2,500,000 Shares EMERALD ACQUISITION CORPORATION Ordinary Shares UNDERWRITING AGREEMENT
2,500,000
Shares
EMERALD
ACQUISITION CORPORATION
Ordinary
Shares
________,
2010
Xxxx
Capital Partners, LLC
00
Xxxxxxxxx Xxxxx
Xxxxxxx
Xxxxx, XX 00000
Ladies
and Gentlemen:
Emerald
Acquisition Corporation, a Cayman Islands corporation (the “Company”), proposes,
subject to the terms and conditions stated herein, to issue and sell to Xxxx
Capital Partners, LLC (the “Underwriter”) an
aggregate of 2,500,000 authorized but unissued ordinary shares, (the “Underwritten Shares”)
par value $0.001 per share, of the Company (the “Ordinary Shares”),
and to grant the Underwriter the option to purchase an aggregate of up to
375,000 additional Ordinary Shares (the “Additional Shares”)
as may be necessary to cover over-allotments made in connection with the
offering. The Underwritten Shares and Additional Shares are
collectively referred to as the “Shares.”
The
Company and the Underwriter hereby confirm their agreement as
follows:
1. Registration
Statement and Prospectus. The Company
has prepared and filed with the Securities and Exchange Commission (the “Commission”) a
registration statement on Form S-1 (No. 333-163278), including a preliminary
prospectus, relating to the Shares and such amendments to the registration
statement and prospectus included therein as may have been required to the date
hereof. The Company will file with the Commission either: (i) prior
to effectiveness of such registration statement, a further amendment thereto,
including a form of prospectus, and if required after effectiveness of such
registration statement, a final prospectus in accordance with Rule 424(b) of the
rules and regulations (“Rules and
Regulations”) under the Securities Act of 1933, as amended (the “Act”); or
(ii) after effectiveness of such registration statement, a final prospectus
in accordance with Rules 430A and 424(b) of the Rules and
Regulations. Any such preliminary prospectus and any prospectus
included in the registration statement at the time it becomes effective that
omits information pursuant to Rule 430A of the Rules and Regulations, is
referred to herein as a “preliminary
prospectus”; such registration statement, as it may have been amended at
the time when it becomes effective, including financial statements, exhibits and
the information, if any, deemed to be a part of such registration statement by
virtue of Rule 430A of the Rules and Regulations, is referred to herein as the
“Registration Statement”; the preliminary prospectus that was included in the
Registration Statement immediately prior to the time it became effective is
referred to herein as the “Pricing Prospectus”; such final form of prospectus,
in the form in which it was first filed pursuant to Rule 424(b) of the Rules and
Regulations or, if no filing pursuant to Rule 424(b) of the Rules and
Regulations is made, in the form included in the Registration Statement at the
time it becomes effective, is referred to herein as the “Prospectus”; and, if
applicable, any “issuer free writing prospectus” as defined in Rule 433 under
the Act relating to the Shares is hereinafter called an “Issuer Free Writing
Prospectus”. If the Company has filed an abbreviated
registration statement to register additional Ordinary Shares pursuant to
Rule 462(b) under the Act (the “Rule 462 Registration
Statement”), then any reference herein to the term “Registration
Statement” shall be deemed to include such Rule 462 Registration
Statement.
2. Representations and
Warranties of the Company Regarding the Offering.
(a) The Company
represents and warrants to, and agrees with, the Underwriter, as of the date
hereof, as of the Closing Date (as defined in Section 5(c) below) and as of the
Option Closing Date (as defined in Section 5(b) below), if any, except as
otherwise indicated, as follows:
(i) The
Commission has not issued an order preventing or suspending the use of any
preliminary prospectus or Issuer Free Writing Prospectus, if applicable, and no
proceedings for such purpose are pending before or, to the Company’s knowledge,
threatened or contemplated by the Commission, and the Company has complied in
all material respects with all requests by the Commission for additional
information in connection therewith. Each preliminary prospectus and
the Prospectus delivered to the Underwriters for use in connection with this
offering will be substantially identical to the electronically transmitted
copies thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T. At the date of this Agreement and at the
date the Registration Statement becomes effective, the Registration Statement,
and the Pricing Prospectus and Prospectus conform, and any amendments or
supplements thereto will conform, in all material respects to the requirements
of the Act and the Rules and Regulations. At the date of this
Agreement, at the date the Registration Statement becomes effective, at the
Closing Date and at any Option Closing date, if any, the Registration Statement
will not include any 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 not misleading. At the date of this Agreement and
at the date the Registration Statement becomes effective, the Prospectus, as
amended or supplemented, if applicable, will not include any untrue statement of
a material fact and will not omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. At the time that
the Registration Statement became effective, the Pricing Prospectus did not
include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations, warranties or agreements as
to information contained in or omitted from the Registration Statement, each
preliminary prospectus or Prospectus or any such amendment or supplement in
reliance upon, and in conformity with, written information furnished to the
Company by the Underwriters expressly for use therein, it being understood and
agreed that the only such information is that described as such in
Section 8(f) hereof. The Registration Statement contains all
exhibits and schedules required to be filed by the Act and the Rules and
Regulations.
(ii) The Company
has not distributed any prospectus or other offering material in connection with
the offering and sale of the Shares other than each preliminary prospectus or
other materials permitted by the Act to be distributed by the
Company. The Company 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 under the Act, or that would otherwise
constitute a “free writing prospectus”, as defined in Rule 405 under the Act,
required to be filed with the Commission.
(ii) The
accountants who certified the financial statements and supporting schedules
included in the Registration Statement are independent public accountants as
required by the Act and the Rules and Regulations. The consolidated
financial statements of the Company set forth in the Registration Statement and
Prospectus, together with the related notes thereto, present fairly the
financial condition of the Company and its Consolidated Entities (as defined in
Section 3(a)(i) below) as of the dates indicated and the results of operations
and cash flows for the periods therein specified in conformity with United
States generally accepted accounting principles (“GAAP”) consistently
applied throughout the periods involved (except as otherwise stated
therein). The selected financial data and the summary financial
information included in the Prospectus present fairly in all material respects
the information shown therein and have been compiled on a basis consistent with
that of the audited financial statements included in the Registration
Statement. The schedules set forth in the Registration Statement
present fairly the information required to be stated therein in conformity with
GAAP. All disclosures contained in the Registration Statement or the
Prospectus regarding “non-GAAP financial
measures” (as such term is defined by rules and regulations of the
Commission) comply in all material respects with Regulation G of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) and
Item 10 of Regulation S-K under the Act, to the extent applicable.
(iv) The Company
had a reasonable basis for and made in good faith, each “forward-looking
statement” (within the meaning of Section 27A of the Act or Section 21E of the
Exchange Act) contained in the Registration Statement, each preliminary
prospectus and the Prospectus.
(v) All
statistical or market-related data included or incorporated by reference in the
Registration Statement, each preliminary prospectus or the Prospectus are based
on or derived from sources that the Company reasonably believes to be reliable
and accurate, and the Company has obtained the written consent to the use of
such data from such sources, to the extent required.
(vi) The Shares
have been approved for listing on the Nasdaq Capital Market, subject to official
notice of issuance.
(vii) The Company
has not taken, directly or indirectly, any action that is designed to or that
has constituted or that would reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(viii) The Company
is not and, after giving effect to the offering and sale of the Shares as
described in each preliminary prospectus and the Prospectus, will not be an
“investment company,” as such term is defined in the Investment Company Act of
1940, as amended.
(b) Any
certificate signed by any officer of the Company and delivered to the
Underwriter or to the Underwriter’s counsel shall be deemed a representation and
warranty by the Company to the Underwriter as to the matters covered
thereby.
3. Representations and
Warranties Regarding the Company.
(a) The Company
represents and warrants to, and agrees with, the Underwriter, as
follows:
(i) Each of the
Company, its Subsidiaries (as defined in Section 3(a)(ii) below) and Shandong
Longkang Juice Co., Ltd., a company incorporated under the laws of the People’s
Republic of China (the “PRC”) (“Longkang”, and
together with the Subsidiaries, the “Consolidated
Entities”) 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 Consolidated Entities has the
corporate power and authority to own or lease its properties and conduct its
business as currently being carried on and as described in the Registration
Statement, each preliminary prospectus, and the Prospectus and is duly qualified
to do business as a foreign corporation in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts business so
as to require such qualification and in which the failure to so qualify would
have or is reasonably likely to result in a material adverse effect upon the
business, prospects, properties, operations, condition (financial or otherwise)
or results of operations of the Company and its Consolidated Entities, taken as
a whole, or in its ability to perform its obligations under this Agreement (a
“Material Adverse
Effect”).
(iii) The
authorized, issued and outstanding capital stock of the Company conforms to the
description thereof contained in the Pricing Prospectus and the
Prospectus. The issued and outstanding Ordinary Shares have been duly
authorized and validly issued and are fully paid and
nonassessable. The sale of the Shares by the Company has been duly
authorized and after issuance of and payment for such Shares in accordance with
this Agreement, such Shares will be validly issued, fully paid and
nonassessable. The Underwriters will acquire good and marketable
title to the Shares to be sold by the Company, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, or other claim, and the holders
of Ordinary Shares are not entitled to any preemptive rights with respect to the
Shares to be sold by the Company. The issued and outstanding shares
of the capital stock of each of the Subsidiaries of the Company have been duly
authorized and validly issued, are fully paid and nonassessable and are owned
beneficially and of record, directly or indirectly, by the Company free and
clear of all liens, claims or encumbrances whatsoever. None of the
outstanding shares of capital stock of the Company or any of its Subsidiaries
was issued in violation of the preemptive or similar rights of any
securityholder arising by operation of law, under the certificate of
incorporation or by-laws of the Company or its Subsidiaries or under any
agreement or obligation to which the Company or any of its Subsidiaries is a
party or by which any of them are bound.
