UNDERWRITING AGREEMENT between CHINA SHANDONG INDUSTRIES, INC. and RODMAN & RENSHAW, LLC as Representative
between
and
XXXXXX
& XXXXXXX, LLC
as
Representative
[●],
2010
Xxxxxx
& Xxxxxxx, LLC
1251
Avenue of the Xxxxxxxx, 00xx
Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
The
undersigned, China Shandong Industries, Inc., a company formed under the laws of
Delaware (collectively with its Subsidiaries (as defined herein) and affiliates,
including, without limitation, all entities disclosed or described in the
Registration Statement (as hereinafter defined) as being Subsidiaries or
affiliates of the Company, the “Company”), hereby confirms its
agreement with Xxxxxx & Xxxxxxx, LLC (hereinafter referred to as “you” (including its
correlatives) or the “Representative”) and with the
other underwriters named on Schedule 1 hereto for which the Representative is
acting as representative (the Representative and such other underwriters being
collectively called the “Underwriters” or,
individually, an “Underwriter”) as
follows:
(i) On
the basis of the representations and warranties herein contained, but subject to
the terms and conditions herein set forth, the Company agrees to issue and sell,
severally and not jointly, to the several Underwriters, an aggregate of [●] shares (“Firm Shares”) of the Company’s
Common Stock, par value $0.0001 per share (the “Shares”).
(ii) The
Underwriters, severally and not jointly, agree to purchase from the Company the
number of Firm Shares set forth opposite their respective names on Schedule 1
attached hereto and made a part hereof at a purchase price (net of discounts and
commissions) of $[●] per Firm Share
(92.0% of the per Firm Share offering price). The Firm Shares are to be offered
initially to the public (the “Offering”) at the offering
price set forth on the cover page of the Prospectus (as defined in Section 2.1.1
hereof).
(i) Delivery
and payment for the Firm Shares shall be made at 10:00 a.m., Eastern time, on
the third (3rd)
Business Day following the Effective Date (as defined in Section 2.1.1 below)
(or the fourth (4th)
Business Day following the Effective Date, if the Applicable Time (as defined in
Section 2.1.1)
is later than 5:00 p.m. Eastern time) or at such earlier time as shall be agreed
upon by the Representative and the Company at the offices of Loeb & Loeb
LLP, counsel to the Underwriters (“Loeb”), or at such other place
(or remotely by facsimile or other electronic transmission) as shall be agreed
upon by the Representative and the Company. The hour and date of delivery and
payment for the Firm Shares is called the “Closing
Date.”
(ii) Payment
for the Firm Shares shall be made on the Closing Date by wire transfer in
Federal (same day) funds, payable to the order of the Company upon delivery of
the certificates (in form and substance satisfactory to the Underwriters)
representing the Firm Shares (or upon delivery of the Firm Shares through the
facilities of the Depository Trust Company (“DTC”)) for the account of the
Underwriters. The Firm Shares shall be registered in such name or names and in
such authorized denominations as the Representative may request in writing at
least two (2) full Business Days prior to the Closing Date. The Company shall
not be obligated to sell or deliver any of the Firm Shares except upon tender of
payment by the Representative for all the Firm Shares. The term “Business Day” means any day
other than a Saturday, a Sunday or a legal holiday or a day on which banking
institutions are authorized or obligated by law to close in New York
City.
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(i) The
Registration Statement, the Prospectus and any post-effective amendments thereto
did and will contain all material statements that are required to be stated
therein in accordance with the Act and the Regulations, and will in all material
respects conform to the requirements of the Act and the
Regulations;
(ii) Neither
the Registration Statement nor the Prospectus, nor any amendment or supplement
thereto, on such dates, do or will contain 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 light of the circumstances under
which they were made, not misleading. When any Preliminary Prospectus was first
filed with the Commission (whether filed as part of the Registration Statement
for the registration of the Securities or any amendment thereto or pursuant to
Rule 424(a) of the Regulations) and when any amendment thereof or supplement
thereto was first filed with the Commission, such Preliminary Prospectus and any
amendments thereof and supplements thereto complied or will have been corrected
in the Prospectus to comply with the applicable provisions of the Act and the
Regulations and did not and will not contain an untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The representation and warranty made
in this Section 2.3.1(ii) does not apply to statements made or statements
omitted in reliance upon and in conformity with written information furnished to
the Company with respect to the Underwriters by the Representative expressly for
use in the Registration Statement or Prospectus or any amendment thereof or
supplement thereto. The parties acknowledge and agree that such information
provided by or on behalf of any Underwriter consists solely of the name of the
Underwriters and the information with respect to dealer’s concessions and
reallowances contained in the section of the Prospectus entitled “Underwriting” and the identity
of counsel to the Underwriters contained in the section of the Prospectus
entitled “Legal Matters”
(the ”Underwriters’
Information”).
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2.19.5. No
Company Affiliate is an owner of ordinary shares or other securities of any
member of FINRA (other than securities purchased on the open
market).
2.19.6. No
affiliate of the Company has made a subordinated loan to any member of
FINRA.
2.19.7. No
proceeds from the sale of the Securities will be paid to any FINRA member, or
any persons associated or affiliated with a member of FINRA, except as
specifically authorized herein.
