CHINA GREEN AGRICULTURE, INC. 3,500,000 Shares of Common Stock UNDERWRITING AGREEMENT
Exhibit
1.1
3,500,000 Shares
of Common Stock
July 20,
2009
XXXX
CAPITAL PARTNERS, LLC
00
Xxxxxxxxx Xxxxx
Xxxxxxx
Xxxxx, XX 00000
Ladies
and Gentlemen:
China
Green Agriculture, Inc., a Nevada corporation (the “Company”), proposes, subject to
the terms and conditions herein, to issue and sell to Xxxx Capital Partners, LLC
(the “Underwriter”) an
aggregate of 3,500,000 shares (the “Shares”) of its common stock,
$0.001 par value per share (the “Common Stock”) of the
Company.
The
Company and the Underwriter hereby confirm their agreement with respect to the
purchase and sale of the Shares as follows:
Section 1. Representations,
Warranties and Agreements of the Company.
The
Company hereby represents, warrants and covenants to the Underwriter as of the
date hereof, as of the Closing Date (as defined below) and as of each Option
Closing Date (as defined below), as follows:
(a) Registration Statement.
(i) The Company has prepared and filed with the Securities and
Exchange Commission (the “Commission”) a registration
statement on Form S-3 (File No. 333-159842) under the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the “Securities
Act”) and such amendments to such registration statement as may have been
required to the date of this Agreement. Such registration statement
has been declared effective by the Commission. Each part of such
registration statement, at any given time, including amendments thereto at such
time, the exhibits and any schedules thereto at such time, the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act at such time and the documents and information otherwise deemed
to be a part thereof or included therein by Rule 430B under the Securities Act
or otherwise pursuant to the Securities Act at such time, is herein called the
“Registration
Statement.” The Company and the transactions contemplated by this
Agreement meet the requirements and comply with the conditions for the use of
Form S-3 under the Securities Act. The offering of the Shares by the
Company complies with the applicable requirements of Rule 415 under the
Securities Act. The Company has complied with all requests of the
Commission for additional or supplemental information.
(ii) No
stop order preventing or suspending use of the Registration Statement, any
Preliminary Prospectus or the Prospectus or the effectiveness of the
Registration Statement, has been issued by the Commission, and no proceedings
for such purpose have been instituted or, to the Company’s knowledge, are
contemplated or threatened by the Commission.
(iii) The
Company shall file with the Commission pursuant to Rule 424 under the Securities
Act a final prospectus supplement relating to the Shares to a form of prospectus
included in the Registration Statement relating to the Shares in the form
heretofore delivered to the Underwriter. Such prospectus included in
the Registration Statement at the time it was declared effective by the
Commission or in the form in which it has been most recently filed with the
Commission on or prior to the date of this Agreement is hereinafter called the
“Base Prospectus.” Such
supplemental form of prospectus, in the form in which it shall be filed with the
Commission pursuant to Rule 424(b)(including the Base Prospectus as so
supplemented) is hereinafter called the “Prospectus.” Any
preliminary form of Prospectus which is filed or used prior to filing of the
Prospectus is hereinafter called a “Preliminary Prospectus.” Any
reference herein to the Base Prospectus, any Preliminary Prospectus or the
Prospectus or to any amendment or supplement to any of the foregoing shall be
deemed to refer to include any documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Securities Act as of the date of such
prospectus, and, in the case of any reference herein to the Prospectus, also
shall be deemed to include any documents incorporated by reference therein, and
any supplements or amendments thereto, filed with the Commission after the date
of filing of the Prospectus under Rule 424(b) under the Securities Act, and
prior to the termination of the offering of the Shares by the
Underwriter.
(iv) For
purposes of this Agreement, all references to the Registration Statement, the
Base Prospectus, any Preliminary Prospectus, the Prospectus or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval System (“XXXXX”). All
references in this Agreement to amendments or supplements to the Registration
Statement, the Base Prospectus, any Preliminary Prospectus or the Prospectus
shall be deemed to mean and include the subsequent filing of any document under
the Exchange Act (as defined herein) and which is deemed to be incorporated
therein by reference therein or otherwise deemed to be a part
thereof.
(b) Compliance with Registration
Requirements. As of the time of filing of the Registration
Statement or any post-effective amendment thereto, at the time it became
effective (including each deemed effective date with respect to the Underwriter
pursuant to Rule 430B under the Securities Act), at all other subsequent
times until the expiration of the Prospectus Delivery Period (as defined below),
as of the Closing Date and as of any Option Closing Date, the Registration
Statement complied and will comply, in all material respects, with the
requirements of the Securities Act, including compliance with the requirements
for use of Form S-3 pursuant to General Instruction I.B.1. of such form, 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. Each Preliminary Prospectus and the
Prospectus, at the time of filing or the time of first use, at all other
subsequent times until the expiration of the Prospectus Delivery Period, as of
the Closing Date and as of any Option Closing Date, complied and will comply, in
all material respects, with the requirements of the Securities Act and did not
and will not contain an 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; provided, that the Company
makes no representations or warranty in this paragraph with respect to any
Underwriter Information (as defined in Section
7).
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(c) Disclosure
Package. As of the Time of Sale (as defined below), at all
other subsequent times until the expiration of the Prospectus Delivery Period,
as of the Closing Date and as of any Option Closing Date, the Statutory
Prospectus (as defined below) and the information included on Schedule II hereto, all
considered together (collectively, the “Disclosure Package”), did not
include or will not include any untrue statement of a material fact or omitted
or will 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;
provided, that the Company makes no representations or warranty in this
paragraph with respect to any Underwriter Information. No statement
of material fact included in the Prospectus has been omitted from the Disclosure
Package and no statement of material fact included in the Disclosure Package
that is required to be included in the Prospectus has been omitted therefrom. As
used in this paragraph and elsewhere in this Agreement:
(1) “Time of Sale” with respect to any
Investor, means 6:30 p.m., Eastern time, on the date of this
Agreement.
(2) “Statutory Prospectus” as of
any time means the prospectus that is included in the Registration Statement
immediately prior to the Time of Sale, including any document incorporated by
reference therein. For purposes of this definition, information
contained in a form of prospectus that is deemed retroactively to be a part of
the Registration Statement pursuant to Rule 430B shall be considered to be
included in the Statutory Prospectus as of the actual time that form of
prospectus is filed with the Commission pursuant to Rule 424(b).
(d) No Free Writing
Prospectuses. As used in this Agreement, “Issuer Free Writing Prospectus” means any
“issuer free writing prospectus,” as defined in Rule 433 under the Securities
Act (“Rule 433”),
whether or not required to be filed with the Commission and whether or not
intended for general distribution to prospective investors. The
Company is ineligible to utilize any Issuer Free Writing Prospectus and no
Issuer Free Writing Prospectus(es) nor any other written information that may
constitute a free writing prospectus have been issued or will be issued or used
by the Company.
(e) No Conflicts with Registration
Statement. The Company acknowledges that any other
Company-prepared or sanctioned written information other than the Disclosure
Package, as of its issue date and at all subsequent times through the Prospectus
Delivery Period or until any earlier date that the Company notified or notifies
the Underwriter, did not, does not and will not include any information that
conflicted, conflicts or will conflict with the information contained in the
Registration Statement, any Statutory Prospectus or the Prospectus, including
any document incorporated by reference therein and any prospectus supplement
deemed to be a part thereof that has not been superseded or modified; provided,
that the Company makes no representations or warranty in this paragraph with
respect to any Underwriter Information.
(f) Distributed
Materials. The Company has not, directly or indirectly, distributed
and will not distribute any prospectus or other offering material in connection
with the offering and sale of the Shares other than any Preliminary Prospectus,
the Disclosure Package or the Prospectus, and other materials, if any, permitted
under the Securities Act to be distributed and consistent with Section 3(d) below. The
parties hereto agree and understand that the content of any and all “road shows”
related to the offering of the Shares contemplated hereby is solely the property
of the Company.
(g) Incorporated
Documents. The documents incorporated by reference in the
Disclosure Package and in the Prospectus, when they became effective or were
filed with the Commission, as the case may be, conformed in all material
respects to the requirements of the Securities Act or the Exchange Act, as
applicable, and were filed on a timely basis with the Commission and none of
such documents contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(h) Due
Incorporation. The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Nevada, with the corporate power and authority to own its properties and
to conduct its business as currently being carried on and as described in the
Registration Statement, the Disclosure Package and the
Prospectus. The Company is duly qualified to transact business as a
foreign corporation and is in good standing under the laws of each other
jurisdiction in which its ownership or leasing of property or the conduct of its
business requires such qualification, except where the failure to be so
qualified and in good standing would not, individually or in the aggregate,
result in any material adverse effect upon, or change in, the general affairs,
business, operations, prospects, properties, financial condition, or results of
operations of the Company (a “Material Adverse
Effect”).
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(i) Subsidiaries. Each
subsidiary of the Company has been duly incorporated or organized, is validly
existing as a corporation or other legal entity in good standing (or the foreign
equivalent thereof) under the laws of the jurisdiction of its incorporation or
organization, has the corporate power and authority to own its properties and to
conduct its business as currently being carried on and as described in the
Registration Statement, the Disclosure Package and the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership, leasing or operation of
property requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not result in a Material Adverse
Effect. All of the issued and outstanding shares of capital stock or
other equity interests of each subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and, except as
otherwise described in the Registration Statement, the Disclosure Package and in
the Prospectus, are owned directly by the Company or through its wholly owned
subsidiaries, free and clear of all liens, encumbrances, equities or claims.
