PLACEMENT AGREEMENT
Exhibit
10.1
September
14, 2007
Placement
Agent
Address
| Re: |
Offering
of Common Stock in the Aggregate Principal Amount of $4,000,000 (Minimum)
and $6,000,000 (Maximum) with Attached
Warrants
|
Gentlemen
and Ladies:
| 1. |
Introduction.
|
Placement
Agent, a XX limited liability company (the “Placement
Agent”),
proposes to act on a best efforts basis as the exclusive placement agent for
Wentworth II, Inc., a Delaware corporation (“Wentworth”),
in a
private placement offering (the “Offering”)
of
common stock, $0.01 par value (the “Common
Stock”),
of
Wentworth (the “Shares”)
with
attached warrants (“Warrants”,
together with the Shares, the “Units”),
at a
price of $1.25 per Unit, in a minimum principal amount of $4,000,000 (the
“Minimum
Amount”)
and a
maximum principal amount of $6,000,000 (the “Maximum
Amount”),
to be
issued by Wentworth, upon the closing of the Exchange Agreement described below.
The offering period shall extend for 45 days from the date hereof, unless
extended for an additional 15 days in the discretion of Omnia Luo (as defined
below), or as otherwise extended with the mutual agreement of the Placement
Agent, Wentworth and Omnia Luo (as and if so extended, the “Offering
Period”).
There
will only be one closing of the Offering.
Prior
to
the closing of the Offering (the “Closing”),
Wentworth and Omnia Luo Group Limited, a British Virgin Islands incorporated
company (“Omnia
Luo”),
shall
have completed the transactions under a certain exchange agreement (the
“Exchange
Agreement”)
entered into by and among the shareholders of Omnia Luo (the “Shareholders”),
Wentworth and certain shareholders of Wentworth (the “Wentworth
Shareholders”).
Pursuant to the Exchange Agreement, all of the issued and outstanding shares
of
capital stock of Omnia Luo will be transferred to Wentworth in exchange for
16,800,000 shares of Common Stock (the “Exchange”).
Upon
completion of the Exchange, Omnia Luo will be an indirect, wholly owned
subsidiary of Wentworth.
Investors
in the Offering (“Investors”)
will
also receive warrants exercisable for five years to purchase shares of Common
Stock in an amount equal to 100% of the Shares. The Warrants will be exercisable
at a price of $1.5625 per share (the “Exercise
Price”).
Following
the consummation of the Exchange and prior to the closing of the Offering,
Wentworth shall succeed to all of Omnia Luo’s rights and assume all of Omnia
Luo’s obligations under this Agreement; provided that prior to Wentworth’s
succession to and assumption of this Agreement, references to Omnia Luo shall
only be deemed to include Omnia Luo and references to Wentworth shall only
be
deemed to include Wentworth.
The
Exchange and the transactions contemplated under the Exchange Agreement are
herein referred to as the “Transaction”
or
collectively as the “Transactions”.
Upon
consummation of the Exchange, Wentworth will prepare a proxy or information
statement pursuant to Regulation 14A or 14C under the Exchange Act (as defined
below) (together with any amendments or supplements thereto, the “Proxy/Information
Statement”)
and
will either solicit proxies from its shareholders or obtain majority consent
from and inform its shareholders to: (i) approve a change in the name of
Wentworth to a name approved by its Board of Directors (“Board”);
and
(ii) to approve such other actions as may be approved by the Board. As a
condition of the closing of the Exchange, Wentworth Shareholders will enter
into
a voting agreement (“Voting
Agreement”)
pursuant to which they agree to vote their shares in favor of the actions
provided in (i) and (ii) above.
The
Shares, the Warrants and the Units are more fully described in a private
placement memorandum dated September 10, 2007, including any supplements or
amendments thereto (the “Memorandum”).
Except as otherwise defined herein, all capitalized terms shall have the meaning
set forth in the Memorandum.
Omnia
Luo
and Wentworth desire to employ the Placement Agent as the exclusive placement
agent to offer for sale and sell the Units subject to all of the terms and
conditions of this Agreement and subject to the terms and conditions contained
in the Memorandum. In the event of any inconsistency between this Agreement
and
the Memorandum, the terms and conditions of this Agreement shall supersede
and
be controlling.
| 2. |
|
(a) Omnia
Luo
represents and warrants to, and covenants with, the Placement Agent as of the
date of this Agreement and as of the date of the Closing as
follows:
(i) Authority.
All
action required to be taken by Omnia Luo necessary for the authorization of
this
Agreement and the performance of all obligations of Omnia Luo hereunder have
been taken; and this Agreement, the Transaction Documents (as defined below),
the Related Documents (as defined below) and the Escrow Documents (as defined
below) shall be in full force and effect.
(ii) Authority
for Exchange Agreement.
All
action required to be taken by Omnia Luo necessary for the authorization of
the
Exchange Agreement (collectively with each of the ancillary agreements related
thereto, collectively the “Transaction
Documents”)
and
the performance of all obligations of Omnia Luo thereunder have been
taken.
(iii) Organization
and Qualification.
(a) Omnia
Luo
is a company incorporated under the laws of the British Virgin Islands, is
duly
formed or organized, validly existing and in good standing under the laws of
its
jurisdiction of organization and has the requisite power and authority to own,
lease and operate its assets and properties and to carry on its business as
it
is now being or currently planned by Omnia Luo to be conducted. Omnia Luo is
in
possession of all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates, approvals and orders (“Approvals”)
necessary to own, lease and operate the properties it purports to own, operate
or lease and to carry on its business as it is now being conducted, and to
consummate the Transactions contemplated under this Agreement and the Exchange
Agreement, except where the failure to have such Approvals would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect (as hereinafter defined). Omnia Luo is not in violation of any
of
the provisions of Omnia Luo’s articles of organization or bylaws or similar
governing, organization or charter documents (collectively referred to herein
as
“Charter
Documents”).
Each
Subsidiary of Omnia Luo that conducts business operations in the People’s
Republic of China (“PRC”)
is
authorized to conduct business in, and is in good standing in the PRC. The
minute books or the equivalent of Omnia Luo contain true, complete and accurate
records of meetings and consents in lieu of meetings of its board of directors
(and any committees thereof), similar governing bodies and shareholders
(“Corporate
Records”)
of
Omnia Luo, since the time of Omnia Luo’s organization. The ownership records of
shares of Omnia Luo’s capital stock are true, complete and accurate records of
the ownership of such shares as of the date of such records and contain all
transfers of such shares since the time of Omnia Luo’s organization
(“Share
Records”).
Omnia
Luo is not required to qualify to do business as a foreign corporation in any
other jurisdiction except where the failure to be so authorized would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. For purposes of this Agreement, the term “Material
Adverse Effect”
when
used in connection with an entity means any change, event, violation,
inaccuracy, circumstance or effect, individually or when aggregated with other
changes, events, violations, inaccuracies, circumstances or effects, that is
materially adverse to the business, assets (including intangible assets),
revenues, prospects, financial condition or results of operations of such entity
or its subsidiaries, if any, taken as a whole or on the transactions
contemplated hereby and the other Transaction Documents, the Related Documents
and the Escrow Documents, as applicable or by the agreements and instruments
to
be entered into in connection herewith or therewith, or on the authority or
ability of such entity to perform its obligations, if any, under the Transaction
Documents, the Related Documents and the Escrow Documents, as applicable, or
under the agreements and instruments to be entered into in connection herewith
or therewith.
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(b) Each
member of the Group (as hereinafter defined) is organized under the laws of
the
jurisdiction set forth in Schedule 2(a)(iii) hereto, is duly formed or
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has the requisite power and authority to own,
lease and operate its assets and properties and to carry on its business as
it
is now being or currently planned by each member of the Group to be conducted.
Each member of the Group is in possession of all Approvals necessary to own,
lease and operate the properties it purports to own, operate or lease, to carry
on its business as it is now being conducted, except where the failure to have
such Approvals would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, and to consummate the Transactions.
No member of the Group is in violation of any of the provisions of their
respective Charter Documents. The Corporate Records of each member of the Group
contain true, complete and accurate records of meetings and consents in lieu
of
meetings of its board of directors (and any committees thereof), similar
governing bodies and holders of its registered capital, since the time of their
respective organization. The ownership records of each Group member’s registered
capital are true, complete and accurate records of such ownership as of the
date
of such records and contains all transfers of such registered capital since
the
time of their respective organization. No member of the Group is required to
qualify to do business as a foreign corporation in any other jurisdiction.
For
purposes of this Agreement, (i) the term “Group”
shall
mean collectively Omnia Luo and Shenzhen Oriental Fashion Co., Ltd.
(“Shenzhen”),
a
company formed under the laws of the PRC, and (ii) the term “Affiliated
Companies”
shall
mean, collectively, Omnia Luo, any member of the Group or any direct or indirect
Subsidiary of Omnia Luo or any member of the Group. For purposes of this
Agreement, (i) the term “Subsidiary”
shall
mean any Person in which Omnia Luo, any member of the Group or any Subsidiary,
directly or indirectly, owns an equity or security interest (excluding interests
in publicly traded securities representing less than 5% of the issuer thereof),
and (ii) the term “Person”
shall
mean and include an individual, a corporation, a partnership (general or
limited), a joint venture, an association, a limited liability company, a trust
or any other organization or entity, including a government or political
subdivision or an agency or instrumentality thereof.
(iv) Subsidiaries.
Set
forth in Schedule 2(a)(iv) hereto is a true and complete list of all
Subsidiaries of Omnia Luo and any member of the Group stating, with respect
to
each Subsidiary, its jurisdiction of incorporation or organization, date of
incorporation or organization, capitalization and equity ownership. Each
Subsidiary is a corporation duly incorporated or organized, validly existing
and
in good standing under the laws of the jurisdiction of its incorporation or
organization, has all requisite corporate power and authority to own, lease
and
operate its properties and to carry on its businesses as they are now being
conducted, and no Subsidiary is required to qualify to do business as a foreign
corporation in any other jurisdiction except where the failure to be so
authorized would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. All of the outstanding shares of capital
stock of each Subsidiary have been duly and validly authorized and issued,
are
fully paid and non-assessable, have not been issued in violation of any
preemptive or other right of shareholders, or any other Person, or of any Legal
Requirements (as defined in Section 2(a)(vii) below), and are owned beneficially
and of record by the Person as specified on Schedule 2(a)(iv), free and clear
of
any liens, claims, charges, encumbrances, pledges, mortgages, security
interests, options, rights to acquire, proxies, voting trusts or similar
agreements, restrictions on transfer or adverse claims of any nature whatsoever
(“Liens”).
No
Subsidiary is in violation of any of the provisions of its Charter Documents.
Except
as
described in Schedule 2(a)(iv) hereto, neither Omnia Luo, any member of the
Group nor any Subsidiary owns, directly or indirectly, any ownership, equity,
profits or voting interest in any Person (other than Omnia Luo, a member of
the
Group or the Subsidiaries) or has any agreement or commitment to purchase any
such interest, and Omnia Luo, each Group member and their Subsidiaries have
not
agreed and are not obligated to make nor are bound by any written, oral or
other
agreement, contract, subcontract, lease, binding understanding, instrument,
note, option, warranty, purchase order, license, sublicense, insurance policy,
benefit plan, commitment or undertaking of any nature, as of the date hereof
or
any date hereafter, under which any of them may be obligated to make any future
investment in or capital contribution to any other entity except where such
obligation could, individually or in the aggregate, reasonably be expected
to
have a Material Adverse Effect.
3
(v) Capitalization.
(a) The
authorized capital stock of Omnia Luo currently consists of 60,000 ordinary
and
6,000 preferred shares, each with par value $1.00 per share. At the close of
business on the business day prior to the date hereof, Schedule 2(a)(v) hereto
lists all of the outstanding equity securities of Omnia Luo. All shares on
Schedule 2(a)(v) have been validly issued, fully paid and are non-assessable
and
have not been issued in violation of any preemptive or other right of
shareholders (or any other Person), or of any legal requirement. Except as
set
forth in Schedule 2(a)(v), there are no outstanding securities, convertible
securities, options, warrants or derivative securities, and there are no
agreements or commitments obligating Omnia Luo to issue or grant any of the
foregoing, including any pre-emptive or similar rights. All outstanding shares
of capital stock, options, warrants and other securities of Omnia Luo have
been
issued in compliance with (i) all applicable securities laws and (in all
material respects) other applicable laws and regulations, and (ii) all
requirements set forth in any applicable contracts. Except as described in
Schedule 2(a)(v) or in Schedule 2(a)(v) hereto, there are no commitments or
agreements of any character to which Omnia Luo is bound obligating Omnia Luo
to
accelerate the vesting of any options or warrants as a result of the
Transactions.
(b) The
authorized and registered capital stock of each member of the Group shall be
as
set forth in Schedule 2(a)(v) hereto. All of the outstanding shares of capital
stock of each member of the Group have been duly and validly authorized and
issued, are fully paid and non-assessable, have not been issued in violation
of
any preemptive or other right of shareholders (or any other Person) or of any
Legal Requirement, and are owned beneficially and of record by the Person as
specified on Schedule 2(a)(v), free and clear, to the knowledge of Omnia Luo,
of
any Lien. Except as set forth in Schedule 2(a)(v), there are no outstanding
securities, convertible securities, options, warrants or derivative securities,
and there are no agreements or commitments obligating any member of the Group
to
issue or grant any of the foregoing, including any pre-emptive or similar
rights. All outstanding shares, options, warrants and other securities of each
member of the Group have been issued in compliance with (i) all applicable
securities laws and (in all material respects) other applicable laws and
regulations, and (ii) all requirements set forth in any applicable contracts.
