are to be sold
by the Company or any other Selling Shareholder to the Underwriters
pursuant to this Agreement; and such Selling Shareholder does not own any
warrants, options or similar rights to acquire, and do not have any right
or arrangement to acquire, any capital shares, right, warrants, options or
other securities from the Company, other than those described in the most
recent Preliminary Prospectus.
(xix) Compliance with Internal Policies. The sale of the Ordinary
Shares by Selling Shareholder does not violate any of such Selling
Shareholder's internal policies regarding the sale of shares by its
affiliates.
(xx) Validity of Choice of Law. The choice of laws of the State of
New York as the governing law of this Agreement, the Custody Agreement,
the Power of Attorney and the Lock-up Agreements is a valid choice of law
under the laws of the British Virgin Islands and the PRC, and will be
honored by courts in the British Virgin Islands, and, to the extent
permitted under the PRC civil law and rules of civil procedures, will be
honored by the courts in the PRC. The Selling Shareholder has the power to
submit, and pursuant to Section 16 of this Agreement and Section 7.06 of
the Deposit Agreement, has legally, validly, effectively and irrevocably
submitted, to the personal jurisdiction of each United States federal
court and New York state court located in the Borough of Manhattan, in The
City of New York, New York, U.S.A. (each, a "NEW YORK COURT").
(xxi) No Immunity. Neither the Selling Shareholder nor any of its
properties, assets or revenues has any right of immunity under British
Virgin Islands, PRC or New York law, from any legal action, suit or
proceeding, from the giving of any relief in any such legal action, suit
or proceeding, from set-off or counterclaim, from the jurisdiction of any
British Virgin Islands, PRC, New York or U.S. federal court, from service
of process, attachment upon or prior to judgment, or attachment in aid of
execution of judgment, or from execution of a judgment, or other legal
process or proceeding for the giving of any relief or for the enforcement
of a judgment, in any such court, with respect to its obligations,
liabilities or any other matter under or arising out of or in connection
with this Agreement, the Custody Agreement, the Power of Attorney and the
Lock-up Agreements, and, to the extent that the Selling Shareholder or any
of its properties, assets or revenues may have or may hereafter become
entitled to any such right of immunity in any such court in which
proceedings may at any time be commenced, the Selling Shareholder waives
or will waive such right to the extent permitted by law and has consented
to such relief and enforcement as provided in Section 16 of this
Agreement.
20
(xxii) Enforcement of Judgment. Any final judgment for a fixed sum
of money rendered by a New York Court having jurisdiction under its own
domestic laws in respect of any suit, action or proceeding against the
Selling Shareholder based upon this Agreement, the Custody Agreement, the
Power of Attorney and the Lock-up Agreements would be recognized and
enforced against the Selling Shareholder by British Virgin Islands courts
without re-examining the merits of the case under the common law doctrine
of obligation; provided that (A) adequate service of process has been
effected and the defendant has had a reasonable opportunity to be heard,
(B) such judgments or the enforcement thereof are not contrary to the law,
public policy, security or sovereignty of the British Virgin Islands, (C)
such judgments were not obtained by fraudulent means and do not conflict
with any other valid judgment in the same matter between the same parties,
and (D) an action between the same parties in the same matter is not
pending in any British Virgin Islands court at the time the lawsuit is
instituted in the foreign court; and it is not necessary that this
Agreement, the Custody Agreement, the Power of Attorney, the Lock-up
Agreements, the prospectus or any other document be filed or recorded with
any court or other authority in the British Virgin Islands or the PRC.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements and subject to the terms and
conditions set forth herein, the Company and the Selling Shareholder agree,
severally and not jointly, to sell to each Underwriter, and each Underwriter
agrees, severally and not jointly, to purchase from the Company and the Selling
Shareholder, at a purchase price of US$[-] per ADS, the respective number of
Firm Securities set forth opposite the names of the Underwriters in Schedule B
hereto, respectively.
Executed transfer forms for the Ordinary Shares represented by the Offered
Securities to be sold by the Selling Shareholder hereunder have been placed in
custody, for delivery under this Agreement, under Custody Agreements made with
the Company, as custodian (in such capacity, the "SSH CUSTODIAN"). The Selling
Shareholder agrees that the Ordinary Shares represented by the transfer forms
held in custody for the Selling Shareholder under such Custody Agreement are
subject to the interests of the Underwriters hereunder, that the arrangements
made by the Selling Shareholder for such custody are to that extent irrevocable,
and that the obligations of the Selling Shareholder hereunder shall not be
terminated by operation of law, whether by the occurrence of any other event or
in the case of a trust, by the death of any trustee or trustees or the
termination of such trust. If the Selling Shareholder or any such trustee or
trustees should die, or if any other such event should occur, or if any of such
trusts should terminate, before the delivery of the Offered Securities
hereunder, such Offered Securities shall be delivered by the SSH Custodian in
accordance with the terms and conditions of this Agreement as if such death or
other event or termination had not occurred, regardless of whether or not the
SSH Custodian shall have received notice of such death or other event or
termination.
The Company and the SSH Custodian will deliver the Firm Securities to or
as instructed by the Representative for the accounts of the several Underwriters
through the facilities of The Depository Trust Company ("DTC") in a form
reasonably acceptable to the Representative against payment of the purchase
price by the Underwriters in Federal (same day) funds by official bank check or
checks or wire transfer to an account at a bank acceptable to the Representative
drawn to the order of the Company for itself and as SSH Custodian on behalf of
the Selling Shareholder, as the case may be, at the New York office of Skadden,
Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇, at
[A.M. / P.M.], New York time, on [-], 2007, or at such other time not later than
seven full business days thereafter as the Representative and the Company
determine, such time being herein referred to as the "FIRST CLOSING DATE". For
the purposes of Rule 15c6-1 under the Exchange Act, the First Closing Date (if
later than the otherwise applicable settlement date) shall be the settlement
date for payment of funds and delivery of securities for all the Offered
Securities sold pursuant to the offering. The ADRs evidencing the Firm
Securities will be in definitive form, in such denominations and registered in
such names as the Representative requests. The ADRs will be made available for
checking and packaging at
21
the above office of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP or such other place
designated by the Representative at least 24 hours prior to the First Closing
Date.
In addition, upon written notice from the Representative given to the
Company and the Selling Shareholder from time to time not more than 30 days
subsequent to the date of the Final Prospectus, the Underwriters may purchase
all or less than all of the Optional Securities at the purchase price per
Security to be paid for the Firm Securities. The Company and the Selling
Shareholder agree to sell to the Underwriters the number of Optional Securities
specified in such notice and the Underwriters agree, severally and not jointly,
to purchase such Optional Securities. Such Optional Securities shall be
purchased for the account of each Underwriter in the same proportion as the Firm
Securities set forth opposite such Underwriter's name bears to the total number
of Firm Securities (subject to adjustment by the Representative to eliminate
fractions) and may be purchased by the Underwriters only for the purpose of
covering over-allotments made in connection with the sale of the Firm
Securities. No Optional Securities shall be sold or delivered unless the Firm
Securities previously have been, or simultaneously are, sold and delivered. The
right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and to the extent not previously exercised may be
surrendered and terminated at any time upon notice by the Representative to the
Company and the Selling Shareholder.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "OPTIONAL CLOSING DATE", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "CLOSING DATE"), shall be determined by the
Representative but shall be not later than five full business days after written
notice of election to purchase Optional Securities is given. The Company and the
SSH Custodian will deliver the Optional Securities being purchased on each
Optional Closing Date to or as instructed by the Representative for the accounts
of the several Underwriters in a form reasonably acceptable to the
Representative against payment of the purchase price therefor in Federal (same
day) funds by official bank check or checks or wire transfer to an account at a
bank acceptable to the Representative drawn to the order of the Company for
itself and as SSH Custodian on behalf of the Selling Shareholder, as the case
may be, at the above office. The ADRs evidencing the Optional Securities will be
in definitive form, in such denominations and registered in such names as the
Representative requests. The ADRs will be made available for checking and
packaging at the above office or such other place designated by the
Representative at least 24 hours prior to the Optional Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Final Prospectus.
