Exhibit 1.1
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CHINA TECHFAITH WIRELESS
COMMUNICATION TECHNOLOGY LIMITED
(an exempted company limited by shares
under the laws of the Cayman Islands)
o American Depositary Shares
each representing 15 Ordinary Shares
UNDERWRITING AGREEMENT
Dated: May o, 2005
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TABLE OF CONTENTS
PAGE
SECTION 1. Representations and Warranties..............................................................3
(a) Representations and Warranties by the Company...............................................3
(b) Representations and Warranties by the Selling Shareholders.................................15
(c) Officer's Certificates.....................................................................18
SECTION 2. Sale and Delivery to the Underwriters; Closing.............................................18
(a) Initial Securities.........................................................................18
(b) Option Securities..........................................................................18
(c) Denominations; Registration; Delivery of ADRs..............................................19
(d) Time and Date of Deliveries and Payments...................................................19
SECTION 3. Covenants of the Company...................................................................19
(a) Compliance with Securities Regulations and Commission Requests.............................19
(b) Filing of Amendments.......................................................................20
(c) Delivery of Registration Statements........................................................20
(d) Delivery of Prospectus.....................................................................20
(e) Continued Compliance with Securities Laws..................................................20
(f) Blue Sky Qualifications....................................................................21
(g) Rule 158...................................................................................21
(h) Use of Proceeds............................................................................21
(i) Compliance with Rule 463...................................................................21
(j) Listing....................................................................................21
(k) Restriction on Sale of Securities..........................................................21
(l) Other Documents............................................................................22
(m) Reporting Requirements.....................................................................22
(n) Compliance with NASD Rules.................................................................22
(o) Submission of Documents....................................................................22
(p) Investment Company Act.....................................................................23
(q) Stabilization and Manipulation.............................................................23
(r) Deposit of Ordinary Shares.................................................................23
(s) Annual Reports.............................................................................23
(t) Liabilities and Agreements Prior to the Closing Time.......................................23
(u) Cayman Islands Matters.....................................................................23
(v) Deposit Agreement..........................................................................23
SECTION 4. Payment of Expenses........................................................................24
(a) Expenses...................................................................................24
(b) Expenses of the Selling Shareholders.......................................................24
(c) Termination of Agreement...................................................................24
SECTION 5. Conditions of the Underwriters' Obligations................................................24
(a) Effectiveness of Registration Statement....................................................25
(b) Opinion of Cayman Islands Counsel for Company..............................................25
(c) Opinion of Special U.S. Counsel for Company................................................25
(d) Opinion of Special PRC Counsel for Company.................................................25
(e) Opinion of BVI Counsel for Company.........................................................25
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(f) Opinions of Counsel for certain Selling Shareholders.......................................25
(g) Opinion of U.S. Counsel for Underwriters...................................................26
(h) Opinion of Special PRC Counsel for Underwriters............................................26
(i) Opinion of Counsel for Depositary..........................................................26
(j) Officers' Certificate......................................................................26
(k) Certificate of Selling Shareholders........................................................26
(l) Accountant's Comfort Letter................................................................27
(m) Bring-down Comfort Letter..................................................................27
(n) Approval of Listing........................................................................27
(o) No Objection by NASD.......................................................................27
(p) Lock-up Agreement..........................................................................27
(q) Conditions to Purchase of Option Securities................................................27
(r) Additional Documents.......................................................................29
(s) Termination of Agreement...................................................................29
SECTION 6. Indemnification............................................................................29
(a) Indemnification of the Underwriters........................................................29
(b) Indemnification of the Company, Directors and Officers and Selling Shareholders............31
(c) Actions against Parties; Notification......................................................31
(d) Settlement without Consent if Failure to Reimburse.........................................32
(e) Indemnification for Reserved Securities....................................................32
(f) Other Agreements with Respect to Indemnification...........................................32
SECTION 7. Contribution...............................................................................32
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.............................33
SECTION 9. Termination of Agreement...................................................................34
(a) Termination; General.......................................................................34
(b) Liabilities................................................................................34
SECTION 10. Default by One or More of the Underwriters.................................................34
SECTION 11. Default by one or more of the Selling Shareholders or the Company..........................35
(a) Default by Selling Shareholders............................................................35
(b) Default by Company.........................................................................36
SECTION 12. Waiver of Immunities.......................................................................36
SECTION 13. Consent to Jurisdiction; Appointment of Agent for Service of Process.......................36
(a) Consent to Jurisdiction....................................................................36
(b) Appointment of Agent for Service of Process................................................36
SECTION 14. Judgment Currency..........................................................................37
SECTION 15. Notices....................................................................................38
SECTION 16. Parties....................................................................................38
SECTION 17. Governing Law and Time.....................................................................38
SECTION 18. Effect of Headings.........................................................................38
SECTION 19. Definitions................................................................................38
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SECTION 20. Counterparts...............................................................................38
SCHEDULES
Schedule A List of Underwriters ............................................................Sch A-1
Schedule B List of Company and Selling Shareholders.........................................Sch B-1
Schedule C Offering Price...................................................................Sch C-1
Schedule D List of Persons and Entities Subject to Lock-up..................................Sch D-1
Schedule E List of Selling Shareholders Providing an Opinion of Counsel.....................Sch E-1
Schedule F Notice Addresses of Selling Shareholders.........................................Sch F-1
EXHIBITS
Exhibit A Form of Opinion of Company's Cayman Islands Counsel to be Delivered Pursuant to
Section 5(b).........................................................................A-1
Exhibit B Form of Opinion of Company's U.S. Counsel to be Delivered Pursuant to Section 5(c)...B-1
Exhibit C Form of Opinion of Company's People's Republic of China Counsel to be Delivered
Pursuant to Section 5(d).............................................................C-1
Exhibit D Form of Opinion of Company's BVI Counsel to be Delivered Pursuant to Section 5(e)....D-1
Exhibit E Form of Opinion of Counsel to Selling Shareholders to be delivered Pursuant to
Section 5(f).........................................................................E-1
Exhibit F Form of Opinion of U.S. Counsel to the Depositary to be Delivered Pursuant to
Section 5(i).........................................................................F-1
Exhibit G Form of Lock-up Letter Pursuant to Section 5(p)......................................G-1
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CHINA TECHFAITH WIRELESS
COMMUNICATION TECHNOLOGY LIMITED
(an exempted company limited by shares
under the laws of the Cayman Islands)
o American Depositary Shares
each representing 15 Ordinary Shares
UNDERWRITING AGREEMENT
May o, 2005
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
as Representative of the several Underwriters
Two World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
China Techfaith Wireless Communication Technology Limited, an exempted
company limited by shares under the laws of the Cayman Islands (the "Company"),
and the persons listed in Schedule B hereto (the "Selling Shareholders") confirm
their respective agreement with Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx") and each of the other underwriters named in
Schedule A hereto (collectively, the "Underwriters," which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof) for whom Xxxxxxx Xxxxx is acting as representative (in such capacity,
the "Representative"), with respect to the issue and sale by the Company and the
sale by the Selling Shareholders, and the purchase by the Underwriters, acting
severally and not jointly, of the respective numbers of American Depositary
Shares ("ADSs"), each ADS representing 15 ordinary shares, par value $0.00002
per share, of the Company ("Ordinary Shares"), set forth in Schedules A and B
hereto, and with respect to the grant by each Selling Shareholder, acting
severally and not jointly, to the Underwriters, acting severally and not
jointly, of the option described in Section 2(b) hereof for the Underwriters to
purchase all or any part of o additional ADSs, to cover over-allotments, if any.
The aforesaid o ADSs (the "Initial Securities") to be purchased by the
Underwriters and all or any part of the o ADSs subject to the option described
in Section 2(b) hereof (the "Option Securities") are hereinafter called,
collectively, the "Securities." The offer of the Securities by the Underwriters
is hereinafter called the "Offering."
The Ordinary Shares to be represented by ADSs are to be deposited pursuant
to a deposit agreement (the "Deposit Agreement"), among the Company, The Bank of
New York, as depositary (the "Depositary"), and the holders from time to time of
the American Depositary Receipts ("ADRs") to be issued under the Deposit
Agreement and evidencing the ADSs.
Unless the context otherwise requires, references to the "Securities"
herein shall constitute references both to the Ordinary Shares and to the ADSs
(and to the Ordinary Shares
represented by such ADSs). All references to "US dollars" or "$" herein are to
United States dollars.
The Company and the Selling Shareholders understand that the Underwriters
propose to make a public offering of the Securities as soon as the
Representative deems advisable after this Agreement has been executed and
delivered.
The Company, the Selling Shareholders and the Underwriters agree that up to
o shares of the Securities to be purchased by the Underwriters (the "Reserved
Securities") shall be reserved for sale by the Underwriters at the purchase
price set forth on the cover page of the Prospectus (as defined below) to
certain eligible directors, officers, employees and associates of the Company,
as part of the distribution of the Securities by the Underwriters, subject to
the terms of this Agreement, the applicable rules, regulations and
interpretations of the National Association of Securities Dealers, Inc. (the
"NASD") and all other applicable laws, rules and regulations. To the extent that
such Reserved Securities are not orally confirmed for purchase by such eligible
directors, officers, employees and associates of the Company by the end of the
first business day after the date of this Agreement, such Reserved Securities
may be offered to the public as part of the public offering contemplated hereby.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form F-1 (No. 333-123921) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus. Promptly after
execution and delivery of this Agreement, the Company will either (i) prepare
and file a prospectus in accordance with the provisions of Rule 430A ("Rule
430A") of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of the
1933 Act Regulations or (ii) if the Company has elected to rely upon Rule 434
("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a "Term
Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). The
information included in such prospectus or in such Term Sheet, as the case may
be, that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective (A) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (B) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Each prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement is called a "preliminary prospectus." Such registration statement,
including the exhibits thereto and schedules thereto, if any, at the time it
became effective and including the Rule 430A Information and the Rule 434
Information, as applicable, is herein called the "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "Rule 462(b) Registration Statement," and after
such filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The final form of the prospectus in the form first
furnished to the Underwriters for use in connection with the Offering are herein
called the "Prospectus." If Rule 434 is relied on, the term "Prospectus" shall
refer to the preliminary prospectus dated April o, 2005 together with the Term
Sheet and all references in this Agreement to the date of the Prospectus shall
mean the date of the Term Sheet.
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The Company and the Depositary have prepared and filed with the Commission
a registration statement on Form F-6 (No. 333-123939) and a related prospectus,
which may be in the form of the ADR certificate, for the registration under the
1933 Act of the ADSs evidenced by ADRs, have filed such amendments thereto and
such amended preliminary prospectuses as may have been required to the date
hereof, and will file such additional amendments thereto and such amended
prospectuses as may hereafter be required. The registration statement on Form
F-6 for the registration of the ADSs evidenced by ADRs, as amended at the time
it becomes effective (including by the filing of any post-effective amendments
thereto), is hereinafter called the "ADR Registration Statement."
The Company has prepared and filed with the Commission a registration
statement on Form 8-A (No. 000-51242) for the registration under the United
States Securities Exchange Act of 1934, as amended (the "1934 Act"), of the
Ordinary Shares. The various parts of such registration statement on Form 8-A
for the registration of the Ordinary Shares, including all exhibits thereto,
each as amended at the time such part of the registration statement became
effective, are hereinafter called the "Form 8-A Registration Statement."
SECTION 1 Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to each Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(d) hereof, and as of each Time of Delivery (if any)
referred to in Section 2(d) hereof, and agrees with each Underwriter, as
follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement, any Rule 462(b) Registration Statement, the ADR
Registration Statement and the Form 8-A Registration Statement has been
declared effective by the Commission under the 1933 Act or 1934 Act, as
applicable, and no stop order suspending the effectiveness of the
Registration Statement, any Rule 462(b) Registration Statement, the ADR
Registration Statement or the Form 8-A Registration Statement has been
issued under the 1933 Act or 1934 Act, as applicable, and no proceedings
for that purpose have been instituted or are pending or, to the knowledge
of the Company, are contemplated by the Commission, and any request on the
part of the Commission for additional information received by the Company
has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any Option Securities are
purchased, at the relevant Time of Delivery), the Registration Statement,
the Rule 462(b) Registration Statement and any amendments and supplements
thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and did not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and the Prospectus, any preliminary prospectus and
any supplement thereto or prospectus wrapper prepared in connection
therewith, at their respective times of issuance and at the Closing Time,
complied and will comply in all material respects with any applicable laws
or regulations
3
of foreign jurisdictions in which the Prospectus and such preliminary
prospectus, as amended or supplemented, if applicable, are distributed in
connection with the offer and sale of Reserved Securities. Neither the
Prospectus nor any amendments or supplements thereto (including any
prospectus wrapper), at the time the Prospectus or any amendments or
supplements thereto were issued and at the Closing Time (and, if any Option
Securities are purchased, at the relevant Time of Delivery), included or
will include an untrue statement of a material fact or omitted or will omit
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. If Rule 434 is used, the Company will comply with the
requirements of Rule 434 and the Prospectus shall not be "materially
different," as such term is used in Rule 434, from the prospectus included
in the Registration Statement at the time it became effective. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through the
Representative expressly for use in the Registration Statement or the
Prospectus (including any prospectus wrapper) or any amendments or
supplements thereto,
Each preliminary prospectus and the Prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when
such Registration Statement became effective in all material respects with
the 1933 Act and the 1933 Act Regulations and each preliminary prospectus
and the Prospectus delivered to the Underwriters for use in connection with
the Offering was identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent permitted
by Regulation S-T.
At the time the ADR Registration Statement became effective and at the
Closing Time (and, if any Option Securities are purchased, at the relevant
Time of Delivery), the ADR Registration Statement complied and will comply
in all material respects with the requirements of the 1933 Act and the 1933
Act Regulations and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
At the time the Form 8-A Registration Statement became effective and
at the Closing Time (and, if any Option Securities are purchased, at the
relevant Time of Delivery), the Form 8-A Registration Statement complied
and will comply in all material respects with the requirements of the 1934
Act and the rules and regulations of the Commission under the 1934 Act (the
"1934 Act Regulations") and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
Notwithstanding the foregoing, this representation and warranty shall
not apply to statements in or omissions from the Registration Statement,
any Rule 462(b) Registration Statement, the ADR Registration Statement or
the Form 8-A Registration Statement
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made in reliance upon and in conformity with information furnished to the
Company in writing by any Underwriter through the Representative expressly
for use in any such Registration Statement.
(ii) Independent Accountants. Deloitte Touche Tohmatsu, who certified
the financial statements and supporting schedules included in the
Registration Statement, are independent public accountants as required by
the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statements. The financial statements included in the
Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly in all material respects the financial
position of the Company and its consolidated subsidiaries at the dates
indicated and the statement of operations, shareholders' equity and cash
flows of the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity with
accounting principles generally accepted in the United States ("US GAAP")
applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included in the Registration Statement
present fairly in all material respects in accordance with US GAAP the
information required to be stated therein. The selected financial data and
the summary financial information included in the Prospectus present fairly
in all material respects the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement.
(iv) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a "Material Adverse Effect"), (B) there have
been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, that are
material with respect to the Company and its subsidiaries considered as one
enterprise, and (C) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(v) Organization of the Company. The Company has been duly organized
and is validly existing under the laws of the Cayman Islands, and has the
legal right, power and authority (corporate and other) to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement and the Deposit Agreement (together, the "Principal Agreements"),
and is duly qualified to transact business in any jurisdiction in which it
owns or leases any properties or conducts any business except where the
failure to so qualify would not result in a Material Adverse Effect. The
Amended and Restated Memorandum of Association and Articles of Association
of the Company (the "Articles of Association") comply with the requirements
of Cayman Islands law and are in full force and effect.