There is no outstanding option, right or agreement of any kind relating to the
issuance, sale or transfer of any capital stock or other equity securities of
the Subsidiaries to any person or entity except the Company, and none of the
outstanding shares of capital stock or other equity interests of any Subsidiary
was issued in violation of any preemptive or other rights to subscribe
for or to purchase or acquire any securities of any of the Subsidiaries.
Except for its Subsidiaries, the Company owns no beneficial interest, directly
or indirectly, in any corporation, partnership, joint venture or other business
entity. The Company has no significant subsidiaries (as such term is
defined in Rule 1-02(w) of Regulation S-X promulgated by the Commission) other
than the Subsidiaries listed on Schedule I attached
hereto (collectively, the “Subsidiaries”).
(j) Capitalization. The
Company has duly and validly authorized capital stock as set forth in each of
the Registration Statement, Disclosure Package and Prospectus; all outstanding
shares of Common Stock of the Company conform, or when issued will conform, to
the description thereof in the Registration Statement, the Disclosure Package
and the Prospectus and have been, or, when issued and paid for in the manner
described herein will be, duly authorized, validly issued, fully paid and
non-assessable; and the issuance of the Shares to be purchased from the Company
hereunder is not subject to preemptive or other similar rights, or any
restriction upon the voting or transfer thereof pursuant to applicable law or
the Company’s Articles of Incorporation, bylaws or governing documents or any
agreement to which the Company is a party or by which it may be
bound.
(k) Authorization,
Issuance. All corporate action required to be taken by the
Company for the authorization, issuance and sale of the Shares has been duly and
validly taken. The Shares have been duly and validly
authorized. When the Shares have been issued and delivered against
payment therefor as provided herein, the Shares, when so issued and sold, will
be duly and validly issued, fully paid and non-assessable and the Investors or
other persons in whose names Shares are registered will acquire good and valid
title to such Shares, in each case free and clear of all liens, encumbrances,
equities, preemptive rights and other claims. The Shares will conform in
all material respects to the description thereof contained in the Registration
Statement, the Disclosure Package and the Prospectus. No further
approval or authority of the shareholders or the Board of Directors of the
Company will be required for the issuance and sale of the Shares as contemplated
herein. Except as disclosed in each of the Disclosure Package and
Prospectus, there are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or rights related to or
entitling any person to purchase or otherwise to acquire any shares of, or any
security convertible into or exchangeable or exercisable for, the capital stock
of, or other ownership interest in, the Company, except for such options or
rights as may have been granted by the Company to employees, directors or
consultants pursuant to its stock option or stock purchase plans.
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(l) No Registration
Rights. Neither the filing of the Registration Statement nor
the offering or sale of the Shares as contemplated by this Agreement gives rise
to any rights, other than those which have been waived or satisfied, for or
relating to the registration of any shares of Common Stock or other securities
of the Company.
(m) Due Authorization and
Enforceability. This Agreement has been duly authorized, executed and
delivered by the Company, and constitutes a valid, legal and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
except as rights to indemnity hereunder may be limited by state securities laws
and except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity.
(n) No
Violation. Neither the Company nor any of the Subsidiaries is
in breach or violation of or in default (nor has any event occurred which with
notice, lapse of time or both would result in any breach or violation of, or
constitute a default) (i) under the provisions of its Articles of Incorporation,
Bylaws or other governing documents or (ii) in the performance or observance of
any term, covenant, obligation, agreement or condition contained in any
indenture, mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any license, lease, contract or other agreement or
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them or any of their properties may be bound or affected, or (iii)
in the performance or observance of any statute, law, rule, regulation,
ordinance, judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority having
jurisdiction over the Company, the Subsidiaries or any of their respective
properties, as applicable except, with respect to clauses (ii) and (iii) above,
to the extent any such contravention would not result in a Material Adverse
Effect.
(o) No Conflict. The
execution, delivery and performance by the Company of this Agreement and the
consummation of the transactions herein contemplated, including the issuance and
sale by the Company of the Shares, will not conflict with or result in a breach
or violation of, or constitute a default under (nor constitute any event which
with notice, lapse of time or both would result in any breach or violation of or
constitute a default under) (i) the provisions of the Articles of Incorporation,
Bylaws or other governing documents of the Company or any of the Subsidiaries,
(ii) any material indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any material license, lease,
contract or other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which any of them or any of their respective
properties may be bound or affected, or (iii) any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order applicable to
the Company or any of the Subsidiaries.
(p) No Consents
Required. No approval, authorization, consent or order of or
filing with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency, or of or with any self-regulatory
organization or other non-governmental regulatory authority, or approval of the
stockholders of the Company (including, but not limited to, such as may be
required pursuant to NYSE Amex Company Guide), is required in connection with
the issuance and sale of the Shares or the consummation by the Company of the
transactions contemplated hereby other than (i) as may be required under the
Securities Act, (ii) under the rules and regulations of the Financial Industry
Regulatory Authority (“FINRA”), and (iii) under the
rules and regulations of the NYSE Amex (“Amex”). The
Company has full power and authority to enter into this Agreement and to
authorize, issue and sell the Shares as contemplated by this
Agreement.
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(q) Absence of Material Changes.
Subsequent to the respective dates as of which information is given in
the Disclosure Package, (a) neither the Company nor any of its subsidiaries has
incurred any material liability or obligation, direct or contingent, or entered
into any material transaction not in the ordinary course of business; (b)
neither the Company nor any of its subsidiaries has purchased any of the
Company's outstanding capital stock, or declared, paid or otherwise made any
dividend or distribution of any kind on the Company's capital stock; and (c)
there has not been any change in the capital stock (other than a change in the
number of outstanding shares of Common Stock due to the issuance of such share
of Common Stock upon the exercise of outstanding options or warrants), or
material change in the short−term debt or long−term debt of the Company and its
Subsidiaries or any issue of options, warrants, convertible securities or other
rights to purchase the capital stock (other than grants of stock options under
the Company’s stock option plans existing on the date hereof) of the Company, or
any Material Adverse Effect.
(r) Permits. The
Company and each of the Subsidiaries possess all necessary licenses,
authorizations, consents and approvals and have made all necessary filings
required under any federal, state, local or foreign law, regulation or rule in
order to conduct its business. Neither the Company nor any of
the Subsidiaries is in violation of, or in default under, or has received notice
of any proceedings relating to revocation or modification of, any such license,
authorization, consent or approval. The Company and each of the
Subsidiaries is in compliance in all material respects with all applicable
federal, state, local and foreign laws, regulations, orders or
decrees.
(s) Legal Proceedings. There are
no legal or governmental proceedings pending or, to the Company’s knowledge,
threatened or contemplated to which the Company or any of the Subsidiaries is or
would be a party or of which any of their respective properties is or would be
subject at law or in equity, before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or agency, or
before or by any self-regulatory organization or other non-governmental
regulatory authority (including, without limitation, Amex), including no notice
or threat or knowledge of any action to (x) rescind any action taken in the
course of the Company's reorganization into its current organizational structure
(as reported in its SEC filings) or the related issuance of securities or
transfer of securities to any prior or current director, officer or significant
stockholder of the Company or any of the Subsidiaries, or (y) implement or
enforce penalties with respect to such actions by any PRC authority (including
national, provincial, local or other authorities), except (i) as described in
the Registration Statement, the Disclosure Package and the Prospectus, (ii) any
such proceeding, which if resolved adversely to the Company or any Subsidiary,
would not result in a judgment, decree, order or penalty having,
individually or in the aggregate, a Material Adverse Effect or (iii) any such
proceeding that would not prevent or materially and adversely affect the ability
of the Company to consummate the transactions contemplated hereby. The
Disclosure Package contains in all material respects the same description of the
foregoing matters contained in the Prospectus.
(t) Statutes;
Contracts. There are no statutes or regulations applicable to
the Company or contracts or other documents of the Company which are required to
be described in the Registration Statement, the Disclosure Package or the
Prospectus or filed as exhibits to the Registration Statement by the Securities
Act which have not been so described or filed.
(u) Independent Accountants. Xxxxxx &
Company, Inc., who has certified the financial statements of the Company and the
Subsidiaries for fiscal years ended June 30, 2008 and 2007, is an independent
registered public accounting firm (as defined in Section 2(a)(12) of the
Xxxxxxxx-Xxxxx Act of 2002 (the “Xxxxxxxx-Xxxxx Act”)) with
respect to the Company within the meaning of the Securities Act and the
applicable rules and regulations thereunder adopted by the Commission and the
Public Company Accounting Oversight Board (United States).
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(v) Financial
Statements. The consolidated financial statements of the
Company and the Subsidiaries, together with the related schedules and notes
thereto, set forth or incorporated by reference in the Registration Statement,
the Disclosure Package and the Prospectus comply in all material respects with
the applicable requirements of the Securities Act and the Exchange Act, as
applicable, and present fairly in all material respects (i) the financial
condition of the Company and the Subsidiaries, taken as a whole, as of the dates
indicated and (ii) the consolidated results of operations, stockholders’ equity
and changes in cash flows of the Company and the Subsidiaries, taken as a whole,
for the periods therein specified; and such financial statements and related
schedules and notes thereto have been prepared in conformity with United States
generally accepted accounting principles, consistently applied throughout the
periods involved (except as otherwise stated therein and subject, in the case of
unaudited financial statements, to the absence of footnotes and normal year-end
adjustments). There are no other financial statements (historical or
pro forma) that are required to be included in the Registration Statement, the
Disclosure Package and the Prospectus; and the Company and the Subsidiaries do
not have any material liabilities or obligations, direct or contingent
(including any off-balance sheet obligations), not disclosed in the Registration
Statement, the Disclosure Package and the Prospectus; and all disclosures
contained in the Registration Statement, the Disclosure Package and the
Prospectus regarding “non-GAAP financial measures” (as such term is defined by
the rules and regulations of the Commission) comply with Regulation G of the
Exchange Act and Item 10(e) of Regulation S-K of the Commission, to the
extent applicable, and present fairly the information shown therein and the
Company’s basis for using such measures.