2.19.8. The
Company has not issued any warrants or other securities, or granted any options,
directly or indirectly, to anyone who is a potential underwriter in the Offering
or a related person (as defined by FINRA rules) of such an underwriter within
the 180-day period prior to the initial filing date of the Registration
Statement.
2.19.9. No
person to whom securities of the Company have been privately issued within the
180-day period prior to the initial filing date of the Registration Statement
has any relationship or affiliation or association with any member of
FINRA.
2.19.10. No
FINRA member intending to participate in the Offering has a conflict of interest
with the Company. For this purpose, a “conflict of interest” exists
when a member of FINRA and/or its associated persons, parent or affiliates in
the aggregate beneficially own 10% or more of the Company’s outstanding
subordinated debt or common equity, or 10% or more of the Company’s preferred
equity. “Members participating
in the Offering” include managing agents, syndicate group members and all
dealers which are members of FINRA.
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2.19.11. The
Company has not entered into any agreement or arrangement (including, without
limitation, any consulting agreement or any other type of agreement) during the
180-day period prior to the initial filing date of the Registration Statement,
which arrangement or agreement provides for the receipt of any item of value
and/or the transfer of any warrants, options, or other securities from the
Company to a FINRA member, any person associated with a member (as defined by
FINRA rules), any potential underwriters in the Offering and/or any related
persons, other than the arrangements the Company has entered into with Xxxxxx in
connection with the Offering and the Private Placement.
2.22.1. Each
of the Company’s officers and directors holding Shares (or securities
convertible into Shares) have agreed pursuant to executed Lock-Up Agreements in
the form attached hereto as Exhibit B-1 that for a period of 180 days from the
effective date of the Registration Statement (the “D&O Lock-Up Period”), and
each owner of at least 5% of the Company outstanding Shares (or securities
convertible into Shares) (together with the Company’s officers and directors the
“Lock-Up Parties”) have
agreed pursuant to executed Lock-Up Agreements in the form attached hereto as
Exhibit B-2 that for a period commencing on the effective date of the Prospectus
and ending on the earlier of (i) 120 days thereafter, or (ii) [DATE] (the “5% Shareholder Lock-Up Period”
and together with the D&O Lock-Up Period, the “Lock-Up Period”), such persons
and their affiliated parties shall not offer, pledge, sell, contract to sell,
grant, lend or otherwise transfer or dispose of, directly or indirectly, any
Shares, or any securities convertible into or exercisable or exchangeable for
Shares, without the consent of the Representative. The Representative may
consent to an early release from the applicable Lock-Up period if, in its
opinion, the market for the Shares would not be adversely impacted by sales and
in cases of financial emergency of an officer, director or other stockholder.
The Company has caused each of the Lock-Up Parties to deliver to the
Representative the agreements of each of the Lock-Up Parties to the foregoing
effect prior to the date that the Company requests that the Commission declare
the Registration Statement effective under the Act.
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2.22.2. The
Company, on behalf of itself and any successor entity, has agreed that, without
the prior written consent of the Underwriter, it will not, for a period of 180
days from the effective date of the Registration Statement, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly, any shares of
capital stock of the Company or any securities convertible into or exercisable
or exchangeable for shares of capital stock of the Company; (ii) file or caused
to be filed any registration statement with the Commission relating to the
offering of any shares of capital stock of the Company or any securities
convertible into or exercisable or exchangeable for shares of capital stock of
the Company or (iii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
capital stock of the Company, whether any such transaction described in clause
(i), (ii) or (iii) above is to be settled by delivery of shares of capital stock
of the Company or such other securities, in cash or otherwise. The restrictions
contained in this paragraph 2.22.2 shall not apply to (i) the Shares to be sold
hereunder, (ii) the issuance by the Company of shares of common stock upon the
exercise of an option or warrant or the conversion of a security outstanding on
the date hereof of which the Representative has been advised in writing or (iii)
the issuance by the Company of option or shares of capital stock of the Company
under any stock compensation plan of the Company.
2.22.3. Notwithstanding
the foregoing, if (i) the Company issues an earnings release or material news,
or a material event relating to the Company occurs, during the last 17 days of
the Lock-Up Period, 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, the restrictions imposed by
paragraph 2.22 shall continue to apply until the expiration of the 18-day period
beginning on the issuance of the earnings release or the occurrence of the
material news or material event, unless the Representative waives such
extension.
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2.27 Representations and
Warranties of the Company Regarding the People’s Republic of China
(“PRC”).
2.27.2. Each
PRC Subsidiary organized in the PRC has been duly established, is validly
existing as a company in good standing under the laws of the PRC, has the
corporate power and authority to own, lease and operate its property and to
conduct its business as described in the Registration Statement and the
Prospectus, and is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not reasonably be likely
to result in a material adverse effect on the assets, business or financial
condition of the Company and its Subsidiaries, individually or taken as a whole.