5
(vi) Organization of Subsidiaries. None of the Company's subsidiaries
is a "significant subsidiary" (as such term is defined in Rule 1-02 of
Regulation S-X) except Techfaith Wireless Communication Technology
(Beijing) Limited ("TechFaith China"), Techfaith Wireless Communication
Technology (Beijing) Limited II ("Techfaith Beijing"), Techfaith Wireless
Communication Technology (Shanghai) Limited ("Techfaith Shanghai")
("Techfaith Shanghai"), STEP Technologies (Beijing) Co., Ltd. ("STEP
Technologies"), Techfaith Wireless Communication Technology Limited
("TechFaith Wireless"), Great Xxxxxxx Technology Limited ("Great Xxxxxxx"),
Xxx Technology Limited ("Xxx Technology") and Finest Technology Limited
("Finest Technology," and together with TechFaith China, Techfaith Beijing,
Techfaith Shanghai, STEP Technologies, Techfaith Wireless, Great Xxxxxxx
and Xxx Technology, the "Significant Subsidiaries"). Each of the Company's
subsidiaries has been duly organized and is validly existing under the laws
of the jurisdiction of its incorporation or formation, and has legal right,
power and authority to own, lease and operate its properties, if any, and
to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in any jurisdiction
in which it owns or leases any properties or conducts any business except
where the failure to so qualify would not result in a Material Adverse
Effect; except as otherwise disclosed in the Registration Statement, all of
the issued and outstanding capital stock or equity interest of each
subsidiary has been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; and none of the outstanding shares of
capital stock or equity interest of any subsidiary was issued in violation
of the preemptive or similar rights of any securityholder of such
subsidiary. The only subsidiaries of the Company are (a) the subsidiaries
listed on Exhibit 21 to the Registration Statement and (b) certain other
subsidiaries which, considered in the aggregate as a single subsidiary, do
not constitute a "significant subsidiary" as defined in Rule 1-02 of
Regulation S-X.
(vii) Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus in the column
entitled "Actual" under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to this Agreement or pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectus and
except for the conversion of all of the Company's redeemable convertible
notes (the "Convertible Notes") immediately prior to the Closing Time). The
shares of issued and outstanding capital stock of the Company have been
duly authorized and validly issued and are fully paid and non-assessable;
the holders of outstanding shares of the Company have irrecovably waived
any entitlement to pre-emptive or other rights to acquire the Ordinary
Shares in connection with the Offering; none of the outstanding shares of
capital stock of the Company was issued in violation of the preemptive or
other similar rights of any securityholder of the Company. Except as
otherwise disclosed in the Prospectus, there are no outstanding securities
convertible into or exchangeable for, or warrants or rights to purchase
from the Company Ordinary Shares or any other shares of capital stock of
the Company or any subsidiary nor are there any obligations of the Company
to allot, issue or transfer, the Securities; the Securities are freely
transferable by the Company to or for the account of the Underwriters and
(to the extent described in the Prospectus) the initial purchasers thereof;
and there are no
6
restrictions on subsequent transfers of the Securities under the laws of
the Cayman Islands or the United States.
(viii) Authorization of Underwriting Agreement. This Agreement has
been duly authorized, executed and delivered by the Company.
(ix) Authorization of Deposit Agreement. The Deposit Agreement has
been duly authorized, executed and delivered by the Company and, assuming
due authorization, execution and delivery by the Depositary, constitutes a
valid and legally binding obligation of the Company, enforceable in
accordance with its terms, subject as to enforcement to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors' rights generally and to general equity
principles.
(x) Validity of ADRs. Upon the due issuance by the Depositary of ADRs
evidencing the ADSs against the deposit of the Ordinary Shares in
accordance with the provisions of the Deposit Agreement, such ADRs will be
duly and validly issued under the Deposit Agreement and persons in whose
names such ADRs are registered will be entitled to the rights of registered
holders of ADRs evidencing the ADSs specified therein and in the Deposit
Agreement.
(xi) No Limitation on Vote, Transfer and Payment of Dividends. Except
as set forth in the Articles of Association of the Company (the "Articles
of Association"), the Deposit Agreement or the Prospectus and except for
applicable securities law restrictions on the sale of securities, there are
no limitations on the rights of holders of Ordinary Shares, ADSs or ADRs
evidencing the ADSs to hold or vote or transfer their respective
securities, and no approvals are currently required in the Cayman Islands
in order for the Company to pay dividends declared by the Company to the
holders of Ordinary Shares, including the Depositary and, except as
disclosed in the Prospectus, no such dividends or other distributions will
be subject to withholding or other taxes under the laws and regulations of
the Cayman Islands and may be so paid without the necessity of obtaining
any Governmental License (as defined in Section 1(a)(xxi)) in the Cayman
Islands.
(xii) Authorization and Description of Securities. The Securities to
be purchased by the Underwriters from the Company have been duly authorized
for issuance and sale to the Underwriters pursuant to this Agreement and,
when issued and delivered by the Company against payment therefor in
accordance with this Agreement and, in the case of the ADSs, the Deposit
Agreement, will be validly issued, fully paid and non-assessable and will
be issued free and clear of all liens, encumbrances, equities or claims;
the Ordinary Shares, the ADRs and the ADSs conform to all statements
relating thereto contained in the Prospectus, including statements under
the captions "Description of Share Capital" and "Description of American
Depositary Shares" and such descriptions conform in all material respects
to the rights set forth in the instruments defining the same; except as
disclosed in the Prospectus or the Registration Statement, no holder of the
Securities is or will be subject to personal liability by reason of being
such a holder; and the issuance of the Securities is not subject to the
preemptive or other similar rights of any securityholder of the Company.
7
(xiii) Arrangements with Directors, Executive Officers and Affiliates.
Except as disclosed in the Prospectus or the Registration Statement or
filed as exhibits thereto, no material indebtedness (actual or contingent)
and no material contract or arrangement is outstanding between the Company
and any director or executive officer of the Company or any person
connected with such director or executive officer (including his/her
spouse, infant children, any company or undertaking in which he/she holds a
controlling interest). There are no relationships or transactions between
the Company on the one hand and its affiliates, officers and directors or
their shareholders, customers or suppliers on the other hand which,
although required to be disclosed under the 1933 Act or the 1933 Act
Regulations, are not disclosed in the Registration Statement.
(xiv) Absence of Labor Dispute. No labor dispute with the employees of
the Company or any subsidiary exists or, to the knowledge of the Company,
is imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or any subsidiary's principal
suppliers, manufacturers, customers or contractors, which, in either case,
may reasonably be expected to result in a Material Adverse Effect.
(xv) Absence of Further Requirements for the Offering. No filing with,
or authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
or any stock exchange authority is necessary or required for the
performance by the Company or any subsidiary of its obligations under any
of the Principal Agreements in connection with the offering, issuance or
sale of the Securities under the Principal Agreements or the consummation
of the transactions contemplated by any of the Principal Agreements, except
(i) such as have been already filed, obtained or as may be required under
the 1933 Act or the 0000 Xxx Xxxxxxxxxxx xxx Xxxxxx Xxxxxx federal and
state, local or other securities or blue sky laws and (ii) such as have
been obtained under the laws and regulations of jurisdictions outside the
United States in which the Reserved Securities are offered.
(xvi) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any
subsidiary, that is required to be disclosed in the Registration Statement
(other than as disclosed therein), or that might reasonably be expected to
result in a Material Adverse Effect, or that might reasonably be expected
to materially and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in the Principal Agreements
or the performance by the Company of its obligations thereunder; the
aggregate of all pending legal or governmental proceedings to which the
Company or any subsidiary is a party or of which any of their respective
property or assets is the subject that are not described in the
Registration Statement, including ordinary routine litigation incidental to
the business of the Company or any subsidiary, could not reasonably be
expected to result in a Material Adverse Effect.
(xvii) Absence of Defaults and Conflicts. Neither the Company nor any
of its subsidiaries is in violation of its respective charter or by-laws or
other constituent or
8
organizational documents or in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease
or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any subsidiary is
subject (collectively, "Agreements and Instruments") except for such
defaults that would not result in a Material Adverse Effect; and the
execution, delivery and performance of each of the Principal Agreements and
the consummation of the transactions contemplated in each of the Principal
Agreements and the Registration Statement (including the issuance and sale
of the Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectus under the caption "Use of
Proceeds"), and compliance by the Company or any subsidiary with its
obligations under each of the Principal Agreements have been duly
authorized by all necessary corporate action and received all necessary
approvals from any governmental or regulatory body and the necessary
sanction or consent of its shareholders and do not and will not, whether
with or without the giving of notice or passage of time or both, conflict
with or constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or any subsidiary
pursuant to, the Agreements and Instruments (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws or other constituent
or organizational documents or business license or other organizational
document of the Company or any subsidiary or any applicable treaty, law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any subsidiary or any of their
assets, properties or operations. As used herein, a "Repayment Event" means
any event or condition that gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness by the Company or any subsidiary.
(xviii) Accuracy of Exhibits. There are no contracts or documents that
are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits thereto that have not been so
described and filed as required.
(xix) Possession of Intellectual Property. Except as disclosed in the
Prospectus, the Company and its subsidiaries own or possess or otherwise
have the legal right to use, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and neither the Company nor any of its subsidiaries
has received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of its Subsidiaries therein, and which infringement or
conflict (if the subject of an unfavorable decision, ruling or
9
finding) or invalidity or inadequacy, individually or in the aggregate,
would result in a Material Adverse Effect.
(xx) Dividends. The Company's subsidiaries are not currently
prohibited, directly or indirectly, from paying any dividends or other
distributions to the Company or Techfaith Wireless, as applicable, from
making any other distribution on their respective equity interests, or from
transferring any of their respective property or assets to the Company or
Techfaith Wireless, as applicable, except as described in or contemplated
by the Prospectus; all dividends and other distributions declared and
payable upon the equity interests in the Company's subsidiaries may be
converted into foreign currency that may be freely transferred out of the
People's Republic of China (the "PRC") and the British Virgin Islands
("BVI"), as applicable, except as disclosed in the Registration Statements
and the Prospectus, and all such dividends and other distributions are not
and, except as disclosed in the Registration Statements and the Prospectus,
will not be subject to withholding or other taxes under the current laws
and regulations of the PRC and BVI and, except as disclosed in the
Registration Statements and the Prospectus, are otherwise free and clear of
any other tax, withholding or deduction in the PRC and BVI, in each case
without the necessity of obtaining any governmental or regulatory
authorization in the PRC and BVI, except such as have been obtained;
(xxi) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by, and have
made all declarations and filings with, the appropriate national, local or
other regulatory agencies or bodies required for the authorization,
execution and delivery by the Company or the relevant subsidiary, as the
case may be, of any of the Principal Agreements or necessary to conduct the
business now operated by them, with such exceptions as would not have a
Material Adverse Effect; the Company and its subsidiaries are in compliance
with the terms and conditions of all such Governmental Licenses, except
where the failure to so comply would not, individually or in the aggregate,
have a Material Adverse Effect; all of the Governmental Licenses are valid
and in full force and effect, except where the invalidity or failure to be
in full force and effect would not have a Marterial Adverse Effect; none of
the Governmental Licenses contains any materially burdensome restrictions
or conditions not described in the Prospectus; and neither the Company nor
any of its subsidiaries has received any notice of proceedings relating to
the revocation or modification (and which modification would reasonably be
expected to have a Material Adverse Effect) of any such Governmental
Licenses or has any reason to believe that any such Governmental License
will be revoked, modified (and which modification would reasonably be
expected to have a Material Adverse Effect) or suspended.
(xxii) Title to Property. The Company and its subsidiaries have good
and marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectus or (b) do not, individually or in the
aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company or any of its subsidiaries; and all
10
of the leases and subleases material to the business of the Company and its
subsidiaries, considered as one enterprise, and under which the Company or
any of its subsidiaries holds properties described in the Prospectus, are
in full force and effect, and neither the Company nor any subsidiary has
any notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company or any subsidiary under any of
the leases or subleases mentioned above, or affecting or questioning the
rights of the Company or such subsidiary to the continued possession of the
leased or subleased premises under any such lease or sublease.
(xxiii) Compliance with Cuba Act. The Company has complied with, and
is and will be in compliance with, the provisions of that certain Florida
act relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(xxiv) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus
will not be, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended (the "1940 Act") immediately
after the Offering.
(xxv) Environmental Laws. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) neither the Company nor any of its
subsidiaries is in violation of any national, local or foreign statute,
law, rule, regulation, ordinance, code, policy or rule of common law or any
judicial or administrative interpretation thereof, including any judicial
or administrative order, consent, decree or judgment, relating to pollution
or protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements, (C)
there are no pending or threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its subsidiaries and (D)
there are no events or circumstances that might reasonably be expected to
form the basis of an order for clean-up or remediation, or an action, suit
or proceeding by any private party or governmental body or agency, against
or affecting the Company or any of its subsidiaries relating to Hazardous
Materials or any Environmental Laws.
(xxvi) PFIC Status. Based on the projected composition of the
Company's income and valuation of its assets, including goodwill, the
Company does not expect to
11
become a passive foreign investment company, as defined in Section 1296(a)
of the United States Internal Revenue Code of 1986, as amended (the
"Code"), in 2005.
(xxvii) Registration Rights. Except as described in the Prospectus,
there are no persons with registration rights or other similar rights to
have any securities registered pursuant to the Registration Statement or
otherwise registered by the Company under the 1933 Act.
(xxviii) Tax Returns. The Company and its subsidiaries have filed all
material tax returns required to have been filed by them or have duly
requested extensions thereof and all such returns are up to date, correct,
and on a proper basis in all material respects and have paid all material
taxes required to be paid by them and any related assessments, charges,
levies, fines or penalties, except for any such taxes, assessments,
charges, levies, fines or penalties that are being contested in good faith
and by appropriate proceedings; and there is no known proposed tax
deficiency, assessment, charge, levy, fine or penalty against it as to
which a reserve would be required to be established under US GAAP which has
not been so reserved or which is required to be disclosed in the Prospectus
which has not been so disclosed and so far as the Company is aware, there
are no facts or circumstances in existence which would reasonably be
expected to give rise to any such deficiency, assessment, charge, levy,
fine or penalty.
(xxix) Accounting Procedures. Each of the Company and its subsidiaries
(A) makes, keeps and prepares books, records and accounts which fairly
reflect transactions and dispositions of its assets and (B) has devised and
maintained a system of internal and accounting controls which provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with US GAAP and to maintain asset accountability; (iii)
accountability of assets is maintained, including regular reconciliations
with existing assets and taking of appropriate action with respect to any
differences; (iv) access to its assets is permitted only in accordance with
management's general or specific authorizations; and (v) financial reports
are prepared on a timely basis based on the transactions recorded pursuant
to clause (ii) above under US GAAP. These reports provide the basis for the
preparation of the Company's consolidated financial statements under US
GAAP and have been maintained in compliance with applicable laws.
(xxx) MD&A Description. The section entitled "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in the
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.
12
(xxxi) Management Review. The Company's management have reviewed and
agreed with the selection, application and disclosure of critical
accounting policies and have consulted with its legal advisers and
independent accountants with regards to such disclosure.
(xxxii) Liquidity and Capital Resources. The section entitled
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources" in the Prospectus accurately
and fully describes: (A) all material trends, demands, commitments, events,
uncertainties and risks, and the potential effects thereof, that the
Company believes would materially affect liquidity and are reasonably
likely to occur, and (B) neither the Company nor any subsidiary is engaged
in any transactions with, or have any obligations to, its unconsolidated
entities (if any) that are contractually limited to narrow activities that
facilitate the transfer of or access to assets by the Company or such
subsidiary, including, without limitation, structured finance entities and
special purpose entities, or otherwise engage in, or have any obligations
under, any off-balance sheet transactions or arrangements. As used herein
in this Section 1(a)(xxxii), the phrase "reasonably likely" refers to a
disclosure threshold lower than "more likely than not."
(xxxiii) Certain Trading Activities. The Company is not engaged in any
trading activities involving commodity contracts or other trading contracts
that are not currently traded on a securities or commodities exchange and
for which the market value cannot be determined.