(w) No Material Adverse
Change. There has not been any material adverse change, or any
development involving a prospective material adverse change, in the business,
properties, management, financial condition or results of operations of the
Company and the Subsidiaries, taken as a whole, from that set forth in the
Disclosure Package (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement).
(x) Not an Investment
Company. Neither the Company nor any of the Subsidiaries is
or, after giving effect to the offering and sale of the Shares and the
application of the proceeds thereof as described in the Prospectus, will be
required to register as an “investment company” as defined in the Investment
Company Act of 1940, as amended.
(y) Good Title to
Property. The Company and each of the Subsidiaries has good
and valid title to all property (whether real or personal) described in the
Registration Statement, the Disclosure Package and the Prospectus, except for
the new three-story building totaling approximately 13,803 square meters (i.e.,
approximately 148,574 square feet) for the new production facility with an
expected annual production capacity of up to 40,000 tons of fertilizer products
as described in the Registration Statement, in which case the Company is in the
process of applying for title certificates for registering such property under
the Techteam’s name, as being owned by each of them, in each case free and
clear of all liens, claims, security interests, other encumbrances or defects
except such as are described in the Registration Statement, the Disclosure
Package and the Prospectus and those that would not, individually or in the
aggregate materially and adversely affect the value of such property and do not
materially and adversely interfere with the use made and proposed to be made of
such property by the Company and the Subsidiaries. All of the
property described in the Registration Statement, the Disclosure Package and the
Prospectus as being held under lease by the Company or a Subsidiary is held
thereby under valid, subsisting and enforceable leases, without any liens,
restrictions, encumbrances or claims, except those that, individually or in the
aggregate, are not material and do not materially interfere with the use made
and proposed to be made of such property by the Company and the
Subsidiaries.
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(z) Intellectual Property
Rights. The Company and the Subsidiaries own, or have obtained
valid and enforceable licenses for, or other rights to use, the inventions,
patent applications, patents, trademarks (both registered and unregistered),
tradenames, copyrights, trade secrets and other proprietary information
described in the Registration Statement, the Disclosure Package and the
Prospectus as being owned or licensed by them or which are necessary for the
conduct of their respective businesses, except where the failure to own,
license or have such rights would not, individually or in the aggregate, result
in a Material Adverse Effect (collectively, “Intellectual Property”);
except as described in the Registration Statement, the Disclosure Package and
the Prospectus (i) there are no third parties who have or, to the Company’s
knowledge, will be able to establish rights to any Intellectual Property, except
for the ownership rights of the owners of the Intellectual Property which is
licensed to the Company; (ii) to the Company’s knowledge, there is no
infringement by third parties of any Intellectual Property; (iii) there is no
pending or, to the Company’s knowledge, threatened action, suit, proceeding or
claim by others challenging the Company’s rights in or to, or the validity,
enforceability, or scope of, any Intellectual Property owned by or licensed to
the Company, and the Company is unaware of any facts which could form a
reasonable basis for any such claim; (iv) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or claim by others that
the Company or any of the Subsidiaries infringes or otherwise violates any
patent, trademark, copyright, trade secret or other proprietary rights of
others, and the Company is unaware of any facts which could form a reasonable
basis for any such claim; (v) to the Company’s knowledge, there is no patent or
patent application that contains claims that interfere with the issued or
pending claims of any of the Intellectual Property; and (vi) to the Company’s
knowledge, there is no prior art that may render any patent owned by the Company
invalid, nor is there any prior art known to the Company that may render any
patent application owned by the Company unpatentable.
(aa) Taxes. The Company
and each of the Subsidiaries has timely filed all material federal, state, local
and foreign income and franchise tax returns (or timely filed applicable
extensions therefore) that have been required to be filed and are not in default
in the payment of any taxes which were payable pursuant to said returns or any
assessments with respect thereto, other than any which the Company or any of the
Subsidiaries is contesting in good faith and for which adequate reserves have
been provided and reflected in the Company’s financial statements included in
the Registration Statement, the Disclosure Package and the
Prospectus. Neither the Company nor any of its Subsidiaries has any
tax deficiency that has been or, to the knowledge of the Company, might be
asserted or threatened against it that would result in a Material Adverse
Effect.
(bb) Insurance. Except
as disclosed in the Registration Statement, the Disclosure Package and the
Prospectus, neither the Company nor any of the Subsidiaries maintains
insurance covering risks relating to the conduct of its business and the value
of its properties. All insurance coverage disclosed in the
Registration Statement, the Disclosure Package and/or the Prospectus is fully in
force on the date hereof and will be fully in force as of the Closing
Date. Neither the Company nor any of the Subsidiaries has any reason
to believe that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost that would not
have a Material Adverse Effect.
(cc) Accounting
Controls. The Company and each of the Subsidiaries maintains a
system of internal 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.
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(dd) Disclosure
Controls. The Company has established, maintains and evaluates
“disclosure controls and procedures” (as such term is defined in Rule 13a-15(e)
and 15d-15(e) under the Exchange Act), 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
those entities, particularly during the periods in which the periodic reports
required under the Exchange Act are being prepared, (ii) have been evaluated for
effectiveness as of the end of the last fiscal period covered by the
Registration Statement; and (iii) such disclosure controls and procedures are
effective to perform the functions for which they were established. There are no
significant deficiencies and material weaknesses in the design or operation of
internal controls which could adversely affect the Company’s ability to record,
process, summarize, and report financial data to management and the Board of
Directors. The Company is not aware of any fraud, whether or not material, that
involves management or other employees who have a role in the Company’s internal
controls; and since the date of the most recent evaluation of such disclosure
controls and procedures, there have been no significant changes in internal
controls or in other factors that could significantly affect internal controls,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
(ee) Corrupt
Practices. At all times that the Company has been subject to
Foreign Corrupt Practices Act of 1977, as amended, neither the Company nor, to
the Company’s knowledge, any other person associated with or acting on behalf of
the Company, including without limitation any director, officer, agent or
employee of the Company or its Subsidiaries has, directly or indirectly, while
acting on behalf of the Company or its Subsidiaries (i) used any corporate funds
for unlawful contributions, gifts, entertainment or other unlawful expenses
relating to political activity, (ii) made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic political
parties or campaigns from corporate funds, (iii) violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended or (iv) made any other
unlawful payment.
(ff) No Price
Stabilization. Neither the Company nor any of the Subsidiaries
nor, to the Company’s knowledge, any of their respective officers, directors,
affiliates or controlling persons has taken or will take, directly or
indirectly, any action designed to cause or result in, or which has constituted
or which might reasonably be expected to constitute the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares.
(gg) No Undisclosed
Relationships. No relationship, direct or indirect, exists
between or among the Company on the one hand and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand which is
required to be described in the Registration Statement, the Disclosure Package
and the Prospectus which has not been so described. There are no outstanding
loans, advances (except normal advances for business expenses in the ordinary
course of business) or guarantees of indebtedness by the Company to or for the
benefit of any of the officers or directors of the Company or any member of
their respective immediate families, except as disclosed in the Registration
Statement, the Disclosure Package and the Prospectus. The Company has not, in
violation of the Xxxxxxxx-Xxxxx Act, directly or indirectly, extended or
maintained credit, arranged for the extension of credit, or renewed an extension
of credit, in the form of a personal loan to or for any director or executive
officer of the Company.
(hh) Xxxxxxxx-Xxxxx
Act. The Company, and to its knowledge after due inquiry, all
of the Company’s directors or officers, in their capacities as such, are in
compliance in all material respects with all applicable effective provisions of
the Xxxxxxxx-Xxxxx Act and any related rules and regulations promulgated by the
Commission.
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(ii) Brokers
Fees. Except for that certain Placement Agent Agreement by and
between Shaanxi Techteam Jinong Humic Acid Product Co., Ltd. and its
subsidiaries and affiliates and Xxxxxx Freihofner Capital, a division of Xxxxx
Securities, Inc. dated as of July 15, 2007 (the “HFC Agreement”), neither the
Company nor any of the Subsidiaries is a party to any contract, agreement or
understanding with any person (other than this Agreement) that would give rise
to a valid claim against the Company or the Subsidiaries or the Underwriter for
a brokerage commission, finder’s fee or other like payment in connection with
the offering and sale of the Shares. The Company entered into a waiver
agreement dated July 14, 2009 with Xxxxxx Freihofner Capital and Xxxxx
Securities, which waived any Continuing Rights, as defined therein, arising from
the HFC Agreement (the "HFC Waiver"). Neither the Company nor any of
its Subsidiaries or affiliates have directly or indirectly, provided or agreed
to provide to Xxxxxx Freihofner Capital, Xxxxx Securities or any of their
affiliates any compensation whatsoever, including but not limited to cash,
securities or other items of monetary value or other rights, for or in
connection with the offering and sale of the Shares, including the execution,
delivery and performance of the obligations under the HFC Waiver.
(jj) Exchange Act Requirements.
