Exhibit 15.5
UNDERWRITER AGREEMENT
between
DOGNESS (INTERNATIONAL) CORPORATION (the
“Company”)
and
SPARTAN SECURITIES GROUP, LTD.
(the “Underwriter”)
DOGNESS (INTERNATIONAL) CORPORATION
UNDERWRITER AGREEMENT
| Spartan Securities Group, Ltd. |
______________, 2017 |
00000 Xxxxxxxxx Xxxx.
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
The undersigned, Dogness
(International) Corporation, a British Virgin Islands company (collectively with its subsidiaries, including, without limitation,
all entities disclosed or described in the Registration Statement (as hereinafter defined) as being subsidiaries of the Company,
the “Company”), hereby confirms its agreement with Spartan Securities Group, Ltd. (hereinafter referred to as
“you” (including its correlatives) or the “Underwriter”), with respect to the sale by the Company,
through the Underwriter, on a best efforts basis, of a minimum of eight million (8,000,000) common shares of the Company and a
maximum of ten million (10,000,000) Class A Common Shares of the Company (the “Best Efforts Shares”), par value
$0.002 per share (the “Shares”).
The Company understands
that the Underwriter proposes to make, on a best efforts basis, a public offering of the Shares as soon as the Underwriter deems
advisable after this Placement Agreement (the “Agreement”) has been executed and delivered.
The Company and the Underwriter
agree as follows:
1. Purchase
and Sale of Best Efforts Shares.
1.1 Best
Efforts Shares.
1.1.1. Upon
the basis of the representations and warranties and other terms and conditions herein set forth, at the purchase price per share
of $_______, the Company agrees to issue and sell to the public through the Underwriter, acting as agent, and the Underwriter agrees
to offer and sell the Best Efforts Shares for the Company on a best efforts basis pursuant to this Agreement (the “Offering”).
The Underwriter shall offer and sell the Best Efforts Shares on behalf of the Company, on a best efforts basis, to both retail
and institutional investors upon the terms and conditions set forth herein. The Company recognizes that “best efforts”
does not assure that the Offering will be consummated. It is understood and agreed that the Underwriter is under no obligation
to and is not permitted to purchase any Best Efforts Shares for its own account and that this Agreement does not create any partnership,
joint venture or other similar relationship between or among the Underwriter and the Company.
1.1.2. Subject
to the provisions of this Agreement, as compensation for the services rendered, the Company shall cause to be paid to the Underwriter
by wire transfer of immediately available funds to one or more accounts designated by the Underwriter, an aggregate amount equal
to 3.0% of the gross proceeds of the Offering for investors introduced by the Company and 6.0% of the gross proceeds of the Offering
for investors introduced by the Underwriter.
1.2 Best
Efforts Shares Payment and Delivery. The Best Efforts Shares to be purchased hereunder, in definitive form, and in such authorized
denominations and registered in such names as the Underwriter may request upon at least 48 hours’ prior notice to the Company,
shall be delivered by or on behalf of the Company to the Underwriter, including, at the option of the Underwriter, through the
facilities of The Depository Trust Company (“DTC”), against payment by or on behalf of the purchasers of the
purchase price therefor by wire transfer of Federal (same-day) funds to the account specified in writing to the Underwriter by
the Company upon at least 48 hours’ prior notice. Upon request of the Underwriter, the Company will cause the certificates
representing the Best Efforts Shares to be made available for checking and packaging at least 24 hours prior to the Closing Time
with respect thereto at the offices of Mei & Xxxx LLP, counsel to the Underwriter, or at such other place (or remotely by facsimile
or other electronic transmission) as shall be agreed upon by the Underwriter and the Company. The time and date of such delivery
and payment shall be 10:00 a.m., New York City time, on the third business day after the date hereof (unless another time and date
shall be agreed to by the Underwriter and the Company). The time at which such payment and delivery are actually made is hereinafter
sometimes called the “Closing Time.”
1.3 Warrants.
At the Closing Time the Company shall issue to Spartan Securities Group, Ltd., warrants to purchase a number of Shares equal to
five percent (5%) of the number of Best Efforts Shares attributable to the Underwriter sold in the Offering (“Warrants”).
