Duoyuan Printing, Inc. [ ] Shares1 Common Stock ($0.001 Par Value) UNDERWRITING AGREEMENT
Exhibit 1.1
[ ] Shares1
Common Stock ($0.001 Par Value)
Common Stock ($0.001 Par Value)
[__________], 2009
XXXXX XXXXXXX & CO.
As the Representative of the several
Underwriters named in Schedule II hereto
c/o Xxxxx Xxxxxxx & Co.
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
As the Representative of the several
Underwriters named in Schedule II hereto
c/o Xxxxx Xxxxxxx & Co.
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Duoyuan Printing, Inc., a Wyoming corporation (the “Company”), and the stockholders of the
Company listed in Schedule I hereto (the “Selling Stockholders”) severally propose to sell to the
several Underwriters named in Schedule II hereto (the “Underwriters”) an aggregate of [•] shares
(the “Firm Shares”) of Common Stock, $0.001 par value per share (the “Common Stock”), of the
Company pursuant to the terms of this underwriting agreement (the “Agreement”). The Firm Shares
consist of [•] authorized but unissued shares of Common Stock to be issued and sold by the Company
and [•] outstanding shares of Common Stock to be sold by the Selling Stockholders. The Company has
also granted to the several Underwriters an option to purchase up to [•] additional shares of
Common Stock on the terms and for the purposes set forth in Section 3 hereof (the “Option Shares”).
The Firm Shares and any Option Shares purchased pursuant to this Agreement are herein collectively
called the “Shares.”
It is understood by all the parties that the Underwriters are offering the Shares in the
United States and internationally outside of the People’s Republic of China (the “PRC”), which, for
purposes of this Agreement only, excludes Taiwan, The Hong Kong Special Administrative Region and
The Macau Special Administrative Region.
The Company and the Selling Stockholders hereby confirm their agreement with respect to the
sale of the Shares to the several Underwriters, for whom you are acting as the representative (the
“Representative”).
1. Registration Statement and Prospectus. A registration statement on Form S-1 (File No.
333-161813) with respect to the Shares, including a preliminary form of prospectus,
1 | Plus an option to purchase up to [ ] additional shares to cover over-allotments. |
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has been
prepared by the Company in conformity with the requirements of the Securities Act of 1933, as
amended (the “Act”), and the rules and regulations (“Rules and Regulations”) of the Securities and
Exchange Commission (the “Commission”) thereunder and has been filed with the Commission; one or
more amendments to such registration statement have also been so prepared and have been, or will
be, so filed; and, if the Company has elected to rely upon Rule 462(b) of the Rules and Regulations
to increase the size of the offering registered under the Act, the Company will prepare and file
with the Commission a registration statement with respect to such increase pursuant to Rule 462(b)
of the Rules and Regulations. Copies of such registration statement(s) and amendments and each
related preliminary prospectus have been delivered to you.
If the Company has elected not to rely upon Rule 430A of the Rules and Regulations, the
Company has prepared and will promptly file an amendment to the registration statement and an
amended prospectus. If the Company has elected to rely upon Rule 430A of the Rules and
Regulations, it will prepare and file a prospectus pursuant to Rule 424(b) of the Rules and
Regulations that discloses the information previously omitted from the prospectus in reliance upon
Rule 430A of the Rules and Regulations. Each part of such registration statement as amended at the
time it is or was declared effective by the Commission, and, in the event of any amendment thereto
after the effective date, each part of such registration statement as so amended (but only from and
after the effectiveness of such amendment, including a registration statement (if any) filed
pursuant to Rule 462(b) of the Rules and Regulations increasing the size of the offering registered
under the Act, and information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rules 430A(b) of the Rules and Regulations, is hereinafter called the
“Registration Statement.” The prospectus included in the Registration Statement at the time it is
or was declared effective by the Commission is hereinafter called the “Prospectus,” except that if
any prospectus filed by the Company with the Commission pursuant to Rule 424(b) of the Rules and
Regulations or any other such prospectus provided to the Underwriters by the Company for use in
connection with the offering of the Shares (whether or not required to be filed by the Company with
the Commission pursuant to Rule 424(b) of the Rules and Regulations, but not including a “free
writing prospectus” as defined in Rule 405 of the Rules and Regulations) differs from the
prospectus on file at the time the Registration Statement is or was declared effective by the
Commission, the term “Prospectus” shall refer to such differing prospectus from and after the time
such prospectus is filed with the Commission or transmitted to the Commission for filing pursuant
to such Rule 424(b) of the Rules and Regulations or from and after the time of its first use within
the meaning of the Rules and Regulations. The term “Preliminary Prospectus” as used herein means
any preliminary prospectus included in the Registration Statement prior to the time it becomes or
became effective under the Act and any prospectus subject to completion as described in Rule 430A
of the Rules and Regulations. All references in this Agreement to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement to any of the foregoing,
shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data
Gathering, analysis and Retrieval System (“XXXXX”).
2. Representations and Warranties of the Company.
(a) The Company represents and warrants to, and agrees with, the several Underwriters as
follows:
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(i) No order preventing or suspending the use of any Preliminary Prospectus has been
issued by the Commission and each Preliminary Prospectus, at the time of filing thereof or
the time of first use within the meaning of the Rules and Regulations, complied in all
material respects with the requirements of the Act and the Rules and Regulations and did not
contain an untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except that the foregoing shall
not apply to statements in or omissions from any Preliminary Prospectus in reliance upon,
and in conformity with, written information furnished to the Company by you, or by any
Underwriter through you, specifically for use in the preparation thereof.
(ii) As of the time any part of the Registration Statement (or any post-effective
amendment thereto, including a registration statement (if any) filed pursuant to Rule 462(b)
of the Rules and Regulations increasing the size of the offering registered under the Act)
became effective, upon the filing or first use (within the meaning of the Rules and
Regulations) of the Prospectus (or any supplement to the Prospectus) and at the First
Closing Date and Second Closing Date (as hereinafter defined), (A) the Registration
Statement and the Prospectus (in each case, as so amended and/or supplemented) conformed or
will conform in all material respects to the requirements of the Act and the Rules and
Regulations, (B) the Registration Statement (as so amended) did not or will not include an
untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and (C) the Prospectus
(as so supplemented) did not or will not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they are or were made, not
misleading; except that the foregoing shall not apply to statements in or omissions from any
such document in reliance upon, and in conformity with, written information furnished to the
Company by you, or by any Underwriter through you, specifically for use in the preparation
thereof. If the Registration Statement has been declared effective by the Commission, no
stop order suspending the effectiveness of the Registration Statement has been issued, and
no proceeding for that purpose has been initiated or, to the Company’s knowledge, threatened
by the Commission.
(iii) Neither (A) the Issuer General Free Writing Prospectus(es) issued at or prior to
the Time of Sale and the Statutory Prospectus, all considered together (collectively, the
“Time of Sale Disclosure Package”), nor (B) any individual Issuer Limited-Use Free Writing
Prospectus, when considered together with the Time of Sale Disclosure Package, includes or
included as of the Time of Sale any untrue statement of a material fact or omit 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 Free Writing Prospectus
based upon and in conformity with written information furnished to the Company by you, or by
any Underwriter through you, specifically for
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use in the preparation thereof. As used in
this paragraph and elsewhere in this Agreement:
(1) “Time of Sale” means [ ] (Eastern time) on the date of this Agreement.
(2) “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 of the Rules and Regulations 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) of the Rules and
Regulations.
(3) “Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as
defined in Rule 433 of the Rules and Regulations, relating to the Shares 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) of the Rules and Regulations because it contains a description
of the Shares 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 Rules and Regulations which is made available without restriction, 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) of the Rules and
Regulations.
(4) “Issuer General Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is intended for general distribution to prospective investors, as evidenced by its
being specified in Schedule II hereto.
(5) “Issuer Limited-Use Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is not an Issuer General Free Writing Prospectus. The term Issuer
Limited-Use Free Writing Prospectus also includes any “bona fide electronic road show,” as
defined in Rule 433 of the Rules and Regulations, that is made available without restriction
pursuant to Rule 433(d)(8)(ii), even though not required to be filed with the Commission.
(iv) (A) Each Issuer Free Writing Prospectus, as of its issue date and at all
subsequent times through the completion of the public offer and sale of the Shares or until
any earlier date that the Company notified or notifies the Representative as described in
Section 4(a)(iii)(B) hereof, 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. The foregoing sentence does not
apply to statements in or omissions from any Issuer Free Writing Prospectus in reliance upon
and in conformity with written information furnished to the Company by you or by any
Underwriter through you specifically for use therein.
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(B) (1) At the time of filing the Registration Statement and (2) at the date hereof,
the Company was not and is not an “ineligible issuer,” as defined in Rule 405 of the Rules
and Regulations, including the Company or any subsidiary in the preceding three years not
having been convicted of a felony or misdemeanor or having been made the subject of a
judicial or administrative decree or order as described in Rule 405 of the Rules and
Regulations (without taking account of any determination by the Commission pursuant to
Rule 405 of the Rules and Regulations that it is not necessary that the Company be
considered an ineligible issuer), nor an “excluded issuer” as defined in Rule 164 of the
Rules and Regulations.
(C) Each Issuer Free Writing Prospectus satisfied, as of its issue date, and will
satisfy at all subsequent times through the completion of the public offer and sale of the
Shares, all other conditions to use thereof as set forth in Rules 164 and 433 of the Rules
and Regulations.
(v) The consolidated financial statements of the Company, together with the related
notes, set forth in the Registration Statement, the Time of Sale Disclosure Package and
Prospectus fairly present the financial condition of the Company as of the dates indicated
and have been prepared in compliance with the requirements of the Act and Exchange Act and
in conformity with U.S. generally accepted accounting principles applied on a consistent
basis during the periods involved. No other financial statements or schedules are required
to be included in the Registration Statement, the Time of Sale Disclosure Package or the
Prospectus. The financial data contained in the Registration Statement, the Time of Sale
Disclosure Package and the Prospectus are accurately and fairly presented and prepared on a
basis consistent with the financial statements and books and records of the Company. The
Company and its subsidiaries do not have any material liabilities or obligations, direct or
contingent (including any off-balance sheet arrangements as defined by the rules of the
Commission), not described in the Registration Statement (excluding the exhibits thereto),
the Time of Sale Disclosure Package and the Prospectus. There are no “non-GAAP financial
measures” (as such term is defined by the rules of the Commission) contained in the
Registration Statement, the Time of Sale Disclosure Package or the Prospectus. To the
Company’s knowledge, Xxxxx Xxxxxxxx Worth Xxxxxx and Xxxxxx, LLP, which has expressed its
opinion with respect to the financial statements and schedules filed as a part of the
Registration Statement and included in the Registration Statement, the Time of Sale
Disclosure Package and the Prospectus, is (x) an independent public accounting firm within
the meaning of the Act and the Rules and Regulations, (y) a registered public accounting
firm (as defined in Section 2(a)(12) of the Xxxxxxxx-Xxxxx Act of 2002 (the “Xxxxxxxx-Xxxxx
Act”)) and (z) not in violation of the auditor independence requirements of the
Xxxxxxxx-Xxxxx Act.
(vi) Each of the Company and its subsidiaries has been duly organized and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation.
Each of the Company and its subsidiaries has full corporate power and authority to own its properties and
conduct its business as currently being carried on and as described in the
Registration Statement, the Time of Sale Disclosure Package and
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Prospectus, and is duly qualified to do business
as a foreign corporation in good standing in each jurisdiction in which it
owns or leases real property or in which the conduct of its business makes such qualification necessary
and in which the failure to so qualify would have a material adverse effect upon the business,
prospects, properties, operations, condition (financial or otherwise)
or results of operations of the Company and its subsidiaries, taken as a whole (“Material Adverse Effect”).
(vii) Except as contemplated in the Time of Sale Disclosure Package and in the
Prospectus, subsequent to the respective dates as of which information is given in the Time
of Sale Disclosure Package, neither the Company nor any of its subsidiaries has incurred any
material liabilities or obligations, direct or contingent, or entered into any material
transactions, or declared or paid any dividends or made any distribution of any kind with
respect to its capital stock; and there has not been any change in the capital stock (other
than a change in the number of shares of Common Stock upon exercise of outstanding options),
or any material change in the short-term or long-term debt, or any issuance of options,
warrants, convertible securities or other rights to purchase the capital stock, of the
Company or any of its subsidiaries, or any material adverse change in the general affairs,
condition (financial or otherwise), business, prospects, property, operations or results of
operations of the Company and its subsidiaries, taken as a whole (“Material Adverse Change”)
or any development involving a prospective Material Adverse Change.
(viii) Except as set forth in the Time of Sale Disclosure Package and in the
Prospectus, there is not pending or, to the knowledge of the Company, threatened or
contemplated, any action, suit or proceeding to which the Company or any of its subsidiaries
is a party or of which any property or assets of the Company is the subject before or by any
court or governmental agency, authority or body, or any arbitrator, which, individually or
in the aggregate, might result in any Material Adverse Change.