The Company has filed in a timely manner all reports required to be filed
pursuant to Sections 13(a), 13(e), 14 and 15(d) of the Exchange Act during the
preceding 12 months (except to the extent that Section 15(d) requires reports to
be filed pursuant to Sections 13(d) and 13(g) of the Exchange Act, which shall
be governed by the next clause of this sentence); and the Company has filed in a
timely manner all reports required to be filed pursuant to Sections 13(d) and
13(g) of the Exchange Act since January 1, 2004, except where the failure to
timely file could not reasonably be expected individually or in the aggregate to
have a Material Adverse Effect.
(kk) FINRA
Affiliations. To the Company’s knowledge, there are no
affiliations or associations between (i) any member of FINRA and (ii) the
Company or any of the Company’s officers, directors or 5% or greater
securityholders or any beneficial owner of the Company’s unregistered equity
securities that were acquired at any time on or after the one hundred eightieth
(180th) day
immediately preceding the date the Registration Statement was initially filed
with the Commission, except as set forth in the Registration Statement, the
Disclosure Package and the Prospectus.
(ll) Compliance with Environmental
Laws. The Company and the Subsidiaries (a) are in compliance
with any and all applicable foreign, federal, state and local laws, orders,
rules, regulations, directives, decrees and judgments relating to the protection
of human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants (“Environmental Laws”), (b)
have received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (c) are
in compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
individually or in the aggregate, result in a Material Adverse
Effect. There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties) which
would, individually or in the aggregate, result in a Material Adverse
Effect.
(mm) No Labor
Disputes. Neither the Company nor any Subsidiary is engaged in
any unfair labor practice; except for matters that would not, individually or in
the aggregate, result in a Material Adverse Effect (i) there is (A)
no unfair labor practice complaint pending or, to the Company’s knowledge after
due inquiry, threatened against the Company or any Subsidiary before the
National Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under collective bargaining agreements is pending or
threatened, (B) no strike, labor dispute, slowdown or stoppage pending or, to
the Company’s knowledge after due inquiry, threatened against the Company or any
Subsidiary and (C) no union representation dispute currently existing concerning
the employees of the Company or any Subsidiary, and (ii) to the Company’s
knowledge (A) no union organizing activities are currently taking place
concerning the employees of the Company or any Subsidiary and (B) there has been
no violation of any federal, state, local or foreign law relating to
discrimination in the hiring, promotion or pay of employees or any applicable
wage or hour laws concerning the employees of the Company.
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(nn) ERISA. The Company
is in compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder (“ERISA”); no “reportable
event” (as defined in ERISA) has occurred with respect to any “pension plan” (as
defined in ERISA) for which the Company would have any liability; the Company
has not incurred and does not expect to incur liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any “pension plan” or
(ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the “Code”); and each “pension
plan” for which the Company would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification.
(oo) Exchange Act
Registration;
Listing. The Common Stock, including the Shares, is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act and the Common Stock has
been approved for listing on the Amex, and the Company has taken no action
designed to, or likely to have the effect of, termination the registration of
the Common Stock under the Exchange Act or delisting of the Common Stock from
the Amex, nor has the Company received any notification that the Commission or
FINRA is contemplating terminating such registration or listing. The Company has
complied in all material respects with the applicable requirements of the Amex
for maintenance of inclusion of the Common Stock thereon.
(pp) PFIC Status. The
Company is not, for the taxable year ended December 31, 2008, and upon
consummation of the transactions described hereby and the application of the
proceeds as described in the Registration Statement, the Disclosure Package and
the Prospectus is not expected to become, a Passive Foreign Investment Company
within the meaning of Section 1297 of the Internal Revenue Code, as
amended.
(qq) Statistical or Market-Related
Data. Any statistical, industry-related and market-related
data included or incorporated by reference in the Registration Statement, the
Disclosure Package, the Prospectus or “road show” presentation, are based on or
derived from sources that the Company reasonably and in good faith believes to
be reliable and accurate, and such data agree with the sources from which they
are derived.
(rr) Descriptions of
Documents. The statements set forth in each of the Disclosure
Package and the Prospectus describing the Shares and this Agreement, insofar as
they purport to describe the provisions of the laws and documents referred to
therein, are accurate, complete and fair in all material respects.
(ss) Money Laundering Laws. The
operations of the Company are and have been conducted at all times in compliance
in all material respects with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money
Laundering
Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
with respect to the Money Laundering Laws is pending, or to the knowledge of the
Company, threatened.
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(tt) OFAC. Neither the Company nor
any of its Subsidiaries nor, to the knowledge of the Company, any director,
officer, agent, employee or affiliate of the Company or any of its Subsidiaries
is currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will
not directly or indirectly use the proceeds of the offering, or lend, contribute
or otherwise make available such proceeds to any subsidiary, joint venture
partner or other person or entity that, to the Company’s knowledge, will use
such proceeds, for the purpose of financing the activities of any person
currently subject to any U.S. sanctions administered by OFAC.
Any
certificate signed by any officer of the Company or a Subsidiary and delivered
to the Underwriter or to counsel for the Underwriter in connection with the
offering of the Shares shall be deemed a representation and warranty by the
Company (and not such officer in an individual capacity) to the Underwriter as
to the matters covered thereby.
Section
2. Purchase,
Sale and Delivery of Shares.
(a) Purchase and Sale of Shares. On the
basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell the Shares to the Underwriter, and the Underwriter agrees to
purchase from the Company the Shares as set forth opposite the name of such
Underwriter below on the signature page hereof. The pricing terms of
the purchase of the Shares by the Underwriter and the pricing terms of the
offering of the Shares to the public are as set forth in Schedule II
hereto.
In
addition, the Company hereby grants to the Underwriter the option to purchase an
aggregate of up to 15% of the Shares purchased pursuant to this Agreement and,
upon the basis of the warranties and representations and subject to the terms
and conditions herein set forth, the Underwriter shall have the right to
purchase, from the Company (subject to such adjustment as you shall determine to
avoid fractional shares), all or a portion of additional Shares (“Additional Shares”) as may be necessary
to cover over-allotments made in connection with the offering of the Shares, at
the same purchase price per share to be paid by the Underwriter to the Company
for the Shares. This option may be exercised by you in whole or in
part and at any time or from time to time on or before the thirtieth day
following the date hereof, by written notice to the Company. Such
notice shall set forth the aggregate number of Additional Shares as to which the
option is being exercised, and the date and time when the Additional Shares are
to be delivered (such date and time being herein referred to as an “Option Closing Date”);
provided, however, that no Option Closing Date shall be earlier than the Closing
Date (as defined below) nor earlier than the first business day after the date
on which the option shall have been exercised with respect to the Additional
Shares to be purchased on such Option Closing Date nor later than the fifth
business day after the date on which the option shall have been exercised with
respect to the Additional Shares to be purchased on such Option Closing Date
unless the Company and you otherwise agree.
Payment
of the purchase price and delivery for the Additional Shares shall be made at
the Option Closing Date in the same manner and at the same office as the payment
for the Shares as set forth in subparagraph (b) below. For the
purpose of expediting the checking of certificates for the Additional Shares by
you, the Company agrees to make forms of such certificates available to you for
such purpose the earlier of the first business day after the date on which the
option shall have been exercised. Any closing of the purchase of Additional
Shares hereunder is hereinafter referred to as an “Option Closing”.
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(b) The
Shares will be delivered by the Company by credit through full fast transfer to
the account at The Depository Trust Company designated by the Underwriter
against payment of the purchase price therefor by wire transfer of same day
funds payable to the order of the Company, as appropriate, at the offices of
Xxxx Capital Partners, LLC, 00 Xxxxxxxxx Xxxxx, Xxxxxxx Xxxxx, XX 00000, or such
other location as may be mutually acceptable, at 6:00 a.m. PDT, on the
third (or if the Shares are priced, as contemplated by Rule 15c6-1(c) under the
Exchange Act, after 4:30 p.m. Eastern time, the fourth) full business day
following the date hereof, or at such other time and date as the Underwriter and
the Company determine pursuant to Rule 15c6-1(a) under the Exchange Act, such
time and date of delivery being herein referred to as the “Closing Date.”
Section 3. Covenants.
The
Company covenants and agrees with the Underwriter as follows:
(a) Reporting Obligations;
Exchange Act
Compliance. The Company will (i) file the Preliminary
Prospectus and the Prospectus with the Commission within the time periods
specified by Rule 424(b) and Rule 430B, as applicable under the Securities Act,
and (ii) file promptly all reports required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and during such period as the
Prospectus would be required by law to be delivered (whether
physically or through compliance with Rule 172 under the Securities Act or any
similar rule) (the “Prospectus
Delivery Period”).
(b) Amendments or
Supplements. The Company will not, during the Prospectus Delivery Period in
connection with the offering contemplated by this Agreement, file any amendment
or supplement to the Registration Statement or the Prospectus unless a copy
thereof shall first have been submitted to the Underwriter within a reasonable
period of time prior to the filing thereof and the Underwriter shall not have
reasonably objected thereto in good faith.
(c) Free Writing
Prospectuses. The Company will not make any offer relating to
the Shares that would constitute an “issuer free writing prospectus” (as defined
in Rule 433) or that would otherwise constitute a “free writing prospectus” (as
defined in Rule 405 under the Securities Act).