(iv) Except as
disclosed in each preliminary prospectus and the Prospectus and the financial
statements of the Company and the related notes thereto included in each
preliminary prospectus and the Prospectus, neither the Company nor any of its
Subsidiaries has outstanding any options or warrants to purchase, any preemptive
rights or other rights to subscribe for or to purchase, any securities or
obligations convertible into, or any contracts or commitments to issue or sell,
shares of its capital stock or any such options, warrants, rights, convertible
securities or obligations. Except as described in the Registration
Statement, each preliminary prospectus and Prospectus, there are no persons with
registration rights or other similar rights to have any securities registered by
the Company pursuant to the Registration Statement or otherwise registered by
the Company under the Act.
(v) Except as
disclosed in each preliminary prospectus and the Prospectus, subsequent to the
respective dates as of which information is given in the Registration Statement,
each preliminary prospectus and the Prospectus, neither the Company nor any of
its Consolidated Entities has incurred any liabilities or obligations, direct or
contingent (including any off-balance sheet obligations or any “variable
interest entities” within the meaning of Financial Accounting Standards Board
Interpretation No. 46), or entered into any transactions, not in the ordinary
course of business, that are material to the Company or its Consolidated
Entities taken as a whole, and there has not been any dividend or distribution
of any kind declared, paid or made by the Company on any class of its capital
stock, any material change in the capital stock, short-term debt or long-term
debt of the Company, or any Material Adverse Effect.
(vi) The Company
has the power and authority to enter into this Agreement and to authorize, issue
and sell the Shares as contemplated by this Agreement. This Agreement
has been duly authorized, executed and delivered by the Company, and constitutes
a valid, legal and binding obligation of the Company, enforceable against the
Company 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 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.
(vii) The
execution, delivery and performance of this Agreement and the consummation of
the transactions herein contemplated will not (A) conflict with or result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, any law, rule or regulation to which the Company or any of its
Consolidated Entities is subject, or by which any property or asset of the
Company or any of its Consolidated Entities is bound or affected, (B) conflict
with, result in any violation or breach of, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or give
to others any right of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, lease, credit
facility, debt, note, bond, mortgage, indenture or other instrument (the “Contracts”) or
obligation or other understanding to which the Company or any of its
Consolidated Entities is a party of by which any property or asset of the
Company or any of its Consolidated Entities is bound or affected, except to the
extent that such conflict, default, termination, amendment, acceleration or
cancellation right is not reasonably likely to result in a Material Adverse
Effect, or (C) result in a breach or violation of any of the terms and
provisions of, or constitute a default under, the Company’s or any of its
Consolidated Entities’ certificate of incorporation, articles of associations,
bylaws or other equivalent organizational or governing documents.
(viii) Neither the
Company nor any of its Consolidated Entities is in violation, breach or default
under its certificate of incorporation, articles of associations, bylaws or
other equivalent organizational or governing documents.
(ix) All consents,
approvals, orders, authorizations and filings required on the part of the
Company and its Consolidated Entities in connection with the execution, delivery
or performance of this Agreement have been obtained or made.
(x) Each of the
Company and its Consolidated Entities has filed all foreign, federal, state and
local returns (as hereinafter defined) required to be filed with taxing
authorities prior to the date hereof or has duly obtained extensions of time for
the filing thereof. Each of the Company and its Consolidated Entities
has paid all taxes (as hereinafter defined) shown as due on such returns that
were filed and has paid all taxes imposed on or assessed against the Company,
such respective Consolidated Entity. The provisions for taxes
payable, if any, shown on the financial statements filed with or as part of the
Registration Statement are sufficient for all accrued and unpaid taxes, whether
or not disputed, and for all periods to and including the dates of such
consolidated financial statements. Except as disclosed in each
preliminary prospectus and the Prospectus, (A) no issues have been raised (and
are currently pending) by any taxing authority in connection with any of the
returns or taxes asserted as due from the Company or any of its Consolidated
Entities and (B) no waivers of statutes of limitation with respect to the
returns or collection of taxes have been given by or requested from the Company
or any of its Consolidated Entities. The term “taxes” means all
federal, state, local, foreign, and other net income, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease,
service, service use, withholding, payroll, employment, excise, severance,
stamp, occupation, premium, property, windfall profits, customs, duties or other
taxes, fees, assessments, or charges of any kind whatever, together with any
interest and any penalties, additions to tax, or additional amounts with respect
thereto. The term “returns” means all
returns, declarations, reports, statements, and other documents required to be
filed in respect to taxes.
(ix) Since the
respective dates as of which information is given in the Registration Statement,
each preliminary prospectus or the Prospectus, (A) neither the Company nor any
of its Consolidated Entities has incurred any material liabilities or
obligations, direct or contingent, or entered into any material transactions
other than in the ordinary course of business, (B) the Company has not declared
or paid any dividends or made any distribution of any kind with respect to
its capital stock, (C) there has not been any change in the capital stock of the
Company or any of its Subsidiaries (other than a change in the number of
outstanding Ordinary Shares due to the issuance of shares upon the exercise of
outstanding options or warrants or the issuance of
restricted stock awards or restricted stock units under the Company’s existing stock
awards plan, or any new grants
thereof in the ordinary course of business), (D) there has not been any material
change in the Company’s or any of its Consolidated Entities’ long-term or
short-term debt, and (E) there has not been the occurrence of any Material
Adverse Effect.
(xii) There is not
pending or, to the knowledge of the Company, threatened, any action, suit or
proceeding to which the Company or any of its Consolidated Entities is a party
or of which any property or assets of the Company or any of its Consolidated
Entities is the subject before or by any court or governmental agency, authority
or body, or any arbitrator or mediator, which is reasonably likely to
result in a Material Adverse Effect.
(xiii) Each of the
Company and its Consolidated Entities holds, and is in compliance with, all
franchises, grants, authorizations, licenses, permits, easements, consents,
certificates and orders (“Permits”) of any
governmental or self-regulatory agency, authority or body required for the
conduct of its business as currently being conducted and as described in the
Registration Statement, and all such Permits are in full force and
effect.
(xiv) The Company,
each of its Consolidated Entities have good and marketable title to all property
(whether real or personal) described in the Registration Statement, each
preliminary prospectus and the Prospectus as being owned by them that are
material to the business of the Company, in each case free and clear of all
liens, claims, security interests, other encumbrances or defects. The
property, production base and land described in the Registration Statement, each
preliminary prospectus and the Prospectus as held under lease or pursuant to
land use rights by the Company, or the Consolidated Entities is held by them
under valid, subsisting and enforceable leases or land use rights, as the case
may be, 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 the Consolidated Entities. The Company and/or the
Consolidated Entities have valid ownership to the offices and manufacturing
facilities built by any of them as described in the Registration Statement, and
has obtained all Permits related to the construction therefore, if
applicable.
(xv) The Company
and the Consolidated Entities own or possess or has valid right to use all
patents, patent applications, trademarks, service marks, trade names, trademark
registrations, service xxxx registrations, copyrights, licenses, inventions,
trade secrets and similar rights (“Intellectual
Property”) necessary for the conduct of the business of the Company and
the Consolidated Entities, as currently carried on and as described in the
Registration Statement, each preliminary prospectus and the
Prospectus. To the knowledge of the Company, no action or use by the
Company or the Consolidated Entities will involve or give rise to
any infringement of, or license or similar fees for, any Intellectual
Property of others. Neither the Company nor any Consolidated Entity
has received any notice alleging any such infringement or fee.
(xvi) The Company
and each of the Consolidated Entities have complied with, are not in violation
of, and have not received any notice of violation relating to any law, rule or
regulation relating to the conduct of its business, or the ownership or
operation of its property and assets, including, without limitation, (A) the
Currency and Foreign Transactions Reporting Act of 1970, as amended, or any
money laundering laws, rules or regulations, (B) any laws, rules or regulations
related to health, safety or the environment, including those relating to the
regulation of hazardous substances, (C) the Xxxxxxxx-Xxxxx Act of 2002 and the
rules and regulations of the Commission thereunder, and (D) the Foreign Corrupt
Practices Act of 1977 and the rules and regulations thereunder.
(xvii) Neither the
Company nor any of the Consolidated Entities, nor, to the knowledge of the
Company, any director, officer, employee, representative, agent or affiliate of
the Company or the Consolidated Entities is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”); and the
Company will not directly or indirectly use the proceeds of the offering of the
Shares contemplated hereby, or lend, contribute or otherwise make available such
proceeds to any person or entity, for the purpose of financing the activities of
any person currently subject to any U.S. sanctions administered by
OFAC.
(xviii) The Company
and each Consolidated Entity carry, or are 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 in the People’s Republic of China (the “PRC”).
(xix) Each of the
Company and its Consolidated Entities has complied with all applicable
employment and labor laws with respect to its employees. No labor
dispute with the employees of the Company or any Consolidated Entity exists and
no disputes with any principal supplier, manufacturer, customer or contractor of
the Company or any Consolidated Entity or any of their employees, exists, or, to
the knowledge of the Company, is imminent that is reasonably likely to result in
a Material Adverse Effect.