The Warrants shall be exercisable at 125% of the public offering price in the Offering. The Warrants shall be subject to a lock-up
restriction pursuant to the rules of Financial Industry Regulatory Authority (“FINRA”) and in particular FINRA
Rule 5110(g)(1), for a period of 180 days immediately following the date of effectiveness of the registration statement for the
Offering, and expire three (3) years from the date of effectiveness of the Registration Statement for the Offering. The Warrants
shall include a “net issuance” or “cashless” exercise feature, and shall contain provisions for unlimited
“piggyback” registration rights until expiration.
2. Representations
and Warranties of the Company. The Company represents and warrants to the Underwriter as of the Applicable Time (as defined
below), as of the Closing Time or as of such other time as specified below, as follows:
2.1 Filing
of Registration Statement.
2.1.1. Pursuant
to the Act. The Company has filed with the Securities and Exchange Commission (the “Commission”) a registration
statement and an amendment or amendments thereto, on Form F-1 (File No. 333-____________), including any related prospectus or
prospectuses, for the registration of securities, including the Best Efforts Shares, under the Securities Act of 1933, as amended
(the “Act”), which registration statement and amendment or amendments have been prepared by the Company in all
material respects in conformity with the requirements of the Act and the rules and regulations of the Commission under the Act
(the “Regulations”). Except as the context may otherwise require, such registration statement, as amended, on
file with the Commission at the time the registration statement becomes effective (including any preliminary prospectus included
in the registration statement or filed with the Commission pursuant to Rule 424(a) under the Act (each, a “Preliminary
Prospectus”), financial statements, schedules, exhibits and all other documents filed as a part thereof or incorporated
therein and all information deemed to be a part thereof as of the Effective Date pursuant to paragraph (b) of Rule 430A of the
Regulations), is referred to herein as the “Registration Statement.” If the Company has filed an abbreviated
registration statement pursuant to Rule 462(b) under the Act (the “Rule 462 Registration Statement”), then any
reference herein to the term “Registration Statement” shall be deemed to include such Rule 462 Registration Statement.
The Preliminary Prospectus, subject to completion, dated ______________, 2017, that was included in the Registration Statement
immediately prior to the Applicable Time, as supplemented by the pricing information communicated to potential investors, is hereinafter
called the “Pricing Prospectus.” The final prospectus in the form first furnished to the Underwriter for use
in the Offering, is hereinafter called the “Prospectus.” Any “issuer free writing prospectus” as
defined in Rule 433 under the Act relating to the Best Efforts Shares is hereinafter called an “Issuer Free Writing Prospectus.”
The Registration Statement has been declared effective by the Commission on the date hereof (the “Effective Date”).
“Applicable Time” means 5:00 P.M., Eastern Time, on the Effective Date or such other time as agreed to by the
Company and the Underwriter.
2.1.2. Registration
under the Exchange Act and Stock Exchange Listing. The Shares are registered pursuant to Section 12(b) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) and the Company has applied to have the Shares listed on The NASDAQ
Global Market (“NASDAQ”), and the Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Shares under the Exchange Act or delisting the Shares from NASDAQ, nor has the Company received
any notification that the Commission or NASDAQ is contemplating terminating such registration or listing except as described in
the Registration Statement, the Pricing Prospectus and Prospectus.
2.2 Effectiveness
of Registration Statement; No Stop Orders, etc. The Registration Statement and any post-effective amendment thereto have been
declared effective by the Commission and, other than the Rule 462 Registration Statement, if any, which became effective upon filing,
no other document with respect to the Registration Statement following the declaration of effectiveness has been filed under the
Act with the Commission. Neither the Commission nor, to the best of the Company’s knowledge, any state regulatory authority
has issued any order preventing or suspending the use of the Registration Statement, any post-effective amendment thereto, or the
Rule 462 Registration Statement, if any, or any Preliminary Prospectus or Issuer Free Writing Prospectus, or has instituted or,
to the best of the Company’s knowledge, threatened to institute any proceedings with respect to such an order.
2.3 Disclosures
in Registration Statement, Preliminary Prospectus, Pricing Prospectus and Prospectus.
2.3.1. 10b-5
Representation. At the respective times the Registration Statement, the Prospectus and any post-effective amendments thereto
become effective, and at the Closing Time:
(i) The
Registration Statement, the Prospectus and any post-effective amendments thereto did and will contain all material statements that
are required to be stated therein in accordance with the Act and the Regulations, and will in all material respects conform to
the requirements of the Act and the Regulations;
(ii) Neither
the Registration Statement nor the Prospectus, nor any amendment or supplement thereto, on such dates, do or will contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading. The representation and warranty made in this
Section 2.3.1(ii) does not apply to statements made or statements omitted in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Underwriter expressly for use in the Registration Statement or Prospectus or any
amendment thereof or supplement thereto. The parties acknowledge and agree that such information provided by or on behalf of the
Underwriter consists solely of the following disclosure contained in the “Plan of Distribution” section of the Prospectus:
the table that shows the per share and total placement discounts and commissions, and the disclosure under the heading “Sales
Outside the U.S.” (the “Underwriter’s Information”).