(xxxiv) Stamp Duty; Transfer Tax. Except as disclosed in the
Prospectus, under the laws and regulations of the Cayman Islands, no
transaction, stamp, capital or other issuance, registration or transfer
taxes or duties are payable in the Cayman Islands by or on behalf of the
Underwriters to any Cayman Islands taxing authority in connection with (A)
the issuance, sale and delivery by the Company to or for the account of the
Underwriters of the Securities or (B) the initial sale and delivery by the
Underwriters of the Securities to purchasers thereof, (C) the holding or
transfer of the Securities outside the Cayman Islands, (D) the deposit of
the Ordinary Shares with the Custodian and the issuance and delivery of the
ADRs, or (E) the execution and delivery of any Principal Agreement.
(xxxv) Accuracy of Information. There are no legal or governmental
proceedings, statutes, contracts or documents that are required under the
1933 Act or the 1933 Act Regulations to be described in the Registration
Statement or the Prospectus which have not been so described. The
description in the Registration Statement and the Prospectus of statutes,
legal and governmental proceedings and contracts and other documents is
accurate and presents the information required to be shown in all material
respects. The Prospectus will contain, when issued, all information and
particulars required to comply with all statutory and other provisions
(including, without limitation, the relevant laws and regulations of the
Cayman Islands[, the British Virgin Islands] and the PRC) so far as
applicable in each relevant Prospectus, which is or might reasonably be
considered to be material for disclosure to a potential subscriber,
investor, underwriter or sub-underwriter of the Securities or for the
purpose of making an informed assessment of the assets and
13
liabilities, financial position, and profits and losses of the Company and
its subsidiaries including, but without prejudice to the generality of the
foregoing, any special trade factors or risks known to the Company and its
subsidiaries or any of their directors and/or executive officers and which
would reasonably be expected to have a Material Adverse Effect. All
material information which ought to have been supplied or disclosed by the
Company and its directors and/or executive officers to the Underwriters,
the Representative, Deloitte Touche Tohmatsu or the legal or other
professional advisers to the Underwriters or the Company for the purposes
of or in the course of preparation of the Prospectus or the Registration
Statement has been supplied or disclosed by the Company and its directors
and executive officers and nothing has occurred since the date the same was
supplied or disclosed which requires the same to be amended or updated in
any material respect.
(xxxvi) Insurance. The business, undertakings, properties and assets
of the Company's subsidiaries in China are adequately insured against all
such risks as are normally insured by persons carrying on similar
businesses in the same jurisdiction as those carried on by the Company's
subsidiaries and such insurances include all the insurances that the
Company's subsidiaries are required under terms of any lease or any
contract in respect of any of their respective properties to undertake and
such insurances are in full force and effect and, so far as the Company is
aware, there are no circumstances which would reasonably be expected to
render any of such insurances void or voidable and there is no material
insurance claim made by or against the Company and its subsidiaries,
pending, threatened or outstanding and so far as the Company is aware, no
facts or circumstances exist which would reasonably be expected to give
rise to any such claim and all due premiums in respect thereof have (if
due) been paid.
(xxxvii) Choice of Law; Consent to Jurisdiction; Appointment of Agent
for Service of Process. The choice of the laws of the State of New York as
the governing law of this Agreement is a valid choice of law under the laws
of the Cayman Islands and will be honored by courts in the Cayman Islands.
The Company has the power to submit, and pursuant to Section 13 of this
Agreement, has legally, validly, effectively and irrevocably submitted, to
the personal jurisdiction of each United States federal court and New York
state court located in the Borough of Manhattan, in Xxx Xxxx xx Xxx Xxxx,
Xxx Xxxx, Xxxxxx Xxxxxx of America (each, a "New York Court"), and the
Company has the power to designate, appoint and empower, and pursuant to
Section 13 of this Agreement, has legally, validly, effectively and
irrevocably designated, appointed and empowered, the Authorized Agent (as
defined in Section 13 hereof) for service of process in any action arising
out of or relating to this Agreement or the Securities in any New York
Court, and service of process effected on such Authorized Agent will be
effective to confer valid personal jurisdiction over the Company as
provided in Section 13 hereof.
(xxxviii) Waiver of Immunity. Neither the Company, any of its
subsidiaries nor any of its or their properties, assets or revenues has any
right of immunity under Cayman Islands or New York law, from any legal
action, suit or proceeding, from the giving of any relief in any such legal
action, suit or proceeding, from set-off or counterclaim, from the
jurisdiction of any Cayman Islands, New York or U.S. federal court, from
service of process, attachment upon or prior to judgment, or attachment in
aid
14
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; and, to the extent that the Company, any of its
subsidiaries or any of its or their properties, assets or revenues may have
or may hereafter become entitled to any such right of immunity in any such
court in which proceedings may at any time be commenced, each of the
Company and the subsidiaries waives or will waive such right to the extent
permitted by law and has consented to such relief and enforcement as
provided in Section 12 of this Agreement.
(xxxix) Enforceability of New York Judgment. Except as described in
the Prospectus, any final judgment for a fixed or readily calculable sum of
money rendered by a New York Court having jurisdiction under its own
domestic laws in respect of any suit, action or proceeding against the
Company based upon this Agreement and the other Principal Agreements would
be declared enforceable against the Company by Cayman Islands courts
without re-examining the merits of the case under the common law doctrine
of obligation; provided that (i) adequate service of process has been
effected and the defendant has had a reasonable opportunity to be heard,
(ii) such judgments or the enforcement thereof are not contrary to the law,
public policy, security or sovereignty of the Cayman Islands, (iii) such
judgments were not obtained by fraudulent means and do not conflict with
any other valid judgment in the same matter between the same parties, and
(iv) an action between the same parties in the same matter is not pending
in any Cayman Islands court at the time the lawsuit is instituted in the
foreign court.
(xl) Listing. The Securities have been authorized for quotation,
subject to official notice of issuance, on the Nasdaq National Market
("NASDAQ"), under the symbol "CNTF".
(xli) Stabilization and Manipulation. Neither the Company nor any of
its affiliates has taken, directly or indirectly, any action that is
designed to or that constitutes or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of any
security of the Company.
(xlii) Foreign Corrupt Practices. Neither the Company nor, to the
Company's knowledge, any director, officer, agent, employee or other person
associated with or acting on behalf of the Company is using any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expenses; is making any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; or is in
violation of any provision of the United States Foreign Corrupt Practices
Act of 1977; or is making any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment.
(b) Representations and Warranties by the Selling Shareholders. Each
Selling Shareholder severally but not jointly represents and warrants to each
Underwriter as of the date hereof, as of the Closing Time, and, if the Selling
Shareholder is selling Option Securities on a Date of Delivery, as of each such
Date of Delivery, and agrees with each Underwriter, as follows:
15
(i) Accurate Disclosure. Such Selling Shareholder has reviewed the
Registration Statement and the Prospectus and neither the Prospectus nor
any amendments or supplements thereto (including any prospectus wrapper)
includes any untrue statement of a material fact relating to such Selling
Shareholder or omits to state a material fact necessary in order to make
the statements therein relating to such Selling Shareholder, in the light
of the circumstances under which they were made, not misleading; such
Selling Shareholder is not prompted to sell the Securities to be sold by
such Selling Shareholder hereunder by any information concerning the
Company or any subsidiary of the Company, which is not set forth in the
Prospectus.
(ii) Authorization of Agreements. Such Selling Shareholder has the
full right, power and authority to enter into this Agreement and a Power of
Attorney and Custody Agreement (the "Power of Attorney and Custody
Agreement") with [Xx. Xxxx Xxxx] and the [Company], respectively, and to
sell, transfer and deliver the Securities to be sold by such Selling
Shareholder hereunder. The execution and delivery of this Agreement and the
Power of Attorney and Custody Agreement and the sale and delivery of the
Securities to be sold by such Selling Shareholder and the consummation of
the transactions contemplated herein and compliance by such Selling
Shareholder with its obligations hereunder have been duly authorized by the
Selling Shareholder and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default under, or result in the creation or imposition of any
tax, lien, charge or encumbrance upon the Securities to be sold by such
Selling Shareholder or any property or assets of such Selling Shareholder
pursuant to any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, license, lease or other agreement or instrument to
which such Selling Shareholder is a party or by which such Selling
Shareholder may be bound, or to which any of the property or assets of the
Selling Shareholder is subject, nor will such action result in any
violation of the provisions of the charter or by-laws or other
organizational instrument of the Selling Shareholder, if applicable, or any
applicable treaty, law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Selling Shareholder or any of its
properties.
(iii) Good and Marketable Title. Such Selling Shareholder has and will
at the Closing Time and, if any Option Securities are purchased, on the
Date of Delivery have good and marketable title to the Securities to be
sold by such Selling Shareholder hereunder, free and clear of any security
interest, mortgage, pledge, lien, charge, claim, equity or encumbrance of
any kind, other than pursuant to this Agreement; and upon delivery of such
Securities and payment of the purchase price therefor as herein
contemplated, assuming each such Underwriter has no notice of any adverse
claim, each of the Underwriters will receive good and marketable title to
the Securities purchased by it from such Selling Shareholder, free and
clear of any security interest, mortgage, pledge, lien, charge, claim,
equity or encumbrance of any kind.
(iv) Absence of Defaults and Conflicts. The execution, delivery and
performance of each of the Principal Agreements to which such Selling
Shareholder is a party and the consummation of the transactions
contemplated in each of the Principal Agreements and the Registration
Statement have been duly authorized by all necessary
16
corporate action by such Selling Shareholder, to the extent applicable, and
received all approvals from any governmental or regulatory body and the
sanction or consent of its shareholders, to the extent applicable, and do
not and will not, whether with or without the giving of notice or passage
of time or both, result in any violation of the provisions of its charter
or by-laws or business license or other organizational document of such
Selling Shareholder, to the extent applicable, or any applicable treaty,
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over such Selling Shareholder or any of its assets,
properties or operations.
(v) Due Execution of Power of Attorney and Custody Agreement. Such
Selling Shareholder has duly executed and delivered, in the form heretofore
furnished to the Representative, the Power of Attorney and Custody
Agreement with [Xx. Xxxx Xxxx] as attorney-in-fact (the "Attorney-in-Fact")
and the [Company], as custodian (the "Custodian"); the Custodian is
authorized to deliver the Securities to be sold by such Selling Shareholder
hereunder and to accept payment therefor; and the Attorney-in-Fact is
authorized to execute and deliver this Agreement and the certificate
referred to in Section 5(k) or that may be required pursuant to Section(s)
5(r) and 5(s) on behalf of such Selling Shareholder, to sell, assign and
transfer to the Underwriters the Securities to be sold by such Selling
Shareholder hereunder, to determine the purchase price to be paid by the
Underwriters to such Selling Shareholder, as provided in Section 2(a)
hereof, to authorize the delivery of the Securities to be sold by such
Selling Shareholder hereunder, to accept payment therefor, and otherwise to
act on behalf of such Selling Shareholder in connection with this
Agreement.
(vi) Absence of Manipulation. Such Selling Shareholder has not taken,
and will not take, directly or indirectly, any action that is designed to
or which has constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(vii) Absence of Further Requirements. No filing with, or consent,
approval, authorization, order, registration, qualification or decree of,
any court or governmental authority or agency, domestic or foreign, is
necessary or required for the performance by such Selling Shareholder of
its obligations hereunder or in the Power of Attorney and Custody
Agreement, or in connection with the sale and delivery of the Securities
hereunder or the consummation of the transactions contemplated by this
Agreement, except (i) such as may have previously been made or obtained or
as may be required under the 1933 Act or the 1933 Act Regulations or state
securities laws and (ii) such as have been obtained under the laws and
regulations of jurisdictions outside the United States in which the
Reserved Securities are offered.
(viii) Certificates Suitable for Transfer. Certificates for all of the
Securities to be sold by such Selling Shareholder pursuant to this
Agreement, in suitable form for transfer by delivery or accompanied by duly
executed instruments of transfer or assignment in blank with signatures
guaranteed, have been placed in custody with the
17
Custodian with irrevocable conditional instructions to deliver such
Securities to the Underwriters pursuant to this Agreement.
(ix) No Association with NASD. Except as disclosed in the Registration
Statement, neither such Selling Shareholder nor any of his, her or its
affiliates directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, or has any
other association with (within the meaning of Article I, Section 1(dd) of
the By-laws of the NASD), any member firm of the NASD.
(c) Officer's Certificates. Any certificate signed by any officer of the
Company or any subsidiaries delivered to the Representative or to counsel for
the Underwriters shall be deemed a representation and warranty by the Company to
the Underwriters as to the matters covered thereby; and any certificate signed
by or on behalf of a Selling Shareholder as such and delivered to the
Representative or to counsel for the Underwriters shall be deemed a
representation and warranty by such Selling Shareholder to the Underwriters as
to the matters covered thereby.
SECTION 2. Sale and Delivery to the Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company and each Selling Shareholder, severally and not jointly, agree to sell
to each Underwriter, severally and not jointly, and each Underwriter, severally
and not jointly, agrees to purchase from the Company and each Selling
Shareholder, at the price per ADS set forth in Schedule C, that proportion of
the number of Initial Securities set forth in Schedule B opposite the name of
the Company or each Selling Shareholder, as the case may be, that the number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities that such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof, bears to the total number of Initial Securities, subject, in
each case, to such adjustments among the Underwriters as the Representative in
its sole discretion shall make to eliminate any sales or purchases of fractional
securities.
(b) Option Securities. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, each Selling Shareholder, acting severally and not jointly, hereby grants
an option to the Underwriters, severally and not jointly, to purchase up to an
additional o ADSs at the same price per ADS set forth in Schedule C less an
amount per Ordinary Share represented by such ADSs equal to any dividends or
distributions declared by the Company and payable on the Initial Securities but
not payable on the Option Securities. The option hereby granted will expire 30
calendar days after the date of the Prospectus and may be exercised from time to
time only for the purpose of covering over-allotments by written notice from the
Representative to the Company and the Selling Shareholders, and setting forth
the aggregate number of Option Securities to be purchased and the date on which
such Option Securities are to be delivered, as determined by the Representative
but in no event earlier than the Closing Time or, unless the Representative and
the Company otherwise agree in writing, not earlier than two or later than ten
business days after the date of such notice. If the option is exercised as to
all or any portion of the Option Securities, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
Option Securities then being purchased that the number of Initial Securities set
forth in Schedule A opposite the name of such Underwriter bears to the total
18
number of Initial Securities, subject in each case to such adjustments among the
Underwriters as the Representative in its sole discretion shall make to
eliminate any sales or purchases of fractional shares.
(c) Denominations; Registration; Delivery of ADRs. ADRs evidencing the
Securities purchased by the Underwriters hereunder shall be delivered by the
Company to the Representative through the facilities of The Depository Trust
Company, New York, New York ("DTC"), for the respective accounts of the
Underwriters, against payment for the Securities by or on behalf of such
Underwriters to the Company and Selling Shareholders of the purchase price
therefor by wire transfer through the Federal Wire System in New York in U.S.
dollars in immediately available funds to an account designated by the Company.
(d) Time and Date of Deliveries and Payments. The time and date of delivery
of, and payment for, the Initial Securities shall be 9:30 a.m., New York City
time on May o, 2005 (unless postponed in accordance with the provisions of
Section 10), or such other time not later than ten business days after such date
as the Representative and the Company may agree upon in writing (such time and
date of payment and delivery being herein called the "Closing Time"). The time
and date of delivery and payment with respect to the Option Securities shall be
9:30 a.m., New York City time on the date specified by the Representative in a
written notice given by the Representative of an election by the Underwriters'
to purchase such Option Securities, or such other time and date as the
Representative and the Company may agree upon in writing. Any such time and date
for delivery of and payment for the Option Securities, if not the Closing Time,
is herein called a "Time of Delivery."
