Exhibit
1.1
UNDERWRITING AGREEMENT
between
DRAGON
XXXXXXX XXXXXXXXXXXXX LIMITED
(a Cayman Islands exempted limited liability
company)
and
BOUSTEAD SECURITIES, LLC
as Underwriter
DRAGON XXXXXXX XXXXXXXXXXXXX LIMITED
Minimum Offering: $_________
Maximum Offering: $_________
($______ per share)
UNDERWRITING AGREEMENT
________, 2017
Boustead Securities, LLC
000 X Xxxxxxxxx Xxxx., Xxxxx 000
Xx Xxxxxxx, XX 00000
Ladies and Gentlemen:
The undersigned, Dragon
Xxxxxxx Xxxxxxxxxxxxx Limited, a Cayman Islands exempted limited liability company (collectively with its subsidiaries and
affiliates, including, without limitation, all entities disclosed or described in the Registration Statement (as hereinafter defined)
as being subsidiaries or affiliates of the Company, the “Company”), proposes to issue and sell an aggregate
of up to _________ shares of the Company’s Ordinary Shares, par value $0.0001 per share (“Ordinary Shares”),
to investors deemed acceptable by the Company (the “Investors”). The shares of Ordinary Shares to be sold by
the Company are collectively called the “Shares.” Boustead Securities, LLC (“Boustead”) and
Network 1 Financial Securities, Inc. (“Network 1”) have agreed to act, severally and not jointly, on a best
efforts basis, in connection with the offering and sale of the Shares. Boustead has agreed to act as representative of the several
underwriters (in such capacity, the “Representative”) and each of the other underwriters listed on Schedule
A hereto (each, an “Underwriter” and collectively, the “Underwriters”). We understand that
the Representative may engage one or more additional Underwriters or selected dealers for purposes of selling the Shares subject
to the terms hereof.
The Company confirms
its agreement with the Underwriters as follows:
SECTION
1. Representations and Warranties of the Company.
The Company represents,
warrants and covenants to the Underwriters as follows with the understanding that the same may be relied upon by all dealers and
Underwriters in this offering:
(a) Filing
of the Registration Statement. The Company has prepared and filed with the Securities and Exchange Commission (the “Commission”)
a registration statement on Form F-1 (File No. 333-214932), which contains a form of prospectus to be used in connection with the
public offering and sale of the Shares. Such registration statement, as amended, including the financial statements, exhibits and
schedules thereto contained in the registration statement at the time such registration statement became effective, in the form
in which it was declared effective by the Commission under the Securities Act of 1933, as amended (the “Securities Act”),
and the rules and regulations promulgated thereunder (the “Securities Act Regulations”), and including any required
information deemed to be a part thereof at the time of effectiveness pursuant to Rule 430A under the Securities Act, or pursuant
to the Securities Exchange Act of 1934, as amended (collectively, the “Exchange Act”) and the rules and regulations
promulgated thereunder (the “Exchange Act Regulations”), is called the “Registration Statement.”
Any registration statement filed by the Company pursuant to Rule 462(b) under the Securities Act is called the “Rule 462(b)
Registration Statement,” and from and after the date and time of filing of the Rule 462(b) Registration Statement, the
term “Registration Statement” shall include the Rule 462(b) Registration Statement. Such prospectus, in the
form first filed pursuant to Rule 424(b) under the Securities Act after the date and time that this Agreement is executed and delivered
by the parties hereto, or, if no filing pursuant to Rule 424(b) under the Securities Act is required, the form of final prospectus
relating to the Shares included in the Registration Statement at the effective date of the Registration Statement, is called the
“Prospectus.” All references in this Agreement to the Registration Statement, the Rule 462(b) Registration Statement,
the preliminary prospectus included in the Registration Statement (each, a “preliminary prospectus”), the Prospectus,
or any amendments or supplements to any of the foregoing, shall include any copy thereof filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval System (“XXXXX”). The preliminary prospectus dated [·],
2017, that was included in the Registration Statement immediately prior to the Applicable Time (as defined below) is hereinafter
called the “Pricing Prospectus.” Any reference to the “most recent preliminary prospectus” shall
be deemed to refer to the latest preliminary prospectus included in the registration statement. Any reference herein to any preliminary
prospectus or the Prospectus or any supplement or amendment to either thereof shall be deemed to refer to and include any documents
incorporated by reference therein as of the date of such reference.
(b) “Applicable
Time” means [·],
Eastern time, on the date of this Agreement.
(c) Compliance
with Registration Requirements. The Registration Statement has been declared effective by the Commission under the Securities
Act and the Securities Act Regulations. The Company has complied, to the Commission’s satisfaction, with all requests of
the Commission for additional or supplemental information. No stop order preventing or suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement is in effect and no proceedings for such purpose have been instituted or are
pending or, to the best knowledge of the Company, are contemplated or threatened by the Commission.
Each preliminary
prospectus and the Prospectus when filed complied or will comply in all material respects with the Securities Act and, if filed
by electronic transmission pursuant to XXXXX (except as may be permitted by Regulation S-T under the Securities Act), was identical
in content to the copy thereof delivered to the Underwriters for use in connection with the offer and sale of the Shares, other
than with respect to any artwork and graphics that were not filed. Each of the Registration Statement, any Rule 462(b) Registration
Statement, and any post-effective amendment to either the Registration Statement or the Rule 462(b) Registration Statement, at
the time it became effective and at all subsequent times until the expiration of the prospectus delivery period required under
Section 4(3) of the Securities Act, complied and will comply in all material respects with the Securities Act and the Securities
Act Regulations and did not and will 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 therein not misleading. The Prospectus, as amended or supplemented, as
of its date and at all subsequent times until the Underwriters have completed the placement of the offering of the Shares, did
not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading. The representations and warranties
set forth in the two immediately preceding sentences do not apply to statements in or omissions from the Registration Statement
or any Rule 462(b) Registration Statement, or any post-effective amendment to either the Registration Statement or the Rule 462(b)
Registration Statement, or in the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, made in reliance
upon and in conformity with information relating to the Underwriters furnished to the Company in writing through the Representative
expressly for use therein, it being understood and agreed that the only such information furnished on behalf of any of the Underwriters
consists of the information described as such in Section 7 hereof. There are no contracts or other documents required to be described
in the Pricing Prospectus or the Prospectus or to be filed as exhibits to the Registration Statement that have not been fairly
and accurately described in all material respects or filed as required.
(d) Disclosure
Package. The term “Disclosure Package” shall mean (i) the Pricing Prospectus, as amended or supplemented,
(ii) each issuer free writing prospectus, as defined in Rule 433 under the Securities Act (each, an “Issuer Free Writing
Prospectus”), if any, identified in Schedule B hereto, (iii) the pricing terms set forth in Schedule C to this Agreement,
and (iv) any other free writing prospectus that the parties hereto shall hereafter expressly agree in writing to treat as part
of the Disclosure Package. As of the Applicable Time, the Disclosure Package did not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from the Disclosure Package
based upon and in conformity with written information furnished to the Company by the any Underwriter through the Representative
expressly for use therein, it being understood and agreed that the only such information furnished on behalf of any of the Underwriters
(the “Underwriters’ Information”) consists of the information described as such in Section 7 hereof.
(e) Company
Not Ineligible Issuer. (i) At the time of filing the Registration Statement and (ii) as of the date of the execution and delivery
of this Agreement (with such date being used as the determination date for purposes of this clause (ii)), the Company was not and
is not an Ineligible Issuer (as defined in Rule 405 under the Securities Act), without taking account of any determination by the
Commission pursuant to Rule 405 under the Securities Act that it is not necessary that the Company be considered an Ineligible
Issuer.
(f) Issuer
Free Writing Prospectuses. No Issuer Free Writing Prospectus includes any information that conflicts with the information contained
in the Registration Statement, including any document incorporated by reference therein that has not been superseded or modified.
The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity
with written information furnished to the Company by the Representative expressly for use therein, it being understood and agreed
that the only such information furnished by the Representative consists of the information described as such in Section 7 hereof.
(g) Offering
Materials Furnished to the Representative. The Company has delivered to the Representative conformed copies of the Registration
Statement and of each consent and certificate of experts filed as a part thereof, and each preliminary prospectus and the Prospectus,
as amended or supplemented, in such quantities and at such places as the Representative has reasonably requested.
(h) Distribution
of Offering Material By the Company. The Company has not distributed and will not distribute, prior to the completion of the
Underwriters’ placement of the Shares, any offering material in connection with the offering and sale of the Shares other
than a preliminary prospectus, the Prospectus, any Issuer Free Writing Prospectus reviewed and consented to by the Representative,
and the Registration Statement.
(i) The
Underwriting Agreement. This Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement
of, the Company, enforceable in accordance with its terms, except as rights to indemnification hereunder may be limited by applicable
law and except as the enforcement hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors or by general equitable principles.
(j) Authorization
of the Shares. The Shares to be sold by the Company through the Underwriters have been duly and validly authorized by all required
corporate action and have been reserved for issuance and sale pursuant to this Agreement and, when so issued and delivered by the
Company, will be validly issued, fully paid and non-assessable.
(k) No
Applicable Registration or Other Similar Rights. There are no persons with registration or other similar rights to have any
securities of the Company registered for sale under the Registration Statement or included in the offering contemplated by this
Agreement.
(l) No
Material Adverse Change. Except as otherwise disclosed in the Disclosure Package, subsequent to the respective dates as of
which information is given in the Disclosure Package: (i) there has been no material adverse change, or any development that could
reasonably be expected to result in a material adverse change, in the condition, financial or otherwise, or in the earnings, business
or operations, whether or not arising from transactions in the ordinary course of business, of the Company (any such change, a
“Material Adverse Change”); (ii) the Company has not incurred any material liability or obligation, indirect,
direct or contingent, not in the ordinary course of business nor entered into any material transaction or agreement not in the
ordinary course of business; and (iii) there has been no dividend or distribution of any kind declared, paid or made by the Company
in respect of its capital stock.
(m) Independent
Accountant. WWC, P.C. (the “Accountant”), which has expressed its opinions with respect to the audited financial
statements (which term as used in this Agreement includes the related notes thereto) of the Company filed with the Commission as
a part of the Registration Statement and included in the Disclosure Package and the Prospectus, is an independent registered public
accounting firm as required by the Securities Act and the Exchange Act.
(n) Preparation
of the Financial Statements. Each of the historical financial statements of the Company, respectively, filed with the Commission
as a part of the Registration Statement and included in the Disclosure Package and the Prospectus, presents fairly the information
provided as of and at the dates and for the periods indicated. Such financial statements comply as to form with the applicable
accounting requirements of the Securities Act and the Securities Act Regulations and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the periods involved, except as may be expressly stated
in the related notes thereto. No other financial statements or supporting schedules are required to be included or incorporated
by reference in the Registration Statement. Each item of historical financial data relating to the operations, assets or liabilities
of the Company set forth in summary form in each of the preliminary prospectuses and the Prospectus fairly presents such information
on a basis consistent with that of the complete financial statements contained in the Registration Statement. The pro forma financial
statements and the related notes thereto included in the Registration Statement, the Pricing Prospectus and the Prospectus present
fairly the information shown therein, have been prepared in accordance with the Commission’s rules and guidelines with respect
to pro forma financial statements and have been properly compiled on the bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances
referred to therein.
(o) Incorporation
and Good Standing. The Company has been duly incorporated or formed and is validly existing as a corporation, in good standing
under the laws of the jurisdiction of its incorporation and has corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Disclosure Package and the Prospectus and to enter into and perform its obligations
under this Agreement. The Company is duly qualified as a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required. As of the Closing, the Company does not own or control, directly or indirectly,
any corporation, association or other entity.
(p) Capitalization
and Other Capital Stock Matters. The authorized, issued and outstanding capital stock of the Company is as set forth in each
of the Disclosure Package and the Prospectus (other than for subsequent issuances, if any, pursuant to employee benefit plans described
in each of the Disclosure Package and the Prospectus or upon exercise of outstanding options or warrants described in the Disclosure
Package and Prospectus, as the case may be). The Ordinary Shares conform, and, when issued and delivered as provided in this Agreement,
the Shares will conform, in all material respects to the description thereof contained in each of the Disclosure Package and Prospectus.
All of the issued and outstanding shares of Ordinary Shareshave been duly authorized and validly issued, are fully paid and non-assessable
and have been issued in compliance with federal and state securities laws. None of the outstanding shares of Ordinary Shares was
issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities
of the Company. There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights
to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Company
other than those accurately described in the Disclosure Package and the Prospectus. The description of the Company’s stock
option and other stock plans or arrangements, and the options or other rights granted thereunder, set forth in the Disclosure Package
and the Prospectus accurately and fairly presents the information required to be shown with respect to such plans, arrangements,
options and rights.
(q) Non-Contravention
of Existing Instruments; No Further Authorizations or Approvals Required. The Company is not in violation of its certificate
of incorporation, or by-laws or in default (or, with the giving of notice or lapse of time, would be in default) (“Default”)
under any indenture, mortgage, loan or credit agreement, note, contract, franchise, lease or other instrument to which it is a
party or by which it may be bound (including, without limitation, any agreement or contract filed as an exhibit to the Registration
Statement or to which any of the property or assets of the Company are subject (each, an “Existing Instrument”)),
except for such Defaults as would not, individually or in the aggregate, result in a Material Adverse Change. The Company’s
execution, delivery and performance of this Agreement and consummation of the transactions contemplated hereby and by the Disclosure
Package and the Prospectus (i) have been duly authorized by all necessary corporate action and will not result in any violation
of the provisions of the certificate of incorporation or by-laws of the Company, (ii) will not conflict with or constitute
a breach of, or Default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to, or require the consent of any other party to, any Existing Instrument and (iii) will not result
in any violation of any law, administrative regulation or administrative or court decree applicable to the Company. No consent,
approval, authorization or other order of, or registration or filing with, any court or other governmental or regulatory authority
or agency, is required for the Company’s execution, delivery and performance of this Agreement and consummation of the transactions
contemplated hereby and by the Disclosure Package and the Prospectus, except the registration or qualification of the Shares under
the Securities Act and applicable state securities or blue sky laws and from the Financial Industry Regulatory Authority (“FINRA”).