(iii) The
Pricing Prospectus, as supplemented by the Issuer Free Writing Prospectuses, if any, listed on Schedule II attached hereto, taken
together as of the Applicable Time, did not contain an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading; and each Issuer Free Writing Prospectus, if any, listed on Schedule II attached hereto does not conflict
with the information contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus,
and each such Issuer Free Writing Prospectus, as supplemented by and taken together with the Pricing Prospectus as of the Applicable
Time, did not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply to the Underwriter’s Information.
2.4 Material
Agreements. The agreements and documents described in the Registration Statement, the Pricing Prospectus and the Prospectus
conform to the descriptions thereof contained therein and there are no agreements or other documents required by the Act and the
Regulations to be described in the Registration Statement, the Pricing Prospectus and the Prospectus or to be filed with the Commission
as exhibits to the Registration Statement, that have not been so described or filed. All agreements between or among the Company
and third parties expressly referenced in the Registration Statement, Pricing Prospectus or Prospectus or required to be referenced
in the Registration Statement, Pricing Prospectus or Prospectus are legal, valid and binding obligations of the Company, enforceable
in accordance with their respective terms, except to the extent enforceability may be limited by (i) laws of general application
relating to bankruptcy, insolvency, moratorium and the relief of debtors and (ii) the availability of specific performance, injunctive
relief and other equitable remedies. None of such agreements or instruments has been assigned by the Company, and neither the Company
nor, to the best of the Company’s knowledge, any other party is in default or breach thereunder and, to the best of the Company’s
knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder,
except in each case as disclosed in the Registration Statement, the Pricing Prospectus and the Prospectus. To the best of the Company’s
knowledge, performance by the Company of the material provisions of such agreements or instruments will not result in a violation
of any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic or foreign,
having jurisdiction over the Company or any of its assets or businesses, including, without limitation, those relating to environmental
laws and regulations.
2.5 Prior
Securities Transactions. No securities of the Company have been sold by the Company or by or on behalf of, or for the benefit
of, any person or persons controlling, controlled by, or under common control with the Company, except as disclosed in the Registration
Statement, the Pricing Prospectus and the Prospectus.
2.6 Regulations.
The disclosures in the Registration Statement, the Pricing Prospectus and the Prospectus concerning the effects of U.S. Federal,
state, and local regulation and all non-U.S. foreign regulation, including but not limited to regulations promulgated by any governmental
agency in the People’s Republic of China (the “PRC”), on the Company’s business as currently contemplated
are correct in all material respects.
2.7 Changes
After Dates in Registration Statement.
2.7.1. No
Material Adverse Effect. Since the respective dates as of which information is given in the Registration Statement, the Pricing
Prospectus and the Prospectus, except as otherwise specifically stated therein: (i) to the knowledge of the Company, no event
has occurred or is reasonably likely to occur that would have a material adverse effect on the assets, business, operations, earnings
or financial condition of the Company or its subsidiaries; (ii) there have been no material transactions entered into by the
Company, other than as contemplated pursuant to this Agreement; and (iii) no officer or director of the Company has resigned
from any position with the Company.
2.7.2. Recent
Securities Transactions, etc. Subsequent to the respective dates as of which information is given in the Registration Statement,
the Pricing Prospectus and the Prospectus, and except as may otherwise be indicated or contemplated herein or disclosed in the
Registration Statement, the Pricing Prospectus and the Prospectus, the Company has not: (i) issued any securities, other than
pursuant to any incentive compensation plan of the Company or, upon approval of the Company’s board of directors, to any
officer, director, employee or consultant of the Company as compensation for services, or incurred any liability or obligation,
direct or contingent, for borrowed money; or (ii) declared or paid any dividend or made any other distribution on or in respect
of its capital stock.