Each of the PRC Subsidiaries has applied for and obtained all requisite business
licenses, clearance and permits required under the laws and regulations of the
PRC as necessary for the conduct of its businesses, and each of the PRC
Subsidiaries has complied in all material respects with all laws and regulations
of the PRC in connection with foreign exchange. All fillings and applications
necessary to the conduct of each PRC Subsidiary’s business have been made to the
applicable PRC authorities, including without limitation the State
Administration for Industry and Commerce of the PRC, and such filings and
applications are true and correct in all material respects. The registered
capital of each of the PRC Subsidiaries has been fully paid up in accordance
with the schedule of payment stipulated in its respective articles of
association, approval document, certificate of approval and legal person
business license (hereinafter referred to as the “Establishment Documents”) and
in compliance with the PRC laws and regulations, and there is no outstanding
capital contribution commitment for any of the PRC Subsidiaries. The
Establishment Documents of the PRC Subsidiaries have been duly approved in
accordance with the laws of the PRC and are valid and enforceable. The business
scope specified in the Establishment Documents of each of the PRC Subsidiaries
complies with the requirements of all relevant the PRC laws and regulations. The
outstanding equity interests of each of the PRC Subsidiaries is owned of record
by the Company or a wholly owned subsidiary, except for such specific entities
or individuals identified as the registered holders thereof in the Registration
Statement and the Prospectus. The Company possesses, directly or indirectly, the
power to direct, or cause the direction of, the management and policies of the
PRC Subsidiaries.
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3.
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Covenants of the
Company. The Company covenants and agrees as
follows:
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3.7 Reports
to the Representative.
3.7.1. Periodic Reports,
etc. For a period of three years from the Effective Date, the Company
will furnish to the Representative copies of such financial statements and other
periodic and special reports as the Company from time to time furnishes
generally to holders of any class of its securities and also promptly furnish to
the Representative: (i) a copy of each periodic report the Company shall be
required to file with the Commission; (ii) a copy of every press release and
every news item and article with respect to the Company or its affairs which was
released by the Company; (iii) a copy of each Form 8-K prepared and filed by the
Company; (iv) five copies of each registration statement filed by the Company
under the Act; (v) such additional documents and information with respect to the
Company and the affairs of any future Subsidiaries of the Company as the
Representative may from time to time reasonably request; provided the
Representative shall sign, if requested by the Company, a Regulation FD
compliant confidentiality agreement which is reasonably acceptable to the
Representative and Loeb in connection with the Representative’s receipt of such
information. Documents filed with the Commission pursuant to its XXXXX system
shall be deemed to have been delivered to the Representative pursuant to this
Section.
3.7.2. Transfer Sheets. For
a period of three (3) years from the Effective Date, the Company shall retain a
transfer and registrar agent acceptable to the Representative (the ”Transfer Agent”) and will
furnish to the Representative at the Company’s sole cost and expense such
transfer sheets of the Company’s securities as the Representative may reasonably
request, including the daily and monthly consolidated transfer sheets of the
Transfer Agent and DTC. Colonial Stock Transfer Company, Inc. is acceptable to
the Representative to act as Transfer Agent for the Company’s
Shares.
3.7.3. Trading Reports.
During such time as the Public Securities are listed on NASDAQ the Company shall
provide to the Representative, at the Company’s expense, such reports published
by the NASDAQ relating to price trading of the Public Securities, as the
Representative shall reasonably request.
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3.8.1. General Expenses Related to
the Offering. The Company hereby agrees to pay on each of the Closing
Date and the Option Closing Date, if any, to the extent not paid at the Closing
Date, all expenses incident to the performance of the obligations of the Company
under this Agreement, including, but not limited to: (a) all filing fees and
communication expenses relating to the registration of the Shares to be sold in
the Offering (including the Over-allotment Shares) with the Commission; (b) all
COBRADesk filing fees associated with the review of the Offering by FINRA; all
fees and expenses relating to the listing of such Shares on the NASDAQ Capital
Market, the NASDAQ National Market or the NYSE Amex and on such other stock
exchanges as the Company and the Representative together determine; (c) all
fees, expenses and disbursements relating to background checks of the Company’s
officers and directors in an amount not to exceed $5,000 per individual; (d) all
fees, expenses and disbursements relating to the registration or qualification
of such Shares under the “blue
sky” securities laws of such states and other jurisdictions as the
Underwriters may reasonably designate (including, without limitation, all filing
and registration fees, and the reasonable fees and disbursements of “blue sky” counsel); (e) all
fees, expenses and disbursements relating to the registration, qualification or
exemption of such Shares under the securities laws of such foreign jurisdictions
as the Representative may reasonably designate; (f) the costs of all mailing and
printing of the underwriting documents (including, without limitation, the
Underwriting Agreement, any Blue Sky Surveys and, if appropriate, any Agreement
Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and
Power of Attorney), Registration Statements, Prospectuses and all amendments,
supplements and exhibits thereto and as many preliminary and final Prospectuses
as the Representative may reasonably deem necessary, (g) the costs and expenses
of the public relations firm referred to in Section 3.6 hereof; (h) the costs of
preparing, printing and delivering certificates representing the Shares; (i)
fees and expenses of the Transfer Agent; (j) stock transfer and/or stamp taxes,
if any, payable upon the transfer of securities from the Company to the
Underwriters; (k) the costs associated with post-Closing advertising the
Offering in the national editions of the Wall Street Journal and New York Times;
(1) the costs associated with bound volumes of the public offering materials as
well as commemorative mementos and lucite tombstones, each of which the Company
or its designee will provide within a reasonable time after the Closing in such
quantities as the Representative may reasonably request; (m) the fees and
expenses of the Company’s accountants; (n) the fees and expenses of the
Company’s legal counsel and other agents and representatives; (o) the $16,000
cost associated with the Underwriters’ use of i-Deal’s book-building, prospectus
tracking and compliance software for the Offering; and (p) up to $10,000 of the
Underwriters’ actual accountable “road show” expenses for the
offering. The Underwriters may also deduct from the net proceeds of the Offering
payable to the Company on the Closing Date, or the Option Closing Date, if any,
the expenses set forth herein to be paid by the Company to the
Underwriters.
