] SHARES OF COMMON STOCK JINTAI MINING GROUP, INC. FORM OF UNDERWRITING AGREEMENT
[ ]
SHARES OF COMMON STOCK
FORM
OF UNDERWRITING AGREEMENT
[ ],
2011
MAXIM
GROUP LLC
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇
As
Representative of the Underwriters
named
on Schedule A
hereto
Ladies
and Gentlemen:
Jintai
Mining Group, Inc., a corporation organized and existing under the laws of the
State of Delaware (the “Company”), confirms its
agreement, subject to the terms and conditions set forth herein, with each of
the underwriters listed on Exhibit A hereto
(collectively, the “Underwriters”), for whom Maxim
Group LLC is acting as representative (in such capacity, the “Representative”), to sell and
issue to the Underwriters an aggregate of
[ ] shares of common stock,
$0.0001 par value (the “Shares”), of the Company (the
“Firm
Shares”). The Firm Shares are more fully described in the
Registration Statement and Prospectus referred to below.
The
offering and sale of the Shares contemplated by this underwriting agreement
(this “Agreement”) is
referred to herein as the “Offering.”
1.1 Firm Shares; Over-Allotment
Option.
(a) Purchase of Firm
Shares. On the basis of the representations and warranties
herein contained, but subject to the terms and conditions herein set forth, the
Company agrees to issue and sell, severally and not jointly, to the several
Underwriters, an aggregate of [ ] Firm Shares of
the Company at a purchase price (net of discounts and commissions) of
$[ ] per Firm Share. The Underwriters,
severally and not jointly, agree to purchase from the Company the number of Firm
Shares set forth opposite their respective names on Schedule A attached hereto
and made a part hereof at a purchase price (net of discounts and commissions) of
$[ ] per Firm Share. In addition, the Company
shall pay the Underwriters a corporate finance fee equal to one percent (1%), or
$[ ] per Firm Share. The corporate finance fee
shall be paid to the Underwriters for the structuring of the terms of the
Offering.
Maxim
Group LLC
[ ],
2011
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(b) Payment and
Delivery. Delivery and payment for the Firm Shares shall be
made at 10:00 A.M., New York time, on the third Business Day following the
effective date (the “Effective
Date”) of the Registration Statement (or the fourth Business Day
following the Effective Date, if the Registration Statement is declared
effective after 4:30 p.m.) or at such earlier time as shall be agreed upon by
the Representative and the Company at the offices of the Representative or at
such other place as shall be agreed upon by the Representative and the
Company. The hour and date of delivery and payment for the Firm
Shares is called the “Closing
Date.” The closing of the payment of the purchase price for,
and delivery of certificates representing, the Firm Shares is referred to herein
as the “Closing.” Payment
for the Firm Shares shall be made on the Closing Date at the Representative’s
election by wire transfer in Federal (same day) funds or by certified or bank
cashier’s check(s) in New York Clearing House funds. Any remaining
proceeds (less commissions, expense allowance and actual expense payments or
other fees payable pursuant to this Agreement) shall be paid to the order of the
Company upon delivery to you of certificates (in form and substance satisfactory
to the Underwriters) representing the Firm Shares (or through the full fast
transfer facilities of the Depository Trust Company (the “DTC”)) for the account of the
Underwriters. The Firm Shares shall be registered in such name or
names and in such authorized denominations as the Representative may request in
writing at least two Business Days prior to the Closing Date. The
Company will permit the Representative to examine and package the Firm Shares
for delivery, at least one full Business Day prior to the Closing
Date. The Company shall not be obligated to sell or deliver the Firm
Shares except upon tender of payment by the Representative for all the Firm
Shares.
(c) Option
Shares. For the purposes of covering any over-allotments in
connection with the distribution and sale of the Firm Shares, the Representative
on behalf of the Underwriters is, hereby granted, an option to purchase up to an
additional 15% of the number of Firm Shares or
[ ] shares (the “Option Shares”) to be offered
by the Company in the Offering (the “Over-allotment
Option”). The Firm Shares and the Option Shares are
hereinafter collectively referred to as the “Securities”. The
purchase price to be paid for the Option Shares (net of discounts and
commissions) will be $[ ] per Option Share. In
addition, the Company shall pay the Underwriters a corporate finance fee equal
to one percent (1%), or $[ ] per Option
Share. The corporate finance fee shall be paid to the Underwriters
for the structuring of the terms of the Offering.
(d) Exercise of
Option. The Over-allotment Option granted pursuant to Section
1.1(c) hereof may be exercised by the Representative as to all (at any time) or
any part (from time to time) of the Option Shares within 45 days after the
Effective Date. The Underwriters will not be under any obligation to
purchase any Option Shares prior to the exercise of the Over-allotment
Option. The Over-allotment Option granted hereby may be exercised by
the giving of oral notice to the Company from the Representative, which must be
confirmed in writing by overnight mail or facsimile transmission setting forth
the number of Option Shares to be purchased and the date and time for delivery
of and payment for the Option Shares, which will not be later than five Business
Days after the date of the notice or such other time as shall be agreed upon by
the Company and the Representative, at the offices of the Representative or at
such other place as shall be agreed upon by the Company and the
Representative. If such delivery and payment for the Option Shares
does not occur on the Closing Date, the date and time of the closing for such
Option Shares will be as set forth in the notice (hereinafter the “Option Closing
Date”). Upon exercise of the Over-allotment Option, the
Company will become obligated to convey to the Underwriters, and, subject to the
terms and conditions set forth herein, the Underwriters will become obligated to
purchase, the number of Option Shares specified in such notice.
Maxim
Group LLC
[ ],
2011
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(e) Payment and Delivery of
Option Shares. Payment for the Option Shares shall be made on
the Option Closing Date at the Representative’s election by wire transfer in
Federal (same day) funds or by certified or bank cashier’s check(s) in New York
Clearing House funds, by deposit of the price per Option Share to the Company
upon delivery to the Underwriters of certificates (in form and substance
satisfactory to the Underwriters) representing the Option Shares (or through the
full fast transfer facilities of DTC) for the account of the
Underwriters. The certificates representing the Option Shares to be
delivered will be in such denominations and registered in such names as the
Representative requests not less than two Business Days prior to the Closing
Date or the Option Closing Date, as the case may be, and will be made available
to the Representative for inspection, checking and packaging at the aforesaid
office of the Company’s transfer agent or correspondent not less than one full
Business Day prior to such Closing Date or Option Closing Date.
2. Representations and
Warranties of the Company.
2.1 The
Company represents, warrants and covenants to, and agrees with, each of the
Underwriters that, as of the date hereof and as of the Closing
Date:
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Group LLC
[ ],
2011
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(a) The
Company has prepared and filed with the Securities and Exchange Commission (the
“Commission”) a
registration statement on Form S-1 (Registration No. 333-168803), and amendments
thereto, and related preliminary prospectuses for the registration under the
Securities Act of 1933, as amended (the “Securities Act”), of the
Securities which registration statement, as so amended (including post-effective
amendments, if any), has been declared effective by the Commission and copies of
which have heretofore been delivered to the Underwriters. The
registration statement, as amended at the time it became effective, including
the prospectus, financial statements, schedules, exhibits and other information
(if any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Securities Act, is hereinafter
referred to as the “Registration
Statement.” If the Company has filed or is required pursuant
to the terms hereof to file a registration statement pursuant to Rule 462(b)
under the Securities Act registering additional Ordinary Shares (a “Rule 462(b) Registration
Statement”), then, unless otherwise specified, any reference herein to
the term “Registration Statement” shall be deemed to include such Rule 462(b)
Registration Statement. Other than a Rule 462(b) Registration
Statement, which, if filed, becomes effective upon filing, no other document
with respect to the Registration Statement has heretofore been filed with the
Commission. All of the Securities have been registered under the
Securities Act pursuant to the Registration Statement or, if any Rule 462(b)
Registration Statement is filed, will be duly registered under the Securities
Act with the filing of such Rule 462(b) Registration Statement. The
Company has responded to all requests of the Commission for additional or
supplemental information. Based on communications from the
Commission, no stop order suspending the effectiveness of either the
Registration Statement or the Rule 462(b) Registration Statement, if any, has
been issued and no proceeding for that purpose has been initiated or threatened
by the Commission. The Company, if required by the Securities Act and
the rules and regulations of the Commission (the “Rules and Regulations”),
proposes to file the Prospectus with the Commission pursuant to Rule 424(b)
under the Securities Act (“Rule
424(b)”). The prospectus, in the form in which it is to be
filed with the Commission pursuant to Rule 424(b), or, if the prospectus is not
to be filed with the Commission pursuant to Rule 424(b), the prospectus in the
form included as part of the Registration Statement at the time the Registration
Statement became effective, is hereinafter referred to as the “Prospectus,” except that if
any revised prospectus or prospectus supplement shall be provided to the
Underwriters by the Company for use in connection with the Offering which
differs from the Prospectus (whether or not such revised prospectus or
prospectus supplement is required to be filed by the Company pursuant to Rule
424(b)), the term “Prospectus” shall also refer to such revised prospectus or
prospectus supplement, as the case may be, from and after the time it is first
provided to the Underwriters for such use. Any preliminary prospectus
or prospectus subject to completion included in the Registration Statement or
filed with the Commission pursuant to Rule 424 under the Securities Act is
hereafter called a “Preliminary
Prospectus.” Any reference herein to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the exhibits incorporated by reference therein pursuant to the
Rules and Regulations on or before the effective date of the Registration
Statement, the date of such Preliminary Prospectus or the date of the
Prospectus, as the case may be. Any reference herein to the terms
“amend”, “amendment” or “supplement” with respect to the Registration Statement,
any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include: (i) the filing of any document under the Securities Exchange
Act of 1934, as amended, and together with the Rules and Regulations promulgated
thereunder (the “Exchange
Act”) after the effective date of the Registration Statement, the date of
such Preliminary Prospectus or the date of the Prospectus, as the case may be,
which is incorporated therein by reference, and (ii) any such document so
filed. All references in this Agreement to the Registration
Statement, the Rule 462(b) Registration Statement, a Preliminary Prospectus and
the Prospectus, or any amendments or supplements to any of the foregoing shall
be deemed to include any copy thereof filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval System (“▇▇▇▇▇”).
(b) The
Company has filed with the Commission a Form 8-A (File Number
001-[ ]) providing for the
registration under the Exchange Act of the Shares. The registration
of the Shares under the Exchange Act has been declared effective by the
Commission on the date hereof.
Maxim
Group LLC
[ ],
2011
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(c) At
the time of the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement or the effectiveness of any post-effective amendment to
the Registration Statement, when the Prospectus is first filed with the
Commission pursuant to Rule 424(b), when any supplement to or amendment of the
Prospectus is filed with the Commission, when any document filed under the
Exchange Act was or is filed, at all other subsequent times until the completion
of the public offer and sale of the Securities, and at the Closing Date (as
hereinafter defined), if any, the Registration Statement and the Prospectus and
any amendments thereof and supplements or exhibits thereto complied or will
comply in all material respects with the applicable provisions of the Securities
Act, the Exchange Act and the Rules and Regulations, and did not and will not
contain an untrue statement of a material fact and did not and will not omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein: (i) in the case of the Registration
Statement, not misleading, and (ii) in the case of the Prospectus in light of
the circumstances under which they were made, not misleading. When
any Preliminary Prospectus was first filed with the Commission (whether filed as
part of the registration statement for the registration of the Securities or any
amendment thereto or pursuant to Rule 424(a) under the Securities Act) and when
any amendment thereof or supplement thereto was first filed with the Commission,
such Preliminary Prospectus and any amendments thereof and supplements thereto
complied in all material respects with the applicable provisions of the
Securities Act, the Exchange Act and the Rules and Regulations and did not
contain an untrue statement of a material fact and did not omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. No representation and warranty is made in this
subsection (b), however, with respect to any information contained in or omitted
from the Registration Statement or the Prospectus or any related Preliminary
Prospectus or any amendment thereof or supplement thereto in reliance upon and
in conformity with information furnished in writing to the Company by or on
behalf of any Underwriter through the Representative specifically for use
therein. The parties acknowledge and agree that such information
provided by or on behalf of any Underwriter consists solely of the subsections
of the “Underwriting” section of the Prospectus captioned “Pricing of
Securities,” the last sentence of “Other Matters,” “Stabilization,” and the
penultimate paragraph on the cover page of the Preliminary Prospectus and the
Prospectus (the “Underwriters’
Information”).
(d) Neither: (i)
any Issuer-Represented General Free Writing Prospectus(es) (as defined below)
issued at or prior to the Time of Sale (as defined below) and the Statutory
Prospectus (as defined below), all considered together (collectively, the “General Disclosure Package”),
nor (ii) any individual Issuer-Represented Limited-Use Free Writing
Prospectus(es) (as defined below), when considered together with the General
Disclosure Package, includes or included as of the Time of Sale, any untrue
statement of a material fact or omits or omitted as of the Time of Sale to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading. The preceding sentence does not apply to statements in or
omissions from any Statutory Prospectus included in the Registration Statement
or any Issuer-Represented Free Writing Prospectus (as defined below) based upon
and in conformity with written information furnished to the Company by the
Representative specifically for use therein.