(r) No
Material Actions or Proceedings. Except as otherwise disclosed in the Disclosure Package and the Prospectus, there are no legal
or governmental actions, suits or proceedings pending or, to the Company’s knowledge, threatened (i) against or affecting
the Company, (ii) which have as the subject thereof any officer or director (in such capacities) of, or property owned or leased
by, the Company or (iii) relating to environmental or discrimination matters, where in any such case (A) there is a reasonable
possibility that such action, suit or proceeding might be determined adversely to the Company and (B) any such action, suit or
proceeding, if so determined adversely, would reasonably be expected to result in a Material Adverse Change or adversely affect
the consummation of the transactions contemplated by this Agreement. No material labor dispute with the employees of the Company
exists or, to the Company’s knowledge, is threatened or imminent.
(s) Intellectual
Property Rights. The Company owns, possesses or licenses, and otherwise has legally enforceable rights to use all patents,
patent applications, trademarks, trade names, copyrights, domain names, licenses, approvals and trade secrets (collectively, “Intellectual
Property Rights”) reasonably necessary to conduct its business as now conducted or, otherwise, as disclosed in the Registration
Statement, the Disclosure Package and the Prospectus; and the expected expiration of any of such Intellectual Property Rights would
not be expected to result in a Material Adverse Change. The Company has not received any written notice of infringement or conflict
with asserted Intellectual Property Rights of others. The Company is not a party to or bound by any options, licenses or agreements
with respect to the Intellectual Property Rights of any other person or entity that are required to be set forth in the Disclosure
Package and the Prospectus and are not described in all material respects. None of the technology employed by the Company has been
obtained or is being used by the Company in violation of any contractual obligation binding on the Company or, to the Company’s
knowledge, any of their respective officers, directors or employees or otherwise in violation of the rights of any persons. The
Company is not subject to any judgment, order, writ, injunction or decree of any court or any federal, state, local, foreign or
other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, or any arbitrator, nor
has it entered into nor is it a party to any agreement made in settlement of any pending or threatened litigation, which materially
restricts or impairs its use of any Intellectual Property Rights. The Company has taken reasonable and customary actions to protect
its rights in confidential information and trade secrets and to protect any confidential information provided to it by any other
person.
(t) All
Necessary Permits, etc. Except as otherwise disclosed in the Disclosure Package and the Prospectus, the Company possesses such
valid and current certificates, authorizations or permits issued by the appropriate state, federal or foreign regulatory agencies
or bodies necessary to conduct its business, and the Company has not received any notice of proceedings relating to the revocation
or modification of, or non-compliance with, any such certificate, authorization or permit.
(u) Title
to Properties. The Company has good and marketable title to all the properties and assets reflected as owned by it in the financial
statements referred to in Section 1(n) above (or elsewhere in the Disclosure Package and the Prospectus), in each case free and
clear of any security interest, mortgage, lien, encumbrance, equity, adverse claim or other defect, except such as do not materially
and adversely affect the value of such property and do not materially interfere with the use made or proposed to be made of such
property by the Company. The real property, improvements, equipment and personal property held under lease by the Company are held
under valid and enforceable leases, with such exceptions as are not material and do not materially interfere with the use made
or proposed to be made of such real property, improvements, equipment or personal property by the Company.
(v) Tax
Law Compliance. The Company has filed all necessary federal, state and foreign income and franchise tax returns or has timely
and properly filed requested extensions thereof and has paid all taxes required to be paid by it and, if due and payable, any related
or similar assessment, fine or penalty levied against it. The Company has made adequate charges, accruals and reserves in the applicable
financial statements referred to in Section 1(n) above in respect of all federal, state and foreign income and franchise taxes
for all periods as to which the tax liability of the Company has not been finally determined.
(w) Company
Not an “Investment Company.” The Company is not, and after giving effect to payment for the Shares and the
application of the proceeds as contemplated under the caption “Use of Proceeds” in each of the Disclosure Package and
the Prospectus will not be, required to register as an “investment company” within the meaning of the Investment Company
Act of 1940, as amended (the “Investment Company Act”), and will conduct its business in a manner so that it will not
become subject to registration under the Investment Company Act.
(x) Insurance.
The Company is insured by institutions believed to be recognized, financially sound and reputable, with policies in such amounts
and with such deductibles and covering such risks as the Company reasonably believes are adequate and customary for its business
including, but not limited to, policies covering real and personal property owned or leased by the Company against theft, damage,
destruction and acts of vandalism. The Company reasonably believes that it will be able (i) to renew its existing insurance coverage
as and when such policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate
to conduct its business as now conducted. The Company has not been denied any insurance coverage which it has sought or for which
it has applied.
(y) No
Price Stabilization or Manipulation. The Company has not taken and will not take, directly or indirectly, any action designed
to, or that might be reasonably expected to cause or result in, stabilization or manipulation of the price of any securities of
the Company to facilitate the sale or resale of the Shares.
(z) Related
Party Transactions. There are no business relationships or related-party transactions involving the Company or any other person
required to be described or filed in the Registration Statement, or described in the Disclosure Package or the Prospectus, that
have not been described as required.
(aa) Disclosure
Controls and Procedures. Except as otherwise disclosed in the Disclosure Package, the Company has established and maintains
disclosure controls and procedures (as such term is defined in Rule 13a-15(e) of the Exchange Act Regulations), which (i) are designed
to ensure that material information relating to the Company is made known to the Company’s principal executive officer and
its principal financial officer by others within the Company, (ii) will be evaluated for effectiveness as of the end of each fiscal
quarter and fiscal year of the Company and (iii) are effective in all material respects to perform the functions for which they
were established. Except as otherwise disclosed in the Disclosure Package, the Company is not aware of (a) any significant deficiency
in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize
and report financial data or any material weaknesses in internal controls or (b) any fraud, whether or not material, that involves
management or other employees who have a significant role in the Company’s internal controls.
(bb) Company’s
Accounting System. Except as otherwise disclosed in the Disclosure Package, the Company maintains a system of accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or
specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain accountability for assets; (iii) access to assets is permitted only
in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(cc) Money
Laundering Law Compliance. The operations of the Company are and have been conducted at all times in material compliance with
all applicable financial recordkeeping and reporting requirements, including those of the Bank Secrecy Act, as amended by Title
III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 (USA PATRIOT Act), and the applicable anti-money laundering statutes of jurisdictions where the Company conducts business,
the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced
by any competent governmental agency (collectively, the “Anti-Money Laundering Laws”), and no action, suit or
proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect
to the Anti-Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
(dd) OFAC.
(i) Neither the Company nor any director, officer, or employee of the Company, nor, to the Company’s knowledge, any agent,
affiliate or underwriter of the Company, is an individual or entity (“Person”) that is, or is owned or controlled
by a Person that is:
A. the
subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”),
the United Nations Security Council (“UNSC”), the European Union (“EU”), Her Majesty’s
Treasury (“HMT”), or other relevant sanctions authority (collectively, “Sanctions”), nor
B. located,
organized or resident in a country or territory that is the subject of Sanctions (including, without limitation, Burma/Myanmar,
Cuba, Iran, Libya, North Korea, Sudan and Syria).
(ii) The
Company will not, directly or indirectly, use the proceeds of the offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other Person:
A. to
fund or facilitate any activities or business of or with any Person or in any country or territory that, at the time of such funding
or facilitation, is the subject of Sanctions; or
B. in
any other manner that will result in a violation of Sanctions by any Person (including any Person participating in the offering,
whether as underwriter, advisor, investor or otherwise).
(iii) For
the past 5 years, the Company has not knowingly engaged in, and is not now knowingly engaged in, any dealings or transactions with
any Person, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions.
(ee) Foreign
Corrupt Practices Act. Neither the Company nor, to the best of the Company’s knowledge, any of the insiders or employees
of the Company or any other person authorized to act on behalf of the Company has, directly or indirectly, knowingly given or agreed
to give any money, gift or similar benefit (other than legal price concessions to customers in the ordinary course of business)
to any customer, supplier, employee or agent of a customer or supplier, or official or employee of any governmental agency or instrumentality
of any government (domestic or foreign) or any political party or candidate for office (domestic or foreign) or other person who
was, is, or may be in a position to help or hinder the business of the Company (or assist it in connection with any actual or proposed
transaction) that might subject the Company to any damage or penalty in any civil, criminal or governmental litigation or proceeding.
(ff) Compliance
with Xxxxxxxx-Xxxxx Act of 2002. The Company has taken all necessary actions to ensure that, upon the effectiveness of the
Registration Statement, it will be in compliance with any provision applicable to it of the Xxxxxxxx-Xxxxx Act of 2002 (the “Xxxxxxxx-Xxxxx
Act”) and the rules and regulations promulgated in connection therewith, including, without limitation, Section 402 related
to loans and Sections 302 and 906 related to certifications of the Xxxxxxxx-Xxxxx Act.
(gg) Exchange
Act Filing. The Company has filed with the Commission a registration statement on Form 8-A (File No 001-[__________]) providing
for the registration under the Exchange Act of the Shares. The registration of the Shares under the Exchange Act has been declared
effective by the Commission on the date hereof.
(hh) Foreign
Private Issuer Status. The Company is a “foreign private issuer” within the meaning of Rule 405 under the Act.
(ii) WFOE
Organization. The Company’s subsidiary Hangzhou Yuyao Network Technology Co., Ltd. (“Yuyao WFOE”)
has been duly organized and is validly existing as a company under the laws of the PRC, and its business license is in full force
and effect; Yuyao WFOE has been duly qualified as a foreign invested enterprise with the following approvals and certificates:
(A) Certificate of Approval, (B) Business License, (C) Tax Registration Certificate, (D) Organization Code Certificate, and (E)
State Administration for Foreign Exchange (“SAFE”) Registration Card. 100% of the equity interests of Yuyao WFOE are
owned by the Company as described in the Prospectus, and such equity interests are free and clear of all liens, encumbrances, equities
or claims; the articles of association, the business license and other constituent documents of Yuyao WFOE comply in all material
respects with the requirements of applicable laws of the PRC and are in full force and effect; Yuyao WFOE has full power and authority
(corporate and other) and all consents, approvals, authorizations, permits, licenses, orders, registrations, clearances and qualifications
of or with any governmental agency having jurisdiction over Yuyao WFOE or any of its properties required for the ownership or lease
of property by it and the conduct of its business in accordance with its registered business scope except for such that would not
reasonably be expected to have a Material Adverse Effect and has the legal right and authority to own, use, lease and operate its
assets and to conduct its business in the manner presently conducted and as described in the Prospectus; and all of the registered
capital of Yuyao WFOE has been paid.
(jj) VIE
Organization. Hangzhou Long Yun Network Technology Co., Ltd. (“Long Yun”), a wholly foreign owned enterprise
established under the laws of the PRC controlled by Yuyao WFOE through the VIE Agreements, has been duly organized and is validly
existing as a limited liability company under the laws of the PRC and its business license is in full force and effect; 100% of
the equity interests of Long Yun are indirectly controlled by the Company through contractual arrangements as described in the
Prospectus (the “VIE Agreements”), and such equity interests are free and clear of all liens, encumbrances,
equities or claims except for the pledge of the equity interests under the VIE Agreements; the articles of association, the business
license and other constituent documents of Long Yun comply in all material respects with the requirements of applicable laws of
the PRC and are in full force and effect; except as disclosed in the Registration Statement, Long Yun has full power and authority
(corporate and other) and has all consents, approvals, authorizations, permits, licenses, orders, registrations, clearances and
qualifications of or with any governmental agency having jurisdiction over Long Yun or any of its properties required for the ownership
or lease of property by it and the conduct of its business, except for such that would not reasonably be expected to have a Material
Adverse Effect, and has the legal right and authority to own, use, lease and operate its assets and to conduct its business in
the manner presently conducted and as described in the Prospectus; the registered capital of has been fully paid by its shareholders.
(kk) Valid
Title. Each of Yuyao WFOE and Long Yun has legal and valid title to all of its properties and assets, free and clear of all
liens, charges, encumbrances, equities, claims, options and restrictions; each lease agreement to which it is a party is duly executed
and legally binding; its leasehold interests are set forth in and governed by the terms of any lease agreements, and, to the best
of the Company’s knowledge such agreements are valid, binding and enforceable in accordance with their respective terms under
PRC law; and, none of Yuyao WFOE or Long Yun owns, operates, manages or has any other right or interest in any other material real
property of any kind, except as described in the Prospectus.
(ll) Foreign
Tax Compliance. Except as disclosed in the Registration Statement, the Disclosure Materials and Prospectus, including the risk
factor set forth in “Risk Factors— Under the PRC Enterprise Income Tax Law, or the EIT Law, we may be classified
as a “resident enterprise” of China, which could result in unfavorable tax consequences to us and our non-PRC shareholders,”
no transaction, stamp, capital or other issuance, registration, transaction, transfer or withholding taxes or duties are payable
in China, Hong Kong or the Cayman Islands to any Chinese, Hong Kong or Cayman Islands taxing authority in connection with (A) the
issuance, sale and delivery of the Ordinary Shares, and the delivery of the Shares to or for the account of the Investors, (B)
the purchase from the Company and the sale and delivery of the Shares to the Investors thereof, or (C) the execution and delivery
of this Agreement by the Underwriter.