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(i) The
Company and each Subsidiary formed under the laws of the State of Delaware has
been duly organized and is validly existing as a corporation and is in good
standing under the laws of the State of Delaware with the requisite corporate
power to own or lease, as the case may be, and operate its respective
properties, and to conduct its business, as described in the Registration
Statement and the Prospectus. The Company and each such Subsidiary is duly
registered or qualified to do business as a foreign corporation and is in good
standing under the laws of the States of Delaware, Oregon and [●].
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(ii) All
issued and outstanding securities of the Company have been duly authorized and
validly issued and are fully paid and non-assessable and none of such securities
were issued in violation of the preemptive rights of any stockholder of the
Company arising by operation of law or under the Organizational Documents. The
offers and sales of the outstanding securities were at all relevant times either
registered under the Act or exempt from such registration requirements. The
authorized and, outstanding Shares of the Company is as set forth in the
Prospectus.
(iii) The
Public Securities have been duly authorized and, when issued and paid for, will
be validly issued and to our knowledge, fully paid and non-assessable; the
holders thereof are not and will not be subject to personal liability solely by
reason of being such holders. The Public Securities are not and will not be
subject to the preemptive rights of any holders of any security of the Company
arising by operation of law or under the Certificate of Incorporation and Bylaws
of the Company. The Over-allotment Option and Representative’s Option constitute
valid and binding obligations of the Company to issue and sell, upon exercise
thereof and payment therefore, the number of Shares called for thereby, and the
Over-allotment Option and the Representative’s Option are enforceable against
the Company in accordance with their respective terms, except (a) as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors’ rights generally; (b) as enforceability of any
indemnification or contribution provision may be limited under the Federal and
state securities laws and (c) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding
therefore may be brought.
(iv)
The issuance of the Firm Shares has been
duly authorized and, when issued and paid for by you pursuant to this Agreement,
the Firm Shares will be validly issued, fully paid and nonassessable. The
holders of outstanding shares of capital of the Company are not entitled to any
preemptive right, right of first offer or right of first refusal (i) set forth
in or provided for by the Company’s currently effective Certificate of
Incorporation and Bylaws (the “Organizational Documents”), or
(ii) granted by the Company in any currently effective written agreement. The
certificates representing the Firm Shares are in due and proper
form.
(v) This
Agreement and the Representative’s Option Agreement have been duly and validly
authorized and executed by the Company and constitute the valid and binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms, except (a) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally, (b) as enforceability of any indemnification or contribution
provisions may be limited under the Federal and state securities laws, and (c)
that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefore may be brought.
(vi) The
execution, delivery and performance of this Agreement, the Lock-Up Agreements,
and the Lock-Up Period restrictions on the Company and the Representative’s
Option Agreement, and compliance by the Company with the terms and provisions
thereof and the consummation of the transactions contemplated thereby, and the
issuance and sale of the Public Securities thereunder, do not and will not, with
or without the giving of notice or the lapse of time, or both, (a) conflict
with, or result in a breach of, any of the terms or provisions of, or constitute
a default under, or result in the creation or modification of any lien, security
interest, charge or encumbrance upon any of the properties or assets of the
Company pursuant to the terms of, any mortgage, deed of trust, note, indenture,
loan, contract, commitment or other agreement or instrument filed as an exhibit
to the Registration Statement, (b) result in any violation of the provisions of
the Organizational Documents, or (c) violate any statute or any judgment, order
or decree, rule or regulation applicable to the Company of any court, domestic
or foreign, or of any federal, state or other regulatory authority or other
governmental body having jurisdiction over the Company, its properties or
assets.
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(vii) The
Registration Statement and the Prospectus and any post-effective amendments or
supplements thereto (other than the financial statements included therein, as to
which no opinion need be rendered) each as of their respective dates complied as
to form in all material respects with the requirements of the Act and
Regulations. The Shares offered pursuant to the Prospectus conform in all
material respects to the description thereof contained in the Registration
Statement and the Prospectus. No United States or state statute or regulation
required to be described in the Prospectus is not described as required (except
as to the Blue Sky laws of the various states, as to which such counsel
expresses no opinions), nor are any contracts or documents of a character
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement not so described or filed as
required.
(viii) The
Registration Statement has been declared effective by the Commission. We have
been orally advised by the Staff of the Commission that no stop order suspending
the effectiveness of the Registration Statement has been issued, and to our
knowledge, no proceedings for that purpose have been instituted or overtly
threatened by the Commission. Any required filing of the Prospectus, and any
required supplement thereto, pursuant to Rule 424(b) under the Securities Act,
has been made in the manner and within the time period required by Rule
424(b).