2.8 Independent
Accountants. To the knowledge of the Company, Xxxxxxxx LLP, whose report is filed with the Commission as part of the Registration
Statement, are independent registered public accountants as required by the Act and the Regulations. Xxxxxxxx LLP has not, during
the periods covered by the financial statements included in the Registration Statement, the Pricing Prospectus and the Prospectus,
provided to the Company any non-audit services, as such term is used in Section 10A(g) of the Exchange Act.
2.9 Financial
Statements, etc. The financial statements, including the notes thereto and supporting schedules included in the Registration
Statement, the Pricing Prospectus and the Prospectus fairly present the financial position and the results of operations of the
Company at the dates and for the periods to which they apply; and such financial statements have been prepared in conformity with
United States generally accepted accounting principles (“GAAP”), consistently applied throughout the periods
involved; and the supporting schedules included in the Registration Statement present fairly the information required to be stated
therein. The Registration Statement, the Pricing Prospectus and the Prospectus disclose all material off-balance sheet transactions,
arrangements, obligations (including contingent obligations), and other relationships of the Company with unconsolidated entities
or other persons that may have a material current or future effect on the Company’s financial condition, changes in financial
condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or
expenses. Except as disclosed in the Registration Statement, the Pricing Prospectus and the Prospectus, (a) neither the Company
nor any of its direct and indirect subsidiaries, including each entity disclosed or described in the Registration Statement as
being a subsidiary of the Company (each a “Subsidiary” and together the “Subsidiaries”),
has incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions other than
in the ordinary course of business, (b) the Company has not declared or paid any dividends or made any distribution of any kind
with respect to its capital stock; (c) there has not been any change in the capital stock of the Company or any of its Subsidiaries
or any grants under any incentive compensation plan and, (d) there has not been any material adverse change in the Company’s
long-term or short-term debt.
2.10 Authorized
Capital; Options, etc. The Company had, at the date or dates indicated in the Registration Statement, the Pricing Prospectus
and the Prospectus, the duly authorized, issued and outstanding capitalization as set forth therein. Based on the assumptions stated
in the Registration Statement, the Pricing Prospectus and the Prospectus, the Company will have at the Closing Time the adjusted
share capitalization set forth therein, except for such changes as a result of the exercise of options, warrants, or other rights
to purchase any Shares as set forth therein. Except as set forth in, or contemplated by, the Registration Statement, the Pricing
Prospectus, the Prospectus and this Agreement, on the Effective Date and at the Closing Time, there will be no options, warrants,
or other rights to purchase or otherwise acquire any authorized, but unissued Shares of the Company or any security convertible
into Shares of the Company, or any contracts or commitments to issue or sell Shares or any such options, warrants, rights or convertible
securities.
2.11 Valid
Issuance of Securities, etc.
2.11.1. Outstanding
Securities. All of the issued and outstanding securities of the Company issued prior to the transactions contemplated by this
Agreement have been duly authorized, validly issued, fully paid and are non-assessable. None of the Company’s securities
were issued in violation of the preemptive rights of any holders of any security of the Company or similar contractual rights granted
by the Company. The authorized Shares conform in all material respects to all statements relating thereto contained in the Registration
Statement, the Pricing Prospectus and the Prospectus. The offers and sales of the outstanding Shares were at all relevant times
either registered under the Act and the applicable state securities or “blue sky” laws or, based in part on the representations
and warranties of the purchasers of such Shares, exempt from such registration requirements.
2.11.2. Securities
Sold Pursuant to this Agreement. The Best Efforts Shares have been duly authorized for issuance and sale and, when issued and
paid for, will be validly issued, fully paid and nonassessable. The Best Efforts Shares are not and will not be subject to the
preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company. All corporate
action required to be taken for the authorization, issuance and sale of the Best Efforts Shares has been duly and validly taken.
The Best Efforts Shares conform in all material respects to all statements with respect thereto contained in the Registration Statement,
the Pricing Prospectus and the Prospectus.
2.12 Registration
Rights of Third Parties. Except as set forth in the Registration Statement, the Pricing Prospectus and the Prospectus, no holders
of any securities of the Company or any rights exercisable for or convertible or exchangeable into securities of the Company have
the right to require the Company to register any such securities of the Company under the Act or to include any such securities
in a registration statement to be filed by the Company.
2.13 Validity
and Binding Effect of Agreements. This Agreement has been duly and validly authorized by the Company, and, when executed and
delivered, will constitute, the valid and binding agreement of the Company, enforceable against the Company in accordance with
its terms, except: (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally; (ii) as enforceability of any indemnification or contribution provision may be limited
under the federal and state securities laws; and (iii) that the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefore
may be brought.