5. Certain Agreements of the Company and the Selling Shareholder.
(a) The Company agrees with the several Underwriters and the Selling
Shareholder that:
(i) Additional Filings. Unless filed pursuant to Rule 462(c) as part
of the Additional Registration Statement in accordance with the next
sentence, the Company will file the Final Prospectus, in a form approved
by the Representative, with the Commission pursuant to and in accordance
with subparagraph (1) (or, if applicable and if consented to by the
Representative, subparagraph (4)) of Rule 424(b) not later than the
earlier of (A) the second business day following the execution and
delivery of this Agreement or (B) the fifteenth business day after the
Effective Time of the Initial Registration Statement. The Company will
advise the Representative promptly of any such filing pursuant to Rule
424(b) and provide satisfactory evidence to the Representative of such
timely filing. If an Additional Registration Statement is necessary to
register a portion of the Offered Securities under the Act but the
Effective Time thereof has not occurred as of the execution and delivery
of this Agreement, the Company will file the additional registration
statement or, if filed, will file a post-effective amendment thereto with
the Commission pursuant to and in accordance with Rule 462(b) on or prior
to 10:00 P.M., New York time, on the date of this Agreement or, if
earlier, on or prior to the time the Final
22
Prospectus is finalized and distributed to any Underwriter, or will make
such filing at such later date as shall have been consented to by the
Representative.
(ii) Filing of Amendments: Response to Commission Requests. The
Company will promptly advise the Representative of any proposal to amend
or supplement at any time the Initial Registration Statement, any
Additional Registration Statement or any Statutory Prospectus and will not
effect such amendment or supplementation without the Representative's
consent; and the Company will also advise the Representative promptly of
(i) the effectiveness of any Additional Registration Statement (if its
Effective Time is subsequent to the execution and delivery of this
Agreement), (ii) any amendment or supplementation of a Registration
Statement or any Statutory Prospectus, (iii) any request by the Commission
or its staff for any amendment to any Registration Statement, for any
supplement to any Statutory Prospectus or for any addition information,
(iv) the institution by the Commission of any stop order proceedings in
respect of a Registration Statement or the threatening of any proceeding
for that purpose and (v) the receipt by the Company of any notification
with respect to the suspension of the qualification of the Offered
Securities in any jurisdiction or the institution or threatening of any
proceedings for such purpose. The Company will use its best efforts to
prevent the issuance of any such stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible the withdrawal
thereof.
(iii) Continued Compliance with Securities Laws. If, at any time
when a prospectus relating to the Offered Securities is (or but for the
exemption in Rule 172 would be) required to be delivered under the Act by
any Underwriter or dealer, any event occurs as a result of which the Final
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary at any time to
amend the Registration Statement or supplement the Final Prospectus to
comply with the Act, the Company will promptly notify the Representative
of such event and will promptly prepare and file with the Commission and
furnish, at its own expense, to the Underwriters and the dealers and any
other dealers upon request of the Representative, an amendment or
supplement which will correct such statement or omission or an amendment
which will effect such compliance. Neither the Representative's consent
to, nor the Underwriters' delivery of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in Section 7
hereof.
(iv) Rule 158. As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally
available to its security holders an earnings statement covering a period
of at least 12 months beginning after the Effective Date of the Initial
Registration Statement (or, if later, the Effective Time of the Additional
Registration Statement) which will satisfy the provisions of Section 11(a)
of the Act and Rule 158 under the Act. For the purpose of the preceding
sentence, "AVAILABILITY DATE" means the 45th day after the end of the
fourth fiscal quarter following the fiscal quarter that includes such
Effective Time, except that, if such fourth fiscal quarter is the last
quarter of the Company's fiscal year, "AVAILABILITY DATE" means the 90th
day after the end of such fourth fiscal quarter.
(v) Furnishing of Prospectuses. The Company will furnish to the
Representative copies of each Registration Statement(1) (each of which
will be signed and will include all exhibits), each related Statutory
Prospectus, and, so long as a prospectus relating to the Offered
Securities is (or but for the exemption in Rule 172 would be) required to
be delivered under the
----------
(1) Number to include one copy for the Representative and one copy for counsel
for the Underwriters.
23
Act, the Final Prospectus and all amendments and supplements to such
documents, in each case in such quantities as the Representative requests.
The Final Prospectus shall be so furnished on or prior to 3:00 P.M., New
York time, on the business day following the execution and delivery of
this Agreement. All other such documents shall be so furnished as soon as
available. The Company and the Selling Shareholder will pay the expenses
of printing and distributing to the Underwriters all such documents.
(vi) Blue Sky Qualifications. The Company will arrange for the
qualification of the Offered Securities for sale under the laws of such
jurisdictions as the Representative designates and will continue such
qualifications in effect so long as required for the distribution.
(vii) Reporting Requirements. During the period of five years
hereafter, the Company will furnish to the Representative and, upon
request, to each of the other Underwriters, as soon as practicable after
the end of each fiscal year, a copy of its annual report to Shareholders
for such year; and the Company will furnish to the Representative (i) as
soon as available, a copy of each report and any definitive proxy
statement of the Company filed with the Commission under the Exchange Act
or mailed to Shareholders, and (ii) from time to time, such other
information concerning the Company as the Representative may reasonably
request. However, so long as the Company is subject to the reporting
requirements of either Section 13 or Section 15(d) of the Exchange Act and
is timely filing reports with the Commission on its Electronic Data
Gathering, Analysis and Retrieval system ("▇▇▇▇▇"), it is not required to
furnish such reports or statements to the Underwriters.
(viii) Payment of Expenses. The Company agrees with the several
Underwriters that the Company will pay all expenses incident to the
performance of the obligations of the Company and the Selling Shareholder
under this Agreement, including but not limited to any filing fees and
other expenses incurred in connection with qualification of the Offered
Securities for sale under the laws of such jurisdictions as the
Representative designates and the preparation and printing of memoranda
relating thereto, costs and expenses related to the review by the FINRA of
the Offered Securities (including, but not limited to, any filing fees),
costs and expenses relating to investor presentations or any "road show"
in connection with the offering and sale of the Offered Securities
including, without limitation, any travel expenses of the Company's
officers and employees and any other expenses of the Company including the
chartering of airplanes, fees and expenses incident to listing the Offered
Securities on The New York Stock Exchange, fees and expenses of the
Depositary in connection with the offering and sale of the Offered
Securities (including, but not limited to, any fees and disbursements of
counsel to Depositary), fees and expenses in connection with the
registration of the Offered Securities under the Exchange Act, any
transfer taxes on the sale by the Selling Shareholder of the Offered
Securities to the Underwriters and expenses incurred in distributing
preliminary prospectuses and the Final Prospectus (including any
amendments and supplements thereto) to the Underwriters and for expenses
incurred for preparing, printing and distributing any Issuer Free Writing
Prospectuses to investors or prospective investors. Such expenses may be
deducted from the purchase price for the Offered Securities set forth in
Section 3 hereof.. Notwithstanding the foregoing, the expenses incurred by
the Underwriters in connection with the offering and sale of the Offered
Securities (including expenses of counsel for the underwriters and any
travel expenses incurred by the Underwriters) shall be borne by the
Underwriters.
(ix) Use of Proceeds. The Company will use the net proceeds received
by it in connection with this offering in the manner described in the "Use
of Proceeds" section of the General Disclosure Package and the Company
does not intend to use any of the proceeds from
24
the sale of the Offered Securities hereunder to repay any outstanding debt
owed to any affiliate of any Underwriter.
(x) Absence of Manipulation. The Company and the Selling Shareholder
will not take, directly or indirectly, any action designed to or that
would constitute or that might reasonably be expected to cause or result
in, stabilization or manipulation of the price of any securities of the
Company to facilitate the sale or resale of the Offered Securities.