(ix) The
Company is not and, after giving effect to the Offering and sale of the
Securities and the application of the proceeds thereof as described in the
Registration Statement and the Prospectus, will not be, an “investment company” as defined
in the Investment Company Act of 1940, as amended.
(x) No
consent, approval, authorization or filing with or order of the NASDAQ Stock
Market, any U.S. Federal, State of New York or State of Delaware court or
governmental agency or body having jurisdiction over the Company is required,
under the laws, rules and regulations of the United States of America and the
States of Delaware and New York for the consummation by the Company of the
transactions contemplated by the Agreement, except (i) such as have been made
with or obtained by the NASDAQ Stock Market (ii) such as have been made or
obtained under the Securities Act and (iii) such as may be required under the
blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Shares by you in the manner contemplated in the Agreement
and in the Prospectus, as to which we express no opinion.
(xi) The
Shares have been approved for listing on the NASDAQ Stock Market upon official
notice of issuance.
(xii) To
our knowledge, the Company is not a party to any written agreement granting any
holders of securities of the Company rights to require the registration under
the Securities Act of resales of such securities.
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(i) [Insert
for each the PRC Subsidiary] [●] has been duly
organized and is validly existing as a [●] under the laws
and regulations of the PRC; [●]’s business
license is in full force and effect; [●] of the equity
interests of [●] are owned by
[●], and to
our Knowledge, such equity interests are free and clear of all liens,
encumbrances, equities or claims; and the articles of association, the business
license and other constituent documents of [●] comply with the
requirements of applicable the PRC laws and regulations and are in full force
and effect.
(ii) Except
as set forth in the Registration Statement and the Prospectus, each of the PRC
Subsidiaries, has full corporate right, power and authority and has all
necessary governmental authorizations of and from, and has made all necessary
declarations and filings with, all governmental agencies to own, lease, license
and use its properties, assets and conduct its business, and such governmental
authorizations contain no materially burdensome restrictions or conditions; to
our Knowledge, none of the PRC Subsidiaries has any reason to believe that any
regulatory body is considering modifying, suspending, revoking or not renewing
any such governmental authorizations; and each of the PRC Subsidiaries is in
compliance in all material respects with the provisions of all such governmental
authorizations and conducts its business in all material respects in accordance
with any the PRC laws and regulations to which it is subject or by which it is
bound.
(iii) Except
as set forth in the Registration Statement and the Prospectus, none of the PRC
Subsidiaries has taken any action nor have any steps been taken or legal or
administrative proceedings been commenced or threatened for the winding up,
dissolution or liquidation of any of the PRC Subsidiaries or for the suspension,
withdrawal, revocation or cancellation of any of their respective business
license.
(iv) The
ownership structure of the PRC Subsidiaries does not violate any prohibitory
provisions of the applicable the PRC laws and regulations and the transactions
conducted in the PRC involving the PRC Subsidiaries relating to the
establishment of such ownership structure, in each case, did not and do not
violate any explicit provisions of the applicable the PRC laws and
regulations.
(v) Except
as set forth in the Registration Statement and the Prospectus, each of the PRC
Subsidiaries owns or otherwise has the legal right to use, or can acquire on
reasonable terms, the intellectual property (“Intellectual Property”) as
currently used or as currently contemplated to be used by the PRC
Subsidiaries.
(vi) Except
as set forth in the Registration Statement and the Prospectus, to our Knowledge,
none of the PRC Subsidiaries is infringing, misappropriating or violating any
intellectual property right of any third party in the PRC; no Intellectual
Property is subject to any outstanding decree, order, injunction, judgment or
ruling restricting the use of such Intellectual Property in the PRC that would
impair the validity or enforceability of such Intellectual Property; and none of
the Company or any of the PRC Subsidiaries has received any notice of any claim
of infringement or conflict with any such rights of others.
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(vii) Except
as set forth in the Registration Statement and the Prospectus, there are no
legal, arbitration or governmental proceedings in progress or pending or, to our
Knowledge, threatened, in the PRC to which the Company, or any the PRC
Subsidiary is a party or of which any property of any the PRC Subsidiary is
subject.
(viii) As
a matter of the laws and regulations of the PRC, none of the PRC Subsidiaries or
their properties, assets or revenues has any right of immunity, on any grounds,
from any legal action, suit or proceeding, from the giving of any relief in any
such legal action, suit or proceeding, from setoff or counterclaim, from the
jurisdiction of any court, from service of process, attachment upon or prior to
judgment, or attachment in aid of execution of judgment, or from execution of a
judgment, or other legal process or proceeding for the giving of any relief with
respect to their respective obligations, liabilities or any other matter under
or arising out of or in connection with the transactions contemplated by the
Agreement.
(ix) The
sale of the Public Securities and Underwriter’s Securities and the compliance by
the Company with all of the provisions of the Agreement and the Representative’s
Options and the consummation of the transactions contemplated thereby do not
result in any violation of the provisions of the articles of association,
business license or any other constituent documents of any of the PRC
Subsidiaries or any applicable statute or any order, rule or regulation, of any
governmental agency having jurisdiction over any of the PRC Subsidiaries or any
of its properties. No governmental authorization of any governmental agency in
the PRC is required for the consummation of the transactions contemplated by the
Agreement and the Representative’s Options, other than those already
obtained.