2.14 No
Conflicts, etc. The execution, delivery, and performance by the Company of this Agreement and all ancillary documents, the
consummation by the Company of the transactions herein and therein contemplated and the compliance by the Company with the terms
hereof and thereof do not and will not, with or without the giving of notice or the lapse of time or both: (i) result in a
material breach of, or conflict with any of the terms and provisions of, or constitute a material default under, or result in the
creation, modification, termination or imposition of any lien, charge or encumbrance upon any property or assets of the Company
pursuant to the terms of any agreement or instrument to which the Company is a party; (ii) result in any violation of the
provisions of the Articles of Association of the Company and Memorandum of Association of the Company (as the same may be amended
from time to time, the “Charters”) or the certificate or articles of incorporation, bylaws, certificate of formation,
limited liability company agreement, joint venture agreement, partnership agreement or other organizational documents of the Subsidiaries;
or (iii) violate any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency or court,
domestic or foreign, having jurisdiction over the Company or any of its properties or business constituted as of the date hereof.
2.15 Company;
Organization and Qualification. The Company has been duly incorporated and is validly existing and in good standing under the
laws of British Virgin Islands with all requisite corporate power and authority to enter into this Agreement, to issue and deliver
the Best Efforts Shares as provided herein and to conduct its business as now conducted and as proposed to be conducted as disclosed
in the Registration Statement, the Pricing Prospectus and the Prospectus. The Company is qualified to do business and is in good
standing in each jurisdiction in which its ownership or lease of property or the conduct of business requires such qualification,
except where the failure to qualify would not have a material adverse effect on the assets, business or operations of the Company.
The Company is not in violation of any provision of its Charter.
2.16 Conduct
of Business. Except as described in the Registration Statement, the Pricing Prospectus and the Prospectus, the Company has
all necessary authorizations, approvals, orders, licenses, certificates and permits of and from all governmental regulatory officials
and bodies that it needs as of the date hereof to conduct its business purpose as described in the Registration Statement, the
Pricing Prospectus and the Prospectus, except where the failure to so possess such authorizations, approvals, orders, licenses,
certificates and permits would not, individually or in the aggregate, result in a material adverse effect on the assets, business
or operations of the Company. The disclosures in the Registration Statement, the Pricing Prospectus and the Prospectus concerning
the effects of Federal, state, local and foreign regulation on this Offering and the Company’s business purpose as currently
contemplated are correct in all material respects.
2.17 Consents.
Except as disclosed in the Registration Statement, Pricing Prospect and Prospectus, no consent, authorization or order of, and
no filing with, any court, government agency or other body is required for the valid issuance, sale and delivery of the Best Efforts
Shares and the consummation of the transactions and agreements contemplated by this Agreement and as contemplated by the Registration
Statement, the Pricing Prospectus and the Prospectus, except with respect to applicable Federal and state securities laws and the
rules and regulations of FINRA.
2.18 D&O
Questionnaires. To the Company’s knowledge, all information contained in the questionnaires (the “Questionnaires”)
completed by each of the Company’s directors and officers immediately prior to the Offering (the “Insiders”)
is true and correct in all respects and the Company has not become aware of any information which would cause the information disclosed
in the Questionnaires completed by each Insider to become inaccurate and incorrect
2.19 Litigation;
Governmental Proceedings. There is no action, suit, proceeding, inquiry, arbitration, investigation, litigation or governmental
proceeding pending or, to the Company’s knowledge, threatened against, or involving the Company or, to the Company’s
knowledge, any executive officer or director which has not been disclosed in the Registration Statement, the Pricing Prospectus
and the Prospectus or in connection with the Company’s listing application for the listing of the Shares on NASDAQ and which
(i) is required to be disclosed in the Registration Statement, the Pricing Prospectus and the Prospectus, (ii) if determined adversely
to the Company would, individually or in the aggregate, reasonably be expected to result in a material adverse effect or (iii)
would, individually or in the aggregate, reasonably be expected to materially and adversely affect the consummation of the transactions
contemplated by this Agreement or the performance by the Company of its obligations hereunder.
2.20 Stop
Orders. The Commission has not issued any order preventing or suspending the use of any Preliminary Prospectus or Prospectus
or any part thereof.
2.21 Transactions
Affecting Disclosure to FINRA.