(xx) Neither the
Company nor any of the Consolidated Entities nor any other party is in
violation, breach or default of any contract that is reasonably likely to result
in a Material Adverse Effect.
(xxi) No
supplier, customer, distributor or sales agent of the Company, or its
Consolidated Entities has notified the Company or such Consolidated Entity
that it intends to discontinue or decrease the rate of business
done with the Company or such Consolidated Entity.
(xxii) There are no
claims, payments, issuances, arrangements or understandings for services in the
nature of a finder’s, consulting or origination fee with respect to the
introduction of the Company to the Underwriter or the sale of the Shares
hereunder or any other arrangements, agreements, understandings, payments or
issuances with respect to the Company that may affect the Underwriter’s
compensation, as determined by FINRA.
(xxiii) Except as
disclosed in each preliminary prospectus and the Prospectus, neither the Company
nor any Subsidiary is in violation of any statute, rule, regulation, decision or
order of any governmental agency or body or any court, domestic or foreign,
relating to the use, disposal or release of hazardous or toxic substances or
relating to the protection or restoration of the environment or human exposure
to hazardous or toxic substances (collectively, “environmental
laws”), owns or operates any real property contaminated with any substance that
is subject to any environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any claim
relating to any environmental laws; and neither the Company nor any Subsidiary
is aware of any pending investigation that might lead to such a
claim.
(xxiv) The Company
has not made any direct or indirect payments (in cash, securities or otherwise)
to (A) any person, as a finder’s fee, investing fee or otherwise, in
consideration of such person raising capital for the Company or introducing to
the Company persons who provided capital to the Company, (B) any FINRA member,
or (C) any person or entity that has any direct or indirect affiliation or
association with any FINRA member within the 12 month period prior to the date
on which the Registration Statement was filed with the Commission or
thereafter.
(xxv) None of the
net proceeds of the offering will be paid by the Company to any participating
FINRA member or any affiliate or associate of any participating FINRA member,
except as specifically authorized herein.
(xxvi) No (A)
officer or director of the Company or its Consolidated Entities, (B) owner of 5%
or more of the Company’s unregistered securities or that of its Subsidiaries or
(C) owner of any amount of the Company’s unregistered securities acquired within
the 180-day period prior to the Filing Date, has any direct or indirect
affiliation or association with any FINRA member. The Company will
advise the Underwriter and its counsel if it becomes aware that any officer,
director or stockholder of the Company or its Consolidated Entities is or
becomes an affiliate or associated person of a FINRA member participating in the
offering.
(xxvii) Other than
the Underwriter, no person has the right to act as an underwriter or as a
financial advisor to the Company in connection with the transactions
contemplated hereby.
4. Representations and
Warranties of the Company Regarding the PRC.
(a) The Company
represents and warrants to, and agrees with, the Underwriter, as of the date
hereof and as of the Closing Date, as follows:
(i) The Company
owns all of the issued and outstanding capital stock of Merit Times
International Limited, a British Virgin Islands corporation (“Merit Times”), which
in turn owns all of the outstanding capital stock of Shandong MeKeFuBang Food
Limited, a company incorporated under the laws of the PRC (“MeKeFuBang”). On
June 10, 2009, MeKeFuBang entered into a series of contractual agreements with
Longkang, pursuant to which MeKeFuBang took over management of the business
activities of Longkang and has the right to appoint all executives and senior
members of the board of directors of Longkang. MeKeFuBang and
Longkang are collectively referred to hereinafter as the “PRC
Entities.”
(ii) The
description of the corporate structure of the Company and the various contracts
between the Company and any of the PRC Entities (each a “Corporate Structure
Contract” and collectively, the “Corporate Structure
Contracts”) as described in the Registration Statement, each preliminary
prospectus and the Prospectus, is true and accurate and nothing has been omitted
from such description which would make it misleading in any
respect. There is no other agreement, contract or other document
relating to the corporate structure or the operation of the Company, its
subsidiaries and the PRC entities which has not been previously disclosed or
made available to the Underwriter and, to the extent material to the Company,
disclosed in the Registration Statement, each preliminary
prospectus and the Prospectus. Except for Merit Times and
the PRC Entities, the Company does not presently own, control or have, directly
or indirectly, any interest in any other corporation, partnership, joint
venture, association, branch offices or other entity.
(iii) (A) Each
Corporate Structure Contract has been duly authorized, executed and delivered to
the parties thereto and constitutes a valid and legally binding obligation of
the parties thereto, enforceable in accordance with its terms; (B) except as
disclosed in the Registration Statement, each preliminary prospectus and the
Prospectus, no consent, approval, authorization, or order of, or filing or
registration with, any person (including any governmental agency or body or any
court) is required for the performance of the obligations under any Corporate
Structure Contract by the parties thereto; and (C) each Corporate Structure
Contract is in full force and effect and none of the parties thereto is in
breach of or default in the performance of any of the terms or provisions of
such Corporate Structure Contract. There is no legal or governmental
proceeding, inquiry or investigation pending against the Company, its
subsidiaries, or the PRC Entities in any jurisdiction challenging the validity
of any of the Corporate Structure Contracts and, to the knowledge of the
Company, no such proceeding, inquiry, or investigation is threatened or
contemplated in any jurisdiction.
(iv) Except for
the Corporate Structure Contracts, there are no outstanding rights, warrants or
options to acquire, or instruments convertible into or exchangeable for, any
equity interest in the PRC Entities, and there is no security interest,
mortgage, pledge, lien, encumbrance, claim or any third party right, the
exercise of which may lead to the change of shareholdings or the amount of the
registered capital of the PRC Entities.
(v) Any previous
restructuring (i.e. equity transfer) of the PRC Entities complied with the
then-effective PRC laws and regulations.
(vi) No dispute
between any of the PRC Entities, Merit Times or the Company exists, or to the
knowledge of the Company is imminent that is reasonably likely to
result in a Material Adverse Effect.
(vii) Except as
disclosed in the Registration Statement, each preliminary prospectus and the
Prospectus, all filings and registrations with the PRC governmental authorities
required in respect of each of the PRC Entities and its respective capital
structure and operations, including without limitation, the registration with
local divisions of the Ministry of Commerce, the State Administration of Foreign
Exchange and tax bureau have been duly completed in accordance with the relevant
PRC rules and regulations and neither of the PRC Entities has received any
letter or notice from any relevant PRC government authority notifying it of
revocation of any licenses or qualifications issued to it by any PRC government
authority for non-compliance with the terms thereof or with applicable PRC laws,
or the lack of compliance or remedial actions in respect of the activities
carried out by each of the PRC Entities.
(viii) Each of the
PRC Entities 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, each preliminary prospectus 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. Each PRC Entity has applied for
and obtained all requisite business licenses, approvals, consents, clearances
and permits required under PRC law and regulations as necessary for the conduct
of its businesses as currently being conducted and as described in the
Registration Statement, and each PRC Entity has complied in all respects with
all PRC laws and regulations in connection with foreign exchange, including
without limitation, carrying out all relevant filings, registrations and
applications for relevant permits with the relevant branch of the PRC State
Administration of Foreign Exchange and any other
relevant authorities, and all such permits are validly subsisting and
as to business licenses, clearances and permits subject to periodic renewal, the
Company has no knowledge of any reasons related to each of the PRC Entities for
which such requisite renewals will not be granted by the relevant PRC
governmental authorities. The registered capital stock of each PRC
Entity 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 PRC laws and regulations, and there is
no outstanding capital contribution commitment for any PRC
Entity. With respect to any increase of registered capital, the
relevant PRC Entity has duly filed the application documents with the competent
PRC government authorities for approval. The Establishment Documents
of the PRC Entities 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 PRC Entity complies with the requirements of
all relevant PRC laws and regulations. Except as disclosed in the
Registration Statement, each preliminary prospectus and the Prospectus, none of
the PRC Entities is carrying out or has carried out any business activities that
are beyond its business scope or the scope of the Permits. The
outstanding equity interests of each PRC Entity is owned of record by the
respective entities or individuals identified as the registered holders thereof
in the Registration Statement, each preliminary prospectus and the Prospectus,
free of any charges, pledges, security or third party rights and there are no
outstanding commitments made by the Company or its subsidiaries to sell any
equity interest in any of the PRC Entities.
(ix) With regard
to employment and staff or labor, except as disclosed in the Registration
Statement, each preliminary prospectus and the Prospectus, each of the PRC
Entities are in compliance with all applicable PRC laws and regulations,
including without limitation, laws and regulations pertaining to welfare funds,
social benefits, medical benefits, insurance, retirement benefits or
pensions.
(x) All
agreements to which each of the PRC Entities is a party are valid, enforceable
and free of defaults on the part of all parties thereto.
(xi) MeKeFuBang is
not currently prohibited, directly or indirectly, from paying any dividends to
the Company (or the Company’s subsidiary that holds the outstanding equity
interests of MeKeFuBang). MeKeFuBang is not prohibited, directly or indirectly,
from making any other distribution on such entity’s equity capital, from
repaying to the Company any loans or advances to such PRC Entity from the
Company or any of the Company’s subsidiaries.
(xii) The choice of
the laws of the State of New York as the governing law of this Agreement does
not contravene the laws of the PRC.