(xi) Taxes. The Company and the Selling Shareholder will indemnify
and hold harmless the Underwriters against any documentary, stamp or
similar issue tax, including any interest and penalties, on the creation,
issue and sale of the Offered Securities and on the execution and delivery
of this Agreement. All payments to be made by the Company and the Selling
Shareholder hereunder shall be made without withholding or deduction for
or on account of any present or future taxes, duties or governmental
charges whatsoever unless the Company or the Selling Shareholder is
compelled by law to deduct or withhold such taxes, duties or charges. In
that event, the Company and the Selling Shareholder shall pay such
additional amounts as may be necessary in order that the net amounts
received after such withholding or deduction shall equal the amounts that
would have been received if no withholding or deduction had been made.
(xii) Restriction on Sale of Securities. For the period specified
below (the "LOCK-UP PERIOD"), the Company will not, directly or
indirectly, take any of the following actions with respect to the Offered
Securities, the Ordinary Shares underlying the Offered Securities, or any
securities convertible into or exchangeable or exercisable for any of its
securities or Ordinary Shares ("LOCK-UP SECURITIES"): (i) offer, sell,
issue, contract to sell, pledge or otherwise dispose of Lock-Up
Securities, (ii) offer, sell, issue, contract to sell, contract to
purchase or grant any option, right or warrant to purchase Lock-Up
Securities, (iii) enter into any swap, hedge or any other agreement that
transfers, in whole or in part, the economic consequences of ownership of
Lock-Up Securities, (iv) establish or increase a put equivalent position
or liquidate or decrease a call equivalent position in Lock-Up Securities
within the meaning of Section 16 of the Exchange Act or (v) file with the
Commission a registration statement under the Act relating to Lock-Up
Securities, or publicly disclose the intention to take any such action,
without the prior written consent of the Representative, and to cause each
officer, director and shareholder of the Company set forth on Schedule G
hereto to furnish to the Representative, prior to the First Closing Date,
a letter or letters, substantially in the form of Schedule F hereto (the
"LOCK-UP AGREEMENTS"). The initial Lock-Up Period will commence on the
date hereof and continue for 180 days after the date of the commencement
of the public offering of the Offered Securities or such earlier date that
the Representative consents to in writing; provided, however, that if (1)
during the last 17 days of the initial Lock-Up Period, the Company
releases earnings results or material news or a material event relating to
the Company occurs or (2) prior to the expiration of the initial Lock-Up
Period, the Company announces that it will release earnings results during
the 16-day period beginning on the last day of the initial Lock-Up Period,
then in each case the Lock-Up Period will be extended until the expiration
of the 18-day period beginning on the date of release of the earnings
results or the occurrence of the materials news or material event, as
applicable, unless the Representative waives, in writing, such extension.
The Company will provide the Representative with notice of any
announcement described in clause (2) of the preceding sentence that gives
rise to an extension of the Lock-Up Period.
(xiii) Transfer Restrictions. The Company shall at all times
maintain transfer restrictions (including the inclusion of legends in
share certificates, as may be required) with respect to the Company's
Ordinary Shares which are subject to transfer restrictions pursuant to
25
this Agreement and the Lock-Up Agreements and shall ensure compliance with
such restrictions on transfer of restricted Ordinary Shares. The Company
shall retain all share certificates which are by their terms subject to
transfer restrictions until such time as such transfer restrictions are no
longer applicable to such securities.
(xiv) Transfer Restrictions Related to the Directed Shares. In
connection with the Directed Share Program, the Company will ensure that
the Directed Shares will be restricted to the extent required by the FINRA
or the FINRA rules from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of the
effectiveness of the Registration Statement. The Designated Underwriter
will notify the Company as to which Participants will need to be so
restricted. The Company will direct the transfer agent to place stop
transfer restrictions upon such securities for such period of time.
(xv) Payment of Expenses Related to Directed Share Program. The
Company will pay all fees and disbursements of counsel (including non-U.S.
counsel) incurred by the Underwriters in connection with the Directed
Share Program and stamp duties, similar taxes or duties or other taxes, if
any, incurred by the Underwriters in connection with the Directed Share
Program.
(xvi) Compliance with Foreign Laws. The Company will comply with all
applicable securities and other applicable laws, rules and regulations in
each foreign jurisdiction in which the Directed Shares are offered in
connection with the Directed Share Program.
(xvii) Listing of Securities. The Company will use its best efforts
to have the Offered Securities accepted for listing on The New York Stock
Exchange and maintain the listing of the Offered Securities on The New
York Stock Exchange.
(xviii) Filing of Reports. The Company, during the period when a
prospectus (or, in lieu thereof, the notice referred to in Rule 173(a)
under the Securities Act) is required to be delivered under the Securities
Act in connection with the offer or sale of the Offered Securities, will
file all reports and other documents required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act and the Rules and Regulations within the time periods
required thereby.
(xix) Performance of Obligations. The Company will use its best
efforts to do and perform all things required to be done or performed
under this Agreement by the Company prior to each Closing Date and to
satisfy all conditions precedent to the delivery of the Firm Securities
and the Optional Securities.
(xx) SAFE Compliance. The Company shall comply with the SAFE Rules
and Regulations, and shall use best efforts to cause its shareholders and
option holders 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, requesting each shareholder and option
holder, 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.
(xxi) D&O Insurance. Prior to the First Closing Date, the Company
will purchase
26
insurance covering its directors and officers for liabilities or losses
arising in connection with this offering, including, without limitation,
liabilities or losses arising under the Act, the Exchange Act and the
Rules and Regulations.
(xxii) Local Security Laws. The Company shall arrange for the
qualification of the Offered Securities for sale under the foreign or
state securities or Blue Sky laws of such jurisdictions as the
Representative designates and will continue such qualifications in effect
so long as required for the distribution.
(xxiii) Deposit Agreement. The Company will comply with the terms of
the Deposit Agreement so that the ADR evidencing the ADSs will be executed
by the Depositary and delivered to each Underwriter's participant account
in DTC, pursuant to this Agreement at the applicable Closing Date.
(xxiv) Cayman Islands Approvals. The Company agrees (A) not to
attempt to avoid any judgment obtained by it or denied to it in a court of
competent jurisdiction outside the Cayman Islands; (B) following the
consummation of the offering of the Offered Securities, it will use its
best efforts to obtain and maintain all approvals required in the Cayman
Islands to pay and remit outside the Cayman Islands all dividends declared
by the Company and payable on the Ordinary Shares; and (C) it will use its
best efforts to obtain and maintain all approvals required in the Cayman
Islands for the Company to acquire sufficient foreign exchange for the
payment of dividends and all other relevant purposes.
(xxv) ▇▇▇▇▇▇▇▇-▇▇▇▇▇. The Company will use its best efforts to
comply with ▇▇▇▇▇▇▇▇-▇▇▇▇▇, and use its best efforts to cause the
Company's directors and officers, in their capacities as such, to comply
with ▇▇▇▇▇▇▇▇-▇▇▇▇▇.
(xxvi) OFAC. The Company will not directly or indirectly use the
proceeds of the Offered Securities hereunder, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture
partner or other person or entity, for the purpose of financing the
activities of any person currently subject to any U.S. sanctions
administered by OFAC.
(b) The Selling Shareholder agrees with the several Underwriters that:
(i) Such Selling Shareholder, severally and not jointly, will pay
all expenses incident to the performance of their respective obligations
under, and the consummation of the transactions contemplated by this
Agreement and the Custody Agreement, including (A) any stamp duties,
capital duties and stock transfer taxes, if any, payable upon the sale of
the Offered Securities by such Selling Shareholder to the Underwriters,
(B) the fees and disbursements of their respective local counsel and
accountants, except for the fees and expenses, if any, incurred by the
Company's counsel on behalf of the Selling Shareholder which will be borne
by the Company and (C) to the extent applicable, any fees and expenses of
the authorized agent for service of process in the State of New York,
County of New York in any action arising out of or relating to this
Agreement.