(e) Each
Issuer-Represented Free Writing Prospectus, as of its issue date and at all
subsequent times through the completion of the public offer and sale of the
Securities or until any earlier date that the Company notified or notifies the
Representative as described in the next sentence, did not, does not and will not
include any information that conflicted, conflicts or will conflict with the
information contained in the Registration Statement, any Statutory Prospectus or
the Prospectus. If at any time following issuance of an
Issuer-Represented Free Writing Prospectus there occurred or occurs an event or
development as a result of which such Issuer-Represented Free Writing Prospectus
conflicted or would conflict with the information contained in the Registration
Statement, any Statutory Prospectus or the Prospectus relating to the Securities
or included or would include an untrue statement of a material fact or omitted
or would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances prevailing at that subsequent time,
not misleading, the Company has notified or will notify promptly the
Representative so that any use of such Issuer-Represented Free Writing
Prospectus may cease until it is promptly amended or supplemented by the
Company, at its own expense, to eliminate or correct such conflict, untrue
statement or omission. The foregoing two sentences do not apply to
statements in or omissions from any Issuer-Represented Free Writing Prospectus
based upon and in conformity with written information furnished to the Company
by the Representative specifically for use therein.
Maxim
Group LLC
[ ],
2011
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(f) The
Company has not distributed and will not distribute any prospectus or other
offering material in connection with the offering and sale of the Securities
other than the General Disclosure Package or the Prospectus or other materials
permitted by the Act to be distributed by the Company. Unless the
Company obtains the prior consent of the Representative, the Company has not
made and will not make any offer relating to the Securities that would
constitute an “issuer free writing prospectus,” as defined in Rule 433 under the
Act, or that would otherwise constitute a “free writing prospectus,” as defined
in Rule 405 under the Act, required to be filed with the
Commission. The Company has complied and will comply with the
requirements of Rules 164 and 433 under the Act applicable to any
Issuer-Represented Free Writing Prospectus as of its issue date and at all
subsequent times through the completion of the public offer and sale of the
Securities, including timely filing with the Commission where required,
legending and record keeping. The Company has satisfied and will
satisfy the conditions in Rule 433 under the Act to avoid a requirement to file
with the Commission any electronic road show.
(g) Each
Underwriter agrees that, unless it obtains the prior written consent of the
Company, it will not make any offer relating to the Securities that would
constitute an Issuer-Represented Free Writing Prospectus (as defined below) or
that would otherwise (without taking into account any approval, authorization,
use or reference thereto by the Company) constitute a “free writing prospectus”
required to be filed by the Company with the Commission (as defined herein) or
retained by the Company under Rule 433 of the Securities Act; provided that the
prior written consent of the Company hereto shall be deemed to have been given
in respect of any Issuer-Represented General Free Writing Prospectuses
referenced on Schedule
C attached hereto
As used
in this Agreement, the terms set forth below shall have the following
meanings:
(i) “Time of Sale” means 4:30 P.M.
(Eastern time) on the date of this Agreement.
(ii) “Statutory Prospectus” as of
any time means the prospectus that is included in the Registration Statement
immediately prior to that time. For purposes of this definition,
information contained in a form of prospectus that is deemed retroactively to be
a part of the Registration Statement pursuant to Rule 430A or 430B shall be
considered to be included in the Statutory Prospectus as of the actual time that
form of prospectus is filed with the Commission pursuant to Rule 424(b) under
the Act.
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Group LLC
[ ],
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(iii) “Issuer-Represented Free Writing
Prospectus” means any “issuer free writing prospectus,” as defined in
Rule 433 under the Act, relating to the Securities that (A) is required to be
filed with the Commission by the Company, or (B) is exempt from filing pursuant
to Rule 433(d)(5)(i) under the Act because it contains a description of the
Securities or of the offering that does not reflect the final terms or pursuant
to Rule 433(d)(8)(ii) because it is a “bona fide electronic road show,” as
defined in Rule 433 of the Regulations, in each case in the form filed or
required to be filed with the Commission or, if not required to be filed, in the
form retained in the Company’s records pursuant to Rule 433(g) under the
Act.
(iv) “Issuer-Represented General Free
Writing Prospectus” means any Issuer-Represented Free Writing Prospectus
that is intended for general distribution to prospective investors, as evidenced
by its being specified in Schedule C to this Agreement.
(v) “Issuer-Represented Limited-Use Free
Writing Prospectus” means any Issuer-Represented Free Writing Prospectus
that is not an Issuer-Represented General Free Writing
Prospectus. The term Issuer-Represented Limited-Use Free Writing
Prospectus also includes any “bona fide electronic road show,” as defined in
Rule 433 of the Regulations, that is made available without restriction pursuant
to Rule 433(d)(8)(ii), even though not required to be filed with the
Commission.
(h) Lake
& Associates CPA’s LLC (“Lake”), whose report relating
to the Company is included in the Registration Statement, is an independent
registered public accounting firm as required by the Securities Act, the
Exchange Act and the Rules and Regulations and, to the Company’s knowledge, such
accountants are not in violation of the auditor independence requirements of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (“Sarb-Ox”).
(i)
Subsequent to the respective dates as
of which information is presented in the Registration Statement, the General
Disclosure Package and the Prospectus, and except as disclosed in the
Registration Statement, the General Disclosure Package and the
Prospectus: (i) the Company has not declared, paid or made any
dividends or other distributions of any kind on or in respect of its capital
stock, and (ii) there has been no material adverse change (or, to the knowledge
of the Company, any development which has a high probability of involving a
material adverse change in the future), whether or not arising from transactions
in the ordinary course of business, in or affecting: (A) the
business, condition (financial or otherwise), results of operations,
shareholders’ equity, properties or prospects of the Company and its
Subsidiaries (as defined below), taken as a whole; (B) the long-term debt or
capital stock of the Company or any of its Subsidiaries; or (C) the Offering or
consummation of any of the other transactions contemplated by this Agreement,
the Registration Statement, the General Disclosure Package and the Prospectus (a
“Material Adverse
Change”). Since the date of the latest balance sheet presented
in the Registration Statement, the General Disclosure Package and the
Prospectus, neither the Company nor any Subsidiary has incurred or undertaken
any liabilities or obligations, whether direct or indirect, liquidated or
contingent, matured or unmatured, or entered into any transactions, including
any acquisition or disposition of any business or asset, which are material to
the Company and the Subsidiaries taken as a whole, except for liabilities,
obligations and transactions which are disclosed in the Registration Statement
and the Prospectus.
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Group LLC
[ ],
2011
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(j)
As of the dates indicated in the
Registration Statement, the General Disclosure Package and the Prospectus, the
authorized, issued and outstanding shares of capital stock of the Company were
as set forth in the Registration Statement, the General Disclosure Package and
the Prospectus in the column headed “Actual” under the section thereof captioned
“Capitalization” and, after giving effect to the Offering and the other
transactions (excluding the offer and sale of the Over-allotment Shares)
contemplated by this Agreement, the Registration Statement, the General
Disclosure Package and the Prospectus, will be as set forth in the column headed
“As Adjusted” in such section. All of the issued and outstanding
shares of capital stock of the Company are fully paid and non-assessable and
have been duly and validly authorized and issued, in compliance with all
applicable state, federal and foreign securities laws and not in violation of or
subject to any preemptive or similar right that does or will entitle any Person
(as defined below), upon the issuance or sale of any security, to acquire from
the Company or any Subsidiary any Relevant Security. As used herein,
the term “Relevant
Security” means any Ordinary Shares or other security of the Company or
any Subsidiary that is convertible into, or exercisable or exchangeable for
Ordinary Shares or equity securities, or that holds the right to acquire any
Ordinary Shares or equity securities of the Company or any Subsidiary or any
other such Relevant Security, except for such rights as may have been fully
satisfied or waived prior to the effectiveness of the Registration
Statement. As used herein, the term “Person” means any foreign or
domestic individual, corporation, trust, partnership, joint venture, limited
liability company or other entity. Except as set forth in, or
contemplated by, the Registration Statement, the General Disclosure Package and
the Prospectus, on the Effective Date and on the Closing Date, there will be no
options, warrants, or other rights to purchase or otherwise acquire any
authorized, but unissued Ordinary Shares or any security convertible into
Ordinary Shares, or any contracts or commitments to issue or sell Ordinary
Shares or any such options, warrants, rights or convertible
securities.
(k) The
Securities have been duly and validly authorized and, when issued, delivered and
paid for in accordance with this Agreement on the Closing Date, will be duly and
validly issued, fully paid and non-assessable, will have been issued in
compliance with all applicable state, federal and foreign securities laws and
will not have been issued in violation of or subject to any preemptive or
similar right that does or will entitle any Person to acquire any Relevant
Security from the Company or any Subsidiary upon issuance or sale of the
Securities in the Offering. The Shares conform to the descriptions
thereof contained in the Registration Statement, the General Disclosure Package
and the Prospectus. Except as disclosed in the Registration
Statement, the General Disclosure Package and the Prospectus, neither the
Company nor any Subsidiary has outstanding warrants, options to purchase, or any
preemptive rights or other rights to subscribe for or to purchase, or any
contracts or commitments to issue or sell, any Relevant Security.
(l)
[Intentionally
omitted.]
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Group LLC
[ ],
2011
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(m) The
subsidiaries of the Company (the “Subsidiaries”) are Jintai Mining Co., Ltd., a
company organized under the laws of Hong Kong (“Jintai Mining Co.”), which is
owned 100% by the Company, and Guangzhou Xiangguang Corporate Management Co.,
Ltd. (“Guangzhou
Xiangguang”), a company organized under the laws of the People’s Republic
of China (the “PRC”),
which is owned 100% by Jintai Mining Co. Guangzhou Xiangguang
controls Huanjiang Jintai Mining Co. Ltd., a company organized under
the laws of the PRC through a number of variable interest entity contractual
agreements. Jintai Mining Co., Guangzhou Xiangguang and Huanjiang
Jintai Mining Co. Ltd. are the only subsidiaries of the Company within the
meaning of Rule 405 under the Securities Act. Except for the
Subsidiaries, the Company holds no ownership or other interest, nominal or
beneficial, direct or indirect, in any corporation, partnership, joint venture
or other business entity. Except as disclosed in the Registration
Statement, the General Disclosure Package and the Prospectus, all of the issued
and outstanding shares of capital stock of, or other ownership interests in,
each Subsidiary have been duly and validly authorized and issued and are fully
paid and non-assessable and are owned, directly or indirectly, by the Company,
free and clear of any lien, charge, mortgage, pledge, security interest, claim,
equity, trust or other encumbrance, preferential arrangement, defect or
restriction of any kind whatsoever (any “Lien”). No
director, officer or key employee of the Company named in the Prospectus holds
any direct equity, debt or other pecuniary interest in any Subsidiary or any
Person with whom the Company or any Subsidiary does business or is in privity of
contract with, other than, in each case, indirectly through the ownership by
such individuals of Ordinary Shares.
(n) Each
of the Company and the Subsidiaries has been duly incorporated, formed or
organized, and validly exists as a corporation, partnership or limited liability
company in good standing under the laws of its jurisdiction of incorporation,
formation or organization. Each of the Company and the Subsidiaries
has all requisite power and authority to carry on its business as it is
currently being conducted and as described in the Registration Statement, the
General Disclosure Package and the Prospectus, and to own, lease and operate its
respective properties. Each of the Company and the Subsidiaries is
duly qualified to do business and is in good standing as a foreign corporation,
partnership or limited liability company in each jurisdiction in which the
character or location of its properties (owned, leased or licensed) or the
nature or conduct of its business makes such qualification necessary, except, in
each case, for those failures to be so qualified or in good standing which
(individually and in the aggregate) would not reasonably be expected to have a
material adverse effect on: (i) the business, condition (financial or
otherwise), results of operations, shareholders’ equity, properties or prospects
of the Company and the Subsidiaries, taken as a whole; (ii) the long-term debt
or capital stock of the Company or any Subsidiary; or (iii) the Offering or
consummation of any of the other transactions contemplated by this Agreement,
the Registration Statement, the General Disclosure Package and the Prospectus
(any such effect being a “Material Adverse
Effect”).
(o) Neither
the Company nor any Subsidiary: (i) is in violation of its
certificate or articles of incorporation, memorandum and articles of
association, by-laws, certificate of formation, limited liability company
agreement, joint venture agreement, partnership agreement or other
organizational documents, (ii) is in default under, and no event has occurred
which, with notice or lapse of time or both, would constitute a default under or
result in the creation or imposition of any Lien upon any of its property or
assets pursuant to, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by which it is bound or
to which any of its property or assets is subject or (iii) is in violation in
any respect of any law, rule, regulation, ordinance, directive, judgment, decree
or order of any judicial, regulatory or other legal or governmental agency or
body, foreign or domestic, except (in the case of clause (ii) above) for any
Lien disclosed in the Registration Statement, the General Disclosure Package and
the Prospectus.
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Group LLC
[ ],
2011
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(p) The
Company has full right, power and authority to execute and deliver this
Agreement and all other agreements, documents, certificates and instruments
required to be delivered pursuant to this Agreement. The Company has
duly and validly authorized this Agreement and each of the transactions
contemplated by this Agreement. This Agreement has been duly and
validly executed and delivered by the Company and constitute the legal, valid
and binding obligations of the Company and are enforceable against the Company
in accordance with their terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(q) The
execution, delivery, and performance of this Agreement and all other agreements,
documents, certificates and instruments required to be delivered pursuant to
this Agreement, and consummation of the transactions contemplated by this
Agreement do not and will not: (i) conflict with, require consent
under or result in a breach of any of the terms and provisions of, or constitute
a default (or an event which with notice or lapse of time, or both, would
constitute a default) under, or result in the creation or imposition of any Lien
upon any property or assets of the Company or any Subsidiary pursuant to, any
indenture, mortgage, deed of trust, loan agreement or other agreement,
instrument, franchise, license or permit to which the Company or any Subsidiary
is a party or by which the Company or any Subsidiary or their respective
properties, operations or assets may be bound or (ii) violate or conflict with
any provision of the certificate or articles of incorporation, by-laws,
certificate of formation, limited liability company agreement, partnership
agreement or other organizational documents of the Company or any Subsidiary, or
(iii) violate or conflict with any law, rule, regulation, ordinance, directive,
judgment, decree or order of any judicial, regulatory or other legal or
governmental agency or body, domestic or foreign, except in the case of
subsections (i) and (iii) for any default, conflict or violation that would not
have or reasonably be expected to have a Material Adverse Effect.