The documents to be delivered at the Closing Time by or on behalf of the
parties hereto pursuant to Section 5 hereof, including any additional documents
reasonably requested by the Underwriters pursuant to Section 5(r) hereof, will
be delivered at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, 0xx Xxxxx, XXXX
Xxxxx, Xxxxx Xxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx at 8:00 a.m., Hong Kong time, on
the day of the Closing Time.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
or Rule 434, as applicable, and will notify the Representative immediately, and
confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement, to the ADR Registration Statement or to the Form 8-A
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement, to the ADR Registration Statement
or to the Form 8-A Registration Statement or any amendment or supplement to the
Prospectus or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement, the ADR Registration Statement or the Form 8-A Registration Statement
or of any order preventing or suspending the use of any preliminary prospectus,
or of the suspension of the qualification of the Securities for offering or sale
in any jurisdiction, or of the
19
initiation or threatening of any proceedings for any of such purposes of which
the Company is aware. The Company will promptly effect the filings necessary
pursuant to Rule 424(b) and will take such steps as it deems necessary to
ascertain promptly whether the form of prospectus transmitted for filing under
Rule 424(b) was received for filing by the Commission and, in the event that it
was not, it will promptly file such prospectus. The Company will use its best
efforts to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Representative notice
of its intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b)), to the ADR Registration Statement or
the Form 8-A Registration Statement, any Term Sheet or any amendment, supplement
or revision to either the prospectus included in the Registration Statement at
the time it became effective or to the Prospectus, whether pursuant to the 1933
Act, the 1934 Act or otherwise, will furnish the Representative with copies of
any such documents a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file or use any such document to which the
Representative or counsel for the Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished or will
deliver to the Representative and counsel for the Underwriters, without charge,
signed copies of the Registration Statement, the ADR Registration Statement and
the Form 8-A Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by reference
therein) and signed copies of all consents and certificates of experts, and will
also deliver to the Representative, without charge, a conformed copy of the
Registration Statement, the ADR Registration Statement and the Form 8-A
Registration Statement as originally filed and of each amendment thereto
(without exhibits) for each of the Underwriters.
(d) Delivery of Prospectus. The Company has delivered to each Underwriter,
without charge, as many copies of each preliminary prospectus as each
Underwriter reasonably requested, and the Company hereby consents to the use of
such copies for purposes permitted by the 1933 Act. The Company will furnish to
each Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such number of
copies of the Prospectus (as amended or supplemented) as each Underwriter may
reasonably request.
(e) Continued Compliance with Securities Laws. The Company will comply with
the 1933 Act and the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations, the rules and regulations of the NASD and the NASDAQ so as to
permit the completion of the distribution of the Securities as contemplated in
this Agreement and the other Principal Agreements and in the Prospectus. If at
any time when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel for
the Underwriters or for the Company, to amend the Registration Statement, the
ADR Registration Statement, the Form 8-A Registration Statement or amend or
supplement the Prospectus in order that the Prospectus will not include any
untrue statements of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of the
circumstances, existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such
20
time to amend the Registration Statement, the ADR Registration Statement, the
Form 8-A Registration Statement or amend or supplement any Prospectus in order
to comply with the requirements of the 1933 Act or the 1933 Act Regulations, or
the 1934 Act or the 1934 Act Regulations, the Company will promptly prepare and
file with the Commission, subject to Section 3(b), such amendment or supplement
as may be necessary to correct such statement or omission or to make the
Registration Statement, the ADR Registration Statement, the Form 8-A
Registration Statement or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriters such number of copies of such amendment
or supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
(within or outside the United States) as the Representative may reasonably
designate and to maintain such qualifications in effect for as long as may be
necessary to complete the distribution of the Securities, which period shall in
no event extend for more than one year from the later of the effective date of
the U.S. Registration Statement and any Rule 462(b) Registration Statement;
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such statements and
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for as long as may be necessary to complete the
distribution of the Securities, which period shall in no event extend for more
than one year from the effective date of the U.S. Registration Statement and any
Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Prospectus under
"Use of Proceeds."
(i) Compliance with Rule 463. The Company will file with the Commission
such reports on Form SR as may be required pursuant to Rule 463 of the 1933 Act
Regulations.
(j) Listing. The Company will use its best efforts to effect and maintain
the quotation of the ADSs on the NASDAQ and will file with the NASDAQ all
documents and notices required by the NASDAQ of companies that are traded on the
NASDAQ and quotations for which are reported by the NASDAQ.
(k) Restriction on Sale of Securities. During a period of 180 days from the
date of this Agreement (the "Lock-Up Period"), the Company shall not, without
the prior written consent of Xxxxxxx Xxxxx, (i) directly or indirectly, dispose
of (including without limitation, issue, agree to issue, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any
21
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, directly or indirectly), any Ordinary Shares
or ADSs or any security that constitutes the right to receive Ordinary Shares or
ADSs or any securities convertible into or exercisable or exchangeable for or
repayable with Ordinary Shares or ADSs or file any registration statement under
the 1933 Act with respect to any of the foregoing or (ii) enter into any swap
agreement or any other agreement or any transaction that transfers, in whole or
in part, directly or indirectly, the economic consequences of ownership of the
Ordinary Shares or ADSs, whether any such swap agreement or other agreement or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Ordinary Shares or ADSs or such other securities, in cash or otherwise. The
foregoing shall not apply to (A) the Ordinary Shares or ADSs to be sold
hereunder, (B) any issuance of Ordinary Shares or ADSs by the Company upon
exercise of any options to purchase Ordinary Shares granted pursuant to a duly
adopted stock option plan of the Company, provided that such options shall not
be exercisable during such 180-day period, and (C) transactions by the Company
with the prior written consent of the Representative, which consent shall not be
unreasonably withheld. Notwithstanding the foregoing, if (1) during the last 17
days of the Lock-Up Period, the Company issues an earnings release or material
news or a material event relating to the Company occurs or (2) prior to the
expiration of the Lock-Up Period, the Company announces that it will release
earnings results or becomes aware that material news or a material event will
occur during the 16-day period beginning on the last day of the Lock-Up Period,
the restrictions imposed by this Subsection (k) shall continue to apply until
the expiration of the 18-day period beginning on the issuance of the earnings
release or the occurrence of the material news or material event, as applicable,
unless the Representative waives, in writing, such extension.
(l) Other Documents. The Company will furnish to the Depositary and to
holders of ADRs, directly or through the Depositary, such reports, documents and
other information described in the Prospectus under the caption "Description of
American Depositary Shares" in accordance with the procedures stated thereunder.
(m) Reporting Requirements. The Company, during the period when any
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(n) Compliance with NASD Rules. The Company hereby agrees that it will
ensure that the Reserved Securities will be restricted as required by the NASD
or the rules, regulations and interpretations of the NASD from sale, transfer,
assignment, pledge or hypothecation for a period of three months following the
date of this Agreement. The Underwriters will notify the Company as to which
persons will need to be so restricted. At the request of the Underwriters, the
Company will direct the transfer agent to place a stop transfer restriction upon
such securities for such period of time. Should the Company release, or seek to
release, from such restrictions any of the Reserved Securities, the Company
agrees to reimburse the Underwriters for any reasonable expenses (including,
without limitation, legal expenses) they incur in connection with such release.
(o) Submission of Documents. The Company agrees to file with the NASD, the
NASDAQ, the Commission and any other governmental or regulatory agency,
authority or
22
instrumentality in the Cayman Islands, the United States[, the British Virgin
Islands] and the People's Republic of China, as may be required, such reports,
documents, agreements and other information which the Company may from time to
time be required to file, including those relating to the implementation and
payment of dividends or other distributions on the Securities.
(p) Investment Company Act. The Company will not be or become, within one
year of the Closing Time, an "investment company" as defined in the 1940 Act.
(q) Stabilization and Manipulation. The Company agrees not to (and to use
its best efforts to cause its affiliates not to) take, directly or indirectly,
any action which is designed to or which constitutes or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of any
security of the Company.
(r) Deposit of Ordinary Shares. Prior to the Closing Time and each Time of
Delivery, the Company will deposit or cause to be deposited Ordinary Shares with
the Depositary in accordance with the provisions of the Deposit Agreement so
that the ADRs evidencing the ADSs to be delivered by such party to the
Underwriters at such Closing Time or Time of Delivery are executed,
countersigned and issued by the Depositary against receipt of such Ordinary
Shares and delivered to the Underwriters at such Closing Time or Time of
Delivery.
(s) Annual Reports. The Company agrees to furnish to its shareholders as
soon as practicable after the end of each fiscal year an annual report in
English, including a review of operations and audited consolidated financial
statements and a report thereon prepared by the Company's independent
accountants in accordance with US GAAP of net income (loss), shareholders'
equity and, as necessary, other selected balance sheet and statement of
operations items in such financial statements.
(t) Liabilities and Agreements Prior to the Closing Time. The Company
agrees that except as disclosed in the Prospectus and except for those which are
not material to the Company, prior to the Closing Time, it will not incur any
liabilities or enter into any material agreements (except in the ordinary course
of its business) without the prior written consent of the Representative.
(u) Cayman Islands Matters. The Company agrees that (A) it will not attempt
to avoid any judgment obtained by it or denied to it in a court of competent
jurisdiction outside the Cayman Islands; (B) following the consummation of the
Offering, 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.
(v) Deposit Agreement. The Company agrees to abide by the covenants set
forth in the Deposit Agreement.
23
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the preparation, printing
and filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, of the ADR
Registration Statement and of each amendment thereto and of the Form 8-A
Registration Statement and of each amendment thereto, each preliminary
prospectus, any Term Sheet and the Prospectus and any amendments or supplements
thereto; (ii) the preparation and delivery to the Underwriters of this Agreement
and such other documents as may be required in connection with the offering,
purchase, sale, issuance or delivery of the Securities, (iii) the preparation,
issuance and delivery of the certificates for the Securities to the
Underwriters, including any stock or other transfer taxes and any stamp or other
duties payable upon the sale, issuance or delivery of the Securities to the
Underwriters, (iv) the delivery of the Ordinary Shares represented by the ADSs
to the Depositary, (v) the fees and disbursements of the Company's counsel,
accountants and other advisors, (vi) the filing fees in connection the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, (vii) the fees and expenses of the
Depositary, any transfer agent or registrar, and each custodian, if any, for the
Securities, (viii) the fees and the Company's own expenses incurred in
connection with the roadshow, (ix) the fees and expenses incurred in connection
with the quotation of the ADSs on NASDAQ, (x) the filing fees incident to the
review by the NASD of the terms of the sale of the Securities, and (xi) the
costs and expenses of the Underwriters, up to $15,000, in connection with
matters related to the Reserved Securities that are designated by the Company
for sale to directors, officers, employees and associates of the Company,
including the fees and disbursements of counsel for the Underwriters.
(b) Expenses of the Selling Shareholders. The Selling Shareholders,
severally and not jointly, will pay all expenses incident to the performance of
their respective obligations under, and the consummation of the transactions
contemplated by this Agreement, including (i) any stamp duties, capital duties
and stock transfer taxes, if any, payable upon the sale of the Securities to the
Underwriters, and (ii) the fees and disbursements of their respective counsel
and accountants, except, as between the Company and the Selling Shareholders, to
the extent the Company has agreed with the Selling Shareholders to bear such
fees and disbursements.
(c) Termination of Agreement. If this Agreement is terminated by the
Representative in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriters for all out-of-pocket
accountable expenses actually incurred, including the reasonable fees and
disbursements of counsel for the Underwriters.
SECTION 5. Conditions of the Underwriters' Obligations. The obligations of
the several Underwriters hereunder, as to the ADSs to be delivered at the
Closing Time and each Time of Delivery, are subject to the accuracy of the
representations and warranties of the Company and the Selling Shareholders
contained in Section 1 hereof or in certificates of any officer of the Company
or any subsidiary or on behalf of any Selling Shareholder delivered pursuant to
the provisions hereof, to the performance by the Company of its covenants and
other obligations hereunder, and to the following further conditions.
24
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, the ADR Registration Statement
and the Form 8-A Registration Statement, has become effective and at such Time
of Delivery no stop order suspending the effectiveness of the Registration
Statement, the ADR Registration Statement or the Form 8-A Registration Statement
shall have been issued under the 1933 Act or the 1934 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriters. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely upon Rule 434,
a Term Sheet shall have been filed with the Commission in accordance with Rule
424(b).
(b) Opinion of Cayman Islands Counsel for Company. At Closing Time, the
Representative shall have received the opinion, dated as of such Closing Time,
of Xxxxxxx Xxxx & Xxxxxxx, Cayman Islands counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters, to the
effect set forth in Exhibit A hereto and to such further effect as counsel for
the Underwriters may reasonably request.
(c) Opinion of Special U.S. Counsel for Company. At Closing Time, the
Representative shall have received the opinion, dated as of such Closing Time,
of Xxxxxx & Xxxxxxx LLP, special U.S. counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such opinion for each of the other Underwriters, to the
effect set forth in Exhibit B hereto and to such further effect as counsel for
the Underwriters may reasonably request.
(d) Opinion of Special PRC Counsel for Company. At Closing Time, the
Representative shall have received the opinion, dated as of such Closing Time,
of Guantao Law Firm, special PRC counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, together with signed or reproduced
copies of such letter for each of the other Underwriters, to the effect set
forth in Exhibit C hereto and to such further effect as counsel for the
Underwriters may reasonably request.
(e) Opinion of BVI Counsel for Company. At Closing Time, the Representative
shall have received the opinion, dated as of such Closing Time, of Xxxxxxx Xxxx
& Xxxxxxx, BVI counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters, together with signed or reproduced copies of such
letter for each of the other Underwriters, to the effect set forth in Exhibit D
hereto and to such further effect as counsel for the Underwriters may reasonably
request.
(f) Opinions of Counsel for certain Selling Shareholders. At Closing Time,
the Representative shall have received the opinions, dated as of such Closing
Time, of counsels for the Selling Shareholders whose names are listed on
Schedule E hereto, respectively, in form and substance satisfactory to counsel
for the Underwriters, together with signed or reproduced copies
25
of such letter for each of the other Underwriters to the effect set forth in
Exhibit E hereto and to such further effect as counsel for the Underwriters may
reasonably request.
(g) Opinion of U.S. Counsel for Underwriters. At Closing Time, the
Representative shall have received the favorable opinion, dated as of such
Closing Time, of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, U.S. counsel for the
Underwriters, in form and substance satisfactory to the Representative, together
with signed or reproduced copies of such letter for each of the other
Underwriters.
(h) Opinion of Special PRC Counsel for Underwriters. At Closing Time, the
Representative shall have received the favorable opinion, dated as of such
Closing Time, of Commerce & Finance Law, special PRC counsel for the
Underwriters, in form and substance satisfactory to the Representative, together
with signed or reproduced copies of such letter for each of the other
Underwriters.
(i) Opinion of Counsel for Depositary. At Closing Time, the Representative
shall have received the favorable opinion, dated as of such Closing Time, of
Xxxxx Xxxxxx & Xxxxxx LLP, counsel for the Depositary, in form and substance
satisfactory to counsel for the Underwriters, together with signed or reproduced
copies of such letter for each of the other Underwriters to the effect set forth
in Exhibit F hereto and to such further effect as counsel for the Underwriters
may reasonably request.
(j) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Representative shall have
received a certificate of the chief executive officer and chief financial
officer of the Company, dated as of the Closing Time, to the effect that (i)
there has been no such material adverse change, (ii) the representations and
warranties in Section 1(a) hereof are true and correct with the same force and
effect as though expressly made at and as of such Closing Time, (iii) the
Company has complied with all agreements and satisfied all conditions contained
herein on its part to be performed or satisfied at or prior to the Closing Time,
and (iv) no stop order suspending the effectiveness of the Registration
Statement, the ADR Registration Statement or the Form 8-A Registration Statement
has been issued and no proceedings for that purpose have been instituted or are
pending or, to such officers' knowledge, are contemplated by the Commission.