(xiii) None of the
PRC Entities nor any of their properties, assets or revenues are entitled to any
right of immunity on the grounds of sovereignty from any legal action, suit or
proceeding, from set-off or counterclaim, from the jurisdiction of any court,
from services of process, from attachment prior to or in aid of execution of
judgment, or from any other legal process or proceeding for the giving of any
relief or for the enforcement of any judgment.
(xiv) It is not
necessary that this Agreement, the Registration Statement, each preliminary
prospectus, the Prospectus or any other document be filed or recorded with any
governmental agency, court or other authority in the PRC.
(xv) No
transaction, stamp, capital or other issuance, registration, transaction,
transfer, income, capital gains, withholding or other taxes or duties are
payable by or on behalf of the Underwriter to the government of the PRC or to
any political subdivision or taxing authority thereof or therein in connection
with (A) the execution and delivery of this Agreement, (B) the issuance,
sale and delivery of the Shares by the Company and the delivery of the Shares to
or for the account of the Underwriter, (C) the purchase from the Company
and the initial sale and delivery by the Underwriter of the Shares to purchasers
thereof, or (D) the consummation of any other transaction contemplated in
this Agreement.
(xvi) The Company
has taken all necessary steps to comply with, and to ensure compliance by all of
the Company’s direct or indirect shareholders and option holders who are PRC
residents with, any applicable rules and regulations of the PRC State
Administration of Foreign Exchange of the PRC (the “SAFE Rules and
Regulations”), including, without limitation, requiring each shareholder
and option holder that is, or is directly or indirectly owned or controlled by,
a PRC resident to complete any registration and other procedures required under
applicable SAFE Rules and Regulations.
(xvii) The Company
is aware of, and has been advised as to, the content of the Rules on Mergers and
Acquisitions of Domestic Enterprises by Foreign Investors jointly promulgated by
the PRC Ministry of Commerce, the PRC State Assets Supervision and
Administration Commission, the PRC State Administration of Taxation, the PRC
State Administration of Industry and Commerce, the China Securities Regulatory
Commission (the “CSRC”) and the PRC
State Administration of Foreign Exchange of the PRC (the “M&A Rules”), in
particular the relevant provisions thereof that purport to require offshore
special purpose vehicles controlled directly or indirectly by PRC-incorporated
companies or PRC residents and established for the purpose of obtaining a stock
exchange listing outside of the PRC to obtain the approval of the CSRC prior to
the listing and trading of their securities on any stock exchange located
outside of the PRC. The Company has received legal advice
specifically with respect to the M&A Rules from its PRC counsel and the
Company understands such legal advice. In addition, the Company has
communicated such legal advice in full to each of its directors that signed the
Registration Statement and each such director has confirmed that he or she
understands such legal advice.
(xviii) The issuance
and sale of the Shares, the listing and trading of the Shares on the Nasdaq
Capital Market and the consummation of the transactions contemplated by this
Agreement, the Registration Statement, each preliminary prospectus and the
Prospectus are not and will not be, as of the date hereof and on the Closing
Date, subject to the M&A Rules or any official clarifications, guidance,
interpretations or implementation rules in connection with or related to the
M&A Rules, including the guidance and notices issued by the CSRC on
September 8, and September 21, 2006 (together with the M&A Rules, the “M&A Rules and Related
Clarifications”).
(xix) The Company
has taken all necessary steps to ensure compliance by each of its shareholders,
option holders, directors, officers and employees that is, or is directly or
indirectly owned or controlled by, a PRC resident or citizen with any applicable
rules and regulations of the relevant PRC government agencies (including but not
limited to the PRC Ministry of Commerce, the PRC National Development and Reform
Commission and the PRC State Administration of Foreign Exchange) relating to
overseas investment by PRC residents and citizens (the “PRC Overseas Investment and
Listing Regulations”), including, requesting each shareholder, option
holder, director, officer, employee and participant that is, or is directly or
indirectly owned or controlled by, a PRC resident or citizen to complete any
registration and other procedures required under applicable PRC Overseas
Investment and Listing Regulations.
(xx) As of the
date hereof, the M&A Rules and Related Clarifications do not require the
Company to obtain the approval of the CSRC prior to the issuance and sale of the
Shares, the listing and trading of the Shares on the Nasdaq Capital Market, or
the consummation of the transactions contemplated by this Agreement, the
Registration Statement, each preliminary prospectus or the
Prospectus.
(xxi) Each of the
PRC Entities is in compliance with all requirements under all applicable PRC
laws and regulations to qualify for their exemptions from enterprise income tax
or other income tax benefits (the “Tax Benefits”) as
described in the Registration Statement, each preliminary prospectus and the
Prospectus, and the actual operations and business activities of each such PRC
Entity are sufficient to meet the qualifications for the Tax
Benefits. No submissions made to any PRC government authority in
connection with obtaining the Tax Benefits contained any misstatement or
omission that would have affected the granting of the Tax
Benefits. No PRC Entity has received notice of any deficiency in its
respective applications for the Tax Benefits, and the Company is not aware of
any reason why any such PRC Entity might not qualify for, or be in compliance
with the requirements for, the Tax Benefits.
(xxii) All local and
national PRC governmental tax holidays, exemptions, waivers, financial
subsidies, and other local and national PRC tax relief, concessions and
preferential treatment enjoyed by any PRC Entity as described in the
Registration Statement, the Time of Disclosure Package and the Prospectus are
valid, binding and enforceable and do not violate any laws, regulations, rules,
orders, decrees, guidelines, judicial interpretations, notices or other
legislation of the PRC.
(xxiii) The entry
into, and performance or enforcement of this Agreement in accordance with its
terms will not subject the Underwriter to any requirement to be licensed or
otherwise qualified to do business in the PRC, nor will the Underwriter be
deemed to be resident, domiciled, carrying on business or subject to taxation
through an establishment or place in the PRC or in breach of any laws or
regulations of the PRC by reason of its execution, delivery, performance or
enforcement of, or the consummation of any transaction contemplated by, this
Agreement, the Registration Statement, each preliminary prospectus or the
Prospectus.
(xxiv) All
descriptions in the Registration Statement, each preliminary prospectus and the
Prospectus of PRC laws or regulations and contracts, documents and matters
governed by or under PRC law are accurate in all material respects. The
statements in the Registration Statement, the preliminary prospectus and the
Prospectus under the headings “Risk Factors” “Dividend Policy,” “Corporate
Structure and History,” and “Business” insofar as such statements constitute
summaries of the laws or regulations of the PRC or documents governed by PRC law
as of the date hereof, fairly present the information called for with respect to
such legal matters and documents and fairly summarize matters referred to
therein.
(xxv) The
application of the net proceeds from the Offering, as contemplated by the
Registration Statement, each preliminary prospectus and the Prospectus, will not
(A) contravene any provision of applicable PRC law, rule or regulation or the
articles of association or any other constituent documents of any of the PRC
Entities or (B) contravene the terms or provisions of, or constitute a default
under, (1) any mortgage, loan agreement, lease or other agreement binding upon
any of the PRC Entities, (2) any mortgage, loan agreement, lease or other
agreement governed by PRC law by which the Company or any of the PRC Entities
are bound or to which any of the properties or assets of any of the PRC Entities
are subject or (3) any judgment, order or decree of any governmental body,
agency or court in the PRC.
(xxvi) The
contribution to the PRC Entities of the proceeds from the sale of the Shares,
subject however to customary and ordinary administrative approvals under the
existing laws and regulations of the PRC, and the compliance by the Company with
all of the provisions of this Agreement and the consummation of the transactions
contemplated thereby does not result in any violation of the provisions of the
articles of association or any other constituent documents of the PRC Entities
or any applicable laws and regulations of the PRC, including without limitation
the New M&A Rules, of any governmental agency having jurisdiction over each
of the PRC Entities or any of its properties.
(xxvii) Except as
disclosed in the Registration Statement, each preliminary prospectus and the
Prospectus, none of the PRC Entities is in violation of any applicable statute,
law, or regulation relating to the environment or occupational health and safety
and no material expenditures are or will be required in order to comply with any
such existing statute, law or regulation.
5. 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 the Underwritten Shares to the Underwriter, and the Underwriter agrees to
purchase the Underwritten Shares. The purchase price for each
Underwritten Share shall be $_______ per share (the “Per Share
Price”).
(c) Payment for
the Shares that the Underwriter agrees to purchase hereunder shall be made to
the Company by wire transfer of immediately available funds to the bank account
designated by the Company at 7:00 a.m., Pacific Time, on ______ __, 2010, or at
the time, date (not later than seven full business days thereafter) and place
agreed upon by the Underwriter and the Company, against delivery to the
Underwriter of the Shares in the form of certificates for the securities
comprising the Shares or through the electronic DWAC facilities of the Company’s
transfer agent. The date and time of this payment and delivery are
sometimes referred to below as the “Closing
Date.”
(d) The
certificates for the Shares shall be registered in the name or names and shall
be in the denominations the Underwriter shall designate at least one full
business day prior to the Closing Date, in the case of the Shares, and at least
one full business day prior to any Additional Closing Date, in the case of the
Additional Shares. The Company agrees to cause certificates for the
Shares to be delivered pursuant to this Agreement at your offices, at the
offices of The Depository Trust Company, New York, New York, or at such other
places as may be designated by the Underwriter, and to be made available for
checking and packaging at one of the above offices or such other places as may
be designated by the Underwriter at least one full business day prior to the
Closing Date in the case of the Shares, and at least one full business day prior
to any Additional Closing Date, in the case of the Additional
Shares.