(c) Except
as
set forth in this Section 2(a)(v) or in Schedule 2(a)(v) hereto, there are
no
equity securities, partnership interests or similar ownership interests of
any
class of any equity security of any Affiliated Company, or any securities
exchangeable or convertible into or exercisable for such equity securities,
partnership interests or similar ownership interests, issued, reserved for
issuance or outstanding. Except as set forth in this Section 2(a)(v) or in
Schedule 2(a)(v) hereof, there are no subscriptions, options, warrants, equity
securities, ownership or partnership interests or similar ownership interests,
calls, rights (including preemptive rights), commitments or agreements of any
character to which the Affiliated Companies are a party or by which they are
bound obligating them to issue, deliver or sell, or cause to be issued,
delivered or sold, or repurchase, redeem or otherwise acquire, or cause the
repurchase, redemption or acquisition of, any registered capital, ownership
interests, partnership interests or similar ownership interests of the
Affiliated Companies or obligating the Affiliated Companies to grant, extend,
accelerate the vesting of or enter into any such subscription, option, warrant,
equity security, call, right, commitment or agreement.
(d) Except
as
contemplated by this Agreement, and except as set forth in Schedule 2(a)(v)
hereto, there are no registration rights, and there is no voting trust, voting
agreement, proxy, rights plan, anti-takeover plan or other agreement or
understanding to which the Affiliated Companies are a party or by which they
are
bound with respect to any shares of capital stock, registered capital, equity
securities, partnership interests or similar ownership interests of any class
of
the Affiliated Companies, and there are no agreements to which the Affiliated
Companies are a party, or which the Affiliated Companies have knowledge of,
which conflict with this Agreement or the transactions contemplated herein
or
otherwise prohibit the consummation of the transactions contemplated hereunder.
(e) Except
as
set forth in Schedule 2(a)(v) hereto, there are no securities or instruments
containing anti-dilution or similar provisions that will be triggered by the
issuance of the Units.
4
(f) As
of the
Closing Date (as defined in Section 4(d)) (and following completion of the
Exchange), Omnia Luo’s capitalization will be the capitalization of Wentworth as
described in Section 2(b)(vi).
(vi) Authority
Relative to this Agreement.
Omnia
Luo has all necessary corporate power and authority to execute and deliver
this
Agreement, the Transaction Documents and the Related Documents and to perform
its obligations hereunder and thereunder and, to consummate the transactions
contemplated hereby and thereby (including the Transactions). The execution
and
delivery of this Agreement, the Transaction Documents and the Related Documents
and the consummation by Omnia Luo of the transactions contemplated hereby and
thereby (including the Transactions) have been duly and validly authorized
by
all necessary action on the part of Omnia Luo (including the approval by Omnia
Luo’s shareholders), and no other proceedings on the part of any Affiliated
Company are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement, the Transaction Documents
and
the Related Documents have been duly and validly executed and delivered by
Omnia
Luo and, assuming the due authorization, execution and delivery thereof by
the
other parties hereto, constitutes the legal and binding obligation of Omnia
Luo,
enforceable against it in accordance with its terms, except as may be limited
by
(a) applicable bankruptcy, insolvency, reorganization, moratorium, or other
laws
of general application relating to or affecting the enforcement of creditors’
rights generally, and (b) laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies and except as
enforceability of the indemnity and contribution provisions contained in Section
7 hereof may be limited by applicable law or principles of public policy.
(vii) No
Conflict: Required Filings and Consents.
(a) The
execution and delivery of this Agreement, the Exchange Agreement and the other
Transaction Documents and the Related Documents by Omnia Luo does not, and
the
performance of this Agreement, the Exchange Agreement and the other Transaction
Documents and the Related Documents to which it is a party by Omnia Luo shall
not, (i) conflict with or violate their respective Charter Documents, (ii)
conflict with or violate any Legal Requirements (as defined below), or (iii)
result in any breach of or constitute a default (or an event that with notice
or
lapse of time or both would become a default) under, or materially impair any
Affiliated Company’s rights or alter the rights or obligations of any third
party under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a Lien or
encumbrance on any of the properties or assets of any Affiliated Company
pursuant to, any Material Contracts (as defined in Section 2(a)(xxi) below),
except, with respect to clauses (ii) or (iii), for any such conflicts,
violations, breaches, defaults or other occurrences that would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect
on
any of the Affiliated Companies. For purposes of this Agreement, the term
“Legal
Requirements”
means
any federal, state, local, municipal, foreign or other law, statute,
constitution, principle of common law, resolution, ordinance, code, edict,
decree, rule, regulation, ruling or requirement issued, enacted, adopted,
promulgated, implemented or otherwise put into effect by or under the authority
of any Governmental Entity (as defined below).
(b) The
execution and delivery of this Agreement, the Exchange Agreement and the other
Transaction Documents and Related Documents to which it is a party by Omnia
Luo
does not, and the performance of obligations of Omnia Luo hereunder or
thereunder will not, require any consent, approval, authorization or permit
of,
or filing with or notification to, any court, administrative agency, commission,
governmental or regulatory authority, domestic or foreign (a “Governmental
Entity”),
except (i) for applicable requirements, if any, of the Securities Act of 1933,
as amended (the “Securities
Act”),
the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”),
state
securities laws (“Blue
Sky Laws”),
and
the rules and regulations thereunder, and appropriate documents with the
relevant authorities of other jurisdictions in which Omnia Luo is qualified
to
do business, and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would
not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on any of the Affiliated Companies or, after the closing of
the
Exchange Agreement, Wentworth, or prevent consummation of the Transactions
or
otherwise prevent the parties hereto from performing their obligations under
this Agreement, the Exchange Agreement or any other Transaction Documents or
Related Documents.
(viii) Compliance.
Each
Affiliated Company has complied with and is not in violation of any Legal
Requirements with respect to the conduct of their business, or the ownership
or
operation of their business, except for failures to comply or violations which,
individually or in the aggregate, have not had and are not reasonably likely
to
have a Material Adverse Effect on any of the Affiliated Companies. To the
knowledge of Omnia Luo, the businesses and activities of the Affiliated
Companies have not been and are not being conducted in violation of any Legal
Requirements, except for violations which, individually or in the aggregate,
have not had and are not reasonably likely to have a Material Adverse Effect
on
any of the Affiliated Companies. Each Affiliated Company is not in default
or
violation of any term, condition or provision of any applicable Charter
Documents or, except for defaults or violations which, individually or in the
aggregate, have not had and are not reasonably likely to have a Material Adverse
Effect on any of the Affiliated Companies, of any Contracts. Except as set
forth
on Schedule 2(a)(viii), no written notice of non-compliance with any Legal
Requirements relating or with respect to the business of the Affiliated
Companies has been received by the Affiliated Companies (and each Affiliated
Company has no knowledge of any such material notice delivered to any other
Person). To the knowledge of Omnia Luo, the Affiliated Companies are not in
violation of any term of any contract or covenant relating to employment,
patents, proprietary information disclosure, non-competition or non-solicitation
except for violations which, individually or in the aggregate, have not had
and
are not reasonably likely to have a Material Adverse Effect on any of the
Affiliated Companies.
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(ix) Financial
Statements.
(a) The
audited financial statements of Omnia Luo in the Memorandum are a correct and
complete copy of the audited financial statements (including, in each case,
any
related notes thereto) of Omnia Luo and the members of the Group, on a
consolidated basis, for the fiscal year ended December 31, 2006, prepared
in accordance with the published rules and regulations of any applicable
Governmental Entity and with generally accepted accounting principles of the
United States (“U.S.
GAAP”)
applied on a consistent basis throughout the periods involved (except as may
be
indicated in the notes thereto) and audited in accordance with the auditing
standards of the Public Company Accounting Oversight Board (“PCAOB”)
by an
independent accountant registered with PCAOB, and such statements fairly present
in all material respects the financial position of Omnia Luo and the members
of
the Group, on a consolidated basis, at the respective dates thereof and the
results of its operations and cash flows for the periods indicated.
(b) The
unaudited financial statements of Omnia Luo in the Memorandum are a complete
copy of the unaudited financial statements (including, in each case, any related
notes thereto) of Omnia Luo and each member of the Group, on a consolidated
basis, for the three-month and six-month periods ended June 30, 2007, prepared
in accordance with U.S. GAAP applied on a consistent basis throughout the period
involved (except as may be indicated in the notes thereto), and have been
reviewed by an independent accountant registered with PCAOB, and such statements
will fairly present in all material respects the financial position of Omnia
Luo
and the members of the Group, on a consolidated basis, at the dates thereof
and
the results of its operations and cash flows for the periods indicated, except
that the unaudited interim financial statements will be subject to normal
adjustments which are not expected to have a Material Adverse Effect on any
of
the Affiliated Companies. The audited financial statements and the unaudited
financial statements (including the September Financial Statements (as defined
below) from and after delivery of such September Financial Statements to the
Placement Agent) described in this Section 2(a)(ix) are collectively referred
to
herein as the “U.S.
GAAP Financial Statements”.
(c) Omnia
Luo
and each member of the Group maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed
in
accordance with management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and
to
maintain asset accountability, (iii) access to assets is permitted only in
accordance with management’s general or specific authorization, and (iv) the
recorded accountability for assets and liabilities is compared with the existing
assets and liabilities at reasonable intervals and appropriate action is taken
with respect to any difference. During the twelve months prior to the date
hereof neither Omnia Luo nor any member of the Group have received any notice
or
correspondence from any accountant relating to any material weakness in any
part
of the system of internal accounting controls of Omnia Luo or any member of
the
Group.
(x) No
Undisclosed Liabilities.
Except
as set forth in Schedule 2(a)(x) hereto, the Affiliated Companies have no
liabilities individually in excess of $25,000 and in the aggregate in excess
of
$100,000 (absolute, accrued, contingent or otherwise) of a nature required
to be
disclosed on a balance sheet or in the related notes to the consolidated
financial statements prepared in accordance with US. GAAP which are,
individually or in the aggregate, material to the business, results of
operations or financial condition of the Affiliated Companies, except: (i)
liabilities provided for in or otherwise disclosed in the consolidated balance
sheets or notes thereto of Omnia Luo and the members of the Group as of June
30,
2007, prepared in accordance with US. GAAP, as included in the Memorandum,
and
(ii) such liabilities not in excess of $100,000, in the aggregate, arising
in
the ordinary course of business of the Affiliated Companies since June 30,
2007,
none of which would have a Material Adverse Effect on any of the Affiliated
Companies.
6
(xi) Absence
of Certain Changes or Events.
Except
as set forth in Schedule 2(a)(xi) hereto or in the Memorandum, including the
consolidated balance sheets of Omnia Luo and the members of the Group since
June
30, 2007, and except for the transactions contemplated under this Agreement
(including the Offering), there has not been, with respect to any Affiliated
Company: (a) any Material Adverse Effect, (b) any declaration, setting aside
or
payment of any dividend on, or other distribution (whether in cash, securities
or property) in respect of, any of equity securities, or any purchase,
redemption or other acquisition of any of equity securities or any options,
warrants, calls or rights to acquire any equity securities or other securities,
(c) any split, combination or reclassification of any equity securities, (d)
any
granting of any increase in compensation or fringe benefits, except for normal
increases of cash compensation in the ordinary course of business consistent
with past practice, or any payment of any bonus, except for bonuses made in
the
ordinary course of business consistent with past practice, or any granting
of
any increase in severance or termination payment or any entry into any currently
effective employment, severance, termination or indemnification agreement or
any
agreement the benefits of which are contingent or the terms of which are
materially altered upon the occurrence of a transaction of the nature
contemplated hereby, (e) entry into any licensing or other agreement with regard
to the acquisition or disposition of any Intellectual Property (as hereinafter
defined) other than licenses in the ordinary course of business consistent
with
past practice or any amendment or consent with respect to any licensing
agreement filed or required to be filed with respect to any Governmental Entity,
(f) any material change in its accounting methods, principles or practices,
(g)
any change in Omnia Luo’s auditing firm, (h) any issuance of securities, or (i)
any revaluation of any of their respective assets, including, without
limitation, writing down the value of capitalized inventory or writing off
notes
or accounts receivable or any sale of assets other than in the ordinary course
of business.
(xii) Litigation.
Except
as disclosed in Schedule 2(a)(xii) hereto, there are no claims, suits, actions
or proceedings pending, or to the knowledge of any Affiliated Company,
threatened in writing against the Affiliated Companies, before any court,
governmental department, commission, agency, instrumentality or authority,
or
any arbitrator that seeks to restrain or enjoin the consummation of the
transactions contemplated by this Agreement or which would reasonably be
expected, either individually or in the aggregate with all such claims, actions
or proceedings, to have a Material Adverse Effect on any of the Affiliated
Companies or have a Material Adverse Effect on the ability of any of the parties
hereto to consummate the Transactions.
(xiii) Employee
Benefit Plans.
(a) All
employee compensation, incentive, fringe or benefit plans, programs, policies,
commitments or other arrangements (whether or not set forth in a written
document) covering any active or former employee, director or consultant of
the
Affiliated Companies, or any trade or business (whether or not incorporated)
which is under common control with the Affiliated Companies, with respect to
which the Affiliated Companies has liability (collectively, the “Plans”)
has
been maintained and administered in all material respects in compliance with
its
terms and with the requirements prescribed by any and all statutes, orders,
rules and regulations which are applicable to such Plans, and all liabilities
with respect to the Plans have been properly reflected in the consolidated
financial statements of Omnia Luo and the members of the Group. No suit, action
or other litigation (excluding claims for benefits incurred in the ordinary
course of Plan activities) has been brought or is continuing, or to the
knowledge of Omnia Luo is threatened in writing, against or with respect to
any
such Plan. There are no audits, inquiries or proceedings pending or, to the
knowledge of Omnia Luo, threatened in writing by any governmental agency with
respect to any Plans. All contributions, reserves or premium payments required
to be made or accrued as of the date hereof to the Plans have been timely made
or accrued. Each Plan can be amended, terminated or otherwise discontinued
after
the closing of the Transactions in accordance with its terms, subject to
applicable laws, without material liability to Omnia Luo or the Affiliated
Companies (other than ordinary administration expenses and expenses for benefits
accrued but not yet paid).