(mm) Compliance
with SAFE Rules and Regulations. The Company has taken all reasonable steps to cause all of the Company’s shareholders
and option holders who are residents or citizens of the PRC, to comply with any applicable rules and regulations of the State Administration
of Foreign Exchange (SAFE) relating to such shareholders’ and option holders’ shareholding with the Company (the “SAFE
Rules and Regulations”), including, without limitation, taking reasonable steps to require each shareholder or option
holder that is, or is directly or indirectly owned or controlled by, a resident or citizen of the PRC to complete any registration
and other procedures required under applicable SAFE Rules and Regulations.
(nn) M&A
Rules. The Company is aware of and has been advised as to the content of the Rules on Mergers and Acquisitions of Domestic
Enterprises by Foreign Investors jointly promulgated by the Ministry of Commerce, the State Assets Supervision and Administration
Commission, the State Tax Administration, the State Administration of Industry and Commerce, the China Securities Regulatory Commission
(“CSRC”) and the State Administration of Foreign Exchange of China (“SAFE”) on August 8,
2006 (the “M&A Rules”), in particular the relevant provisions thereof that purport to require offshore special
purpose vehicles formed for the purpose of obtaining a stock exchange listing outside of the PRC and controlled directly or indirectly
by companies or natural persons of the PRC, to obtain the approval of the CSRC prior to the listing and trading of their securities
on a stock exchange located outside of the PRC; the Company has received legal advice specifically with respect to the M&A
Rules from its PRC counsel and based on such legal advice, the Company confirms with the Underwriter:
(i) Except
as disclosed in the Disclosure Materials, Registration Statement and the Prospectus, the issuance and sale of the Shares, the listing
and trading of the Shares on New York Stock Exchange MKT LLC (“NYSE MKT”) and the consummation of the transactions
contemplated by this Agreement are not and will not be, as of the date hereof, at the Closing Date or on each settlement date,
affected by the M&A Rules or any official clarifications, guidance, interpretations or implementation rules in connection with
or related to the M&A Rules, including the guidance and notices issued by the CSRC on September 8 and September 21, 2006, as
amended (collectively, the “M&A Rules and Related Clarifications”).
(ii) Except
as disclosed in the Disclosure Materials, Registration Statement and the Prospectus, as of the date hereof, the M&A Rules and
Related Classifications did not and do not require the Company to obtain the approval of the CSRC prior to the issuance and sale
of the Shares, the listing and trading of the Shares on NYSE MKT, or the consummation of the transactions contemplated by this
Agreement.
Any certificate
signed by an officer of the Company and delivered to the Underwriters or to counsel for the Underwriters shall be deemed to be
a representation and warranty by the Company to the Underwriters as to the matters set forth therein. The Company acknowledges
that the Underwriters and, for purposes of the opinions to be delivered pursuant to Section 5 hereof, counsel to the Company, will
rely upon the accuracy and truthfulness of the foregoing representations and hereby consents to such reliance.
SECTION
2. Purchase, Sale and Delivery of the Shares.
(a) The
Shares. Upon the terms herein set forth, the Company agrees to issue and sell the Shares, and on the basis of the representations,
warranties and agreements herein contained, and upon the terms hereof, the Underwriters agree, severally and not jointly, to use
their best efforts to arrange for the sale of the Shares to the Investors. The Underwriters are under no obligation to arrange
for the sale of any minimum number or dollar amount of Shares. The purchase price per Share to be paid by the Investors shall be
as set forth in Schedule C hereto.
(b) The
Closing Date. Delivery of the Shares to be purchased by the Investors and payment therefor shall be made at [10:00 a.m.] (Eastern
time) on a date mutually agreed to between the Company and the Underwriters (the time and date of such closing are called the “Closing
Date”).
(c) Public
Offering of the Shares. The Company hereby appoints Boustead as representative of the Underwriters, and each Underwriter has
agreed to such appointment. The Company hereby authorizes the Underwriters to act as its exclusive agents to solicit offers for
the purchase of all or part of the Shares from the Company in connection with the proposed offering of the Shares. The Representative
hereby advises the Company that the Underwriters intend, on a best efforts basis, to arrange for sale to the public, as described
in the Disclosure Package and the Prospectus, of the Shares as soon after the Registration Statement has been declared effective
and this Agreement has been executed by the Representative, as the Representative, in its sole judgment, has determined is advisable
and practicable. The Company hereby acknowledges that the Underwriters have agreed, as agents of the Company, to use their reasonable
best efforts to solicit offers to purchase the Shares from the Company on the terms and subject to the conditions set forth in
the Disclosure Package and the Prospectus. The Underwriters shall use reasonable best efforts to assist the Company in obtaining
performance by each Investor whose offer to purchase Shares has been solicited by the Underwriters and accepted by the Company,
but the Underwriters shall not, except as otherwise provided herein, be obligated to disclose the identity of any potential investor
not previously identified to the Company or have any liability to the Company in the event any investment is not consummated for
any reason.
(d) Payment
for the Shares. The Shares are being sold to the Investors at an aggregate initial public offering price per Share as set forth
in Schedule C hereto. The purchase of Shares by each of the Investors shall be evidenced by the execution of a subscription agreement
by each such Investor and the Company. In the event that the any of the Underwriters receives any payment from an Investor in connection
with the purchase of any Shares by such Investor, such payment shall be promptly transmitted to and deposited into the escrow account
(the “Escrow Account”) established by the Company in connection with this offering with Signature Bank, as escrow
agent (the “Escrow Agent”). Among other things, the Underwriters shall forward any checks so received by the
Underwriters to the Escrow Agent by noon of the next business day. The Underwriters and the Company shall instruct Investors to
make wire transfer payments to Signature Bank, ABA No. 000000000, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, for credit to Signature
Bank, as Escrow Agent for Dragon Xxxxxxx Xxxxxxxxxxxxx Limited, Account No. [·]],
with the name and address of the Investor making payment. Payment by the Investors out of the Escrow Account for the Shares to
be sold by the Company shall be made at the Closing Date to the Company in straight compliance with Rule 15c2-4 of the Commission.
(e) Delivery
of the Shares. Delivery of the Shares shall be made through the facilities of The Depository Trust Company unless the Underwriters
shall otherwise instruct. Time shall be of the essence, and delivery at the time and place specified in this Agreement is a further
condition to the obligations of the Underwriters.
(f) Delivery
of Prospectus to the Underwriters. Not later than 10:00 a.m. (Eastern time) on the second business day following the date the
Shares are first released by the Company for sale to the public, the Company shall deliver or cause to be delivered, copies of
the Prospectus in such quantities and at such places as the Underwriters shall request.
SECTION
3. Covenants of the Company.
The Company covenants
and agrees with each of the Underwriters as follows:
(a) Representative’s
Review of Proposed Amendments and Supplements. During the period beginning at the Applicable Time and ending on the later of
the Closing Date or such date as, in the opinion of counsel for the Underwriters, the Prospectus is no longer required by law to
be delivered in connection with sales by the Underwriters or selected dealers, including under circumstances where such requirement
may be satisfied pursuant to Rule 172 under the Securities Act (the “Prospectus Delivery Period”), prior to
amending or supplementing the Registration Statement or the Prospectus, including any amendment or supplement through incorporation
by reference of any report filed under the Exchange Act, the Company shall furnish to the Representative for review a copy of each
such proposed amendment or supplement, and the Company shall not file any such proposed amendment or supplement to which the Representative
reasonably objects.
(b) Securities
Act Compliance. After the date of this Agreement, during the Prospectus Delivery Period, the Company shall promptly advise
the Underwriters through the Representative in writing (i) of the receipt of any comments of, or requests for additional or supplemental
information from, the Commission, (ii) of the time and date of any filing of any post-effective amendment to the Registration Statement
or any amendment or supplement to the Pricing Prospectus or the Prospectus, (iii) of the time and date that any post-effective
amendment to the Registration Statement becomes effective and (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or any post-effective amendment thereto or of any order or notice preventing or
suspending the use of the Registration Statement, the Pricing Prospectus or the Prospectus, or of any proceedings to remove, suspend
or terminate from listing or quotation the Ordinary Shares from any securities exchange upon which it is listed for trading or
included or designated for quotation, or of the threatening or initiation of any proceedings for any of such purposes. The Company
shall use its best efforts to prevent the issuance of any such stop order or prevention or suspension of such use. If the Commission
shall enter any such stop order or order or notice of prevention or suspension at any time, the Company will use its best efforts
to obtain the lifting of such order at the earliest possible moment, or will file a new registration statement and use its best
efforts to have such new registration statement declared effective as soon as practicable. Additionally, the Company agrees that
it shall comply with the provisions of Rules 424(b) and 430A, as applicable, under the Securities Act, including with respect to
the timely filing of documents thereunder, and will confirm that any filings made by the Company under such Rule 424(b) were received
in a timely manner by the Commission.
(c) Exchange
Act Compliance. During the Prospectus Delivery Period, the Company will file all documents required to be filed with the Commission
pursuant to Section 13, 14 or 15 of the Exchange Act in the manner and within the time periods required by the Exchange Act.
(d) Amendments
and Supplements to the Registration Statement, Prospectus and Other Securities Act Matters. If, during the Prospectus Delivery
Period, any event or development shall occur or condition exist as a result of which the Disclosure Package or the Prospectus as
then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein in the light of the circumstances under which they were made, as the case may be, not misleading,
or if it shall be necessary to amend or supplement the Disclosure Package or the Prospectus, in order to make the statements therein,
in the light of the circumstances under which they were made, as the case may be, not misleading, or if in the opinion of the Representative
it is otherwise necessary to amend or supplement the Registration Statement, the Disclosure Package or the Prospectus, or to file
a new registration statement containing the Prospectus, in order to comply with law, including in connection with the delivery
of the Prospectus, the Company agrees to (i) notify the Representative of any such event or condition (unless such event or condition
was previously brought to the Company’s attention by the Representative during the Prospectus Delivery Period) and (ii) promptly
prepare (subject to Section 3(a) and Section 3(e) hereof), file with the Commission (and use its best efforts to have any amendment
to the Registration Statement or any new registration statement to be declared effective) and furnish at its own expense to the
Underwriters and to dealers, amendments or supplements to the Registration Statement, the Disclosure Package or the Prospectus,
or any new registration statement, necessary in order to make the statements in the Disclosure Package or the Prospectus as so
amended or supplemented, in the light of the circumstances under which they were made, as the case may be, not misleading or so
that the Registration Statement, the Disclosure Package or the Prospectus, as amended or supplemented, will comply with law.
(e) Permitted
Free Writing Prospectuses. The Company represents that it has not made, and agrees that, unless it obtains the prior written
consent of the Representative, it will not make, any offer relating to the Shares that would constitute an Issuer Free Writing
Prospectus or that would otherwise constitute a “free writing prospectus” (as defined in Rule 405 under the
Securities Act) required to be filed by the Company with the Commission or retained by the Company under Rule 433 under the Securities
Act; provided that the prior written consent of the Representative hereto shall be deemed to have been given in respect of each
free writing prospectuses listed on Schedule B hereto. Any such free writing prospectus consented to by the Representative is hereinafter
referred to as a “Permitted Free Writing Prospectus.” The Company agrees that (i) it has treated and will treat,
as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus, and (ii) has complied and will
comply, as the case may be, with the requirements of Rules 164 and 433 under the Securities Act applicable to any Permitted Free
Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping.
(f) Copies
of any Amendments and Supplements to the Prospectus. The Company agrees to furnish the Underwriters, without charge, during
the Prospectus Delivery Period, as many copies of each of the preliminary prospectuses, the Prospectus and the Disclosure Package
and any amendments and supplements thereto (including any documents incorporated or deemed incorporated by reference therein) as
the Underwriters may reasonably request.
(g) Blue
Sky Compliance. The Company shall cooperate with the Representative and counsel for the Underwriters to qualify or register
the Shares for sale under (or obtain exemptions from the application of) the state securities or blue sky laws of those jurisdictions
designated by the Representative, shall comply with such laws and shall continue such qualifications, registrations and exemptions
in effect so long as required for the distribution of the Shares. The Company shall not be required to qualify as a foreign corporation
or to take any action that would subject it to general service of process in any such jurisdiction where it is not presently qualified
or where it would be subject to taxation as a foreign corporation. The Company will advise the Representative promptly of the suspension
of the qualification or registration of (or any such exemption relating to) the Shares for offering, sale or trading in any jurisdiction
or any initiation or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, the Company shall use its best efforts to obtain the withdrawal thereof at the earliest
possible moment.
(h) Use
of Proceeds. The Company shall apply the net proceeds from the sale of the Shares sold by it in the manner described under
the caption “Use of Proceeds” in the Disclosure Package and the Prospectus.
(i) Transfer
Agent. The Company shall engage and maintain, at its expense, a registrar and transfer agent for the Shares.
(j) Earnings
Statement. As soon as practicable and in any event no later than 15 months after the effective date of the Registration Statement,
the Company will make generally available to its security holders and to the Representative an earnings statement (which need not
be audited) covering a period of at least 12 months beginning after the effective date of the Registration Statement that satisfies
the provisions of Section 11(a) of the Securities Act and Rule 158 under the Securities Act.