6. Covenants.
(a) The Company
covenants and agrees with the Underwriter as follows:
(i) To use all
reasonable efforts to bring about the effectiveness of the Registration
Statement and not, at any time, whether before or after the effective date, to
file any amendment to the Registration Statement or Prospectus or supplement
thereto of which you shall not previously have been advised and furnished with a
copy or to which you or your counsel shall have objected or which is not in
compliance in all material respects with the Act and the Rules and Regulations,
and as soon as the Company is advised thereof, to advise the Underwriter and
confirm this advice in writing (i) when the Registration Statement has
become effective and (ii) of the issuance by the Commission or any state
securities or “Blue Sky” commissioner or authority of any order suspending the
effectiveness of the Registration Statement or any qualification of the Shares
or prohibiting the sale of the Shares or the initiation or threatening of any
proceedings for any such purpose.
(ii) During the
period beginning on the date hereof and ending on the later of the Closing Date
or such date as determined by the Underwriter the Prospectus is no longer
required by law to be delivered in connection with sales by an underwriter or
dealer (the “Prospectus Delivery
Period”), prior to amending or supplementing the Registration Statement,
including any Rule 462 Registration Statement, each preliminary prospectus or
the Prospectus, the Company shall furnish to the Underwriter for review and
comment a copy of each such proposed amendment or supplement, and the Company
shall not file any such proposed amendment or supplement to which the
Underwriter reasonably objects.
(iii) From the date
of this Agreement until the end of the Prospectus Delivery Period, the Company
shall promptly advise the Underwriter in writing of any proceedings to remove,
suspend or terminate from listing or quotation the Ordinary Shares from any
securities exchange upon which it is listed for trading or included or
designated for quotation, or of the threatening or initiation of
any proceedings for any of such purposes.
(iv) During the
Prospectus Delivery Period, the Company will comply with all requirements
imposed upon it by the Securities Act, as now and hereafter amended, and by the
Rules and Regulations, as from time to time in force, and by the Exchange Act,
as now and hereafter amended, so far as necessary to permit the continuance of
sales of or dealings in the Shares as contemplated by the provisions hereof,
each preliminary prospectus, the Registration Statement and the
Prospectus. If during such period any event occurs the result of
which the Prospectus (or if the Prospectus is not yet available to prospective
purchasers, each preliminary prospectus ) would include an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances then existing, not misleading, or if
during such period it is necessary or appropriate in the opinion of the Company
or its counsel or the Underwriter or its counsel to amend the Registration
Statement or supplement the Prospectus (or if the Prospectus is not yet
available to prospective purchasers, each preliminary prospectus) to comply with
the Securities Act, the Company will promptly notify the Underwriter and will
amend the Registration Statement or supplement the Prospectus (or if the
Prospectus is not yet available to prospective purchasers, each preliminary
prospectus) so as to correct such statement or omission or effect such
compliance.
(v) The Company
shall take or cause to be taken all necessary action to cause the Shares to be
listed on the Nasdaq Capital Market and to qualify the Shares for sale under the
securities laws of such jurisdictions as the Underwriter reasonably designates
and to continue such qualifications in effect so long as required for the
distribution of the Shares, except that the Company shall not be required in
connection therewith to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified, to execute a
general consent to service of process in any state or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise subject.
(vi) The Company
will furnish to the Underwriter and counsel for the Underwriter copies of the
Registration Statement and each Prospectus and all amendments and supplements to
such documents, in each case as soon as available and in such quantities as the
Underwriter may from time to time reasonably request.
(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 that shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 of the Rules and Regulations.
(viii) The Company,
whether or not the transactions contemplated hereunder are consummated or this
Agreement is terminated, will pay or cause to be paid (A) all
expenses (including transfer taxes allocated to the respective transferees)
incurred in connection with the delivery of the Shares to the Underwriter, (B)
all expenses and fees (including, without limitation, fees and disbursements
made by the Company’s 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 Prospectus, and any
amendment thereof or supplement thereto, (C) all reasonable filing fees and
reasonable fees and disbursements of the Underwriter’s counsel incurred in
connection with the qualification of the Shares for offering and sale by the
Underwriter or by dealers under the securities or blue sky laws of the states
and other jurisdictions that the Underwriter shall designate, (D) the fees and
expenses of any transfer agent or registrar, (E) the reasonable filing fees and
fees of counsel incident to any required review and approval by FINRA of the
terms of the sale of the Shares, (F) Nasdaq Capital Market listing fees, (G) all
other costs and expenses incident to the performance of its obligations
hereunder that are not otherwise specifically provided for herein, and (H) upon
the closing of the offering of the Underwritten Shares, the Underwriter’s
out-of-pocket expenses incurred in connection with its services under this
Agreement, including fees and disbursements of the Underwriter’s legal counsel,
not to exceed $50,000, provided that any expense greater than $2,000 must be
pre-approved and agreed to by the Company in writing. If this
Agreement is terminated by the Underwriter in accordance with the provisions of
Section 7 or Section 10, the Company will reimburse the Underwriter for all
out-of-pocket disbursements (including, but not limited to, reasonable fees and
disbursements of counsel, travel expenses, postage, facsimile and telephone
charges) incurred by the Underwriter in connection with its investigation,
preparing to market and marketing the Shares or in contemplation of performing
its obligations hereunder.
(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 each preliminary prospectus and in the
Final Prospectus and in no event will any of such net proceeds be used by the
Company to make any direct or indirect payments pursuant to the option agreement
between Shandong MeKeFuBang Food Limited and the shareholders of Shandong
Longkang Juice Co., Ltd. or otherwise to or for the direct or indirect benefit
of such shareholders.
(x) The Company
has not taken and will not take, directly or indirectly, during the Prospectus
Delivery Period, any action designed to or which might reasonably be expected to
cause or result in, or that has constituted, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Shares.
(xi) The Company
represents and agrees that 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 under the Act, or that would otherwise constitute a “free
writing prospectus”, as defined in Rule 405 under the Act.
(xii) The Company
hereby agrees that, without the prior written consent of the Underwriter, it
will not, during the period ending 180 days after the date hereof (“Lock-Up Period”), (A)
offer, pledge, issue, sell, contract to sell, purchase, contract to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly, any Ordinary
Shares or any securities convertible into or exercisable or exchangeable for
Ordinary Shares; or (B) 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 Ordinary Shares, whether any such transaction described in clause (A) or
(B) above is to be settled by delivery of Ordinary Shares or such other
securities, in cash or otherwise; or (C) file any registration statement with
the Commission relating to the offering of any Ordinary Shares or any securities
convertible into or exercisable or exchangeable for Ordinary
Shares. The restrictions contained in the preceding sentence shall
not apply to (1) the Shares to be sold hereunder, or (2) the issuance of
Ordinary Shares upon the exercise of options or warrants disclosed as
outstanding in the Registration Statement (excluding exhibits thereto) or the
Prospectus. Notwithstanding the foregoing, if (x) 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 (y) 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 clause 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 Underwriter waives such extension in writing.
(b) The
Underwriter covenants and agrees with the Company as follows:
(i) The
Underwriter represents and agrees that 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 under the Act, or that would otherwise
constitute a “free writing prospectus”, as defined in Rule 405 under the
Act.
7. Conditions of the
Underwriter’s Obligations. The
obligations of the Underwriter hereunder to purchase the Shares are subject to
the accuracy, as of the date hereof and at the Closing Date (as if made at the
Closing Date), of and compliance with all representations, warranties and
agreements of the Company contained herein, the performance by the Company of
its obligations hereunder and the following additional conditions:
(a) If filing of
the Prospectus, or any amendment or supplement thereto, is required under the
Securities Act or the Rules and Regulations, the Company shall have filed the
Prospectus (or such amendment or supplement) with the Commission in the manner
and within the time period so required (without reliance on Rule 424(b)(8) or
Rule 164(b) under the Securities Act); the Registration Statement shall remain
effective; no stop order suspending the effectiveness of the Registration
Statement or any part thereof, any Rule 462 Registration Statement, or any
amendment thereof, nor suspending or preventing the use of each preliminary
prospectus or the Prospectus shall have been issued; no proceedings for the
issuance of such an order shall have been initiated or threatened; any request
of the Commission or the Underwriter for additional information (to be included
in the Registration Statement, each preliminary prospectus, the Prospectus or
otherwise) shall have been complied with to the Underwriter’s
satisfaction.
(b) FINRA shall
have raised no objection to the fairness and reasonableness of the underwriting
terms and arrangements.
(c) The
Underwriter shall not have determined, and
advised the Company, that the Registration Statement, each preliminary
prospectus or the Prospectus, or any amendment thereof or supplement thereto,
contains an untrue statement of fact which, in the Underwriter’s opinion, is
material, or omits to state a fact which, in the Underwriter’s opinion, is
material and is required to be stated therein or necessary to make the
statements therein not misleading.
(d) On or after
the date hereof (i) no downgrading shall have occurred in the rating accorded
any of the Company’s securities by any “nationally recognized statistical
organization,” as that term is defined by the Commission for purposes of Rule
436(g)(2) under the Securities Act, 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
securities.