(b) Except
as
disclosed on Schedule 2(a)(xiii) hereto, neither the execution and delivery
of
this Agreement, the Exchange Agreement or any other Transaction Documents,
Related Documents or Escrow Documents, as applicable, nor the consummation
of
the transactions contemplated hereby or thereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute,
bonus
or otherwise) becoming due to any shareholder, officer, director or employee
of
the Affiliated Companies under any Plan or otherwise, (ii) materially
increase any benefits otherwise payable under any Plan, or (iii) result in
the acceleration of the time of payment or vesting of any such
benefits.
7
(xiv) Labor
Matters.
Except
as disclosed in Schedule 2(a)(xiv) hereto, the Affiliated Companies are not
a
party to any collective bargaining agreement or other labor union contract
applicable to persons employed by the Affiliated Companies nor does any
Affiliated Company know of any activities or proceedings of any labor union
to
organize any such employees.
(xv) Restrictions
on Business Activities.
Except
as disclosed on Schedule 2(a)(xv) hereto, there is no agreement, commitment,
judgment, injunction, order or decree binding upon the Affiliated Companies
or
to which the Affiliated Companies is a party which has or would reasonably
be
expected to have the effect of prohibiting or materially impairing any business
practice of the Affiliated Companies, any acquisition of property by the
Affiliated Companies or the conduct of business by the Affiliated Companies
as
currently conducted other than such effects, individually or in the aggregate,
which have not had and would not reasonably be expected to have a Material
Adverse Effect on the Affiliated Companies.
(xvi) Title
to Property.
(a) All
real
estate or land use rights owned by the Affiliated Companies (including land
use
rights, improvements and fixtures thereon, easements and rights of way) (the
“Real
Property”)
is
shown or reflected on the US. GAAP Financial Statements. The Affiliated
Companies have good, valid and marketable title to the Real Property, and except
as set forth in the US. GAAP Financial Statements or on Schedule 2(a)(xvi)
hereto, all of the Real Property is held free and clear of all Liens, rights
of
way, easements, restrictions, exceptions, variances, reservations, covenants
or
other title defects or limitations of any kind, other than Liens for taxes
not
yet due and payable and such Liens or other imperfections of title, if any,
that
do not materially detract from the value of or materially interfere with the
present use of the property affected thereby. Schedule 2(a)(xvi) hereto is
a
list of all options or other contracts under which any Affiliated Company has
a
right to acquire any interest in real property.
(b) All
leases of real property held by the Affiliated Companies and all personal
property and other property and assets of the Affiliated Companies (other than
Real Property) owned, used or held for use in connection with the business
of
the Affiliated Companies (the “Personal
Property”)
are
shown or reflected on the US. GAAP Financial Statements. The Affiliated
Companies own and have good and marketable title to the Personal Property,
and
all such assets and properties are in each case held free and clear of all
Liens, except for Liens disclosed in the U.S. GAAP Financial Statements or
in
Schedule 2(a)(xvi) hereto, none of which Liens has or will have, individually
or
in the aggregate, a Material Adverse Effect on such property or on the present
or contemplated use of such property in the businesses of any of the Affiliated
Companies.
(c) All
leases pursuant to which an Affiliated Company leases from others material
real
or personal property are valid and effective in accordance with their respective
terms, and there is not, under any of such leases, any existing material default
or event of default of the Affiliated Companies or, to the knowledge of Omnia
Luo, any other party (or any event which with notice or lapse of time, or both,
would constitute a material default), except where the lack of such validity
and
effectiveness or the existence of such default or event of default would not
reasonably be expected to have a Material Adverse Effect on any of the
Affiliated Companies.
(xvii) Taxes.
(a) Definition
of Taxes.
For the
purposes of this Agreement, “Tax”
or
“Taxes”
refers
to any and all applicable central, federal, provincial, state, local, municipal
and foreign taxes, including, without limitation, gross receipts, income,
profits, sales, use, occupation, value added, ad valorem, transfer, franchise,
withholding, payroll, recapture, employment, excise and property taxes,
assessments, governmental charges and duties together with all interest,
penalties and additions imposed with respect to any such amounts and any
obligations under any agreements or arrangements with any other person with
respect to any such amounts and including any liability of a predecessor entity
for any such amounts.
8
(b) Tax
Returns and Audits.
Except
as set forth in Schedule 2(a)(xvii) hereto:
(i) The
Affiliated Companies have timely filed all federal, state, local and foreign
returns, estimates, information statements and reports relating to Taxes
(“Returns”)
required to be filed by the Affiliated Companies with any Tax authority prior
to
the date hereof. All such Returns are true, correct and complete in all material
respects. The Affiliated Companies have paid all Taxes shown to be due on such
Returns, except for such Taxes as are being disputed in good faith.
(ii) All
Taxes
that the Affiliated Companies are required by law to withhold or collect have
been duly withheld or collected, and have been timely paid over to the proper
governmental authorities to the extent due and payable.
(iii) The
Affiliated Companies have not been delinquent in the payment of any Tax nor
is
there any Tax deficiency outstanding, proposed or assessed against the
Affiliated Companies, nor have the Affiliated Companies executed any unexpired
waiver of any statute of limitations on or extending the period for the
assessment or collection of any Tax.
(iv) No
audit
or other examination of any Return of the Affiliated Companies by any Tax
authority is presently in progress, nor have the Affiliated Companies been
notified of any request for such an audit or other examination.
(v) No
adjustment relating to any Returns filed by the Affiliated Companies has been
proposed in writing, formally or informally, by any Tax authority to the
Affiliated Companies or any representative thereof.
(vi) The
Affiliated Companies have no liability for any unpaid Taxes which have not
been
accrued for or reserved on Omnia Luo’s balance sheets included in the U.S. GAAP
Financial Statements for the most recent fiscal year ended, whether asserted
or
unasserted, contingent or otherwise, other than any liability for unpaid Taxes
that may have accrued since the end of the most recent fiscal year in connection
with the operation of the business of the Affiliated Companies in the ordinary
course of business, none of which is material to the business, results of
operations or financial condition of the Affiliated Companies.
(xviii) Environmental
Matters.
Except
as disclosed in Schedule 2(a)(xviii) hereto and except for such matters that,
individually or in the aggregate, are not reasonably likely to have a Material
Adverse Effect: (a) the Affiliated Companies have complied with all
applicable Environmental Laws; (b) the properties currently owned or
operated by the Affiliated Companies (including soils, groundwater, surface
water, buildings or other structures) are not contaminated with any Hazardous
Substances; (c) the properties formerly owned or operated by the Affiliated
Companies were not contaminated with Hazardous Substances prior to or during
the
period of ownership or operation by the Affiliated Companies; (d) the
Affiliated Companies are not subject to liability for any Hazardous Substance
disposal or contamination on any third party property; (e) the Affiliated
Companies have not been associated with any release or threat of release of
any
Hazardous Substance; (f) the Affiliated Companies have not received any
notice, demand, letter, claim or request for information alleging that the
Affiliated Companies may be in violation of or liable under any Environmental
Law; and (g) the Affiliated Companies are not subject to any orders,
decrees, injunctions or other arrangements with any Governmental Entity or
subject to any indemnity or other agreement with any third party relating to
liability under any Environmental Law or relating to Hazardous
Substances.
As
used
in this Agreement, the term “Environmental
Law”
means
all applicable central, federal, provincial, state, local or municipal law,
regulation, order, decree, permit, authorization, opinion, common law or agency
requirement relating to: (A) the protection, investigation or restoration
of the environment, health and safety, or natural resources; (B) the
handling, use, presence, disposal, release or threatened release of any
Hazardous Substance or (C) noise, odor, wetlands, pollution, contamination
or any injury or threat of injury to persons or property.
As
used
in this Agreement, the term “Hazardous
Substance”
means
any substance that is: (a) listed, classified or regulated pursuant to any
Environmental Law; (b) any petroleum product or by-product,
asbestos-containing material, lead-containing paint or plumbing, polychlorinated
biphenyls, radioactive materials or radon; or (c) any other substance which
is the subject of regulatory action by any Governmental Entity pursuant to
any
Environmental Law.
9
(xix) Brokers:
Third Party Expenses.
Except
as set forth in this Agreement and in the Related Agreements, and except as
set
forth in this Section 2(a)(xix), neither the Affiliated Companies, Omnia Luo
nor, to the knowledge of Omnia Luo, the Shareholders, have incurred, nor will
they incur, directly or indirectly, any liability for brokerage, finders’ fees,
agent’s commissions or any similar charges in connection with this Agreement,
the Exchange Agreement, any other Transaction Documents, Related Documents
or
Escrow Documents, as applicable, or any transactions contemplated hereby or
thereby. Except as disclosed on Schedule 2(a)(xix), no ownership interests,
equity securities, convertible securities, warrants, options, or other
derivative securities of the Affiliated Companies or Wentworth are payable
to
any third party by any Affiliated Company, Omnia Luo or any Shareholder as
a
result of the Transactions.
(xx) Intellectual
Property.
For the
purposes of this Agreement, the following terms have the following
definitions:
(a) “Intellectual
Property”
shall
mean any or all of the following: (i) patents and applications therefor and
all reissues, divisions, renewals, extensions, provisionals, continuations
and
continuations-in-part thereof (“Patents”)
worldwide; (ii) inventions (whether patentable or not), invention
disclosures, improvements, trade secrets, proprietary information, know how,
technology, technical data and customer lists, and all documentation relating
to
any of the foregoing; (iii) registered copyrights and applications
therefor, and all other rights corresponding thereto, worldwide;
(iv) material domain names, uniform resource locators (“URLs”)
and
other names and locators associated with the Internet (“Domain
Names”);
(v) registered industrial designs and applications therefor, worldwide;
(vi) registered trade names, logos, trademarks and service marks, and any
applications therefor (collectively, “Trademarks”),
worldwide; (vii) all databases and data collections and all rights therein;
and
(viii) all moral and economic rights of authors and inventors, however
denominated.
(b) “Omnia
Luo Intellectual Property”
shall
mean any Intellectual Property that is owned by, or licensed to any of the
Affiliated Companies.
(c) “Omnia
Luo Products”
means
all current versions of products or services of any of the Affiliated Companies.
(d) The
Affiliated Companies own or possess adequate rights or licenses to use all
Intellectual Property necessary to conduct their respective businesses as now
conducted. None of any Affiliated Company’s registered, or applied for, Omnia
Luo Intellectual Property have expired or terminated or have been abandoned,
or
are expected to expire or terminate or expected to be abandoned, within three
years from the date of this Agreement. The Affiliated Companies have taken
reasonable security measures, consistent with prevailing local practice, to
protect the secrecy, confidentiality and value of all of their Intellectual
Property Rights.
(e) Except
as
disclosed on Schedule 2(a)(xx), Omnia Luo Intellectual Property and Omnia Luo
Products are not subject to any material proceeding or outstanding decree,
order, judgment, contract, license, agreement or stipulation restricting in
any
manner the use, transfer or licensing thereof by the Affiliated Companies,
or
which may affect the validity, use or enforceability of such Omnia Luo
Intellectual Property or Omnia Luo Products, which in any such case would
reasonably be expected to have a Material Adverse Effect on any of the
Affiliated Companies. No Affiliated Company has any knowledge of any
infringement by any Affiliated Company of Intellectual Property of others.
There
is no claim, action or proceeding being made or brought, or to the knowledge
of
Omnia Luo, being threatened in writing, against any Affiliated Company regarding
the Omnia Luo Intellectual Property and/or the Omnia Luo Products. No Affiliated
Company is aware of any facts or circumstances which might give rise to any
of
the foregoing infringements or claims, actions or proceedings which in any
such
case would reasonably be expected to have a Material Adverse Effect on any
of
the Affiliated Companies.
(f) Except
as
disclosed on Schedule 2(a)(xx) hereto, the Affiliated Companies either own
and
have good and marketable title to each material item of Omnia Luo Intellectual
Property owned by it free and clear of any Liens (excluding licenses and related
restrictions granted in the ordinary course) or have one or more licenses
sufficient for use of Omnia Luo Intellectual Property by the Affiliated
Companies; and the Affiliated Companies are the owner or licensee of all
Trademarks used in connection with the operation or conduct of the business
of
the Affiliated Companies including the sale of any Omnia Luo Products.
10
(g) The
operation of the business of the Affiliated Companies as such business currently
is conducted, including the use of any product, device or process, to the
knowledge of Omnia Luo and except as would not reasonably be expected to have
a
Material Adverse Effect, does not infringe or misappropriate the Intellectual
Property of any third party or constitute unfair competition or trade practices
under the laws of any jurisdiction.
(xxi) Agreements,
Contracts and Commitments.