(k) Periodic
Reporting Obligations. During the Prospectus Delivery Period, the Company shall file, on a timely basis, with the Commission
all reports and documents required to be filed under the Exchange Act. Additionally, the Company shall report the use of proceeds
from the issuance of the Shares as may be required under Rule 463 under the Securities Act.
(l) Company
to Provide Interim Financial Statements. Prior to the Closing Date, the Company will furnish to the Representative, as soon
as they have been prepared by or are available to the Company, a copy of any unaudited interim financial statements of the Company
for any period subsequent to the period covered by the most recent financial statements appearing in the Registration Statement
and the Prospectus.
(m) Exchange
Listing. The Company will use its best efforts to include, commencing on the Closing Date or as soon thereafter as is practicable,
subject to notice of issuance, the Shares on NYSE MKT.
(n) Future
Reports to the Representative. During the period of five years hereafter, the Company will furnish, if not otherwise available
on XXXXX, to the Representative at 000 X. Xxxxxxxxx Xxxx., Xxxxx 000, Xx Xxxxxxx, XX 00000, Attention: Xxxxx Xxxxx, CEO: (i) as
soon as practicable after the end of each fiscal year, copies of the Annual Report of the Company containing the balance sheet
of the Company as of the close of such fiscal year and statements of income, stockholders’ equity and cash flows for the
year then ended and the opinion thereon of the Company’s independent public or certified public accountants; (ii) as soon
as practicable after the filing thereof, copies of each proxy statement, Annual Report on Form 20-F, quarterly financial statements
using a Form 6-K or other report filed by the Company with the Commission; and (iii) as soon as available, copies of any report
or communication of the Company mailed generally to holders of its capital stock.
(o) No
Manipulation of Price. The Company will not take, directly or indirectly, any action designed to cause or result in, or that
has constituted or might reasonably be expected to constitute, the stabilization or manipulation of the price of any securities
of the Company.
(p) Existing
Lock-Up Agreements. Except as described in the Registration Statement, the Disclosure Package and the Prospectus, there are
no existing agreements between the Company and its security holders that prohibit the sale, transfer, assignment, pledge or hypothecation
of any of the Company’s securities. The Company will direct the transfer agent to place stop transfer restrictions upon the
securities of the Company that are bound by such “lock-up” agreements for the duration of the periods contemplated
therein.
(q) Agreement
Not to Offer or Sell Additional Shares. During the period commencing on and including the date hereof and ending on and including
the 180th day following the effective date of the Registration Statement (as the same may be extended as described below,
the “Lock-up Period”), the Company will not, without the prior written consent of the Representative (which
consent may be withheld at the Representative’s sole discretion), directly or indirectly, sell (including, without limitation,
any short sale), offer, contract or grant any option to sell, pledge, transfer or establish an open “put equivalent position”
within the meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or transfer, or announce the offering of, or
file any registration statement under the Securities Act, except for a registration statement on Form S-8 relating to the Company’s
employee benefit plans, in respect of, any shares of Ordinary Shares, options, rights or warrants to acquire shares of Ordinary
Shares or securities exchangeable or exercisable for or convertible into shares of Ordinary Shares (other than as contemplated
by this Agreement with respect to the Shares) or publicly announce the intention to do any of the foregoing, other than (i) the
issuance of restricted Ordinary Shares, restricted stock units or options to acquire Ordinary Shares pursuant to the Company’s
employee benefit plans, qualified stock option plans or other equity incentive plans as such plans are in existence on the date
hereof and, if material, described in the Disclosure Package, (ii) issuances of Ordinary Shares upon the exercise or settlement
of options or warrants disclosed as outstanding in the Prospectus.
SECTION
4. Payment of Fees and Expenses.
(a) Upon
the closing of the Offering, the Company shall (x) pay the Representative, upon the closing of the sale of the Shares, a success
fee, payable in cash, equal to seven percent (7%) of the aggregate gross proceeds to the Company from the sale of the Shares and
(y) issue to the Representative a warrant, substantially in form of Exhibit A hereto, equal to seven percent (7%) of the aggregate
gross proceeds to the Company from the offering and sale of the Shares (the “Warrant”). The foregoing cash success
fee and Warrant shall be paid to Boustead for the account of the several Underwriters and split among the Underwriters and any
selected dealers in such amounts as agreed to among them.
(b) Whether
or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, the Company agrees to pay
all costs, fees and expenses incurred in connection with the transactions contemplated hereby, including without limitation (i)
all of the reasonable and documented out-of-pocket expenses incurred by the Underwriters (excluding fees and expenses of its legal
counsel but including travel expenses of the Underwriters to attend any due diligence or road show meetings) in an aggregate amount
not to exceed $95,000, (ii) all expenses incident to the issuance and delivery of the Shares (including all printing and engraving
costs, if any), (iii) all fees and expenses of the clearing firm, registrar and transfer agent of the Ordinary Shares and the warrant
agent, (iv) all necessary issue, transfer and other stamp taxes in connection with the issuance and sale of the Shares placed by
the Underwriters, (v) all fees and expenses of the Company’s counsel, independent public or certified public accountants
and other advisors, (vi) all costs and expenses incurred in connection with the preparation, printing, filing, shipping and distribution
of the Registration Statement (including financial statements, exhibits, schedules, consents and certificates of experts), each
Issuer Free Writing Prospectus, each preliminary prospectus and the Prospectus, and all amendments and supplements thereto, and
this Agreement, (vii) all filing fees, attorneys’ fees and expenses incurred by the Company, or the Underwriters, in connection
with qualifying or registering (or obtaining exemptions from the qualification or registration of) all or any part of the Shares
for offer and sale under the state securities or blue sky laws, and, if requested by the Representative, preparing and printing
a “Blue Sky Survey” or memorandum, and any supplements thereto, advising the Underwriters of such qualifications, registrations
and exemptions, (viii) the filing fees incident to FINRA’s review and approval of the Underwriters’ participation in
the offering and placement of the Shares and legal fees and expenses of counsel for the Underwriters and the Underwriters related
thereto, (ix) all other reasonable fees, costs and expenses referred to in Item 13 of Part II of the Registration Statement; provided
that the aggregate amount of expenses payable by the Company pursuant to clauses (viii) (exclusive of FINRA filing fees) and (ix)
shall in no event exceed $100,000.
SECTION
5. Conditions of the Obligations of the Underwriters. The obligations of the Underwriters to arrange for the
sale of the Shares as provided herein on the Closing Date shall be subject to (1) the accuracy of the representations and warranties
on the part of the Company set forth in Section 1 hereof as of the date hereof and as of the Closing Date as though then made;
(2) the timely performance by the Company of its covenants and other obligations hereunder; and (3) each of the following
additional conditions:
(a) Accountant’s
Comfort Letter. On the date hereof, the Representative shall have received from the Accountant, a letter dated the date hereof
addressed to the Underwriters, in form and substance satisfactory to the Representative, containing statements and information
of the type ordinarily included in accountants’ “comfort letters” to Underwriters, delivered according to Statement
of Auditing Standards No. 72 (or any successor bulletin), with respect to the audited and unaudited financial statements and certain
financial information contained in the Registration Statement and the Prospectus.
(b) Effectiveness
of Registration Statement; Compliance with Registration Requirements; No Stop Order. During the period from and after the execution
of this Agreement to and including the Closing Date:
(i) the
Company shall have filed the Prospectus with the Commission (including the information required by Rule 430A under the Securities
Act) in the manner and within the time period required by Rule 424(b) under the Securities Act; or the Company shall have filed
a post-effective amendment to the Registration Statement containing the information required by such Rule 430A, and such post-effective
amendment shall have become effective; and
(ii) no
stop order suspending the effectiveness of the Registration Statement, or any post-effective amendment to the Registration Statement,
shall be in effect and no proceedings for such purpose shall have been instituted or threatened by the Commission.
(c) No
Material Adverse Change. For the period from and after the date of this Agreement to and including the Closing Date, in the
reasonable judgment of the Representative there shall not have occurred any Material Adverse Change.
(d) Opinion
of Counsel for the Company. On the Closing Date, the Representative shall have received the opinion of Xxxxxx Xxxxxxx Xxxxxx
& Li LLC, counsel for the Company, addressed to the Underwriters, dated as of the Closing Date, substantially in the form satisfactory
to the Representative.
(e) Officers’
Certificate. On the Closing Date, the Representative shall have received a written certificate executed by the Chairman of
the Board and Acting Chief Executive Officer and the Chief Financial Officer of the Company, dated as of such Closing Date, to
the effect that the signers of such certificate have reviewed the Registration Statement, the Disclosure Package and the Prospectus
and any amendment or supplement thereto, each Issuer Free Writing Prospectus and this Agreement, to the effect that to the knowledge
of such individuals:
(i) for
the period from and after the date of this Agreement to and including the Closing Date, there has not occurred any Material Adverse
Change;
(ii) the
representations and warranties of the Company set forth in Section 1 and the covenants of the Company set forth in Section 3 of
this Agreement are true and correct with the same force and effect as though expressly made on and as of such Closing Date; and
(iii) the
Company has complied with all the agreements hereunder and satisfied all the conditions on its part to be performed or satisfied
hereunder at or prior to such Closing Date.
(f) Bring-down
Comfort Letter. On the Closing Date, the Underwriters shall have received from the Accountant, a letter dated such date, in
form and substance satisfactory to the Representative, to the effect that the Accountant reaffirms the statements made in the letter
furnished by it pursuant to subsection (a) of this Section 5, except that the specified date referred to therein for the carrying
out of procedures shall be no more than three business days prior to the Closing Date.
(g) Lock-Up
Agreement from Certain Securityholders of the Company. On or prior to the date hereof, the Company shall have furnished to
the Representative an agreement substantially in the form of Exhibit B hereto from each of the Company’s officers, directors,
security holders of 5% or more of the Company’s Ordinary Shares or securities convertible into or exercisable for shares
of the Company’s Ordinary Shares, as well as, to the extent not included above, from each purchaser of the Company’s
securities in a private placement since June, 2015, and each such agreement shall be in full force and effect on the Closing Date.
(h) Exchange
Listing. The Shares to be delivered on the Closing Date shall have been approved for listing on the NYSE MKT, subject to official
notice of issuance.
| (i) | the favorable opinion of Xxxxxx Xxxxxxx Xxxxxxx & Li LLC, U.S. securities counsel to the Company,
dated the Closing Date, addressed to the Underwriter, in form and substance reasonably satisfactory to the Underwriter; |
| (ii) | the favorable opinion of Ogier, Cayman Islands counsel to the Company, in form and substance reasonably
satisfactory to the Underwriter; |
| (iii) | the favorable opinion of Guantao Law Firm, PRC counsel to the Company, in form and substance reasonably
satisfactory to the Underwriter. |
(j) Additional
Documents. On or before the Closing Date, the Underwriters and counsel for the Representative shall have received such information,
documents and opinions as they may reasonably require for the purposes of enabling them to pass upon the issuance and sale of the
Shares as contemplated herein, or in order to evidence the accuracy of any of the representations and warranties, or the satisfaction
of any of the conditions or agreements, herein contained.
If any condition
specified in this Section 5 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the Representative
by notice to the Company at any time on or prior to the Closing Date, which termination shall be without liability on the part
of any party to any other party, except that Section 4 (with respect to the reimbursement of out-of-pocket accountable, bona fide
expenses actually incurred by the Underwriters or person associated with the Underwriters) and Section 7 shall at all times be
effective and shall survive such termination.
SECTION
6. Effectiveness of this Agreement. This Agreement shall not become effective until the later of (i) the execution
of this Agreement by the parties hereto and (ii) notification (including by way of oral notification from the reviewer at the Commission)
by the Commission to the Company of the effectiveness of the Registration Statement under the Securities Act; provided that Sections
4, 9 and 10 shall at all times be effective.
SECTION
7. Indemnification.
(a) Indemnification
by the Company. The Company shall indemnify and hold harmless each of the Underwriters, their respective affiliates and each
of their respective directors, officers, members, employees and agents and each person, if any, who controls such Underwriter within
the meaning of Section 15 of the Securities Act of or Section 20 of the Exchange Act (collectively the “Underwriter Indemnified
Parties,” and each a “Underwriter Indemnified Party”) against any loss, claim, damage, expense or liability whatsoever
(or any action, investigation or proceeding in respect thereof), to which such Underwriter Indemnified Party may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage, expense, liability, action, investigation or proceeding
arises out of or is based upon (A) any untrue statement or alleged untrue statement of a material fact contained in any preliminary
prospectus, any Issuer Free Writing Prospectus, any “issuer information” filed or required to be filed pursuant to
Rule 433(d) of the Securities Act Regulations, any Registration Statement or the Prospectus, or in any amendment or supplement
thereto, (B) the omission or alleged omission to state in any preliminary prospectus, any Issuer Free Writing Prospectus, any “issuer
information” filed or required to be filed pursuant to Rule 433(d) of the Securities Act Regulations, any Registration Statement
or the Prospectus, or in any amendment or supplement thereto, a material fact required to be stated therein or necessary to make
the statements therein not misleading or (C) any breach of the representations and warranties of the Company contained herein or
failure of the Company to perform its obligations hereunder or pursuant to any law, any act or failure to act, or any alleged act
or failure to act, by any of the Underwriters in connection with, or relating in any manner to, this Agreement, the Securities
or the Offering, and which is included as part of or referred to in any loss, claim, damage, expense, liability, action, investigation
or proceeding arising out of or based upon matters covered by subclause (A), (B) or (C) above of this Section 7(a) (provided that
the Company shall not be liable in the case of any matter covered by this subclause (C) to the extent that it is determined in
a final judgment by a court of competent jurisdiction that such loss, claim, damage, expense or liability resulted directly from
any such act or failure to act undertaken or omitted to be taken by the Underwriters through their gross negligence or willful
misconduct), and shall reimburse the Underwriter Indemnified Party promptly upon demand for any legal fees or other expenses reasonably
incurred by that Underwriter Indemnified Party in connection with investigating, or preparing to defend, or defending against,
or appearing as a third party witness in respect of, or otherwise incurred in connection with, any such loss, claim, damage, expense,
liability, action, investigation or proceeding, as such fees and expenses are incurred; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage, expense or liability arises out of or is based
upon an untrue statement in, or omission from any preliminary prospectus, any Registration Statement or the Prospectus, or any
such amendment or supplement thereto, or any Issuer Free Writing Prospectus made in reliance upon and in conformity with written
information furnished to the Company through the Representative expressly for use therein, which information the parties hereto
agree is limited to the Underwriters’ Information. This indemnity agreement is not exclusive and will be in addition to any
liability, which the Company might otherwise have and shall not limit any rights or remedies which may otherwise be available at
law or in equity to each Underwriter Indemnified Party.