(ix) There are no statutes, regulations, contracts or documents that are required to be
described in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus or be filed as exhibits to the Registration Statement by the Act or by the Rules
and Regulations that have not been so described or filed.
(x) This Agreement has been duly authorized, executed and delivered by the Company, and
constitutes a valid, legal and binding obligation of the Company, enforceable in accordance
with its terms, except as rights to indemnity hereunder may be limited by federal or state
securities laws and except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors generally and subject to
general principles of equity. The execution, delivery and performance of this Agreement and
the consummation of the transactions herein and therein contemplated will not result in a
breach or violation of any of the terms and provisions of, or constitute a default under,
any statute, any agreement or instrument to which the Company is a party or by which it is
bound or to which any of its property is subject, the Company’s charter or by-laws, or any
order, rule, regulation or decree of any court or governmental agency, authority or body
having jurisdiction over the Company or
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any of its properties; no consent, approval,
authorization or order of, or filing with, any court or governmental agency, authority or
body is required for the execution, delivery and performance of this Agreement or for the
consummation of the transactions contemplated hereby or thereby, including the issuance or
sale of the Shares, except such as may be required under the Act or state securities or blue
sky laws; and the Company has full power and authority to enter into this Agreement and to
authorize, issue and sell the Shares as contemplated by this Agreement.
(xi) Except as disclosed in the Time of Sale Disclosure Package and the Prospectus, no
transaction, stamp, capital or other issuance, registration, transaction, transfer or
withholding taxes or duties are payable in the PRC or Wyoming by or on behalf of the
Underwriters to any PRC or Wyoming taxing authority in connection with (A) the execution and
delivery of this Agreement; (B) the issuance, sale and delivery of the Shares; or (C) the
purchase from the Company and the initial sale and delivery by the Underwriters of the
Shares to purchasers thereof.
(xii) All of the issued and outstanding shares of capital stock of the Company,
including the outstanding shares of Common Stock and the outstanding shares of Common Stock
issued pursuant to the Securities Purchase Agreement dated October 24, 2006, are duly
authorized and validly issued, fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, were not issued in violation of or subject to
any preemptive rights or other rights to subscribe for or purchase securities that have not
been waived in writing (a copy of which has been delivered to counsel to the
Representative), and the holders thereof are not subject to personal liability by reason of
being such holders; the Shares which may be issued hereunder by the Company have been duly
authorized and, when issued, delivered and paid for in accordance with the terms of this
Agreement, will have been validly issued and will be fully paid and nonassessable, and the
holders thereof will not be subject to personal liability by reason of being such holders;
and the capital stock of the Company, including the Common Stock, conforms to the
description thereof in the Registration Statement, the Time of Sale Disclosure Package and
the Prospectus. Except as otherwise stated in the Registration Statement, the Time of Sale
Disclosure Package and the Prospectus, there are no preemptive rights or other rights to
subscribe for or to purchase, or any restriction upon the voting or transfer of, any Common
Stock pursuant to the Company’s charter, by-laws or any agreement or other instrument to
which the Company is a party or by which the Company is bound. Neither the filing of the
Registration Statement nor the offering or sale of the Shares as contemplated by this
Agreement gives rise to any rights for or relating to the registration of any Common Stock
or other securities of the Company. All of the issued and outstanding shares of capital
stock of each of the Company’s subsidiaries have been duly and validly authorized and issued
and are fully paid and nonassessable, and, except as otherwise described in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus and except for any
directors’ qualifying shares, the Company owns of record and beneficially, free and clear of
any security interests, claims, liens, proxies, equities or other encumbrances, all of the
issued and outstanding shares of such stock. Except as described in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus, there are no options,
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warrants, agreements, contracts or other rights in existence to purchase or acquire from the
Company or any subsidiary of the Company any shares of the capital stock of the Company or
any subsidiary of the Company. The Company has an authorized and outstanding capitalization
as set forth in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus.
(xiii) Except as disclosed in the Time of Sale Disclosure Package and the Prospectus,
the Company and each of its subsidiaries holds, and is operating in compliance in all
material respects with, all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates and orders of any governmental or self-regulatory body
required for the conduct of its business and all such franchises, grants, authorizations,
licenses, permits, easements, consents, certifications and orders are valid and in full
force and effect; and the Company and each of its subsidiaries is in compliance in all
material respects with all applicable national, provincial and local laws, regulations,
orders and decrees.
(xiv) The Company and each of its subsidiaries have good and marketable title to all
property (whether real or personal) described in the Registration Statement, the Time of
Sale Disclosure Package and the Prospectus as being owned by them, in each case free and
clear of all liens, claims, security interests, other encumbrances or defects except such as
are described in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus. The property held under lease by the Company and its subsidiaries is held by
them under valid, subsisting and enforceable leases with only such exceptions with respect
to any particular lease as do not interfere in any material respect with the conduct of the
business of the Company or its subsidiaries.
(xv) Except as disclosed in the Time of Sale Disclosure Package and the Prospectus, the
Company and each of its subsidiaries owns or possesses all patents, patent applications,
trademarks, service marks, tradenames, trademark registrations, service xxxx registrations,
copyrights, licenses, inventions, trade secrets and rights necessary for the conduct of the
business of the Company and its subsidiaries as currently carried on and as described in the
Registration Statement, the Time of Sale Disclosure Package and the Prospectus; except as
stated in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus, no name which the Company or any of its subsidiaries uses and no other aspect of
the business of the Company or any of its subsidiaries will involve or give rise to any
infringement of, or license or similar fees for, any patents, patent applications,
trademarks, service marks, tradenames, trademark registrations, service xxxx registrations,
copyrights, licenses, inventions, trade secrets or other similar rights of others material
to the business or prospects of the Company and neither the Company nor any of its
subsidiaries has received any notice alleging any such infringement or fee.
(xvi) Neither the Company nor any of its subsidiaries is (A) in violation of its
respective charter, by-laws, memorandum of association or articles of association (or
similar constitutional or organizational documents) or (B) in breach of or otherwise in
default, and no event has occurred which, with notice or lapse of time or both, would
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constitute such a default in the performance of any material obligation, agreement or
condition contained in any bond, debenture, note, indenture, loan agreement or any other
material contract, lease or other instrument to which it is subject or by which any of them
may be bound, or to which any of the material property or assets of the Company or any of
its subsidiaries is subject, except in the case of (B) as individually or in the aggregate
would not reasonably be expected to result in a Material Adverse Effect.
(xvii) The Company and each of its subsidiaries have timely filed all national,
provincial, local income and franchise tax returns required to be filed and are not in
default in the payment of any taxes which were payable pursuant to said returns or any
assessments with respect thereto, other than any which the Company or any of its
subsidiaries is contesting in good faith and for which adequate reserves have been provided,
or except as individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect; all national, provincial and local PRC governmental tax relief,
concessions, waivers, holidays and preferential treatments enjoyed by the Company and its
subsidiaries are valid, binding and enforceable and do not violate any PRC law.
(xviii) The Company has not distributed and will not distribute any prospectus or other
offering material in connection with the offering and sale of the Shares and the Shares
other than any Preliminary Prospectus, the Time of Sale Disclosure Package or the Prospectus
or other materials permitted by the Act to be distributed by the Company; provided, however,
that, except as set forth on Schedule II hereto, the Company has not made and will not make
any offer relating to the Shares that would constitute a “free writing prospectus” as
defined in Rule 405 of the Rules and Regulations, except in accordance with the provisions
of Section 4(a)(iii) hereof.
(xix) The Shares have been approved for listing on the New York Stock Exchange (the
“NYSE”) upon official notice of issuance and, on the date the Registration Statement became
or becomes effective, the Company’s Registration Statement on Form 8-A or other applicable
form under the Shares Exchange Act of 1934, as amended (the “Exchange Act”), became or will
become effective.
(xx) Other than the subsidiaries of the Company listed in Exhibit 21.1 to the
Registration Statement, the Company has no other subsidiaries.
(xxi) The Company maintains 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 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. Except as
disclosed in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus, the Company’s internal control over financial reporting is effective and the
Company is not aware of any material weaknesses in its
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internal control over financial
reporting, and since the end of the latest audited fiscal year, there has been no change in
the Company’s internal control over financial reporting (whether or not remediated) that has
materially affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting.
(xxii) Other than as contemplated by this Agreement, the Company has not incurred any
liability for any finder’s or broker’s fee or agent’s commission in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(xxiii) Each of the Company and its subsidiaries carries, or is covered by, insurance
in such amounts and covering such risks as is adequate for the conduct of its business and
the value of its properties and as is customary for companies engaged in similar businesses
in similar industries.
(xxiv) The Company is not, and after giving effect to the offering and sale of the
Shares will not be, an “investment company,” as such term is defined in the Investment
Company Act of 1940, as amended.
(xxv) The Company is in compliance with all applicable provisions of the Xxxxxxxx-Xxxxx
Act and the rules and regulations of the Commission thereunder.
(xxvi) 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, the Time of Sale Disclosure Package and the
Prospectus.
(xxvii) Since June 30, 2008, the Company has filed with the Commission all reports and
documents required to be filed by the Company with the Commission in order to comply with
the Exchange Act (the “SEC Filings”); the SEC Filings, when they were filed with Commission,
conformed in all material respects to the applicable requirements of the Exchange Act and
the rules and regulation of the Commission promulgated thereunder applicable to the SEC
Filings; and each of the SEC Filings, as of the respective date it was filed with the
Commission, did not and will not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances in which they were made, not misleading.
(xxviii) No labor dispute with the employees of the Company or any of its subsidiaries
exists or, to the Company’s knowledge, is threatened or imminent, and, to the Company’s
knowledge, there is no existing, threatened or imminent labor disturbance by the employees
of any of its or its subsidiaries’ principal suppliers, manufacturers, customers or
contractors, which would, individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect.
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(xxix) Except as disclosed in the Time of Sale Disclosure Package and the Prospectus,
there are no pending, threatened or imminent actions, suits or proceedings (including any
inquiries or investigations by any court or governmental agency, authority or body, domestic
or foreign) against or affecting the Company, any of its subsidiaries or any of their
respective properties that, if determined adversely to the Company or any of its
subsidiaries, would, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect or could materially and adversely affect the ability of the Company
to perform its obligations under this Agreement; and no such actions, suits or proceedings
(including any inquiries or investigations by any court or governmental agency, authority or
body, domestic or foreign) are, to the Company’s knowledge, threatened or contemplated.
(xxx) Except as disclosed in the Time of Sale Disclosure Package and the Prospectus,
(A) there are no proceedings that are pending, or, to the Company’s knowledge, contemplated,
against the Company or any of its subsidiaries under any laws, regulations, ordinances,
rules, orders, judgments, decrees, permits or other legal requirements of any governmental
authority, including without limitation any international, national, state, provincial,
regional, or local authority, relating to the protection of human health or safety, the
environment, or natural resources, or to hazardous or toxic substances or wastes, pollutants
or contaminants (“Environmental Laws”) in which a governmental authority is also a party
that could, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, (B) the Company and its subsidiaries are not aware of any issues regarding
compliance with Environmental Laws, or liabilities or other obligations under Environmental
Laws or concerning hazardous or toxic substances or wastes, pollutants or contaminants, that
would reasonably be expected to have a Material Adverse Effect, and (C) none of the Company
and its subsidiaries anticipates material capital expenditures relating to Environmental
Laws.
(xxxi) The Company and each of its subsidiaries owns, possesses, or can acquire on
reasonable terms, all Intellectual Property necessary for the conduct of the Company’s and
it subsidiaries’ business as now conducted, except as such failure to own, possess, or
acquire such rights would not reasonably be expected to result in a Material Adverse Effect.
Furthermore, (A) to the Company’s knowledge, there is no infringement, misappropriation or
violation by third parties of any such Intellectual Property, except as such infringement,
misappropriation or violation would not reasonably expected to result in a Material Adverse
Effect; (B) there is no pending or, to the knowledge of the Company, threatened, action,
suit, proceeding or claim by others challenging the Company’s or any of its subsidiaries’
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; (C) the Intellectual Property owned
by the Company and its subsidiaries, and to the Company’s knowledge, the Intellectual
Property licensed to the Company and its subsidiaries, has not been adjudged invalid or
unenforceable, in whole or in part, and, to the Company’s knowledge, there is no pending or
threatened action, suit, proceeding or claim by others challenging the validity or scope of
any such Intellectual Property; and (D) there is no pending or, to the Company’s knowledge,
11
threatened action, suit, proceeding or claim by others that, if determined adversely to the
Company, would reasonably be expected to have a Material Adverse Effect. “Intellectual
Property” means all patents, patent applications, trade and service marks, trade and service
xxxx registrations, trade names, copyrights, licenses, inventions, trade secrets, domain
names, technology, know-how and other intellectual property.