(a) For
purposes of this Agreement, (i) “Indebtedness”
of
any
Person means, without duplication (a) all indebtedness for borrowed money,
(b) all obligations issued, undertaken or assumed as the deferred purchase
price of property or services, including (without limitation) “capital
leases”
in
accordance with generally accepted accounting principles, but excluding trade
payables entered into in the ordinary course of business, (c) all
reimbursement or payment obligations with respect to letters of credit, surety
bonds and other similar instruments, (d) all obligations evidenced by
notes, bonds, debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of property, assets or
businesses, (e) all indebtedness created or arising under any conditional
sale or other title retention agreement, or incurred as financing, in either
case with respect to any property or assets acquired with the proceeds of such
indebtedness (even though the rights and remedies of the seller or bank under
such agreement in the event of default are limited to repossession or sale
of
such property), (f) all monetary obligations under any leasing or similar
arrangement which, in connection with generally accepted accounting principles,
consistently applied for the periods covered thereby, is classified as a capital
lease, (g) all indebtedness referred to in clauses (a) through (f) above secured
by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge,
security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by any Person, even though the
Person which owns such assets or property has not assumed or become liable
for
the payment of such indebtedness, and (ii) all Contingent Obligations in
respect of indebtedness or obligations of others of the kinds referred to in
clauses (a) through (g) above; (ii) “Contingent
Obligation”
means,
as to any Person, any direct or indirect liability, contingent or otherwise,
of
that Person with respect to any indebtedness, lease, dividend or other
obligation of another Person if the primary purpose or intent of the Person
incurring such liability, or the primary effect thereof, is to provide assurance
to the obligee of such liability that such liability will be paid or discharged,
or that any agreements relating thereto will be complied with, or that the
holders of such liability will be protected (in whole or in part) against loss
with respect thereto; (iii) the term “Contracts”
shall
mean all written contracts, agreements, leases, mortgages, indentures, notes,
bonds, Liens, licenses, arbitration awards, judgments, decrees, orders,
documents, instruments, understandings and commitments to which the Affiliated
Companies is a party or by or to which any of the properties or assets of the
Affiliated Companies may be bound, subject or affected (including without
limitation notes or other instruments payable to the Affiliated Companies),
and
(iv) the term “Material
Contracts”
shall
mean (x) each Contract, (I) providing for payments (present or future) to
the Affiliated Companies in excess of $100,000 in the aggregate, or
(II) under which or in respect of which the Affiliated Companies presently
have any liability or obligation of any nature whatsoever (absolute, contingent
or otherwise) in excess of $100,000, and (y) without limitation of
subclause (x), each of the following Contracts:
(i) any
Indebtedness of the Affiliated Companies, including, without limitation, any
mortgage, indenture, note, installment obligation or other instrument, agreement
or arrangement for or relating to any borrowing of money by or from Omnia Luo
or
any of the Affiliated Companies;
(ii) any
guaranty, direct or indirect, by the Affiliated Companies or any officer,
director or 5% or more shareholder (“Insider”)
of the
Affiliated Companies of any obligation of the Affiliated Companies for
borrowings, or otherwise, excluding endorsements made for collection in the
ordinary course of business;
(iii) any
Contract made other than in the ordinary course of business and (x) providing
for the grant of any preferential rights to purchase or lease any asset of
the
Affiliated Companies or (y) providing for any right (exclusive or non-exclusive)
to sell or distribute, or otherwise relating to the sale or distribution of,
any
product or service of the Affiliated Companies;
11
(iv) any
obligation to register any shares of the capital stock or other securities
of
the Affiliated Companies with any Governmental Entity;
(v) any
obligation to make payments, contingent or otherwise, arising out of the prior
acquisition of the business, assets or stock of other Persons;
(vi) any
collective bargaining agreement with any labor union;
(vii) any
Contract made other than in the ordinary course of business and granting or
purporting to grant, or otherwise in any way relating to, any rights or any
other interest (including, without limitation, a leasehold interest) in real
property;
(viii) any
Contract of the Affiliated Companies, the violation of which, or default under
which, by the other party(ies) to such contract, agreement or instrument would
reasonably be expected to result in a Material Adverse Effect; and
(ix) any
Contract with the Affiliated Companies to which any Insider of the Affiliated
Companies is a party.
(b) Each
Material Contract was entered into at arms’ length and in the ordinary course,
is in full force and effect and, to the knowledge of Omnia Luo, is valid and
binding upon and enforceable against each of the parties thereto.
(c) Except
as
set forth in Schedule 2(a)(xxi), neither Omnia Luo nor Affiliated Companies
nor,
to the knowledge of Omnia Luo, any other party thereto, is in breach of or
in
default under, and no event has occurred which with notice or lapse of time
or
both would become a breach of or default under, any Material Contract, which
breach, individually or in the aggregate, would be reasonably likely to have
a
Material Adverse Effect on Omnia Luo or any of the Affiliated Companies, and
no
party to any Material Contract has given any written notice of any claim of
any
such breach, default or event, which, individually or in the aggregate, are
reasonably likely to have a Material Adverse Effect on Omnia Luo or any of
the
Affiliated Companies. Each Material Contract to which the Affiliated Companies
is a party or by which it is bound that has not expired by its terms is in
full
force and effect, except where such failure to be in full force and effect
is
not reasonably likely to have a Material Adverse Effect on Omnia Luo or any
of
the Affiliated Companies.
(xxii) Insurance.
Schedule 2(a)(xxi) sets forth the insurance policies and fidelity bonds covering
the assets, business, equipment, properties, operations, employees, officers
and
directors (collectively, the “Insurance
Policies”)
of the
Affiliated Companies. The Affiliated Companies are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as management of Omnia Luo believes to be prudent and customary in
the
businesses in which the Affiliated Companies operate. No Affiliated Company
has
been refused any insurance coverage sought or applied for and no Affiliated
Company has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business
at a
cost that would not have a Material Adverse Effect.
(xxiii) Governmental
Actions/Filings: Approvals.
Except
as set forth in Schedule 2(a)(xxiii), the Company and/or the Affiliated
Companies hold, and/or have made, all Governmental Actions/Filings and Approvals
necessary for the conduct by the Company and the Affiliated Companies of their
business (as presently conducted and to be conducted following the Closing
and
the closing of the Exchange Agreement), except with respect to any Governmental
Actions/Filings and Approvals the failure of which to hold or make would not
reasonably be likely to have a Material Adverse Effect on any of the Affiliated
Companies.
For
purposes of this Agreement, the term “Governmental
Action/Filing”
shall
mean any franchise, license, certificate of compliance, authorization, consent,
order, permit, approval, consent or other action of, or any filing, registration
or qualification with, any federal, state, municipal, foreign or other
governmental, administrative or judicial body, agency or authority.
12
(xxiv) Interested
Party Transactions.
Except
as set forth in Schedule 2(a)(xxiv) hereto, in the Memorandum or as reflected
in
the financial statements included in the Memorandum, no employee, officer,
director or shareholder of the Affiliated Companies or a member of his or her
immediate family is indebted to the Affiliated Companies, nor are the Affiliated
Companies indebted (or committed to make loans or extend or guarantee credit)
to
any of them, other than (a) for payment of salary for services rendered, (b)
reimbursement for reasonable expenses incurred on behalf of the Affiliated
Companies, and (c) for other employee benefits made generally available to
all
employees. Except as set forth in Schedule 2(a)(xxiv), in the Memorandum or
as
reflected in the financial statements included in the Memorandum, to the
knowledge of Omnia Luo, none of such individuals has any direct or indirect
ownership interest in any Person with whom the Affiliated Companies is
affiliated or with whom the Affiliated Companies has a contractual relationship,
or any Person that competes with the Affiliated Companies, except that each
employee, officer, director or shareholder of the Affiliated Companies and
members of their respective immediate families may own less than 5% of the
outstanding stock in publicly traded companies that may compete with the
Affiliated Companies. Except as set forth in Schedule 2(a)(xxiv), to the
knowledge of Omnia Luo, no employee, officer, director or shareholder or any
member of their immediate families is, directly or indirectly, interested in
any
material contract with the Affiliated Companies (other than such contracts
as
relate to any such individual ownership of interests in or securities of the
Affiliated Companies).
(xxv) Management.
Except
as set forth in Schedule 2(a)(xxv) hereto, during the past five year period,
no
current or former officer or director or shareholder of the Affiliated Companies
has been the subject of:
(a) a
petition under bankruptcy laws or any other insolvency or moratorium law or
has
a receiver, fiscal agent or similar officer been appointed by a court for such
person, or any partnership in which such person was a general partner at or
within two years before the time of such filing, or any corporation or business
association of which such person was an executive officer at or within two
years
before the time of such filing;
(b) a
conviction in a criminal proceeding or a named subject of a pending criminal
proceeding (excluding traffic violations that do not relate to driving while
intoxicated or driving under the influence);
(c) any
order, judgment or decree, not subsequently reversed, suspended or vacated,
of
any court of competent jurisdiction, permanently or temporarily enjoining any
such person from, or otherwise limiting, the following activities:
(i) Acting
as
a futures commission merchant, introducing broker, commodity trading advisor,
commodity pool operator, floor broker, leverage transaction merchant, any other
person regulated by the United States Commodity Futures Trading Commission
or an
associated person of any of the foregoing, or as an investment adviser,
underwriter, broker or dealer in securities, or as an affiliated person,
director or employee of any investment company, bank, savings and loan
association or insurance company, or engaging in or continuing any conduct
or
practice in connection with such activity;
(ii) Engaging
in any type of business practice; or
(iii) Engaging
in any activity in connection with the purchase or sale of any security or
commodity or in connection with any violation of securities laws or commodities
laws;
(d) any
order, judgment or decree, not subsequently reversed, suspended or vacated,
of
any authority barring, suspending or otherwise limiting for more than 60 days
the right of any such person to engage in any activity described in the
preceding sub paragraph, or to be associated with persons engaged in any such
activity;
(e) a
finding
by a court of competent jurisdiction in a civil action or by the US. Securities
and Exchange Commission (“SEC”)
or
other authority to have violated any securities law, regulation or decree and
the judgment in such civil action or finding by the SEC or any other authority
has not been subsequently reversed, suspended or vacated; or
13
(f) a
finding
by a court of competent jurisdiction in a civil action or by the Commodity
Futures Trading Commission to have violated any federal commodities law, and
the
judgment in such civil action or finding has not been subsequently reversed,
suspended or vacated.
(xxvi) Escrow
Agreements.
Each of
(w) the Escrow Agreement (the “Escrow
Agreement”)
among
Wentworth, the Placement Agent and Xxxxxx Street Bank & Trust (the
“Escrow
Agent”),
(x) the Escrow Agreement (the “Make
Good Share Escrow Agreement”)
among
the Placement Agent, Omnia Luo, Wentworth, certain shareholders of Omnia Luo
and
Computershare Trust Company, Inc. (the “Share
Escrow Agent”),
(y) the Make Good Agreement (the “Make
Good Agreement”)
among
the Placement Agent Omnia Luo, Wentworth and certain shareholders of Omnia
Luo,
and (z) such other ancillary documents related thereto (collectively with
the Escrow Agreement, the Make Good Share Escrow Agreement and the Make Good
Agreement, the “Escrow
Documents”)
have
been duly and validly executed and delivered by or on behalf of Omnia Luo,
as
applicable, and constitutes a legal, valid, and binding obligation of Omnia
Luo,
as applicable, enforceable in accordance with its terms, except as such
enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium, or other laws of general application relating to
or
affecting enforcement of creditors’ rights generally and (b) laws relating
to the availability of specific performance, injunctive relief, or other
equitable remedies.
(xxvii) Injunction.
None of
the Affiliated Companies is or has been subject to any order, judgment, or
decree of any court of competent jurisdiction temporarily, preliminarily, or
permanently enjoining such person for failure to comply with Rule 503 under
Regulation D.
(xxviii) Foreign
Corrupt Practices.
None of
the Affiliated Companies nor any director, officer, agent, employee or other
Person acting on behalf of any Affiliated Company has, in the course of its
actions for, or on behalf of, any Affiliated Company (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expenses relating to political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee
from
corporate funds; (iii) violated or is in violation of any provision of the
U S.
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment
to
any foreign or domestic government official or employee.
(xxix) Investment
Company Status.
None of
the Affiliated Companies are, and upon consummation of the sale of the Units
will not be, an “investment
company,”
a
company controlled by an “investment
company”
or
an
“affiliated
person”
of,
or
“promoter”
or
“principal
underwriter”
for,
an
“investment
company”
as
such
terms are defined in the Investment Company Act of 1940, as amended.
(xxx) US.
Real Property Holding Corporation.
None of
the Affiliated Companies are, nor have any ever been, a US. real property
holding corporation within the meaning of Section 897 of the Internal Revenue
Code of 1986, as amended, and the Affiliated Companies shall so certify upon
the
Placement Agent’s request.
(xxxi) Representations
and Warranties Complete.
The
representations and warranties of Omnia Luo included in this Agreement and
any
Schedule provided pursuant to this Agreement, are true and complete in all
material respects and do not contain any untrue statement of a material fact
or
omit to state a material fact required to be stated therein or necessary to
make
the statements contained therein not misleading, under the circumstance under
which they were made.
(b) Wentworth
represents and warrants to, and covenants with, the Placement Agent and Omnia
Luo as of the date of this Agreement and as of the date of the Closing as
follows:
(i) All
reports and statements required to be filed by Wentworth with the SEC under
the
Exchange Act and the rules and regulations thereunder, including all reports
and
statements with respect to the Transactions contemplated hereunder, have been
made or will be made at or prior to the Closing. Such filings, together with
all
documents incorporated by reference therein, are referred to as “Exchange
Act Documents”.
Each
Exchange Act Document, as amended, conformed in all material respects to the
requirements of the Exchange Act and the rules and regulations thereunder,
and
no Exchange Act Document, as amended, at the time each such document was filed,
included any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(ii) The
financial statements, together with the related notes, of Wentworth contained
in
the Exchange Act Documents filed for the 36 months prior to the date of this
Agreement, and the financial statements that are included in Wentworth’s Annual
Report on Form 10-KSB for the year ended December 31, 2006, fairly present
in all material respects, on the basis stated therein and on the date thereof,
the financial position of Wentworth at the respective dates therein specified
and its results of operations and cash flows for the periods then ended. Such
statements and related notes have been prepared in accordance with US. GAAP
applied on a consistent basis except as expressly noted therein.
14
(iii) Except
for the Transactions or the transactions contemplated by this Agreement, or
as
disclosed in the Exchange Act Documents or on Schedule 2(b)(iii), since June
30,
2007, Wentworth has not incurred any material liabilities or obligations, direct
or contingent, except in the ordinary course of business, and there has not
been
any material adverse change, or to the actual knowledge of Wentworth, any
development involving a prospective material adverse change, in the condition
(financial or otherwise), business, prospects, or results of operations of
Wentworth or any change in the capital or any increase in the long-term or
short-term debt of Wentworth, nor has Wentworth declared, paid, or made any
dividend or distribution of any kind on its capital stock.