(ii) Such Selling Shareholder will indemnify and hold harmless the
Underwriters against any documentary, stamp or similar issue tax,
including any interest and penalties, on the creation, issue and sale of
the Offered Securities by such Selling Shareholder and on the
27
execution and delivery of this Agreement and the Custody Agreement. All
payments to be made by such Selling Shareholder hereunder shall be made
without withholding or deduction for or on account of any present or
future taxes, duties or governmental charges whatsoever unless such
Selling Shareholder or the Company is compelled by law to deduct or
withhold such taxes, duties or charges. In that event, such Selling
Shareholder shall pay such additional amounts as may be necessary in order
that the net amounts received after such withholding or deduction shall
equal the amounts that would have been received if no withholding or
deduction had been made.
(iii) Such Selling Shareholder agrees during the relevant Lock-Up
Period not to (i) offer, sell, issue, contract to sell, pledge or
otherwise dispose of Lock-Up Securities, (ii) offer, sell, issue, contract
to sell, contract to purchase or grant any option, right or warrant to
purchase Lock-Up Securities, (iii) enter into any swap, hedge or any other
agreement that transfers, in whole or in part, the economic consequences
of ownership of Lock-Up Securities, (iv) establish or increase a put
equivalent position or liquidate or decrease a call equivalent position in
Lock-Up Securities within the meaning of Section 16 of the Exchange Act or
(v) demand the filing with the Commission of a registration statement
under the Act relating to Lock-Up Securities, or publicly disclose the
intention to take any such action, without the prior written consent of
the Representative.
The initial Lock-Up Period for the Selling Shareholder will commence
on the date hereof and will continue and include the date 180 days after
the date hereof or such earlier date that the Representative consents to
in writing; provided, however, that if (1) during the last 17 days of the
initial Lock-Up Period, the Company releases earnings results or material
news or a material event relating to the Company occurs or (2) prior to
the expiration of the initial Lock-up Period, the Company announces that
it will release earnings results during the 16-day period beginning on the
last day of the initial Lock-Up Period, then in each case the Lock-Up
Period will be extended until the expiration of the 18-day period
beginning on the date of release of the earnings results or the occurrence
of the material news or material event, as applicable, unless the
Representative waives, in writing, such extension.
(iv) Sales of Company Securities. Prior to engaging in any
transaction or taking any other action that is subject to the terms of
Section 5(b)(iii) during the period from the date of this Agreement to and
including the 34th day following the expiration of the relevant Lock-Up
Period, it will give notice thereof to the Company and will not consummate
such transaction or take any such action unless it has received written
confirmation from the Company that the relevant Lock-Up Period (as such
may have been extended pursuant to Section 5(l)) has expired.
(v) W-9 / W-8 Form. The Selling Shareholder agrees to procure
delivery to the Representative on or prior to the First Closing Date a
properly completed and executed United States Treasury Department Form W-9
or applicable Form W-8 (or other applicable form or statement specified by
Treasury Department regulations in lieu thereof).
(vi) Interest of Underwriters. The Offered Securities to be sold by
the Selling Shareholder hereunder is subject to the interest of the
Underwriters and the obligations of the Selling Shareholder hereunder
shall not be terminated by any act of the Selling Shareholder, by
operation of law, by the death or incapacity of any individual Selling
Shareholder or, in the case of a trust, by the death or incapacity of any
executor or trustee or the termination of such trust, or the occurrence of
any other event.
28
(vii) Material Event. The Selling Shareholder agrees to notify
promptly the Company and the Representative if, at any time prior to the
date on which the distribution of the Offered Securities as contemplated
herein and in the prospectus or Registration Statement has been completed,
as determined by the Representative, such Selling Shareholder has
knowledge of the occurrence of any event relating to such Selling
Shareholder as a result of which the prospectus or the Registration
Statement, in each case as then amended or supplemented, would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein (except in the case of the
Registration Statement), in the light of the circumstances under which
they were made not misleading.
(viii) Further Agreement. The Selling Shareholder agrees to
cooperate to the extent necessary to cause the Registration Statement or
any post-effective amendment thereto to become effective at the earliest
practical time and to do and perform all things to be done and performed
under this Agreement prior to any Closing Date and to satisfy all
conditions precedent of such Selling Shareholder to the delivery of the
Offered Securities and underlying Ordinary Shares to be sold by such
Selling Shareholder pursuant to this Agreement.
6. Free Writing Prospectuses. The Company and the Selling Shareholder
represent and agree that, unless they obtain the prior consent of the
Representative, and each Underwriter represents and agrees that, unless it
obtains the prior consent of the Company and the Representative, it has not made
and will not make any offer relating to the Offered Securities that would
constitute an Issuer Free Writing Prospectus, or that would otherwise constitute
a "free writing prospectus", as defined in Rule 405, required to be filed with
the Commission. Any such free writing prospectus consented to by the Company and
the Representative is hereinafter referred to as a "PERMITTED FREE WRITING
PROSPECTUS." The Company represents that it has treated and agrees that it will
treat each Permitted Free Writing Prospectus as an "issuer free writing
prospectus", as defined in Rule 433, and has complied and will comply with the
requirements of Rules 164 and 433 applicable to any Permitted Free Writing
Prospectus, including timely Commission filing where required, legending and
record keeping. The Company represents that it has satisfied and agrees that it
will satisfy the conditions in Rule 433 to avoid a requirement to file with the
Commission any electronic road show.
7. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties of the Company and the Selling Shareholder herein (as though made on
such Closing Date), to the accuracy of the statements of Company officers made
pursuant to the provisions hereof, to the performance by the Company and the
Selling Shareholder of their obligations hereunder and to the following
additional conditions precedent:
(a) Accountants' Comfort Letter. The Representative shall have received
letters, dated, respectively, the date hereof and each Closing Date, of Ernst &
Young Hua Ming confirming that they are a registered public accounting firm and
independent public accountants within the meaning of the Securities Laws and
substantially in the form of Schedule E hereto (except that, in any letter dated
a Closing Date, the specified date referred to in Schedule E hereto shall be a
date no more than three days prior to such Closing Date).
(b) Effectiveness of Registration Statement. If the Effective Time of the
Additional Registration Statement (if any) is not prior to the execution and
delivery of this Agreement, such Effective Time shall have occurred not later
than 10:00 P.M., New York time, on the date of this Agreement or, if earlier,
the time the Final Prospectus is finalized and distributed to any Underwriter,
or
29
shall have occurred at such later time as shall have been consented to by the
Representative. The Final Prospectus shall have been filed with the Commission
in accordance with the Rules and Regulations and Section 5(a) hereof. Prior to
such Closing Date, no stop order suspending the effectiveness of a Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or, to the knowledge of the Selling Shareholder, the Company or
the Representative, shall be contemplated by the Commission.
(c) No Material Adverse Change. Subsequent to the execution and delivery
of this Agreement, there shall not have occurred (i) any change, or any
development or event involving a prospective change, in the condition (financial
or otherwise), results of operations, business, properties or prospects of the
Company and its Subsidiaries taken as a whole which, in the judgment of the
Representative, is material and adverse and makes it impractical or inadvisable
to market the Offered Securities; (ii) any change in U.S., the Cayman Islands,
Hong Kong, PRC or international financial, political or economic conditions or
currency exchange rates or exchange controls the effect of which is such as to
make it, in the judgment of the Representative, impractical to market or to
enforce contracts for the sale of the Offered Securities, whether in the primary
market or in respect of dealings in the secondary market; (iv) any suspension or
material limitation of trading in securities generally on the New York Stock
Exchange, the Nasdaq Stock Markets, the Hong Kong Stock Exchange, or any setting
of minimum or maximum prices for trading on such exchange; (v) or any suspension
of trading of any securities of the Company on any exchange or in the
over-the-counter market; (vi) any banking moratorium declared by any U.S.
federal, New York, the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ or
PRC authorities; (vii) any major disruption of settlements of securities,
payment or clearance services in the United States, the Cayman Islands, the
British Virgin Islands, Hong Kong, the PRC or any other country where such
securities are listed or (viii) any attack on, outbreak or escalation of
hostilities or act of terrorism involving the United States, the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ or the PRC or, any declaration of war by
Congress or any other national or international calamity or emergency if, in the
judgment of the Representative, the effect of any such attack, outbreak,
escalation, act, declaration, calamity or emergency is such as to make it
impractical or inadvisable market the Offered Securities or to enforce contracts
for the sale of the Offered Securities.