(b) Indemnification
by the Underwriters. The Underwriters shall indemnify and hold harmless the Company and the Company’s directors, its
officers who signed the Registration Statement and each person, if any, who controls the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act (collectively the “Company Indemnified Parties” and each
a “Company Indemnified Party”) against any loss, claim, damage, expense or liability whatsoever (or any action, investigation
or proceeding in respect thereof), to which such Company Indemnified Party may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, expense, liability, action, investigation or proceeding arises out of or is based upon (i)
any untrue statement of a material fact contained in any preliminary prospectus, any Issuer Free Writing Prospectus, any “issuer
information” filed or required to be filed pursuant to Rule 433(d) of the Securities Act Regulations, any Registration Statement
or the Prospectus, or in any amendment or supplement thereto, or (ii) the omission to state in any preliminary prospectus, any
Issuer Free Writing Prospectus, any “issuer information” filed or required to be filed pursuant to Rule 433(d) of the
Securities Act Regulations, any Registration Statement or the Prospectus, or in any amendment or supplement thereto, a material
fact required to be stated therein or necessary to make the statements therein not misleading, but in each case only to the extent
that the untrue statement or omission was made in reliance upon and in conformity with written information furnished to the Company
through the Representative expressly for use therein, which information the parties hereto agree is limited to the Underwriters’
Information and shall reimburse the Company for any legal or other expenses reasonably incurred by such party in connection with
investigating or preparing to defend or defending against or appearing as third party witness in connection with any such loss,
claim, damage, liability, action, investigation or proceeding, as such fees and expenses are incurred. Notwithstanding the provisions
of this Section 7(b), in no event shall any indemnity by the Underwriters under this Section 7(b) exceed the total discount and
commission received by the Underwriters in connection with the Offering.
(c) Procedure.
Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against an indemnifying party under this Section 7, notify such indemnifying
party in writing of the commencement of that action; provided, however, that the failure to notify the indemnifying party shall
not relieve it from any liability which it may have under this Section 7 except to the extent it has been materially adversely
prejudiced by such failure; and, provided, further, that the failure to notify an indemnifying party shall not relieve it from
any liability which it may have to an indemnified party otherwise than under this Section 7. If any such action shall be brought
against an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense
of such action with counsel reasonably satisfactory to the indemnified party (which counsel shall not, except with the written
consent of the indemnified party, be counsel to the indemnifying party). After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such action, except as provided herein, the indemnifying party shall not be liable
to the indemnified party under Section 7 for any legal or other expenses subsequently incurred by the indemnified party in connection
with the defense of such action other than reasonable costs of investigation; provided, however, that any indemnified party shall
have the right to employ separate counsel in any such action and to participate in the defense of such action but the fees and
expenses of such counsel (other than reasonable costs of investigation) shall be at the expense of such indemnified party unless
(i) the employment thereof has been specifically authorized in writing by the Company in the case of a claim for indemnification
under 7(a), (ii) such indemnified party shall have been advised by its counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the indemnifying party, or (iii) the indemnifying party has
failed to assume the defense of such action and employ counsel reasonably satisfactory to the indemnified party within a reasonable
period of time after notice of the commencement of the action or the indemnifying party does not diligently defend the action after
assumption of the defense, in which case, if such indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the
defense of (or, in the case of a failure to diligently defend the action after assumption of the defense, to continue to defend)
such action on behalf of such indemnified party and the indemnifying party shall be responsible for legal or other expenses subsequently
incurred by such indemnified party in connection with the defense of such action; provided, however, that the indemnifying party
shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate
firm of attorneys at any time any such indemnified party (in addition to any local counsel), which firm shall be designated in
writing by the Underwriters if the indemnified party under this Section 7 is an Underwriter Indemnified Party or by the Company
if an indemnified party under this Section 7 is a Company Indemnified Party. Subject to this Section 7(b), the amount payable by
an indemnifying party under Section 7 shall include, but not be limited to, (x) reasonable legal fees and expenses of counsel to
the indemnified party and any other expenses in investigating, or preparing to defend or defending against, or appearing as a third
party witness in respect of, or otherwise incurred in connection with, any action, investigation, proceeding or claim, and (y)
all amounts paid in settlement of any of the foregoing. No indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of judgment with respect to any pending or threatened action or any claim
whatsoever, in respect of which indemnification or contribution could be sought under this Section 7 (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release
of each indemnified party in form and substance reasonably satisfactory to such indemnified party from all liability arising out
of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party. Subject to the provisions of the following sentence, no indemnifying party shall be liable
for settlement of any pending or threatened action or any claim whatsoever that is effected without its written consent (which
consent shall not be unreasonably withheld or delayed), but if settled with its written consent, if its consent has been unreasonably
withheld or delayed or if there be a judgment for the plaintiff in any such matter, the indemnifying party agrees to indemnify
and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment. In addition,
if at any time an indemnified party shall have requested that an indemnifying party reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated herein
effected without its written consent if (i) such settlement is entered into more than forty-five (45) days after receipt by such
indemnifying party of the request for reimbursement, (ii) such indemnifying party shall have received notice of the terms of such
settlement at least thirty (30) days prior to such settlement being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to the date of such settlement.
(d) Contribution.
If the indemnification provided for in this Section 7 is unavailable or insufficient to hold harmless an indemnified party under
Section 7(a), then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid,
payable or otherwise incurred by such indemnified party as a result of such loss, claim, damage, expense or liability (or any action,
investigation or proceeding in respect thereof), as incurred, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Shares, or (ii)
if the allocation provided by clause (i) of this Section 7(d) is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) of this Section 7(d) but also the relative fault of the Company
on the one hand and the Underwriters on the other with respect to the statements, omissions, acts or failures to act which resulted
in such loss, claim, damage, expense or liability (or any action, investigation or proceeding in respect thereof) as well as any
other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on
the other with respect to such offering shall be deemed to be in the same proportion as the total proceeds from the offering of
the Shares purchased by investors as contemplated by this Agreement (before deducting expenses) received by the Company bear to
the total underwriting commissions received by the Underwriters in connection with the Offering, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault of the Company on the one hand and the Underwriters on the other
shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Underwriters
on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent
such untrue statement, omission, act or failure to act; provided that the parties hereto agree that the written information furnished
to the Company by the Representative for use in any preliminary prospectus, any Registration Statement or the Prospectus, or in
any amendment or supplement thereto, consists solely of the Underwriters’ Information. The Company and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this Section 7(d) be determined by pro rata allocation or
by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid
or payable by an indemnified party as a result of the loss, claim, damage, expense, liability, action, investigation or proceeding
referred to above in this Section 7(d) shall be deemed to include, for purposes of this Section 7(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating, preparing to defend or defending against or appearing
as a third party witness in respect of, or otherwise incurred in connection with, any such loss, claim, damage, expense, liability,
action, investigation or proceeding. Notwithstanding the provisions of this Section 7(d), the Underwriters shall not be required
to contribute any amount in excess of the total commission received in cash by the Underwriters in connection with the Offering
less the amount of any damages that the Underwriters have otherwise paid or become liable to pay by reason of any untrue or alleged
untrue statement, omission or alleged omission, act or alleged act or failure to act or alleged failure to act. 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.
SECTION
8. Termination of this Agreement. Prior to the Closing Date, whether before or after notification by the Commission
to the Company of the effectiveness of the Registration Statement under the Securities Act, this Agreement may be terminated by
the Representative by notice given to the Company if at any time (i) trading or quotation in any of the Company’s securities
shall have been suspended or limited by the Commission or by the NYSE MKT; (ii) a general banking moratorium shall have been declared
by any of federal, New York or Cayman Islands authorities; or (iii) there shall have occurred any outbreak or escalation of national
or international hostilities or any crisis or calamity, or any change in the United States or international financial markets,
or any substantial change or development involving a prospective substantial change in United States’ or international political,
financial or economic conditions that, in the reasonable judgment of the Representative, is material and adverse and makes it impracticable
to market the Shares in the manner and on the terms described in the Prospectus or to enforce contracts for the sale of securities.
Any termination pursuant to this Section 8 shall be without liability on the part of (a) the Company to any of the Underwriters,
except that the Company shall be obligated to reimburse the expenses of the Underwriters as provided for herein, (b) the Underwriters
to the Company, or (c) of any party hereto to any other party except that the provisions of Section 4 (with respect to the reimbursement
of out-of-pocket accountable, bona fide expenses actually incurred by the Underwriters or person associated with the Underwriters)
and Section 7 shall at all times be effective and shall survive such termination.
SECTION
9. No Advisory or Fiduciary Responsibility. The Company acknowledges and agrees that: (i) the purchase and sale
of the Shares pursuant to this Agreement, including the determination of the public offering price of the Shares and any related
discounts and commissions, is an arm’s-length commercial transaction between the Company and the Investors; (ii) in connection
with each transaction contemplated hereby and the process leading to such transaction the Underwriters are and have been acting
solely as placement agents on a best efforts basis and are not a financial advisor or fiduciary of the Company or its affiliates,
stockholders, creditors or employees or any other party; (iii) the Underwriters have not assumed and will not assume an advisory
or fiduciary responsibility in favor of the Company with respect to any of the transactions contemplated hereby or the process
leading thereto (irrespective of whether any Underwriter has advised or is currently advising the Company on other matters) and
the Underwriters have no obligation to the Company with respect to the offering contemplated hereby except the obligations expressly
set forth in this Agreement; (iv) the Underwriters and their respective affiliates may be engaged in a broad range of transactions
that involve interests that differ from those of the Company; and (v) the Underwriters have not provided any legal, accounting,
regulatory or tax advice with respect to the offering contemplated hereby and the Company has consulted its own legal, accounting,
regulatory and tax advisors to the extent it deemed appropriate.
This Agreement supersedes
all prior agreements and understandings (whether written or oral) between the Company and the Underwriters, solely with respect
to the offering contemplated by this Agreement. For elimination of doubt, nothing in this Agreement or contemplated hereby, including
without limitation the immediately previous sentence, shall supersede, curtail, limit, terminate, eliminate or invalidate any provision
of the Engagement Letter not related to the transactions contemplated by the Registration Statement and the Prospectus, each of
which provisions shall remain in full force and effect.
SECTION
10. Representations and Indemnities to Survive Delivery; Third Party Beneficiaries. The respective indemnities,
agreements, representations, warranties and other statements of the Company, of its officers, and of the Underwriters set forth
in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf
of the Underwriters or the Company or any of its or their partners, officers or directors or any controlling person, as the case
may be, and will survive delivery of and payment for the Shares sold hereunder and any termination of this Agreement. Each Investor
shall be a third party beneficiary with respect to the representations, warranties, covenants and agreements of the Company set
forth herein.
SECTION
11. Notices. All communications hereunder shall be in writing and shall be mailed, hand delivered or telecopied
and confirmed to the parties hereto as follows:
If to the Representative:
Boustead Securities, LLC
As Representative of the Several Underwriters
000 X. Xxxxxxxxx Xxxx., Xxxxx 000,
Xx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxx, CEO
Fax: x0 000 000 0000
with a copy (which
shall not constitute notice) to:
Mei & Xxxx LLP
000 00xx Xxxxxx XX, Xxxxx 000
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxx Xxx, Esq.
If to the Company:
Dragon Xxxxxxx
Xxxxxxxxxxxxx Limited
Xxxxx X0-000,
Xx.000, Xxxx Xxxx,
Xxxxxxxx
Xxxxxxxx, Xxxxxxxx, PRC
Attention:
Xxxxxxx Xx, CFO
Fax:
with a copy (which
shall not constitute notice) to:
Xxxxxx Xxxxxxx Xxxxxxx & Li LLC
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxx Xx, Esq.
Any party hereto may
change the address for receipt of communications by giving written notice to the others.
SECTION
12. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and to the
benefit of the employees, officers and directors and controlling persons referred to in Section 7, and in each case their respective
successors, and no other person will have any right or obligation hereunder. The term “successors” shall not
include any purchaser of the Shares as such merely by reason of such purchase.
SECTION
13. Partial Unenforceability. The invalidity or unenforceability of any Section, paragraph or provision of this
Agreement shall not affect the validity or enforceability of any other Section, paragraph or provision hereof. If any Section,
paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to
be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.
SECTION
14. Governing Law Provisions. This Agreement shall be governed by and construed in accordance with the internal
laws of the State of California.