(r) Except
as disclosed in the Registration Statement, the General Disclosure Package and
the Prospectus, each of the Company and the Subsidiaries has all consents,
approvals, authorizations, orders, registrations, qualifications, licenses,
filings and permits of, with and from all judicial, regulatory and other legal
or governmental agencies and bodies and all third parties, foreign and domestic
(collectively, the “Consents”), to own, lease and
operate its properties and conduct its business as it is now being conducted and
as disclosed in the Registration Statement, the General Disclosure Package and
the Prospectus, and each such Consent is valid and in full force and
effect. Neither the Company nor any Subsidiary has received notice of
any investigation or proceedings which results in or, if decided adversely to
the Company or any Subsidiary, could reasonably be expected to result in, the
revocation of, or imposition of a materially burdensome restriction on, any
Consent. No Consent contains a materially burdensome restriction not
adequately disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus.
Maxim
Group LLC
[ ],
2011
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(s) Each
of the Company and the Subsidiaries is in compliance with all applicable laws,
rules, regulations, ordinances, directives, judgments, decrees and orders,
foreign and domestic, except for any non-compliance the consequences of which
would not have or reasonably be expected to have a Material Adverse
Effect. Neither the Company, nor any of its Affiliates (within the
meaning of Rule 144 under the Securities Act) (“Affiliates”) has received any
notice or other information from any regulatory or other legal or governmental
agency which could reasonably be expected to result in any default or potential
decertification by the Company, or any of its Affiliates.
(t) No
Consent of, with or from any judicial, regulatory or other legal or governmental
agency or body or any third party, foreign or domestic is required for the
execution, delivery and performance of this Agreement or consummation of each of
the transactions contemplated by this Agreement, including the issuance, sale
and delivery of the Securities to be issued, sold and delivered hereunder,
except the registration under the Securities Act of the Securities, which has
become effective, and such Consents as may be required under state securities or
blue sky laws or the by-laws and rules of the NYSE Amex Equities, where the
Shares have been approved for listing, and the Financial Industry Regulatory
Authority, Inc. (“FINRA”) in connection with the
purchase and distribution of the Securities by the Underwriters, each of which
has been obtained and is in full force and effect.
(u) Except
as disclosed in the Registration Statement, the General Disclosure Package and
the Prospectus, there is no judicial, regulatory, arbitral or other legal or
governmental proceeding or other litigation or arbitration, domestic or foreign,
pending to which the Company or any Subsidiary is a party or of which any
property, operations or assets of the Company or any Subsidiary is the subject
which, individually or in the aggregate, if determined adversely to the Company
or any Subsidiary, would reasonably be expected to have a Material Adverse
Effect. To the Company’s knowledge, no such proceeding, litigation or
arbitration is threatened or contemplated; and the defense of all such
proceedings, litigation and arbitration against or involving the Company or any
Subsidiary would not reasonably be expected to have a Material Adverse
Effect.
(v) The
financial statements, including the notes thereto, and the supporting schedules
included in the Registration Statement, the General Disclosure Package and the
Prospectus comply in all material respects with the requirements of the
Securities Act, the Exchange Act and present fairly the financial position as of
the dates indicated and the cash flows and results of operations for the periods
specified of the Company and its consolidated Subsidiaries. Except as
otherwise stated in the Registration Statement, the General Disclosure Package
and the Prospectus, said financial statements have been prepared in conformity
with United States generally accepted accounting principles applied on a
consistent basis throughout the periods involved, except in the case of
unaudited financials which are subject to normal year end adjustments and do not
contain certain footnotes. The supporting schedules included in the
Registration Statement, the General Disclosure Package and the Prospectus
present fairly the information required to be stated therein. No
other financial statements or supporting schedules are required to be included
or incorporated by reference in the Registration Statement, the General
Disclosure Package or the Prospectus. The other financial and
statistical information included in the Registration Statement, the General
Disclosure Package and the Prospectus present fairly the information included
therein and have been prepared on a basis consistent with that of the financial
statements that are included in the Registration Statement, the General
Disclosure Package and the Prospectus and the books and records of the
respective entities presented therein.
Maxim
Group LLC
[ ],
2011
Page 12
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(w) There
are no pro forma or as adjusted financial statements which are required to be
included in the Registration Statement, the General Disclosure Package and the
Prospectus in accordance with Regulation S-X which have not been included as so
required. The pro forma and pro forma as adjusted financial
information included in the Registration Statement, the General Disclosure
Package and the Prospectus has been properly compiled and prepared in accordance
with the applicable requirements of the Securities Act and the Rules and
Regulations and include all adjustments necessary to present fairly in
accordance with generally accepted accounting principles the pro forma and as
adjusted financial position of the respective entity or entities presented
therein at the respective dates indicated and their cash flows and the results
of operations for the respective periods specified. The assumptions
used in preparing the pro forma and pro forma as adjusted financial information
included in the Registration Statement, the General Disclosure Package and the
Prospectus provide a reasonable basis for presenting the significant effects
directly attributable to the transactions or events described
therein. The related pro forma and pro forma as adjusted adjustments
give appropriate effect to those assumptions; and the pro forma and pro forma as
adjusted financial information reflect the proper application of those
adjustments to the corresponding historical financial statement
amounts.
(x) The
statistical, industry-related and market-related data included in the
Registration Statement, the General Disclosure Package and the Prospectus are
based on or derived from sources which the Company reasonably and in good faith
believes are reliable and accurate, and such data agree with the sources from
which they are derived.
(y) [Intentionally
omitted.]
(z) The
Company has established and maintains disclosure controls and procedures (as
defined in Rules 13a-14 and 15d-14 under the Exchange Act) and such controls and
procedures are effective in ensuring that material information relating to the
Company, including its subsidiaries, is made known to the principal executive
officer and the principal financial officer. The Company has utilized
such controls and procedures in preparing and evaluating the disclosures in the
Registration Statement, in the General Disclosure Package and in the
Prospectus.
(aa) Except
as disclosed in the Registration Statement, the General Disclosure Package and
the Prospectus, the Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with management’s general or specific
authorization; (B) transactions are recorded as necessary to permit preparation
of financial statements in conformity with United States generally accepted
accounting principles and to maintain accountability for assets; (C) access to
assets is permitted only in accordance with management’s general or specific
authorization; and (D) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
Maxim
Group LLC
[ ],
2011
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(bb) Intentionally
Omittted.
(cc) The
Company’s Board of Directors has validly appointed an audit committee whose
composition satisfies the requirements of the rules and regulations of the NYSE
Amex Equities and the Board of Directors and/or audit committee has adopted a
charter that satisfies the requirements of the rules and regulations of the NYSE
Amex Equities. Except as disclosed in the Registration Statement, the
General Disclosure Package and the Prospectus, the Board of Directors nor the
audit committee has been informed, nor is any director of the Company aware,
of: (i) any significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the Company’s ability to record, process,
summarize and report financial information; or (ii) any fraud, whether or not
material, that involves management or other employees who have a significant
role in the Company’s internal control over financial reporting.
(dd) Neither
the Company nor any of its Affiliates has taken, directly or indirectly, any
action which constitutes or is designed to cause or result in, or which could
reasonably be expected to constitute, cause or result in, the stabilization or
manipulation of the price of any security to facilitate the sale or resale of
the Securities.
(ee) Neither
the Company nor any of its Affiliates has, prior to the date hereof, made any
offer or sale of any securities which are required to be “integrated” pursuant
to the Securities Act or the Rules and Regulations with the offer and sale of
the Securities pursuant to the Registration Statement. Except as
disclosed in the Registration Statement, the General Disclosure Package, the
Prospectus, neither Company nor any of its Affiliates has sold or issued any
Relevant Security during the six-month period preceding the date of the
Prospectus, including but not limited to any sales pursuant to Rule 144A or
Regulation D or S under the Securities Act, other than Ordinary Shares issued
pursuant to employee benefit plans, qualified stock option plans or the employee
compensation plans or pursuant to outstanding options, rights or warrants as
described in the Registration Statement, the General Disclosure Package and the
Prospectus.
(ff) All
information contained in the questionnaires completed by each of the Company’s
officers and directors immediately prior to the Offering and provided to the
Representative as well as the biographies of such individuals in the
Registration Statement is true and correct in all material respects and the
Company has not become aware of any information which would cause the
information disclosed in the questionnaires completed by the directors and
officers to become inaccurate and incorrect.
(gg) No
director or officer of the Company is subject to any non-competition agreement
or non-solicitation agreement with any employer or prior employer which could
materially affect his ability to be and act in his respective capacity of the
Company.
Maxim
Group LLC
[ ],
2011
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of 45
(hh) Except
as disclosed in the Registration Statement, the General Disclosure Package and
the Prospectus, no holder of any Relevant Security has any rights to require
registration of any Relevant Security as part or on account of, or otherwise in
connection with, the offer and sale of the Securities contemplated hereby, and
any such rights so disclosed have either been fully complied with by the Company
or effectively waived by the holders thereof, and any such waivers remain in
full force and effect.
(ii) The
conditions for use of Form S-1 to register the Offering under the Securities
Act, as set forth in the General Instructions to such Form, have been
satisfied.
(jj) The
Company is not and, at all times up to and including consummation of the
transactions contemplated by this Agreement, and after giving effect to
application of the net proceeds of the Offering, will not be, subject to
registration as an “investment company” under the Investment Company Act of
1940, as amended, and is not and will not be an entity “controlled” by an
“investment company” within the meaning of such act.
(kk) No
relationship, direct or indirect, exists between or among any of the Company or
any Affiliate of the Company, on the one hand, and any director, officer,
shareholder, customer or supplier of the Company or any affiliate of the
Company, on the other hand, which is required by the Securities Act, the
Exchange Act or the Rules and Regulations to be described in the Registration
Statement or the Prospectus which is not so described as
required. There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or guarantees
of indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of their respective family members, except as
described in the Registration Statement, the General Disclosure Package and the
Prospectus. The Company has not, in violation of the Sarb-Ox directly
or indirectly, including through a Subsidiary (other than as permitted under the
Sarb-Ox for depositary institutions), extended or maintained credit, arranged
for the extension of credit, or renewed an extension of credit, in the form of a
personal loan to or for any director or executive officer of the
Company.
(ll) The
Company is in material compliance with the provisions of Sarb-Ox and the Rules
and Regulations promulgated thereunder and related or similar rules and
regulations promulgated by the NYSE Amex Equities or any other governmental or
self regulatory entity or agency, except for such violations which, singly or in
the aggregate, would not have a Material Adverse Effect. Without
limiting the generality of the foregoing: (i) all members of the
Company’s board of directors who are required to be “independent” (as that term
is defined under applicable laws, rules and regulations), including, without
limitation, all members of the audit committee of the Company’s board of
directors, meet the qualifications of independence as set forth under applicable
laws, rules and regulations and (ii) the audit committee of the Company’s board
of directors has at least one member who is an “audit committee financial
expert” (as that term is defined under applicable laws, rules and
regulations).
Maxim
Group LLC
[ ],
2011
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of 45
(mm) Except
as disclosed in the Registration Statement, the General Disclosure Package and
the Prospectus, there are no contracts, agreements or understandings between the
Company and any Person that would give rise to a valid claim against the Company
or any Underwriter for a brokerage commission, finder’s fee or other like
payment in connection with the transactions contemplated by this Agreement or,
to the Company’s knowledge, any arrangements, agreements, understandings,
payments or issuance with respect to the Company or any of its officers,
directors, shareholders, partners, employees, Subsidiaries or Affiliates that
may affect the Underwriters’ compensation as determined by FINRA.
(nn) The
Company and each Subsidiary owns or leases all such properties as are necessary
to the conduct of its business as presently operated and as proposed to be
operated as described in the Registration and the Prospectus. The
Company and the Subsidiaries have good and marketable title in fee simple to all
real property and good and marketable title to all personal property owned by
them, in each case free and clear of all Liens except such as are described in
the Registration Statement, the General Disclosure Package and the Prospectus or
such as do not (individually or in the aggregate) materially affect the business
or prospects of the Company or any of the Subsidiaries. Any real
property and buildings held under lease or sublease by the Company and the
Subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material to, and do not interfere with, the use
made and proposed to be made of such property and buildings by the Company and
the Subsidiaries. Neither the Company nor any Subsidiary has received
any notice of any claim adverse to its ownership of any real or personal
property or of any claim against the continued possession of any real property,
whether owned or held under lease or sublease by the Company or any
Subsidiary.
(oo) The
Company and each Subsidiary: (i) owns or possesses adequate right to
use all patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service ▇▇▇▇ registrations, copyrights, licenses,
formulae, customer lists, and know-how and other intellectual property
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures, “Intellectual Property”)
necessary for the conduct of their respective businesses as being conducted and
as described in the Registration Statement, the General Disclosure and
Prospectus and (ii) have no knowledge that the conduct of their respective
businesses do or will conflict with, and they have not received any notice of
any claim of conflict with, any such right of others. Except as set
forth in the Registration Statement, the General Disclosure Package or the
Prospectus, neither the Company nor any Subsidiary has granted or assigned to
any other Person any right to sell the current products and services of the
Company and its Subsidiaries or those products and services described in the
Registration Statement and Prospectus. To the Company’s best
knowledge, there is no infringement by third parties of any such Intellectual
Property; there is no pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by others challenging the Company’s or any
Subsidiary’s rights in or to any such Intellectual Property, and the Company is
unaware of any facts which would form a reasonable basis for any such claim; and
there is no pending or, to the Company’s knowledge, threatened action, suit,
proceeding or claim by others that the Company or any Subsidiary infringes or
otherwise violates any patent, trademark, copyright, trade secret or other
proprietary rights of others, and the Company is unaware of any other fact which
would form a reasonable basis for any such claim.