(d) Opinion of U.S. Counsel for the Company. The Representative shall have
received an opinion, dated such Closing Date, of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, U.S. counsel
for the Company, addressed to the Underwriters substantially in the form
attached hereto as Annex A.
(e) Opinion of Cayman Islands Counsel for the Company. The Representative
shall have received an opinion, dated such Closing Date, of ▇▇▇▇▇▇ and Calder,
Cayman Islands counsel for the Company, addressed to the Underwriters
substantially in the form attached hereto as Annex B.
(f) Opinion of British Virgin Islands Counsel for the Company. The
Representative shall have received an opinion, dated such Closing Date, of
▇▇▇▇▇▇ and ▇▇▇▇▇▇, British Virgin Islands counsel for the Company, addressed to
the Underwriters substantially in the form attached hereto as Annex C.
(g) Opinion of Hong Kong Counsel for the Company. The Representative shall
have received an opinion, dated such Closing Date, of [-], Hong Kong counsel for
the Company, addressed to the Underwriters substantially in the form attached
hereto as Annex D
(h) Opinion of PRC Counsel for the Company. The Representative shall have
received an opinion, dated such Closing Date, of Commerce & Finance Law Offices,
PRC counsel for the Company, addressed to the Underwriters substantially in the
form attached hereto as Annex E.
30
(i) Opinions of U.S. and Local Counsels for the Selling Shareholder. The
Representative shall have received (A) an opinion, dated such Closing Date, of
local counsel for the Selling Shareholder, and (B) an opinion, dated such
Closing Date, of U.S. Counsel for the Selling Shareholder, addressed to the
Underwriters substantially in the forms attached hereto as Annex F-1 and Annex
F-2 respectively.
(j) Opinion of Depositary's Counsel. The Representative shall have
received an opinion, dated such Closing Date, of ▇▇▇▇▇▇▇▇ Chance US LLP, counsel
for the Depositary, addressed to the Underwriters substantially in the form
attached hereto as Annex G.
(k) Opinion of U.S. Counsel for Underwriters. The Representative shall
have received from Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, counsel for the
Underwriters, such opinion or opinions, dated such Closing Date, with respect to
such matters as the Representative may require, and the Selling Shareholder and
the Company shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters. In rendering such
opinion, Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ may rely as to all matters
governed by Cayman Islands law upon the opinion of ▇▇▇▇▇▇ and Calder, referred
to above and all matters governed by PRC law upon the opinion of Commerce &
Finance Law Offices.
(l) Opinion of PRC Counsel for Underwriters. The Representative shall have
received from Jingtian & Gongcheng Attorneys at Law, PRC counsel for the
Underwriters, such opinion or opinions, dated such Closing Date, with respect to
such matters as the Representative may require, and the Company and the Selling
Shareholder shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters.
(m) Officer's Certificate. The Representative shall have received a
certificate, dated such Closing Date, of an executive officer of the Company and
a principal financial or accounting officer of the Company in which such
officers shall state that (A) the representations and warranties of the Company
in this Agreement are true and correct; (B) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to such Closing Date; (C) no stop order suspending the
effectiveness of any Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the best of their knowledge and
after reasonable investigation, are contemplated by the Commission; (D) the
Additional Registration Statement (if any) satisfying the requirements of
subparagraphs (1) and (3) of Rule 462(b) was timely filed pursuant to Rule
462(b), including payment of the applicable filing fee in accordance with Rule
111(a) or (b) of Regulation S-T of the Commission; and (E) subsequent to the
date of the most recent financial statements in the General Disclosure Package,
there has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition (financial or
otherwise), results of operations, business, properties or prospects of the
Company and its Subsidiaries taken as a whole except as set forth in the General
Disclosure Package or as described in such certificate.
(n) Selling Shareholder's Certificate. The Representative shall have
received a certificate, dated such Closing Date, of an authorized representative
of the Selling Shareholder in which such authorized representative, to the best
of its knowledge after reasonable investigation, shall state that (A) the
representations and warranties of such Selling Shareholder in this Agreement are
true and correct; and (B) the Selling Shareholder has complied with all
agreements and satisfied all conditions on their part to be performed or
satisfied hereunder at or prior to such Closing Date.
(o) Lock-Up Agreements. On or prior to the date hereof, the Representative
shall have received
31
lock-up agreements from each of the executive officers, directors and
shareholders of the Company who are not the Selling Shareholder.
(p) Depositary's Certificate. The Depositary shall have furnished or
caused to be furnished to the Underwriters a certificate satisfactory to the
Representative of one of its authorized officers with respect to the deposit
with it of the Ordinary Shares represented by the Offered Securities against
issuance of the ADRs evidencing the Offered Securities, the execution, issuance,
countersignature and delivery of the ADRs evidencing the Offered Securities
pursuant to the Deposit Agreement and such other matters related thereto as the
Representative may reasonably request.
(q) Execution of Deposit Agreement. The Company and the Depositary shall
have executed and delivered the Deposit Agreement; the Deposit Agreement shall
be in full force and effect; and the Company and the Depositary shall have taken
all action necessary to permit the deposit of the Ordinary Shares and the
issuance of the Offered Securities in accordance with the Deposit Agreement.
(r) Listing Approval. The ADSs included in the Offered Securities shall
have been approved to be listed on The New York Stock Exchange, subject to
notice of issuance.
The Selling Shareholder and the Company will furnish the Representative with
such conformed copies of such opinions, certificates, letters and documents as
the Representative reasonably requests. The Representative may in its sole
discretion waive on behalf of the Underwriters compliance with any conditions to
the obligations of the Underwriters hereunder, whether in respect of an Optional
Closing Date or otherwise.
8. Indemnification and Contribution. (a) Indemnification of Underwriters
by Company. The Company will indemnify and hold harmless each Underwriter, its
partners, members, directors, officers, employees, agents, affiliates and each
person, if any who controls such Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act (each an "INDEMNIFIED PARTY"), against
any and all losses, claims, damages or liabilities, joint or several, to which
such Indemnified Party may become subject, under the Act, the Exchange Act,
other Federal or state statutory law or regulation or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any part of any Registration Statement at any time,
any Statutory Prospectus as of any time, the Final Prospectus or any Issuer Free
Writing Prospectus, or arise out of or are based upon the omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Indemnified Party
for any legal or other expenses reasonably incurred by such Indemnified Party in
connection with investigating or defending against any loss, claim, damage,
liability, action, litigation, investigation or proceeding whatsoever (whether
or not such Indemnified Party is a party thereto), whether threatened or
commenced, and in connection with the enforcement of this provision with respect
to any of the above as such expenses are incurred; provided, however, that the
Company will 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 in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company by any Underwriter through the Representative specifically for
use therein, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in
subsection (c) below.
The Company agrees to indemnify and hold harmless the Designated
Underwriter and its affiliates and each person, if any, who controls the
Designated Underwriter within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act (the "DESIGNATED ENTITIES"), from and against
32
any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) (i) arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in any material prepared by or with the consent of the Company for
distribution to Participants in connection with the Directed Share Program or
arising out of or based upon any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading; (ii) arising out of or based upon the failure of any Participant to
pay for and accept delivery of Directed Shares that the Participant agreed to
purchase; or (iii) arising out of, related to, or in connection with the
Directed Share Program, other than losses, claims, damages or liabilities (or
expenses relating thereto) that are finally judicially determined to have
resulted from the willful misconduct or gross negligence of the Designated
Entities.