SECTION
15. General Provisions. This Agreement constitutes the entire agreement of the parties to this Agreement and
supersedes all prior written or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the
offering contemplated by this Agreement. For elimination of doubt, nothing in this Agreement or contemplated hereby, including
without limitation the immediately previous sentence, shall supersede, curtail, limit, terminate, eliminate or invalidate any provision
of the Engagement Letter not related to the transactions contemplated by the Registration Statement and the Prospectus, each of
which provisions shall remain in full force and effect. This Agreement may be executed in two or more counterparts, each one of
which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement
may not be amended or modified unless in writing by all of the parties hereto, and no condition herein (express or implied) may
be waived unless waived in writing by each party whom the condition is meant to benefit. The section headings herein are for the
convenience of the parties only and shall not affect the construction or interpretation of this Agreement.
Each of the parties
hereto acknowledges that it is a sophisticated business person who was adequately represented by counsel during negotiations regarding
the provisions hereof, including, without limitation, the indemnification and contribution provisions of Section 7, and is fully
informed regarding said provisions. Each of the parties hereto further acknowledges that the provisions of Section 7 hereto fairly
allocate the risks in light of the ability of the parties to investigate the Company, its affairs and its business in order to
assure that adequate disclosure has been made in the Registration Statement, any preliminary prospectus and the Prospectus (and
any amendments and supplements thereto), as required by the Securities Act and the Exchange Act.
The respective indemnities,
contribution agreements, representations, warranties and other statements of the Company and the Underwriters set forth in or made
pursuant to this Agreement shall remain operative and in full force and effect, regardless of (i) any investigation, or statement
as to the results thereof, made by or on behalf of the Underwriters, the officers or employees of the Underwriters, any person
controlling any of the Underwriters, the Company, the officers or employees of the Company, or any person controlling the Company,
(ii) acceptance of the Shares and payment for them as contemplated hereby and (iii) termination of this Agreement.
Except as otherwise
provided, this Agreement has been and is made solely for the benefit of and shall be binding upon the Company, the Underwriters,
the Underwriters’ officers and employees, any controlling persons referred to herein, the Company’s directors and the
Company’s officers who sign the Registration Statement and their respective successors and assigns, all as and to the extent
provided in this Agreement, and no other person shall acquire or have any right under or by virtue of this Agreement. The term
“successors and assigns” shall not include a purchaser of any of the Shares from the Underwriters merely because
of such purchase.
If the foregoing is
in accordance with your understanding of our agreement, kindly sign and return to the Company the enclosed copies hereof, whereupon
this instrument, along with all counterparts hereof, shall become a binding agreement in accordance with its terms.
|
Very truly yours, |
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DRAGON XXXXXXX XXXXXXXXXXXXX LIMITED |
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By: |
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Name: |
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Title: |
The foregoing Underwriting
Agreement is hereby confirmed and accepted by the Representative as of the date first above written.
For itself and on behalf of the several |
|
Underwriters listed on Schedule A hereto |
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BOUSTEAD SECURITIES, LLC |
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By: |
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Name: Xxxxx X. Xxxxx |
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Title: CEO |
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SCHEDULE A
Underwriters |
|
Shares Sold
through the
Underwriters
|
|
Boustead Securities, LLC |
|
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[·] |
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Network 1 Financial Securities, Inc. |
|
|
[·] |
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Total |
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[·] |
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SCHEDULE B
Issuer Free Writing Prospectus(es)
SCHEDULE C
Pricing Terms
Price
per Share to public: $[·]
Underwriters’
Commission per Share: $[·]
EXHIBIT A
Form of Warrant
Form of Underwriter’s Warrant Agreement
THE
REGISTERED HOLDER OF THIS PURCHASE WARRANT AGREES BY HIS, HER OR ITS ACCEPTANCE HEREOF, THAT SUCH HOLDER WILL NOT FOR A PERIOD
OF ONE HUNDRED EIGHTY (180) DAYS FOLLOWING THE EFFECTIVE DATE (AS DEFINED BELOW) OF THE REGISTRATION STATEMENT: (A) SELL, TRANSFER,
ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE WARRANT TO ANYONE OTHER THAN OFFICERS OR PARTNERS OF BOUSTEAD, EACH OF WHOM SHALL HAVE
AGREED TO THE RESTRICTIONS CONTAINED HEREIN, IN ACCORDANCE WITH FINRA CONDUCT RULE 5110(G)(1), OR (B) CAUSE THIS PURCHASE
WARRANT OR THE SECURITIES ISSUABLE HEREUNDER TO BE THE SUBJECT OF ANY HEDGING, SHORT SALE, DERIVATIVE, PUT OR CALL TRANSACTION
THAT WOULD RESULT IN THE EFFECTIVE ECONOMIC DISPOSITION OF THIS PURCHASE WARRANT OR THE SECURITIES HEREUNDER, EXCEPT AS PROVIDED
FOR IN FINRA RULE 5110(G)(2).
THIS PURCHASE WARRANT
IS NOT EXERCISABLE PRIOR TO [●], 20[__] [DATE THAT IS 180 DAYS FROM THE EFFECTIVE DATE OF THE OFFERING]. VOID AFTER 5:00
P.M., EASTERN TIME, [●], 20[__] [DATE THAT IS FIVE YEARS FROM THE EFFECTIVE DATE OF THE OFFERING].
ORDINARY SHARES PURCHASE WARRANT
For the Purchase of [●] Shares of
Ordinary Shares
of
DRAGON XXXXXXX XXXXXXXXXXXXX LIMITED
1. Purchase
Warrant. THIS CERTIFIES THAT, pursuant to that certain Underwriting Agreement by and between., Dragon Xxxxxxx Xxxxxxxxxxxxx
Limited, a Cayman Islands corporation (the “Company”) and Boustead Securities, LLC (“Boustead”),
as Representative of the several underwriters, dated [●], 2017 (the “Underwriting Agreement”), Boustead
(in such capacity with its permitted successors or assigns, the “Holder”), as registered owner of this Purchase
Warrant, is entitled, at any time or from time to time from [●], 20[__] (the “Exercise Date”) [THE DATE
THAT IS 180 DAYS AFTER THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT], and at or before 5:00 p.m., Eastern time, [●],
20[ ] [DATE THAT IS FIVE YEARS FROM THE EFFECTIVE DATE OF THE OFFERING] (the “Expiration Date”), but not thereafter,
to subscribe for, purchase and receive, in whole or in part, up to [●] shares of Ordinary Shares of the Company, par value
$0.0001 per share (the “Shares”), subject to adjustment as provided in Section 6 hereof. If
the Expiration Date is a day on which banking institutions are authorized by law or executive order to close, then this Purchase
Warrant may be exercised on the next succeeding day which is not such a day in accordance with the terms herein. During the period
commencing on the date hereof and ending on the Expiration Date, the Company agrees not to take any action that would terminate
this Purchase Warrant. This Purchase Warrant is initially exercisable at $[●] per Share (100% of the price of the Shares
sold in the Offering); provided, however, that upon the occurrence of any of the events specified in Section 6 hereof,
the rights granted by this Purchase Warrant, including the exercise price per Share and the number of Shares to be received upon
such exercise, shall be adjusted as therein specified. The term “Exercise Price” shall mean the initial exercise
price or the adjusted exercise price, depending on the context. Any term not defined herein shall have the meaning ascribed thereto
in the Underwriting Agreement.
2. Exercise.
2.1 Exercise
Form. In order to exercise this Purchase Warrant, the exercise form attached hereto as Exhibit A (the “Exercise
Form”) must be duly executed and completed and delivered to the Company, together with this Purchase Warrant and payment
of the Exercise Price for the Shares being purchased payable in cash by wire transfer of immediately available funds to an account
designated by the Company or by certified check or official bank check to the order of the Company. If the subscription rights
represented hereby shall not be exercised at or before 5:00 p.m., Eastern time, on the Expiration Date, this Purchase Warrant shall
become and be void without further force or effect, and all rights represented hereby shall cease and expire.
2.2 Cashless
Exercise. In lieu of exercising this Purchase Warrant by payment of cash or check payable to the order of the Company pursuant
to Section 2.1 above, Holder may elect to receive the number of Shares equal to the value of this Purchase Warrant
(or the portion thereof being exercised), by surrender of this Purchase Warrant to the Company, together with the Exercise Form,
in which event the Company shall issue to Holder, Shares in accordance with the following formula:
| Where, | X = The
number of Shares to be issued to Holder; |
Y = The number
of Shares for which the Purchase Warrant is being exercised;
A = The fair
market value of one Share; and
B = The Exercise
Price.
For purposes of this Section 2.2,
the fair market value of a Share is defined as follows:
(i) if
the Company’s Ordinary Shares is traded on a securities exchange, the value shall be deemed to be the closing price on such
exchange on the trading day immediately prior to the Exercise Form being submitted in connection with the exercise of this Purchase
Warrant; or
(ii) if
the Company’s Ordinary Shares is actively traded over-the-counter, the value shall be deemed to be the closing bid price
on the trading day immediately prior to the Exercise Form being submitted in connection with the exercise of the Purchase Warrant;
if there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Company’s
Board of Directors.
2.3 Legend.
Each certificate for the securities purchased under this Purchase Warrant shall bear a legend as follows unless such securities
have been registered under the Securities Act of 1933, as amended (the “Act”):
“The securities represented
by this certificate have not been registered under the Securities Act of 1933, as amended (the “Act”), or applicable
state law. Neither the securities nor any interest therein may be offered for sale, sold or otherwise transferred except pursuant
to an effective registration statement under the Act, or pursuant to an exemption from registration under the Act and applicable
state law which, in the opinion of counsel to the Company, is available.”
3. Transfer.
3.1 General
Restrictions. The registered Holder of this Purchase Warrant agrees by his, her or its acceptance hereof, that such Holder
will not for a period of one hundred eighty (180) days following the Effective Date of the Registration Statement: (a) sell, transfer,
assign, pledge or hypothecate this Purchase Warrant to anyone other than: (i) Boustead or an underwriter or a selected dealer participating
in the offering (the “Offering”) contemplated by the Underwriting Agreement, or (ii) officers or partners of
Boustead, each of whom shall have agreed to the restrictions contained herein, in accordance with FINRA Conduct Rule 5110(g)(1),
or (b) cause this Purchase Warrant or the securities issuable hereunder to be the subject of any hedging, short sale, derivative,
put or call transaction that would result in the effective economic disposition of this Purchase Warrant or the securities hereunder,
except as provided for in FINRA Rule 5110(g)(2). On and after that date that is one hundred eighty (180) days after the Effective
Date of the Registration Statement, transfers to others may be made subject to compliance with or exemptions from applicable securities
laws. In order to make any permitted assignment, the Holder must deliver to the Company the assignment form attached hereto as Exhibit B
duly executed and completed, together with this Purchase Warrant and payment of all transfer taxes, if any, payable in connection
therewith. The Company shall within five (5) Business Days transfer this Purchase Warrant on the books of the Company and shall
execute and deliver a new Purchase Warrant or Purchase Warrants of like tenor to the appropriate assignee(s) expressly evidencing
the right to purchase the aggregate number of Shares purchasable hereunder or such portion of such number as shall be contemplated
by any such assignment.
3.2 Restrictions
Imposed by the Act. The securities evidenced by this Purchase Warrant shall not be transferred unless and until: (i) the Company
has received the opinion of counsel for the Holder that the securities may be transferred pursuant to an exemption from registration
under the Act and applicable state securities laws, the availability of which is established to the reasonable satisfaction of
the Company, (ii) a Registration Statement relating to the offer and sale of such securities that includes a current prospectus
with respect to which the Holder has exercised its registration rights pursuant to Section 4.2 herein, has been
filed and declared effective by the Securities and Exchange Commission (the “Commission”) and compliance with
applicable state securities law has been established.
4. Registration
Rights.
4.1 Demand
Registration.
4.1.1 Grant
of Right. The Company, upon written demand (a “Demand Notice”) of the Holder(s) of at least 51% of the Purchase
Warrants and/or the underlying shares (“Majority Holders”), agrees to register, on one occasion, all or any
portion of the shares underlying the Purchase Warrants (collectively, the “Registrable Securities”). On such occasion,
the Company will file a registration statement with the Commission covering the Registrable Securities within sixty (60) days after
receipt of a Demand Notice and use its reasonable best efforts to have the registration statement declared effective promptly thereafter,
subject to compliance with review by the Commission; provided, however, that the Company shall not be required
to comply with a Demand Notice if the Company has filed a registration statement with respect to which the Holder is entitled to
piggyback registration rights pursuant to Section 4.2 hereof and either: (i) the Holder has elected to participate in the offering
covered by such registration statement or (ii) if such registration statement relates to an underwritten primary offering of securities
of the Company, until the offering covered by such registration statement has been withdrawn or until thirty (30) days after such
offering is consummated. The demand for registration may be made at any time during a period of four (4) years beginning on the
Exercise Date. The Company covenants and agrees to give written notice of its receipt of any Demand Notice by any Holder(s) to
all other registered Holders of the Purchase Warrants and/or the Registrable Securities within ten (10) days after the date of
the receipt of any such Demand Notice.