Maxim
Group LLC
[ ],
2011
Page 16
of 45
(pp) The
agreements and documents described in the Registration Statement, the General
Disclosure Package and the Prospectus conform to the descriptions thereof
contained therein and there are no agreements or other documents required to be
described in the Registration Statement, the General Disclosure Package or the
Prospectus or to be filed with the Commission as exhibits to the Registration
Statement, that have not been so described or filed. Each agreement
or other instrument (however characterized or described) to which the Company is
a party or by which its property or business is or may be bound or affected and
(i) that is referred to in the Registration Statement, the General Disclosure
Package or the Prospectus or attached as an exhibit thereto, or (ii) is material
to the Company’s business, has been duly and validly executed by the Company, is
in full force and effect in all material respects and is enforceable against the
Company and, to the Company’s knowledge, the other parties thereto, in
accordance with its terms, except (x) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally, (y) as enforceability of any indemnification or contribution
provision may be limited under the foreign, federal and state securities laws,
and (z) that the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought, and
none of such agreements or instruments has been assigned by the Company, and
neither the Company nor, to the Company’s knowledge, any other party is in
breach or default thereunder and, to the Company’s knowledge, no event has
occurred that, with the lapse of time or the giving of notice, or both, would
constitute a breach or default thereunder. To the Company’s
knowledge, performance by the Company of the material provisions of such
agreements or instruments will not result in a violation of any existing
applicable law, rule, regulation, judgment, order or decree of any governmental
agency or court, domestic or foreign, having jurisdiction over the Company or
any of its assets or businesses, including, without limitation, those relating
to environmental laws and regulations.
(qq) No
securities of the Company have been sold by the Company or by or on behalf of,
or for the benefit of, any person or persons controlling, controlled by, or
under common control with the Company since the date of the Company’s formation,
except as disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus.
(rr) The
disclosures in the Registration Statement, the General Disclosure Package and
the Prospectus concerning the effects of foreign, federal, state and local
regulation on the Company’s business as currently contemplated are correct in
all material respects and do not omit to state a material fact necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading.
Maxim
Group LLC
[ ],
2011
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(ss) Each
of the Company and the Subsidiaries has accurately prepared and timely filed all
federal, state, foreign, including the PRC, and other tax returns that are
required to be filed by it and has paid or made provision for the payment of all
taxes, assessments, governmental or other similar charges, including without
limitation, all sales and use taxes and all taxes which the Company or any
Subsidiary is obligated to withhold from amounts owing to employees, creditors
and third parties, with respect to the periods covered by such tax returns
(whether or not such amounts are shown as due on any tax return). No
deficiency assessment with respect to a proposed adjustment of the Company’s or
any Subsidiary’s federal, state, local or foreign, including the PRC, taxes is
pending or, to the Company’s knowledge, threatened. The accruals and
reserves on the books and records of the Company and the Subsidiaries in respect
of tax liabilities for any taxable period not finally determined are adequate to
meet any assessments and related liabilities for any such period and, since the
date of the Company’s most recent audited financial statements, the Company and
the Subsidiaries have not incurred any liability for taxes other than in the
ordinary course of its business. There is no tax lien, whether
imposed by any federal, state, foreign or other taxing authority, outstanding
against the assets, properties or business of the Company or any
Subsidiary.
(tt) No
labor disturbance by the employees of the Company or any Subsidiary currently
exists or, to the Company’s knowledge, is likely to occur.
(uu) Except
as disclosed in the Registration Statement, the General Disclosure Package and
the Prospectus, the Company and each Subsidiary have at all times operated their
respective businesses in material compliance with all Environmental Laws, and no
material expenditures are or will be required in order to comply
therewith. Neither the Company nor any Subsidiary has received any
notice or communication that relates to or alleges any actual or potential
violation or failure to comply with any Environmental Laws that will result in a
Material Adverse Effect. As used herein, the term “Environmental
Laws” means all applicable laws and regulations, including any licensing,
permits or reporting requirements, and any action by a federal state or local
government entity pertaining to the protection of the environment, protection of
public health, protection of worker health and safety, or the handling of
hazardous materials, including without limitation, the Clean Air Act, 42 U.S.C.
§ 7401, et seq., the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. § 9601, et seq., the Federal Water Pollution
Control Act, 33 U.S.C. § 1321, et seq., the Hazardous Materials Transportation
Act, 49 U.S.C. § 1801, et seq., the Resource Conservation and Recovery Act, 42
U.S.C. § 690-1, et seq., and the Toxic Substances Control Act, 15 U.S.C. § 2601,
et seq. or similar laws and regulations, to the extent applicable, under the
laws and regulations of the PRC.
(vv) Except
as set forth in the Registration Statement, the General Disclosure Package or
the Prospectus, neither the Company nor any Subsidiary is a party to an
“employee benefit plan,” as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974 (“ERISA”) or similar rules and
regulations of the PRC which: (i) is subject to any provision of
ERISA or such rules and regulations of the PRC and (ii) is or was at any time
maintained, administered or contributed to by the Company or any Subsidiary and
covers any employee or former employee of the Company or any Subsidiary or any
ERISA Affiliate (as defined hereafter). These plans are referred to
collectively herein as the “Employee
Plans.” For purposes of this Section, “ERISA Affiliate” of any person
or entity means any other person or entity which, together with that person or
entity, could be treated as a single employer under Section 414(m) of the
Internal Revenue Code of 1986, as amended (the “Code”), or is an “affiliate,”
whether or not incorporated, as defined in Section 407(d)(7) of ERISA, of the
person or entity.
Maxim
Group LLC
[ ],
2011
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(ww) The
Registration Statement, the General Disclosure Package and the Prospectus
identify each employment, severance or other similar agreement, arrangement or
policy and each material plan or arrangement providing for insurance coverage
(including any self-insured arrangements), workers’ compensation, disability
benefits, severance benefits, supplemental unemployment benefits, vacation
benefits, retirement benefits or for deferred compensation, profit-sharing,
bonuses, stock options, stock appreciation or other forms of incentive
compensation, or post-retirement insurance, compensation or benefits
which: (i) is not an Employee Plan, (ii) is entered into, maintained
or contributed to, as the case may be, by the Company or any Subsidiary or any
of their respective ERISA Affiliates, and (iii) covers any employee or former
employee of the Company or any Subsidiary or any of their respective ERISA
Affiliates. These contracts, plans and arrangements are referred to
collectively in this Agreement as the “Benefit
Arrangements.” Each Benefit Arrangement has been maintained in
substantial compliance with its terms and with requirements prescribed by any
and all statutes, orders, rules and regulations that are applicable to that
Benefit Arrangement.
(xx) Except
as set forth in the Registration Statement, the General Disclosure Package or
the Prospectus, there is no liability in respect of post-retirement health and
medical benefits for retired employees of the Company or any Subsidiary or any
of their respective ERISA Affiliates other than medical benefits required to be
continued under applicable law, determined using assumptions that are reasonable
in the aggregate, over the fair market value of any fund, reserve or other
assets segregated for the purpose of satisfying such liability (including for
such purposes any fund established pursuant to Section 40 1(h) of the
Code). With respect to any of the Company’s or any Subsidiaries’
Employee Plans which are “group health plans” under Section 4980B of the Code
and Section 607(1) of ERISA, there has been material compliance with all
requirements imposed there under such that the Company or any Subsidiary or
their respective ERISA Affiliates have no (and will not incur any) loss,
assessment, tax penalty, or other sanction with respect to any such
plan.
(yy) Except
as set forth in the Registration Statement, the General Disclosure Package or
the Prospectus, neither the Company nor any Subsidiary is a party to or subject
to any employment contract or arrangement providing for annual future
compensation, or the opportunity to earn annual future compensation (whether
through fixed salary, bonus, commission, options or otherwise) of more than
$120,000 to any officer, consultant, director or employee.
(zz)
The execution of this Agreement and the consummation of the Offering do
not constitute a triggering event under any Employee Plan or any other
employment contract, whether or not legally enforceable, which (either alone or
upon the occurrence of any additional or subsequent event) will or may result in
any payment (of severance pay or otherwise), acceleration, increase in vesting,
or increase in benefits to any current or former participant, employee or
director of the Company or any Subsidiary other than an event that is not
material to the financial condition or business of the Company or any
Subsidiary, either individually or taken as a whole.
Maxim
Group LLC
[ ],
2011
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(aaa) No
“prohibited transaction” (as defined in either Section 406 of the ERISA or
Section 4975 of Code), “accumulated funding deficiency” (as defined in Section
302 of ERISA) or other event of the kind described in Section 4043(b) of ERISA
(other than events with respect to which the 30-day notice requirement under
Section 4043 of ERISA has been waived) has occurred with respect to any employee
benefit plan for which the Company or any Subsidiary would have any liability;
each employee benefit plan of the Company or any Subsidiary is in compliance in
all material respects with applicable law, including (without limitation) ERISA
and the Code; the Company has not incurred and does not expect to incur
liability under Title IV of ERISA with respect to the termination of, or
withdrawal from any “pension plan”; and each employee benefit plan of the
Company or any Subsidiary that is intended to be qualified under Section 401(a)
of the Code is so qualified and nothing has occurred, whether by action or by
failure to act, which could cause the loss of such qualification.
(bbb) Neither
the Company, any Subsidiary nor, to the Company’s knowledge, any of their
respective employees or agents has at any time during the last five (5)
years: (i) made any unlawful contribution to any candidate for
foreign office, or failed to disclose fully any contribution in violation of
law, or (ii) made any payment to any federal or state governmental officer or
official, including the PRC, or other Person charged with similar public or
quasi-public duties, other than payments that are not prohibited by the laws of
the United States of any jurisdiction thereof.
(ccc) The
Company has not offered, or caused the Underwriters to offer, the Firm Shares to
any Person or entity with the intention of unlawfully
influencing: (i) a customer or supplier of the Company or any
Subsidiary to alter the customer’s or supplier’s level or type of business with
the Company or any Subsidiary or (ii) a journalist or publication to write or
publish favorable information about the Company, any Subsidiary or its products
or services.
(ddd) As
of the date hereof and as of the Closing Date, and except as contemplated by
this Agreement, neither the Company nor any Subsidiary operates within the
United States or any state or territory thereof in such a manner so as to
subject the Company or its operations or businesses to registration as a foreign
company doing business in any state within the United States or to any of the
following laws in any material respect: (i) the Bank Secrecy Act, as
amended, (ii) the Uniting and Strengthening of America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, as amended,
(iii) the Foreign Corrupt Practices Act of 1977, as amended, (iv) the Currency
and Foreign Transactions Reporting Act of 1970, as amended, (v) the Employee
Retirement Income Security Act of 1974, as amended, (vi) the Money Laundering
Control Act of 1986, as amended (vii) the rules and regulations promulgated
under any such law, or any successor law, or any judgment, decree or order of
any applicable administrative or judicial body relating to such law and (viii)
any corresponding law, rule, regulation, ordinance, judgment, decree or order of
any state or territory of the United States or any administrative or judicial
body thereof.
(eee) The
operations of the Company and its Subsidiaries are and have been conducted at
all times in compliance with applicable financial record keeping and reporting
requirements and money laundering statutes of the PRC and the United States and,
to the Company’s knowledge, all other jurisdictions to which the Company and its
Subsidiaries are subject, the rules and regulations thereunder and any related
or similar rules, regulations or guidelines, issued, administered or enforced by
any applicable governmental agency (collectively, the “Money Laundering Laws”) and no
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its
Subsidiaries with respect to the Money Laundering Laws is pending or, to the
best knowledge of the Company, threatened.
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Group LLC
[ ],
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(fff) Except
as set forth in the Registration Statement and the Prospectus, no holders of any
securities of the Company or any rights exercisable for or convertible or
exchangeable into securities of the Company have the right to require the
Company to register any such securities of the Company under the Act or to
include any such securities in a registration statement to be filed by the
Company.
(ggg) Neither
the Company nor, to the knowledge of the Company, any director, officer, agent,
employee or affiliate of the Company (as such term is defined under Rule 144
under the Securities Act, an “Affiliate”) is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”); and the Company will
not directly or indirectly use the proceeds of the offering, or lend, contribute
or otherwise make available such proceeds to any joint venture partner or other
person or entity, for the purpose of financing the activities of any person
currently subject to any U.S. sanctions administered by OFAC.
(hhh) The
establishment of the Subsidiaries and the entry into the variable interest
entity contractual agreements fully complied with the PRC laws and regulations
and all the necessary approvals and registrations for the Subsidiaries and and
the entry into the variable interest entity contractual agreements had been
obtained.
(iii) None
of the entities or natural persons holding any shares or other equity securities
of the Company, directly or indirectly, immediately before the Offering, is a
PRC resident which shall be subject to the approval and registration
requirements under the PRC laws and regulations in connection with its holding
of shares or equity securities in the Company, including the Notice on Issues
Relating to Administration of Foreign Exchange in Fund-raising and Reverse
Investment Activities of Domestic Residents Conducted via Offshore Special
Purpose Companies and any implementing rules and guidelines related
thereto.