(d) Notice to Underwriter. The
Company will notify the Underwriter promptly, and will, if requested,
confirm such notification in writing: (i) the receipt of any comments of, or
requests for additional information from, the Commission; (ii) the time and date
of any filing of any post-effective amendment to the Registration Statement or
any amendment or supplement to the Disclosure Package or the Prospectus, (iii)
the time and date when any post-effective amendment to the Registration
Statement becomes effective, but only during the Prospectus Delivery Period;
(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 any order preventing or suspending the use of any Preliminary
Prospectus, the Disclosure Package, or the Prospectus, or the initiation of any
proceedings for that purpose or the threat thereof, but only during the
Prospectus Delivery Period; (v) of receipt by the Company of any notification
with respect to any suspension or the approval of the Shares from any securities
exchange upon which it is listed for trading or included or designated for
quotation, or the initiation or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the
issuance or invocation of any such stop order or suspension by the Commission
and, if any such stop order or suspension is so issued or invoked, to obtain as
soon as possible the withdrawal or removal thereof.
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(e) Filing of Amendments or
Supplements. If, during the Prospectus Delivery Period, any event shall
occur or condition exist as a result of which it is necessary to amend or
supplement the Prospectus (or, if the Prospectus is not yet available to
prospective purchasers, the Disclosure Package) in order to make the statements
therein, in the light of the circumstances when the Prospectus (or, if the
Prospectus is not yet available to prospective purchasers, the Disclosure
Package) is delivered to an Investor, not misleading, or if, in the opinion of
counsel for the Underwriter, it is necessary to amend or supplement the
Prospectus (or, if the Prospectus is not yet available to prospective
purchasers, the Disclosure Package) to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriter, either amendments or supplements to the Prospectus (or, if the
Prospectus is not yet available to prospective purchasers, the Disclosure
Package) so that the statements in the Prospectus (or, if the Prospectus is not
yet available to prospective purchasers, the Disclosure Package) as so amended
or supplemented will not, in the light of the circumstances when the Prospectus
(or, if the Prospectus is not yet available to prospective purchasers, the
Disclosure Package) is delivered to an Investor, be misleading or so that the
Prospectus (or, if the Prospectus is not yet available to prospective
purchasers, the Disclosure Package), as amended or supplemented, will comply
with law.
(f) Delivery of
Copies. The Company will deliver promptly to the Underwriter
and its counsel such number of the following documents as the Underwriter shall
reasonably request: (i) conformed copies of the Registration
Statement as originally filed with the Commission and each amendment thereto (in
each case excluding exhibits), (ii) copies of any Preliminary Prospectus, (iii)
during the Prospectus Delivery Period, copies of the Prospectus (or any
amendments or supplements thereto), (iv) any document incorporated by reference
in the Prospectus (other than any such document that is filed with the
Commission electronically via XXXXX or any successor system) and (v) all
correspondence to and from, and all documents issued to and by, the Commission
in connection with the registration of the Shares under the Securities
Act.
(g) Earnings Statement. As
soon as practicable, but in any event not later than 15 months after the end of
the Company’s current fiscal quarter, the Company will make generally available
to holders of its securities and deliver to the Underwriter, an earnings
statement of the Company (which need not be audited) that will satisfy the
provisions of Section 11(a) and Rule 158 of the Securities Act.
(h) Use of
Proceeds. The Company will apply the net proceeds from the
sale of the Shares in the manner set forth in the Registration Statement,
Disclosure Package and the Prospectus under the heading “Use of
Proceeds”.
(i) Public Communications. Prior to the
Closing Date and prior to the earlier of (i) the thirtieth day after the date of
this Agreement or (ii) the Option Closing Date after which all of the Additional
Shares have been purchased by the Underwriter, the Company will not issue any
press release or other communication directly or indirectly or hold any press
conference with respect to the Company, its condition, financial or otherwise,
or the earnings, business, operations or prospects of any of them, or the
offering of the Shares, without the prior written consent of the Underwriter,
unless in the reasonable judgment of the Company and its counsel, and after
notification to the Underwriter, such press release or communication is required
by law, in which case the Company shall use its best efforts to allow the
Underwriter reasonable time to comment on such release or other communication in
advance of such issuance.
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(j) Lock-Up
Period. For a period of 90 days after the date hereof (the
“Lock-Up Period”), the
Company will not directly or indirectly, (1) offer to sell, hypothecate, pledge,
announce the intention to sell, sell, contract to sell, sell any option or
contract to purchase (to the extent such option or contract to purchase is
exercisable within one year from the Closing Date), purchase any option or
contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of, directly or indirectly, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position within
the meaning of Section 16 of the Exchange Act, with respect to, any shares of
Common Stock, or any securities convertible into or exercisable or exchangeable
for shares of Common Stock, provided that the foregoing
restriction shall not apply to establishment of an employee stock option plan by
the Company and issuance of options pursuant to such plan during the Lock-Up
Period; (2) file or cause to become effective a registration
statement, other than on Form S-8, under the Securities Act relating
to the offer and sale of any shares of Common Stock or securities convertible
into or exercisable or exchangeable for shares of Common Stock or (3) enter into
any swap or other agreement that transfers, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clauses (1), (2) or (3) above is to be settled by
delivery of shares of Common Stock or such other securities, in cash or
otherwise, without the prior written consent of the Underwriter (which consent
may be withheld in its sole discretion), other than (i) the Shares to be sold
hereunder, (ii) the issuance of shares of Common Stock upon the exercise
of options or warrants outstanding as of the date of this Agreement or to
satisfy other pre-existing issuance obligations disclosed in the Company’s
periodic SEC filings prior to the date of this Agreement; and (iii) the issuance
by the Company of any shares of Common Stock, upon five (5) business days notice
to the Underwriter, as consideration for mergers, acquisitions, other business
combinations, or strategic alliances, occurring after the date of this
Agreement. Notwithstanding the foregoing, for the purpose of allowing the
Underwriter to comply with NASD Rule 2711(f)(4), or the applicable successor
FINRA Rule when published, if (1) during the last 17 days of the Lock-Up Period,
the Company releases earnings results or publicly announces other material news
or a material event relating to the Company occurs or (2) prior to the
expiration of the Lock-Up Period, the Company announces that it will
release earnings results during the 16 day period beginning on the last day of
the Lock-Up Period, then in each case the Lock-Up Period will be extended until
the expiration of the 18 day period beginning on the date of release of the
earnings results or the public announcement regarding the material news or the
occurrence of the material event, as applicable, unless the Underwriter waives,
in writing, such extension. The Underwriter agrees to waive such
extension if the provisions of NASD Rule 2711(f)(4) (or any applicable successor
rule) are not applicable to the Offering. The Company agrees not to accelerate
the vesting of any option or warrant or other contractual right or the lapse of
any repurchase right prior to the expiration of the Lock-Up Period.
(k) Stabilization. The
Company will not take directly or indirectly any action designed, or that might
reasonably be expected to cause or result in, or that will constitute,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Shares.
(l) Transfer
Agent. The Company shall engage and maintain, at its expense,
a transfer agent and, if necessary under the jurisdiction of incorporation of
the Company, a registrar for the Shares.
(m) Investment Company
Act. The Company shall not invest, or otherwise use the
proceeds received by the Company from its sale of the Shares in such a manner as
would require the Company to register as an investment company under the
Investment Company Act.
(n) Xxxxxxxx-Xxxxx
Act. The Company will comply with all effective applicable
provisions of the Xxxxxxxx-Xxxxx Act.
(o) Periodic
Reports. The Company will file with the Commission such
periodic and special reports as required by the Securities Act.
(p) Amex. The Company will use
its best efforts to obtain approval for, and maintain the listing of the Shares
on the Amex for so long as the Common Stock is listed thereon.
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(q) HFC
Waiver. Neither the Company nor any of its Subsidiaries or
affiliates will provide Xxxxxx Freihofner Capital, Xxxxx Securities or any of
their affiliates any cash compensation, other items of monetary value or other
rights in connection with the offering and sale of the Shares, including the
execution, delivery and performance of the obligations under the HFC Waiver;
provided that nothing
in this Section 3(q) shall be interpreted to preclude the Company from engaging
the services of Xxxxxx Freihofner Capital in connection with any future offering
of the Company’s securities with compensation for such services at the then
market rate.
Section 4. Costs and
Expenses.
The
Company, whether or not the transactions contemplated hereunder are consummated
or this Agreement is terminated, will pay (or reimburse if paid by the
Underwriter) all actual out-of-pocket costs and expenses incident to the
performance of the obligations of the Company under this Agreement and in
connection with the transactions contemplated hereby, including but not limited
to costs and expenses of or relating to (i) the preparation, printing, filing,
delivery and shipping of the Registration Statement, each Preliminary
Prospectus, the Disclosure Package and the Prospectus, and any amendment or
supplement to any of the foregoing and the printing and furnishing of copies of
each thereof to the Underwriter and dealers (including costs of mailing and
shipment), (ii) the registration, issue, sale and delivery of the Shares
including any stock or transfer taxes and stamp or similar duties payable upon
the sale, issuance or delivery of the Shares and the printing, delivery, and
shipping of the certificates representing the Shares, (iii) the fees and
expenses of any transfer agent or registrar for the Shares, (iv) the filing fees
required to be paid by the Underwriter or the Company with FINRA (including all
COBRADesk fees), (v) fees, disbursements and other charges of counsel to the
Company (vi) listing fees, if any, for the listing or quotation of the Shares on
the Amex, (vii) fees and disbursements of the Company’s auditor incurred in
delivering the letter(s) described in Section 5(i) of this Agreement,
and (viii) the costs and expenses of the Company and the Underwriter in
connection with the marketing of the offering and the sale of the Shares to
prospective investors including, but not limited to, those related to any
presentations or meetings undertaken in connection therewith including, without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged with the written consent
of the Company in connection with the road show presentations, travel, lodging
and other expenses incurred by the officers of the Company and any such
consultants, and the cost of any aircraft or other transportation chartered by
the Company in connection with the road show. It is understood that
except as provided in this Section 4, Section 6 and Section 8(b), the
Underwriter shall pay all of its own expenses.