(b) Indemnification of Underwriters by Selling Shareholder. The Selling
Shareholder will indemnify and hold harmless each Underwriter and its
Indemnified Party, against any and all losses, claims, damages or liabilities,
joint or several, to which such Indemnified Party may become subject, under the
Act, the Exchange Act, other Federal or state statutory law or regulation or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any part of any Registration
Statement at any time, any Statutory Prospectus as of any time, the Final
Prospectus or any Issuer Free Writing Prospectus, or arise out of or are based
upon the omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Indemnified Party for any legal or other expenses reasonably
incurred by such Indemnified Party in connection with investigating or defending
against any loss, claim, damage, liability, action, litigation, investigation or
proceeding whatsoever (whether or not such Indemnified Party is a party
thereto), whether threatened or commenced, and in connection with the
enforcement of this provision with respect to the above as such expenses are
incurred; provided, however, that the Selling Shareholder will 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
in or omission or alleged omission from any of such documents in reliance upon
and in conformity with written information furnished to the Company by any
Underwriter through the Representative specifically for use therein, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in subsection (c)
below; provided, however, that the liabilities of the Selling Shareholder
pursuant to this subsection shall not exceed the net proceeds received by the
Selling Shareholder from the sale of the Offered Securities by the Selling
Shareholder.
(c) Indemnification of Company and Selling Shareholder. Each Underwriter
will severally and not jointly indemnify and hold harmless the Company, each of
its directors and each of its officers who signs a Registration Statement and
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, and the Selling Shareholder ( the
"UNDERWRITER INDEMNIFIED PARTY") against any losses, claims, damages or
liabilities to which such Underwriter Indemnified Party may become subject,
under the Act, the Exchange Act, or other Federal or state statutory law or
regulation or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
Registration Statement at any time, any Statutory Prospectus at any time, the
Final Prospectus or any Issuer Free Writing Prospectus or arise out of or are
based upon the omission or the alleged omission of 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 reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through the Representative specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by such Underwriter
Indemnified Party in connection with investigating or defending against any such
loss, claim, damage, liability, action, litigation, investigation or proceeding
whatsoever (whether or not such Underwriter Indemnified Party is a party
thereto),
33
whether threatened or commenced, based upon any such untrue statement or
omission, or any such alleged untrue statement or omission as such expenses are
incurred, it being understood and agreed that only the concession and
reallowance figures appearing in the paragraph under the caption "Underwriting"
in the Final Prospectus furnished by the Representative on behalf of each
Underwriter.
(d) Actions against Parties; Notification. Promptly after receipt by an
indemnified party under this Section of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under subsection (a), (b) or (c) above, notify the
indemnifying party of the commencement thereof; but the failure to notify the
indemnifying party shall not relieve it from any liability that it may have
under subsection (a), (b) or (c) above except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or defenses)
by such failure; and provided further that the failure to notify the
indemnifying party shall not relieve it from any liability that it may have to
an indemnified party otherwise than under subsection (a), (b) or (c) above. In
case any such action is brought against any indemnified party and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who 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 will
not be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
Notwithstanding anything contained herein to the contrary, if indemnify may be
sought pursuant to the last paragraph in Section 8(a) hereof in respect of such
action or proceeding, then in addition to such separate firm for the indemnified
parties, the indemnifying party shall be liable for the reasonable fees and
expenses of not more than one separate firm (in addition to any local counsel)
for the Designated Underwriter for the defense of any losses, claims, damages
and liabilities arising out of the Directed Share Program, and all persons, if
any, who control the Designated Underwriter within the meaning of either Section
15 of the Act or Section 20 of the Exchange Act. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement (i) includes
an unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act by
or on behalf of an indemnified party.
(e) Contribution. If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a), (b) or (c)
above (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Shareholder on the one hand and the
Underwriters on the other from the offering of the Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Selling Shareholder 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 as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Shareholder 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 (before
deducting expenses) received by the Company and the Selling Shareholder to the
total underwriting discounts and commissions received by the Underwriters. 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 Selling Shareholder or the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to
34
correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of 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 action or claim which is
the subject of this subsection (e). 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 Offered Securities
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. The
Company, the Selling Shareholder and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 8(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 in this Section 8(e).
9. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities hereunder on either the First
or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, the
Representative may make arrangements satisfactory to the Company and the Selling
Shareholder for the purchase of such Offered Securities by other persons,
including any of the Underwriters, but if no such arrangements are made by such
Closing Date, the non-defaulting Underwriters shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the Offered
Securities that such defaulting Underwriters agreed but failed to purchase on
such Closing Date. If any Underwriter or Underwriters so default and the
aggregate number of shares of Offered Securities with respect to which such
default or defaults occur exceeds 10% of the total number of shares of Offered
Securities that the Underwriters are obligated to purchase on such Closing Date
and arrangements satisfactory to the Representative, the Company and the Selling
Shareholder for the purchase of such Offered Securities by other persons are not
made within 36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter, the Company or the
Selling Shareholder, except as provided in Section 10 (provided that if such
default occurs with respect to Optional Securities after the First Closing Date,
this Agreement will not terminate as to the Firm Securities or any Optional
Securities purchased prior to such termination). As used in this Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.
10. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Selling Shareholder, of the Company or its officers and of the several
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, the Selling
Shareholder, the Company or any of their respective representatives, officers or
directors or any controlling person, and will survive delivery of and payment
for the Offered Securities. If the purchase of the Offered Securities by the
Underwriters is not consummated for any reason other than solely because of the
termination of this Agreement pursuant to Section 9 hereof, the Company and the
Selling Shareholder will, jointly and severally, reimburse the Underwriters for
all out-of-pocket expenses (including fees and disbursements of counsel)
reasonably incurred by them in connection with the offering of the Offered
Securities. In addition, if any Offered Securities have been purchased
hereunder, the representations and warranties in Section 2 and all obligations
under Section 5 shall also remain in effect.
35
11. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
the Representative, c/o Credit Suisse Securities (USA) LLC, Eleven Madison
Avenue, New York, N.Y. 10010-3629, or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it at Agria Corporation., ▇▇▇▇ ▇▇▇,
▇/▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Zhongguancun, Haidian District,
Beijing 100081, People's Republic of China, Attention: ▇▇. ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
or, if sent to the Selling Shareholder or any of them, will be mailed, delivered
or telegraphed and confirmed to [-] at [-].
12. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 7, and no other person
will have any right or obligation hereunder.
13. Representation. The Representative will act for the several
Underwriters in connection with the transactions contemplated by this Agreement,
and any action under this Agreement taken by the Representative will be binding
upon all the Underwriters.
14. Counterparts. This Agreement may be executed 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 Agreement.
15. Absence of Fiduciary Relationship. The Company and the Selling
Shareholder acknowledge and agree that:
(a) No Other Relationship. The Representative has been retained solely to
act as underwriters in connection with the sale of the Offered Securities and
that no fiduciary, advisory or agency relationship between the Company or the
Selling Shareholder, on the one hand, and the Representative, on the other, has
been created in respect of any of the transactions contemplated by this
Agreement or the Final Prospectus, irrespective of whether the Representative
has advised or is advising the Company or the Selling Shareholder on other
matters;
(b) Arms' Length Negotiations. The price of the Offered Securities set
forth in this Agreement was established by Company and the Selling Shareholder
following discussions and arms-length negotiations with the Representative and
the Company and the Selling Shareholder are capable of evaluating and
understanding and understand and accept the terms, risks and conditions of the
transactions contemplated by this Agreement;
(c) Absence of Obligation to Disclose. The Company and the Selling
Shareholder have been advised that the Representative and its affiliates are
engaged in a broad range of transactions which may involve interests that differ
from those of the Company or the Selling Shareholder and that the Representative
has no obligation to disclose such interests and transactions to the Company or
the Selling Shareholder by virtue of any fiduciary, advisory or agency
relationship; and
(d) Waiver. The Company and the Selling Shareholder waive, to the fullest
extent permitted by law, any claims they may have against the Representative for
breach of fiduciary duty or alleged breach of fiduciary duty and agree that the
Representative shall have no liability (whether direct or indirect) to the
Company or the Selling Shareholder in respect of such a fiduciary duty claim or
to any person asserting a fiduciary duty claim on behalf of or in right of the
Company, including Shareholders, employees or creditors of the Company.