(xxxii) To the Company’s knowledge, the operations of the Company and its subsidiaries
are and have been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the U.S. Currency and Foreign Transactions
Reporting Act of 1970, as amended, any applicable money laundering statutes of all
jurisdictions, the rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any governmental agency,
authority or body (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 knowledge of the Company, threatened, except in each
case as would not reasonably be expected to have a Material Adverse Effect.
(xxxiii) The Company has adopted policies and procedures reasonably designed to ensure
compliance with the U.S. Foreign Corrupt Practices Act (the “FCPA”) [and has appointed a
compliance officer as part of the Company’s FCPA compliance efforts].
(xxxiv) Neither the Company nor any of its subsidiaries nor, to the Company’s
knowledge, any director, officer, agent, employee or affiliate of the Company or any of its
subsidiaries is currently subject to any U.S. sanctions administered by the Office of
Foreign Asset Control of the U.S. Treasury Department (“OFAC”); the Company has adopted
policies and procedures reasonably designed to ensure compliance with U.S. sanctions
administered by OFAC; 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 U.S. sanctions administered by OFAC is pending or, to the
Company’s knowledge, threatened, except in each case, as would not reasonably be expected
to have a Material Adverse Effect; 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 subsidiary, joint venture partner or other person or entity, for the purpose of
financing the activities of any person that would, if undertaken by a U.S. person as defined
in U.S. sanctions administered by OFAC, be prohibited by any U.S. sanctions administered by
OFAC.
(xxxv) Except as disclosed in the Time of Sale Disclosure Package and in the
Prospectus, none of the subsidiaries of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other distribution on
such subsidiary’s share capital, from repaying to the Company any loans or advances to such
subsidiary from the Company or from transferring any of such subsidiary’s property or assets
to the Company or any other subsidiary of the Company;
12
any dividends and other distributions
declared with respect to after-tax retained earnings on the equity interests of the
Company’s PRC subsidiaries may under PRC laws and regulations be paid to the Company; and
all such dividends and distributions will not be subject to withholding or other taxes under
PRC laws and regulations and are otherwise free and clear of any other tax, withholding or
deduction in the PRC, and without the necessity of obtaining any governmental authorization
in the PRC.
(xxxvi) Except as disclosed in the Time of Sale Disclosure Package and in the
Prospectus, the Company and each of its subsidiaries has taken or is in the process of
taking all reasonable steps (to the extent required of the Company and each such subsidiary
under PRC laws and regulations) to comply with, and to ensure compliance by each of (i) its
principal shareholders as disclosed in the Registration Statement, Time of Sale Disclosure
Package and the Prospectus, and (ii) any other persons known to the Company that are
required to comply (in connection with their interests in the Company) with applicable rules
and regulations of the relevant PRC governmental agencies (including, without limitation,
the Ministry of Commerce, National Development and Reform Commission and the State
Administration of Foreign Exchange (“SAFE”)) relating to overseas investment by PRC
residents and citizens or overseas 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
such persons to complete any registration and other procedures required under applicable PRC
Overseas Investment and Listing Regulations.
(xxxvii) Except as disclosed in the Time of Sale Disclosure Package and in the
Prospectus, there are no affiliations or associations between (i) any member of the
Financial Industry Regulatory Authority, Inc. (“FINRA”) and (ii) the Company or, to the
Company’s knowledge, any of the Company’s officers, directors or 5% or greater security
holders or any beneficial owner of the Company’s unregistered equity securities that were
acquired at any time on or after the 180th day immediately preceding the date the
Registration Statement was initially filed with the Commission.
(xxxviii) The Time of Sale Disclosure Package and the Prospectus each fairly and
accurately describe all material trends, demands, commitments and events known to the
Company and uncertainties, and the potential effects thereof, that the Company believes
would materially affect its liquidity and are reasonably likely to occur; and neither the
Company nor any of its subsidiaries is engaged in any, nor has any obligations under, any
“off-balance sheet transactions or arrangements” as defined by the Commission. As used
herein, the phrase “reasonably likely” refers to a disclosure threshold lower than “more
likely than not.”
(xxxix) The statements set forth in the Statutory Prospectus and the Prospectus under
the caption “Description of Securities to be Registered”, insofar as they purport to
constitute a summary of the terms of the Shares, and under the captions “Regulations,”
“Related Party Transactions,” “Taxation,” and “Underwriting,” and
13
insofar as they purport to
describe the provisions of the laws and documents referred to therein, are accurate,
complete and fair in all material respects.
(xl) The entering into and performance or enforcement of this Agreement in accordance
with its terms will not subject the Underwriters to a requirement to be licensed or
otherwise qualified to do business in the PRC, nor will the Underwriters be deemed to be
resident, domiciled, carrying on business through an establishment or place in the PRC or in
breach of any laws or regulations in the PRC by reason of the entering into, performance or
enforcement of this Agreement.
(xli) As of the date of the Prospectus and as of the date of this Agreement, 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 and SAFE of the PRC on August 8, 2006 (the “M&A Rules”) did
not and do not apply to the issuance and sale of the Shares, the listing and trading of the
Shares on the NYSE, or the consummation of the transactions contemplated by this Agreement
and the Deposit Agreement, nor is the China Securities Regulatory Commission (the “CSRC”) or
other PRC governmental approval required in connection with the above.
(xlii) The statements set forth in the Statutory Prospectus and Prospectus under the
captions “Risk Factors—Risks Related to Doing Business in China—Failure to comply with
Chinese regulations relating to the establishment of offshore special purpose companies by
Chinese residents may subject our Chinese resident shareholders to personal liability, limit
our ability to acquire Chinese companies or to inject capital into our Chinese subsidiaries,
limit our Chinese subsidiaries’ ability to distribute profits to us or otherwise materially
and adversely affect us” and “Risk Factors—Risks Related to Doing Business in China—If the
China Securities Regulatory Commission, or CSRC, or another Chinese regulatory agency,
determines that CSRC approval is required in connection with this offering, this offering
may be delayed or cancelled, or we may become subject to penalties” are a fair and accurate
summary in all material respects of the matters described therein, and nothing has been
omitted from such summary which would make the same misleading in any material respect.
(xliii) Except as set forth in the Time of Sale Disclosure Package and the Prospectus,
the Company has no obligation to provide retirement, death or disability benefits to any of
the present or past employees of the Company, its subsidiaries or to any other person; the
Company and its subsidiaries are in compliance in all material respects with all applicable
laws, rules, regulations, ordinances, codes and other requirements relating to employee
benefits.
(xliv) None of the Company, any of its subsidiaries or any of their respective
properties or assets has any immunity from the jurisdiction of any court or from any legal
process (whether through service or notice, attachment prior to judgment, attachment in aid
of execution or otherwise) under the laws of the PRC, Wyoming, New York or United States
federal law; and, to the extent that the Company, any of its
14
subsidiaries or any of their
respective properties, assets or revenues may have or may hereafter become entitled to any
such right of immunity in any such court in which proceedings may at any time be commenced,
each of the Company and its subsidiaries waive and will waive such right to the extent
permitted by law and has consented to such relief and enforcement as provided in Section 15
hereof.
(xlv) The Company has obtained written consents to the use the statistical and
market-related data included in the Time of Sale Disclosure Package and the Prospectus, and
such consents have not been revoked.
(xlvi) Except as described in the Time of Sale Disclosure Package and the Prospectus,
there are no business relationships or related-party transactions involving the Company or
any of its subsidiaries or any other person.
(b) Each Selling Stockholder represents and warrants to, and agrees with, the several
Underwriters as follows:
(i) Such Selling Stockholder is the record and beneficial owner of, and has, and on the
First Closing Date and/or the Second Closing Date, as the case may be, will have, valid and
marketable title to the Shares to be sold by such Selling Stockholder, free and clear of all
security interests, claims, liens, restrictions on transferability, legends, proxies,
equities or other encumbrances; and upon delivery of and payment for such Shares hereunder,
the several Underwriters will acquire valid and marketable title thereto, free and clear of
any security interests, claims, liens, restrictions on transferability, legends, proxies,
equities or other encumbrances. Such Selling Stockholder is selling the Shares to be sold
by such Selling Stockholder for such Selling Stockholder’s own account and is not selling
such Shares, directly or indirectly, for the benefit of the Company, and no part of the
proceeds of such sale received by such Selling Stockholder will inure, either directly or
indirectly, to the benefit of the Company other than as described in the Registration
Statement and Prospectus.
(ii)
Such Selling Stockholder has duly authorized, executed and delivered
a Power of Attorney and Custody Agreement (collectively, the “Custody Agreement”), which Custody Agreement is a valid
and binding obligation of such Selling Stockholder, to [•], as Custodian (the “Custodian”);
pursuant to the Custody Agreement the Selling Stockholder has placed in custody with the
Custodian, for delivery under this Agreement, the certificates representing the Shares to be
sold by such Selling Stockholder and such certificates were duly and
properly endorsed in blank for transfer, or were accompanied by all documents duly and
properly executed that are necessary to validate the transfer of title thereto, to the
Underwriters, free of any legend, restriction on transferability, proxy, lien or claim,
whatsoever.
(iii) Such Selling Stockholder has the power and authority to enter into this Agreement
and to sell, transfer and deliver the Shares to be sold by such
Selling Stockholder.
15
(iv)
This Agreement and the Custody Agreement have each been
duly authorized, executed and delivered by or on behalf of such Selling Stockholder and each
constitutes a valid and binding agreement of such Selling Stockholder, enforceable in
accordance with its terms, except as rights to indemnity hereunder or thereunder may be
limited by federal or state securities laws and except as such enforceability may be limited
by bankruptcy, insolvency, reorganization or laws affecting the rights of creditors
generally and subject to general principles of equity. The execution and delivery of this
Agreement and the Custody Agreement and the performance of the terms
hereof and thereof and the consummation of the transactions herein and therein contemplated
will not result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any agreement or instrument to which such Selling Stockholder is
a party or by which such Selling Stockholder is bound, or any law, regulation, order or
decree applicable to such Selling Stockholder; no consent, approval, authorization or order
of, or filing with, any court or governmental agency or body is required for the execution,
delivery and performance of this Agreement or the Custody Agreement or for the consummation of the transactions contemplated hereby and thereby, including the
sale of the Shares being sold by such Selling Stockholder, except such as may be required
under the Act or state securities laws or blue sky laws.
(v) Such Selling Stockholder has not distributed and will not distribute any prospectus
or other offering material in connection with the offering and sale of the Shares other than
any Preliminary Prospectus, the Time of Sale Disclosure Package or the Prospectus or other
materials permitted by the Act to be distributed by such Selling Stockholder; provided,
however, that no Selling Stockholder has made nor will make any offer relating to the Shares
that would constitute a “free writing prospectus” as defined in Rule 405 under the Act.
(c) Any certificate signed by any officer of the Company and delivered to you or to counsel
for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby;
any certificate signed by or on behalf of any Selling Stockholder as
such and delivered to you or to counsel for the
16
Underwriters shall be deemed a representation and warranty by such Selling Stockholder to each
Underwriter as to the matters covered thereby.
3. Purchase, Sale and Delivery of Shares.
(a) On the basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to issue and sell
[___] Firm Shares and each Selling Stockholder agrees, severally and not jointly, to sell
the number of Firm Shares set forth opposite the name of such Selling Stockholder in Schedule I
hereto, to the several Underwriters, and each Underwriter agrees, severally and not jointly, to
purchase from the Company and the Selling Stockholders the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule II hereto. The purchase price for each Firm
Shares shall be $[___] per Share. The obligation of each Underwriter to the Company and the
Selling Stockholders shall be to purchase from the Company and the Selling Stockholders that
number of Firm Shares (to be adjusted by the Representative to avoid fractional shares) which
represents the same proportion of the number of Firm Shares to be sold by each of the Company and
the Selling Stockholders pursuant to this Agreement as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule II hereto represents to the total number of
Firm Shares to be purchased by all Underwriters pursuant to this Agreement. In making this
Agreement, each Underwriter is contracting severally and not jointly; except as provided in
Section 3(c) and in Section 8 hereof, the agreement of each Underwriter is to purchase only the
respective number of Firm Shares specified in Schedule II.
The Firm Shares will be delivered by or on behalf of the Company to you for the accounts of
the several Underwriters against payment of the purchase price therefor by wire transfer of same
day funds payable to the order of the Company, at the offices of Xxxxx Xxxxxxx & Co., 000 Xxxxxxxx
Xxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be mutually acceptable, at 9:00 a.m.