(x) No
stamp or other issuance or transfer taxes or duties and no capital gains,
income, withholding or other taxes are payable by the Underwriters to the
government of the PRC or to any political subdivision or taxing authority
thereof or therein in connection with the execution and delivery of the
Agreement, the sale and delivery by the Company of the Firm Shares to or for the
account of the Underwriter, the sale and delivery outside the PRC by the
Underwriters of the Firm Shares to the purchasers thereof in the manner
contemplated in the Agreement, or the consummation of any other transaction
contemplated in the Agreement.
(xi) Although
we do not assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement, or the Prospectus, we
have no reason to believe, that (a) when it became of effective, any part of the
Registration Statement (other than the financial statements and related
schedules therein, as to which we express no opinion) describing or summarizing
the PRC laws and regulations or documents, agreements or proceedings governed by
the PRC laws and regulations contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein not
misleading; (b) as of the date of the Agreement and the date hereof, any part of
the Prospectus (other than the financial statements and related schedules
therein, as to which we express no opinion) describing or summarizing the PRC
laws and regulations or documents, agreements or proceedings governed by the PRC
laws and regulations contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the statements
therein not misleading; or (c) at the time the Prospectus was filed with the
Commission or at the date hereof, any part of the Prospectus (other than the
financial statements and related schedules therein, as to which we express no
opinion) describing or summarizing the PRC laws and regulations or documents,
agreements or proceedings governed by the PRC laws and regulations contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein not misleading. The term
“Knowledge” as used in
this opinion shall mean the actual knowledge of the attorneys who have been
involved in representing the Company after due and reasonable
inquiry.
25
26
27
5.
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28
29
5.3.3. Each
Underwriter’s obligations to contribute pursuant to this Section 5.3 are several
and not joint.
30
31
8.2 Termination. You
shall have the right to terminate this Agreement at any time prior to any
Closing Date, (i) if any domestic or international event or act or occurrence
has materially disrupted, or in your opinion will in the immediate future
materially disrupt, general securities markets in the United States; or (ii) if
trading on the New York Stock Exchange, the NASDAQ, the NASDAQ Global Market or
the NASDAQ Capital Market shall have been suspended or materially limited, or
minimum or maximum prices for trading shall have been fixed, or maximum ranges
for prices for securities shall have been required by FINRA or by order of the
Commission or any other government authority having jurisdiction, or (iii) if
the United States shall have become involved in a new war or an increase in
major hostilities, or (iv) if a banking moratorium has been declared by a New
York State or federal authority, or (v) if a moratorium on foreign exchange
trading has been declared which materially adversely impacts the United States
securities markets, or (vi) if the Company shall have sustained a material loss
by fire, flood, accident, hurricane, earthquake, theft, sabotage or other
calamity or malicious act which, whether or not such loss shall have been
insured, will, in your opinion, make it inadvisable to proceed with the delivery
of the Firm Shares or Option Shares, or (vii) if the Company is in material
breach of any of its representations, warranties or covenants hereunder, or
(viii) if the Representative shall have become aware after the date hereof of
such a material adverse change in the conditions or prospects of the Company and
its Subsidiaries, individually, or taken as a whole, or such adverse material
change in general market conditions as in the Representative’s judgment would
make it impracticable to proceed with the offering, sale and/or delivery of the
securities or to enforce contracts made by the Underwriters for the sale of the
securities.
32
9.
|
If to the
Representative:
Xxxxxx
& Xxxxxxx, LLC
0000
Xxxxxx xx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx,
XX 00000
Attn:
General Counsel
Fax No.:
000-000-0000
Copy
to:
Loeb & Loeb LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxxxxx X. Xxxxxxxx,
Esq.
Fax:
000-000-0000
If to the
Company:
No. 0000 Xxxxxx
Xxxx
Development Zone Cao
County
Xxxxxxxx
Xxxxxxxx, 000000 Xxxxx
Attn: Xx.
Xxxxxxxx Xx, Chief Executive Officer
Copy
to:
Gusrae, Xxxxxx, Xxxxx & Xxxxxxx
PLLC
000 Xxxx Xxxxxx, 00xx
Xxxxx
Xxx Xxxx, Xxx Xxxx
00000
Attn: Xx. Xxxxxxxx X. Xxxxxxx,
Esq.
Fax:
(000) 000-0000
33
9.6 Governing Law. This
Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of New York, without giving effect to conflict of laws
principles thereof. The Company hereby agrees that any action, proceeding or
claim against it arising out of, or relating in any way to this Agreement shall
be brought and enforced in New York Supreme Court, County of New York or in
United States District Court for the Southern District of New York, and
irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive.
The Company hereby waives any objection to such exclusive jurisdiction and that
such courts represent an inconvenient forum. Any such process or summons to be
served upon the Company may be served by transmitting a copy thereof by
registered or certified mail, return receipt requested, postage prepaid,
addressed to it at the address set forth in Section 9.1 hereof. Such mailing
shall be deemed personal service and shall be legal and binding upon the Company
in any action, proceeding or claim. The Company agrees that the prevailing
party(ies) in any such action shall be entitled to recover from the other
party(ies) all of its reasonable attorneys’ fees and expenses relating to such
action or proceeding and/or incurred in connection with the preparation
therefor.