4.1.2 Terms.
The Company shall bear all fees and expenses attendant to the registration of the Registrable Securities pursuant to Section 4.1.1,
but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to
represent them in connection with the sale of the Registrable Securities. The Company agrees to use its reasonable best efforts
to cause the filing required herein to become effective promptly and to qualify or register the Registrable Securities in such
States as are reasonably requested by the Holder(s); provided, however, that in no event shall the Company
be required to register the Registrable Securities in a State in which such registration would cause: (i) the Company to be obligated
to register or license to do business in such State or submit to general service of process in such State, or (ii) the principal
stockholders of the Company to be obligated to escrow their shares of capital stock of the Company. The Company shall cause any
registration statement filed pursuant to the demand right granted under Section 4.1.1 to remain effective for a period of at least
twelve (12) consecutive months after the date that the Holders of the Registrable Securities covered by such registration statement
are first given the opportunity to sell all of such securities. The Holders shall only use the prospectuses provided by the Company
to sell the shares covered by such registration statement, and will immediately cease to use any prospectus furnished by the Company
if the Company advises the Holder that such prospectus may no longer be used due to a material misstatement or omission. Notwithstanding
the provisions of this Section 4.1.2, the Holder shall be entitled to a demand registration under this Section 4.1.2 on only one
(1) occasion and such demand registration right shall terminate on the fifth anniversary of the effectiveness of the registration
statement in accordance with FINRA 5110(f)(2)(G)(iv).
4.2 Reserved.
4.3 General
Terms.
4.3.1 Indemnification.
The Company shall indemnify the Holder(s) of the Registrable Securities to be sold pursuant to any registration statement hereunder
and each person, if any, who controls such Holders within the meaning of Section 15 of the Act or Section 20(a) of the Securities
Exchange Act of 1934, as amended (“Exchange Act”), against all loss, claim, damage, expense or liability (including
all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any
claim whatsoever) to which any of them may become subject under the Act, the Exchange Act or otherwise, arising from such registration
statement but only to the same extent and with the same effect as the provisions pursuant to which the Company has agreed to indemnify
the Underwriters contained in Section 5.1 of the Underwriting Agreement. The Holder(s) of the Registrable Securities to be sold
pursuant to such registration statement, and their successors and assigns, shall severally, and not jointly, indemnify the Company,
against all loss, claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably
incurred in investigating, preparing or defending against any claim whatsoever) to which they may become subject under the Act,
the Exchange Act or otherwise, arising from information furnished by or on behalf of such Holders, or their successors or assigns,
in writing, for specific inclusion in such registration statement to the same extent and with the same effect as the provisions
contained in Section 5.2 of the Underwriting Agreement pursuant to which the Underwriters have agreed to indemnify the Company.
4.3.2 Exercise
of Purchase Warrants. Nothing contained in this Purchase Warrant shall be construed as requiring the Holder(s) to exercise
their Purchase Warrants prior to or after the initial filing of any registration statement or the effectiveness thereof.
4.3.3 Documents
Delivered to Holders. If the registration statement includes an underwritten public offering, the Company shall furnish to
each underwriter of any such offering, a signed counterpart, addressed to such underwriter, of: (i) an opinion of counsel to the
Company, dated as of the date on which the Registrable Securities are delivered to the underwriter for sale pursuant to such registration,
and (ii) a “cold comfort” letter dated the effective date of such registration statement and the date of the closing
under the underwriting agreement signed by the independent registered public accounting firm which has issued a report on the Company’s
financial statements included in such registration statement, in each case covering substantially the same matters with respect
to such registration statement (and the prospectus included therein) and, in the case of such accountants’ letter, with respect
to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer’s counsel
and in accountants’ letters delivered to underwriter(s) in underwritten public offerings of securities. The Company shall
also deliver promptly to each Holder participating in the offering requesting the correspondence and memoranda described below
and to the managing underwriter, if any, copies of all correspondence between the Commission and the Company, its counsel or auditors
and all memoranda relating to discussions with the Commission or its staff with respect to the registration statement and permit
each Holder and underwriter(s) to do such investigation, upon reasonable advance notice, with respect to information contained
in or omitted from the registration statement as it deems reasonably necessary to comply with applicable securities laws or rules
of FINRA. Such investigation shall include access to books, records and properties and opportunities to discuss the business of
the Company with its officers and independent auditors, all to such reasonable extent and at such reasonable times as any such
Holder shall reasonably request.
4.3.4 Underwriting
Agreement. The Company shall enter into an underwriting agreement with the managing underwriter(s), if any, selected by any
Holders whose Registrable Securities are being registered pursuant to this Section 4, which managing underwriter shall
be reasonably satisfactory to the Company. Such agreement shall be reasonably satisfactory in form and substance to the Company,
each Holder and such managing Underwriter, and shall contain such representations, warranties and covenants by the Company and
such other terms as are customarily contained in agreements of that type used by the managing underwriter. The Holders shall be
parties to any underwriting agreement relating to an underwritten sale of their Registrable Securities and may, at their option,
require that any or all the representations, warranties and covenants of the Company to or for the benefit of such Underwriter(s)
shall also be made to and for the benefit of such Holders. Such Holders shall not be required to make any representations or warranties
to or agreements with the Company or the Underwriter(s) except as they may relate to such Holders, their Shares and their intended
methods of distribution.
4.3.5 Documents
to be Delivered by Holder(s). Each of the Holder(s) participating in any of the foregoing offerings shall furnish to the Company
a completed and executed questionnaire provided by the Company requesting information customarily sought of selling security holders.
4.3.6 Damages.
Should the registration or the effectiveness thereof required by Section 4.3 hereof be delayed by the Company
or the Company otherwise fails to comply with such provisions, the Holder(s) shall, in addition to any other legal or other relief
available to the Holder(s), be entitled to obtain specific performance or other equitable (including injunctive) relief against
the threatened breach of such provisions or the continuation of any such breach, without the necessity of proving actual damages
and without the necessity of posting bond or other security.
4.3.7 Rule
144 Registration. The provisions of this Section 4 shall be inapplicable to the extent the Registrable Securities
become eligible for sale by the Holder upon a cashless exercise of this Purchase Warrant as set forth in Section 2.2 hereof without
the need for current pubic information or other restriction pursuant to Rule 144 under the Act.
5. New
Purchase Warrants to be Issued.
5.1 Partial
Exercise or Transfer. Subject to the restrictions in Section 3 hereof, this Purchase Warrant may be exercised
or assigned in whole or in part. In the event of the exercise or assignment hereof in part only, upon surrender of this Purchase
Warrant for cancellation, together with the duly executed exercise or assignment form and funds sufficient to pay any Exercise
Price and/or transfer tax if exercised pursuant to Section 2.1 hereof, the Company shall cause to be delivered
to the Holder without charge a new Purchase Warrant of like tenor to this Purchase Warrant in the name of the Holder evidencing
the right of the Holder to purchase the number of Shares purchasable hereunder as to which this Purchase Warrant has not been exercised
or assigned.
5.2 Lost
Certificate. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this
Purchase Warrant and of reasonably satisfactory indemnification or the posting of a bond, the Company shall execute and deliver
a new Purchase Warrant of like tenor and date. Any such new Purchase Warrant executed and delivered as a result of such loss, theft,
mutilation or destruction shall constitute a substitute contractual obligation on the part of the Company.
6. Adjustments.
6.1 Adjustments
to Exercise Price and Number of Shares. The Exercise Price and the number of Shares underlying this Purchase Warrant shall
be subject to adjustment from time to time as hereinafter set forth:
6.1.1 Share
Dividends; Split Ups. If, after the date hereof, and subject to the provisions of Section 6.3 below, the number
of outstanding Shares is increased by a stock dividend payable in Shares or by a split up of Shares or other similar event, then,
on the effective day thereof, the number of Shares purchasable hereunder shall be increased in proportion to such increase in outstanding
shares, and the Exercise Price shall be proportionately decreased.
6.1.2 Aggregation
of Shares. If, after the date hereof, and subject to the provisions of Section 6.3 below, the number of outstanding
Shares is decreased by a consolidation, combination or reclassification of Shares or other similar event, then, on the effective
date thereof, the number of Shares purchasable hereunder shall be decreased in proportion to such decrease in outstanding shares,
and the Exercise Price shall be proportionately increased.
6.1.3 Replacement
of Shares upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding Shares other than
a change covered by Section 6.1.1 or Section 6.1.2 hereof or that solely affects the par
value of such Shares, or in the case of any share reconstruction or amalgamation or consolidation of the Company with or into another
corporation (other than a consolidation or share reconstruction or amalgamation in which the Company is the continuing corporation
and that does not result in any reclassification or reorganization of the outstanding Shares), or in the case of any sale or conveyance
to another corporation or entity of the property of the Company as an entirety or substantially as an entirety in connection with
which the Company is dissolved, the Holder of this Purchase Warrant shall have the right thereafter (until the expiration of the
right of exercise of this Purchase Warrant) to receive upon the exercise hereof, for the same aggregate Exercise Price payable
hereunder immediately prior to such event, the kind and amount of shares of stock or other securities or property (including cash)
receivable upon such reclassification, reorganization, share reconstruction or amalgamation, or consolidation, or upon a dissolution
following any such sale or transfer, by a Holder of the number of Shares of the Company obtainable upon exercise of this Purchase
Warrant immediately prior to such event; and if any reclassification also results in a change in Shares covered by Section
6.1.1 or Section 6.1.2, then such adjustment shall be made pursuant to Section 6.1.1, Section
6.1.2 and this Section 6.1.3. The provisions of this Section 6.1.3 shall similarly apply
to successive reclassifications, reorganizations, share reconstructions or amalgamations, or consolidations, sales or other transfers.
6.1.4 Changes
in Form of Purchase Warrant. This form of Purchase Warrant need not be changed because of any change pursuant to this Section
6.1, and Purchase Warrants issued after such change may state the same Exercise Price and the same number of Shares as are
stated in the Purchase Warrants initially issued pursuant to this Agreement. The acceptance by any Holder of the issuance of new
Purchase Warrants reflecting a required or permissive change shall not be deemed to waive any rights to an adjustment occurring
after the date hereof or the computation thereof.
6.2 Substitute
Purchase Warrant. In case of any consolidation of the Company with, or share reconstruction or amalgamation of the Company
with or into, another corporation (other than a consolidation or share reconstruction or amalgamation which does not result in
any reclassification or change of the outstanding Shares), the corporation formed by such consolidation or share reconstruction
or amalgamation shall execute and deliver to the Holder a supplemental Purchase Warrant providing that the holder of each Purchase
Warrant then outstanding or to be outstanding shall have the right thereafter (until the stated expiration of such Purchase Warrant)
to receive, upon exercise of such Purchase Warrant, the kind and amount of shares of stock and other securities and property receivable
upon such consolidation or share reconstruction or amalgamation, by a holder of the number of Shares of the Company for which such
Purchase Warrant might have been exercised immediately prior to such consolidation, share reconstruction or amalgamation, sale
or transfer. Such supplemental Purchase Warrant shall provide for adjustments which shall be identical to the adjustments provided
for in this Section 6. The above provision of this Section 6 shall similarly apply to successive consolidations
or share reconstructions or amalgamations.
6.3 Elimination
of Fractional Interests. The Company shall not be required to issue certificates representing fractions of Shares upon the
exercise of the Purchase Warrant, nor shall it be required to issue scrip or pay cash in lieu of any fractional interests, it being
the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up or down, as the case may
be, to the nearest whole number of Shares or other securities, properties or rights.
7. Reservation
and Listing. The Company shall at all times reserve and keep available out of its authorized Shares, solely for the purpose
of issuance upon exercise of this Purchase Warrant, such number of Shares or other securities, properties or rights as shall be
issuable upon the exercise thereof. The Company covenants and agrees that, upon exercise of this Purchase Warrant and payment of
the Exercise Price therefor, in accordance with the terms hereby, all Shares and other securities issuable upon such exercise shall
be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any shareholder. The Company
further covenants and agrees that upon exercise of this Purchase Warrant and payment of the exercise price therefor, all Shares
and other securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject
to preemptive rights of any shareholder. As long as this Purchase Warrant shall be outstanding, the Company shall use its commercially
reasonable efforts to cause all Shares issuable upon exercise of this Purchase Warrant to be listed (subject to official notice
of issuance) on all national securities exchanges (or, if applicable, on the OTC Bulletin Board or any successor trading market)
on which the Shares issued to the public in the Offering may then be listed and/or quoted.
8. Certain
Notice Requirements.
8.1 Holder’s
Right to Receive Notice. Nothing herein shall be construed as conferring upon the Holders the right to vote or consent or to
receive notice as a shareholder for the election of directors or any other matter, or as having any rights whatsoever as a shareholder
of the Company. If, however, at any time prior to the expiration of the Purchase Warrants and their exercise, any of the events
described in Section 8.2 shall occur, then, in one or more of said events, the Company shall give written notice
of such event at least fifteen days prior to the date fixed as a record date or the date of closing the transfer books (the “Notice
Date”) for the determination of the shareholders entitled to such dividend, distribution, conversion or exchange of securities
or subscription rights, or entitled to vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify
such record date or the date of the closing of the transfer books, as the case may be. Notwithstanding the foregoing, the Company
shall deliver to each Holder a copy of each notice given to the other shareholders of the Company at the same time and in the same
manner that such notice is given to the shareholders.
8.2 Events
Requiring Notice. The Company shall be required to give the notice described in this Section 8 upon one or
more of the following events: (i) if the Company shall take a record of the holders of its Shares for the purpose of entitling
them to receive a dividend or distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise
than out of retained earnings, as indicated by the accounting treatment of such dividend or distribution on the books of the Company,
(ii) the Company shall offer to all the holders of its Shares any additional shares of capital stock of the Company or securities
convertible into or exchangeable for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor,
or (iii) a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or share reconstruction
or amalgamation) or a sale of all or substantially all of its property, assets and business shall be proposed.