Central time on the third (or if the Shares are priced, as contemplated by Rule 15c6-1(c) under the
Exchange Act, after 4:30 p.m. Eastern time, the fourth) full business day following the date
hereof, or at such other time and date as you and the Company determine pursuant to Rule 15c6-1(a)
under the Exchange Act, such time and date of delivery being herein referred to as the “First
Closing Date.” If the Representative so elects, delivery of Firm Shares may be made by credit
through full fast transfer to the accounts at The Depository Trust Company designated by the
Representative. Certificates representing the Firm Shares, in definitive form and in such
denominations and registered in such names as you may request upon at least two business days’
prior notice to the Company, will be made available for checking and packaging not later than 10:30
a.m., Central time, on the business day next preceding the First Closing Date at the offices of
Xxxxx Xxxxxxx & Co., Minneapolis, Minnesota, or such other location as may be mutually acceptable.
(b) On the basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company, with respect to the Option
Shares, hereby grants to the several Underwriters an option to purchase all or any
portion of the Option Shares at the same purchase price as the Firm Shares, for use solely
in covering any over-allotments made by the Underwriters in the sale and distribution of the
17
Firm
Shares. The option granted hereunder may be exercised in whole or in part at any time (but not
more than once) within 30 days after the effective date of this Agreement upon notice (confirmed
in writing) by the Representative to the Company setting forth the aggregate number of Option
Shares as to which the several Underwriters are exercising the option, the names and
denominations in which the certificates for the Option Shares are to be registered and the date
and time, as determined by you, when the Option Shares are to be delivered, such time and date
being herein referred to as the “Second Closing” and “Second Closing Date”, respectively;
provided, however, that the Second Closing Date shall not be earlier than the First Closing Date
nor earlier than the second business day after the date on which the option shall have been
exercised. The number of Option Shares to be purchased by each Underwriter shall be the same
percentage of the total number of Option Shares to be purchased by the several Underwriters as
the percentage of Firm Shares to be purchased by such Underwriter, as adjusted by the
Representative in such manner as the Representative deems advisable to avoid fractional shares.
No Option Shares shall be sold and delivered unless the Firm Shares previously have been, or
simultaneously are, sold and delivered.
The Option Shares will be delivered by or on behalf of the Company, to you for the accounts of
the several Underwriters against payment of the purchase price therefor by wire transfer of same
day funds payable to the order of the Company, at the offices of Xxxxx Xxxxxxx & Co., 000 Xxxxxxxx
Xxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be mutually acceptable at 9:00 a.m.,
Central time, on the Second Closing Date. If the Representative so elects, delivery of the Option
Shares may be made by credit through full fast transfer to the accounts at The Depository Trust
Company designated by the Representative. Certificates representing the Option Shares in
definitive form and in such denominations and registered in such names as you have set forth in
your notice of option exercise, will be made available for checking and packaging not later than
10:30 a.m., Central time, on the business day next preceding the Second Closing Date at the office
of Xxxxx Xxxxxxx & Co., 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be
mutually acceptable.
(c) It is understood that you, individually and not as the Representative of the several
Underwriters, may (but shall not be obligated to) make payment to the Company or the Selling
Stockholders on behalf of any Underwriter for the Shares to be purchased by such Underwriter.
Any such payment by you shall not relieve any such Underwriter of any of its obligations
hereunder. Nothing herein contained shall constitute any of the Underwriters an unincorporated
association or partner with the Company or any Selling Stockholder.
4. (a) Covenants. The Company covenants and agrees with the several Underwriters as follows:
(i) If the Registration Statement has not already been declared effective by the
Commission, the Company will use its best efforts to cause the Registration Statement and
any post-effective amendments thereto to become effective as promptly as possible; the
Company will notify you promptly of the time when the Registration Statement or any
post-effective amendment to the Registration Statement has
become effective or any supplement to the Prospectus has been filed and of any request
by the Commission for any amendment or supplement to the Registration
18
Statement or
Prospectus or additional information; if the Company has elected to rely on Rule 430A of the
Rules and Regulations, the Company will prepare and file a Prospectus containing the
information omitted therefrom pursuant to Rule 430A of the Rules and Regulations with the
Commission within the time period required by, and otherwise in accordance with the
provisions of, Rules 424(b) and 430A of the Rules and Regulations; if the Company has
elected to rely upon Rule 462(b) of the Rules and Regulations to increase the size of the
offering registered under the Act, the Company will prepare and file a registration
statement with respect to such increase with the Commission within the time period required
by, and otherwise in accordance with the provisions of, Rule 462(b) of the Rules and
Regulations; the Company will prepare and file with the Commission, promptly upon your
request, any amendments or supplements to the Registration Statement or Prospectus that, in
your opinion, may be necessary or advisable in connection with the distribution of the
Shares by the Underwriters and to which the Company does not reasonably object; and the
Company will not file any amendment or supplement to the Registration Statement or
Prospectus to which you shall reasonably object by notice to the Company after having been
furnished a copy a reasonable time prior to the filing.
(ii) The Company will advise you, promptly after it shall receive notice or obtain
knowledge thereof, of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, or any post-effective amendment thereto or
preventing or suspending the use of any Preliminary Prospectus, the Time of Sale Disclosure
Package, the Prospectus or any Issuer Free Writing Prospectus, of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, or of the initiation
or threatening of any proceeding for any such purpose; and the Company will promptly use its
best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such a
stop order should be issued. Additionally, the Company agrees that it shall comply with the
provisions of Rules 424(b) and 430A, as applicable, of the Rules and Regulations and will
use its reasonable efforts to confirm that any filings made by the Company under Rule
424(b), Rule 433 or Rule 462 of the Rules and Regulations were received in a timely manner
by the Commission.
(iii) (A) Within the time during which a prospectus (or in lieu thereof the notice
referred to in Rule 173(a) of the Rules and Regulations) relating to the Shares is required
to be delivered under the Act, the Company will comply as far as it is able with all
requirements imposed upon it by the Act, as now and hereafter amended, and by the Rules and
Regulations, as from time to time in force, so far as necessary to permit the continuance of
sales of or dealings in the Shares as contemplated by the provisions hereof, the Time of
Sale Disclosure Package 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 Time of Sale 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 to amend the Registration Statement or supplement the Prospectus (or if the
Prospectus is not yet available to prospective
investors, the Time of Sale Disclosure Package) to comply with the Act, the Company
19
will promptly notify you and will amend the Registration Statement or supplement the
Prospectus (or, if the Prospectus is not yet available to prospective purchasers, the Time
of Sale Disclosure Package) (at the expense of the Company) so as to correct such statement
or omission or effect such compliance.
(B) If at any time following issuance of an Issuer Free Writing Prospectus there
occurred or occurs an event or development as a result of which such Issuer Free Writing
Prospectus conflicted or would conflict with the information contained in the Registration
Statement, any Statutory Prospectus or the Prospectus relating to the Shares 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 Representative and has promptly amended or will
promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to
eliminate or correct such conflict, untrue statement or omission.
(iv) The Company will take or cause to be taken all necessary action to qualify the
Shares for sale under the securities laws of such jurisdictions as you reasonably designate
and to continue such qualifications in effect so long as required for the distribution of
the Shares, except that the Company will not be required in connection therewith to qualify
as a foreign corporation, to execute a general consent to service of process in any state,
or to subject itself to taxation in any jurisdiction if it is not otherwise so subject.
(v) The Company will furnish to the Underwriters and counsel for the Underwriters
copies of the Registration Statement (three of which will be signed and will include all
consents and exhibits filed therewith), each Preliminary Prospectus, the Time of Sale
Disclosure Package, the Prospectus, any Issuer Free Writing Prospectus and all amendments
and supplements to such documents, in each case as soon as available and in such quantities
as you may from time to time reasonably request.
(vi) During a period of five years commencing with the date hereof, the Company will
furnish to the Representative, and to each Underwriter who may so request in writing, copies
of all periodic and special reports furnished to the stockholders of the Company and all
information, documents and reports filed with the Commission, FINRA, the NYSE or any
securities exchange (other than any such information, documents and reports that are filed
with the Commission electronically via XXXXX or any successor system).
(vii) 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 beginning after the effective date of the Registration
Statement that shall satisfy the provisions of Section 11(a) of the Act and Rule 158 of
the Rules and Regulations.
20
(viii) The Company, whether or not the transactions contemplated hereunder are
consummated or this Agreement is prevented from becoming effective under the provisions of
Section 9(a) hereof or is terminated, will pay or cause to be paid (i) all expenses
(including transfer taxes allocated to the respective transferees) incurred in connection
with the delivery to the Underwriters of the Shares, (ii) all expenses and fees (including,
without limitation, fees and expenses of the Company’s accountants and counsel but, except
as otherwise provided below, not including fees of the Underwriters’ counsel) in connection
with the preparation, printing, filing, delivery, and shipping of the Registration Statement
(including the financial statements therein and all amendments, schedules, and exhibits
thereto), the Shares, each Preliminary Prospectus, the Time of Sale Disclosure Package, the
Prospectus, any Issuer Free Writing Prospectus and any amendment thereof or supplement
thereto, and the printing, delivery, and shipping of this Agreement and other underwriting
documents, including Blue Sky Memoranda (covering the states and other applicable
jurisdictions), (iii) all filing fees and reasonable fees and disbursements of the
Underwriters’ counsel incurred in connection with the qualification of the Shares for
offering and sale by the Underwriters or by dealers under the securities or blue sky laws of
the states and other jurisdictions which you shall designate, (iv) the fees and expenses of
any transfer agent or registrar, (v) the filing fees and reasonable fees and disbursements
of the Underwriters’ counsel incident to any required review by the FINRA of the terms of
the sale of the Shares, (vi) listing fees, if any, (vii) all travel expenses of the
Company’s officers and employees and any other expense of the Company incurred in connection
with any “road show” or attending or hosting meetings with prospective purchasers of the
Shares, except that in the event a private jet is commissioned for part or all of any such
“road show,” the Company shall bear 50% of all private jet travel related expenses; (viii)
all expenses and taxes arising as a result of the issuance, sale and delivery of the Shares
by the Company to or for the account of the Underwriters and to the initial purchasers
thereof in the manner contemplated under this Agreement, (ix) the fees and expenses of the
Custodian under the Custody Agreement, and (x) all other costs and expenses incident to the
performance of its obligations hereunder that are not otherwise specifically provided for
herein. It is understood, however, that except as provided in this Section 4(a)(viii) and
Sections 6 and 9 hereof, the Underwriters will pay their own costs and expenses, including
the fees of their counsel and stock transfer taxes on resale of any of the Shares by them.
If the sale of the Shares provided for herein is not consummated by reason of action by the
Company pursuant to Section 9(a) hereof which prevents this Agreement from becoming
effective, or by reason of any failure, refusal or inability on the part of the Company to
perform any agreement on its or their part to be performed, or because any other condition
of the Underwriters’ obligations hereunder required to be fulfilled by the Company is not
fulfilled, the Company will reimburse the several Underwriters for all out-of-pocket
disbursements (including reasonable fees and disbursements of counsel) incurred by the
Underwriters in connection with their investigation, preparing to market and marketing the
Shares or in contemplation of performing their obligations hereunder (the “Out-of-
Pocket Expenses”); provided, however, that the maximum aggregate reimbursement to which
the Underwriters will collectively be reimbursed by the Company for Out-of-Pocket Expenses
will in no event exceed $[___]. The Company will not in any
21
event be liable to any
of the Underwriters for loss of anticipated profits from the transactions covered by this
Agreement. [Fees to be confirmed with the Company.]
(ix) The Company will apply the net proceeds from the sale of the Shares to be sold by
it hereunder for the purposes set forth in the Time of Sale Disclosure Package and in the
Prospectus and will file such reports with the Commission with respect to the sale of the
Shares and the application of the proceeds therefrom as may be required in accordance with
Rule 463 of the Rules and Regulations.
(x) The Company will not, without the prior written consent of Xxxxx Xxxxxxx & Co.,
from the date of execution of this Agreement and continuing to and including the date 180
days after the date of the Prospectus (the “Lock-Up Period”) offer for sale, sell, contract
to sell, pledge, grant any option for the sale of, enter into any transaction which is
designed to, or might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash settlement or otherwise) by
the Company or any affiliate, or otherwise issue or dispose of, directly or indirectly (or
publicly disclose the intention to make any such offer, sale, pledge, grant, issuance or
other disposition), any Common Stock or any securities convertible into or exchangeable for,
or any options or rights to purchase or acquire, Common Stock, except (i) to the
Underwriters pursuant to this Agreement and (ii) to directors, officers and employees of the
Company and its Affiliates under the Company’s equity incentive plans disclosed in the Time
of Sale Disclosure Package and in the Prospectus, so long as such persons agree to sign the
Lock-Up Agreement (as defined below). The Company agrees not to accelerate the vesting of
any option or warrant or the lapse of any repurchase right prior to the expiration of the
Lock-Up Period. If (i) during the period that begins on the date that is 18 calendar days
before the last day of the Lock-Up Period and ends on the last day of the Lock-Up Period,
(A) the Company issues an earnings release, (B) the Company publicly announces material news
or (C) a material event relating to the Company occurs; or (ii) prior to the expiration of
the Lock-Up Period, the Company announces that it will release earnings results during the
16-day period beginning on the last day of the Lock-Up Period, then the restrictions in this
Agreement, unless otherwise waived by Xxxxx Xxxxxxx & Co. in writing, shall continue to
apply until the expiration of the date that is 18 calendar days after the date on which (A)
the Company issues the earnings release, (B) the Company publicly announces material news,
or (C) a material event relating to the Company occurs. The Company will provide the
Representative, any co-managers and each shareholder subject to the Lock-Up Agreement (as
defined below) with prior notice of any such announcement that gives rise to the extension
of the Lock-Up Period.