Section 5. Conditions of Underwriter's Obligations.
The
obligations of the Underwriter hereunder are subject to the following
conditions:
(a) Filings with the
Commission. The Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) under the Securities Act at or before 5:30
p.m., Eastern time, on the second full business day after the date of this
Agreement (or such earlier time as may be required under the Securities
Act).
(b) No Stop
Orders. Prior to the Closing or the Option Closing, as
applicable: (i) no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act and no proceedings
initiated under Section 8(d) or 8(e) of the Securities Act for that purpose
shall be pending or threatened by the Commission, and (ii) any request for
additional information on the part of the Commission (to be included in the
Registration Statement, the Disclosure Package, the Prospectus or any Issuer
Free Writing Prospectus or otherwise) shall have been complied with to the
reasonable satisfaction of the Underwriter.
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(c) Action Preventing
Issuance. No action shall have been taken and no statute,
rule, regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date or the Option
Closing Date, as applicable, prevent the issuance or sale of the Shares; and no
injunction, restraining order or order of any other nature by any federal, state
or foreign court of competent jurisdiction shall have been issued as of the
Closing Date or the Option Closing Date, as applicable, which would prevent the
issuance or sale of the Shares.
(d) Objection of Underwriter. No
Prospectus or amendment or supplement to the Registration Statement shall have
been filed to which the Underwriter shall have objected in writing, which
objection shall not be unreasonable. The Underwriter shall not have
advised the Company that the Registration Statement, the Disclosure Package or
the Prospectus, or any amendment thereof or supplement thereto, or any Issuer
Free Writing Prospectus contains an untrue statement of fact which, in its
opinion, is material, or omits to state a fact which, in its opinion, is
material and is required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(e) No Material Adverse
Change. (i) Prior to the Closing or the Option
Closing, as applicable, there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company from that
set forth in the Disclosure Package and the Prospectus that, in the
Underwriter’s judgment, is material and adverse and that makes it, in the
Underwriter’s judgment, impracticable to market the Shares on the
terms and in the manner contemplated in the Disclosure Package.
(ii) There
shall not have occurred any of the following: (i) a suspension
or material limitation in trading in securities generally on the New York Stock
Exchange, the NYSE Amex or the Nasdaq Stock Market or the establishing on such
exchanges by the SEC or by such exchanges of minimum or maximum prices that are
not in force and effect on the date hereof; (ii) a suspension or material
limitation in trading in the Company’s securities on Amex or the establishing on
such market by the SEC or by such market of minimum or maximum prices that are
not in force and effect on the date hereof; (iii) a general moratorium on
commercial banking activities declared by either federal or any state
authorities; (iv) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency or
war, which in your judgment makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares in the manner
contemplated in the Prospectus; or (v) any calamity or crisis, change in
national, international or world affairs, act of God, change in the
international or domestic markets, or change in the existing financial,
political or economic conditions in the United States or elsewhere, that in your
judgment makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares or the Additional Shares, as
applicable, in the manner contemplated in each of the Disclosure Package and the
Prospectus.
(f) Representations and
Warranties. Each of the representations and warranties of the
Company contained herein shall be true and correct when made and on and as of
the Closing Date, or the Option Closing Date, as applicable, as if made on such
date (except that those representations and warranties that address matters only
as of a particular date shall remain true and correct as of such date), and all
covenants and agreements herein contained to be performed on the part of the
Company and all conditions herein contained to be fulfilled or complied with by
the Company at or prior to the Closing Date or the Option Closing Date, as
applicable, shall have been duly performed, fulfilled or complied
with.
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(g) Opinion of Counsel to the
Company. On the Closing Date, there shall have been furnished
to the Underwriter the opinion of Guzov Ofsink, LLC, counsel for the Company,
dated the Closing Date and addressed to the Underwriter, in form and substance
reasonably satisfactory to the Underwriter, including customary negative
assurance representations.
In rendering such
opinion such counsel may rely (i) as to matters of law other than Nevada, New
Jersey, New York, and federal law, upon the opinion or opinions of local counsel
provided that the extent of such reliance is specified in such opinion and that
such counsel shall state that such opinion or opinions of local counsel are
satisfactory to them and that they believe they and the Underwriter are
justified in relying thereon and (ii) as to matters of fact, to the extent
such counsel deems reasonable upon certificates of officers of the Company and
its Subsidiaries provided that the extent of such reliance is specified in such
opinion.
(h) Opinion of PRC Counsel to the Company. On
the Closing Date, there shall have been furnished to the Underwriter the Opinion
of Global Law Office, PRC counsel for the Company, dated the Closing Date and
addressed to the Underwriter, in form and substance reasonably satisfactory to
the Underwriter.
(i) Accountant’s Comfort
Letter. The Underwriter shall have received on the date of the
Time of Sale, a letter dated the date hereof (the “Original Letter”), addressed
to the Underwriter and in form and substance reasonably satisfactory to the
Underwriter and its counsel, from Xxxxxx & Company, Inc., which letter
shall cover, without limitation, the various financial disclosures, if any,
contained in the Disclosure Package and shall contain statements and information
of the type customarily included in accountants’ “comfort letters” to
underwriters, delivered according to Statement of Auditing Standards No. 72 and
Statement of Auditing Standard No. 100 (or successor bulletins), with respect to
the audited and unaudited financial statements and certain financial information
contained in or incorporated by reference into the Registration Statement, the
Disclosure Package and the Prospectus. At the Closing Date and any
Option Closing Date, as applicable, the Underwriter shall have received
from Xxxxxx & Company, Inc., a letter, dated the Closing Date or the
Option Closing Date, as applicable, which shall confirm, on the basis of a
review in accordance with the procedures set forth in the Original Letter, that
nothing has come to their attention during the period from the date of the
Original Letter referred to in the prior sentence to a date (specified in the
letter) not more than three days prior to the Closing Date or the Option Closing
Date, as applicable, which would require any change in the Original Letter if it
were required to be dated and delivered at the Closing Date, or the Option
Closing Date, as applicable.
(j) Officer’s Certificate. The
Underwriter shall have received on the Closing Date, or the Option Closing Date,
as applicable, a certificate, addressed to the Underwriter and dated the Closing
Date, or the Option Closing Date, as applicable, of the chief executive or chief
operating officer and the chief financial officer or chief accounting officer of
the Company to the effect that:
(i) each
of the representations, warranties and agreements of the Company in this
Agreement were true and correct when originally made and are true and correct as
of the Time of Sale and the Closing Date or the Option Closing Date, as
applicable (except that those representations and warranties that address
matters only as of a particular date shall remain true and correct as of such
date); and the Company has complied with all agreements and satisfied all the
conditions on its part required under this Agreement to be performed or
satisfied at or prior to the Closing Date, or the Option Closing Date, as
applicable;
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(ii) subsequent
to the respective dates as of which information is given in the Disclosure
Package, there has not been (A) a material adverse change or any development
involving a prospective material adverse change in the general affairs,
business, properties, management, financial condition or results of operations
of the Company and the Subsidiaries taken as a whole, (B) any transaction that
is material to the Company and the Subsidiaries taken as a whole, except
transactions entered into in the ordinary course of business, (C) any
obligation, direct or contingent, that is material to the Company and the
Subsidiaries taken as a whole, incurred by the Company or the Subsidiaries,
except obligations incurred in the ordinary course of business, (D) except as
disclosed in the Disclosure Package and in the Prospectus, any change in the
capital stock (other than a change in the number of outstanding shares of Common
Stock due to the issuance of shares upon the exercise of outstanding options or
warrants) or any material change in the short term or long term indebtedness of
the Company or any of the Subsidiaries taken as a whole, (E) any dividend or
distribution of any kind declared, paid or made on the capital stock of the
Company any of the Subsidiaries or (F) any loss or damage (whether or not
insured) to the property of the Company or any of its Subsidiaries which has
been sustained or will have been sustained which has had or is reasonably likely
to result in a Material Adverse Effect.
(iii) no
stop order suspending the effectiveness of the Registration Statement or any
part thereof or any amendment thereof or the qualification of the Shares for
offering or sale, nor suspending or preventing the use of the Disclosure Package
or the Prospectus shall have been issued, and no proceedings for that purpose
shall be pending or to their knowledge, threatened by the Commission or any
state or regulatory body; and
(iv) the
signers of said certificate have reviewed the Registration Statement, the
Disclosure Package and the Prospectus, and any amendments thereof or supplements
thereto (and any documents filed under the Exchange Act and deemed to be
incorporated by reference into the Disclosure Package and the Prospectus), and
(A) (i) each part of the Registration Statement and any amendment thereof do not
and did not contain when the Registration Statement (or such amendment) became
effective, any untrue statement of a material fact or omit to state, and did not
omit to state when the Registration Statement (or such amendment) became
effective, any material fact required to be stated therein or necessary to make
the statements therein not misleading and (ii) as of the Time of Sale,
the Disclosure Package did not contain any untrue statement of material
fact or omits to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading and (iii) the Prospectus, as amended or supplemented, does not and
did not contain, as of its issue date, any untrue statement of material fact or
omit to state and did not omit to state as of such date, a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and (B) since the Time of Sale, there has
occurred no event required to be set forth in an amendment or supplement to the
Registration Statement, the Disclosure Package or the Prospectus which has not
been so set forth and there has been no document required to be filed under the
Exchange Act that upon such filing would be deemed to be incorporated by
reference in to the Disclosure Package and into the Prospectus that has not been
so filed.