(k) Certificate of Selling Shareholders. At Closing Time, the
Representative shall have received a certificate of an Attorney-in-Fact on
behalf of each Selling Shareholder, dated as of the Closing Time, to the effect
that (i) the representations and warranties in Section 1(b) hereof are true and
correct with the same force and effect as though expressly made at and as of
such Closing Time, and (ii) each Selling Shareholder has complied with all
agreements and satisfied all conditions contained herein on its part to be
performed or satisfied at or prior to the Closing Time.
26
(l) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representative shall have received from Deloitte Touche Tohmatsu
a letter dated such date, in form and substance satisfactory to the
Representative and Deloitte Touche Tohmatsu, together with signed or reproduced
copies of such letter for each of the other Underwriters containing statements
and information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and certain
financial information contained in the Registration Statement and the
Prospectus.
(m) Bring-down Comfort Letter. At Closing Time, the Representative shall
have received from Deloitte Touche Tohmatsu a letter, dated as of such Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (l) of this section, except that the specified
date referred to shall be a date not more than five business days prior to such
Closing Time.
(n) Approval of Listing. At Closing Time, the ADSs shall have been approved
for inclusion in the NASDAQ, subject only to official notice of approval.
(o) No Objection by NASD. At or prior to Closing Time, the NASD shall have
confirmed that it has not raised any objection with respect to the fairness and
reasonableness of the underwriting terms and arrangements.
(p) Lock-up Agreement. At the date of this Agreement, the Representative
shall have received a lock-up agreement substantially in the form of Exhibit G
hereto duly signed by each of the persons and entities listed on Schedule D
hereto.
(q) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company and the Selling Shareholders contained herein and the statements
in any certificates furnished by the Company, any subsidiary of the Company and
the Selling Shareholders hereunder shall be true and correct as of each Time of
Delivery and, at the relevant Time of Delivery, the Representative shall have
received:
(i) Officers' Certificate. A certificate, dated such Time of Delivery,
of the chief executive officer and chief financial officer of the Company
confirming that the certificate delivered at the Closing Time pursuant to
Section 5(j) hereof remains true and correct as of such Time of Delivery.
(ii) Certificate of Selling Shareholders. A certificate, dated such
Time of Delivery, of an Attorney-in-Fact on behalf of each Selling
Shareholder confirming that the certificate delivered at the Closing Time
pursuant to Section 5(k) hereof remains true and correct as of such Time of
Delivery.
(iii) Opinion of Cayman Islands Counsel for Company. The favorable
opinion of Xxxxxxx Xxxx & Xxxxxxx, Cayman Islands counsel for the Company,
in form and substance satisfactory to counsel for the Underwriters, dated
such Time of Delivery, relating to the Option Securities to be purchased on
such Time of Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
27
(iv) Opinion of Special U.S. Counsel for Company. The opinion of
Xxxxxx & Xxxxxxx LLP, special U.S. counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, dated such Time of
Delivery, relating to the Option Securities to be purchased on such Time of
Delivery and otherwise to the same effect as the opinion required by
Section 5(c) hereof.
(v) Opinion of Special PRC Counsel for Company. The favorable opinion
of Guantao Law Firm, special PRC counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, dated such Time of
Delivery, relating to the Option Securities to be purchased on such Time of
Delivery and otherwise to the same effect as the opinion required by
Section 5(d) hereof.
(vi) Opinion of Special BVI Counsel for Company(vii). The favorable
opinion of Xxxxxxx Xxxx & Xxxxxxx, BVI counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, dated such Time of
Delivery, relating to the Option Securities to be purchased on such Time of
Delivery and otherwise to the same effect as the opinion required by
Section 5(e) hereof.
(viii) Opinions of Counsels for certain Selling Shareholders. The
favorable opinions of counsels for the Selling Shareholders whose names are
listed on Schedule E hereto, respectively, in form and substance
satisfactory to counsel for the Underwriters, dated such Time of Delivery,
relating to the Option Securities to be purchased on such Time of Delivery
and otherwise to the same effect as the opinion required by Section 5(f)
hereof.
(ix) Opinion of U.S. Counsel for Underwriters. The favorable opinion
of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, U.S. counsel for the Underwriters, in
form and substance satisfactory to the Underwriters, dated such Time of
Delivery, relating to the Option Securities to be purchased on such Time of
Delivery and otherwise to the same effect as the opinion required by
Section 5(g) hereof.
(x) Opinion of Special PRC Counsel for Underwriters. The favorable
opinion of Commerce & Finance Law, special PRC counsel for the
Underwriters, in form and substance satisfactory to the Underwriters, dated
such Time of Delivery, relating to the Option Securities to be purchased on
such Time of Delivery and otherwise to the same effect as the opinion
required by Section 5(h) hereof.
(xi) Opinion of Counsel for Depositary. The favorable opinion of Xxxxx
Xxxxxx & Xxxxxx LLP, counsel for the Depositary, in form and substance
satisfactory to counsel for the Underwriters, dated such Time of Delivery,
relating to the Option Securities to be purchased on such Time of Delivery
and otherwise to the same effect as the opinion required by Section 5(i)
hereof.
(xii) Bring-down Comfort Letter. A letter from Deloitte Touche
Tohmatsu, in form and substance satisfactory to the Representative dated
such Time of Delivery, substantially in the same form and substance as the
letter furnished to the Underwriters pursuant to Section 5(m) hereof,
except that the "specified date" in the letter furnished
28
pursuant to this paragraph shall be a date not more than five business days
prior to such Time of Delivery.
(r) Additional Documents. At each Time of Delivery, counsel for the
Underwriters shall have been furnished with such documents and opinions as
they may reasonably require for the purpose of enabling them to pass upon
the issuance and sale of the Securities as herein contemplated, or in order
to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company and the Selling Shareholders in connection
with the issuance and sale of the Securities as herein contemplated shall
be reasonably satisfactory in form and substance to the Representative and
counsel for the Underwriters.
(s) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, the Deposit Agreement, or, in the case of any condition to
the purchase of Option Securities at a Time of Delivery which is after the
Closing Time, the obligations of the Underwriters to purchase the relevant
Option Securities, may be terminated by the Representative by notice to the
Company at any time at or prior to the Closing Time or such Time of
Delivery, as the case may be, and such termination shall be without
liability of any party to any other party except as provided in Section 4
and except that Sections 1, 6, 7, 8, 12, 13 and 14 shall survive any such
termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of the Underwriters. The Company agrees to indemnify
and hold harmless, jointly and severally with the Selling Shareholders, and the
Selling Shareholders agree to indemnify and hold harmless, severally but not
jointly with each other or the Company, each Underwriter and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, the ADR Registration Statement or the
Form 8-A Registration Statement or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of (A) the violation of any applicable
laws or regulations of foreign jurisdictions where Reserved Securities have
been offered and (B) any untrue statement or alleged untrue statement of a
material fact included in the supplement or prospectus wrapper material
distributed in jurisdictions outside the United States in
29
connection with the reservation and sale of the Reserved Securities to
eligible directors, officers, employees and associates of the Company or
the omission or alleged omission therefrom of a material fact necessary to
make the statements therein, when considered in conjunction with the
Prospectus or preliminary prospectus, not misleading;
(iii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission or in connection with any violation of
the nature referred to in Section 6(a)(ii)(A) hereof; provided that
(subject to Section 6(d) below) any such settlement is effected with the
written consent of the Company; and
(iv) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Xxxxxxx Xxxxx), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission or
in connection with any violation of the nature referred to in Section
6(a)(ii)(A) hereof, to the extent that any such expense is not paid under
(i) or (ii) above;
provided, however, that each Selling Shareholder's indemnification obligations
under this Section 6 shall only apply to any and all loss, liability, claim,
damage and expenses whatsoever, arising out of or are based upon any untrue
statement or alleged untrue statement of a material fact relating to such
Selling Shareholder contained in the Registration Statement or the Prospectuses
or any amendment thereof or supplement thereto, or the omission or alleged
omission therefrom of a material fact relating to such Selling Shareholder
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; and
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through the Representative expressly for use in the Registration
Statement, the ADR Registration Statement or the Form 8-A Registration Statement
(or any amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto); provided, further, that this indemnity
agreement shall not inure to the benefit of any U.S. Underwriter or any person
who controls such U.S. Underwriter on account of any such loss, liability,
claim, damage or expense arising out of any such defect or alleged defect in any
preliminary prospectus if a copy of the U.S. Prospectus shall not have been
given or sent by such U.S. Underwriter with or prior to the written confirmation
of the sale involved to the extent that (i) the U.S. Prospectus would have cured
such defect or alleged defect and (ii) sufficient quantities of the U.S.
Prospectus were timely made available to such U.S. Underwriter; and provided,
further, that notwithstanding the foregoing provisions, the aggregate amount of
each Selling Shareholder's indemnity obligations under this
30
Section 6 shall not exceed an amount equal to the net cash proceeds (before
deducting expenses) received by such Selling Shareholder from the sale of
Securities pursuant to this Agreement.
(b) Indemnification of the Company, Directors and Officers and Selling
Shareholders. Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, the ADR Registration Statement or the Form 8-A Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and each Selling
Shareholder against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement, the ADR
Registration Statement or the Form 8-A Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434 Information, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representative
expressly for use in the Registration Statement, the ADR Registration Statement
and the Form 8-A Registration Statement (or any amendment thereto) or such
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by the Representative, and,
in the case of parties indemnified pursuant to Section 6(b) above, counsel to
the indemnified parties shall be selected by the Company. An indemnifying party
may participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
31
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(iii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(e) Indemnification for Reserved Securities. In connection with the offer
and sale of the Reserved Securities, the Company agrees, promptly upon a request
in writing, to indemnify and hold harmless the Underwriters from and against any
and all losses, liabilities, claims, damages and expenses incurred by them as a
result of the failure of eligible directors, officers, employees and associates
of the Company to pay for and accept delivery of Reserved Securities which, by
the end of the first business day following the date of this Agreement, were
subject to a properly confirmed agreement to purchase.
(f) Other Agreements with Respect to Indemnification. The provisions of
this Section shall not affect any agreement among the Company and the Selling
Shareholders with respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received respectively by the
Company and each of the Selling Shareholders on the one hand and the
Underwriters on the other hand from the offering of the Securities pursuant to
this Agreement or (ii) if the allocation provided by clause (i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and each of the Selling Shareholders on the one hand and the
Underwriters on the other hand, respectively, in connection with the statements
or omissions, or in connection with any violation of the nature referred to in
Section 6(a)(ii)(A) hereof, that resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received respectively by the Company and each of the
Selling Shareholders on the one hand and the Underwriters on the other hand in
connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of the Securities pursuant to this Agreement (before deducting
expenses) received respectively by the Company and each of the Selling
Shareholders and the total underwriting discount received by the Underwriters,
in each case as set forth on the cover of the Prospectus, or, if Rule 434 is
used, the corresponding location on the Term Sheet, bear to the aggregate
initial public offering price of the Securities as set forth on such cover.
32
The relative fault of the Company and each of the Selling Shareholders on
the one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or each of the Selling
Shareholders or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission or any violation of the nature referred in on Section 6(a)(ii)(A)
hereof.
The Company, the Selling Shareholders and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the 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 any such untrue or
alleged untrue statement or omission or alleged omission. Further, the aggregate
amount of each Selling Shareholder's contribution obligations under this Section
7 shall not exceed the amount equal to the net proceeds (before deducting
expenses) received by such Selling Shareholder from the sale of Securities
pursuant to this Agreement.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, the ADR Registration Statement and the Form 8-A
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial Securities set forth opposite their
respective names in Schedule A hereto and not joint.
The provisions of this Section shall not affect any agreement among the
Company and the Selling Shareholders with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of
33
officers of the Company or any of its subsidiaries or the Selling Shareholders
submitted pursuant hereto shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or any
controlling person, or by or on behalf of the Company or the Selling
Shareholders, and shall survive delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representative may terminate this Agreement,
by notice to the Company and the Selling Shareholders, at any time at or prior
to the Closing Time (i) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred, after
the date hereof and prior to the Closing Time, any material adverse change in
the financial markets in the Cayman Islands, the United States, the People's
Republic of China, Asian or international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions or currency exchange rates or
exchange controls, in each case the effect of which is such as to make it, in
the judgment of the Representative, impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission, NASDAQ, or if trading generally on the American Stock Exchange or
the New York Stock Exchange or in NASDAQ has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the NASD or any other governmental authority, or
a material disruption has occurred in commercial banking or securities
settlement or clearance services in the United States or with respect to
Clearstream or Euroclear systems in Europe, or (iv) if a banking moratorium has
been declared by the Cayman Islands, People's Republic of China, U.S. federal or
New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided, further, that Sections 1,
6, 7, 8, 12, 13 and 14 shall survive such termination and remain in full force
and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at the Closing Time or a Time of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Representative shall have the right,
within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representative shall not
have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the number
of Securities to be purchased on such date, each of the non-defaulting
Underwriters shall be
34
obligated, severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Time of Delivery which occurs after the Closing Time, the obligation of the
Underwriters to purchase and of the Company to sell the Option Securities to be
purchased and sold on such Time of Delivery shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default that does not result in a termination of
this Agreement or, in the case of a Time of Delivery that is after the Closing
Time, that does not result in a termination of the obligation of the
Underwriters to purchase and the Company [and the Selling Shareholders] to sell
the relevant Option Securities, as the case may be, either the Representative or
the Company shall have the right to postpone the Closing Time or the relevant
Time of Delivery, as the case may be, for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus
or in any other documents or arrangements. As used herein, the term
"Underwriters" includes any person substituted for a Underwriter under this
Section 10.
SECTION 11. Default by one or more of the Selling Shareholders or the
Company.
(a) Default by Selling Shareholders. If a Selling Shareholder shall fail at
Closing Time or at a Date of Delivery to sell and deliver the number of
Securities that such Selling Shareholder is obligated to sell hereunder, and the
remaining Selling Shareholders do not exercise the right hereby granted to
increase, pro rata or otherwise (subject to being exercised only by the
applicable Selling Shareholders and not by the Attorney-in-Fact designated by
the Selling Shareholders), the number of Securities to be sold by them hereunder
to the total number to be sold by all Selling Shareholders as set forth in
Schedule B hereto, then the Underwriters may, at option of the Representative,
by notice from the Representative to the Company and the non-defaulting Selling
Shareholders, either (a) terminate this Agreement without any liability on the
fault of any non-defaulting party except that the provisions of Sections 1, 4,
6, 7, 8, 12, 13 and 14 shall remain in full force and effect or (b) elect to
purchase the Securities that the non-defaulting Selling Shareholders and the
Company have agreed to sell hereunder. No action taken pursuant to this Section
11 shall relieve any Selling Shareholder so defaulting from liability, if any,
in respect of such default.
In the event of a default by any Selling Shareholder as referred to in this
Section 11, each of the Representative, the Company and the non-defaulting
Selling Shareholders shall have the right to postpone Closing Time or Date of
Delivery for a period not exceeding seven days in order to effect any required
change in the Registration Statement or Prospectus or in any other documents or
arrangements.
35
(b) Default by Company. If the Company shall fail at Closing Time to sell
the number of Securities that it is obligated to sell hereunder, then this
Agreement shall terminate without any liability on the part of any nondefaulting
party; provided, however, that the provisions of Sections 1, 4, 6, 7, 8, 12, 13
and 14 shall remain in full force and effect. No action taken pursuant to this
Section shall relieve the Company from liability, if any, in respect of such
default.