(xi) The Company has caused to be delivered to you prior to the date of this Agreement
a letter from each person or entity set forth on Schedule IV hereto stating that such person
or entity agrees that he, she or it will not, without your prior written consent, offer for
sale, sell, contract to sell or otherwise dispose of, as set forth in such
letter, any Common Stock or rights to purchase Common Stock, except to the Underwriters
pursuant to this Agreement, for a period of 180 days after commencement of the public
offering of the Shares by the Underwriters (the “Lock-Up Agreement”).
22
The Company will
enforce the terms of each Lock-Up Agreement and issue stop-transfer instructions to the
transfer agent for the Common Stock with respect to any transaction or contemplated
transaction that would constitute a breach of or default under the applicable Lock-Up
Agreement.
(xii) The Company has not taken and will not take, directly or indirectly, any action
designed to or which might reasonably be expected to cause or result in, or which has
constituted, the stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares, and has not effected any sales of Common
Stock which are required to be disclosed in response to Item 701 of Regulation S-K under the
Act which have not been so disclosed in the Registration Statement.
(xiii) The Company will not incur any liability for any finder’s or broker’s fee or
agent’s commission in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
(xiv) The Company will use its best efforts to maintain the listing of the Shares on
the NYSE.
(xv) The Company will timely file with the Commission such periodic and special reports
as required by the Rules and Regulations.
(xvi) The Company and its subsidiaries will use its best efforts to maintain such
controls and other procedures, including without limitation those required by Sections 302
and 906 of the Xxxxxxxx-Xxxxx Act and the applicable regulations thereunder, that are
designed to ensure that information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the Commission’s rules and forms, including
without limitation, controls and procedures designed to ensure that information required to
be disclosed by the Company in the reports that it files or submits under the Exchange Act
is accumulated and communicated to the Company’s management, including its principal
executive officer and its principal financial officer, or persons performing similar
functions, as appropriate to allow timely decisions regarding required disclosure, to ensure
that material information relating to Company, including its subsidiaries, is made known to
them by others within those entities.
(xvii) The Company and its subsidiaries will use its best efforts to comply with all
effective applicable provisions of the Xxxxxxxx-Xxxxx Act.
(xviii) The Company will comply with the SAFE rules and regulations (the “SAFE Rules
and Regulations”) in all material respects, and will use commercially
reasonable efforts to cause its shareholders that are, or that are directly or
indirectly owned or controlled by, PRC residents or PRC citizens to comply with the SAFE
Rules and Regulations applicable to them in connection with the Company, including, without
limitation, requesting each shareholder that is, or is directly or indirectly owned or
23
controlled by, a PRC resident or PRC citizen to complete any registration or procedures
required under applicable SAFE Rules and Regulations.
(xix) The Company will arrange for the qualification of the Shares for sale under the
foreign or state securities or blue sky laws of such jurisdictions as the Representative
designates and will continue such qualification in effect so long as required for the
distribution.
(xx) The Company will not directly or indirectly use the proceeds of the Shares
hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered by OFAC.
(xxi) The Company, including any parent, subsidiary, affiliate, employee or agent
thereof, will use its best efforts to comply with the FCPA.
(xxii) The Company represents and agrees that, unless it obtains the prior written
consent of the Representative, and each Underwriter severally represents and agrees that,
unless it obtains the prior written consent of the Company and the Representative, it has
not made and will not make any offer relating to the Shares that would constitute an “issuer
free writing prospectus,” as defined in Rule 433 of the Rules and Regulations, or that would
otherwise constitute a “free writing prospectus,” as defined in Rule 405 of the Rules and
Regulations, 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 III hereto. 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 will treat each Permitted Free Writing
Prospectus as an “issuer free writing prospectus,” as defined in Rule 433 of the Rules and
Regulations, and has complied and will comply with the requirements of Rule 433 of the Rules
and Regulations applicable to any Permitted Free Writing Prospectus, including timely
Commission filing where required, legending and record keeping.
(b) Each Selling Stockholder covenants and agrees with the several Underwriters as follows:
(i) Except as otherwise agreed to by the Company and the Selling Stockholders pursuant
to an outstanding registration rights agreement, a true and correct copy of which has been
delivered to counsel to the Underwriters, each Selling Stockholder will pay all taxes, if
any, on the transfer and sale, respectively, of the Shares being sold by such Selling
Stockholder and the fees of such Selling Stockholder’s counsel.
24
(ii) If this Agreement shall be terminated by the Underwriters because of any failure,
refusal or inability on the part of such Selling Stockholder to perform any agreement on
such Selling Stockholder’s part to be performed, or because any other condition of the
Underwriters’ obligations hereunder required to be fulfilled by such Selling Stockholder is
not fulfilled, such Selling Stockholder agrees to reimburse the several Underwriters for all
out of pocket disbursements (including fees and disbursements of counsel for the
Underwriters) incurred by the Underwriters in connection with their investigation, preparing
to market and marketing the Shares to be sold by such Selling
Stockholders or in contemplation of performing their obligations to
such Selling Stockholders
hereunder. The Selling Stockholders shall not in any event be liable to any of the
Underwriters for loss of anticipated profits from the transactions covered by this
Agreement.
(iii) The Shares to be sold by such Selling Stockholder, represented by the
certificates on deposit with the Custodian pursuant to the Custody Agreement of such Selling
Stockholder, are subject to the interest of the several Underwriters and the other Selling
Stockholders; the arrangements made for such custody are, except as specifically provided in
the Custody Agreement, irrevocable; and the obligations of such Selling Stockholder
hereunder shall not be terminated, except as provided in this Agreement or in the Custody
Agreement, by any act of such Selling Stockholder, by operation of law, whether by the
liquidation, dissolution or merger of such Selling Stockholder, by the death of such Selling
Stockholder, or by the occurrence of any other event. If any Selling Stockholder should
liquidate, dissolve or be a party to a merger or if any other such event should occur before
the delivery of the Shares hereunder, certificates for the Shares deposited with the
Custodian shall be delivered by the Custodian in accordance with the terms and conditions of
this Agreement as if such liquidation, dissolution, merger or other event had not occurred,
whether or not the Custodian shall have received notice thereof.
(iv) Such Selling Stockholder will not, without the prior written consent of Xxxxx
Xxxxxxx & Co., during the Lock-Up Period, offer for sale, sell, contract to sell, pledge,
grant any option for the sale of, enter into any transaction which is designed to, or might
reasonably be expected to, result in disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) or otherwise dispose of, directly
or indirectly (or publicly disclose the intention to make any such offer, sale, pledge,
grant, or other disposition), any Common Stock or any securities convertible into or
exchangeable for, or any options or rights to purchase or acquire, Common Stock, except to
the Underwriters pursuant to this Agreement. In addition, each Selling Stockholder agrees
that, without the prior written consent of Xxxxx Xxxxxxx & Co., it will
not, during the Lock-Up Period, make any demand for or exercise any right with respect
to, the registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for shares of Common Stock. If (1) during the period that
begins on the date that is 18 calendar days before the last day of the Lock-Up Period
25
and
ends on the last day of the Lock-Up Period, (a) the Company issues an earnings release, (b)
the Company publicly announces material news or (c) a material event relating to the Company
occurs; or (2) prior to the expiration of the Lock Up Period, the Company announces that it
will release earnings results during the 16-day period beginning on the last day of the
Lock-Up Period, then the restrictions in this Agreement, unless otherwise waived by Xxxxx
Xxxxxxx & Co. in writing, shall continue to apply until the expiration of the date that is
18 calendar days after the date on which (A) the Company issues the earnings release, (B)
the Company publicly announces material news, or (C) a material event relating to the
Company occurs.
Any shares of Common stock received upon exercise of options granted to a Selling
Stockholder will also be subject to this clause (iv). A transfer of shares of Common Stock
in connection with a bona fide gift or to a family member or trust may be made, provided the
transferee agrees to be bound in writing by the terms of this Agreement. In addition,
notwithstanding the foregoing, if a Selling Stockholder is a corporation, business trust,
association, limited liability company, partnership, limited liability partnership, limited
liability limited partnership or other entity (collectively, the “Entities” or,
individually, the “Entity”), such Selling Stockholder may transfer shares of Common Stock or
securities convertible into or exchangeable or exercisable for any shares of Common Stock to
any Entity which is directly or indirectly controlled by, or is under common control with
such Selling Stockholder and, if such Selling Stockholder is a partnership or limited
liability company, such Selling Stockholder may transfer the Common Stock or securities
convertible into or exchangeable or exercisable for any shares of Common Stock to its
partners, former partners or an affiliated partnership (or members, former members or an
affiliated limited liability company) managed by the same manager or managing partner (or
managing member, as the case may be) or management company, or managed by an entity
controlling, controlled by, or under common control with, such manager or managing partner
(or managing member) or management company in accordance with partnership (or membership)
interests; provided, however, that in any such case, it shall be a condition to the transfer
that the transferee execute an agreement stating that the transferee is receiving and
holding such shares of Common Stock or securities convertible into or exchangeable or
exercisable for any shares of Common Stock subject to the provisions of this Agreement and
there shall be no further transfer of such Common Stock or securities convertible into or
exchangeable or exercisable for any shares of Common Stock except in accordance with this
Agreement, and provided further that any such transfer shall not involve a disposition for
value.
(v) Such Selling Stockholder has not taken and will not take, directly or indirectly,
any action designed to or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares, and has not effected any sales of Common Stock
which, if effected by the Company, would be required to be disclosed in response to
Item 701 of Regulation S-K.
26
(vi) Such Selling Stockholder shall immediately notify you if any event occurs, or of
any change in information relating to such Selling Stockholder in the Prospectus or any supplement thereto, which results in the Time
of Sale Disclosure Package or in the Prospectus (as amended or supplemented) including an
untrue statement of a material fact or omitting to state any material fact necessary to make
the statements therein, in light of the circumstances under which they were made, not
misleading.
(vii) Such Selling Stockholder shall deliver to the Custodian or the Representative, as
appropriate, prior to the First Closing Date, a properly completed and executed U.S.
Treasury Department Form W-8BEN or Form W-9 (or other applicable form or statement specified
by U.S. Treasury Department regulations in lieu thereof).
5. Conditions of Underwriters’ Obligations. The obligations of the several Underwriters
hereunder are subject to the accuracy, as of the date hereof and at each of the First Closing Date
and the Second Closing Date (as if made at such Closing Date), of and compliance with all
representations, warranties and agreements of the Company and the Selling Stockholders contained
herein, to the performance by the Company and the Selling Stockholders of their respective
obligations hereunder and to the following additional conditions:
(a) The Registration Statement shall have become effective not later than 5:00 p.m., Central
time, on the date of this Agreement, or such later time and date as you, as the Representative of
the several Underwriters, shall approve and all filings required by Rules 424, 430A and 433 of
the Rules and Regulations shall have been timely made (without reliance on Rule 424(b)(8) or Rule
164(b) of the Rules and Regulations); 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 Time of Sale 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; and any request of the Commission for additional information (to be
included in the Registration Statement, the Time of Sale Disclosure Package, the Prospectus, any
Issuer Free Writing Prospectus or otherwise) shall have been complied with to your satisfaction.
(b) No Underwriter shall have advised the Company that the Registration Statement, the Time
of Sale 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 your opinion,
is material, or omits to state a fact which, in your opinion, is material and is required to be
stated therein or necessary to make the statements therein not misleading.
(c) Except as contemplated in the Time of Sale Disclosure Package and in the Prospectus,
subsequent to the respective dates as of which information is given in the Time
of Sale Disclosure Package, neither the Company nor any of its subsidiaries shall have
incurred any material liabilities or obligations, direct or contingent, or entered into any
material transactions, or declared or paid any dividends or made any distribution of any kind
with respect to its capital stock; and there shall not have been any change in the capital stock
27
(other than a change in the number of outstanding shares of Common Stock due to the issuance of
shares upon the exercise of outstanding options), or any material change in the short-term or
long-term debt of the Company, or any issuance of options, warrants, convertible securities or
other rights to purchase the capital stock of the Company or any of its subsidiaries, or any
Material Adverse Change or any development involving a prospective Material Adverse Change
(whether or not arising in the ordinary course of business), that, in your judgment, makes it
impractical or inadvisable to offer or deliver the Shares on the terms and in the manner
contemplated in the Time of Sale Disclosure Package and in the Prospectus.