[SIGNATURE
PAGE FOLLOWS]
34
If the
foregoing correctly sets forth the understanding between the Underwriters and
the Company, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between
us.
Very
truly yours,
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By:
|
|
Name:
|
|
Title:
|
Accepted
on the date first above written.
XXXXXX
& XXXXXXX, LLC
By:
|
|
Name:
|
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Title:
|
35
SCHEDULE
I
Underwriters
36
EXHIBIT
A
Form
of Representative’s Option Agreement
37
EXHIBIT
B-1
Lock-Up
Agreement
___________
____, 2010
Xxxxxx
& Xxxxxxx, LLC
0000
Xxxxxx xx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx,
XX 00000
Ladies
and Gentlemen:
The
undersigned understands that Xxxxxx & Xxxxxxx, LLC (the “Representative”) proposes to
enter into an Underwriting Agreement (the “Underwriting Agreement”) with
[NAME OF COMPANY]., a [TYPE OF COMPANY] (the “Company”), providing for the
public offering (the “Public
Offering”) by the Representative of [_____] shares of common stock
(“Firm Shares”), par
value $_____ per share, of the Company (the “Shares”).
To induce
the Representative to continue its efforts in connection with the Public
Offering, the undersigned hereby agrees that, without the prior written consent
of the Representative, it will not, during the period commencing on the date
hereof and ending 180 days
after the date of the final prospectus (the “Prospectus”) relating to the
Public Offering (the “Lock-Up
Period”), (1) offer, pledge, sell, contract to sell, grant, lend, or
otherwise transfer or dispose of, directly or indirectly, any Shares or any
securities convertible into or exercisable or exchangeable for Shares, or (2)
enter into any swap or other arrangement that transfers to another, in whole or
in part, any of the economic consequences of ownership of the Shares, whether
any such transaction described in clause (1) or (2) above is to be settled by
delivery of Shares or such other securities, in cash or otherwise.
Notwithstanding the foregoing, the undersigned may transfer Shares without the
prior consent of the Representative in connection with (a) transactions relating
to Shares or other securities acquired in open market transactions after the
completion of the Public Offering, provided that no filing
under Section 16(a) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), shall
be required or shall be voluntarily made in connection with subsequent sales of
Shares or other securities acquired in such open market transactions, (b)
transfers of Shares or any security convertible into Shares as a bona fide gift,
by will or intestacy or to a family member or trust for the benefit of a family
member; provided that
in the case of any transfer or distribution pursuant to clause (b), (i) each
donee or distributee shall sign and deliver a lock-up letter substantially in
the form of this letter agreement and (ii) no filing under Section 16(a) of the
Exchange Act, reporting a reduction in beneficial ownership of Shares, shall be
required or shall be voluntarily made during the Lock-up Period, (c) transfer of
Shares to a charity or educational institution, or (d) if the undersigned,
directly or indirectly, controls a corporation, partnership, limited liability
company or other business entity, any transfers of Shares to any shareholder,
partner or member of, or owner of similar equity interests in, the undersigned,
as the case may be, if, in any such case, such transfer is not for value. In
addition, the undersigned agrees that during the Lock-Up Period, without the
prior written consent of the Representative, it will not make any demand for or
exercise any right with respect to the registration of any Shares or any
security convertible into or exercisable or exchangeable for Shares. The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company’s transfer agent and registrar against the transfer of the
undersigned’s Shares except in compliance with this Agreement.
If (i)
the Company issues an earnings release or material news, during the last 17 days
of the Lock-Up Period, 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, the restrictions imposed
by this agreement shall continue to apply until the expiration of the 18-day
period beginning on the issuance of the earnings release, unless the
Representative waives such extension.
No
provision in this agreement shall be deemed to restrict or prohibit the exercise
or exchange by the undersigned of any option or warrant to acquire Shares, or
securities exchangeable or exercisable for or convertible into Shares, provided that the undersigned
does not transfer the Shares acquired on such exercise or exchange during the
Lock-Up Period, unless otherwise permitted pursuant to the terms of this letter
agreement. In addition, no provision herein shall be deemed to restrict or
prohibit the entry into or modification of a so-called “10b5-1” plan at any time
(other than the entry into or modification of such a plan in such a manner as to
cause the sale of any Shares or any securities convertible into or exercisable
or exchangeable for Shares within the Lock-Up Period).
The
undersigned understands that the Company and the Representative are relying upon
this letter agreement in proceeding toward consummation of the Public Offering.
The undersigned further understands that this agreement is irrevocable and shall
be binding upon the undersigned’s heirs, legal representatives, successors and
assigns.
The
undersigned understands that, if the Underwriting Agreement is not executed by
____________, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Shares to be sold thereunder this agreement
shall be void and of no further force or effect.
Whether
or not the Public Offering actually occurs depends on a number of factors,
including market conditions. Any Public Offering will only be made pursuant to
an Underwriting Agreement, the terms of which are subject to negotiation between
the Company and the Representative.