SECTION 12. Waiver of Immunities. To the extent that the Company, the
Selling Shareholders or any of their respective properties, assets or revenues
may have or may hereafter become entitled to, or have attributed to the Company
or the Selling Shareholders, any right of immunity, on the grounds of
sovereignty or otherwise, from any legal action, suit or proceeding, from the
giving of any relief in any such legal action, suit or proceeding, from setoff
or counterclaim, from the jurisdiction of any Cayman Islands, New York or U.S.
federal court, from service of process, from attachment upon or prior to
judgment, from attachment in aid of execution of judgment, or from execution of
judgment, or other legal process or proceeding for the giving of any relief or
for the enforcement of any judgment, in any such court in which proceedings may
at any time be commenced, with respect to the obligations and liabilities of the
Company or the Selling Shareholders, or any other matter under or arising out of
or in connection with, the Principal Agreements or any of them, the Company and
the Selling Shareholders hereby irrevocably and unconditionally waive or will
waive such right to the extent permitted by law, and agree not to plead or
claim, any such immunity and consents to such relief and enforcement.
SECTION 13. Consent to Jurisdiction; Appointment of Agent for Service of
Process.
(a) Consent to Jurisdiction. The Company and the Selling Shareholders, by
their execution and delivery of this Agreement, hereby irrevocably consent and
submit to the nonexclusive jurisdiction of any New York Court in personam
generally and unconditionally in respect of any such suit or proceeding.
(b) Appointment of Agent for Service of Process. The Company and the
Selling Shareholders further, by their execution and delivery of this Agreement,
irrevocably designate, appoint and empower CT Corporation System, 000 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx as their designee, appointee and authorized agent
(the "Authorized Agent") to receive for and on their behalf service of any and
all legal process, summons, notices and documents that may be served in any
action, suit or proceeding brought against the Company or Selling Shareholders,
respectively, with respect to their obligations, liabilities or any other matter
arising out of or in connection with this Agreement and that may be made on the
Authorized Agent in accordance with legal procedures prescribed for such courts,
and it being understood that the designation and appointment of CT Corporation
System as the Authorized Agent shall become effective immediately without any
further action on the part of the Company or the Selling Shareholders. Each of
the Company and the Selling Shareholders represents to each Underwriter that it
has notified CT Corporation System of such designation and appointment and that
CT Corporation System has accepted the same. The Company and Selling
Shareholders further agree that, to the extent permitted by law, proper service
of process upon CT Corporation System (or its successors as agent for service of
36
process) and written notice of said service to the Company or Selling
Shareholders pursuant to Section 15, shall be deemed in every respect effective
service of process upon the Company or Selling Shareholders, respectively, in
any such suit or proceeding. If for any reason such designee, appointee and
agent hereunder shall cease to be available to act as such, the Company and
Selling Shareholders agree to designate a new designee, appointee and agent in
The City of New York, New York on the terms and for the purposes of this Section
13 reasonably satisfactory to the Representative. The Company and Selling
Shareholders further hereby irrevocably consent and agree to the service of any
and all legal process, summons, notices and documents in any such action, suit
or proceeding against the Company or Selling Shareholders, respectively, by
serving a copy thereof upon the relevant agent for service of process referred
to in this Section 13 (whether or not the appointment of such agent shall for
any reason prove to be ineffective or such agent shall accept or acknowledge
such service) and by mailing copies thereof by registered or certified air mail,
postage prepaid, to the Company or Selling Shareholders, respectively, at the
addresses specified in or designated pursuant to this Agreement. The Company and
Selling Shareholders agree that the failure of any such designee, appointee and
agent to give any notice of such service to them shall not impair or affect in
any way the validity of such service or any judgment rendered in any action or
proceeding based thereon. Nothing herein shall in any way be deemed to limit the
ability of the Underwriters and the other persons referred to in Sections 6 and
7 to serve any such legal process, summons, notices and documents in any other
manner permitted by applicable law or to obtain jurisdiction over the Company or
the Selling Shareholders or bring actions, suits or proceedings against the
Company or Selling Shareholders in such other jurisdictions, and in such manner,
as may be permitted by applicable law. The Company and Selling Shareholders
hereby irrevocably and unconditionally waive, to the fullest extent permitted by
law, any objection that they may now or hereafter have to the laying of venue of
any of the aforesaid actions, suits or proceedings arising out of or in
connection with this Agreement brought in any New York Court and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such action, suit or proceeding brought in such court has
been brought in an inconvenient forum.
SECTION 14. Judgment Currency. The Company and the Selling Shareholders
agree to indemnify each Underwriter and each person, if any, who controls such
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act, and each Underwriter severally agrees to indemnify the Company,
its directors, each of its officers who signed the Registration Statement, the
ADR Registration Statement and the Form 8-A Registration Statement, the Selling
Shareholders and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any
loss incurred, as incurred, as a result of any judgment being given in
connection with this Agreement, the Prospectus, the Registration Statement, the
ADR Registration Statement or the Form 8-A Registration Statement for which
indemnification is provided by such person pursuant to Section 6 of this
Agreement and any such judgment or order being paid in a currency (the "Judgment
Currency") other than US dollars as a result of any variation as between (i) the
spot rate of exchange in New York at which the Judgment Currency would have been
convertible into US dollars as of the date such judgment or order is entered,
and (ii) the spot rate of exchange at which the indemnified party is first able
to purchase US dollars with the amount of the Judgment Currency actually
received by the indemnified party. If, alternatively, the indemnified party
receives a profit as a result of such currency conversion, it will return any
such profits to the indemnifying party (after taking into account any taxes or
other costs arising in connection with such conversion and repayment). The
foregoing indemnity shall constitute a separate and independent, several and not
joint, obligation of the Company, the Selling Shareholders and the
37
Underwriters and shall continue in full force and effect notwithstanding any
such judgment or order as aforesaid. The term "spot rate of exchange" shall
include any premiums and costs of exchange payable in connection with the
purchase of, or conversion into, the relevant currency.
SECTION 15. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representative care of Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated, Two World Financial Center, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of Equity Capital Markets; notices
to the Company shall be directed to it at 3/F M8 West No. 1 Jiu Xian Xxxx Xxxx
Road, Xxxx Xxxx Xxxxxxxx, Xxxxxxx 000000, Xxxxxx'x Xxxxxxxx of China, attention:
Chief Financial Officer; and notices to the Selling Shareholders shall be
directed at the Selling Shareholders' respective addresses set forth on Schedule
F hereto.
SECTION 16. Parties. This Agreement shall each inure to the benefit of and
be binding upon the Underwriters, the Company the Selling Shareholders and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters, the Company and the Selling Shareholders and their
respective successors and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
Underwriters, the Company and the Selling Shareholders and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
SECTION 17. Governing Law and Time. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS MAY BE
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 18. Effect of Headings. The Section headings herein and the Table
of Contents are for convenience only and shall not affect the construction
hereof.
SECTION 19. Definitions. For purposes of this Agreement, (a) "business day"
means any day other than Saturday or Sunday that is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close and (b) "subsidiary" has the meaning set forth in Rule
405 under the 1933 Act Regulations.
SECTION 20. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all
counterparts shall together constitute one and the same Agreement.
38
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Underwriters, the Company and the Selling Shareholders in accordance with
its terms.
Very truly yours,
CHINA TECHFAITH WIRELESS
COMMUNICATION TECHNOLOGY LIMITED
By:
--------------------------------------------
Name:
Title:
ATTORNEY-IN-FACT FOR SELLING
SHAREHOLDERS
By:
--------------------------------------------
Name:
As Attorney-in-Fact acting on behalf of each of
the Selling Shareholders named in Schedule B
to this Agreement
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By:
-------------------------------------
Authorized Signatory
For themselves and as Representative of
the other Underwriters named in
Schedule A hereto
Schedule A
LIST OF UNDERWRITERS
Number of Initial Securities
Name of Underwriter (in the form of ADSs)
------------------- ----------------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated...................................... x
Xxxxxx Brothers Inc............................................... o
CIBC World Markets Corp........................................... o
-------------
Total......................................................... o
=============
Sch A-1
Schedule B
LIST OF COMPANY AND SELLING SHAREHOLDERS
Maximum Number of
Number of Initial Option Securities
Securities to be Sold to Be Sold
--------------------- ------------------
China Techfaith Wireless Communication
Technology Limited o --
Stone Column Assets Limited.......................... o o
HTF 7 Limited........................................ o o
Intel Capital Corporation............................ o o
SeaBright China Special Opportunities (1) Limited.... o o
Fortune Ideal Capital Inc............................ o o
Global Strategic Investment Inc...................... o o
Xxxx Xx.............................................. o o
Capital Group Resources.............................. o o
Iek Ngan............................................. o o
Xxx Xxxx Chow........................................ o o
XXXXXXXX Xxxxxxxxxxxx................................ o o
Xxxxx Xxxxx So....................................... o o
Financiere Natexis Singapore 2 Pte Ltd............... o o
Modern Ray Limited................................... o o
Total................................................ o o
Sch B-1
Schedule C
OFFERING PRICE
CHINA TECHFAITH WIRELESS COMMUNICATION TECHNOLOGY LIMITED
o American Depositary Shares, each representing 15 Ordinary Shares
(Par Value $0.00002 Per Ordinary Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $o.
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $o, being an amount equal to the initial public
offering price set forth above less $o per share; provided that the purchase
price per share for any Option Securities purchased upon the exercise of the
over-allotment option described in Section 2(b) shall be reduced by an amount
per share equal to any dividends or distributions declared by the Company and
payable on the Initial Securities but not payable on the Option Securities.
Sch C-1
Schedule D
LIST OF PERSONS AND ENTITIES SUBJECT TO LOCK-UP
Defu Dong
Baozhunag Huo
Cangsong Liu
Changke He
Stone Column Assets Limited
Crossvine Assets Limited
HTF 7 Limited
Intel Capital Corporation
SeaBright China Special Opportunities (1) Limited
Fortune Ideal Capital Inc.
Global Strategic Investment Inc.
Xxxx Xx
Capital Group Resources
Iek Xxxx
Xxx Hong Chow
XXXXXXXX Xxxxxxxxxxxx
Xxxxx Xxxxx So
Financiere Natexis Singapore 2 Pte Ltd.
Modern Ray Limited
Investec Bank (UK) Limited
Sch D-1
Schedule E
LIST OF SELLING SHAREHOLDERS PROVIDING AN OPINION OF COUNSEL
Stone Column Assets Limited
HTF 7 Limited
Intel Capital Corporation
SeaBright China Special Opportunities (I) Limited
Fortune Ideal Capital Inc.
Global Strategic Investment Inc.
Capital Group Resources
XXXXXXXX Xxxxxxxxxxxx
Financiere Natexis Singapore 2 Pte Ltd.
Modern Ray Limited
Sch E-1
Schedule F
NOTICE ADDRESSES OF SELLING SHAREHOLDERS
[PLEASE CONFIRM]
Stone Column Assets Limited
[Address]
Attention: _________________
HTF 7 Limited
Xxxxxxxxxx Xxxxx
Xxxxx Xxxxxx Xxxxxx
P.O. Box 1109
Xxxxxx Town, Grand Cayman
Cayman Islands
Attention: _____________________
Intel Capital Corporation
0000 Xxxxxxx Xxxxxxx Xxxx
Xxxxx Xxxxx, XX 00000
U.S.A.
Attention: ___________________
SeaBright China Special Opportunities (1) Limited
000 Xxxx Xxxxxx
X.X. Xxxx 144
Road Xxxxx, Tortola
British Virgin Islands
Attention: ___________________
Fortune Ideal Capital Inc.
x/x XXX
Xxxxxxx Xxxxxxxx
P.O. Box 146
Road Town, Tortola
British Virgin Islands
Attention: ___________________
Sch F-1
Global Strategic Investment Inc.
0xx Xxxxx
Xx. 00 Xxx Xxx Xxxxx Xxxx, Sec. 2
Taipei 000
Xxxxxx, Xxxxxxxx of China
Attention: ___________________
Xxxx Xx
Room 1909, 00/X
Xxxxxxxxxx Xxxxx
00 Xxxxxxxx Xxxx, Xxxxxxx
Xxxx Xxxx
Capital Group Resources
39/F Two International Finance Centre
0 Xxxxxxx Xxxxxx
Xxxx Xxxx
Xxxxxxxxx: ___________________
Iek Xxxx
Xxx xx Xxxxxx
Xx. 00, Xxxx. San Xxx Xxx Centro Commercial
17 andar
Macau
Xxx Xxxx Chow
Room 1909, 00/X
Xxxxxxxxxx Xxxxx
00 Xxxxxxxx Xxxx, Xxxxxxx
Xxxx Xxxx
XXXXXXXX Xxxxxxxxxxxx
X000 Xxxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
U.S.A
Attention: ___________________
Sch F-2
Xxxxx Xxxxx So
Xxxx 0000, 00/X
Xxxxxx Xxxxx
Xxxx Xxxx Convention and Xxxxxxxxxx Xxxxx
0 Xxxxxxx Xxxx, Xxxxxxx
Xxxx Xxxx
Financiere Natexis Singapore 2 Pte Ltd.
0 Xxxxxxx Xxxxx #00-00
Xxxxxxxx Xxxxx
Xxxxxxxxx 000000
Attention: ___________________
Modern Ray Limited
Sea Meadow House
Blackburne Highway
P.O. Box 116
Road Town, Tortola
British Virgin Islands
Attention: ___________________
Sch F-3
Exhibit A
FORM OF OPINION OF COMPANY'S CAYMAN ISLANDS COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(b)
(i) The Company has been duly incorporated and is validly existing under
the laws of the Cayman Islands and is validly existing as an exempted company
and in good standing (meaning that it has not failed to make any filing with any
Cayman Islands government authority or to pay any Cayman Islands government fee
or tax which might make it liable to be struck off the Register of Companies and
thereby cease to exist under the laws of the Cayman Islands) and has the
corporate power and authority required to carry on its business and to own,
lease and operate its properties in accordance with its memorandum of
association and as described in the Prospectus.
(ii) The Company has the authorized and issued share capital set forth in
the Registration Statement and the Prospectus. All of the issued Ordinary Shares
of the Company have been duly authorised and validly issued and are fully paid
and non-assessable (meaning that no further sums are payable to the Company on
such shares) and are not subject to any pre-emptive or similar rights under the
articles of association of the Company.
(iii) The Ordinary Shares to be issued and sold by the Company under the
Underwriting Agreement have been duly authorized, and when issued and delivered
by the Company to the Underwriters pursuant to the
Underwriting Agreement
against payment in full of the consideration set forth in the
Underwriting
Agreement, will have been validly issued, fully paid and non-assessable (meaning
that no further sums are payable to the Company on such Ordinary Shares) and
such Ordinary Shares will not be subject to any pre-emptive or similar rights
under the articles of association of the Company.
(iv) The Ordinary Shares to be issued and delivered by the Company pursuant
to the
Underwriting Agreement and Deposit Agreement (collectively, the
"Transaction Documents") against payment in full of the consideration set forth
therein will have been validly issued, fully paid and non-assessable (meaning
that no further sums are payable to the Company on such shares) when issued and
delivered in accordance with the
Underwriting Agreement and Deposit Agreement.
(v) Based solely on such counsel's review of the certified register of
members as at the date of its opinion, relevant board resolutions and share
transfer forms, (1) the Selling Shareholders are the registered holders of such
number of Ordinary Shares set out in the schedule to the opinion immediately
prior to their transfer to the Depositary and (2) all Ordinary Shares to be
deposited by the Selling Shareholders (the "Sale Shares") with the Depositary by
way of share transfers pursuant to the terms of the
Underwriting Agreement and
the Deposit Agreement have been duly authorized, are validly issued, fully paid
and non-assessable (meaning that no further sums are payable to the Company on
the Sale Shares) and legal title to the Sale Shares has been duly transferred to
the Depositary.
(vi) The Company has the necessary corporate power and authority to enter
into and perform its obligations under the Transaction Documents. The issue and
sale of the Ordinary Shares, the execution and delivery of the Transaction
Documents by the Company and the performance by the Company of its obligations
thereunder will not violate the Memorandum or Articles of Association of the
Company nor any applicable law, regulation, order or decree in the Cayman
Islands.
(vii) The Company has taken all corporate action required to authorise its
execution,
A-1
delivery and performance of the Transaction Documents. The Transaction Documents
have been duly executed and delivered by or on behalf of the Company, and
constitute valid and binding obligations of the Company enforceable in
accordance with the terms thereof.