(d) On or after the Time of Sale (i) no downgrading shall have occurred in the rating
accorded the Company’s debt securities or preferred stock by any “nationally recognized
statistical organization,” as that term is defined by the Commission for purposes of Rule
436(g)(2) of the Rules and Regulations, and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible negative implications, its
rating of any of the Company’s debt securities or preferred stock.
(e) On each Closing Date, there shall have been furnished to you, as the Representative of
the several Underwriters, the opinion of Xxxxx & Xxxxxxx LLP, special counsel for the Company,
dated such Closing Date and addressed to you, in form and substance satisfactory to the
Representative.
(f) On each Closing Date, there shall have been furnished to you, as the Representative of
the several Underwriters, the opinion of Xxxxxx & White P.C., Wyoming counsel for the Company,
dated such Closing Date and addressed to you, in form and substance satisfactory to the
Representative and substantially in the form attached hereto as Exhibit A.
(g) On each Closing Date, there shall have been furnished to you, as the Representative of
the several Underwriters, the opinion of Commerce & Finance Law Offices, PRC counsel for the
Company, dated such Closing Date and addressed to you, in form and substance satisfactory to the
Representative and substantially in the form attached hereto as Exhibit B.
(h) On each Closing Date, there shall have been furnished to you, as the Representative of
the several Underwriters, the opinion of [ ], counsel for the Selling Stockholders, dated such
Closing Date and addressed to you, in form and substance satisfactory to the Representative and
substantially in the form attached hereto as Exhibit C.
(i) On each Closing Date, there shall have been furnished to you, as the Representative of
the several Underwriters, such opinion or opinions from O’Melveny & Xxxxx LLP, United States
counsel for the several Underwriters, dated such Closing Date and addressed to you, in form and
substance satisfactory to the Representative.
(j) On each Closing Date, there shall have been furnished to you, as the Representative of
the several Underwriters, such opinion or opinions from Tian Yuan Law Firm, PRC counsel for the
several Underwriters, dated such Closing Date and addressed to you, in form and substance
satisfactory to the Representative.
28
(k) At the time of execution of this Agreement, you, as the Representative of the several
Underwriters, shall have received a letter of Xxxxx Xxxxxxxx Worth Xxxxxx and Xxxxxx, LLP, dated
the date hereof and addressed to you, confirming that they are independent public accountants
within the meaning of the Act and are in compliance with the applicable requirements relating to
the qualifications of accountants under Rule 2-01 of Regulation S-X of the Commission, and
stating, as of the date of such letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial information is given in
the Time of Sale Disclosure Package, as of a date not prior to the date hereof or more than five
days prior to the date of such letter), the conclusions and findings of said firm, customarily
included in the accountants’ “comfort letter,” with respect to the financial information and
other matters covered by its letter delivered to you concurrently with the execution of this
Agreement; and on each Closing Date, you shall have received a letter of Xxxxx Xxxxxxxx Worth
Xxxxxx and Xxxxxx, LLP, dated such Closing Date and addressed to you, confirming, as of the date
of such letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the Time of Sale
Disclosure Package, as of a date not prior to the initial Closing Date or more than five days
prior to the date of such letter), the conclusions and findings set forth in such prior letter.
(l) On each Closing Date, there shall have been furnished to you, as the Representative of
the Underwriters, a certificate, dated such Closing Date and addressed to you, signed by the
chief executive officer and by the chief financial officer of the Company, to the effect that:
(i) The representations and warranties of the Company in this Agreement are true and
correct as if made at and as of such Closing Date (and any representations and warranties
qualified by materiality in this Agreement will continue to be qualified by materiality as
of such Closing Date), and the Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at or prior to such Closing
Date;
(ii) No stop order or other order suspending the effectiveness of the Registration
Statement or any part thereof or any amendment thereof or the qualification of the Shares
for offering or sale, nor suspending or preventing the use of the Time of Sale Disclosure
Package, the Prospectus or any Issuer Free Writing Prospectus, has been issued, and no
proceeding for that purpose has been instituted or, to the best of their knowledge, is
contemplated by the Commission or any state or regulatory body; and
(iii) The signers of said certificate have carefully examined the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus, and any amendments
thereof or supplements thereto, and (A) each part of the Registration
Statement and the Prospectus, and any amendments thereof or supplements thereto
contain, and contained when such part of the Registration Statement, or any amendment
thereof, became
effective, all statements and information required to be included therein,
the Registration Statement, or any amendment thereof, does not contain and did not contain
when such part of the Registration Statement, or any amendment thereof, became
29
effective,
any untrue statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and the
Prospectus, as amended or supplemented, does not include and did not include as of its date
or the time of first use within the meaning of the Rules and Regulations, any untrue
statement of material fact or omit to state and did not omit to state as of its date or the
time of first use within the meaning of the rules and Regulations a material fact necessary
to make the statements therein, in light of the circumstances under which they were made,
not misleading, (B) neither (1) the Time of Sale Disclosure Package nor (2) any individual
Issuer Limited-Use Free Writing Prospectus, when considered together with the Time of Sale
Disclosure Package, include, nor 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, (C) since the Time of Sale there has occurred no event
required to be set forth in an amended or supplemented prospectus which has not been so set
forth, (D) subsequent to the respective dates as of which information is given in the Time
of Sale Disclosure Package, neither the Company nor any of its subsidiaries has incurred any
material liabilities or obligations, direct or contingent, or entered into any material
transactions, not in the ordinary course of business, or declared or paid any dividends or
made any distribution of any kind with respect to its capital stock, and except as disclosed
in the Time of Sale Disclosure Package and in the Prospectus, there has not been any change
in the capital stock (other than a change in the number of outstanding shares of Common
Stock due to the issuance of shares upon the exercise of outstanding options or warrants),
or any material change in the short-term or long-term debt, or any issuance of options,
warrants, convertible securities or other rights to purchase the capital stock, of the
Company, or any of its subsidiaries, or any Material Adverse Change or any development
involving a prospective Material Adverse Change (whether or not arising in the ordinary
course of business), and (E) except as disclosed in the Time of Sale Disclosure Package and
the Prospectus, there is not pending, or, to the knowledge of the Company, threatened or
contemplated, any action, suit or proceeding to which the Company or any of its subsidiaries
is a party before or by any court or governmental agency, authority or body, or any
arbitrator, which might result in any Material Adverse Change.
(m) On each Closing Date, the Company will deliver to you a certificate signed by the
secretary of the Company dated such Closing Date and in form and substance satisfactory to you
and substantially in the form attached hereto as Exhibit D.
(n) On each Closing Date, the Company will deliver to you a certificate signed by the
chairman of the board of directors of the Company dated such Closing Date and in form and
substance satisfactory to you.
(o) On each Closing Date, the Company will deliver to you a certificate signed by the chief
financial officer of the Company dated such Closing Date and in form and substance satisfactory
to you.
30
(p) On each Closing Date, there shall have been furnished to you, as the Representative of
the several Underwriters, a certificate or certificates, dated such Closing Date and addressed to
you, signed by each of the Selling Stockholders or either of such Selling Stockholder’s Attorneys
in Fact to the effect that the representations and warranties of such Selling Stockholder
contained in this Agreement are true and correct as if made at and as of such Closing Date, and
that such Selling Stockholder has complied with all the agreements and satisfied all the
conditions on such Selling Stockholder’s part to be performed or satisfied at or prior to such
Closing Date.
(q) You shall have received each of the Lock-Up Agreements signed by the persons and
entities set forth on Schedule IV hereto on or before the date of this Agreement, and each such
Lock-Up Agreement shall be in full force and effect on each Closing Date.
(r) The Company shall have furnished to you and counsel for the Underwriters such additional
documents, certificates and evidence as you or they may have reasonably requested.
All such opinions, certificates, letters and other documents will be in compliance with the
provisions hereof only if they are satisfactory in form and substance to you and counsel for the
Underwriters. The Company will furnish you with such conformed copies of such opinions,
certificates, letters and other documents as you shall reasonably request.
6. Indemnification and Contribution.
(a) The Company and Xx. Xxxxxx Xxx (the “Controlling Person”), jointly and severally, agree
to indemnify and hold harmless each Underwriter, its affiliates, directors and officers and each
person, if any, who controls such Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or otherwise (including in
settlement of any litigation if such settlement is effected with the written consent of the
Company and/or such Controlling Person, as the case may be), insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in the Registration Statement,
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 430(C) of the Rules and
Regulations, if applicable, any Preliminary Prospectus, the Time of Sale Disclosure Package, the
Prospectus, or any amendment or supplement thereto, 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 Shares (“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 each Underwriter
for any legal or other expenses reasonably incurred by it in connection with investigating or
defending against such loss, claim, damage, liability or action; provided, however, that neither
the Company nor the Controlling Person shall 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
31
or alleged untrue statement or omission or alleged omission made in the Registration Statement,
any Preliminary Prospectus, the Time of Sale 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 written information furnished to the Company by you, or by
any Underwriter through you, specifically for use in the preparation thereof.
In addition to their other obligations under this Section 6(a), the Company and the
Controlling Person, jointly and severally, agree that, as an interim measure during the pendency
of any claim, action, investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, described in this Section 6(a), they
will reimburse each Underwriter on a monthly basis for all reasonable legal fees or other expenses
incurred in connection with investigating or defending any such claim, action, investigation,
inquiry or other proceeding, notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the Company’s and/or the Controlling Person’s obligation to
reimburse the Underwriters for such expenses and the possibility that such payments might later be
held to have been improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, the Underwriter that received such
payment shall promptly return it to the party or parties that made such payment, together with
interest, compounded daily, determined on the basis of the prime rate (or other commercial lending
rate for borrowers of the highest credit standing) announced from time to time by Bank of America,
N.A. (the “Prime Rate”). Any such interim reimbursement payments which are not made to an
Underwriter within 30 days of a request for reimbursement shall bear interest at the Prime Rate
from the date of such request. This indemnity agreement shall be in addition to any liabilities
which the Company or the Controlling Person may otherwise have.
(b) Each Selling Stockholder agrees to indemnify and hold harmless
each Underwriter against any losses, claims, damages or liabilities to which
such Underwriter may become subject, under the Act or otherwise (including in settlement of any
litigation if such settlement is effected with the written consent of the Company and/or such
Selling Stockholders, as the case may be), insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, 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 430(C) of the Rules and Regulations, if
applicable, any Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus, or
any amendment or supplement thereto or in any 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 each Underwriter for any legal or
other expenses reasonably incurred by it in connection with investigating or defending against
such loss, claim, damage, liability or action in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged omission was made
in the Registration Statement, any Preliminary Prospectus, the Time of Sale
32
Disclosure Package,
the Prospectus, or any such amendment or supplement or in any Marketing Materials, in reliance
upon and in conformity with written information furnished to the Company or such Underwriter by
such Selling Stockholder expressly for use therein.
(c) Each Underwriter will indemnify and hold harmless the Company and each Selling
Stockholder against any losses, claims, damages or liabilities to which the Company and the
Selling Stockholders may become subject, under the Act or otherwise (including in settlement of
any litigation, if such settlement is effected with the written consent of such Underwriter),
insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement, 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 430(C) of the Rules
and Regulations, if applicable, any Preliminary Prospectus, the Time of Sale Disclosure Package,
the Prospectus, or any amendment 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 such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, any Preliminary Prospectus, the Time of Sale
Disclosure Package, the Prospectus, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by you, or by such Underwriter
through you, specifically for use in the preparation thereof, and will reimburse the Company and
the Selling Stockholders for any legal or other expenses reasonably incurred by the Company or
any such Selling Stockholder in connection with investigating or defending against any such loss,
claim, damage, liability or action.
(d) Promptly after receipt by an indemnified party under subsections (a), (b) or (c) above
of notice of the commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any liability that it may have
to any indemnified party except to the extent such indemnifying party has been materially
prejudiced by such failure. In case any such action shall be brought against any indemnified
party, and it shall notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate in, and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party, and after notice from the indemnifying party
to such indemnified party of the indemnifying party’s election so to assume the defense thereof,
the indemnifying party shall not be liable to such indemnified party under such subsection for
any legal or other expenses subsequently incurred by such indemnified party in connection with
the defense thereof other than reasonable costs of investigation; provided, however, that if, in
the sole judgment of the Representative, it is advisable for the Underwriters to be represented
as a group by separate counsel, the Representative shall have the right to employ a single
counsel to represent the Representative and all Underwriters who
may be subject to liability arising from any claim in respect of which indemnity may be
sought by the Underwriters under subsection (a) or (b) of this Section 6, in which event the
reasonable fees and expenses of such separate counsel shall be borne by the indemnifying party or
parties and reimbursed to the Underwriters as incurred (in accordance with the provisions of the
second paragraph in subsection (a) above). An
33
indemnifying party shall not be obligated under
any settlement agreement relating to any action under this Section 6 to which it has not agreed
in writing.