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Group LLC
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(jjj) Organization, Qualification
and Authority. Each of the PRC Subsidiaries has been duly established, is
validly existing as a company in good standing under the laws of the PRC, and
the Hong Kong Subsidiary has been duly established, is validly existing as a
company in good standing under the laws of the Hong Kong. Each of the
PRC Subsidiaries and the Hong Kong Subsidiary has the corporate power and
authority to own, lease and operate its property and to conduct its business as
described in the Registration Statement and the Prospectus, and is duly
qualified to transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of property
requires such qualification, except where the failure to do so would not have a
Material Adverse Effect on the assets, business or operations of the Company and
its Subsidiaries taken as a whole. Each of the PRC Subsidiaries and
the Hong Kong Subsidiary has applied for and obtained all requisite business
licenses, clearance and permits required under the laws and regulations of the
PRC or Hong Kong, as applicable, as necessary for the conduct of its businesses,
and each of the PRC Subsidiaries and the Hong Kong Subsidiary has complied in
all material respects with all laws and regulations of the PRC or Hong Kong, as
applicable, in connection with foreign exchange, except where the failure to do
so would not have a Material Adverse Effect on the assets, business or
operations of the Company taken as a whole. The registered capital of
each of the PRC Subsidiaries and the Hong Kong Subsidiary has been fully paid in
accordance with the schedule of payment stipulated in its respective Articles of
Incorporation, approval document, certificate of approval and legal person
business license (hereinafter referred to as the “Establishment Documents”) and
in compliance with the PRC or Hong Kong laws and regulations, as applicable, and
there is no outstanding capital contribution commitment for any of the PRC
Subsidiaries or Hong Kong Subsidiary. The Establishment Documents of
the PRC Subsidiaries and the Hong Kong Subsidiary have been duly approved in
accordance with the laws of the PRC and Hong Kong, as applicable, and are valid
and enforceable. The business scope specified in the Establishment
Documents of each of the PRC Subsidiaries and the Hong Kong Subsidiary complies
with the requirements of all relevant the PRC or Hong Kong laws and regulations,
as the case may be. All of the outstanding equity interests of each
of the PRC Subsidiaries and Hong Kong Subsidiary are owned of record by the
Company or a wholly owned subsidiary, except for such specific entities or
individuals identified as the registered holders thereof in the Registration
Statement and the Prospectus. The Company possesses, directly or
indirectly, the power to direct, or cause the direction of, the management and
policies of the PRC Subsidiaries and the Hong Kong Subsidiary.
(kkk) Dividends. Except
pursuant to applicable PRC law or Hong Kong law, no PRC Subsidiary or Hong Kong
Subsidiary is currently prohibited, directly or indirectly, from paying any
dividends to the Company (or the Company’s subsidiary that holds the outstanding
equity interest of such PRC Subsidiary and Hong Kong
Subsidiary). Except pursuant to applicable PRC law or Hong Kong law,
no PRC Subsidiary or Hong Kong Subsidiary is prohibited, directly or indirectly,
from making any other distribution on such applicable PRC Subsidiary’s or Hong
Kong Subsidiary’s equity capital, from repaying to the Company any loans or
advances to such the PRC Subsidiary or Hong Kong Subsidiary from the Company or
any of the Company’s Subsidiaries.
(lll) Immunity. None
of the PRC Subsidiaries, Hong Kong Subsidiary nor any of their properties,
assets or revenues are entitled to any right of immunity on the grounds of
sovereignty from any legal action, suit or proceeding, from set-off or
counterclaim, from the jurisdiction of any court, from services of process, from
attachment prior to or in aid of execution of judgment, or from any other legal
process or proceeding for the giving of any relief or for the enforcement of any
judgment.
(mmm) Filing with the PRC and Hong
Kong. Except as described in the Registration Statement and
the Prospectus, it is not necessary that this Agreement, the Registration
Statement, the Prospectus or any other document related to the Offering be filed
or recorded with any governmental agency, court or other authority in the PRC or
Hong Kong.
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Group LLC
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(nnn) Transfer Taxes. No
transaction, stamp, capital or other issuance, registration, transaction,
transfer or withholding taxes or duties are payable in the PRC or Hong Kong by
or on behalf of the Underwriters to any PRC or Hong Kong taxing authority in
connection with (i) the issuance, sale and delivery of any Shares by the Company
and the delivery of any Shares to or for the account of the Underwriters, (ii)
the purchase from the Company and the initial sale and delivery by the
Underwriters of any Shares to purchasers thereof, or (iii) the execution and
delivery of this Agreement.
(ooo) Compliance. Except
as described in the Registration Statement and the Prospectus, the Company has
taken all necessary steps to ensure compliance by each of its shareholders,
option holders, directors, officers and employees that is, or is directly or
indirectly owned or controlled by, a PRC or Hong Kong resident or citizen, with
any applicable rules and regulations of the relevant the PRC or Kong government
agencies, including, without limitation, Circular 75.
(ppp) PRC/Hong Kong
Approvals. Except as described in the Registration Statement
and the Prospectus, the issuance and sale of the Securities to the Underwriters,
the listing and trading of the Securities on NYSE Amex Equities and the
consummation of the other transactions contemplated by this Agreement, the
Registration Statement and the Prospectus are not and will not be, as of the
date hereof and on the Closing Date, subject to any approval by any the PRC or
Hong Kong governmental or regulatory authority.
(qqq) PRC/Hong Kong Tax Benefits,
etc. Any PRC or Hong Kong governmental tax benefits,
exemptions, waivers, or other relief, enjoyed by any Subsidiary as described in
the Registration Statement and the Prospectus are valid, binding and enforceable
and in accordance with PRC and Hong Kong law and regulations, as the case may
be.
(rrr) Previous
Restructuring. Any previous restructuring (i.e. equity
transfer) of the Company and the Subsidiaries will not (i) conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary is bound or to
which any of the property or assets of the Company or any Subsidiary is subject
to the extent that such conflict or breach is reasonably likely, individually or
in the aggregate, to have a Material Adverse Effect; (ii) result in any
violation of the provisions of the Certificate of Incorporation, by-laws or
other constituent documents of the Company or any Subsidiary; or (iii) result in
any violation of any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
Subsidiary or any of their properties (including but not limited to the Ministry
of Commerce, the State Administration of Industry and Commerce and the State
Administration of Foreign Exchange of the PRC) to the extent that such violation
is reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect.
(sss) Mergers and Acquisitions
Rules. The Company is aware of, and has been advised as to, the content
of the Rules on Mergers and Acquisitions of Domestic Enterprises by Foreign
Investors jointly promulgated by the Ministry of Commerce, the State Assets
Supervision and Administration Commission, the State Tax Administration, the
State Administration of Industry and Commerce, the China Securities Regulatory
Commission (“CSRC”) and
the State Administration of Foreign Exchange of the PRC on August 8, 2006 (the
“M&A Rules”), in particular the
relevant provisions thereof which purport to require offshore special purpose
vehicles, or SPVs, formed for listing purposes and controlled directly or
indirectly by PRC companies or individuals, to obtain the approval of the CSRC
prior to the listing and trading of their securities on an overseas stock
exchange. The Company has received legal advice specifically with
respect to the M&A Rules from its PRC counsel and the Company understands
such legal advice. The Company has provided such legal advice from its PRC
counsel to each of its directors that signed the Registration Statement and each
director has confirmed that he or she understands such legal
advice.
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Group LLC
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(ttt) Compliance with Mergers and
Acquisitions Rules. The issuance and sale of the Shares, the listing and
trading of the Shares on NYSE Amex Equities or the consummation of the
transactions contemplated by this Agreement is not and will not be, as of the
date hereof and on the Closing Date adversely affected by the M&A Rules or
any official clarifications, guidance, interpretations or implementation rules
in connection with or related to the M&A Rules (collectively, the “M&A Rules and Related
Clarifications”).
(uuu) Compliance with Overseas
Investment and Listing Regulations. Except as provided for in the
Registration Statement and Prospectus, each of the Company and the Subsidiaries
that were incorporated outside of the PRC has taken, or is in the process of
taking, reasonable steps to ensure compliance by each of its shareholders,
option holders, directors, officers, and employees that is, or is directly or
indirectly owned or controlled by, a PRC resident or citizen with any applicable
rules and regulations of the relevant PRC government agencies (including but not
limited to the Ministry of Commerce, the National Development and Reform
Commission and the State Administration of Foreign Exchange) relating to
overseas investment by PRC residents and citizens or the repatriation of the
proceeds from overseas offering and listing by offshore special purpose vehicles
controlled directly or indirectly by PRC companies and individuals, such as the
Company, (the “PRC Overseas
Investment and Listing Regulations”), including without
limitation, requesting each shareholder, option holder, director, officer, and
employees that is, or is directly or indirectly owned or controlled by, a PRC
resident or citizen to complete any registration and other procedures required
under applicable PRC Overseas Investment and Listing Regulations.
(vvv) Compliance with SAFE Rules
and Regulations. The Company has taken all reasonable steps to comply
with, and to ensure compliance by all of the Company’s shareholders who are PRC
residents with any applicable rules and regulations of the PRC State
Administration of Foreign Exchange (the “SAFE Rules and Regulations”), including
without limitation, taking reasonable steps to require each of its shareholders
and option holders that is, or is directly or indirectly owned or controlled by,
a PRC resident to complete any registration and other procedures required under
applicable SAFE Rules and Regulations.
(www) As
used in this Agreement, references to matters being “material” with respect to the
Company or its Subsidiaries shall mean a material event, change, condition,
status or effect related to the condition (financial or otherwise), properties,
assets (including intangible assets), liabilities, business, prospects,
operations or results of operations of the Company or the applicable
Subsidiaries, either individually or taken as a whole, as the context
requires.
Maxim
Group LLC
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(xxx) As
used in this Agreement, the term “knowledge of the Company” (or
similar language) shall mean the knowledge of the officers and directors of the
Company and the applicable Subsidiaries who are named in the Prospectus, with
the assumption that such officers and directors shall have made reasonable and
diligent inquiry of the matters presented (with reference to what is customary
and prudent for the applicable individuals in connection with the discharge by
the applicable individuals of their duties as officers, directors or managers of
the Company or the applicable Subsidiaries).
Any
certificate signed by or on behalf of the Company and delivered to the
Underwriters or to DLA Piper LLP (US) (“Underwriters’ Counsel”) shall
be deemed to be a representation and warranty by the Company to each Underwriter
listed on Schedule
A hereto as to the matters covered thereby.
3. Reserved.
4. Offering. Upon
authorization of the release of the Firm Shares by the Representative, the
Underwriters propose to offer the Securities for sale to the public upon the
terms and conditions set forth in the Prospectus.
5. Covenants of the
Company. The Company acknowledges, covenants and agrees with
the Underwriters that:
(a) The
Registration Statement and any amendments thereto have been declared effective,
and if Rule 430A is used or the filing of the Prospectus is otherwise required
under Rule 424(b), the Company will file the Prospectus (properly completed if
Rule 430A has been used) pursuant to Rule 424(b) within the prescribed time
period and will provide evidence satisfactory to the Representative of such
timely filing.
(b) During
the period beginning on the date hereof and ending on the later of the Closing
Date or such date, as in the opinion of counsel for the Underwriter, the
Prospectus is no longer required by law to be delivered (or in lieu thereof the
notice referred to in Rule 173(a) under the Securities Act is no longer required
to be provided), in connection with sales by an underwriter or dealer (the
“Prospectus Delivery
Period”), prior to amending or supplementing the Registration Statement,
the General Disclosure Package or the Prospectus, the Company shall furnish to
the Underwriter for review a copy of each such proposed amendment or supplement,
and the Company shall not file any such proposed amendment or supplement to
which the Underwriter reasonably object within 36 hours of delivery thereof to
the Underwriter and its counsel.
(c) After
the date of this Agreement, the Company shall promptly advise the Underwriter in
writing (i) of the receipt of any comments of, or requests for additional or
supplemental information from, the Commission, (ii) of the time and date of any
filing of any post-effective amendment to the Registration Statement or any
amendment or supplement to any Prospectus, the General Disclosure Package or the
Prospectus, (iii) of the time and date that any post-effective amendment to the
Registration Statement becomes effective and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto or of any order preventing or
suspending its use or the use of any Prospectus, the General Disclosure Package,
the Prospectus or any Issuer-Represented Free Writing Prospectus, or of any
proceedings to remove, suspend or terminate from listing the Common Stock from
any securities exchange upon which it is listed for trading, or of the
threatening or initiation of any proceedings for any of such
purposes. If the Commission shall enter any such stop order at any
time, the Company will use its reasonable efforts to obtain the lifting of such
order at the earliest possible moment. Additionally, the Company
agrees that it shall comply with the provisions of Rules 424(b), 430A and 430B,
as applicable, under the Securities Act and will use its reasonable efforts to
confirm that any filings made by the Company under Rule 424(b) or Rule 433 were
received in a timely manner by the Commission (without reliance on Rule
424(b)(8) or Rule 164(b)).
Maxim
Group LLC
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(d) (i) During
the Prospectus Delivery Period, the Company will comply as far as it is able
with all requirements imposed upon it by the Securities Act, as now and
hereafter amended, and by the Rules and Regulations, as from time to time in
force, and by the Exchange Act so far as necessary to permit the continuance of
sales of or dealings in the Securities as contemplated by the provisions hereof,
the General Disclosure Package, and the Registration Statement and the
Prospectus. If during such period any event occurs as a result of
which the Prospectus (or if the Prospectus is not yet available to prospective
purchasers, the General Disclosure Package ) would include an untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances then existing, not
misleading, or if during such period it is necessary or appropriate in the
opinion of the Company or its counsel or the Underwriter or counsel to the
Underwriter to amend the Registration Statement or supplement the Prospectus (or
if the Prospectus is not yet available to prospective purchasers, the General
Disclosure Package ) to comply with the Securities Act or to file under the
Exchange Act any document which would be deemed to be incorporated by reference
in the Prospectus in order to comply with the Securities Act or the Exchange
Act, the Company will promptly notify the Underwriter and will amend the
Registration Statement or supplement the Prospectus (or if the Prospectus is not
yet available to prospective purchasers, the General Disclosure Package) or file
such document (at the expense of the Company) so as to correct such statement or
omission or effect such compliance.