2.21.1. Finder’s
Fees. Except as described in the Registration Statement, the Pricing Prospectus and the Prospectus, and as otherwise detailed
in questionnaires provided to the Underwriter, there are no claims, payments, arrangements, agreements or understandings relating
to the payment of a finder’s, consulting or origination fee by the Company or any Insider with respect to the sale of the
Best Efforts Shares hereunder or any other arrangements, agreements or understandings of the Company or, to the Company’s
knowledge, any of its shareholders that may affect the Underwriter’s compensation, as determined by FINRA.
2.21.2. Payments
Within Twelve Months. Except as described in the Registration Statement, the Pricing Prospectus and the Prospectus, the Company
has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a finder’s fee,
consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons
who raised or provided capital to the Company; (ii) to any FINRA member; or (iii) to any person or entity that has any
direct or indirect affiliation or association with any FINRA member, within the twelve months prior to the Effective Date, other
than payment to the Underwriter as provided hereunder in connection with the Offering.
2.21.3. Use
of Proceeds. None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its
affiliates, except as specifically authorized herein.
2.21.4. FINRA
Affiliation. Except as described in the Registration Statement, the Pricing Prospectus and the Prospectus, no officer, director
or any beneficial owner of the Company’s unregistered securities has any direct or indirect affiliation or association with
any FINRA member (as determined in accordance with the rules and regulations of FINRA). The Company will advise the Underwriter
and Mei & Xxxx LLP if it learns that any officer, director or owner of at least 5% of the Company’s outstanding Shares
(or securities convertible into Shares) is or becomes an affiliate or associated person of a FINRA member participating in the
Offering.
2.22 Foreign
Corrupt Practices Act. Neither the Company nor any director, officer or employee of the Company or any of its Subsidiaries
nor, to the Company’s knowledge, any agent or representative of the Company or any of its Subsidiaries, has, directly or
indirectly, given or agreed to give any money, gift or similar benefit (other than legal price concessions to customers in the
ordinary course of business) to any customer, supplier, employee or agent of a customer or supplier, or official or employee of
any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate for office
(domestic or foreign) or other person who was, is, or may be in a position to help or hinder the business of the Company (or assist
it in connection with any actual or proposed transaction) that (i) might subject the Company to any damage or penalty in any
civil, criminal or governmental litigation or proceeding, (ii) if not given in the past, might have had a material adverse
effect on the assets, business or operations of the Company as reflected in any of the financial statements contained in the Registration
Statement, the Pricing Prospectus and the Prospectus or (iii) if not continued in the future, might adversely affect the assets,
business, operations or prospects of the Company. The Company has taken reasonable steps to ensure that its accounting controls
and procedures are sufficient to cause the Company to comply in all material respects with the Foreign Corrupt Practices Act of
1977, as amended.
2.23 OFAC.
Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, after due inquiry, any director, officer,
agent, employee, affiliate or person acting on behalf 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”). None
of the issue and sale of the Best Efforts Shares, the execution, delivery and performance of the Placement Agreement, the consummation
of any transaction contemplated hereby, or the provision of services with respect to the Offering or the facilitation of any of
the foregoing will result in (i) the provision of any funds or services, directly or indirectly, unless authorized under applicable
law, to (a) the government of or any person or entity in or organized under the laws of, or owned or controlled by, the government
of or a person in or organized under the laws of Cuba, Iran, North Korea, Sudan or Syria, (b) any person, entity or vessel on the
List of Specially Designated Nationals and Blocked Persons published by OFAC or (c) any government, person or entity that is otherwise
the subject of any sanctions administered by OFAC or the European Union or its members (collectively “EU”) or
(ii) a violation by any person (including, without limitation, the Underwriters and purchasers of the Best Efforts Shares) of any
economic sanctions administered by OFAC or the EU.
2.24 Officers’
Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to you or to Mei & Xxxx
LLP shall be deemed a representation and warranty by the Company to the Underwriter as to the matters covered thereby.
2.25 Subsidiaries.
All direct and indirect Subsidiaries of the Company are duly organized and in good standing under the laws of the place of organization
or incorporation, and each such Subsidiary is in good standing in each jurisdiction in which its ownership or lease of property
or the conduct of business requires such qualification, except where the failure to qualify would not have a material adverse effect
on the assets, business or operations of the Company taken as a whole. The Company’s ownership and control of each Subsidiary
is as described in the Registration Statement, the Pricing Prospectus and the Prospectus.