(iv) All
action required to be taken by Wentworth for the authorization of this
Agreement, the Exchange Agreement, the Related Agreements, the Escrow Documents,
the Transaction Documents, Related Documents or Escrow Documents, the
performance of all obligations of Wentworth and Omnia Luo hereunder and
thereunder at the Closing, and as a condition to the due and proper
authorization, issuance, sale, and delivery of the Units to subscribers therefor
in accordance with the terms of this Agreement has been, or prior to the Closing
Date (as defined in Section 4(d) below), has been taken.
(v) Wentworth
is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Delaware and has all requisite right, power, and
authority to own or lease its properties, to conduct its business as described
in the Exchange Act Documents, and to execute, deliver, and perform this
Agreement, the Exchange Agreement, the Securities Purchase Agreement between
Wentworth and the purchasers of the Units, in (in such form as executed by
such
parties in this Transaction, the “Securities
Purchase Agreement”),
the
Registration Rights Agreement, (in such form as executed by such parties in
this
Transaction, the “Registration
Rights Agreement”
and
together with the Securities Purchase Agreement and the other Transaction
Documents (as defined in the Securities Purchase Agreement), the “Related
Agreements”),
to
issue and sell the Units and to carry out the provisions of this Agreement,
the
Transaction Documents, the Escrow Documents and the Related Agreements and
to
carry on its business as presently conducted. Wentworth is duly qualified to
do
business and in good standing as a foreign corporation in all other
jurisdictions in which its ownership or leasing of properties, or the conduct of
its business requires or may require such qualification except where the failure
to be so qualified would not have a Material Adverse Effect. Wentworth has
complied in all material respects with all material laws, rules, regulations,
applicable to Wentworth’s business, operations, properties, assets, products,
and services, and Wentworth is in possession of and operating in compliance
with
all material permits, licenses, and other authorization, required to conduct
its
business as currently conducted.
(vi) As
of the
date hereof, the authorized capital stock of Wentworth consists of 40,000,000
shares of Common Stock, and 10,000,000 shares of preferred stock, par value
$0.01 (“Preferred
Stock”).
Immediately prior to the Closing of the Offering, Wentworth will have 1,120,000
shares of Common Stock issued and outstanding and no shares of Preferred Stock
issued and outstanding. Except as contemplated by this Agreement and the
Exchange Agreement, or as described in the Exchange Act Documents or on Schedule
2(b)(vi), immediately prior to the Closing (a) there is no commitment by
Wentworth to issue any shares of capital stock, subscriptions, warrants,
options, convertible securities, or other similar rights to purchase or receive
Wentworth securities or to distribute to the holders of any of its equity
securities any evidence of Indebtedness, cash, or other assets, (b) Wentworth
is
under no obligation (contingent or otherwise) to purchase, redeem, or otherwise
acquire any of its equity or debt securities or any interest therein, (c) there
are no securities or instruments containing antidilution or similar provisions
that will be triggered by the issuance of the Units and (d) there are no voting
trusts or similar agreements, stockholders’ agreements, pledge agreements,
buy-sell agreements, rights of first refusal, preemptive rights, or proxies
relating to any securities of Wentworth. Except for those persons issued
securities pursuant to the Exchange Agreement or as set forth in the Exchange
Act Documents or filings with the Commission made by third parties pursuant
to
Schedule 13D or 13G or Form 3 or 4, and to the knowledge of Wentworth, no person
holds of record or beneficially, 5% or more of the outstanding shares of the
capital stock of Wentworth. All outstanding securities of Wentworth were issued
in compliance with applicable Federal and state securities laws.
(vii) Except
as
disclosed in the Exchange Act Documents or as described on Schedule 2(b)(vii),
there is no pending or, to the knowledge of Wentworth, threatened in writing
(a)
action, suit, claim, proceeding, or investigation against Wentworth, at law
or
in equity, or before or by any Federal, state, municipal, or other governmental
department, commission, board, bureau, agency or instrumentality, domestic
or
foreign Governmental Entity, (b) arbitration proceeding against Wentworth,
(c)
governmental inquiry against Wentworth, or (d) any action or suit by or on
behalf of Wentworth pending or threatened against others.
15
(viii) Wentworth
is not in violation of its articles of incorporation or bylaws, or in default,
or with the giving of notice or lapse of time or both, would be in default,
in
the performance of any obligation, agreement, or condition contained in any
lease, license, contract, indenture, or loan agreement or in any bond,
debenture, note, or any other evidence of Indebtedness, except for such defaults
as would not have a Material Adverse Effect. The execution, delivery, and
performance of this Agreement, the Transaction Documents, the Related
Agreements, and the Escrow Documents, the incurrence of the obligations herein,
the issuance, sale, and delivery of the Units, and the consummation of the
transactions contemplated herein, have been duly authorized by all requisite
corporate action on the part of Wentworth and (a) do not and will not conflict
with Wentworth’s articles of incorporation or bylaws, (b) do not and will not,
with or without the passage of time or the giving of notice, result in the
breach of, or constitute a default, cause the acceleration of performance,
or
require any consent under, or result in the creation of any lien, charge or
encumbrance upon any property assets of Wentworth pursuant to, any material
loan
agreement, mortgage, deed of trust, indenture, or other instrument or agreement
to which Wentworth is a party or by which Wentworth or its properties are bound,
except such consents as have been obtained as of the date hereof or to the
extent that the same have been, or prior to the Closing Date will be, waived
or
cured, and as may be required by the Over-the-Counter Bulletin Board
(“OTC
BB”),
which
Wentworth undertakes to obtain as promptly as practicable, or (c) do not and
will not result in the violation of any law, statute, order, rule,
administrative regulation, or decree of any court, or governmental agency or
body having jurisdiction over Wentworth or its properties. Upon its execution
and delivery the Exchange Agreement will be in full force and effect.
(ix) Except
as
disclosed in the Exchange Act Documents or as described on Schedule 2(b)(ix),
and other than pursuant to the Exchange Agreement and the documents related
thereto, there are no pre-emptive rights or other rights to subscribe for or
to
purchase, or any restriction upon the voting or transfer of, shares of Common
Stock pursuant to Wentworth’s articles of incorporation, bylaws, or any
agreement or other instrument to which Wentworth is a party. Except as disclosed
on Schedule 2(b)(ix), the issuance of the Units is not subject to any preemptive
right of any stockholder of Wentworth or to any right of first refusal or other
right in favor of any person.
(x) This
Agreement constitutes a legal, valid, and binding obligation of Wentworth
enforceable in accordance with its terms, except to the extent that its
enforceability is limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium, or other laws of general application relating to
or
affecting the enforcement of creditors’ rights generally, and (b) laws relating
to the availability of specific performance, injunctive relief, or other
equitable remedies and except as enforceability of the indemnity and
contribution provisions contained in Section 7 hereof may be limited by
applicable law or principles of public policy.
(xi) The
Escrow Documents, the Related Documents and the Transaction Documents to which
it is a party have been duly and validly executed and delivered by or on behalf
of Wentworth and constitutes a legal, valid, and binding obligation of Wentworth
enforceable in accordance with its terms, except as such enforceability may
be
limited by (a) applicable bankruptcy, insolvency, reorganization,
moratorium, or other laws of general application relating to or affecting
enforcement of creditors’ rights generally and (b) laws relating to the
availability of specific performance, injunctive relief, or other equitable
remedies.
(xii) No
consent, approval, authorization, or order of any court or governmental
authority or agency is required for the consummation by Wentworth of the
transactions contemplated by this Agreement.
(xiii) Except
as
disclosed on Schedule 2(b)(xiii), Wentworth has filed, or caused to be filed,
on
a timely basis, all tax returns (including payroll, unemployment, and other
taxes related to its employees and independent contractors) required to be
filed
with any Governmental Entity and has paid or caused to be paid all taxes,
levies, assessments, tariffs, duties or other fees imposed, assessed, or
collected by any Governmental Entity that may have become due and payable
pursuant to those tax returns or otherwise except taxes being disputed by
Wentworth in good faith. Except as disclosed on Schedule 2(b)(xiii), no
deficiency assessment with respect to or proposed adjustment of any of
Wentworth’s Federal, state, municipal, or local tax returns has occurred or is
threatened. There has been no tax lien imposed by any Governmental Entity
outstanding against Wentworth’s assets or properties, except the lien for
current taxes not yet due. The charges, accruals, and reserves on the books
of
Wentworth with respect to taxes for all fiscal periods are adequate, in the
opinion of Wentworth, and Wentworth does not know of any actual or proposed
tax
assessment for any fiscal period or of any basis therefor against which adequate
reserves have not been set up. Except as disclosed on Schedule 2(b)(xiii),
Wentworth has not been advised that any Federal income tax return of Wentworth
has been, or will be, examined or audited by the Internal Revenue Service.
16
(xiv) The
Wentworth Common Stock is registered pursuant to Section 12(g) of the Exchange
Act.
(xv) Except
as
set forth on Schedule 2(b)(xv), Wentworth has not during the past twelve months
offered or sold any security by or for Wentworth that is of the same or a
similar class as the Shares and Warrants, other than offers of securities made
solely to accredited investors or otherwise under an employee benefit plan
as
defined in Rule 405 under the Securities Act, or securities issued in connection
with the Transactions or other acquisitions. No such offers or sales will
invalidate the exemption from registration relied on to offer and sell the
Shares and Warrants.
(xvi) Neither
Wentworth nor any of its affiliates is or has been subject to any order,
judgment, or decree of any court of competent jurisdiction temporarily,
preliminarily, or permanently enjoining such person for failure to comply with
Rule 503 under Regulation D.
(xvii) The
execution, delivery, and performance by Wentworth of this Agreement, the
Transaction Documents, the Escrow Documents and the Related Agreements, and
the
offer and sale of the Units require no consent of, action by or in respect
of,
or filing with, any person or Governmental Entity other than those consents
that
have been obtained and filings that have been made pursuant to applicable state
securities laws and post-sale filings pursuant to applicable state and federal
securities laws, which Wentworth undertakes to file within the applicable time
period.
(xviii) All
disclosure provided to you and Omnia Luo regarding Wentworth, its business
and
the transactions contemplated hereby, furnished by or on behalf of Wentworth
(including the disclosures, representations and warranties made by each of
the
parities to the Exchange Agreement) are true and correct and do not contain
any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
(xix) Except
as
set forth on Schedule 2(b)(xix), other than pursuant to this Agreement, there
are no brokers, representatives or other persons which have an interest in
commissions or other compensation payable by Wentworth in connection with the
transactions contemplated hereunder.
| 3. |
Representations
and Warranties of the Placement Agent.
|
The
Placement Agent represents and warrants to, and agrees with, Omnia Luo and
Wentworth that as of the date hereof and the Closing Date:
(a) The
Placement Agent has been duly organized and validly existing and in good
standing as a limited liability company under the laws of the State of Delaware
with power and authority (corporate and other) to perform its obligations under
this Agreement and the Escrow Documents; the Placement Agent is a broker-dealer
registered and in good standing under the Exchange Act and under the securities
or Blue Sky laws of each state, where required by applicable law, in which
the
Units are being offered or sold by the Placement Agent, and the Placement Agent
is a member in good standing of the FINRA; the Placement Agent is in possession
of and operating in compliance with all authorizations, licenses, permits,
consents, certificates, and orders required for the performance of its duties
under this Agreement and the Escrow Documents, and the Placement Agent’s
performance of its duties hereunder and thereunder will be in compliance with
all applicable laws, including state securities and Blue Sky laws.
(b) There
are
no legal or governmental proceedings pending to which the Placement Agent is
a
party or of which any of its properties is the subject or, to the Placement
Agent’s knowledge, threatened, which, if determined adversely to the Placement
Agent, would individually or in the aggregate materially and adversely affect
its ability to perform its obligations under this Agreement or the Escrow
Documents.
(c) No
consent, approval, authorization or order of any court or governmental authority
or agency is required for the performance by the Placement Agent of its
obligations under this Agreement, except such as may be required by the FINRA
or
under Regulation D or state securities or Blue Sky laws.
(d) This
Agreement has been duly and validly executed and delivered by or on behalf
of
the Placement Agent and constitutes a legal, valid, and binding obligation
of
the Placement Agent enforceable in accordance with its terms, except to the
extent that its enforceability is limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium, or other laws of general application
relating to or affecting the enforcement of creditors’ rights generally, and
(ii) laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies and except as enforceability of the
indemnity and contribution provisions contained in Section 7 hereof may be
limited by applicable law or principles of public policy.
17
(e) The
Escrow Documents, when executed and delivered by or on behalf of the Placement
Agent, shall constitute a legal, valid, and binding obligation of the Placement
Agent enforceable in accordance with its terms, except as such enforceability
may be limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium, or other laws of general application relating to or affecting
enforcement of creditors’ rights generally and (ii) laws relating to the
availability of specific performance, injunctive relief, or other equitable
remedies.
| 4. |
Offering
and Sale of the Units.
|
(a) On
the
basis of the representations, warranties, and covenants herein contained, but
subject to the terms and upon the conditions herein set forth, the Placement
Agent is hereby appointed the Placement Agent of Omnia Luo and Wentworth on
an
exclusive basis during the Offering Period for the purpose of finding
subscribers for the Units on a best-efforts basis for the account of Wentworth
(conditioned upon closing of the Exchange Agreement) at $25,000 per Unit
(“Offering
Price”)
to an
unlimited number of “accredited
investors”
(as
such term is defined in Rule 501 of Regulation D) (“Accredited
Investors”)
pursuant to and in accordance with the Securities Act. The minimum subscription
amount per subscriber will be $25,000 unless Omnia Luo agrees to accept a lesser
amount. Subject to the performance by Omnia Luo and Wentworth of all their
respective obligations to be performed hereunder, and to the completeness and
accuracy of all the representations and warranties contained herein, the
Placement Agent hereby accepts such agency and agrees on the terms and
conditions herein set forth to use its best efforts during the Offering Period
to find subscribers for the Units at the Offering Price.