(ii) If
at any time following issuance of an Issuer-Represented Free Writing Prospectus
there occurred or occurs an event or development as a result of which such
Issuer-Represented Free Writing Prospectus conflicted or would conflict with the
information contained in the Registration Statement, the Statutory Prospectus or
the Prospectus or included or would include an untrue statement of a material
fact or omitted or would omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances prevailing at
that subsequent time, not misleading, the Company has promptly notified or
promptly will notify the Underwriter and has promptly amended or will promptly
amend or supplement, at its own expense, such Issuer-Represented Free Writing
Prospectus to eliminate or correct such conflict, untrue statement or
omission.
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Group LLC
[ ],
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(e) The
Company will promptly deliver to the Underwriters and Underwriters’ Counsel a
signed copy of the Registration Statement, as initially filed and all amendments
thereto, including all consents and exhibits filed therewith, and will maintain
in the Company’s files manually signed copies of such documents for at least
five (5) years after the date of filing thereof. The Company will
promptly deliver to each of the Underwriters such number of copies of any
Preliminary Prospectus, the Prospectus, the Registration Statement, and all
amendments of and supplements to such documents, if any, and all documents which
are exhibits to the Registration Statement and Prospectus or any amendment
thereof or supplement thereto, as the Underwriters may reasonably
request. Prior to 10:00 A.M., New York time, on the business day next
succeeding the date of this Agreement and from time to time thereafter, the
Company will furnish the Underwriters with copies of the Prospectus in New York
City in such quantities as the Underwriters may reasonably request.
(f) The
Company consents to the use and delivery of the Preliminary Prospectus by the
Underwriters in accordance with Rule 430 and Section 5(b) of the Securities
Act.
(g) If
the Company elects to rely on Rule 462(b) under the Securities Act, the Company
shall both file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with Rule
111 of the Act by the earlier of: (i) 10:00 p.m., New York City time,
on the date of this Agreement, and (ii) the time that confirmations are given or
sent, as specified by Rule 462(b)(2).
(h) The
Company will use its best efforts, in cooperation with the Representative, at or
prior to the time of effectiveness of the Registration Statement, to qualify the
Securities for offering and sale under the securities laws relating to the
offering or sale of the Securities of such jurisdictions, domestic or foreign,
as the Representative may designate and to maintain such qualification in effect
for so long as required for the distribution thereof; except that in no event
shall the Company be obligated in connection therewith to qualify as a foreign
corporation or to execute a general consent to service of process or to subject
itself to taxation if it is otherwise not so subject.
(i) The
Company will make generally available to its security holders as soon as
practicable, but in any event not later than 15 months after the end of the
Company’s current fiscal quarter, an earnings statement (which need not be
audited) covering a 12-month period that shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 of the Rules and
Regulations.
(j) Except
with respect to (i) securities of the Company which may be issued in connection
with an acquisition of another entity (or the assets thereof), (ii) the issuance
of securities of the Company intended to provide the Company with proceeds to
acquire anther entity (or the assets thereof), or (iii) the issuance of
securities at fair market value (as defined in such plan) under the Company’s
stock option plans in effect from time to time, during the twelve (12) months
following the Closing Date, the Company or any successor to the Company shall
not undertake any public or private offerings of any equity securities of the
Company (including equity-linked securities) without the written consent of the
Representative, which consent shall not be unreasonably
withheld.
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Group LLC
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(k) Except
with respect to (i) securities of the Company which may be issued in connection
with an acquisition of another entity (or the assets thereof), (ii) the issuance
of securities of the Company intended to provide the Company with proceeds to
acquire anther entity (or the assets thereof), during the twelve (12) months
following the Closing Date, without the consent of the Representative which
shall not be unreasonably withheld: (i) the Company will not file any
registration statement relating to the offer or sale of any of the Company’s
securities, except Form S-8 filed with the Commission in connection with the
Company’s Stock Option Plan.
(l) Following
the Closing Date, the Company and any of the individuals listed on Schedule B hereto
(the “Lock-Up Parties”)
shall not sell or otherwise dispose of any securities of the Company, whether
publicly or in a private placement during the period that their respective
lock-up agreements are in effect. The Company will deliver to the
Representative the agreements of Lock-Up Parties to the foregoing effect prior
to the Closing Date, which agreements shall be substantially in the form agreed
to by the parties.
(m) Intentionally
Omitted.
(n) For
a period of one (1) year from the effective date of the Registration Statement,
the Company, at its expense, shall provide the Representative on a weekly basis
with a copy of the Company’s weekly transfer sheets from the previous week and
securities positions listings.
(o) If
the Company fails to maintain the listing of its Ordinary Shares on a nationally
recognized exchange, for a period of three (3) years from the effective date of
the Registration Statement, the Company, at its expense, shall obtain and keep
current a listing in the Standard & Poor’s Corporation Records Services or
the ▇▇▇▇▇’▇ Industrial Manual; provided that ▇▇▇▇▇’▇ OTC Industrial Manual is
not sufficient for these purposes.
(p) During
the period of three (3) years from the effective date of the Registration
Statement, the Company will make available to the Underwriters copies of all
reports or other communications (financial or other) furnished to security
holders or from time to time published or publicly disseminated by the Company,
and will deliver to the Underwriters: as soon as they are available,
copies of any reports, financial statements and proxy or information statements
furnished to or filed with the Commission or any national securities exchange on
which any class of securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the Company as
the Representative may from time to time reasonably request (such financial
information to be on a consolidated basis to the extent the accounts of the
Company and the Subsidiaries are consolidated in reports furnished to its
security holders generally or to the Commission).
(q) The
Company will not issue press releases or engage in any other publicity, without
the Representative’ prior written consent, for a period ending at 5:00 p.m.
Eastern time on the first business day following the fortieth (40th) day
following the Closing Date, other than normal and customary releases issued in
the ordinary course of the Company’s business.
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Group LLC
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(r) Prior
to the consummation of the Offering, the Company will engage or continue to
engage (for no less than two (2) years from the date of the Closing Date) a
financial public relations firm mutually acceptable to the Company and the
Representative. The Company further agrees to consult with the
Representative as is customary within the securities industry prior to
distribution to third parties of any financial information, news releases,
and/or other publicity regarding the Company, its business, or any terms of the
proposed Offering, it being agreed that the Company shall give the
Representative no less than twelve (12) hours prior notice of any such
distribution and a reasonable opportunity during or prior to such period to
review the contents of the proposed distribution.
(s) The
Company has or will retain Continental Stock Transfer & Trust Company (or a
transfer agent of similar competence and quality) as transfer agent for the
Securities and shall continue to retain such transfer agent for a period of
three (3) years following the Closing Date.
(t) The
Company will apply the net proceeds from the sale of the Securities as set forth
under the caption “Use of Proceeds” in the Prospectus. Without the
written consent of the Representative, no proceeds of the Offering will be used
to pay outstanding loans from officers, directors or shareholders or to pay any
accrued salaries or bonuses to any employees or former employees.
(u) The
Company will use its best efforts to effect and maintain the listing of the
Securities on the NYSE Amex Equities or another national securities exchange for
at least three (3) years after the Closing Date.
(v) The
Company, during the period when the Prospectus is required to be delivered under
the Securities Act or the Exchange Act, will file all documents required to be
filed with the Commission pursuant to the Securities Act, the Exchange Act and
the Rules and Regulations within the time periods required thereby.
(w) The
Company will use its best efforts to do and perform all things required to be
done or performed under this Agreement by the Company prior to the Closing Date,
and to satisfy all conditions precedent to the delivery of the Firm
Shares.
(x) The
Company will not take, and will cause its Affiliates not to take, directly or
indirectly, any action which constitutes or is designed to cause or result in,
or which could reasonably be expected to constitute, cause or result in, the
stabilization or manipulation of the price of any security to facilitate the
sale or resale of the Securities.
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Group LLC
[ ],
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(y) The
Company shall cause to be prepared and delivered to the Representative, at its
expense, within one (1) business day from the effective date of this Agreement,
an Electronic Prospectus to be used by the Underwriters in connection with the
Offering. As used herein, the term “Electronic Prospectus” means a
form of prospectus, and any amendment or supplement thereto, that meets each of
the following conditions: (i) it shall be encoded in an electronic
format, satisfactory to the Representative, that may be transmitted
electronically by the other Underwriters to offerees and purchasers of the
Securities for at least the period during which a Prospectus relating to the
Securities is required to be delivered under the Securities Act; (ii) it shall
disclose the same information as the paper prospectus and prospectus filed
pursuant to ▇▇▇▇▇, except to the extent that graphic and image material cannot
be disseminated electronically, in which case such graphic and image material
shall be replaced in the electronic prospectus with a fair and accurate
narrative description or tabular representation of such material, as
appropriate; and (iii) it shall be in or convertible into a paper format or an
electronic format, satisfactory to the Representative, that will allow
recipients thereof to store and have continuously ready access to the prospectus
at any future time, without charge to such recipients (other than any fee
charged for subscription to the Internet as a whole and for on-line
time). The Company hereby confirms that it has included or will
include in the Prospectus filed pursuant to ▇▇▇▇▇ or otherwise with the
Commission and in the Registration Statement at the time it was declared
effective an undertaking that, upon receipt of a request by an investor or his
or her representative within the period when a prospectus relating to the
Securities is required to be delivered under the Securities Act, the Company
shall transmit or cause to be transmitted promptly, without charge, a paper copy
of the Prospectus.
(z) The
Company represents and agrees that, unless it obtains the prior written consent
of the Representative, and the Representative represents and agrees that, unless
it obtains the prior written consent of the Company, it has not made and will
not make any offer relating to the Securities that would constitute an “issuer
free writing prospectus,” as defined in Rule 433 under the Securities Act, or
that would otherwise constitute a “free writing prospectus,” as defined in Rule
405 under the Securities Act, required to be filed with the Commission; provided
that the prior written consent of the parties hereto shall be deemed to have
been given in respect of the free writing prospectuses included in Schedule
C. Any such free writing prospectus consented to by the
Company and the Representative is hereinafter referred to as a “Permitted Free
Writing Prospectus.” The Company represents that it has treated or
agrees that it will treat each Permitted Free Writing Prospectus as an “issuer
free writing prospectus,” as defined in Rule 433, and has complied and will
comply with the requirements of Rule 433 applicable to any Permitted Free
Writing Prospectus, including timely Commission filing where required, legending
and record keeping.
(aa) For
a period of three (3) years from the Closing Date the Company agrees to hold all
special and annual meetings of its shareholders within the United
States.
6. Consideration; Payment of
Expenses.
(a) In
consideration of the services to be provided for hereunder, the Company shall
pay to the Underwriters or their respective designees their pro rata portion
(based on the Securities purchased) of the following compensation with respect
to the Securities which they are offering:
(i) An
underwriting discount of seven percent (7%) as set forth in Section 1.1(a)
and (c); and
(ii) A
corporate finance fee of one percent (1%) as set forth in Section 1.1(a)
and (c).
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(b) The
Company grants the Representative the right of participation for a period of
fifteen (15) months from the Closing Date to act as lead managing underwriter
and book runner or lead placement agent with at least 50% of the economics; for
any and all public and private equity and debt offerings generated by the
Company or any successor to or any subsidiary of the Company. The
Company shall provide written notice to Representative with terms of such
offering and if Representative fails to accept in writing any such proposal for
such public or private sale within 30 days after receipt of a written notice
from the Company containing such proposal, then Representative will have no
claim or right with respect to any such sale contained in any such
notice.
(c) The
Representative reserves the right to reduce any item of compensation or adjust
the terms thereof as specified herein in the event that a determination shall be
made by FINRA to the effect that the Underwriters’ aggregate compensation is in
excess of FINRA Rules or that the terms thereof require adjustment.
(d) Whether
or not the transactions contemplated by this Agreement, the Registration
Statement and the Prospectus are consummated or this Agreement is terminated,
the Company hereby agrees to pay all costs and expenses incident to the
performance of its obligations hereunder, including the following:
(i) all
expenses in connection with the preparation, printing, formatting for ▇▇▇▇▇ and
filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and any and all amendments and supplements thereto and the mailing
and delivering of copies thereof to the Underwriters and dealers;
(ii) all
fees and expenses in connection with the filing of Corporate Offerings Business
& Regulatory Analysis (“COBRADesk”) filings with
FINRA;
(iii) all
fees and expenses in connection with filing of the Registration Statement and
Prospectus with the Commission;
(iv) the
fees, disbursements and expenses of the Company’s counsel and accountants in
connection with the registration of the Securities under the Securities Act and
the Offering;
(v) all
expenses in connection with the qualifications of the Securities for offering
and sale under state or foreign securities or blue sky laws, including the fees
and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with any blue by survey undertaken by such
counsel;
(vi) all
fees and expenses in connection with listing the Securities on the NYSE Amex
Equities;
(vii) all
travel expenses of the Company’s officers and employees and any other expense of
the Company incurred in connection with attending or hosting meetings with
prospective purchasers of the Shares (“Road Show
Expenses”);
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(viii) any
stock transfer taxes incurred in connection with this Agreement or the
Offering
(ix) the
cost of preparing stock certificates representing the Securities;
(x) the
cost and charges of any transfer agent or registrar for the
Securities;
(xi) any
cost and expenses in conducting satisfactory due diligence investigation and
analysis of the Company’s officers, directors, employees, and affiliates;
and
(xii) all
other costs and expenses incident to the performance of the Company obligations
hereunder which are not otherwise specifically provided for in this Section
6.