36
16. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. The Company irrevocably and unconditionally
waives any objection to the laying of venue of any suit or proceeding arising
out of or relating to this Agreement or the transactions contemplated hereby in
Federal and state courts in the Borough of Manhattan in the City of New York and
irrevocably and unconditionally waives and agrees not to plea or claim in any
such court that any such suit or proceeding in any such court has been brought
in an inconvenient forum. The Company irrevocably appoints Law Debenture, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, as its authorized agent in the
Borough of Manhattan in The City of New York upon which process may be served in
any such suit or proceeding, and agrees that service of process upon such agent,
and written notice of said service to the Company by the person serving the same
to the address provided in Section 10 shall be deemed in every respect effective
service of process upon the Company in any such suit or proceeding. The Company
further agrees to take any and all action as may be necessary to maintain such
designation and appointment of such agent in full force and effect for a period
of seven years from the date of this Agreement.
The obligation of the Company or the Selling Shareholder pursuant to this
Agreement in respect of any sum due to any Underwriter shall, notwithstanding
any judgment in a currency other than United States dollars, not be discharged
until the first business day, following receipt by such Underwriter of any sum
adjudged to be so due in such other currency, on which (and only to the extent
that) such Underwriter may in accordance with normal banking procedures purchase
United States dollars with such other currency; if the United States dollars so
purchased are less than the sum originally due to such Underwriter hereunder,
the Company and such Selling Shareholder agree, as a separate obligation and
notwithstanding any such judgment, to indemnify such Underwriter against such
loss. If the United States dollars so purchased are greater than the sum
originally due to such Underwriter hereunder, such Underwriter agrees to pay to
the Company or such Selling Shareholder an amount equal to the excess of the
dollars so purchased over the sum originally due to such Underwriter hereunder.
37
If the foregoing is in accordance with the Representative's understanding
of our agreement, kindly sign and return to each of the Company and the Selling
Shareholder one of the counterparts hereof, whereupon it will become a binding
agreement among the Company, the Selling Shareholder and the several
Underwriters in accordance with its terms.
Very truly yours,
AGRIA CORPORATION
By
---------------------------------------------
Name:
Title:
SELLING SHAREHOLDER
By
---------------------------------------------
Name:
Attorney-in-fact for and on behalf of the
Selling Shareholder
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of the
date first above written.
CREDIT SUISSE SECURITIES (USA) LLC
By:
-------------------------
Name:
Title:
Acting on behalf of itself and as the
Representative of the several Underwriters.
[SIGNATURE PAGE - UNDERWRITING AGREEMENT]
SCHEDULE A
NUMBER OF
NUMBER OF OPTIONAL
FIRM SECURITIES SECURITIES TO
SELLING SHAREHOLDER TO BE SOLD BE SOLD
------------------- ---------- -------------
Brothers Capital Limited 5,150,000 -
5,150,000 -
---------- ------
Total................... 5,150,000 -
========== ======
SCH-A - 1
SCHEDULE B
NUMBER OF
FIRM SECURITIES
UNDERWRITER TO BE PURCHASED
----------- ---------------
Credit Suisse Securities (USA) LLC.........
HSBC Securities (USA) Inc..................
▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.........................
CIBC World Markets Corp....................
---------------
Total...........
===============
SCH-B - 1
SCHEDULE C
1. GENERAL USE FREE WRITING PROSPECTUSES (INCLUDED IN THE GENERAL DISCLOSURE
PACKAGE)
"General Use Issuer Free Writing Prospectus" includes each of the
following documents:
[1. Final term sheet, dated ___________[, a copy of which is attached
hereto].]
2. [list other documents]
2. OTHER INFORMATION INCLUDED IN THE GENERAL DISCLOSURE PACKAGE
The following information is also included in the General Disclosure
Package:
[1. The initial price to the public of the Offered Securities.
2. [list other information]]
SCH-C - 1
SCHEDULE D
(TO COME)
SCH-D - 1
SCHEDULE E
The Representative shall have received letters, dated, respectively, the
date hereof and the First Closing Date, of Ernst & Young Hua Ming confirming
that they are a registered public accounting firm and independent public
accountants within the meaning of the Securities Laws to the effect that:
(i) in their opinion the audited consolidated financial statements
and schedules examined by them and included or incorporated by reference
in the Registration Statements and the General Disclosure Package comply
as to form in all material respects with the applicable accounting
requirements of the Securities Laws;
(ii) with respect to the period(s) covered by the unaudited
quarterly consolidated financial statements included in the Registration
Statements and the General Disclosure Package, they have performed the
procedures specified by the American Institute of Certified Public
Accountants for a review of interim financial information as described in
▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Financial Information, on the unaudited quarterly
consolidated financial statements (including the noted thereto) of the
Company and its consolidated subsidiaries included in the Registration
Statements and the General Disclosure Package, and have made inquiries of
certain officials of the Company who have responsibility for financial and
accounting matters of the Company and its consolidated subsidiaries as to
whether such unaudited quarterly consolidated financial statements comply
as to form in all material respects with the applicable accounting
requirements of the Securities Act and the related published rules and
regulations; they have read the latest unaudited monthly consolidated
financial statements (including the notes thereto) [and the supplementary
summary unaudited financial information] of the Company and its
consolidated subsidiaries made available by the Company and the minutes of
the meetings of the Shareholders, Board of Directors and committees of the
Board of Directors of the Company; and have made inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters of the Company and its consolidated subsidiaries as to
whether the unaudited monthly financial statements are stated on a basis
substantially consistent with that of the audited consolidated financial
statements included in the Registration Statement and General Disclosure
Package; and on the basis thereof, nothing came to their attention which
caused them to believe that:
(A) the unaudited financial statements included in the
Registration Statements or the General Disclosure Package do not
comply as to form in all material respects with the applicable
accounting requirements of the Securities Laws, or that any material
modifications should be made to the unaudited quarterly consolidated
financial statements for them to be in conformity with generally
accepted accounting principles;
(B) with respect to the period subsequent to the date of the
most recent unaudited quarterly consolidated financial statements
included in the General Disclosure Package, at a specified date at
the end of the most recent month, there were any increases in the
short-term debt or long-term debt of the Company and its
consolidated subsidiaries, or any change in Shareholders' equity or
the consolidated capital stock of the Company and its consolidated
subsidiaries or any decreases in the net current assets or net
assets of the Company and its consolidated subsidiaries, as compared
with the amounts shown on the latest balance sheet included in the
General Disclosure
SCH-E - 1
Package; or for the period from the day after the date of the most
recent unaudited quarterly consolidated financial statements for
such entities included in the General Disclosure Package to such
specified date, there were any decreases, as compared with the
corresponding period in the preceding year, in consolidated net
sales or in the total or per share amounts of consolidated [income
before extraordinary items or] net income of the Company and its
consolidated subsidiaries, except for such changes, increases or
decreases set forth in such letter which the General Disclosure
Package discloses have occurred or may occur;
(iii) With respect to any period as to which officials of the
Company have advised that no consolidated financial statements as of any
date or for any period subsequent to the specified date referred to in
(ii)(B) above are available, they have made inquiries of certain officials
of the Company who have responsibility for the financial and accounting
matters of the Company and its consolidated subsidiaries as to whether, at
a specified date not more than three business days prior to the date of
such letter, there were any increases in the short-term debt or long-term
debt of the Company and its consolidated subsidiaries, or any change in
Shareholders' equity or the consolidated capital stock of the Company and
its consolidated subsidiaries or any decreases in the net current assets
or net assets of the Company and its consolidated subsidiaries, as
compared with the amounts shown on the most recent balance sheet for such
entities included in the General Disclosure Package; or for the period
from the day after the date of the most recent unaudited quarterly
financial statements for such entities included in the General Disclosure
Package to such specified date, there were any decreases, as compared with
the corresponding period in the preceding year, in net sales or in the
total or per share amounts of consolidated [income before extraordinary
items or] net income of the Company and its consolidated subsidiaries and,
on the basis of such inquiries and the review of the minutes described in
paragraph (ii) above, nothing came to their attention which caused them to
believe that there was any such change, increase, or decrease, except for
such changes, increases or decreases set forth in such letter which the
General Disclosure Package discloses have occurred or may occur; and
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial and statistical
information contained in the Registration Statements, each Issuer Free
Writing Prospectus (other than any Issuer Free Writing Prospectus that is
an "electronic road show", as defined in Rule 433(h)) and the General
Disclosure Package (in each case to the extent that such dollar amounts,
percentages and other financial and statistical information are derived
from the general accounting records of the Company and its subsidiaries or
are derived directly from such records by analysis or computation) with
the results obtained from inquiries, a reading of such general accounting
records and other procedures specified in such letter and have found such
dollar amounts, percentages and other financial and statistical
information to be in agreement with such results.