(e) On the
Closing Date, there shall have been furnished to the Underwriter the opinion of
Xxxxxx+Xxxxxx, LLP, dated the Closing Date and addressed to the Underwriter, in
form and substance reasonably satisfactory to the Underwriter, to the effect set
forth in Schedule I.
(f) On the
Closing Date, there shall have been furnished to the Underwriter the opinion of
Xxxxxxxxx Law Offices, dated the Closing Date and addressed to the Underwriter,
in form and substance reasonably satisfactory to the Underwriter, to the effect
set forth in Schedule II.
(g) On the
Closing Date, there shall have been furnished to the Underwriter the opinion of
the Company’s British Virgin Islands counsel, dated the Closing Date and
addressed to the Underwriter, in form and substance reasonably satisfactory to
the Underwriter, to the effect set forth in Schedule III.
(h) On the
Closing Date, there shall have been furnished to the Underwriter the opinion of
the Company’s Cayman Islands counsel, dated the Closing Date and addressed to
the Underwriter, in form and substance reasonably satisfactory to the
Underwriter, to the effect set forth in Schedule IV.
(i) The
Underwriter shall have received a letter from Sherb & Co., LLP, on the date
hereof and on the Closing Date addressed to the Underwriter, confirming that
they are independent public accountants within the meaning of the Securities 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 confirming, as of the date of each such letter (or, with respect
to matters involving changes or developments since the respective dates as of
which specified financial information is given in each preliminary prospectus,
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 with respect to
the financial information and other matters required by the
Underwriter.
(j) On or before
the date hereof, the Underwriter shall have received duly executed “lock-up”
agreements, in a form acceptable to the Underwriter, between the Underwriter and
those persons set forth on Schedule V.
(k) On the
Closing Date, or the Option Closing Date, if any, there shall have been
furnished to the Underwriter a certificate, dated the Closing Date, or the
Option Closing Date, as the case may be, and addressed to the Underwriter,
signed by the chief executive officer and the chief financial officer of the
Company, in their capacity as officers of the Company, to the effect
that:
(i) The
representations and warranties of the Company in this Agreement are true and
correct, in all material respects, as if made at and as of the Closing Date, or
the Option Closing Date, as the case may be, 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 the Closing Date, or the Option Closing Date, as the
case may be;
(ii) No stop order
or other order (A) suspending the effectiveness of the Registration Statement or
any part thereof or any amendment thereof, (B) suspending the qualification of
the Shares for offering or sale, or (C) suspending or preventing the use of each
preliminary prospectus or the Prospectus, has been issued, and no proceeding for
that purpose has been instituted or, to their knowledge, is contemplated by the
Commission or any state or regulatory body; and
(iii) There has
been no occurrence of any event resulting or reasonably likely to result in a
Material Adverse Effect during the period from and after the date of this
Agreement and prior to the Closing Date, or the Option Closing Date, as the case
may be.
(l) The Company
shall have furnished to the Underwriter and counsel for the Underwriter such
additional documents, certificates and evidence as the Underwriter or counsel
for the Underwriter may have reasonably requested.
If any
condition specified in this Section 7 shall not have been fulfilled when and as
required to be fulfilled, this Agreement may be terminated by the Underwriter by
notice to the Company at any time at or prior to the Closing Date and such
termination shall be without liability of any party to any other party, except
that Section 6(a)(vii), Section 8 and Section 9 shall survive any such
termination and remain in full force and effect.
8. Indemnification and
Contribution.
(a) The Company
agrees to indemnify, defend and hold harmless the Underwriter,
its affiliates, directors and officers and employees, and each
person, if any, who controls the Underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, from and against any
losses, claims, damages or liabilities to which the Underwriter or such person
may become subject, under the Securities Act or otherwise (including in
settlement of any litigation if such settlement is effected with the written
consent of the Company), insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon (i) an untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, including the information deemed to be a part of the
Registration Statement at the time of effectiveness and at any subsequent time
pursuant to Rules 430A and 430B of the Rules and Regulations, each preliminary
prospectus, the Prospectus, or any amendment or supplement thereto (including
any documents filed under the Exchange Act and deemed to be incorporated by
reference into the Registration Statement or the Prospectus), 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, in
light of the circumstances under which they were made, not misleading, (ii) in
whole or in part, any inaccuracy in the representations and warranties of the
Company contained herein, or (iii) in whole or in part, any failure of the
Company to perform its obligations hereunder or under law, and will reimburse
the Underwriter for any legal or other expenses reasonably incurred by it in
connection with evaluating, investigating or defending against such loss, claim,
damage, liability or action; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, each preliminary prospectus, the Prospectus, or any
amendment or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by the Underwriter specifically for use in
the preparation thereof.
(b) The
Underwriter will indemnify, defend and hold harmless the Company, its
affiliates, directors, officers and employees, and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any losses, claims, damages or
liabilities to which the Company may become subject, under the Securities Act or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of 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, each preliminary prospectus, 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, each preliminary prospectus, the Prospectus, or any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by the Underwriter specifically for use in
the preparation thereof, and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with defending against
any such loss, claim, damage, liability or action.
(c) Promptly
after receipt by an indemnified party under subsection (a) or (b) 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 failure 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
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; provided,
however, that if (i)
the indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party,
(ii) a conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party), or (iii) the indemnifying
party has not in fact employed counsel reasonably satisfactory to the
indemnified party to assume the defense of such action within a reasonable time
after receiving notice of the commencement of the action, the indemnified party
shall have the right to employ a single counsel to represent it in any claim in
respect of which indemnity may be sought under subsection (a) or (b) of this
Section 8, 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 indemnified party as incurred.
The
indemnifying party under this Section 8 shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party against any loss, claim, damage,
liability or expense by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement, compromise or consent to the entry of judgment in
any pending or threatened action, suit or proceeding in respect of which any
indemnified party is a party or could be named and indemnity was or would be
sought hereunder by such indemnified party, unless such settlement, compromise
or consent (a) includes an unconditional release of such indemnified party from
all liability for claims that are the subject matter of such action, suit or
proceeding and (b) does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf of any indemnified
party.
(d) If the
indemnification provided for in this Section 8 is unavailable or insufficient to
hold harmless an indemnified party under subsection (a) or (b) 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) or (b) above, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, on the one
hand, and the Underwriter, on the other hand, from the offering and sale 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 on the one hand and the Underwriter 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 on the
one hand and the Underwriter 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 bear to the total underwriting discounts and
commissions received by the Underwriter, in each case as set forth in the table
on the cover page of the Final 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 or the
Underwriter and the parties’ relevant intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or
omission. The Company and the Underwriter agree that it would not be
just and equitable if contributions pursuant to this subsection (d) were to be
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in the first
sentence of this subsection (d). 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 (d) 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 that is
the subject of this subsection (d). Notwithstanding the provisions of
this subsection (d), the Underwriter shall not be required to contribute
any amount in excess of the amount of the Underwriter’s commissions referenced
in Section 6(a) actually received by the Underwriter pursuant to this
Agreement. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The
obligations of the Company under this Section 8 shall be in addition to any
liability that the Company may otherwise have and the benefits of such
obligations shall extend, upon the same terms and conditions, to each person, if
any, who controls the Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act; and the obligations of the
Underwriter under this Section 8 shall be in addition to any liability that the
Underwriter may otherwise have and the benefits of such obligations shall
extend, upon the same terms and conditions, to the Company, and officers,
directors and each person who controls the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act.
(f) For purposes
of this Agreement, the Underwriter confirms, and the Company acknowledges, that
there is no information concerning the Underwriter furnished in writing to the
Company by the Underwriter specifically for preparation of or inclusion in the
Registration Statement, each preliminary prospectus, the Prospectus, other than
the statements set forth in the last paragraph on the cover page of the
Prospectus and the statements set forth in the “Underwriting” section of
the Prospectus and each preliminary prospectus, only insofar as such
statements relate to the amount of selling concession and re-allowance or to
over-allotment and related activities that may be undertaken by the
Underwriter.
9. Representations and
Agreements to Survive
Delivery. All representations, warranties, and agreements of
the Company herein or in certificates delivered pursuant hereto, including, but
not limited to, the agreements of the Underwriter and the Company contained in
Section 6(a)(vii) and Section 8 hereof, shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of the
Underwriter or any controlling person thereof, or the Company or any of its
officers, directors, or controlling persons, and shall survive delivery of, and
payment for, the Shares to and by the Underwriter hereunder.
10. Termination of this
Agreement.
(a) The
Underwriter shall have the right to terminate this Agreement by giving notice to
the Company as hereinafter specified at any time at or prior to the Closing
Date, if (i) trading in the Company’s Ordinary Shares shall have been suspended
by the Commission or the Nasdaq Capital Market or trading in securities
generally on the Nasdaq Capital Market, New York Stock Exchange or NYSE Amex
shall have been suspended, (ii) minimum or maximum prices for trading shall have
been fixed, or maximum ranges for prices for securities shall have been
required, on the Nasdaq Capital Market, New York Stock Exchange or NYSE Amex, by
such exchange or by order of the Commission or any other governmental
authority having jurisdiction, (iii) a banking moratorium shall have been
declared by federal, state or the PRC authorities, (iv) there shall have
occurred any attack on, outbreak or escalation of hostilities or act of
terrorism involving the United States or the PRC, any declaration by the United
States or the PRC of a national emergency or war, any change in financial
markets, any substantial change or development involving a prospective
substantial change in United States, the PRC or other international political,
financial or economic conditions or any other calamity or crisis, or (v) the
Company suffers any loss by strike, fire, flood, earthquake, accident or other
calamity, whether or not covered by insurance, the effect of which, in each case
described in this subsection (a), in the Underwriter’s judgment is material and
adverse and makes it impractical or inadvisable to proceed with the completion
of the sale of and payment for the Shares. Any such termination shall
be without liability of any party to any other party except that the provisions
of Section 6(a)(vii) and Section 8 hereof shall at all times be effective and
shall survive such termination.