(viii) No order, consent, approval, licence, authorisation or validation of
or exemption by any government or public body or authority of the Cayman Islands
or any sub-division thereof is required to authorize or is required in
connection with the issue and sale of the shares and the ADSs, the deposit of
the Ordinary Shares with the Depositary against issuance of the ADRs evidencing
the ADSs and the execution, delivery, performance and enforcement of the
Transaction Documents, issue and delivery of the Ordinary Shares and the payment
of any amount under the
Underwriting Agreement and the Deposit Agreement (other
than court filings if legal proceedings are brought in the Cayman Islands).
(ix) It is not necessary or desirable to ensure the enforceability,
legality, validity or admissibility in evidence in the Cayman Islands of the
Transaction Documents that they be registered in any register kept by, or filed
with, any governmental authority or regulatory body in the Cayman Islands (other
than court filings in the ordinary course of proceedings).
(x) There is no stamp, registration or similar tax or duty to be paid on or
in relation to any of the Transaction Documents provided that they are executed
and remain outside the Cayman Islands. If it becomes necessary to bring any of
the Transaction Documents into the Cayman Islands for enforcement or otherwise,
nominal stamp duty will be payable on such Transaction Documents. Apart from the
payment of stamp duty and court filing fees if the ordinary course of court
proceedings, there are no acts, conditions or things required by the laws and
regulations of the Cayman Islands to be done, fulfilled or performed in order to
make any of the Transaction Documents admissible in evidence in the Cayman
Islands.
(xi) The statements in the Prospectus under the captions "Description of
Share Capital," "Dividend Policy" "Management," "Taxation," "Enforceability of
Civil Liabilities," "Principal and Selling Shareholders" and "Capitalization"
insofar and to the extent that they constitute a summary or description of the
laws and regulations of the Cayman Islands, are true and correct in all respects
and nothing has been omitted from such statements which would make them
misleading in any material respect.
(xii) The Registration Statement, the Prospectus and the ADS Registration
Statement and the filing of the Registration Statement and the ADS Registration
Statement with the SEC have been duly authorised by and on behalf of the
Company, and the Registration Statement and the ADSs Registration Statement have
been duly executed pursuant to such authorisation by and on behalf of the
Company.
(xiii) Except as described in the Prospectus, no taxes, imposts or duties
of any nature (including, without limitation, stamp or other issuance or
transfer taxes or duties and capital gains, income, withholding or other taxes)
are payable by or on behalf of the Underwriters to the Cayman Islands or any
political subdivision or taxing authority thereof or therein in connection with
(i) the allotment, issuance, and initial sale of the Ordinary Shares or the
ADSs; (ii) the initial sale of the Ordinary Shares and ADSs to the Underwriters
in the manner contemplated in the Transaction Documents; (iii) the resale and
delivery of the Ordinary Shares and ADSs by the
A-2
Underwriters in the manner contemplated in the Prospectus; (iv) the declaration
and payment of dividends on the Ordinary Shares; (v) the entering of the
Depositary as the registered holder of the Ordinary Shares; or (vi) the deposit
with the Depositary of Ordinary Shares by the Company and the Selling
Shareholders against the issuance of ADRs evidencing the ADSs.
(xiv) All dividends and other distributions declared and payable on the
Ordinary Shares of the Company may under the current laws and regulations of the
Cayman Islands be paid to the Depositary as the registered holder of the
Ordinary Shares and where they are to be paid from the Cayman Islands are freely
transferred out of the Cayman Islands.
(xv) The choice of New York law as the governing law of the Transaction
Documents is a valid choice of law and would be recognised and given effect to
in any action brought before a court of competent jurisdiction in the Cayman
Islands, except for those laws (i) which such court considers to be procedural
in nature, (ii) which are revenue or penal laws or (iii) the application of
which would be inconsistent with public policy, as such term is interpreted
under the laws of the Cayman Islands. The submission in the Transaction
Documents to the non-exclusive jurisdiction of the New York courts is valid and
binding upon the Company. The Company can xxx and be sued in its own name under
the laws of the Cayman Islands.
(xvi) The courts of the Cayman Islands would recognize as a valid judgment,
a final and conclusive judgment in personam obtained in the New York courts
against the Company based upon the Transaction Documents under which a sum of
money is payable (other than a sum of money payable in respect of multiple
damages, taxes or other charges of a like nature or in respect of a fine or
other penalty) and would give a judgment based thereon provided that (a) such
courts had proper jurisdiction over the parties subject to such judgment; (b)
such courts did not contravene the rules of natural justice of the Cayman
Islands; (c) such judgment was not obtained by fraud; (d) the enforcement of the
judgment would not be contrary to the public policy of the Cayman Islands; (e)
no new admissible evidence relevant to the action is submitted prior to the
rendering of the judgment by the courts of the Cayman Islands; and (f) there is
due compliance with the correct procedures under the laws of the Cayman Islands.
(xvii) Based solely upon a search of the Register of Writs and other
Originating Process of the Grand Court of the Cayman Islands conducted at [o]
[a.m./p.m.] on [o], 2005 (which would not reveal details of matters which have
been filed but not actually entered in the Register of Writs and other
Originating Process at the time of our search), no legal or governmental
proceedings were pending against the Company or any property of the Company and
no petitions to wind up the Company had been filed in the Grand Court of the
Cayman Islands as at the date and time of our search.
(xviii) The Transaction Documents are in an acceptable legal form under the
laws of the Cayman Islands for enforcement thereof against the Company in the
Cayman Islands in accordance with its terms.
(xix) There is no exchange control legislation under Cayman Islands law and
accordingly there are no exchange control regulations imposed under Cayman
Islands law.
(xx) The Company is not entitled to any immunity under the laws of the
Cayman
A-3
Islands, whether characterised as sovereign immunity or otherwise, from any
legal proceedings to enforce the Transaction Documents in respect of itself or
its property.
(xxi) The Underwriters has standing to bring an action or proceedings
before the appropriate courts in the Cayman Islands for the enforcement of the
Transaction Documents. It is not necessary or advisable in order for the
Underwriters to enforce its rights under the Transaction Documents, including
the exercise of remedies thereunder, that it be licensed, qualified or otherwise
entitled to carry on business in the Cayman Islands.
(xxii) The appointment of CT Corporation System to accept service of
process in the New York courts and the waiver by the Company of any objection to
the venue of a proceeding in the New York courts pursuant to the Deposit
Agreement and Underwriting Agreement is legal, valid and binding on the Company.
(xxiii) The form of certificate used to evidence the Ordinary Shares
complies with all applicable statutory requirements, with any applicable
requirements of the Memorandum and Articles of Association of the Company.
A-4
Exhibit B
FORM OF OPINION OF COMPANY'S U.S. COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(c)
(i) Assuming the Underwriting Agreement has been duly authorized, executed
and delivered by the Company in accordance with the laws of the Cayman Islands,
the Underwriting Agreement has been duly executed and delivered by the Company
to the extent such execution and delivery are governed by the laws of the State
of New York.
(ii) Assuming the Deposit Agreement has been duly authorized, executed and
delivered by the Company in accordance with the laws of the Cayman Islands, the
Deposit Agreement has been duly executed and delivered by the Company and,
assuming due authorization, execution and delivery by the Depositary,
constitutes a valid and legally binding obligation of the Company, enforceable
in accordance with its terms, except that the enforcement thereof may be subject
to (a) bankruptcy, insolvency, reorganization and other laws of general
applicability now or hereinafter in effect relating to or affecting creditors'
rights generally, (b) general equity principles and the discretion of the court
before which any proceeding therefor may be brought (regardless of whether such
enforceability is considered in a proceeding in equity or at law), and (c) an
implied covenant of good faith and fair dealing, and except as rights of
indemnification and contribution, if any, may be limited by principles of public
policy and applicable law.
(iii) Upon the due issuance by the Depositary of ADSs evidenced by ADRs
against the deposit of Ordinary Shares in accordance with the Deposit Agreement,
such ADSs will be validly issued and persons in whose names such ADRs are duly
registered will be entitled to the rights specified therein and in the Deposit
Agreement.
(iv) The execution and delivery of the Underwriting Agreement and the
Deposit Agreement by the Company do not violate any federal or New York statute,
rule or regulation, and do not result in the breach of or a default under any
agreement that is known to such counsel and that is governed by the U.S. federal
laws or the laws of the State of New York and to which the Company or any of its
subsidiaries is a party.
(v) Each of the Registration Statements has become effective under the Act
and, to the best of our knowledge, no stop order suspending the effectiveness of
the Registration Statements has been issued under the Act and no proceedings
therefor have been initiated by the Commission; and any required filing of the
Prospectus pursuant to Rule 424(b) under the Act has been made in accordance
with Rule 424(b) under the Act.
(vi) Each Registration Statement, as of the date it was declared effective,
and the Prospectus, as of its date, complied as to form in all material respects
with the applicable requirements for registration statements on Form F-1 and
Form F-6 under the Act and the rules and regulations of the Commission
thereunder; it being understood, however, that we express no opinion with
respect to Regulation S-T or the financial statements, schedules or other
financial data included in, or omitted from, the Registration Statements or the
Prospectus. In passing upon the compliance as to form of the Registration
Statements and the Prospectus, such counsel has
B-1
assumed that the statements made therein are correct and complete.
(vii) The statements set forth in the Prospectus under the captions
"Description of American Depositary Shares" and "Shares Eligible for Future
Sale," insofar as they purport to describe or summarize certain provisions of
the agreements, statutes or regulations referred to therein, are accurate
descriptions or summaries in all material respects.
(viii) No consent, approval, authorization, order, registration or
qualification of or with any federal or New York governmental agency or body or,
to our knowledge, any federal or New York court is required for the compliance
by the Company with all of the provisions of the Underwriting Agreement, except
for (a) the registration under the Act and the Securities Exchange Act of 1934,
as amended, of the ADSs, (b) such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the ADSs by
the Underwriters as contemplated in the Underwriting Agreement, and (c) such as
are required by the National Association of Securities Dealers.
(ix) The Company is not an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the Investment Company
Act of 1940, as amended.
(x) Under the laws of the State of New York relating to personal
jurisdiction, (a) each of the Company and the Selling Shareholders has, under
the Underwriting Agreement, validly submitted to the personal jurisdiction of
any state or federal court located in the State of New York, County of New York
in any action arising out of or relating to the Underwriting Agreement, and the
transactions contemplated therein and has validly and effectively waived any
objection to the venue of a proceeding in any such court as provided in Section
13 of the Underwriting Agreement, (b) its appointment thereunder of CT
Corporation Systems as its authorized agent for service of process is valid,
legal and binding, and (c) service of process in the matter set forth in Section
13 of the Underwriting Agreement is effective to confer valid personal
jurisdiction over the Company and the Selling Shareholders.
(xi) Under the laws of the State of New York relating to personal
jurisdiction, (a) the Company has, under the Deposit Agreement, validly
submitted to the personal jurisdiction of any state or federal court located in
the State of New York, County of New York in any action arising out of or
relating to the Deposit Agreement and the transactions contemplated therein and
has validly and effectively waived any objection to the venue of a proceeding in
any such court as provided in Section 7.7 of the Deposit Agreement, (b) its
appointment thereunder of CT Corporation Systems as its authorized agent for
service of process is valid, legal and binding, and (c) service of process in
the matter set forth in Section 7.7 of the Deposit Agreement is effective to
confer valid personal jurisdiction over the Company.
(xii) Under the laws of the State of New York relating to choice of law,
the Company has validly chosen New York law to govern its rights and duties
under the Underwriting Agreement and the Deposit Agreement
(xiii) To the best of such counsel's knowledge, there are no contracts,
documents or franchises of a character required to be described in the
Registration Statements or the Prospectus or to be filed as exhibits to the
Registration Statements that are not described or filed as required.
(xiv) Subject to certain assumptions and qualifications, upon indication by
book entry that the ADSs sold by the Company and the Selling Shareholders as
listed on Schedule B to the Underwriting Agreements (the "Securities") have been
credited to a securities account maintained by the Representative at the
Depository Trust Company ("DTC") and payment therefor in accordance with the
Underwriting Agreement,
B-2
the Representative will acquire a securities entitlement on behalf of the
several Underwriters with respect to the Securities and, under the NY UCC, an
action based on an adverse claim to such securities entitlement, whether framed
in conversion, replevin, constructive trust, equitable lien or other theory, may
not be asserted against the Representative.
(xv) Based on such facts and subject to the limitations set forth in the
Prospectus, it is such counsel's opinion that the statements in the Prospectus
under the caption "Taxation - United States Federal Income Taxation," insofar as
they purport to summarize certain provisions of the statutes and regulations
referred to therein, are accurate summaries in all material respects.
(xvi) Based on such counsel's participation, review and reliance as
described in its disclosure letter, such counsel advises the Underwriters that
no facts came to its attention that caused it to believe that either of the
Registration Statements, at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus, as of its date, contained an untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; it being understood that such counsel expresses no belief with
respect to the financial statements, schedules, or other financial data included
in, or omitted from, the Registration Statements or the Prospectus.
B-3
Exhibit C
FORM OF OPINION OF COMPANY'S PEOPLE'S REPUBLIC OF CHINA COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(d)
(i) Each of Techfaith Wireless Communication Technology (Beijing) Limited
("Techfaith China"), Techfaith Wireless Communication Technology (Beijing)
Limited II ("Techfaith Beijing"), Techfaith Wirelss Communication Technology
(Shanghai) Limited ("Techfaith Shanghai") ("Techfaith Shanghai") and STEP
Technologies (Beijing) Co., Ltd. ("STEP Technologies") (each, a "PRC Subsidiary"
and together, the "PRC Subsidiaries") is a company duly incorporated with
limited liability and validly existing in good standing under the laws of the
People's Republic of China (the "PRC"). No steps have been or are being taken
and no order or resolution has been made or passed to appoint a receiver,
liquidator or similar officer of, or to wind up or dissolve, any PRC Subsidiary.
(ii) All of the issued shares of capital stock of each PRC Subsidiary have
been duly and validly authorized and issued and are fully paid and
non-assessable. All of the issued shares of capital stock of Techfaith China,
Techfaith Beijing and Techfaith Shanghai are owned indirectly by Techfaith
Wireless Communication Technology Limited ("Techfaith Wireless"), and 70% of the
issued shares of capital stock of STEP Technologies are owned directly by
Techfaith Wireless, free and clear of all liens, encumbrances, equities or
claims. The remaining 30% of the issued shares of capital stock of STEP
Technologies are owned directly by NEC. The liability of Techfaith Wireless in
respect of equity interests in each PRC Subsidiary is limited to its investments
therein.
(iii) Each PRC Subsidiary possesses adequate certificates, authorities,
approvals, licenses or permits issued by appropriate governmental agencies or
bodies in the PRC necessary to conduct its business as presently conducted and
as proposed to be conducted.
(iv) Each PRC Subsidiary possesses valid licenses in full force and effect
or otherwise have the legal right to use, or can acquire on reasonable terms,
all material patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks and
trade names or other intellectual property necessary to carry on the business
now operated by them, and none of the PRC Subsidiaries has received any notice
of infringement of or conflict with asserted rights of others with respect to
any of the foregoing that, individually or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would result in a Material Adverse
Effect.
(v) To the best of such counsel's knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to which the
Company or any subsidiary is a party, or to which the property of the Company or
any subsidiary is subject, before or brought by any court or governmental agency
or body in the PRC, that might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation of the
transactions contemplated in the Underwriting Agreement or the performance by
the Company of its obligations thereunder.
C-1
(vi) All descriptions in the Registration Statement and the Prospectus of
contracts and other documents to which any PRC subsidiary is a party are
accurate in all material respects; to the best of such counsel's knowledge.
(vii) To the best of such counsel's knowledge after due inquiry, there are
no outstanding guarantees or contingent payment obligations of the PRC
Subsidiaries in respect of indebtedness of third parties except as disclosed in
the Prospectus.