(b) Each
Investor desiring to purchase Units will be required to: (i) complete, execute,
and deliver to the Placement Agent an executed copy of a Securities Purchase
Agreement in the form attached as Exhibit A
hereto
together with an Investor Questionnaire, and (ii) deliver to the Escrow Agent
payment for such purchase in the form of a wire transfer of immediately
available funds in the amount that the Investor desires to purchase in
accordance with the wire transfer instructions set forth in the Securities
Purchase Agreement. Any payment received that is not accompanied or preceded
by
the required documentation will be returned to an Investor by the end of the
next business day following receipt. The Escrow Agent, upon receipt of such
funds, will hold the funds in an escrow account pursuant to the Escrow
Documents. The Placement Agent shall promptly forward each executed Securities
Purchase Agreement received to Omnia Luo for acceptance or rejection, together
with a schedule setting forth the name and address of each subscriber and the
amount received from each subscriber. The Placement Agent acknowledges that
Omnia Luo may limit its acceptance of subscriptions in any manner it deems
prudent and may reject any subscription for any reason, and the Placement Agent
agrees that any such rejection of a subscription obtained by the Placement
Agent
or by the Participating Agent shall be deemed not to be a sale made by the
Placement Agent or by the Selected Dealers.
(c) In
the
event that acceptable subscriptions for $4,000,000 in aggregate principal amount
of the Units (the “Minimum
Amount”)
shall
not have been received and accepted by the Placement Agent and accepted by
Omnia
Luo at the end of the Offering Period, all funds received from subscribers
(if
any) shall be returned in full, and the Placement Agent’s agency and this
Agreement shall terminate without any obligation on their part or on the part
of
Omnia Luo or Wentworth.
(d) If
the
Placement Agent has received subscriptions for the Minimum Amount and such
subscriptions have been accepted by Omnia Luo (in its sole discretion) and
the
other conditions to Closing of the Offering have been satisfied, the Placement
Agent shall promptly notify Omnia Luo in writing of the aggregate amount of
Units for which the Placement Agent has received subscriptions (the
“Notice
Date”).
Payment of the purchase price for the Units, and delivery, with respect to
each
subscriber for the Units, of a copy of a Securities Purchase Agreement signed
by
such subscriber (the “Closing”),
shall
then be made at such place and time as shall be agreed upon between the
Placement Agent and Omnia Luo, no later than the fifth full business day after
the Notice Date (the “Closing
Date”).
The
Placement Agent shall use its commercial best efforts, subject to the terms
and
conditions of this Agreement, to expedite the occurrence of the Closing within
14 days following completion of the road show for the Offering.
(e) As
compensation for the Placement Agent’s services, Omnia Luo will pay the
Placement Agent a cash fee (“Fee”)
with
respect to all subscriptions as to which the payments and deliveries provided
for in this Section 4 are made at the Closing Date equal to 7.75% of the gross
proceeds from the Offering. Such cash Fees shall be paid to the Placement Agent,
in immediately available funds, pursuant to a mutually agreeable disbursement
schedule provided to Omnia Luo by the Placement Agent prior to the Closing
Date.
18
(f) [reserved]
(g) In
addition, Omnia Luo agrees to pay the Placement Agent a non-accountable expense
allowance (“Allowance”)
equal
to 1.5% of the gross proceeds from the Offering. Omnia Luo has paid to the
Placement Agent a $15,000 non-refundable advance against the Allowance prior
to
the date of this Agreement. Such Allowance (less any advance previously paid)
shall be paid to the Placement Agent, on the Closing Date by bank wire transfer
payable in immediately available funds.
(h) Omnia
Luo
will pay all costs and expenses incurred by it related to the Offering and/or
the performance of Omnia Luo’s obligations under this Agreement, including
preparation and distribution of the Memorandum and related documentation,
accounting fees, legal fees, experts’ fees, consultants’ fees, escrow fees,
filing fees with the SEC and applicable states, any costs and expenses to
qualify the Shares and Warrants for sale in any state, any all costs and
expenses (including travel) for investor or road show presentations (the latter
subject to budget or guidelines to be established by mutual agreement between
it
and the Placement Agent), and any and all costs and expenses incurred by the
Placement Agent in connection with the preparation of closing books. Except
for
the specific roadshow and related travel expenses of Placement Agent set forth
above, Omnia Luo shall not be responsible for any expenses of the Placement
Agent or any Selected Dealers (as hereinafter defined) incurred in connection
with the Offering, including, but without limitation, attorneys’ fee, operating
expenses, travel expenses and other incidental expenses incurred by the
Placement Agent or any Selected Dealers.
(i) Neither
the Placement Agent, Omnia Luo, Wentworth nor any Selected Dealer (as
hereinafter defined) shall, directly or indirectly, pay or award any finder’s
fees, commissions or other compensation to any person engaged by a potential
investor for investment advice as an inducement to such advisor to advise the
purchase of the Units; provided, however, that normal sales commissions payable
to a registered broker-dealer or other properly licensed person for selling
the
Units shall not be prohibited hereby.
(j) As
additional compensation, Wentworth will issue to the Placement Agent or its
designee on the Closing Date a Common Stock purchase warrant (the “Agent
Warrants”)
in the
form attached hereto as Exhibit C
granting
such party the right to purchase from Wentworth for a period commencing after
the Closing Date and ending five years after the Closing Date, a number of
shares of Common Stock equal to 10% of the number of the Shares purchased at
the
Closing. Such Agent Warrants shall be issued by Wentworth to the Placement
Agent
in accordance with the Placement Agent’s instructions, for an issue price of
$.0001 per warrant. The Agent Warrants shall be exercisable at an exercise
price
equaling $1.5625 per share. Such Agent Warrants shall not be redeemable by
Wentworth and may be exercised on a cashless or net-issuance basis. Wentworth
hereby grants the same registration rights to the Placement Agent or its
designees with respect to the shares of Common Stock underlying the Agent
Warrants as are granted to Investors with respect to the Warrants as set forth
in this Agreement and the Common Stock issuable upon exercise of the Warrants
shall be registered on the Initial Registration Statement (as defined in the
Registration Rights Agreement), subject to such cutback or registration priority
provisions set forth the Registration Rights Agreement.
(k) In
connection with the Offering, the Placement Agent will, to the extent within
its
control or subject to its oversight or supervision, conduct the Offering in
accordance with the applicable provisions of the Securities Act and Regulation
D
so as to preserve for Omnia Luo the exemption provided by Rule 506 of Regulation
D. The Placement Agent agrees not to offer or sell the Units by means of (i)
any
means of general solicitation, including any advertisement, article, notice,
or
other communication published in any newspaper, magazine, or similar media
or
broadcast over television or radio or (ii) any seminar or meeting, whose
attendees have been invited by any general solicitation or general advertising.
Prior to the sale of any of the Units, the Placement Agent will have reasonable
grounds to believe, and in fact believe, that each subscriber for the Units
is
an Accredited Investor. The Placement Agent agrees not to disclose any material
nonpublic information regarding Omnia Luo to any subscriber except as such
disclosure may be permitted pursuant to Regulation FD, or is included in the
Memorandum, or is otherwise agreed to in writing in advance by Omnia Luo.
(l) In
connection with the performance of its obligations under this Agreement, the
Placement Agent may engage, for the account of Omnia Luo, the services of one
or
more broker-dealers (“Selected
Dealers”)
who
are members of FINRA (as well as foreign broker-dealers who are not members
of
FINRA pursuant to FINRA Rule 2420) and who are acceptable to Omnia Luo, and,
as
compensation for their services, shall pay to such Selected Dealers an amount
to
be negotiated between the Placement Agent and such Selected Dealers. Such amount
will be paid to the Selected Dealers by the Placement Agent only out of the
cash
fees received by you in respect of sales of the Units as described in paragraph
(e) of this Section 4, and Omnia Luo shall have no obligation to any Selected
Dealers respecting any such payment. The arrangements, if any, between Omnia
Luo, you, and any Selected Dealer shall be set forth in an Selected Dealer
Agreement (“Selected
Dealer Agreement”),
which
shall provide, among other things, that such Selected Dealer shall be deemed
to
have agreed to the matters set forth herein as if the Selected Dealer were
a
signatory hereof. Nothing contained in this Agreement or in the Selected Dealer
Agreement shall be deemed to constitute the Selected Dealers, if any, as agents
of the Placement Agent, and the Placement Agent shall not be liable to Omnia
Luo
in respect of the performance by the Selected Dealers, if any, of any
representations, warranties or covenants of such Selected Dealers contained
herein or in the Selected Dealer Agreement, provided, however, that the
Placement Agent shall have exercised reasonable care in its selection and
monitoring of the activities of such Selected Dealers.
19
| 5. |
Covenants
and Agreements of Omnia Luo and Wentworth.
|
Omnia
Luo
and Wentworth severally and not jointly prior to the consummation of the
transactions contemplated in the Exchange Agreement, and jointly and severally
after the consummation of the transactions contemplated in the Exchange
Agreement, covenant and agree with the Placement Agent that:
(a) Except
as
contemplated or described in this Agreement, the Exchange Agreement or in a
public disclosure made prior to the date hereof, neither Omnia Luo nor Wentworth
will, prior to the Closing Date, incur any material liability or obligation,
direct or contingent, or enter into any material transaction, in each case,
other than in the ordinary course of business. Neither Omnia Luo nor Wentworth
will, prior to the Closing Date, declare or pay any dividend on its shares
of
common or preferred stock or any distribution on its common or preferred stock
payable to stockholders of record on a date prior to the Closing Date.
(b) Omnia
Luo
and Wentworth will cooperate with the Placement Agent to enable the Shares
and
Warrants to be qualified for sale under the securities laws of such
jurisdictions as the Placement Agent may designate, subject to approval by
Omnia
Luo, and at the Placement Agent’s request Wentworth will make such applications
and furnish such information as may be required of it for that purpose;
provided, however, that the Placement Agent and Omnia Luo shall first determine
whether an exemption from registration other than the Uniform Limited Offering
Exemption (ULOE) or a similar exemption is available in each such jurisdiction
and Wentworth shall not be required to qualify to do business or to file a
general consent to service of process in any such jurisdiction or to subject
itself to taxation. Wentworth will, from time to time, prepare and file all
applications, forms and documents required in each jurisdiction where the Shares
and Warrants are to be qualified or registered or qualified or offered in an
exempt transaction under the state securities laws, and Wentworth will continue
such qualifications in effect for so long a period as the Placement Agent may
reasonably request for the distribution of the Shares and Warrants. Wentworth
shall provide the Placement Agent with copies of all applications, forms and
documents filed in each jurisdiction.
(c)
Omnia
Luo will make available to the Placement Agent and each purchaser of the Units
at a reasonable time prior to the Closing Date the opportunity to ask questions
and receive answers concerning the terms and conditions of the Offering and
to
obtain any additional information that Omnia Luo possess or can acquire without
unreasonable effort or expense that is necessary to verify the accuracy of
any
information in the Memorandum relating to Omnia Luo or otherwise furnished
by
Omnia Luo to the Placement Agent or any purchaser of the Units.
(d) Wentworth
or its counsel will prepare and file a Form D (and any and all amendments or
supplements thereto) with the SEC in timely manner and deliver copies thereof
to
the Placement Agent, together with copies of all forms (including without
limitation, Form Ds) and other documents and/or materials filed either before
or
after the Closing, and comply with Regulation D and all applicable state Blue
Sky laws and make any fillings required by the SEC and state securities
authorities in a timely manner.
(e) Wentworth
will not offer or sell any securities of Wentworth that are of the same or
a
similar class as the Shares and Warrants for a period of six months after the
Closing Date, other than those offers or sales of securities under an employee
benefit plan as defined in Rule 405 under the Securities Act, in connection
with
options, warrants, or convertible securities outstanding as of the Closing
Date,
or in connection with an acquisition of assets or another business by Wentworth,
if such offering will be integrated with the Offering of the Shares and Warrants
pursuant to this Agreement for purposes of the exemptions under Regulation
D, so
as to invalidate the exemption from registration relied on to offer and sell
the
Shares and Warrants.
(f) For
a
period of at least 24 months following the Closing Date, Wentworth will maintain
the registration of Wentworth’s common stock under Section 12 of the Exchange
Act so long as the Exchange Act requires it to be so registered, will comply
in
all respects with its reporting and filing obligations under the Exchange Act,
and will not take any action or file any document (whether or not permitted
by
the Exchange Act or the rules thereunder) to terminate or suspend such
registration or to terminate or suspend its reporting and filing obligations
under said Act unless required to do so by the Exchange Act.
20
(g) For
a
period of at least 24 months following the Closing Date, Wentworth will use
its
best efforts (i) to timely file all reports required to be filed by Wentworth
under the Securities Act and the Exchange Act (including the reports pursuant
to
Section l3(a) or 15(d) of the Exchange Act referred to in subparagraph (c)(1)
of
Rule 144) and the rules and regulations adopted by the Commission thereunder),
(ii) if Wentworth is not required to file reports pursuant to such sections,
Wentworth will prepare and furnish to the purchasers of the Shares and Warrants
and make publicly available in accordance with Rule 144(c) such information
as
is required for the purchasers to sell the shares underlying the Shares and
Warrants under Rule 144, and (iii) to take such further action as any holder
of
the Shares and Warrants may reasonably request, all to the extent required
from
time to time to enable the purchasers to sell shares underlying the Shares
and
Warrants without registration under the Securities Act within the limitation
of
the exemptions provided by Rule 144, including causing its attorneys to issue
and deliver any appropriate legal opinion required to permit a purchaser to
sell
shares underlying the Shares and Warrants under Rule 144 upon receipt of
appropriate documentation relating to such sale.