2.26 Related
Party Transactions. Except as disclosed in the Registration Statement, the Pricing Prospectus and the Prospectus, there are
no business relationships or related party transactions involving the Company or any other person required to be described in the
Registration Statement, the Pricing Prospectus and the Prospectus that have not been described as required.
2.27 Board
of Directors. The Board of Directors of the Company is comprised of the persons set forth under the heading of the Registration
Statement, the Pricing Prospectus and the Prospectus captioned “Management.” The qualifications of the persons serving
as board members and the overall composition of the board comply with the Xxxxxxxx-Xxxxx Act of 2002 and the rules promulgated
thereunder applicable to the Company and the rules of NASDAQ. At least one member of the Board of Directors of the Company qualifies
as a “financial expert” as such term is defined under the Xxxxxxxx-Xxxxx Act of 2002 and the rules promulgated thereunder
and the rules of NASDAQ. In addition, at least a majority of the persons serving on the Board of Directors qualify as “independent”
as defined under the rules of NASDAQ.
2.28 Xxxxxxxx-Xxxxx
Compliance.
2.28.1. Disclosure
Controls. The Company has developed and currently maintains disclosure controls and procedures that comply with Rule 13a-15
or 15d-15 of the Exchange Act.
2.28.2. Compliance.
The Company is, and on the Effective Date will be, in material compliance with the provisions of the Xxxxxxxx-Xxxxx Act of 2002
applicable to it, and has implemented or will implement such programs and has taken reasonable steps to ensure the Company’s
future compliance (not later than the relevant statutory and regulatory deadlines therefore) with all the material provisions of
the Xxxxxxxx-Xxxxx Act of 2002.
2.29 No
Investment Company Status. The Company is not and, after giving effect to the Offering and sale of the Shares and the Option
Shares, if any, and the application of the proceeds thereof as described in the Registration Statement, the Pricing Prospectus
and the Prospectus, will not be, an “investment company” as defined in the Investment Company Act of 1940, as amended.
2.30 No
Labor Disputes. No labor dispute with the employees of the Company or any of its Subsidiaries exists or, to the knowledge of
the Company, is imminent.
2.31 Intellectual
Property. The Company and each of its Subsidiaries owns or possesses or has valid right to use all patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service xxxx registrations, copyrights, licenses, inventions,
trade secrets and similar rights (“Intellectual Property”) necessary for the conduct of the business of the
Company and its Subsidiaries as currently carried on and as described in the Registration Statement, the Pricing Prospectus and
the Prospectus. To the knowledge of the Company, no action or use by the Company or any of its Subsidiaries will involve or give
rise to any infringement of, or license or similar fees for, any Intellectual Property of others, except as described in the Registration
Statement, the Pricing Prospectus and the Prospectus. Neither the Company nor any of its Subsidiaries has received any notice alleging
any such infringement or fee.
2.32 Taxes.
The Company and each of its Subsidiaries have filed (or have duly requested extension(s) of) all federal, state, local and foreign
tax returns which have been required to be filed and have paid all taxes indicated by such returns and all assessments received
by them or any of them to the extent that such taxes have become due and payable, except as described in the Registration Statement,
the Pricing Prospectus and the Prospectus. The provisions for taxes payable, if any, shown on the financial statements filed with
or as part of the Registration Statement are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all
periods to and including the dates of such consolidated financial statements. Except as disclosed in writing to the Underwriter
or described in the Registration Statement, the Pricing Prospectus and the Prospectus, (i) no issues have been raised (and are
currently pending) by any taxing authority in connection with any of the returns or taxes asserted as due from the Company or its
Subsidiaries, and (ii) no waivers of statutes of limitation with respect to the returns or collection of taxes have been given
by or requested from the Company or its Subsidiaries. The term “taxes” mean all Federal, state, local, foreign,
and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service,
service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs,
duties or other taxes, fees, assessments, or charges of any kind whatever, together with any interest and any penalties, additions
to tax, or additional amounts with respect thereto. The term “returns” means all returns, declarations, reports,
statements, and other documents required to be filed in respect to taxes.