(b) If the
Underwriter elects to terminate this Agreement as provided in this Section, the
Company shall be notified promptly by the Underwriter by telephone, confirmed by
letter.
11. Notices. Except
as otherwise provided herein, all communications hereunder shall be in writing
and, if to Xxxx, shall be mailed, delivered or telecopied to Xxxx Capital
Partners, LLC, 00 Xxxxxxxxx Xxxxx, Xxxxxxx Xxxxx, XX 00000, telecopy number:
(000) 000-0000, Attention: Managing Director; and if to the Company,
shall be mailed, delivered or telecopied to it at Xx. 00 Xxxxx Xxxxxxxx Xxxx.
Xxxxxxx Xxxx, Xxxxxxxx 265200, People’s Republic of China, telecopy number: x00
(000) 0000-000, Attention: Secretary; 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 8. 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
the Underwriter.
13. Absence of Fiduciary
Relationship. The Company
acknowledges and agrees that: (a) the Underwriter has been retained solely to
act as underwriter in connection with the sale of the Shares and that no
fiduciary, advisory or agency relationship between the Company and the
Underwriter has been created in respect of any of the transactions contemplated
by this Agreement, irrespective of whether the Underwriter 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 Underwriter 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 Underwriter and its affiliates are engaged in a broad
range of transactions that may involve interests that differ from those of the
Company and that the Underwriter has no obligation to disclose such interest and
transactions to the Company by virtue of any fiduciary, advisory or agency
relationship; and (d) it has been advised that the Underwriter is acting, in
respect of the transactions contemplated by this Agreement, solely for the
benefit of the Underwriter, and not on behalf of the Company.
14. Amendments and
Waivers. No supplement, modification or waiver of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby. The failure of a party to exercise any right or remedy shall
not be deemed or constitute a waiver of such right or remedy in the
future. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (regardless of
whether similar), nor shall any such waiver be deemed or constitute a
continuing waiver unless otherwise expressly provided.
15. Partial
Unenforceability. The invalidity or unenforceability of any
section, paragraph, clause or provision of this Agreement shall not affect the
validity or enforceability of any other section, paragraph, clause or
provision.
16. Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
17. Counterparts. This
Agreement may be executed and delivered (including by facsimile transmission or
electronic mail attaching a portable document file (.pdf)) 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.
Please
sign and return to the Company the enclosed duplicates of this letter whereupon
this letter will become a binding agreement between the Company and the
Underwriter in accordance with its terms.
|
Very
truly yours,
|
|
|
EMERALD
ACQUISITION CORPORATION
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
Confirmed
as of the date first above-
|
|
|
mentioned
by the Underwriter.
|
|
|
XXXX
CAPITAL PARTNERS, LLC
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
SCHEDULE
I
Company
Opinions
1. The
holders of outstanding shares of capital stock of the Company are not entitled
to preemptive rights or rights of first refusal arising (i) pursuant to the
Agreement or any agreements filed as an exhibit to the Registration Statement or
to any report filed under the Exchange Act (each such agreement, a “Material Contract”),
or (ii) to our knowledge, otherwise.
2. The
Registration Statement has become effective under the Securities
Act. 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).
3. The
Company is not, and after giving effect to the offering and sale of the Shares
and the application of the proceeds thereof as described in each preliminary
prospectus and the Prospectus will not be, required to register as an
“investment company” as defined in the Investment Company Act.
4. No
consent, approval, authorization or filing with or order of any U.S. Federal,
State of New York court or governmental agency or body having jurisdiction over
the Company is required for the consummation by the Company of the transactions
contemplated by the Agreement, except (i) such as have been made or obtained
under the Securities Act and (ii) such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and distribution of the
Shares by Xxxx in the manner contemplated in the Agreement and in the Final
Prospectus (as to which we need express no opinion).
5. The
issue and sale of the Shares pursuant to the Agreement will not result in a
breach or violation of (or constitute any event that with notice, lapse of time
or both would result in a breach of violation of): (i) any statute,
rule, or regulation which, in our experience, is typically applicable to
transactions of the nature contemplated by the Agreement and is applicable to
the Company, (ii) any order, writ, judgment, injunction, decree, or award that
has been entered against the Company and of which we are aware, or (iii) any
Material Contract.
6. To
our knowledge, except as set forth in each preliminary prospectus and the
Prospectus, 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.
SCHEDULE
II
China
Opinions
|
1.
|
Each
of the PRC Entities has been duly incorporated and is validly existing
with limited liability under the PRC Laws as of the date of this opinion.
Each PRC Entity has the enterprise legal person
status.
|
|
2.
|
Each
of the PRC Entities has sufficient corporate right, power and authority
for it to own, use, lease and license its assets and conduct its business
in the manner as currently being conducted and as described in the
Registration Statement. Each of the PRC Entities has obtained
all Governmental Authorizations from, and completed all filings with, the
Government Agencies that are necessary for it to own, use, lease and
license its assets and conduct its business in the manner as currently
being conducted and as described in the Registration
Statement. Such Governmental Authorizations contain no material
burdensome restrictions that are not described in the Registration
Statement. To our best knowledge, each of the PRC Entities is
in compliance with the provisions of all its Governmental Authorizations
in all material aspects, and such PRC Entity has not received any
notification of proceedings relating to, or has any reason to believe that
any Governmental Agencies are considering, the modification, suspension or
revocation of any such Governmental
Authorizations.
|
|
3.
|
Each
PRC Entity is in compliance with any and all applicable environmental laws
in the PRC. There are no administrative, regulatory or judicial actions,
demands, letters, claims, warnings, or notices of non-compliance or
violation, investigation or proceedings relating to any environmental laws
of the PRC against any PRC Entity. There are no events or
circumstances that might reasonably be expected to form the basis of an
order for clean-up or remedial measures, or an action, suit or proceeding
by any private party or Governmental Agencies, against or affecting
any PRC Entity relating to hazardous materials or any
environmental matters or any environmental laws. Each of the PRC Entities
has received all permits, reports, licenses or other approval required of
it under the applicable environmental laws in the PRC to conduct its
businesses as currently being conducted and as described in the
Registration Statement, and such PRC Entity is in compliance with all
terms and conditions of any such environmental permit, license or
approval.
|
|
4.
|
The
registered capital of each PRC Entity has been fully paid up in accordance
with the applicable PRC Laws and such PRC Entity’s articles of
association. The shareholding percentage and ownership
structure of each PRC Entity as described in the Registration Statement
are true and correct. To our best knowledge, there is no
security interest, mortgage, pledge, lien, encumbrance, claim, call option
or any other third party right upon the registered capital or the equity
interest of any PRC Entity, other than pledge on Longkang’s equity
interests to MeKeFuBang pursuant to the Corporate Structure
Contracts.
|
|
5.
|
The
articles of association, approval certificate, business license, tax
registration certificate, SAFE IC card, financial registration certificate
and other Governmental Authorizations of each PRC Entity are in compliance
with the requirements of the applicable PRC Laws and are in full force and
effect. Each PRC Entity has completed annual inspection for
each of the aforesaid certificates, licenses and Governmental
Authorizations, if required by the PRC Laws. The operation
duration of each PRC Entity is as follows:
[ ].
|
|
6.
|
The
ownership structure of each PRC Entity complies with the current PRC Laws;
the establishment of each PRC Entity and any historical acquisition and/or
transfer of equity interest of the PRC Entity (if any) complied with all
PRC Laws.
|
|
7.
|
The
business currently carried out by each PRC Entity (including those
described in the Registration Statements) complies in all material aspects
with the PRC Laws and its articles of association. No
Governmental Authorizations other than those already obtained is required
under the PRC Laws for carrying out the business of each PRC Entity and
for the ownership structure of each PRC Entity as described in the
Registration Statement.
|
|
8.
|
None
of the PRC Entities is in breach or violation of or in default
under (A) any PRC Laws, (B) any Governmental Authorizations granted by any
Governmental Agencies in the PRC, (C) its articles of association,
business licenses or other Governmental Authorizations, or (D) any
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument known to us and governed by PRC laws to which
such PRC Entity is a party or by which it or any of its
properties may be bound, except where such default would not have a
Material Adverse Effect on the Company and the PRC
Entities.
|
|
9.
|
Each
PRC Entity has full power and authority to execute the contracts,
agreements, and deeds to which it is a party and perform its obligations
thereunder.
|
|
10.
|
There
are no outstanding guarantees or contingent payment obligations of each
PRC Entity in respect of the indebtedness of third
parties.
|
|
11.
|
Each
PRC Entity has valid leasehold interest in all lands, buildings and
facilities used and leased by it; and all of the leases of such PRC Entity
used in relation to its business and under which such PRC Entity holds
properties are in full force and effect. To the best of our knowledge,
each PRC Entity has not received notice of any material claim of any sort
that has been asserted by anyone adverse to its rights under any of the
leases mentioned above, or affecting or questioning the rights of such PRC
Entity to the continued possession or use of the land, the buildings or
the facilities held under any such lease. [If any PRC Entity owns any
land use rights, then please state that such PRC Entity has obtained all
necessary Governmental Authorizations for the use of
land.]