Very
truly yours,
|
|
[LOCKED
UP PARTY]
|
|
By:
|
|
Name:
|
|
Title:
|
EXHIBIT
B-2
Lock-Up
Agreement
___________
____, 2010
Xxxxxx & Xxxxxxx,
LLC
0000 Xxxxxx xx Xxxxxxxx, 00xx
Xxxxx
Xxx Xxxx,
XX 00000
Ladies
and Gentlemen:
The
undersigned understands that Xxxxxx & Xxxxxxx, LLC (the “Representative”) proposes to
enter into an Underwriting Agreement (the “Underwriting Agreement”) with
[NAME OF COMPANY]., a [TYPE OF COMPANY] (the “Company”), providing for the
public offering (the “Public
Offering”) by the Representative of [_____] shares of common stock
(“Firm Shares”), par
value $____ per share, of the Company (the “Shares”).
To induce
the Representative to continue its efforts in connection with the Public
Offering, the undersigned hereby agrees that, without the prior written consent
of the Representative, it will not, during the period commencing on the date
hereof and ending on the earlier of (1) 120 days after the date of the final
prospectus relating to the Public Offering (the “Prospectus”) and (2) [DATE]
(the “Lock-Up Period”),
(1) offer, pledge, sell, contract to sell, grant, lend, or otherwise transfer or
dispose of, directly or indirectly, any Shares or any securities convertible
into or exercisable or exchangeable for Shares, or (2) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Shares, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Shares or
such other securities, in cash or otherwise. Notwithstanding the foregoing, the
undersigned may transfer Shares without the prior consent of the Representative
in connection with (a) transactions relating to Shares or other securities
acquired in open market transactions after the completion of the Public
Offering, provided that
no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”),
shall be required or shall be voluntarily made in connection with subsequent
sales of Shares or other securities acquired in such open market transactions,
(b) if the undersigned is an individual, transfers of Shares or any security
convertible into Shares as a bona fide gift, by will or intestacy or to a family
member or trust for the benefit of a family member; provided that in the case of
any transfer or distribution pursuant to clause (b), (i) each donee or
distributee shall sign and deliver a lock-up letter substantially in the form of
this letter agreement and (ii) no filing under Section 16(a) of the Exchange
Act, reporting a reduction in beneficial ownership of Shares, shall be required
or shall be voluntarily made during the Lock-up Period, (c) transfer of Shares
to a charity or educational institution, (d) if the undersigned is, or directly
or indirectly controls, a corporation, partnership, limited liability company or
other business entity, any transfers of Shares to any shareholder, partner or
member of, or owner of similar equity interests in, the undersigned, as the case
may be, if, in any such case, such transfer is not for value, or (e) if the
undersigned is a corporation, partnership, limited liability company or other
business entity, any transfer of Shares made by the undersigned (i) in
connection with the sale or other bona fide transfer in a single transaction of
all or substantially all of the undersigned’s capital stock, partnership
interests, membership interests or other similar equity interests, as the case
may be, or all or substantially all of the undersigned’s assets, in any such
case not undertaken for the purpose of avoiding the restrictions imposed by this
agreement or (ii) to another corporation, partnership, limited liability company
or other business entity so long as the transferee is an affiliate of the
undersigned and such transfer is not for value. [In addition, the undersigned
agrees that during the Lock-Up Period and except for the registration statement
relating to the Public Offering or any registration statement filed on Form S-3
contemplated by the Registration Rights Agreement, dated ____________, between
the Company and, among others, the undersigned, without the prior written
consent of the Representative, it will not make any demand for or exercise any
right with respect to the registration of any Shares or any security convertible
into or exercisable or exchangeable for Shares.] The undersigned also agrees and
consents to the entry of stop transfer instructions with the Company’s transfer
agent and registrar against the transfer of the undersigned’s Shares except in
compliance with this Agreement.
If (i)
the Company issues an earnings release or material news, during the last 17 days
of the Lock-Up Period, 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, the restrictions imposed
by this agreement shall continue to apply until the expiration of the 18-day
period beginning on the issuance of the earnings release, unless the
Representative waives such extension.
No
provision in this agreement shall be deemed to restrict or prohibit the exercise
or exchange by the undersigned of any option or warrant to acquire Shares, or
securities exchangeable or exercisable for or convertible into Shares, provided that the undersigned
does not transfer the Shares acquired on such exercise or exchange during the
Lock-Up Period, unless otherwise permitted pursuant to the terms of this letter
agreement. In addition, no provision herein shall be deemed to restrict or
prohibit the entry into or modification of a so-called “10b5-1” plan at any time
(other than the entry into or modification of such a plan in such a manner as to
cause the sale of any Shares or any securities convertible into or exercisable
or exchangeable for Shares within the Lock-Up Period).
The
undersigned understands that the Company and the Representative are relying upon
this letter agreement in proceeding toward consummation of the Public Offering.
The undersigned further understands that this agreement is irrevocable and shall
be binding upon the undersigned’s heirs, legal representatives, successors and
assigns.
The
undersigned understands that, if the Underwriting Agreement is not executed by
_____________, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Shares to be sold thereunder this agreement
shall be void and of no further force or effect.
Whether
or not the Public Offering actually occurs depends on a number of factors,
including market conditions. Any Public Offering will only be made pursuant to
an Underwriting Agreement, the terms of which are subject to negotiation between
the Company and the Representative.
Very
truly yours,
|
|
[LOCKED
UP PARTY]
|
|
By:
|
|
Name:
|
|
Title:
|
ANNEX
I
Subsidiaries
ANNEX
II
PRC
Subsidiaries