(e) In
addition to the costs and expenses set forth in Section 6(c), the Company will
be responsible for: (i) the cost of two (2) “tombstone”
advertisements to be placed in appropriate daily or weekly periodicals of the
Representative’s choice (i.e., The Wall Street Journal and The New York Times);
and (ii) the cost of five (5) bound volumes of the Offering documents and eight
(8) Offering commemorative lucite (or other reasonable form) memorabilia, both
to be supplied to the Representative.
(f) It
is understood, however, that except as provided in this Section, and Sections 7,
8 and 12(d) hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel. Notwithstanding
anything to the contrary in this Section 6, the Company will pay, up to $130,000
(less any advances previously paid (the “Advances”)), all out-of-pocket
expenses of the Underwriters (including but not limited to fees and
disbursements of counsel to the Underwriters) incurred in connection herewith
which shall be limited to expenses which are actually incurred as allowed under
FINRA Rule 5110. In the event the Offering is completed, any Advances
received by Maxim shall be reimbursed to the Company at the Closing to the
extent such Advances are in excess of the expense reimbursement owed by the
Company.
7. Conditions of Underwriters’
Obligations. The obligations of the Underwriters to purchase
and pay for the Firm Shares or Option Shares, as the case may be, as provided
herein shall be subject to: (i) the accuracy of the representations
and warranties of the Company herein contained, as of the date hereof and as of
the Closing Date (ii) the absence from any certificates, opinions, written
statements or letters furnished to the Representative or to Underwriters’
Counsel pursuant to this Section 7 of any misstatement or omission (iii) the
performance by the Company of its obligations hereunder, and (iv) each of the
following additional conditions. For purposes of this Section 7, the
terms “Closing Date” and “Closing” shall refer to the Closing Date for the Firm
Shares or Option Shares, as the case may be, and each of the foregoing and
following conditions must be satisfied as of each Closing.
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(a) The
Registration Statement shall have become effective and all necessary regulatory
or listing approvals shall have been received not later than 5:30 P.M., New York
time, on the date of this Agreement, or at such later time and date as shall
have been consented to in writing by the Representative. If the
Company shall have elected to rely upon Rule 430A under the Securities Act, the
Prospectus shall have been filed with the Commission in a timely fashion in
accordance with the terms hereof and a form of the Prospectus containing
information relating to the description of the Securities and the method of
distribution and similar matters shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period; and, at or prior to
the Closing Date or the actual time of the Closing, no stop order suspending the
effectiveness of the Registration Statement or any part thereof, or any
amendment thereof, nor suspending or preventing the use of the General
Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus shall
have been issued; no proceedings for the issuance of such an order shall have
been initiated or threatened; any request of the Commission for additional
information (to be included in the Registration Statement, the General
Disclosure Package, the Prospectus, any Issuer Free Writing Prospectus or
otherwise) shall have been complied with to the Representative’s satisfaction;
and FINRA shall have raised no objection to the fairness and reasonableness of
the underwriting terms and arrangements.
(b) The
Representative shall not have reasonably determined, and advised the Company,
that the Registration Statement, the General Disclosure Package or the
Prospectus, or any amendment thereof or supplement thereto, or any Issuer Free
Writing Prospectus, contains an untrue statement of fact which, in the
Representative’s reasonable opinion, is material, or omits to state a fact
which, in the Representative’s reasonable opinion, is material and is required
to be stated therein or necessary to make the statements therein not
misleading.
(c) The
Representative shall have received (i) the favorable written opinion of each of
▇▇▇▇▇▇▇ Savage LLP, United States legal counsel for the Company, dated as of the
Closing Date addressed to the Representative of the Underwriters in form and
substance satisfactory to the Representative and their counsel and (ii) the
favorable written opinion of Dacheng Law Offices, legal counsel for the Company
with respect to the laws of the PRC, dated as of the Closing Date, addressed to
the Representative of the Underwriters in form and substance satisfactory to the
Representative and their counsel.
(d) Intentionally
Omitted.
(e) The
Representative shall have received a certificate of the Chief Executive Officer
and Chief Financial Officer of the Company, dated as of each Closing Date to the
effect that: (i) the condition set forth in subsection (a) of this
Section 7 has been satisfied, (ii) as of the date hereof and as of the
applicable Closing Date, the representations and warranties of the Company set
forth in Sections 1 and 2 hereof are accurate, (iii) as of the applicable
Closing Date, all agreements, conditions and obligations of the Company to be
performed or complied with hereunder on or prior thereto have been duly
performed or complied with, (iv) the Company and the Subsidiaries have not
sustained any material loss or interference with their respective businesses,
whether or not covered by insurance, or from any labor dispute or any legal or
governmental proceeding, (v) no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereof has been issued
and no proceedings therefor have been initiated or threatened by the Commission,
(vi) there are no pro forma or as adjusted financial statements that are
required to be included or incorporated by reference in the Registration
Statement and the Prospectus pursuant to the Rules and Regulations which are not
so included or incorporated by reference and (vii) subsequent to the respective
dates as of which information is given in the Registration Statement and the
Prospectus there has not been any Material Adverse Change or any development
involving a prospective Material Adverse Change, whether or not arising from
transactions in the ordinary course of business.
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(f) On
the date of this Agreement and on the Closing Date, the Representative shall
have received a “cold comfort” letter from Lake as of the date of the date of
delivery and addressed to the Underwriters and in form and substance
satisfactory to the Representative and Underwriters’ Counsel, confirming that
they are an independent registered public accounting firm with respect to the
Company and its Subsidiaries within the meaning of the Securities Act and the
Rules and Regulations, and stating, as of the date of delivery (or, with respect
to matters involving changes or developments since the respective dates as of
which specified financial information is given in the Prospectus, as of a date
not more than five (5) days prior to the date of such letter), the conclusions
and findings of such firm with respect to the financial information and other
matters relating to the Registration Statement covered by such
letter.
(g) Subsequent
to the execution and delivery of this Agreement or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement thereto),
there shall not have been any change in the capital stock or long-term debt of
the Company or any Subsidiary or any change or development involving a change,
whether or not arising from transactions in the ordinary course of business, in
the business, condition (financial or otherwise), results of operations,
shareholders’ equity, properties or prospects of the Company and the
Subsidiaries, taken as a whole, including but not limited to the occurrence of
any fire, flood, storm, explosion, accident, act of war or terrorism or other
calamity, the effect of which, in any such case described above, is, in the sole
judgment of the Representative, so material and adverse as to make it
impracticable or inadvisable to proceed with the Offering on the terms and in
the manner contemplated in the Prospectus (exclusive of any
supplement).
(h) The
Representative shall have received a lock-up agreement from each Lock-Up Party,
duly executed by the applicable Lock-Up Party, in each case substantially in the
form attached as Annex I.
(i) The
Securities shall have been approved for quotation on the NYSE Amex
Equities.
(j) FINRA
shall have confirmed that it has not raised any objection with respect to the
fairness and reasonableness of the underwriting terms and
arrangements.
(k) No
action shall have been taken and no statute, rule, regulation or order shall
have been enacted, adopted or issued by any federal, state or foreign
governmental or regulatory authority that would, as of the Closing Date, prevent
the issuance or sale of the Securities; and no injunction or order of any
federal, state or foreign court shall have been issued that would, as of the
Closing Date, prevent the issuance or sale of the Securities.
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(l) The
Company shall have furnished the Underwriters and Underwriters’ Counsel with
such other certificates, opinions or other documents as they may have reasonably
requested.
If any of
the conditions specified in this Section 7 shall not have been fulfilled when
and as required by this Agreement, or if any of the certificates, opinions,
written statements or letters furnished to the Representative or to
Underwriters’ Counsel pursuant to this Section 7 shall not be reasonably
satisfactory in form and substance to the Representative and to Underwriters’
Counsel, all obligations of the Underwriters hereunder may be cancelled by the
Representative at, or at any time prior to, the consummation of the
Closing. Notice of such cancellation shall be given to the Company in
writing, or by telephone. Any such telephone notice shall be
confirmed promptly thereafter in writing.
8. Indemnification.
(a) The
Company agrees to indemnify and hold harmless the Underwriters and each Person,
if an, who controls each Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any losses, claims,
damages or liabilities to which such party may become subject, under the
Securities Act or otherwise (including in settlement of any litigation if such
settlement is effected with the written consent of the Company), insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, including the information
deemed to be a part of the Registration Statement at the time of effectiveness
and at any subsequent time pursuant to Rules 430A and 430B of the Rules and
Regulations, the General Disclosure Package, the Prospectus, or any amendment or
supplement thereto (including any documents filed under the Exchange Act and
deemed to be incorporated by reference into the Prospectus), any Issuer Free
Writing Prospectus or in any materials or information provided to investors by,
or with the approval of, the Company in connection with the marketing of the
offering of the Securities (“Marketing Materials”),
including any roadshow or investor presentations made to investors by the
Company (whether in person or electronically) or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse such indemnified party for any legal or other expenses reasonably
incurred by it in connection with investigating or defending against such loss,
claim, damage, liability or action; or (ii) in whole or in part upon any
inaccuracy in the representations and warranties of the Company contained
herein; or (iii) in whole or in part upon any failure of the Company to perform
its obligations hereunder or under law; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in the
Registration Statement, any Preliminary Prospectus, the General Disclosure
Package, the Prospectus, or any such amendment or supplement, any Issuer Free
Writing Prospectus or in any Marketing Materials, in reliance upon and in
conformity with the Underwriters Information.
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(b) Each
Underwriter, severally and not jointly, shall indemnify and hold harmless the
Company, each of the directors of the Company, each of the officers of the
Company who shall have signed the Registration Statement, and each other Person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
not limited to attorneys’ fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, as
originally filed or any amendment thereof, or any related Preliminary Prospectus
or the Prospectus, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
any such loss, liability, claim, damage or expense arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with the
Underwriters’ Information; provided, however, that in no case
shall any Underwriter be liable or responsible for any amount in excess of the
underwriting discount applicable to the Securities to be purchased by such
Underwriter hereunder. The parties agree that such information
provided by or on behalf of any Underwriter through the Representative consists
solely of the material referred to in the last sentence of Section 1(b)
hereof.
(c) Promptly
after receipt by an indemnified party under subsection (a) or (b) above of
notice of any claims or the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification is
to be sought in writing of the claim or the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve the indemnifying
party from any liability which it may have under this Section 8 to the extent
that it is not materially prejudiced as a result thereof and in any event shall
not relieve it from any liability that such indemnifying party may have
otherwise than on account of the indemnity agreement hereunder). In
case any such claim or action is brought against any indemnified party, and it
notifies an indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate, at its own expense in the defense of such
action, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel satisfactory to
such indemnified party; provided however, that counsel to the indemnifying party
shall not (except with the written consent of the indemnified party) also be
counsel to the indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by one of the indemnifying
parties in connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to have charge of the defense of such
action within a reasonable time after notice of commencement of the action,
(iii) the indemnifying party does not diligently defend the action after
assumption of the defense, or (iv) such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
indemnifying parties. No indemnifying party shall, without the prior
written consent of the indemnified parties, effect any settlement or compromise
of, or consent to the entry of judgment with respect to, any pending or
threatened claim, investigation, action or proceeding in respect of which
indemnity or contribution may be or could have been sought by an indemnified
party under this Section 8 or Section 9 hereof (whether or not the indemnified
party is an actual or potential party thereto), unless (x) such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such claim, investigation, action or
proceeding and (ii) does not include a statement as to or an admission of fault,
culpability or any failure to act, by or on behalf of the indemnified party, and
(y) the indemnifying party confirms in writing its indemnification obligations
hereunder with respect to such settlement, compromise or
judgment.
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9. Contribution. In
order to provide for contribution in circumstances in which the indemnification
provided for in Section 8 hereof is for any reason held to be unavailable from
any indemnifying party or is insufficient to hold harmless a party indemnified
thereunder, the Company and the Underwriters shall contribute to the aggregate
losses, claims, damages, liabilities and expenses of the nature contemplated by
such indemnification provision (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claims asserted, but after deducting in the
case of losses, claims, damages, liabilities and expenses suffered by the
Company, any contribution received by the Company from Persons, other than the
Underwriters, who may also be liable for contribution, including Persons who
control the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, officers of the Company who signed the
Registration Statement and directors of the Company) as incurred to which the
Company and one or more of the Underwriters may be subject, in such proportions
as is appropriate to reflect the relative benefits received by the Company and
the Underwriters from the Offering or, if such allocation is not permitted by
applicable law, in such proportions as are appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Company
and the Underwriters in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits
received by the Company and the Underwriters shall be deemed to be in the same
proportion as (x) the total proceeds from the Offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Company
bears to (y) the underwriting discount or commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of each of the Company and of the
Underwriters shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Underwriters and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 9 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. The aggregate amount of losses, liabilities, claims, damages
and expenses incurred by an indemnified party and referred to above in this
Section 9 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 judicial,
regulatory or other legal or 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 9: (i) no Underwriter shall be required to
contribute any amount in excess of the amount by which the discounts and
commissions applicable to the Securities underwritten by it and distributed to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission and (ii) no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. For purposes of this
Section 9, each Person, if any, who controls an Underwriter within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Underwriter, and each Person, if any,
who controls the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to clauses
(i) and (ii) of the immediately preceding sentence. Any party
entitled to contribution will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a claim
for contribution may be made against another party or parties, notify each party
or parties from whom contribution may be sought, but the omission to so notify
such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this
Section 9 or otherwise. The obligations of the Underwriters to
contribute pursuant to this Section 9 are several in proportion to the
respective number of Shares to be purchased by each of the Underwriters
hereunder and not joint.
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10. Underwriter
Default.