(k) Secretary’s Certificate. On the
Closing Date, or the Option Closing Date, as applicable, the Company shall have
furnished to the Underwriter a Secretary’s Certificate of the Company including
copies of all resolutions of the Company’s Board of Directors or committees
thereof relating to the Registration Statement and the offer and sale of the
Shares, and the Company’s Articles of Incorporation and Bylaws as amended and in
effect on the Closing Date.
(l) Other Filings with the
Commission. The Company shall have prepared and filed with the
Commission a Current Report on Form 8-K with respect to the transactions
contemplated hereby, including as an exhibit thereto this Agreement and any
other documents relating thereto.
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(m) No FINRA
Objection. FINRA shall not have raised any objection with
respect to the fairness and reasonableness of the placement agency terms and
arrangements relating to the issuance and sale of the Shares; provided that if
any such objection is raised, the Company and the Underwriter shall negotiate
promptly and in good faith appropriate modifications to such underwriting terms
and arrangements in order to satisfy such objections.
(n) Amex. The Shares shall have
been approved for listing on Amex, subject to official notice of
issuance.
(o) CEO Lock-Up
Agreement. Mr. Xxx Xx shall execute and deliver a Lock-up
Agreement, in a form satisfactory to the Underwriter, restricting the
transfer or other disposition of any shares of Common Stock of the Company or
securities convertible into, exchangeable, or exercisable for Common Stock of
the Company held of record or beneficially by Xx. Xx for a period of ninety (90)
days after the Closing Date.
(p) Additional
Documents. Prior to the Closing Date, or the Option Closing
Date, as applicable, the Company shall have furnished to the Underwriter such
further information, certificates or documents as the Underwriter shall have
reasonably requested for the purpose of enabling it 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.
All
opinions, letters, evidence and certificates mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Underwriter.
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 Underwriter by notice to the Company at any time prior to the Closing
Date, or the Option Closing Date, as applicable, which termination shall be
without liability on the part of any party to any other party, except that Section 4, Section 6 and Section 8 shall
at all times be effective and shall survive such termination.
Section 6. Indemnification and
Contribution.
(a) Indemnification of the Underwriter. The
Company agrees to indemnify and hold harmless the Underwriter against any
losses, claims, damages or liabilities to which the Underwriter may become
subject, under the Securities Act or otherwise (including in settlement of any
litigation if such settlement is effected with the written consent of the
Company), insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) an untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, including the information deemed to be a part of the Registration
Statement at the time of effectiveness and at any subsequent time pursuant to
Rule 430B of the Rules and Regulations, the Disclosure Package, the Prospectus,
or any amendment or supplement thereto (including any documents filed under the
Exchange Act and deemed to be incorporated by reference into the Prospectus) or
in any materials or information provided to investors by, or with the approval
of, the Company in connection with the marketing of the offering of the Common
Stock (“Marketing
Materials”), including any roadshow or investor presentations made to
investors by the Company (whether in person or electronically) or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse the Underwriter for any legal or other
expenses reasonably incurred by it in connection with investigating or defending
against such loss, claim, damage, liability or action; or (ii) in whole or in
part upon any inaccuracy in the representations and warranties of the Company
contained herein; or (iii) in whole or in part upon any failure of the Company
to perform its obligations hereunder or under law; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any Preliminary Prospectus, the Disclosure Package,
the Prospectus, or any such amendment or supplement, or in any Marketing
Materials, in reliance upon and in conformity with written information furnished
to the Company by the Underwriter specifically for use in the preparation
thereof.
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The
Company agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
this Section
6(a), it will reimburse the Underwriter on a monthly basis for all
reasonable legal fees or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Company’s obligation to reimburse the
Underwriter for such expenses and the possibility that such payments might later
be held to have been improper by a court of competent
jurisdiction. To the extent that any such interim reimbursement
payment is so held to have been improper, the Underwriter shall promptly return
it to the Company, together with interest, compounded daily, determined on the
basis of the prime rate (or other commercial lending rate for borrowers of the
highest credit standing) announced from time to time by Xxxxx Fargo Bank, N.A.
(the “Prime
Rate”). Any such interim reimbursement payments which are not
made to the Underwriter within 30 days of a written request for reimbursement
shall bear interest at the Prime Rate from the date of such
request. This indemnity agreement shall be in addition to any
liabilities which the may otherwise have.
(b) Indemnification of the
Company. The Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the Company
may become subject, under the Securities Act or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Disclosure Package, the Prospectus, or any amendment
or supplement thereto or any Marketing Materials, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in the
Registration Statement, the Disclosure Package, the Prospectus, or any amendment
or supplement thereto, or any Marketing Materials in reliance upon and in
conformity with written information furnished to the Company by the Underwriter
specifically for use in the preparation thereof, and will reimburse the Company
for any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending against any such loss, claim, damage, liability
or action.
(c) Notice and
Procedures. Promptly after receipt by an indemnified party
under subsection (a) or (b) above of notice
of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
the indemnifying party from any liability that it may have to any indemnified
party except to the extent such indemnifying party has been materially
prejudiced by such failure. In case any such action shall be brought
against any indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of the indemnifying party’s election so to
assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that if
(i) the indemnified party has reasonably concluded (based on advice of counsel)
that there may be legal defenses available to it or other indemnified parties
that are different from or in addition to those available to the indemnifying
party, (ii) or a conflict or potential conflict exists (based on advice of
counsel to the indemnified party) between the indemnified party and the
indemnifying party (in which case the indemnifying party will not have the right
to direct the defense of such action on behalf of the indemnified party), or
(iii) the indemnifying party has not in fact employed counsel reasonably
satisfactory to the indemnified party to assume the defense of such action with
a reasonable time after receiving notice of the commencement of the action, the
indemnified party shall have the right to employ a single counsel to represent
it in any claim in respect of which indemnity may be sought under subsection (a) or (b) of this Section 6, in which
event the reasonable fees and expenses of such separate counsel shall be borne
by the indemnifying party or parties and reimbursed to the indemnified party as
incurred (in accordance with the provisions of the second paragraph in subsection (a) or (b)
above).
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The
indemnifying party under this Section 6 shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement,
compromise or consent to the entry of judgment in any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity was or could have been sought hereunder by such
indemnified party, unless such settlement, compromise or consent (a) includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding and (b) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.
(d) Contribution. If the
indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities
referred to in subsection (a) or (b) above, (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriter on the other from the offering
of the Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Underwriter on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and the Underwriter on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriter, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the
Underwriter and the parties’ relevant intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or
omission. The Company and the Underwriter agree that it would not be
just and equitable if contributions pursuant to this subsection (d) were to be
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the first
sentence of this subsection (d). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (d) shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending against any action or claim
which is the subject of this subsection (d). Notwithstanding
the provisions of this subsection (d), the Underwriter
shall not be required to contribute any amount in excess of the amount by which
the total discounts, commissions and expense reimbursement, if any, received by
the Underwriter exceeds the amount of any damages that the Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
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(e) Representations and Agreements to
Survive Delivery. The obligations of the Company under this
Section 6 shall
be in addition to any liability which the Company may otherwise have and the
benefits of such obligations shall extend, upon the same terms and conditions,
to each person, if any, who controls the Underwriter within the meaning of the
Securities Act; and the obligations of the Underwriter under this Section 6 shall be in
addition to any liability that the Underwriter may otherwise have and the
benefits of such obligations shall extend, upon the same terms and conditions,
to each director of the Company (including any person who, with his consent, is
named in the Registration Statement as about to become a director of the
Company), to each officer of the Company who has signed the Registration
Statement and to each person, if any, who controls the Company within the
meaning of the Securities Act. The indemnity and contribution agreements of
the parties contained in this Section 6 and the
covenants, warranties and representations of the Company contained in this
Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of the Underwriter, any person who controls the Underwriter within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act or
any affiliate of the Underwriter, or by or on behalf of the Company, its
directors or officers or any person who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act,
and (iii) the issuance and delivery of the Shares. The Company and the
Underwriter agree promptly to notify each other of the commencement of any
Proceeding against it and, in the case of the Company, against any of the
Company’s officers or directors in connection with the issuance and sale of the
Shares, or in connection with the Registration Statement, the Disclosure Package
or the Prospectus.
Section 7. Information Furnished by Underwriter.
The
Underwriter confirms and the Company acknowledges that the information
concerning the Underwriter furnished in writing to the Company by the
Underwriter specifically for inclusion in the Registration Statement, the
Disclosure Package, or the Prospectus consists only of the information set forth
in the table on the cover page of the Prospectus and the information set forth
in the “Underwriting” section of the Prospectus and Disclosure Package, only
insofar as such information relates to the amount of selling concession and
re-allowance or to over-allotment and related activities that may be undertaken
by the Underwriter, including, without limitation, those relating to stabilizing
transactions (the “Underwriter Information”) and
constitutes the only information relating to the Underwriter furnished in
writing to the Company by the Underwriter as such information is referred to in
Sections 2 and
6
hereof.
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Section 8. Termination.