(viii) To the best of such counsel's knowledge after due inquiry, the PRC
Subsidiaries are not (A) in violation of their respective Articles of
Association, business licenses and any other constituent documents or (B) in
default in the performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument known to such counsel and to
which any of the PRC Subsidiaries are a party or by which any of their
respective properties may be bound.
(ix) To best of such counsel's knowledge after due inquiry, there is no
pending or threatened PRC regulatory, administrative or other governmental
initiative that, if implemented or adopted in the manner proposed or
contemplated, would have a material adverse effect on the operations of any PRC
Subsidiary in the PRC in the manner presently conducted or as disclosed in the
Prospectus.
(x) The execution, delivery and performance of the Underwriting Agreement
and the Deposit Agreement and the consummation of the transactions contemplated
in the Underwriting Agreement, the Deposit Agreement and in the Registration
Statement (including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Prospectus under
the caption "Use Of Proceeds") and compliance by the Company with its
obligations under the Underwriting Agreement and the Deposit Agreement do not
and will not, whether with or without the giving of notice or lapse of time or
both, conflict with or constitute a breach of, or default under or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of any PRC Subsidiary pursuant to any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or any other agreement or
instrument, known to such counsel, to which any PRC Subsidiary is a party or by
which it or any of them may be bound, or to which any of the property or assets
of any PRC Subsidiary is subject (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have a Material
Adverse Effect), nor will such action result in any violation of the provisions
of the charter or by-laws of any PRC Subsidiary, or any applicable law, statute,
rule, regulation, judgment, order, writ or decree, known to such counsel, of any
government, government instrumentality or court, domestic or foreign, having
jurisdiction over any PRC Subsidiary or any of their respective properties,
assets or operations.
(xi) To be best of such counsel's knowledge after due inquiry, (A) the PRC
tax laws and regulations and other PRC laws and regulations applicable to the
activities of the PRC Subsidiaries in the PRC (including regulatory fees,
capital gains, income, sales, withholding or other taxes and stamp or other
issuance or transfer taxes or duties to which any of the PRC Subsidiaries may
become subject due to the conduct of activities in the PRC) are assessed or
apply to the PRC Subsidiaries in substantially the same manner as are currently
applicable to any company incorporated under the PRC Company law that is engaged
in the same or similar
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industry in the PRC as each of the PRC Subsidiaries are engaged in and (B) there
are no material PRC fees or taxes that are or will become applicable to any of
the PRC Subsidiaries as a consequence of the issuance and sale of the Securities
and the use of the proceeds from the sale of the Securities as described in the
Prospectus under the caption "Use of Proceeds" that have not been disclosed in
the Prospectus.
(xii) The statements in the Prospectus under "Risk Factors,"
"Enforceability of Civil Liabilities" and "Business -- Regulation," insofar as
they purport to describe the provisions of PRC laws and documents referred to
therein, are accurate, complete and fair summaries thereof.
C-3
Exhibit D
FORM OF OPINION OF COMPANY'S BVI COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(e)
(i) Each of Techfaith Wireless, Great Xxxxxxx, Xxx Technology and Finest
Technology (collectively, the "BVI Subsidiaries") is duly incorporated and
existing under the laws of the British Virgin Islands in good standing (meaning
solely that it has not failed to make any filing with any British Virgin Islands
governmental authority or to pay any British Virgin Islands government fee or
tax which would make it liable to be struck off the Register of Companies and
thereby cease to exist under the laws of the British Virgin Islands).
(ii) Each of the BVI Subsidiaries has the necessary corporate power and
authority to engage in any act or activity for that is not prohibited under any
law for the time being in force in the British Virgin Islands.
(iii) The execution and delivery of the Underwriting Agreement and the
Deposit Agreement by the Company and the performance by the Company of its
obligations thereunder will not violate the memorandum of association or
articles of association of each of the BVI Subsidiaries nor any applicable law,
regulation, order or decree in the British Virgin Islands.
(iv) Based solely on a search of the public records in respect of Techfaith
Wireless maintained at the offices of the Registrar of Companies at [11:00 am]
on [o], 2005 which would not reveal details of matters which have not been
lodged for registration or have been lodged for registration but not actually
registered at the time of our search) and a search of the Index of Civil Suits
maintained at the Supreme Court Registry, Road Town, Tortola British Virgin
Islands conducted at [3:00 pm] on [o], 2005 (which would not reveal details of
proceedings which have been filed but not actually entered in the Index of Civil
Suits at the time of our search), there are no judgments against Techfaith
Wireless, nor any legal or governmental proceedings pending in the British
Virgin Islands to which Techfaith Wireless is subject, and no steps have been,
or are being, taken in the British Virgin Islands for the appointment of a
receiver, administrator or liquidator to, or for the winding-up, dissolution,
reconstruction or reorganisation of, Techfaith Wireless (however, it should be
noted that failure to file notice of appointment of a receiver does not
invalidate the receivership but only gives rise to penalties on the part of the
receiver).
(v) Based solely on a search of the public records in respect of Xxx
Technology maintained at the offices of the Registrar of Companies at [11:00 am]
on [o], 2005 which would not reveal details of matters which have not been
lodged for registration or have been lodged for registration but not actually
registered at the time of our search) and a search of the Index of Civil Suits
maintained at the Supreme Court Registry, Road Town, Tortola British Virgin
Islands conducted at [3:00 pm] on [o], 2005 (which would not reveal details of
proceedings which have been filed but not actually entered in the Index of Civil
Suits at the time of our search), there are no judgments against Xxx Technology,
nor any legal or governmental proceedings pending in the British Virgin Islands
to which Xxx Technology is subject, and no steps have been, or are being, taken
in the British Virgin Islands for the appointment of a receiver, administrator
or liquidator to, or for the winding-up, dissolution, reconstruction or
reorganisation of, Xxx Technology (however, it should be noted that failure to
file notice of appointment of a receiver does not
D-1
invalidate the receivership but only gives rise to penalties on the part of the
receiver).
(vi) Based solely on a search of the public records in respect of Great
Xxxxxxx maintained at the offices of the Registrar of Companies at [11:00 am] on
[o], 2005 which would not reveal details of matters which have not been lodged
for registration or have been lodged for registration but not actually
registered at the time of our search) and a search of the Index of Civil Suits
maintained at the Supreme Court Registry, Road Town, Tortola British Virgin
Islands conducted at [3:00 pm] on [o], 2005 (which would not reveal details of
proceedings which have been filed but not actually entered in the Index of Civil
Suits at the time of our search), there are no judgments against Great Xxxxxxx,
nor any legal or governmental proceedings pending in the British Virgin Islands
to which Great Xxxxxxx is subject, and no steps have been, or are being, taken
in the British Virgin Islands for the appointment of a receiver, administrator
or liquidator to, or for the winding-up, dissolution, reconstruction or
reorganisation of, Great Xxxxxxx (however, it should be noted that failure to
file notice of appointment of a receiver does not invalidate the receivership
but only gives rise to penalties on the part of the receiver).
(vii) Based solely on a search of the public records in respect of Finest
Technology maintained at the offices of the Registrar of Companies at [11:00 am]
on [o], 2005 which would not reveal details of matters which have not been
lodged for registration or have been lodged for registration but not actually
registered at the time of our search) and a search of the Index of Civil Suits
maintained at the Supreme Court Registry, Road Town, Tortola British Virgin
Islands conducted at [3:00 pm] on [o], 2005 (which would not reveal details of
proceedings which have been filed but not actually entered in the Index of Civil
Suits at the time of our search), there are no judgments against Finest
Technology, nor any legal or governmental proceedings pending in the British
Virgin Islands to which Finest Technology is subject, and no steps have been, or
are being, taken in the British Virgin Islands for the appointment of a
receiver, administrator or liquidator to, or for the winding-up, dissolution,
reconstruction or reorganisation of, Finest Technology (however, it should be
noted that failure to file notice of appointment of a receiver does not
invalidate the receivership but only gives rise to penalties on the part of the
receiver).
(viii) Based solely on such counsel's review of the share register of
Techfaith Wireless certified by a director of Techfaith Wireless on [o], 2005,
the registered holder of all the issued shares of Techfaith Wireless is the
Company, all of which issued shares are validly issued, fully paid and
non-assessable (meaning that no further sums are required to be paid by the
holders thereof in connection with the issue thereof).
(ix) Based solely on such counsel's review of the share register of Xxx
Technology certified by a director of Xxx Technology on [o], 2005, the
registered holder of all the issued shares of Xxx Technology is Techfaith
Wireless, all of which issued shares are validly issued, fully paid and
non-assessable (meaning that no further sums are required to be paid by the
holders thereof in connection with the issue thereof).
(x) Based solely on such counsel's review of the share register of Great
Xxxxxxx certified by a director of Great Xxxxxxx on [o], 2005, the registered
holder of all the issued shares of Great Xxxxxxx is Techfaith Wireless, all of
which issued shares are validly issued, fully paid and non-assessable (meaning
that no further sums are required to be paid by the holders thereof in
connection with the issue thereof).
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(xi) Based solely on such counsel's review of the share register of Finest
Technology certified by a director of Finest Technology on [o], 2005, the
registered holder of all the issued shares of Finest Technology is Techfaith
Wireless, all of which issued shares are validly issued, fully paid and
non-assessable (meaning that no further sums are required to be paid by the
holders thereof in connection with the issue thereof).
D-3
Exhibit E
FORM OF OPINION OF COUNSEL TO SELLING SHAREHOLDERS
TO BE DELIVERED PURSUANT TO SECTION 5(f)
(i) No filing with, or consent, approval, authorization, license, order,
registration, qualification or decree of, any court or governmental authority or
agency, domestic or foreign, (other than the issuance of the order of the
Commission declaring the Registration Statement effective and such
authorizations, approvals or consents as may be necessary under state securities
laws, as to which we need express no opinion) is necessary or required to be
obtained by the Selling Shareholders for the performance by each Selling
Shareholder of its obligations under the Underwriting Agreement or in the Power
of Attorney and Custody Agreement, or in connection with the offer, sale or
delivery of the Securities.
(ii) Each of the Selling Shareholders has been duly incorporated and is
validly existing and in good standing under the law of its jurisdiction of
incorporation.
(iii) Each Power of Attorney and Custody Agreement has been duly executed
and delivered by the respective Selling Shareholders named therein and
constitutes the legal, valid and binding agreement of such Selling Shareholder.
(iv) The Underwriting Agreement have been duly authorized, executed and
delivered by or on behalf of each Selling Shareholder.
(v) Each Attorney-in-Fact has been duly authorized by the Selling
Shareholders to deliver the Securities on behalf of the Selling Shareholders in
accordance with the terms of the Underwriting Agreement.
(vi) The execution, delivery and performance of the Underwriting Agreement
and the Power of Attorney and Custody Agreement and the sale and delivery of the
Securities and the consummation of the transactions contemplated in the
Underwriting Agreement and in the Registration Statement and compliance by each
Selling Shareholder with its obligations under the Underwriting Agreement have
been duly authorized by all necessary action on the part of such Selling
Shareholder and do not and will not result in any violation of the provisions of
the charter or by-laws of the Selling Shareholders, if applicable, or any law,
administrative regulation, judgment or order of any governmental agency or body
or any administrative or court decree having jurisdiction over such Selling
Shareholder or any of its properties.
E-1
Exhibit F
FORM OF OPINION OF U.S. COUNSEL TO THE DEPOSITARY
TO BE DELIVERED PURSUANT TO SECTION 5(h)
(i) The Deposit Agreement has been duly authorized, executed and delivered
by the Depositary and constitutes a valid and legally binding obligation of the
Depositary, enforceable in accordance with its terms, subject as to enforcement
to bankruptcy, insolvency, reorganization and similar laws of general
applicability relating to or affecting creditors' rights generally and to
general equity principles;
(ii) Upon issuance by the Depositary of ADRs evidencing ADSs against the
deposit of Ordinary Shares in respect thereof in accordance with the provisions
of the Deposit Agreement, such ADRs will be duly and validly issued;
(iii) The ADRs issued under and in accordance with the provisions of the
Deposit Agreement to evidence ADSs will entitle the holders thereof to the
rights specified therein and in the Deposit Agreement, assuming that (A) the
Ordinary Shares represented by the ADSs which are in turn evidenced by the ADRs
have been duly authorized and validly issued and are fully paid and
nonassessable and that any preemptive rights with respect to the Ordinary Shares
have been validly waived or exercised and (B) such Ordinary Shares have been
duly deposited with o, as Custodian, in each case under and in accordance with
all applicable laws and regulations; and
(iv) The ADR Registration Statement and any amendments thereof or
supplements thereto, as of their respective effective dates, complied as to form
in all material respects with the requirements of the 1933 Act and the 1933 Act
Regulations. No stop order suspending the effectiveness of the ADR Registration
Statement or any part thereof and any amendments or supplements thereto has been
issued and no proceedings for that purpose have been instituted or are pending
or contemplated under the 1933 Act and the 1933 Act Regulations.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction outside the United States.
F-1
Exhibit G
FORM OF LOCK-UP LETTER PURSUANT TO SECTION 5(p)
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx o, 2005
Incorporated
as Representative of the several Underwriters
Two World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Proposed Initial Public Offering by China Techfaith Wireless
Communication Technology Limited
Dear Sirs:
The undersigned, a shareholder [and an officer and/or director] of China
Techfaith Wireless Communication Technology Limited, a Cayman Islands
corporation (the "Company"), understands that Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated (the "Representative"), on behalf of the several
Underwriters, proposes to enter into an Underwriting Agreement (the
"Underwriting Agreement") with the Company and certain selling shareholders
named therein (the "Selling Shareholders") providing for the public offering of
the Company's Ordinary Shares, par value $0.00002 per share (the "Ordinary
Shares"), and American Depositary Shares ("ADSs"), each representing 15 of the
Company's Ordinary Shares. In recognition of the benefit that such offering will
confer upon the undersigned as a shareholder [and an officer and/or director] of
the Company, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with the
Underwriters that, during a period of 180 days from the date of the Underwriting
Agreement (the "Lock-Up Period"), the undersigned will not, without the prior
written consent of the Underwriters, directly or indirectly, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant for the sale of,
or otherwise dispose of or transfer any Ordinary Shares or any securities
convertible into or exchangeable or exercisable for ADSs or Ordinary Shares,
held by the undersigned on the date of the Underwriting Agreement or cause the
Company to file any registration statement under the United States Securities
Act of 1933, as amended, with respect to any of the foregoing or (ii) enter into
any swap or any other agreement or any transaction that transfers, in whole or
in part, directly or indirectly, the economic consequence of ownership of the
Ordinary Shares held by the undersigned on the date of the Underwriting
Agreement, whether any such swap or transaction is to be settled by delivery of
Ordinary Shares or ADSs or other securities, in cash or otherwise. For the
purposes hereof, if, on the date of the Underwriting Agreement, the undersigned
holds securities convertible into Ordinary Shares, the undersigned will be
deemed to hold such Ordinary Shares on the date of the Underwriting Agreement.
Notwithstanding the foregoing, if:
(1) during the last 17 days of the Lock-Up Period, the Company issues an
earnings release or material news or a material event relating to the Company
occurs; or
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(2) prior to the expiration of the Lock-Up Period, the Company announces
that it will release earnings results or becomes aware that material news or a
material event will occur during the 16-day period beginning on the last day of
the Lock-Up Period,
the restrictions imposed by this letter shall continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings
release or the occurrence of the material news or material event, as applicable,
unless Xxxxxxx Xxxxx waives, in writing, such extension.
The undersigned hereby consents and agrees to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of the undersigned's Ordinary Shares in violation of the restrictions
set forth in this letter during the Lock-Up Period (as may be extended under the
previous paragraph).
This agreement will be terminate and have no effect if the Underwriting
Agreement is not executed on or prior to June 30, 2005.
.
Very truly yours,
Signature:
-------------------------
Print Name:
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