(a) If
any Underwriter or Underwriters shall default in its or their obligation to
purchase Firm Shares hereunder, and if the Firm Shares with respect to which
such default relates (the “Default Shares”) do not (after
giving effect to arrangements, if any, made by the Representative pursuant to
subsection (b) below) exceed in the aggregate 10% of the number of Firm Shares,
each non-defaulting Underwriter, acting severally and not jointly, agrees to
purchase from the Company that number of Default Shares that bears the same
proportion of the total number of Default Shares then being purchased as the
number of Firm Shares set forth opposite the name of such Underwriter on
Schedule A hereto bears to the aggregate number of Firm Shares set forth
opposite the names of the non-defaulting Underwriters, subject, however, to such
adjustments to eliminate fractional shares as the Representative in its sole
discretion shall make.
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(b) In
the event that the aggregate number of Default Shares exceeds 10% of the number
of Firm Shares, the Representative may in their discretion arrange for
themselves or for another party or parties (including any non-defaulting
Underwriter or Underwriters who so agree) to purchase the Default Shares on the
terms contained herein. In the event that within five calendar days
after such a default the Representative do not arrange for the purchase of the
Default Shares as provided in this Section 10, this Agreement shall thereupon
terminate, without liability on the part of the Company with respect thereto
(except in each case as provided in Sections 5, 7, 8, 10 and 12(d)) or the
Underwriters, but nothing in this Agreement shall relieve a defaulting
Underwriter or Underwriters of its or their liability, if any, to the other
Underwriters and the Company for damages occasioned by its or their default
hereunder.
(c) In
the event that any Default Shares are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as aforesaid,
the Representative or the Company shall have the right to postpone the Closing
Date for a period, not exceeding five (5) business days, in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus or in any other documents and arrangements, and the Company
agrees to file promptly any amendment or supplement to the Registration
Statement or the Prospectus which, in the reasonable opinion of Underwriters’
Counsel, may thereby be made necessary or advisable. The term
“Underwriter” as used in this Agreement shall include any party substituted
under this Section 10 with like effect as if it had originally been a party to
this Agreement with respect to such Firm Shares.
11. Survival of Representations
and Agreements. All representations and warranties, covenants
and agreements of the Company and the Underwriters contained in this Agreement
or in certificates of officers of the Company or any Subsidiary submitted
pursuant hereto, including the agreements contained in Section 6, the indemnity
agreements contained in Section 8 and the contribution agreements contained in
Section 9 hereof, 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 thereof or by or on behalf of the Company, any of its officers and
directors or any controlling Person thereof, and shall survive delivery of and
payment for the Securities to and by the Underwriters. The
representations contained in Section 2 hereof and the covenants and agreements
contained in Sections 5, 6, 8, 9, this Section 11 and Sections 15 and 16 hereof
shall survive any termination of this Agreement, including termination pursuant
to Section 10 or 12 hereof.
12. Effective Date of Agreement;
Termination.
(a) This
Agreement shall become effective upon the later of: (i) receipt by
the Representative and the Company of notification of the effectiveness of the
Registration Statement or (ii) the execution of this
Agreement. Notwithstanding any termination of this Agreement, the
provisions of this Section 12 and of Sections 1, 5, 7, 8 and 12 through 17,
inclusive, shall remain in full force and effect at all times after the
execution hereof.
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(b) The
Representative shall have the right to terminate this Agreement at any time
prior to the consummation of the Closing if: (i) any domestic or
international event or act or occurrence has materially disrupted, or in the
opinion of the Representative will in the immediate future materially disrupt,
the market for the Company’s securities or securities in general; or (ii)
trading on the New York Stock Exchange, the Nasdaq Stock Market or the NYSE Amex
Equities shall have been suspended or been made subject to material limitations,
or minimum or maximum prices for trading shall have been fixed, or maximum
ranges for prices for securities shall have been required, on the New York Stock
Exchange, the Nasdaq Stock Market or the NYSE Amex Equities or by order of the
Commission or any other governmental authority having jurisdiction; or (iii) a
banking moratorium has been declared by any state or federal authority or if any
material disruption in commercial banking or securities settlement or clearance
services shall have occurred; (iv) any downgrading shall have occurred in the
Company’s corporate credit rating or the rating accorded the Company’s debt
securities or trust preferred stock by any “nationally recognized statistical
rating organization” (as defined for purposes of Rule 436(g) under the
Securities Act) or if any such organization shall have been publicly announced
that it was under surveillance or review, with possible negative implications,
its rating of any of the Company’s debt securities; or (v) (A) there shall have
occurred any outbreak or escalation of hostilities or acts of terrorism
involving the United States or there is a declaration of a national emergency or
war by the United States or (B) there shall have been any other calamity or
crisis or any change in political, financial or economic conditions if the
effect of any such event in (A) or (B), in the judgment of the Representative,
is so material and adverse that such event makes it impracticable or inadvisable
to proceed with the offering, sale and delivery of the Firm Shares on the terms
and in the manner contemplated by the Prospectus.
(c) Any
notice of termination pursuant to this Section 12 shall be in
writing.
(d) If
this Agreement shall be terminated pursuant to any of the provisions hereof, or
if the sale of the Securities provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof, the
Company will, subject to demand by the Representative, reimburse the
Underwriters for only those out-of-pocket expenses (including the fees and
expenses of their counsel), actually incurred by the Underwriters in connection
herewith up to $130,000 less any amounts previously paid by the
Company.
13. Notices. All
communications hereunder, except as may be otherwise specifically provided
herein, shall be in writing, and:
(a) if
sent to the Representative or any Underwriter, shall be mailed, delivered, or
faxed and confirmed in writing, to Maxim Group LLC, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Director of
Investment Banking, with a copy to Underwriters’ Counsel at DLA Piper LLP (US),
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.; and
(b) if
sent to the Company, shall be mailed, delivered, or faxed and confirmed in
writing to the Company and its counsel at the addresses set forth in the
Registration Statement;
Maxim
Group LLC
[ ],
2011
Page 40
of 45
provided, however, that any notice to
an Underwriter pursuant to Section 8 shall be delivered or sent by mail or
facsimile transmission to such Underwriter at its address set forth in its
acceptance facsimile to the Representative, which address will be supplied to
any other party hereto by the Representative upon request. Any such
notices and other communications shall take effect at the time of receipt
thereof.
14. Parties; Limitation of
Relationship. This Agreement shall inure solely to the benefit
of, and shall be binding upon, the Underwriters, the Company and the controlling
Persons, directors, officers, employees and agents referred to in Sections 7 and
8 hereof, and their respective successors and assigns, and no other Person shall
have or be construed to have any legal or equitable right, remedy or claim under
or in respect of or by virtue 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 parties hereto and
said controlling Persons and their respective successors, officers, directors,
heirs and legal Representative, and it is not for the benefit of any other
Person. The term “successors and assigns” shall not include a
purchaser, in its capacity as such, of Shares from any of the
Underwriters.
15. Governing
Law. This Agreement shall be deemed to have been executed and
delivered in New York and both this Agreement and the transactions contemplated
hereby shall be governed as to validity, interpretation, construction, effect,
and in all other respects by the laws of the State of New York, without regard
to the conflicts of laws principals thereof (other than Section 5-1401 of The
New York General Obligations Law). Each of the Underwriters and the
Company: (a) agrees that any legal suit, action or proceeding arising
out of or relating to this Agreement and/or the transactions contemplated hereby
shall be instituted exclusively in the Supreme Court of the State of New York,
New York County, or in the United States District Court for the Southern
District of New York, (b) waives any objection which it may have or hereafter to
the venue of any such suit, action or proceeding, and (c) irrevocably consents
to the jurisdiction of Supreme Court of the State of New York, New York County,
or in the United States District Court for the Southern District of New York in
any such suit, action or proceeding. Each of the Underwriters and the
Company further agrees to accept and acknowledge service of any and all process
which may be served in any such suit, action or proceeding in the Supreme Court
of the State of New York, New York County, or in the United States District
Court for the Southern District of New York and agrees that service of process
upon the Company mailed by certified mail to the Company’s address or delivered
by Federal Express via overnight delivery shall be deemed in every respect
effective service of process upon the Company, in any such suit, action or
proceeding, and service of process upon the Underwriters mailed by certified
mail to the Underwriters’ address or delivered by Federal Express via overnight
delivery shall be deemed in every respect effective service process upon the
Underwriter, in any such suit, action or proceeding. THE COMPANY (ON
BEHALF OF ITSELF, THE SUBSIDIARIES AND, TO THE FULLEST EXTENT PERMITTED BY LAW,
ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVE ANY RIGHT
THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT
OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT, THE REGISTRATION STATEMENT AND THE PROSPECTUS.
Maxim
Group LLC
[ ],
2011
Page 41
of 45
16. Entire
Agreement. This Agreement, together with the schedule and
exhibits attached hereto and as the same may be amended from time to time in
accordance with the terms hereof, contains the entire agreement among the
parties hereto relating to the subject matter hereof and there are no other or
further agreements outstanding not specifically mentioned herein.
17. Severability. If
any term or provision of this Agreement or the performance thereof shall be
invalid or unenforceable to any extent, such invalidity or unenforceability
shall not affect or render invalid or unenforceable any other provision of this
Agreement and this Agreement shall be valid and enforced to the fullest extent
permitted by law.
18. Amendment. This
Agreement may only be amended by a written instrument executed by each of the
parties hereto.
19. Waiver,
etc. The failure of any of the parties hereto to at any time
enforce any of the provisions of this Agreement shall not be deemed or construed
to be a waiver of any such provision, nor to in any way effect the validity of
this Agreement or any provision hereof or the right of any of the parties hereto
to thereafter enforce each and every provision of this Agreement. No
waiver of any breach, non-compliance or non-fulfillment of any of the provisions
of this Agreement shall be effective unless set forth in a written instrument
executed by the party or parties against whom or which enforcement of such
waiver is sought; and no waiver of any such breach, non-compliance or
non-fulfillment shall be construed or deemed to be a waiver of any other or
subsequent breach, non-compliance or non-fulfillment.
20. No Fiduciary
Relationship. The Company hereby acknowledges that the
Underwriters are acting solely as underwriters in connection with the offering
of the Company’s securities. The Company further acknowledge that the
Underwriters are acting pursuant to a contractual relationship created solely by
this Agreement entered into on an arm’s length basis and in no event do the
parties intend that the Underwriters act or be responsible as a fiduciary to the
Company, its management, shareholders, creditors or any other person in
connection with any activity that the Underwriters may undertake or have
undertaken in furtherance of the offering of the Company’s securities, either
before or after the date hereof. The Underwriters hereby expressly
disclaim any fiduciary or similar obligations to the Company, either in
connection with the transactions contemplated by this Agreement or any matters
leading up to such transactions, and the Company hereby confirms its
understanding and agreement to that effect. The Company hereby
further confirms its understand that no Underwriter has assumed an advisory or
fiduciary responsibility in favor of the Company with respect to the Offering
contemplated hereby or the process leading thereto, including any negotiation
related to the pricing of the Shares; and the Company has consulted its own
legal and financial advisors to the extent it has deemed appropriate in
connection with this Agreement and the Offering. The Company and the
Underwriters agree that they are each responsible for making their own
independent judgments with respect to any such transactions, and that any
opinions or views expressed by the Underwriters to the Company regarding such
transactions, including but not limited to any opinions or views with respect to
the price or market for the Company’s securities, do not constitute advice or
recommendations to the Company. The Company hereby waives and
releases, to the fullest extent permitted by law, any claims that the Company
may have against the Underwriters with respect to any breach or alleged breach
of any fiduciary or similar duty to the Company in connection with the
transactions contemplated by this Agreement or any matters leading up to such
transactions.
Maxim
Group LLC
[ ],
2011
Page 42
of 45
21. Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument. Delivery of a signed counterpart of this
Agreement by facsimile or electronic transmission shall constitute valid and
sufficient delivery thereof.
22. Headings. The
headings herein are inserted for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this
Agreement.
23. Time is of the
Essence. Time shall be of the essence of this
Agreement. As used herein, the term “business day” shall mean any day
other than a Saturday, Sunday or any day on which the major stock exchanges in
New York, New York are not open for business.
[Signature
Pages Follow]
Maxim
Group LLC
November
9, 2009
Page 43
of 45
If the
foregoing correctly sets forth your understanding, please so indicate in the
space provided below for that purpose, whereupon this letter shall constitute a
binding agreement among us.
|
Very
truly yours,
|
|||
|
By:
|
|
||
|
Name:
|
|||
|
Title:
|
|||
Maxim
Group LLC
November
9, 2009
Page 44
of 45
Accepted
by the Representative, acting for themselves and as Representative of the
Underwriters named on Schedule A
attached hereto, as of the date first written above:
|
MAXIM
GROUP LLC
|
||
|
By:
|
|
|
|
Name:
|
||
|
Title:
|
||
SCHEDULE
A
Underwriters
|
Underwriter
|
Number of
Firm Shares to
be Purchased
from the
Company
|
Over-Allotment Option
Shares
|
|
Maxim
Group LLC
|
||
|
Total
|
V-1
SCHEDULE
B
Lock-Up
Parties
|
Kuizhong
Cai
|
|
|
Yuan
▇▇▇
|
|
|
▇▇▇▇▇▇▇▇
▇▇
|
|
|
▇▇▇▇▇
T.N. Ho
|
|
|
▇▇▇▇▇▇▇
▇▇▇▇▇
|
|
|
Danien
Ye
|
|
|
Cha
▇▇▇ ▇▇▇▇▇
|
|
|
▇▇▇▇▇▇▇▇
▇▇▇▇
|
|
|
Zhenwei
Jin
|
|
|
▇▇▇▇▇▇▇
▇▇▇
|
|
|
▇▇▇▇▇
▇▇
|
|
|
▇▇▇▇▇▇
▇▇▇▇▇
|
[Any
other shareholders?]
V-2
SCHEDULE
C
Issuer-Represented
General Free Writing Prosectus
None
V-3