|
|
12.
|
Each
PRC Entity has obtained all the property ownership certificates in
relation to all the properties and manufacturing facilities currently
owned and used by it in relation to its business (including without
limitation those described in the Registration Statement). Each PRC Entity
has obtained all Governmental Authorizations for the construction of
offices, towers and manufacturing facilities as described in the
Registration Statement. All the certificates obtained by
the PRC Entities in respect of the real estate property and
manufacturing facilities used or owned by it are valid and in fill force
and effect, free and clear of all liens, encumbrances, security interest,
mortgage, pledge, equities or claims or any third-party
right.
|
|
13.
|
Each
PRC Entity has entered into an employment contract with each of its
employees and such employment contracts are in compliance with the PRC
Laws. No labor dispute, or disturbance involving the employees
of each PRC Entity, exists or is imminent or threatened. Each PRC Entity
has complied in all material respects with all employment, labor and
similar laws applicable to such PRC Entity and has paid insurance and
welfare contributions for its employees as required under PRC
Laws.
|
|
14.
|
There
are no restrictions or limitations under PRC Laws on the ability of each
PRC Entity to declare and pay dividends to its shareholder, nor any
restriction or limitation on the ability of MeKeFuBang to convert such
dividends into foreign currencies and remit such dividends out of the PRC
to its offshore shareholders, subject to the payment of applicable taxes
as described in the Registration Statement and the contribution to a
reserve fund, employee bonus and welfare fund under PRC
Laws.
|
|
15.
|
Each
PRC Entity is not delinquent in the payment of any taxes due and there is
no tax deficiency which might be assessed against it, and there is no
material breach or violation by such PRC Entity of any applicable PRC tax
law or regulation. Each PRC Entity will not have any material
PRC tax liability as a consequence of the Offering (as defined below) that
has not been disclosed in the Registration
Statement.
|
|
16.
|
Each
PRC Entity has full, valid and clean title to, or otherwise has the legal
right to use, all of the assets and intellectual property as currently
being used by it, free and clear of all security interest, liens,
encumbrances and third party rights.
Each PRC
Entity is not infringing, misappropriating or violating any intellectual
property right of any third party in the PRC, and no intellectual property
of such PRC Entity 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 PRC Entities has
received any notice of any claim of infringement or conflict with any such
rights of others.
All
necessary filings and registrations required to be made by PRC Laws have
been made with the competent Government Agencies in order to protect the
intellectual property of the PRC Entities and such filings and
registrations are still valid and effective and have not been revoked by
the relevant PRC
authorities.
|
|
17.
|
The
Offering does not and will not result in a breach or violation of or
constitute a default under (i) any provisions of the articles of
association, business licenses or any Governmental Authorizations of
any PRC Entity; (ii) any applicable PRC Laws, (iii) to our best
knowledge, any agreement, contracts or instrument to which
any PRC Entity is a party or which is binding on it or any of
its assets; or (iv) to our best knowledge, any effective arbitration award
or judgment, order or decree given to any PRC Entity by any
court or arbitration tribune of the PRC having jurisdiction over
such PRC Entity.
|
|
18.
|
There
are no legal, arbitration or governmental proceedings in progress or
pending in the PRC to which any PRC Entity is a party or of which any
property of such PRC Entity is the
subject.
|
|
19.
|
No
stamp or other issuance or transfer taxes or duties and no capital gains,
income, withholding or other taxes are payable by or on behalf of the
Company, any PRC Entity or the underwriters of the Company to
the competent Chinese Government Agency, except as disclosed in the
Registration Statement, in connection with the (A) the Offering,
(B) the sale and delivery by the Company of the ordinary shares
to or for the accounts of the underwriters in the manner contemplated in
the Underwriting Agreement.
|
|
20.
|
The
statements in the Registration Statement, insofar as such statements
constitute matters of the PRC Laws and summaries of legal matters,
contracts or proceedings referred to therein, to the extent governed by
the PRC Laws, are true and correct and fairly present the matters referred
to therein, and such statements did not contain and do not contain any
untrue or incorrect statements of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements, in the light of the circumstances under which they were made,
not misleading.
|
|
21.
|
Each
of the PRC Entities has not taken any corporate action, nor is there any
legal proceedings commenced against it, for its liquidation, winding up,
dissolution, or bankruptcy, for the appointment of a liquidation
committee, team of receivers or similar officers in respect of its assets
or for the suspension, withdrawal, revocation or cancellation of any of
the Governmental Authorizations.
|
|
22.
|
There
is no action, suit, proceeding (legal or administrative), claim,
arbitration, investigation or audit pending or threatened against
any PRC Entity, any of its assets or properties or any of its
directors and officers (in their capacities as such). There is no
judgment, decree or order against any PRC Entity that could reasonably be
expected to prevent, alter or materially delay the Offering or that would
have or could reasonably be expected to have a Material Adverse
Effect.
|
|
23.
|
Each
of the entities or natural persons holding any shares or other securities
of the Company, directly or indirectly, immediately before the Offering
has fully complied with, or is not subject to, the Notice on Issues Relating to
Administration of Foreign Exchange in Fund-raising and Reverse Investment
Activities of Domestic Residents Conducted via Offshore Special Purpose
Companies issued on October 21, 2005 by SAFE and any implementing
rules and guidelines related thereto, to the extent that such entity or
natural person is a PRC resident.
|
|
24.
|
On
August 8, 2006, six PRC Government Agencies, namely, the Ministry of
Commerce, the State Assets Supervision and Administration Commission, the
State Administration for Taxation, the State Administration for Industry
and Commerce, the China Securities Regulatory Commission (the “CSRC”), and the
SAFE, jointly issued the Regulations on Mergers and
Acquisitions of Domestic Enterprises by Foreign Investors (the
“New M&A
Rules”), which became effective on September 8,
2006. The New M&A Rules purport, among other things, to
require offshore special purpose vehicles formed for the purpose of
overseas listing of the equity interests in PRC companies and controlled
directly or indirectly by PRC companies and/or PRC individuals to obtain
the approval of the CSRC prior to the listing and trading of their
securities on overseas stock exchanges. On September 21, 2006,
pursuant to the New M&A Rules and other PRC Laws, the CSRC published
on its official website relevant guidance with respect to the listing and
trading of PRC domestic enterprises’ securities on overseas stock
exchanges (the “Related
Clarifications”), including a list of application materials
regarding the listing on overseas stock exchange by special purpose
vehicles. Based on our understanding of current PRC Laws as of
the date hereof, we believe that the Company is not a special purpose
vehicle, therefore the Company is not required to obtain the approval of
the CSRC or any other Government Agencies in the PRC in connection with
the Offering under the New M&A
Rules.
|
SCHEDULE
III
British
Virgin Islands Opinions
1. The
Company is duly incorporated and validly existing under British Virgin Islands
law;
2. All
the issued shares of the Company are legally owned by Emerald Acquisition
Corporation and there are no outstanding securities exercisable for or
convertible into shares in the Company;
3. There
are no legal proceedings pending in the British Virgin Islands by or against the
Company; and
4. To
the best of our knowledge, the Company has not taken any action nor have any
steps been taken or legal proceedings been commenced for the winding up,
dissolution or liquidation of the Company.
SCHEDULE
IV
Cayman
Islands Opinions
1. The
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the Cayman Islands, with the requisite corporate
power to own or lease, as the case may be, and to operate its properties and
conduct its business, as described in the Registration Statement, each
preliminary prospectus and the Final Prospectus.
2. The
issuance of the Shares has been duly authorized and, when issued in accordance
with the Agreement and paid for by you pursuant to the Agreement, the Shares
will be duly and validly issued, fully paid and non-assessable.
3. The
holders of outstanding shares of capital stock of the Company are not entitled
to preemptive rights or rights of first refusal arising (i) by operation of the
Company’s certificate of incorporation or bylaws (collectively, the “Company Governing
Documents”), or (ii) to our knowledge, otherwise.
4. The
statements in each preliminary prospectus and the Prospectus under the under the
headings “Description of Capital Stock” and in the Registration Statement in
Part II, Item 14, insofar as such statements purport to summarize legal
matters, agreements or documents discussed therein, fairly summarize such legal
matters, agreements or documents, in all material respects.
5. The
Agreement has been duly authorized by all necessary corporate action on the part
of the Company and has been duly executed and delivered by the
Company.
6. No
consent, approval, authorization or filing with or order of any Cayman Islands
court or governmental agency or body having jurisdiction over the Company is
required for the consummation by the Company of the transactions contemplated by
the Agreement, except such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the Shares by
Xxxx in the manner contemplated in the Agreement and in the Final Prospectus (as
to which we need express no opinion).
7. The
issue and sale of the Shares pursuant to the Agreement will not result in a
breach or violation of (or constitute any event that with notice, lapse of time
or both would result in a breach of violation of): (i) the Company
Governing Documents, (ii) any Colorado statute, rule, or regulation which, in
our experience, is typically applicable to transactions of the nature
contemplated by the Agreement and is applicable to the Company, or (iii) any
order, writ, judgment, injunction, decree, or award that has been entered
against the Company and of which we are aware.
SCHEDULE
V
Persons
to be Subject to Lock-Up Agreements
[To be
provided]