(a) The
Underwriter shall have the right to terminate this Agreement by giving notice as
hereinafter specified at any time at or prior to the Closing Date, without
liability on the part of the Underwriter to the Company, if (i) prior to
delivery and payment for the Shares (A) trading in securities generally shall
have been suspended or materially limited on or by the New York Stock Exchange,
the Amex, the Nasdaq Stock Market or the National Association of Securities
Dealers, Inc. (each, a “Trading Market”), (B) trading
in the shares of Common Stock of the Company shall have been suspended or
materially limited on any exchange or in the over-the-counter market, (C) a
general moratorium on commercial banking activities shall have been declared by
federal or California state authorities, (D) there shall have occurred any
outbreak or material escalation of hostilities or acts of terrorism involving
the United States or there shall have been a declaration by the United States of
a national emergency or war, (E) there shall have occurred any other calamity or
crisis or any material change in general economic, political or financial
conditions in the United States or elsewhere, if the effect of any such
event specified in clause (D) or (E), in the judgment of the Underwriter, makes
it impractical or inadvisable to proceed with the completion of the sale of and
payment for the Shares on the Closing Date on the terms and in the manner
contemplated by this Agreement, the Disclosure Package and the Prospectus, or
(ii) since the time of execution of this Agreement or the earlier respective
dates as of which information is given in the Disclosure Package, there has been
(A) any Material Adverse Effect or (B) the Company shall have sustained a loss
by strike, fire, flood, earthquake, accident or other calamity of such character
that in the judgment of the Underwriter would, individually or in the aggregate,
result in a Material Adverse Effect and which would, in the judgment of the
Underwriter, make it impracticable or inadvisable to proceed with the offering
or the delivery of the Shares on the terms and in the manner contemplated in the
Disclosure Package. Any such termination shall be without liability
of any party to any other party except that the provisions of Section 4, Section 6, Section 8(b) and
Section 11
hereof shall at all times be effective notwithstanding such
termination.
(b) If
(1) this Agreement shall be terminated by the Underwriter pursuant to Section 5, Section 8(a)(i)(B) or
Section
8(a)(ii)(A) or (2) the sale of the Shares to the Underwriter is not
consummated because of any failure, refusal or inability on the part of the
Company to comply with the terms or perform any agreement or obligation of this
Agreement, other than by reason of a default by the Underwriter, the Company
will, in addition to paying the amounts described in Section 4 hereof,
reimburse the Underwriter for all of its reasonable and actual out-of-pocket
disbursements (including, but not limited to, the reasonable fees and
disbursements of its counsel).
Section
9. Notices.
All
statements, requests, notices and agreements hereunder shall be in writing or by
facsimile, and:
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|
(a)
|
if
to the Underwriter, shall be delivered or sent by mail, telex or facsimile
transmission to:
|
Xxxx
Capital Partners, LLC
00
Xxxxxxxxx Xxxxx
Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000
Attention:
Managing Director
Facsimile
No.: 000-000-0000
with a
copy (which shall not constitute notice) to:
K&L
Gates LLP
00000
Xxxxx Xxxxxx Xxxx.
0xx
Xxxxx
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention:
Xxxxxx X. Xxxxxxx, Esq./Xxxxxxxxxx X. Xxxx, Esq.
Facsimile
No.: 310-552-5001
|
(b)
|
if
to the Company shall be delivered or sent by mail, telex or facsimile
transmission to:
|
0/X,
Xxxxxxx X, Xxxxx A
No. 000,
Xxxxx Xxxxxx Xxxx
Xi’An,
710065, PRC
Attention:
Xxx Xx, Chief Executive Officer
Facsimile:
00.00.0000.0000
with a
copy (which shall not constitute notice) to:
Guzov
Ofsink, LLC
000
Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx,
XX 00000
Attention:
Xxxxxx Xxxxxx, Esq.
Facsimile:
212.688.7273
Any such
notice shall be effective only upon receipt. Any party to this
Agreement may change such address for notices by sending to the parties to this
Agreement written notice of a new address for such purpose.
Section 10. Persons Entitled to Benefit of
Agreement.
This
Agreement shall inure to the benefit of and shall be binding upon the
Underwriter, the Company and their respective successors and assigns and the
controlling persons, officers and directors referred to in Section
6. Nothing in this Agreement is intended or shall be construed
to give to any other person, firm or corporation, other than the persons, firms
or corporations mentioned in the preceding sentence, any legal or equitable
remedy or claim under or in respect of this Agreement, or any provision herein
contained. The term “successors and assigns” as herein used shall not
include any purchaser of the Shares by reason merely of such
purchase.
Section 11. Governing Law.
This
Agreement shall be governed by and construed in accordance with the laws of the
State of California, without giving effect to the conflicts of laws provisions
thereof.
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Section 12. No Fiduciary
Relationship.
The
Company hereby acknowledges that the Underwriter is acting solely as underwriter
in connection with the offering of the Company’s securities. The Company further
acknowledges that the Underwriter is acting pursuant to a contractual
relationship created solely by this Agreement entered into on an arm’s length
basis and in no event do the parties intend that the Underwriter act or be
responsible as a fiduciary to the Company, its management, stockholders,
creditors or any other person in connection with any activity that the
Underwriter may undertake or have undertaken in furtherance of the offering of
the Company’s securities, either before or after the date hereof. The
Underwriter hereby expressly disclaims any fiduciary or similar obligations to
the Company, either in connection with the transactions contemplated by this
Agreement or any matters leading up to such transactions, and the Company hereby
confirms its understanding and agreement to that effect. The Company and the
Underwriter agree that they are each responsible for making their own
independent judgments with respect to any such transactions, and that any
opinions or views expressed by the Underwriter to the Company regarding such
transactions, including but not limited to any opinions or views with respect to
the price or market for the Company’s securities, do not constitute advice or
recommendations to the Company. The Company hereby waives and releases, to the
fullest extent permitted by law, any claims that the Company may have against
the Underwriter with respect to any breach or alleged breach of any fiduciary or
similar duty to the Company in connection with the transactions contemplated by
this Agreement or any matters leading up to such transactions.
Section 13. Headings.
The
Section headings in this Agreement have been inserted as a matter of convenience
of reference and are not a part of this Agreement.
Section 14. Amendments and
Waivers.
No
supplement, modification or waiver of this Agreement shall be binding unless
executed in writing by the party to be bound thereby. The failure of a party to
exercise any right or remedy shall not be deemed or constitute a waiver of such
right or remedy in the future. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (regardless of whether similar), nor shall any such waiver constitute a
continuing waiver unless otherwise expressly provided.
Section 15. Submission to
Jurisdiction.
Except as
set forth below, no Proceeding may be commenced, prosecuted or continued in any
court other than the courts of the State of California or a United States
District Court, each located in Orange County, California, which courts shall
have jurisdiction over the adjudication of such matters, and the Company hereby
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company hereby consents to personal jurisdiction, service and venue
in any court in which any Proceeding arising out of or in any way relating to
this Agreement is brought by any third party against the Underwriter. The
Company hereby waives all right to trial by jury in any Proceeding (whether
based upon contract, tort or otherwise) in any way arising out of or relating to
this Agreement. The Company agrees that a final judgment in any such Proceeding
brought in any such court shall be conclusive and binding upon the Company and
may be enforced in any other courts in the jurisdiction of which the Company is
or may be subject, by suit upon such judgment.
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Section 16. Counterparts.
This
Agreement may be executed in one or more counterparts and, if executed in more
than one counterpart, the executed counterparts shall each be deemed to be an
original and all such counterparts shall together constitute one and the same
instrument. Delivery of an executed counterpart by facsimile shall be
effective as delivery of a manually executed counterpart thereof.
(Signature
page immediately follows)
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If the
foregoing is in accordance with your understanding of the agreement between the
Company and the Underwriter, kindly indicate your acceptance in the space
provided for that purpose below.
|
Very
truly yours,
|
|||
|
By:
|
/s/ Xxx Xx
|
||
|
Name:
Xxx Xx
|
|||
|
Title: President
and Chief Executive Officer
|
|||
Accepted
as of
the date
first above written:
XXXX
CAPITAL PARTNERS, LLC
|
By:
|
/s/ Xxxxx X. Xxxxxxxx
|
|
|
Name:
Xxxxx X. Xxxxxxxx
|
||
|
Title:
Head of Equity Capital Markets
|
Schedules
|
Schedule
I:
|
Subsidiaries
|
|
Schedule
II
|
Pricing
Information
|
Schedule
I
Subsidiaries
|
Name
|
Registered
Office
|
Principal
Activity
|
Principal
Country of Incorporation
|
Group
% holding
|
|
Green
Agriculture Holding Corporation
|
00
Xxx Xxxxxxxxx Xxxxx Xxxx 0, Xxxx Xxxxxxx, XX 00000
|
General
|
New
Jersey
|
100%
by China Green Agriculture, Inc.
|
|
Shaanxi
TechTeam Jinong Humic Acid Product Co., Ltd.
|
0xx
Xxxxx, Xxxxxxx X, Xxxxx A.
No.181
South Taibai Road
Xi’an,
Shaanxi Province
People’s
Republic of China 710065
|
Manufacture
and sales of humic acid fertilizer
|
PRC
|
100%
by Green Agriculture Holding Corporation
|
|
Xi’an
Jintai Agriculture Technology Development Company
|
0xx
Xxxxx, Xxxxxxx X, Xxxxx A.
No.181
South Taibai Road
Xi’an,
Shaanxi Province
People’s
Republic of China 710065
|
Research
and development of humic acid fertilizer;
Manufacture
and sales of fruits, vegetables and flowers
|
PRC
|
100%
by Shaanxi TechTeam Jinong Humic Acid Product Co.,
Ltd.
|
Schedule
II
Pricing
Information
Number of
Shares to be Sold:
Public
Offering Price: $7.15 per Share
Underwriting
Discount: $0.3575 per Share
Proceeds
to Company (before expenses): $6.7925 per Share