(e) If the indemnification provided for in this Section 6 is unavailable or insufficient to
hold harmless an indemnified party under subsection (a), (b) or (c) above, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a), (b) or (c) above, (i) in
such proportion as is appropriate to reflect the relative benefits received by the Company, the
Controlling Person and the Selling Stockholders on the one hand and the Underwriters on the other
from the offering of the Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of the Company, the
Controlling Person and the Selling Stockholders on the one hand and the Underwriters on the other
in connection with the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The relative benefits
received by the Company, the Controlling Person and the Selling Stockholders on the one hand and
the Underwriters on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company, the Controlling
Person and Selling Stockholders bear to the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus.
The relative fault shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company, the Controlling Person and the
Selling Stockholders or the Underwriters and the parties’ relevant intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or omission. The
Company, the Controlling Person and the Selling Stockholders and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this subsection (e) were to be
determined by pro rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the equitable
considerations referred to in the first sentence of this subsection (e). The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities referred to in the
first sentence of this subsection (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating or defending
against any action or claim which is the subject of this subsection (e). Notwithstanding the
provisions of this subsection (e), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person
who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations in
this subsection (e) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company, the Controlling Person and the Selling Stockholders
under this Section 6 shall be in addition to any liability which the Company, the Controlling
Person and the Selling Stockholders may otherwise have and shall extend, upon the
34
same terms and
conditions, to each person, if any, who controls any Underwriter within the meaning of the Act;
and the obligations of the Underwriters under this Section 6 shall be in addition to any
liability that the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each director of the Company (including any person who, with his
consent, is named in the Registration Statement as about to become a director of the Company), to
each officer of the Company who has signed the Registration Statement and to each person, if any,
who controls the Company or any Selling Stockholder within the meaning of the Act.
(g) The Underwriters severally confirm and the Company, the Controlling Person and each
Selling Stockholder acknowledges that the statements with respect to the public offering of the
Shares by the Underwriters regarding the names and corresponding share amounts set forth in the
table of the underwriters under the caption “Underwriting” and the concession and reallowance
figures and the paragraph relating to stabilization by the Underwriters appearing under the
caption “Underwriting” in the Statutory Prospectus and in the Prospectus are correct and
constitute the only information concerning such Underwriters furnished in writing to the Company
by or on behalf of the Underwriters specifically for inclusion in the Registration Statement, any
Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus or any Issuer Free
Writing Prospectus.
7. Representations and Agreements to Survive Delivery. All representations, warranties, and
agreements of the Company, the Controlling Person and the Selling Stockholders herein or in
certificates delivered pursuant hereto, and the agreements of the several Underwriters, the
Company, the Controlling Person and the Selling Stockholders contained in Section 6 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 the Company or any of its officers,
directors or the Controlling Person or any Selling Stockholders or any controlling person thereof
and shall survive delivery of, and payment for, the Shares to and by the Underwriters hereunder.
8. Substitution of Underwriters.
(a) If any Underwriter or Underwriters shall fail to take up and pay for the amount of Firm
Shares agreed by such Underwriter or Underwriters to be purchased hereunder, upon tender of such
Firm Shares in accordance with the terms hereof, and the amount of Firm Shares not purchased does
not aggregate more than 10% of the total amount of Firm Shares set forth in Schedule I hereto,
the remaining Underwriters shall be obligated to take up and pay for (in proportion to their
respective underwriting obligations hereunder as set
forth in Schedule II hereto except as may otherwise be determined by you) the Firm Shares
that the withdrawing or defaulting Underwriters agreed but failed to purchase.
(b) If any Underwriter or Underwriters shall fail to take up and pay for the amount of Firm
Shares agreed by such Underwriter or Underwriters to be purchased hereunder, upon tender of such
Firm Shares in accordance with the terms hereof, and the amount of Firm Shares not purchased
aggregates more than 10% of the total amount of Firm Shares set forth in Schedule II hereto, and
arrangements satisfactory to you for the purchase of such Firm Shares by other persons are not
made within 36 hours thereafter, this Agreement
35
shall terminate. In the event of any such
termination neither the Company nor any Selling Stockholder shall be under any liability to any
Underwriter (except to the extent provided in Section 4(a)(viii) and Section 6 hereof) nor shall
any Underwriter (other than an Underwriter who shall have failed, otherwise than for some reason
permitted under this Agreement, to purchase the amount of Firm Shares agreed by such Underwriter
to be purchased hereunder) be under any liability to the Company, the Controlling Person or the
Selling Stockholders (except to the extent provided in Section 6 hereof).
If Firm Shares to which a default relates are to be purchased by the non-defaulting
Underwriters or by any other party or parties, the Representative or the Company shall have the
right to postpone the First Closing Date for not more than seven business days in order that the
necessary changes in the Registration Statement, the Time of Sale Disclosure Package, the
Prospectus or in any other documents, as well as any other arrangements, may be effected. As used
herein, the term “Underwriter” includes any person substituted for an Underwriter under this
Section 8.
9. Effective Date of this Agreement and Termination.
(a) This Agreement shall become effective at 10:00 a.m., Central time, on the first full
business day following the effective date of the Registration Statement, or at such earlier time
after the effective time of the Registration Statement as you in your discretion shall first
release the Shares for sale to the public; provided, that if the Registration Statement is
effective at the time this Agreement is executed, this Agreement shall become effective at such
time as you in your discretion shall first release the Shares for sale to the public. For the
purpose of this Section, the Shares shall be deemed to have been released for sale to the public
upon release by you of an electronic communication authorizing commencement of the offering the
Shares for sale by the Underwriters or other securities dealers. By giving notice as hereinafter
specified before the time this Agreement becomes effective, you, as the Representative of the
several Underwriters, or the Company, may prevent this Agreement from becoming effective without
liability of any party to any other party, except that the provisions of Section 4(a)(viii) and
Section 6 hereof shall at all times be effective.
(b) You, as the Representative of the several Underwriters, may terminate this Agreement by
giving notice as hereinafter specified at any time at or prior to the First Closing Date, and the
option referred to in Section 3(b) hereof, if exercised, may be cancelled at any time prior to
the Second Closing Date, if (i) the Company shall have failed, refused or been unable, at or
prior to such Closing Date, to perform any agreement on its part to be
performed hereunder, (ii) if there has been, since the time of execution of this Agreement
or since the respective dates as of which information is given in the Time of Sale Disclosure
Package or the Prospectus, any material adverse change in the condition, financial or otherwise,
or in the earnings, shareholders’ equity, properties, management, business affairs or business
prospects of the Company and its subsidiaries, whether or not arising in the ordinary course of
business, (iii) any other condition of the Underwriters’ obligations hereunder is not fulfilled,
(iv) trading on the Nasdaq Global Market, New York Stock Exchange or the American Stock Exchange
shall have been wholly suspended, (v) minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices have been required, on
36
the Nasdaq Global Market, New York
Stock Exchange or the American Stock Exchange, by such Exchange or by order of the Commission or
any other governmental authority having jurisdiction, (vi) if a banking moratorium has been
declared by the PRC or U.S. federal or New York authorities, or (vii) if there has occurred,
after the date hereof and prior to the First Closing Date, any material adverse change in the
financial markets in the PRC, the United States, Asian or international financial markets, any
outbreak of hostiles or escalation thereof or other calamity or crisis or any change that, in the
sole judgment of the Representative, makes it impracticable or inadvisable to market the Shares
or to enforce contracts for the sale of the Shares. Any such termination shall be without
liability of any party to any other party except that the provisions of Section 4(a)(viii) and
Section 6 hereof shall at all times be effective.
(c) If you elect to prevent this Agreement from becoming effective or to terminate this
Agreement as provided in this Section, the Company and an Attorney-in-Fact, on behalf of the
Selling Stockholders, shall be notified promptly by you by telephone, confirmed by letter. If
the Company elects to prevent this Agreement from becoming effective, you and an
Attorney-in-Fact, on behalf of the Selling Stockholders, shall be notified by the Company by
telephone, confirmed by letter.
10. Default by One or More of the Selling Stockholders or the Company. If one or more of the
Selling Stockholders shall fail at the First Closing Date to sell and deliver the number of Shares
which such Selling Stockholder or Selling Stockholders are obligated to sell hereunder, and the
remaining Selling Stockholders do not exercise the right hereby granted to increase, pro rata or
otherwise, the number of Shares to be sold by them hereunder to the total number of Shares to be
sold by all Selling Stockholders as set forth in Schedule I hereto, then the Underwriters may at
your option, by notice from you to the Company and the non-defaulting Selling Stockholders, either
(a) terminate this Agreement without any liability on the part of any non-defaulting party or (b)
elect to purchase the Shares which the Company and the non-defaulting Selling Stockholders have
agreed to sell hereunder.
In the event of a default by any Selling Stockholder as referred to in this Section 10, either
you or the Company or, by joint action only, the non defaulting Selling Stockholders shall have the
right to postpone the First Closing Date for a period not exceeding seven days in order to effect
any required changes in the Registration Statement, in the Time of Sale Disclosure Package or in
the Prospectus or in any other documents or arrangements.
If the Company shall fail at the First Closing Date to sell and deliver the number of Shares
which it is obligated to sell hereunder, then this Agreement shall terminate without any liability
on the part of any non defaulting party.
No action taken pursuant to this Section 10 shall relieve the Company or any Selling
Stockholders so defaulting from liability, if any, in respect of such default.
11. Notices. Except as otherwise provided herein, all communications hereunder shall be in
writing and, if to the Underwriters, shall be mailed or delivered to the Representative c/o Xxxxx
Xxxxxxx & Co., 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, with a copy to O’Melveny & Xxxxx
LLP, Plaza 66, 37th Floor, 0000 Xxxxxxx Xxxx Xxxx, Xxxxxxxx 000000,
37
People’s Republic of
China, Attention: Xxxx X. Xxxxxx, Esq., except that notices given to an Underwriter pursuant to
Section 6 hereof shall be sent to such Underwriter at the address stated in the Underwriters’
Questionnaire furnished by such Underwriter in connection with this offering; if to the Company,
shall be mailed or delivered to it at Xx. 0 Xxxxxxx Xxxx, Xxxxxx Xxxxxxxxxx Xxxxxxxxxxx Xxxx,
Xxxxxxx 000000, People’s Republic of China, Attention: Xxxxxx Xxx, Chairman of the Board of
Directors, with a copy to Xxxxx & Xxxxxxx LLP, Suite 2101, Two Xxxxxxx Xxxxx, 00 Xxxxxxxxx, Xxxx
Xxxx, Attention: Man Xxxx Xxx, Esq.; if to any of the Selling Stockholders, at the address of the
Attorneys-in-Fact as set forth in the Powers of Attorney, or in each case to such other address as
the person to be notified may have requested in writing. Any party to this Agreement may change
such address for notices by sending to the parties to this Agreement written notice of a new
address for such purpose.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and assigns and the
controlling persons, officers and directors referred to in Section 6 hereof. Nothing in this
Agreement is intended or shall be construed to give to any other person, firm or corporation any
legal or equitable remedy or claim under or in respect of this Agreement or any provision herein
contained. The term “successors and assigns” as herein used shall not include any purchaser, as
such purchaser, of any of the Shares from any of the several Underwriters.
13. Absence of Fiduciary Relationship. The Company acknowledges and agrees that: (a) the
Representative has been retained solely to act as an underwriter in connection with the sale of the
Shares and that no fiduciary, advisory or agency relationship between the Company and the
Representative has been created in respect of any of the transactions contemplated by this
Agreement, irrespective of whether the Representative has advised or is advising the Company on
other matters; (b) the price and other terms of the Shares set forth in this Agreement were
established by the Company following discussions and arms-length negotiations with the
Representative and the Company is capable of evaluating and understanding and understands and
accepts the terms, risks and conditions of the transactions contemplated by this Agreement; (c) it
has been advised that the Representative and its affiliates are engaged in a broad range of
transactions which may involve interests that differ from those of the Company and that the
Representative has no obligation to disclose such interest and transactions to the Company by
virtue of any fiduciary, advisory or agency relationship; (d) it has been advised that the
Representative is acting, in respect of the transactions contemplated by this Agreement, solely for
the benefit of the Representative and the other Underwriters, and not on
behalf of the Company; (e) it waives to the fullest extent permitted by law, any claims it may
have against the Representative for breach of fiduciary duty or alleged breach of fiduciary duty in
respect of any of the transactions contemplated by this Agreement and agrees that the
Representative shall have no liability (whether direct or indirect) to the Company in respect of
such a fiduciary duty claim on behalf of or in right of the Company, including shareholders,
employees or creditors of the Company.
14. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
38
15. Submission to Jurisdiction. In connection with any action involving the Company or the
Controlling Person arising out of or relating to this Agreement, the courts of the State of New
York located in the City and County of New York or in the United States District Court for the
Southern District of New York (each, a “New York Court”) shall have jurisdiction over the
adjudication of such matters, and the Company and Controlling Person consent to the jurisdiction of
such New York Courts and personal service with respect thereto. The Company and the Controlling
Person hereby consent to personal jurisdiction, service and venue in any New York Court in which
any claim arising out of or in any way relating to this Agreement is brought by any third party
against any Underwriter or any indemnified party. The Company, each of the Underwriters and the
Controlling Person waive all right to trial by jury in any action, proceeding or counterclaim
(whether based upon contract, tort or otherwise) in any way arising out of or relating to this
Agreement. The Company and the Controlling Person agree that a final judgment in any such action,
proceeding or counterclaim brought in any such court shall be conclusive and binding upon the
Company and the Controlling Person and may be enforced in any other courts to the jurisdiction of
which the Company or the Controlling Person is or may be subject by suit upon such judgment. The
Company and the Controlling Person have appointed CT Corporation System as their respective
authorized agent (the “Authorized Agent”) upon whom process may be served in any action, proceeding
or counterclaim in any way relating to, arising out of or based on this Agreement or the
transactions contemplated hereby which may be instituted in any New York Court.
16. Currency. In respect of any judgment or order given or made for any amount due hereunder
that is expressed and paid in a currency (the “judgment currency”) other than United States
dollars, the Company and the Controlling Person will indemnify each Underwriter against any loss
incurred by such Underwriter as a result of any variation as between (i) the rate of exchange at
which the United States dollar amount is converted into the judgment currency for the purpose of
such judgment or order and (ii) the rate of exchange at which the Underwriter is able to purchase
United States dollars with the amount of the judgment currency actually received by such
Underwriter. The foregoing indemnity shall constitute a separate and independent obligation of the
Company and the Controlling Person and shall continue in full force and effect notwithstanding any
such judgment or order as aforesaid. The term “rate of exchange” shall include any premiums and
costs of exchange payable in connection with the purchase of or conversion into United States
dollars.
17. Entire Agreement. This Agreement constitutes the entire agreement among the parties and
supersedes all prior agreements and understandings (whether written or oral) among the Company and
the Underwriters, or any of them, with respect to the subject matter hereof.
18. Time. Time is of the essence of this Agreement.
19. Effect of Headings. The Section headings herein are for convenience only and shall not
affect the construction hereof.
20. Counterparts. This Agreement may be executed in one or more counterparts and, if executed
in more than one counterpart, the executed counterparts shall each be deemed to be an original and
all such counterparts shall together constitute one and the same instrument.
[Signature Page Follows]
39
Please sign and return to the Company the enclosed duplicates of this letter whereupon this
letter will become a binding agreement between the Company, the Controlling Person and the several
Underwriters in accordance with its terms.
Very truly yours, “Company” Duoyuan Printing, Inc. |
||||
By | ||||
Xxxxxxxxxxx Xxxxxxx Xxxxxxx | ||||
Chief Executive Officer | ||||
“Controlling Person” |
||||
By | ||||
Xxxxxx Xxx | ||||
“Selling Stockholders” |
||||
By | ||||
Xxxxxxxxxxx Xxxxxxx Xxxxxxx | ||||
Attorney-in-Fact | ||||
Confirmed as of the date first
above mentioned, on behalf of
themselves and the other several
Underwriters named in Schedule II
hereto.
above mentioned, on behalf of
themselves and the other several
Underwriters named in Schedule II
hereto.
Xxxxx Xxxxxxx & Co.
By |
||||
S-1
SCHEDULE I
Selling Stockholders
Number of | ||||
Firm Shares | ||||
Name | to be Sold | |||
Total |
||||
Schedule I-1
SCHEDULE II
Underwriter | Number of Firm Shares (1) | |
Xxxxx Xxxxxxx & Co. |
||
XXXX Capital Partners, LLC |
||
Total |
||
(1) | The Underwriters may purchase up to an additional [ ] Option Shares, to the extent the option described in Section 3(b) of the Agreement is exercised, in the proportions and in the manner described in the Agreement. |
Schedule II-1
SCHEDULE III
Issuer General Free Writing Prospectuses
Schedule III-1
SCHEDULE IV
List of Parties to Execute Lock-Up Agreements
Schedule IV-1
EXHIBIT A
FORM OF OPINION — XXXXX & XXXXXXX LLP
AS SPECIAL COUNSEL TO THE COMPANY
AS SPECIAL COUNSEL TO THE COMPANY
(i) Assuming the Agreement has been duly authorized, executed and delivered under all
applicable laws other than Applicable State Law, the Underwriting Agreement has been duly executed
and delivered on behalf of the Company under Applicable State Law.
(ii) The execution and delivery by the Company of the Underwriting Agreement and the
performance on the date hereof by the Company of the Underwriting Agreement, including the issuance
of the Shares and the consummation of the transactions contemplated by the Underwriting Agreement,
do not (i) violate any provision of Applicable Federal Law or any provision of Applicable State
Law, or (ii) breach or constitute a default under any agreement to which the Company, or any of its
subsidiaries, is a party filed as an exhibit to the Registration Statement (except that we express
no opinion with respect to any matters that would require a mathematical calculation or a financial
or accounting determination).
(iii) No approval, consent, order or permit of, or notice or filing with, any U.S. federal
government agency or any New York State government agency is required to be obtained by the Company
under Applicable Federal Law or Applicable State Law in connection with the execution, delivery and
performance on the date hereof by the Company of the Underwriting Agreement, which has not, to our
knowledge, been received.
(iv) Each of the S-1 Registration Statement and 462(b) Registration Statement (except for the
financial statements included therein as to which we express no opinion), the Statutory Prospectus
included in the Time of Sale Disclosure Package and the Prospectus, and any amendment thereof or
supplement thereto comply, and as of their respective effective dates, complied as to form in all
material respects with the requirements of the Securities Act and the applicable rules and
regulations promulgated thereunder.
(v) The information in the Statutory Prospectus included in the Time of Sale of Disclosure
Package and the Prospectus under the captions “Taxation—U.S. Federal Income Taxation”,
“Underwriting” and “Shares Eligible for Future Sale”, to the extent that such information
constitutes matters of law or legal conclusions, has been reviewed by us and is accurate in all
material respects.
(vi) The Company is not, and immediately following the issuance and sale of the Shares and the
application of the proceeds thereof as described in the Prospectus will not be, an “investment
company” within the meaning of the Investment Company Act.
Exhibit A-1
(vii) The Shares have been approved for listing on the New York Stock Exchange.
(viii) Assuming the validity of such action under all laws, rules, regulations and public
policies of any applicable jurisdiction other than the State of New York, under the provisions of
Applicable State Law relating to submission to personal jurisdiction, the Company has pursuant to
Section 15 of the Underwriting Agreement validly submitted to the non-exclusive personal
jurisdiction of any state court located in the County of New York, State of New York, or federal
court located in the Southern District of New York, having subject matter jurisdiction, as to any
action duly brought by the Underwriters arising out of the Underwriting Agreement.
(ix) Based solely on the telephone conversations between an attorney of this firm and a member
of the Commission staff, the S-1 Registration Statement and the 462(b) Registration Statement have
become effective under the Securities Act, the required filings of the Prospectus pursuant to Rules
424(b), 430A and 433, as applicable, promulgated pursuant to the Securities Act have been made in
the manner and within the time period required by Rules 424(b), 430A and 433, as applicable, and,
to our knowledge, no stop order suspending the effectiveness of the S-1 Registration Statement or
the 462(b) Registration Statement or suspending or preventing the use of the Prospectus has been
issued and no proceedings for that purpose have been instituted or are threatened by the
Commission.
Exhibit A-2
EXHIBIT B
FORM OF OPINION — XXXXXX & WHITE P.C.
The Company has been duly organized and is validly existing as a corporation in good standing
under the laws of the state of Wyoming.
The Company has full corporate power and authority to own its properties and conduct its
business as currently being carried on and as described in the Registration Statement, in the Time
of Sale Disclosure Package and in the Prospectus.
The capital stock of the Company conforms as to legal matters to the description thereof
contained in the Time of Sale Disclosure Package and in the Prospectus under the caption
“Description of Securities to be Registered.” All of the issued and outstanding shares of the
capital stock of the Company have been duly authorized and validly issued and are fully paid and
nonassessable, and the holders thereof are not subject to personal liability by reason of being
such holders.
The Shares to be issued and sold by the Company hereunder have been duly authorized and, when
issued, delivered and paid for in accordance with the terms of the Underwriting Agreement, will
have been validly issued and will be fully paid and nonassessable, and the holders thereof will not
be subject to personal liability by reason of being such holders.
Except as otherwise stated in the Registration Statement, in the Time of Sale Disclosure
Package and in the Prospectus, there are no preemptive rights or other rights to subscribe for or
to purchase, or any restriction upon the voting or transfer of, any shares of Common Stock pursuant
to the Company’s charter, by-laws or any agreement or other instrument known to such counsel to
which the Company is a party or by which the Company is bound. To such counsel’s knowledge,
neither the filing of the Registration Statement nor the offering or sale of the Shares as
contemplated by the Underwriting Agreement gives rise to any rights for or relating to the
registration of any shares of Common Stock or other securities of the Company.
The descriptions in the Registration Statement, in the Time of Sale Disclosure Package and in
the Prospectus of Wyoming statutes, regulations, legal and governmental proceedings, contracts and
other documents governed by Wyoming law are accurate and fairly present the information required to
be shown; and such counsel does not know of any other Wyoming statutes, regulations, legal or
governmental proceedings or contracts or other documents required to be described in the Time of
Sale Disclosure Package or in the Prospectus or included as exhibits to the Registration Statement
that are not described or included as required.
The Company has full corporate power and authority to enter into the Underwriting Agreement,
and the Underwriting Agreement has been duly authorized,
Exhibit B-1
executed and delivered by the Company and constitutes a valid, legal and binding obligation of
the Company enforceable in accordance with its terms (except as rights to indemnity hereunder may
be limited by federal or state securities laws and except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally
and subject to general principles of equity); the execution, delivery and performance of the
Underwriting Agreement and the consummation of the transactions contemplated therein will not
result in a breach or violation of any of the terms and provisions of, or constitute a default
under, any statute, rule or regulation, any agreement or instrument known to such counsel to which
the Company is a party or by which it is bound or to which any of its property is subject, the
Company’s charter or by-laws, or any order or decree known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or any of its respective
properties.
No consent, approval, authorization or order of, or filing with, any court or governmental
agency or body is required for the execution, delivery and performance of the Underwriting
Agreement or for the consummation of the transactions contemplated therein, including the issuance
or sale of the Shares by the Company, except such as may be required under the Act or state
securities laws.
Exhibit B-2
EXHIBIT C
Exhibit C-1
EXHIBIT D
FORM OF OPINION COUNSEL TO THE SELLING STOCKHOLDERS
(i) Each of the Selling Stockholders is the sole record and beneficial owner of the Shares to
be sold by such Selling Stockholder and delivery of the certificates for the Shares to be sold by
each Selling Stockholder pursuant to the Underwriting Agreement, upon payment therefor by the
Underwriters, will pass marketable title to such Shares to the Underwriters and the Underwriters
will acquire all the rights of such Selling Stockholder in the Shares (assuming the Underwriters
have no knowledge of an adverse claim), free and clear of any security interests, claims, liens or
other encumbrances.
(ii) Each of the Selling Stockholders has the power and authority to enter into the Custody
Agreement, the Power of Attorney and the Underwriting Agreement and to perform and discharge such
Selling Stockholder’s obligations thereunder and hereunder; and the Underwriting Agreement, the
Custody Agreements and the Powers of Attorney have been duly and validly authorized, executed and
delivered by (or by the Attorneys-in-Fact, or either of them, on behalf of) the Selling
Stockholders and are valid and binding agreements of the Selling Stockholders, enforceable in
accordance with their respective terms (except as rights to indemnity hereunder or thereunder may
be limited by federal or state securities laws and except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally and
subject to general principles of equity).
(iii) The execution and delivery of the Underwriting Agreement, the Custody Agreement and the
Power of Attorney and the performance of the terms hereof and thereof and the consummation of the
transactions therein contemplated will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, rule or regulation, or any agreement or
instrument known to such counsel to which such Selling Stockholder is a party or by which such
Selling Stockholder is bound or to which any of its property is subject, any such Selling
Stockholder’s charter or by-laws, or any order or decree known to such counsel of any court or
government agency or body having jurisdiction over such Selling Stockholder or any of its
respective properties; and no consent, approval, authorization or order of, or filing with, any
court or governmental agency or body is required for the execution, delivery and performance of the
Underwriting Agreement, the Custody Agreement and the Power of Attorney or for the consummation of
the transactions contemplated thereby, including the sale of the Shares being sold by such Selling
Stockholder, except such as may be required under the Act or state securities laws or blue sky
laws.
Exhibit D-1