8.3 Notice
of Change in Exercise Price. The Company shall, promptly after an event requiring a change in the Exercise Price pursuant to Section
6 hereof, send notice to the Holders of such event and change (“Price Notice”). The Price Notice shall
describe the event causing the change and the method of calculating same and shall be certified as being true and accurate by the
Company’s Chief Financial Officer.
8.4 Transmittal
of Notices. All notices, requests, consents and other communications under this Purchase Warrant shall be in writing and shall
be deemed to have been duly made (1) when hand delivered, (2) when mailed by express mail or private courier service or (3)
when the event requiring notice is disclosed in all material respects and filed in a current report on Form 8-K or in a definitive
proxy statement on Schedule 14A prior to the Notice Date: (i) if to the registered Holder of the Purchase Warrant, to the address
of such Holder as shown on the books of the Company, or (ii) if to the Company, to following address or to such other address as
the Company may designate by notice to the Holders:
If to the Holder:
Boustead Securities, LLC
As Representative of the Several Underwriters
000 X. Xxxxxxxxx Xxxx., Xxxxx 000,
Xx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxx, CEO
Fax: x0 000 000 0000
with a copy (which
shall not constitute notice) to:
Mei & Xxxx LLP
000 00xx Xxxxxx XX, Xxxxx 000
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxx Xxx, Esq.
If to the Company:
Dragon Xxxxxxx
Xxxxxxxxxxxxx Limited
Xxxxx X0-000,
Xx.000, Xxxx Xxxx,
Xxxxxxxx
Xxxxxxxx, Xxxxxxxx, PRC
Attention:
Xxxxxxx Xx, CFO
Fax:
with a copy (which
shall not constitute notice) to:
Xxxxxx Xxxxxxx Xxxxxxx & Li LLC
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxx Xx, Esq.
9. Miscellaneous.
9.1 Amendments.
The Company and Boustead may from time to time supplement or amend this Purchase Warrant without the approval of any of the Holders
in order to cure any ambiguity, to correct or supplement any provision contained herein that may be defective or inconsistent with
any other provisions herein, or to make any other provisions in regard to matters or questions arising hereunder that the Company
and Boustead may deem necessary or desirable and that the Company and Boustead deem shall not adversely affect the interest of
the Holders. All other modifications or amendments shall require the written consent of and be signed by the party against whom
enforcement of the modification or amendment is sought.
9.2 Headings.
The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Purchase Warrant.
9.3 Entire
Agreement. This Purchase Warrant (together with the other agreements and documents being delivered pursuant to or in connection
with this Purchase Warrant) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and
supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.
9.4 Binding
Effect. This Purchase Warrant shall inure solely to the benefit of and shall be binding upon, the Holder and the Company and
their permitted assignees and respective successors and no other person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of or by virtue of this Purchase Warrant or any provisions herein contained.
9.5 Governing
Law; Submission to Jurisdiction. This Purchase Warrant shall be governed by and construed and enforced in accordance with the
laws of the State of California, without giving effect to conflict of laws principles thereof. The Company hereby agrees that any
action, proceeding or claim against it arising out of, or relating in any way to this Purchase Warrant shall be brought and enforced
in the California Supreme Court, Los Angeles County , or in the United States District Court for the Central District of California,
and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to
such exclusive jurisdiction and that such courts represent an inconvenient forum. Any process or summons to be served upon the
Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid,
addressed to it at the address set forth in Section 8 hereof. Such mailing shall be deemed personal service and
shall be legal and binding upon the Company in any action, proceeding or claim. The Company and the Holder agree that the prevailing
party(ies) in any such action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees
and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor.
9.6 Waiver,
etc. The failure of the Company or the Holder to at any time enforce any of the provisions of this Purchase Warrant shall not
be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this Purchase Warrant or
any provision hereof or the right of the Company or any Holder to thereafter enforce each and every provision of this Purchase
Warrant. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Purchase Warrant shall be
effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver
is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any
other or subsequent breach, non-compliance or non-fulfillment.
9.7 Exchange
Agreement. As a condition of the Holder’s receipt and acceptance of this Purchase Warrant, Holder agrees that, at any
time prior to the complete exercise of this Purchase Warrant by Holder, if the Company and Boustead enter into an agreement (“Exchange
Agreement”) pursuant to which they agree that all outstanding Purchase Warrants will be exchanged for securities or cash
or a combination of both, then Holder shall agree to such exchange and become a party to the Exchange Agreement.
9.8 Execution
in Counterparts. This Purchase Warrant may be executed in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and
the same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and
delivered to each of the other parties hereto. Such counterparts may be delivered by facsimile transmission or other electronic
transmission.
[Remainder of page intentionally left
blank.]
IN WITNESS WHEREOF, the Company
has caused this Purchase Warrant to be signed by its duly authorized officer as of the ____ day of _______, 2017.
DRAGON XXXXXXX XXXXXXXXXXXXX LIMITED |
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EXHIBIT A
Form to be used to exercise Purchase Warrant:
Date: __________, 20___
The undersigned hereby
elects irrevocably to exercise the Purchase Warrant for ______ Shares of Dragon Xxxxxxx Xxxxxxxxxxxxx Limited, a Cayman Islands
corporation (the “Company”) and hereby makes payment of $____ (at the rate of $____ per Share) in payment of
the Exercise Price pursuant thereto. Please issue the Shares as to which this Purchase Warrant is exercised in accordance with
the instructions given below and, if applicable, a new Purchase Warrant representing the number of Shares for which this Purchase
Warrant has not been exercised.
or
The undersigned hereby
elects irrevocably to convert its right to purchase ___ Shares under the Purchase Warrant for ______ Shares, as determined in accordance
with the following formula:
| Where, | X = The
number of Shares to be issued to Holder; |
Y = The number of
Shares for which the Purchase Warrant is being exercised;
A = The fair market
value of one Share which is equal to $_____; and
B = The Exercise Price
which is equal to $______ per share
The undersigned agrees
and acknowledges that the calculation set forth above is subject to confirmation by the Company and any disagreement with respect
to the calculation shall be resolved by the Company in its sole discretion.
Please issue the Shares
as to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable, a new Purchase
Warrant representing the number of Shares for which this Purchase Warrant has not been exercised.
Signature
Signature Guaranteed
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
Name:
(Print in Block Letters)
Address:
NOTICE: The signature
to this form must correspond with the name as written upon the face of the Purchase Warrant without alteration or enlargement or
any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership
on a registered national securities exchange.
EXHIBIT B
Form to be used to assign Purchase Warrant:
(To be executed by
the registered Holder to effect a transfer of the within Purchase Warrant):
FOR VALUE RECEIVED,
does
hereby sell, assign and transfer unto the right to purchase shares of Dragon Xxxxxxx Xxxxxxxxxxxxx Limited, a Cayman Islands corporation
(the “Company”), evidenced by the Purchase Warrant and does hereby authorize the Company to transfer such right
on the books of the Company.
Dated: ____________, 20__
Signature
NOTICE: The signature
to this form must correspond with the name as written upon the face of the within Purchase Warrant without alteration or enlargement
or any change whatsoever.
Exhibit B
Form of Lock-Up Agreement
[•], 2017
Boustead Capital Partners, LLC,
As Representative of the several Underwriters
000 X. Xxxxxxxxx Xxxx., Xxxxx 000
Xx Xxxxxxx, XX 00000
Ladies and Gentlemen:
The undersigned, a
holder, in the aggregate, (except as otherwise set forth in the second paragraph immediately following this paragraph below) of
shares of Ordinary Shares and/or securities convertible into or exercisable for 5% of the outstanding shares of Ordinary Shares,
and/or an officer and/or a director, of Dragon Xxxxxxx Xxxxxxxxxxxxx Limited, a Cayman Islands corporation (the “Company”),
understands that Boustead Securities, LLC (the “Representative”), for itself and on behalf of each of the other
underwriters listed on Schedule A to the Underwriting Agreement (the “Underwriting Agreement”), proposes to
enter into the Underwriting Agreement with the Company, providing for the public offering (the “Public Offering”)
of shares of Ordinary Shares, par value $0.0001 per share, of the Company (the “Shares”).
To induce the Representative
to continue its efforts in connection with the Public Offering and in recognition of the benefit that the Public Offering will
confer on the undersigned as a stockholder and/or director and/or officer of the Company, and for other good and valuable consideration,
the sufficiency of which are hereby acknowledged, the undersigned hereby agrees that, without the prior written consent of the
Representative, the undersigned will not, during the period commencing on the effective date of the registration statement (the
“Registration Statement”) relating to the Public Offering and ending 180 days (subject to extension) after such
date (the “Lock-Up Period”), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose
of, directly or indirectly, any shares of our securities or any securities convertible into or exercisable or exchangeable for
the Shares whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter
acquires the power of disposition (collectively, the “Lock-Up Securities”); (2) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up Securities,
whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Lock-Up Securities, in cash or
otherwise; (3) make any demand for or exercise any right with respect to the registration of the offer and sale of any Lock-Up
Securities; or (4) publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction,
swap, hedge or other arrangement relating to any Lock-Up Securities. Notwithstanding the foregoing, and subject to the conditions
below, the undersigned may transfer Lock-Up Securities without the prior written consent of the Representative in connection with
(a) transactions relating to Lock-Up Securities acquired in open market transactions after the completion of the Public Offering; provided that
no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), shall
be required or shall be voluntarily made in connection with subsequent sales of Lock-Up Securities acquired in such open market
transactions; (b) transfers of Lock-Up Securities as a bona fide gift, by will or intestacy or to a family member
or trust for the benefit of a family member (for purposes of this lock-up agreement, “family member” means any relationship
by blood, marriage or adoption, not more remote than first cousin); (c) transfers of Lock-Up Securities to a charity or educational
institution; or (d) if the undersigned, directly or indirectly, controls a corporation, partnership, limited liability company
or other business entity, any transfers of Lock-Up Securities to any shareholder, partner or member of, or owner of similar equity
interests in, the undersigned, as the case may be; provided that in the case of any transfer pursuant to the foregoing
clauses (b), (c) or (d), (i) any such transfer shall not involve a disposition for value, (ii) each transferee shall sign and deliver
to the Representative a lock-up agreement substantially in the form of this lock-up agreement and (iii) no filing under Section 16(a)
of the Exchange Act shall be required or shall be voluntarily made. The undersigned also agrees and consents to the entry of stop
transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s Lock-Up
Securities except in compliance with this lock-up agreement.
If (i) during the last
17 days of the Lock-Up Period, the Company issues an earnings release or material news or a material event relating to the Company
occurs, or (ii) prior to the expiration of the Lock-Up Period, the Company announces that it will release earnings results or becomes
aware that material news or a material event will occur during the 16-day period beginning on the last day of the Lock-Up Period,
the restrictions imposed by this lock-up agreement shall continue to apply until the expiration of the 18-day period beginning
on the issuance of the earnings release or the occurrence of such material news or material event, as applicable, unless the Representative
waives, in writing, such extension.
The undersigned agrees
that, prior to engaging in any transaction or taking any other action that is subject to the terms of this lock-up agreement during
the period from the date hereof to and including the 34th day following the expiration of the initial Lock-Up Period,
the undersigned will give notice thereof to the Company and will not consummate any such transaction or take any such action unless
it has received written confirmation from the Company that the Lock-Up Period (as may have been extended pursuant to the previous
paragraph) has expired.
If the undersigned
is an officer or director of the Company, (i) the undersigned agrees that the foregoing restrictions shall be equally applicable
to any issuer-directed or “friends and family” Shares that the undersigned may purchase in the Public Offering; (ii)
the Representative agrees that, at least three (3) business days before the effective date of any release or waiver of the foregoing
restrictions in connection with a transfer of Lock-Up Securities, the Representative will notify the Company of the impending release
or waiver; and (iii) the Company has agreed in the Underwriting Agreement to announce the impending release or waiver by press
release through a major news service at least two (2) business days before the effective date of the release or waiver. Any release
or waiver granted by the Representative hereunder to any such officer or director shall only be effective two (2) business days
after the publication date of such press release. The provisions of this paragraph will not apply if (a) the release or waiver
is effected solely to permit a transfer of Lock-Up Securities not for consideration and (b) the transferee has agreed in writing
to be bound by the same terms described in this lock-up agreement to the extent and for the duration that such terms remain in
effect at the time of such transfer.
No provision in this
lock-up agreement shall be deemed to restrict or prohibit the exercise, exchange or conversion by the undersigned of any securities
exercisable or exchangeable for or convertible into Shares, as applicable; provided that the undersigned does
not transfer the Shares acquired on such exercise, exchange or conversion during the Lock-Up Period, unless otherwise permitted
pursuant to the terms of this lock-up agreement. In addition, no provision herein shall be deemed to restrict or prohibit the entry
into or modification of a so-called “10b5-1” plan at any time (other than the entry into or modification of such a
plan in such a manner as to cause the sale of any Lock-Up Securities within the Lock-Up Period) or a sale or exchange of 100% of
the Company’s outstanding Shares.
The undersigned understands
that the Company and the Representative are relying upon this lock-up agreement in proceeding toward consummation of the Public
Offering. The undersigned further understands that this lock-up agreement is irrevocable and shall be binding upon the undersigned’s
heirs, legal underwriters, successors and assigns.
The undersigned understands
that, if the Underwriting Agreement is not executed by _____________, 2017, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Shares then this lock-up
agreement shall be void and of no further force or effect.
Whether or not the
Public Offering actually occurs depends on a number of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Representative.
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Very truly yours, |
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(Name – Please Print) |
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(Signature) |
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(Name of Signatory, in the case of entities – Please Print) |
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(Title of Signatory, in the case of entities – Please Print) |