For purposes of this Schedule, if the Effective Time of the Additional
Registration Statement is subsequent to the execution and delivery of this
Agreement, "REGISTRATION STATEMENTS" shall mean the Initial Registration
Statement and the Additional Registration Statement as proposed to be filed
shortly prior to its Effective Time. All financial statements [and schedules]
included in material incorporated by reference into the Registration Statements
or the General Disclosure Package shall be deemed included in the Registration
Statements or the General Disclosure Package for purposes of this Schedule.
SCH-E - 2
SCHEDULE F
FORM OF LOCK-UP AGREEMENT FOR DIRECTORS, OFFICERS AND
SHAREHOLDERS
[DATE], 2007
Credit Suisse Securities (USA) LLC
Eleven Madison Avenue
New York, N.Y. 10010-3629
USA
As Representative of the several Underwriters,
Dear Sirs:
As an inducement to the Underwriters to execute the Underwriting
Agreement, pursuant to which an offering (the "OFFERING") will be made that is
intended to result in the establishment of a public market for the American
Depositary Shares (the "SECURITIES") of Agria Corporation, a company
incorporated under the laws of the Cayman Islands (the "COMPANY"), the
undersigned hereby agrees that during the period specified in the following
paragraph (the "LOCK-UP PERIOD"), the undersigned will not offer, sell, contract
to sell, pledge or otherwise dispose of, directly or indirectly, any shares of
Securities or any ordinary shares of the Company or securities convertible into
or exchangeable or exercisable for any shares of Securities, enter into a
transaction which would have the same effect, or enter into any swap, hedge or
other arrangement that transfers, in whole or in part, any of the economic
consequences of ownership of the Securities or the ordinary shares of the
Company, whether any such aforementioned transaction is to be settled by
delivery of the Securities or such other securities, in cash or otherwise, or
publicly disclose the intention to make any such offer, sale, pledge or
disposition, or to enter into any such transaction, swap, hedge or other
arrangement, without, in each case, the prior written consent of Credit Suisse
Securities (USA) LLC (the "REPRESENTATIVE"). In addition, the undersigned agrees
that, without the prior written consent of the Representative, it will not,
during the Lock-Up Period, make any demand for or exercise any right with
respect to, the registration of any Securities, any ordinary shares of the
Company, or any security convertible into or exercisable or exchangeable for the
Securities or ordinary shares of the Company.
The initial Lock-Up Period will commence on the date hereof and continue
and include the date 180 days after the Offering date set forth on the final
prospectus used to sell the Securities (the "PUBLIC OFFERING DATE") pursuant to
the Underwriting Agreement; provided, however, that if (1) during the last 17
days of the initial Lock-Up Period, the Company releases earnings results or
material news or a material event relating to the Company occurs or (2) prior to
the expiration of the initial Lock-Up Period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of
the initial Lock-Up Period, then in each case the Lock-Up Period will be
extended until the expiration of the 18-day period beginning on the date of
release of the earnings results or the occurrence of the material news or
material event, as applicable, unless the Representative waives, in writing,
such extension.
The undersigned hereby acknowledges and agrees that written notice of any
extension of the Lock-Up Period pursuant to the previous paragraph will be
delivered by the Representative to the Company (in accordance with the
Underwriting Agreement) and that any such notice properly delivered will be
deemed to have given to, and received by, the undersigned. The undersigned
further agrees that,
SCH-F - 1
prior to engaging in any transaction or taking any other
action that is subject to the terms of this Lock-Up Agreement during the period
from the date of this Lock-Up Agreement to and including the 34th day following
the expiration of the initial Lock-Up Period, it will give notice thereof to the
Company and will not consummate such transaction or take any such action unless
it has received written confirmation from the Company that the Lock-Up Period
(as may have been extended pursuant to the previous paragraph) has expired.
Any Securities received upon exercise of options granted to the
undersigned will also be subject to this Agreement. Any Securities acquired by
the undersigned in the open market will not be subject to this Agreement. Any
Securities sold in the Offering will not be subject to this Agreement. A
transfer of Securities to a family member, a trust for the benefits of the
undersigned or the undersigned's family members, or a personal holding company
owned by the undersigned or the undersigned's family members may be made,
provided the transferee agrees to be bound in writing by the terms of this
Agreement prior to such transfer and no filing by any party (donor, donee,
transferor or transferee) under the Securities Exchange Act of 1934 shall be
required or shall be voluntarily made in connection with such transfer (other
than a filing on a Form 5 made after the expiration of the Lock-Up Period).
In furtherance of the foregoing, the Company and its transfer agent and
registrar are hereby authorized to decline to make any transfer of shares of
Securities if such transfer would constitute a violation or breach of this
Agreement.
This Agreement shall be binding on the undersigned and the successors,
heirs, personal representatives and assigns of the undersigned. This Agreement
shall lapse and become null and void if the Public Offering Date shall not have
occurred on or before March 31, 2008. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[Signature page follows]
SCH-F - 2
[If natural person]
Very truly yours,
By:
-----------------------
Name:
[If entity]
Very truly yours,
[ENTITY NAME]
By:
-----------------------
Name:
Title:
SCH-F - 3
SCHEDULE G
LIST OF OFFICERS, DIRECTORS AND SELLING SHAREHOLDERS
(TO COME)
SCH-G - 1
ANNEX A
FORM OF OPINION OF ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
US COUNSEL FOR THE COMPANY
(To Come)
Annex A - 1
ANNEX B
FORM OF OPINION OF ▇▇▇▇▇▇ AND CALDER
CAYMAN ISLANDS COUNSEL FOR THE COMPANY
(To Come)
Annex B - 1
ANNEX C
FORM OF OPINION OF ▇▇▇▇▇▇ AND ▇▇▇▇▇▇
BRITISH VIRGIN ISLANDS COUNSEL FOR THE COMPANY
(To Come)
Annex C - 1
ANNEX D
FORM OF OPINION OF [-]
HONG KONG COUNSEL FOR THE COMPANY
(To Come)
Annex D - 1
ANNEX E
FORM OPINION OF COMMERCE & FINANCE LAW OFFICES
PRC COUNSEL FOR THE COMPANY
(To Come)
Annex E - 1
ANNEX F-1
FORM OPINION OF ▇▇▇▇▇▇ AND CALDER
LOCAL COUNSEL FOR THE SELLING SHAREHOLDER
(TO COME)
Annex F - 1- 1
ANNEX F-2
FORM OPINION OF LATHAM
U.S. COUNSEL FOR THE SELLING SHAREHOLDER
(TO COME)
Annex F - 2 - 1
ANNEX G
FORM OPINION OF DEPOSITARY'S COUNSEL
(TO COME)
Annex G - 1