(h) Omnia
Luo
and Wentworth shall use commercially reasonable efforts to consummate the
Transactions.
(i) Before
any party to this Agreement releases any information referring to another
party’s role in the Offering or uses another party’s name in a manner which may
result in public dissemination thereof, the prospective releaser shall furnish
drafts of all documents or prepared oral statements to the other party for
comments, and shall not release any information relating thereto without the
prior written consent of the other party. Nothing herein shall prevent a party
hereto from releasing any information to the extent that such release is
required by law, rule or regulation.
6. Memorandum.
Omnia
Luo warrants and represents to the Placement Agent that the Memorandum, and
any
amendments or supplements thereto, as of the date hereof, and at all subsequent
times through the Closing, together with all other information concerning Omnia
Luo provided to the Placement Agent in connection with the Offering, shall
in
all material respects conform to any applicable provisions of the Securities
Act, the rules and regulations under the Securities Act and state securities
laws, and shall not contain any untrue statement of a material fact or omit
to
state any material fact required to be stated therein or necessary to make
the
statements therein not misleading, in light of the circumstances under which
they were made. Wentworth warrants and represents to the Placement Agent and
Omnia Luo that all information concerning Wentworth provided to Omnia Luo or
the
Placement Agent for use in the Memorandum or otherwise in connection with the
Offering, shall in all material respects conform to any applicable provisions
of
the Securities Act, the rules and regulations under the Securities Act and
state
securities laws, and shall not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
to
make the statements therein not misleading, in light of the circumstances under
which they were made.
7. Indemnification
and Contribution.
(a) Omnia
Luo
agrees to indemnify and hold harmless the Placement Agent, each Selected Dealer,
and each person, if any, who controls the Placement Agent or such Selected
Dealer within the meaning of the Securities Act (the “Placement
Agent Indemnified Parties”),
along
with the agents and advisors of such Indemnified Parties, against any losses,
claims, damages, liabilities, or expenses (including, unless Omnia Luo elects
to
assume the defense as hereinafter provided, the reasonable cost of investigating
and defending against any claims therefor and counsel fees incurred in
connection therewith), joint or several, which arise out of Omnia Luo’s breach
of a representation or warranty or covenant or agreement contained in this
Agreement (it being understood that in the event the Transactions are not
completed, Omnia Luo shall not provide any indemnity or contribution with
respect to breaches by Wentworth). Omnia Luo will be entitled to participate
at
its own expense in the defense, or if it so elects, to assume the defense of
any
suit brought to enforce any such liability, but, if Omnia Luo elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
reasonably acceptable to the indemnified parties. In the event Omnia Luo elects
to assume the defense of any such suit and retain such counsel, the Placement
Agent Indemnified Parties may retain additional counsel but shall bear the
fees
and expenses of such counsel unless (i) Omnia Luo shall have specifically
authorized in writing the retaining of such counsel (ii) the Placement
Agent Indemnified Parties and Omnia Luo have been advised by counsel that one
or
more material legal defenses may be available to the Placement Agent Indemnified
Parties that may not be available to Omnia Luo in which case the Placement
Agent
Indemnified Parties shall have the right to employ separate counsel to represent
them and assume their defense (in which case, Omnia Luo’s counsel shall not
represent them). In no event shall Omnia Luo be liable for the fees and expenses
of more than one counsel for all the Placement Agent Indemnified Parties in
connection with any one action or separate but similar or related actions in
the
same jurisdiction arising out of the same general allegations or circumstances.
Omnia Luo shall not be required to indemnify any person for any settlement
of
any such claim effected without Omnia Luo’s consent, which shall not be
unreasonably withheld. Omnia Luo shall not, without an indemnified party’s
consent, consent to the entry of any judgment or enter into any settlement
that
does not include as an unconditional term thereof, the giving by the claimant
or
plaintiff to such indemnified party of a release from all liability in respect
of such claim or litigation. This indemnification obligation will be in addition
to any primary liability that Omnia Luo might otherwise have.
21
(b) The
Placement Agent agrees (and each Selected Dealer shall pursuant to their
individual Selected Dealer agreement jointly and severally agree) to indemnify
and hold harmless Omnia Luo, each of Omnia Luo’s officers, directors and each
other person, if any, who controls Omnia Luo within the meaning of the
Securities Act (the “Omnia
Luo Indemnified Parties”),
against any losses, claims, damages, liabilities, or expenses (including, unless
the Placement Agent, or such Selected Dealer elects to assume the defense,
the
reasonable cost of investigating and defending against any claims therefor
and
counsel fees incurred in connection therewith), which (i) arise out of any
untrue statement of a material fact with respect to Omnia Luo made by the
Placement Agent or such Selected Dealer to any purchaser of Shares and Warrants
not contained in an Exchange Act Document, the Memorandum or other written
material provided to the Placement Agent or such Selected Dealer by Omnia Luo,
(ii) arise out of any acts or omissions by the Placement Agent, any
Selected Dealer, or any purchaser of the Shares or Warrants that cause the
offering to involve a public offering under the Securities Act or such party’s
failure to be properly licensed to sell the Shares or Warrants, or
(iii) arise out of such party’s breach of a representation or warranty or
covenant or agreement contained in this Agreement; provided, however, that
in no
case shall the Placement Agent or any Selected Dealer be liable with respect
to
any claims made against any Omnia Luo Indemnified Parties or any such person
against whom the action is brought unless Omnia Luo or such person shall have
notified the Placement Agent or such Selected Dealer, as the case may be, in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon Omnia
Luo or such person, if such failure materially and adversely prejudices the
indemnifying party, and failure to provide such notification shall not relieve
the Placement Agent or such Selected Dealer from any liability that the
Placement Agent or such Selected Dealer may have to Omnia Luo or such person
otherwise than on account of the indemnity agreement contained in this
paragraph. The Placement Agent or such Selected Dealer shall be entitled to
participate at its expense in the defense, or if the Placement Agent or such
Selected Dealer so elect, to assume the defense of any suit brought to enforce
any such liability, but, if the Placement Agent or such Selected Dealer elect
to
assume the defense, counsel chosen by the Placement Agent or such Selected
Dealer and reasonably acceptable to Omnia Luo shall conduct such defense. In
the
event that the Placement Agent or such Selected Dealer elect to assume the
defense of any such suit and retain such counsel, Omnia Luo, said officers
and
directors and any person or persons, defendant or defendants in the suit, may
retain additional counsel but shall bear the fees and expenses of such counsel
unless (i) the indemnifying parties shall have specifically authorized the
retaining of such counsel, (ii) the parties to such suit include the
Placement Agent, such Selected Dealer, or such controlling person or persons,
and Omnia Luo and the Placement Agent, such Selected Dealer, or such controlling
person or persons have been advised by counsel that one or more material legal
defenses may be available to Omnia Luo that may not be available to the
Placement Agent or them, in which case the Omnia Luo Indemnified Parties shall
have the right to employ separate counsel to represent them and assume their
defense (in which case, the Placement Agent or Selected Dealer’s counsel shall
not represent them). The Placement Agent or such Selected Dealer shall not
be
liable to indemnify any person for any settlement of any such claim effected
without its consent, which consent shall not be unreasonably withheld. The
Placement Agent or any Selected Dealer shall not, without the consent of Omnia
Luo, consent to entry of any judgment or enter into any settlement that does
not
include as an unconditional term thereof, the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
of such claim or litigation. This indemnification obligation will be in addition
to any primary liability that the Placement Agent or any Selected Dealer might
otherwise have.
(c) If
the
indemnification provided for in this Section 7 is unavailable, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities
or
expenses (or actions in respect thereof) in such proportion as is appropriate
to
reflect not only the relative benefits received by Omnia Luo on one hand and
the
Placement Agent and the Selected Dealers, if any, on the other from the
Offering, but also the relative fault of Omnia Luo on the one hand and the
Placement Agent and the Selected Dealers, if any, on the other in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities, or expenses (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by Omnia
Luo
on the one hand and the Placement Agent and the Selected Dealers, if any, on
the
other, shall be deemed to be in the same proportion as the total gross proceeds
from the Offering (before deducting expenses) received by Omnia Luo, bear to
the
total cash fees received by the Placement Agent and the Selected Dealers, if
any, pursuant to Section 4(e) and the value of the Agent Warrant issued to
the
Placement Agent and the Selected Dealers, if any, pursuant to Section 4(i)
(collectively, the “Placement
Agent Proceeds”).
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
Omnia Luo, the Placement Agent, or a Selected Dealer, the party’s relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission, and whether a party breached a representation or
warranty or covenant or agreement contained in this Agreement. Omnia Luo and
the
Placement Agent and the Selected Dealers agree that it would not be just and
equitable if contribution were determined by pro rata allocation or by any
other
method of allocation which does not take account of the equitable considerations
referred to above. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or expenses (or actions
in
respect thereof) referred to above shall be deemed to include any legal or
other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such claim. 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.
22
(d) The
indemnification required by this Section 7 shall be made by periodic payments
of
the amount thereof during the course of the investigation or defense, as and
when bills are received or such losses, claims, damages, liabilities, or
expenses are incurred.
(e) Notwithstanding
anything to the contrary contained in this Agreement: (i) the Placement
Agent and the Selected Dealers shall not be liable for any special, exemplary
or
punitive damages and (ii) the maximum amount of any indemnifiable losses,
claims, damages, liabilities, or expenses which may be recovered from either
the
Placement Agent or the Selected Dealers, in the aggregate, shall equal the
Placement Agent Proceeds received by such indemnifying party.
8. Survival
of Indemnities, Representations, Warranties, etc.
The
respective representations and warranties of the Placement Agent, Omnia Luo
and
Wentworth as set forth in this Agreement or made by them respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless of any
investigation made by or on behalf of the Placement Agent, Omnia Luo, or any
of
the officers or directors of Omnia Luo or any controlling person, and shall
survive delivery of and payment for the Units for 24 months following the
Closing.
9. Conditions
of the Placement Agent’s Obligations.
The
Placement Agent’s obligations hereunder are subject to: (i) the
representations and warranties made by Omnia Luo in Sections 2(a) and 6 shall
be
true and correct in all material respects at and as of the date hereof (except
for such representations and warranties qualified by materiality, which shall
be
true and correct in all respects and except for such representation and
warranties qualified by an other date, which shall be true and correct as of
such other date); (ii) the representations and warranties made by Omnia Luo
and Wentworth in Sections 2(a), 2(b) and 6 shall be true and correct in all
material respects at and as of the Closing Date (except for such representations
and warranties qualified by materiality, which shall be true and correct in
all
respects and except for such representation and warranties qualified by an
other
date, which shall be true and correct as of such other date); (iii) the
compliance in all material respects at and as of the Closing Date by Omnia
Luo
and Wentworth with its covenants and agreements contained herein and in any
other Transaction Document, Escrow Document, as applicable, or Related
Agreement, and other provisions hereof and thereof to be satisfied at or prior
to the Closing Date; and (iv) the following additional
conditions:
(a) The
Transactions (other than the sale of Units) shall have been
consummated.
(b) The
Placement Agent shall have received a certificate, dated the Closing Date,
on
behalf of Wentworth by the Chief Executive Officer or the President and the
Chief Financial or Accounting Officer of Wentworth to the effect
that:
(i) The
representations and warranties in Sections 2(a), 2(b) and 6 are true and correct
in all material respects at and as of the Closing Date (except for such
representations and warranties qualified by materiality, which shall be true
and
correct in all respects and except for such representation and warranties
qualified by an other date, which shall be true and correct as of such other
date), and Omnia Luo and Wentworth has complied with all the agreements and
satisfied in all material respects all the conditions on its part to be
performed or satisfied at or prior to the Closing Date;
(ii) The
Transactions (other than the sale of Units) have been consummated;
(iii) The
representations and warranties of Wentworth contained in the Securities Purchase
Agreement entered into with the Investors are true and correct in all material
respects as of the date of such certificate (except for such representations
and
warranties qualified by materiality, which shall be true and correct in all
respects and except for such representation and warranties qualified by another
date, which shall be true and correct as of such other date);
23
(iv) Between
the date of this Agreement and the Closing Date, no litigation has been
instituted or, to the knowledge of Wentworth, threatened in writing against
Omnia Luo or Wentworth; and
(v) Between
the date of this Agreement and the Closing Date, there has not been any material
adverse change in the financial condition, business, prospects or results of
operations of Omnia Luo or Wentworth.
(c) Registration
Rights Agreement. Wentworth shall have entered into the Registration Rights
Agreement with the purchasers of Units, certain other stockholders of Wentworth,
certain shareholders of Omnia Luo who will become stockholders of Wentworth,
and
the Placement Agent.
(d) Wentworth
shall have accepted subscriptions in such amount as mutually determined by
Wentworth and the Placement Agent, but not less than the Minimum Amount.
(e) The
conditions set forth in the Securities Purchase Agreement between Wentworth
and
each Investor shall have been satisfied.
(f) The
Placement Agent shall have received an Opinion of Omnia Luo’s US. counsel, as to
matters reasonably requested by the Placement Agent.
(g) Wentworth
shall have filed the Proxy/Information Statement contemplated by the Exchange
Agreement with the SEC.
(h) Wentworth
shall have obtained all consents, waivers and approvals required in connection
with the consummation of the transactions contemplated by the Offering, other
than consents, waivers and approvals the absence of which, either alone or
in
the aggregate would not reasonably be expected to have a Material Adverse
Effect.
(i) If
the
Closing Date occurs after November 13, 2007, on or prior to the Closing Date,
Omnia Luo shall have delivered to the Placement Agent a complete copy of the
unaudited financial statements (including any related notes thereto) of Omnia
Luo and each member of the Group, on a consolidated basis, for the three-month
period ended September 30, 2007 (the “September
Financial Statements”),
prepared in accordance with US. GAAP applied on a consistent basis throughout
such period (except as may be indicated in the notes thereto), and reviewed
by
an independent accountant registered with PCAOB, and the September Financial
Statements shall fairly present in all material respects the financial position
of Omnia Luo and the members of the Group, on a consolidated basis, at September
30, 2007 and the results of its operations and cash flows for such period,
except that such unaudited interim financial statements may be subject to normal
adjustments which do not have, and are not expected to have, a Material Adverse
Effect on any of the Affiliated Companies.
(j) Immediately
prior to Closing, Wentworth shall be in compliance with the reporting
requirements under the Exchange Act.
If
any of
the conditions provided for in this Section 9 shall not have been satisfied
when
and as required by this Agreement, and such conditions are not capable of being
satisfied during the Offering Period (inclusive of all extensions which may
be
effected by Omnia Luo under this Agreement without consent of the Placement
Agent), then this Agreement may be terminated by the Placement Agent by
notifying Omnia Luo of such termination in writing at or prior to the Closing
Date, but the Placement Agent shall be entitled to waive any of such conditions.
10. Effective
Date.
This
Agreement shall become effective at 11: 00 AM., New York time, on the date
hereof (the “Effective
Time”).
11. Termination.
In the
event of any termination of this Agreement under this or any other provision
of
this Agreement, there shall be no liability of any party to this Agreement
to
any other party, other than as provided in Sections 7 and 8, and this Section
11. This Agreement may be terminated after the Effective Time by (a) Omnia
Luo for any reason by notice to the Placement Agent, and (b) the Placement
Agent by notice to Omnia Luo (i) if, Omnia Luo shall materially breach any
of its representations and warranties in this Agreement or shall fail to fulfill
its covenants and agreements contained in this Agreement on or prior to the
end
of the Offering Period; (ii) if at or prior to the Closing Date there shall
have been a material escalation of hostilities between the United States and
any
foreign country (other than Iraq), or any other material insurrection or armed
conflict involving the United States which, in the reasonable judgment of the
Placement Agent after consultation with Omnia Luo, makes it impracticable or
inadvisable to offer or sell the Share and Warrants; or (iii) if there
shall be any material litigation or regulatory action, pending or threatened
in
writing against or involving Omnia Luo, which, in the reasonable judgment of
the
Placement Agent after consultation with Omnia Luo, makes it impracticable or
inadvisable to offer or deliver the Units on the terms contemplated by this
Agreement. This Agreement shall automatically terminate at the end of the
Offering Period in the absence of a Closing. Section 12 of this Agreement shall
automatically terminate on the first anniversary of the Closing
Date.
24
If,
and
only if, Omnia Luo terminates this Agreement after it becomes effective for
any
reason (other than the Placement Agent’s material failure to comply with its
obligations under this Agreement or material breach of its representations
and
warranties) or the Offering fails to close because of Omnia Luo’s material
breach of any representations or warranties contained in this Agreement or
Omnia
Luo’s failure in any material respect to fulfill its covenants and agreements
contained in this Agreement, Omnia Luo shall pay the Placement Agent its actual
out-of-pocket expenses incurred (less than amount of the advance of the
Allowance paid under Section 4(g)).
12. Confidentiality.
The
Placement Agent agrees to treat confidentially any material nonpublic
information that is furnished to the Placement Agent (or to parties acting
on
their behalf) by or on behalf of Omnia Luo (the “Information”)
until
such time as such Information is disclosed to the public (including disclosures
in SEC filings). The Placement Agent agrees that it will use the Information
only for the purposes related to a determination of its willingness to act
as an
exclusive selling agent pursuant to this Agreement, and that the Information
will be kept confidential by them and their partners, members, managers,
officers, directors, employees, agents, and other affiliates (collectively,
the
“Affiliates”),
and
their attorneys and accountants (collectively, the “Professionals”);
provided, however, that the Information may be disclosed to (a) Selected
Dealers, Affiliates and Professionals who need to know such Information for
the
purpose of evaluating or providing services in connection with the Placement
Agent and their clients’ investment in Omnia Luo; provided such parties agree to
be bound by this undertaking, (b) to any federal or state regulatory agency
and their employees, agents, and attorneys (collectively, “Regulators”)
for
the purpose of making any filings with Regulators if disclosure of such
Information is required by law (provided that you advise Omnia Luo in writing
of
the Information to be so disclosed within a reasonable time prior to such
filing), (c) any other person to which Omnia Luo consents in writing prior
to any such disclosure, and (d) any potential Investor or its Affiliates or
Professionals who need to know such Information for the purpose of evaluating
the transaction contemplated hereby, if such Investor has executed a
confidentiality agreement with Omnia Luo, such Investor has agreed to keep
the
Information confidential and to cause its Affiliates and Professionals to keep
the Information confidential, and to refrain from trading in securities of
Wentworth or Omnia Luo
In
the
event that the Placement Agent is requested or required (by oral questions,
documents, subpoena, civil investigation, demand, interrogatories, request
for
information, or other similar process) to disclose to any Governmental Entity
any information supplied to such party, Selected Dealers, its Affiliates, or
its
Professionals in the course of their dealings with Omnia Luo or their respective
representatives, such Placement Agent agrees that it will provide Omnia Luo
with
prompt notice of such request(s) so that Omnia Luo may seek an appropriate
protective order and/or waiver of compliance with the provisions of this
Agreement. It is further agreed that, if a protective order is not obtained,
or
a waiver is not granted hereunder, and such Placement Agent is nonetheless,
in
the opinion of counsel, compelled to disclose information concerning Omnia
Luo
to any Governmental Entity, such Placement Agent may disclose such information
to such Governmental Entity without liability hereunder. Such Placement Agent
will exercise its commercially reasonable efforts, at Omnia Luo’s expense, to
obtain a protective order or other reliable assurance that confidential
treatment will be accorded the Information.
13. Notices.
All
notices or other communications that are required or permitted under this
Agreement shall be in writing and sufficient if delivered by hand, by facsimile
transmission, by registered or certified mail, postage pre-paid, by electronic
mail, or by courier or overnight carrier, to the persons at the addresses set
forth below (or at such other address as any party shall have furnished to
the
other parties in writing), and shall be deemed to have been delivered as of
the
date so delivered:
25
If
to
Omnia Luo: Omnia
Luo
Group Limited
Xxxx
000,
Xxxxxxxx X0,
Xxxxxxxxxxxx
Xxxx Xxxxxxxxxx Xxxx
Xxxxxxx
Xxxxxxxx, Xxxxxxxx, 000000
The
People’s Republic of China
Telephone:
x00 (000) 0000-0000
Facsimile:
x00 (000) 0000-0000
Attention:
Chief Financial Officer
with
a
copy (for informational
purposes
only to: Xxxxxx
Xxxx Xxxxx Raysman & Xxxxxxx LLP
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
XX
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Attention:
Xxxxx X. Xxxxxxx, Esq.
If
to the
Placement Agent (at any time) or to Wentworth (prior to Closing):
Placement
Agent
Address
Telephone:
XXX-XXX-XXXX
Facsimile:
YYY-YYY-YYYY
Attention:
ZZZZZZZ
with
a
copy (for informational purposes
only) to:
Law
Firm
Address
Telephone:
XXX-XXX-XXXX
Facsimile:
YYY-YYY-YYYY
Attention:
ZZZZZZZ
Omnia
Luo
confirms that it has irrevocably appointed Xxxxxx Xxxx Xxxxx Raysman &
Xxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000 (“TRBRS”)]
as
its agent for the receipt of service of process in the United States. Omnia
Luo
agrees that any document may be effectively served on it in connection with
any
action, suit or proceeding in the United States by service on its agent. The
Placement Agent consents and agrees that Omnia Luo may, in its reasonable
discretion, irrevocably appoint a substitute agent for the receipt of service
of
process located within the United States, and that upon such appointment, the
appointment of TRBRS may be revoked.
Any
document shall be deemed to have been duly served if marked for the attention
of
TRBRS at its address as set forth in Section 13 or such other address in the
United States as may be notified to the party wishing to serve the document
and
(a) left at the specified address if its receipt is acknowledged in writing;
or
(b) sent to the specified address by post, registered mail return receipt
requested. In the case of (a), the document will be deemed to have been duly
served when it is left and signed for. In the case of (b), the document shall
be
deemed to have been duly served when received and acknowledged.
If
Omnia
Luo’s agent at any time ceases for any reason to act as such, Omnia Luo shall
appoint a replacement agent having an address for service in the United States
and shall notify the Placement Agent of the name and address of the replacement
agent. Failing such appointment and notification, the holders of a majority
of
the Shares shall be entitled by notice to Omnia Luo to appoint a replacement
agent to act on Omnia Luo’s behalf. The provisions of this Section 13 applying
to service on an agent apply equally to service on a replacement
agent.
14. Successors.
This
Agreement shall inure to the benefit of and be binding upon the Placement Agent,
and Selected Dealers, Omnia Luo, Wentworth and their respective successors
and
legal representatives, except that neither Omnia Luo nor the Placement Agent
may
assign or transfer any of its or their rights or obligations under this
Agreement without the prior written consent of the other; provided, however,
that upon consummation of the Transactions, Wentworth shall succeed to all
of
the rights and assume all of the obligations of Omnia Luo under this Agreement
without the need for further consent of the parties. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any person
other than the persons mentioned in the preceding sentence any legal or
equitable right, remedy or claim under or in respect of this Agreement, or
any
provisions herein contained, this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of
such
persons and for the benefit of no other person; except that the indemnities
of
Omnia Luo contained in this Agreement shall also be for the benefit of the
person or persons, if any, who control the Placement Agent or any Selected
Dealers within the meaning of Section 15 of the Securities Act, and the
Placement Agent’s and any Selected Dealer’s indemnities shall also be for the
benefit of each officer and director of Omnia Luo and the person or persons,
if
any, who control Omnia Luo within the meaning of Section 15 of the Securities
Act.
26
15. Governing
Law: Jurisdiction: Jury Trial.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision
or
rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State
of
New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of
the state and federal courts sitting in The City of New York, Borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction
of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process
and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it
under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or
the
validity or enforceability of any provision of this Agreement in any other
jurisdiction. EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
16. Lock-Up
Agreement.
The
Placement Agent agrees (and shall cause its Affiliates to agree) that during
the
period commencing on the date of this Agreement and ending six months following
the first Effective Date (as defined in the Registration Rights Agreement)
it
will not (i) sell, offer to sell, contract or agree to sell, hypothecate, hedge,
pledge, grant any option to purchase or otherwise dispose of or agree to dispose
of, directly or indirectly, any Common Stock or warrants or other rights to
purchase Common Stock, or (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences
of
ownership of Common Stock, or warrants or other rights to purchase Common Stock,
whether any such transaction is to be settled by delivery of such securities,
in
cash or otherwise (collectively, a “Transfer”).
Notwithstanding the foregoing, the Placement Agent is not subject to this
Section 16 in connection with its market-making operations.
17. Currency.
As used
herein, “Dollar”,
“US
Dollar”
and
“$”
each
mean the lawful money of the United States.
18. Miscellaneous
Provisions.
(a) Severability.
If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or
the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.
(b) Modification,
Amendment or Waiver.
This
Agreement may not be modified or amended except by written agreement executed
by
the parties hereto. No provision hereof may be waived other than by an
instrument in writing signed by the party against whom enforcement is sought.
(c) Number
and Gender of Words.
Whenever the contest so requires, the masculine shall include the feminine
and
neuter, and the singular shall include the plural, and conversely.
(d) Counterparts.
This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party;
provided that a facsimile signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if
the
signature were an original, not a facsimile signature.
27
(e) No
Partnership.
Each of
the parties hereto agree and acknowledge that neither of the Placement Agent
is
a principal of or a partner with, or does not control in any way, Omnia Luo
or
its employees or agents and nothing contained in this Agreement shall be deemed
to create any partnership or other similar arrangement between Omnia Luo and
the
Placement Agent.
(f) Entire
Agreement.
This
Agreement contains the entire understanding between the parties and supersedes
any prior understandings or written or oral agreements between them respecting
the subject matter hereof, including the letter agreement dated January 9,
2007
between Omnia Luo and an affiliate (AAAAAAAA) of the Placement Agent.
(g) Headings.
The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.
(h) No
Third Party Beneficiaries.
This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person.
(i) Further
Assurances.
Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated hereby.
(j) No
Strict Construction.
The
language used in this Agreement will be deemed to be the language chosen by
the
parties to express their mutual intent, and no rules of strict construction
will
be applied against any party.
[Signatures
on following page]
28
If
the
foregoing correctly sets forth our understanding please indicate your acceptance
thereof in the space provided below for that purpose, whereupon this letter
and
your acceptance shall constitute a binding agreement between us.
|
Very
truly yours,
WENTWORTH
II, INC.
|
||
| |
|
|
| By: | /s/ Xxxxx X. Xxxxxxx | |
|
Name: Xxxxx X. Xxxxxxx |
||
| Title: President | ||
| OMNIA LUO GROUP LIMITED | ||
| |
|
|
| By: | /s/ Luo Zheng | |
|
Name: Luo Zheng |
||
| Title: Chief Executive Officer | ||
Accepted
and Agreed:
PLACEMENT
AGENT
By:
/s/
XXXXXXX
Name: XXXXXXX
Title: Partner
Exhibit
A
Securities
Purchase Agreement
Exhibit
A
- Page 1
Exhibit
B
Registration
Rights Agreement
Exhibit B
- Page 1
Exhibit
C
Form
of Agent Warrant
Exhibit C
- Page 1
DISCLOSURE
SCHEDULES TO PLACEMENT AGREEMENT