2.33 PRC
Taxes. Except as disclosed in the Registration Statement and Prospectus, including the risk factor set forth in “Risk
Factors— Under the Enterprise Income Tax Law, we may be classified as a “Resident Enterprise” of China. Such
classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders,” no transaction, stamp,
capital or other issuance, registration, transaction, transfer or withholding taxes or duties are payable in China, Hong Kong or
the Cayman Islands to any Chinese, Hong Kong or British Virgin Islands taxing authority in connection with (A) the issuance, sale
and delivery of the Best Efforts Shares to or for the account of the purchasers, (B) the purchase from the Company and the sale
and delivery of the Best Efforts Shares to purchasers thereof, or (C) the execution and delivery of this Agreement by the Underwriter.
2.34 Environmental
Matters. The Company and its Subsidiaries and their respective properties, assets and operations are in compliance with, and
the Company and each of its subsidiaries hold all permits, authorizations and approvals required under, Environmental Laws (as
defined below). Except as disclosed in the Registration Statement, the Pricing Prospectus and the Prospectus, there are no past,
present or, to the Company’s knowledge, reasonably anticipated future events, conditions, circumstances, activities, practices,
actions, omissions or plans that could reasonably be expected to give rise to any material costs or liabilities to the Company
or any subsidiary under, or to interfere with or prevent compliance by the Company or any subsidiary with, Environmental Laws.
Neither the Company nor any of its subsidiaries (i) to the Company’s knowledge, is the subject of any investigation, (ii)
has received any notice or claim, (iii) is a party to or affected by any pending or, to the Company’s knowledge, threatened
action, suit or proceeding, (iv) is bound by any judgment, decree or order or (v) has entered into any material agreement, in each
case relating to any alleged violation of any Environmental Law or any actual or alleged release or threatened release or cleanup
at any location of any Hazardous Materials (as defined below) (as used herein, “Environmental Law” means any
federal, state, local or foreign law, statute, ordinance, rule, regulation, order, decree, judgment, injunction, permit, license,
authorization or other binding requirement, or common law, relating to health, safety or the protection, cleanup or restoration
of the environment or natural resources, including those relating to the distribution, processing, generation, treatment, storage,
disposal, transportation, other handling or release or threatened release of Hazardous Materials, and “Hazardous Materials”
means any material (including, without limitation, pollutants, contaminants, hazardous or toxic substances or wastes) that is regulated
by or may give rise to liability under any Environmental Law).
2.35 Safety
and Quality Matters. The Company and its Subsidiaries are in compliance with and hold all permits, authorizations and approvals
required under Safety Law (as defined below). Except as disclosed in the Registration Statement, the Pricing Prospectus and the
Prospectus, there are no past, present or, to the Company’s knowledge, reasonably anticipated future events, conditions,
circumstances, activities, practices, actions, omissions or plans that could reasonably be expected to give rise to any material
costs or liabilities to the Company or any subsidiary under, or to interfere with or prevent compliance by the Company or any subsidiary
with, Safety Laws. Neither the Company nor any of its subsidiaries (i) to the Company’s knowledge, is the subject of any
investigation, (ii) has received any notice or claim, (iii) is a party to or affected by any pending or, to the Company’s
knowledge, threatened action, suit or proceeding, (iv) is bound by any judgment, decree or order or (v) has entered into any material
agreement, in each case relating to any alleged violation of any Safety Law. As used herein, “Safety Law” means
any federal, state, local or foreign law, statute, ordinance, rule, regulation, order, decree, judgment, injunction, permit, license,
authorization or other binding requirement, or common law, relating to food safety and quality, including during the growing, packing,
storage, handling or transportation phases.
2.36 Property.
Except as disclosed in the Registration Statement, the Pricing Prospectus and the Prospectus or as would not materially and adversely
affect the value of such property, the Company and each of its subsidiaries have good and marketable title to all personal property
described in the Registration Statement, the Pricing Prospectus and the Prospectus, as being owned by any of them, free and clear
of all liens, claims, security interests or other encumbrances. All the property described in the Registration Statement, the Pricing
Prospectus and the Prospectus as being held under land use right certificates by the Company or any subsidiary is held thereby
under valid, subsisting and enforceable land use rights certificates, free and clear of all liens, claims, security interests or
other encumbrances. Any real property and buildings held under lease or sublease by the Company and the Subsidiaries are held by
them under valid, subsisting and enforceable leases with such exceptions as are not material to, and do not interfere with, the
use made and proposed to be made of such property and buildings by the Company and the Subsidiaries. Neither the Company nor any
Subsidiary has received any written notice of any claim adverse to its ownership of any real or personal property or of any claim
against the continued possession of any real property, whether owned or held under lease or sublease by the Company or any Subsidiary.
2.37 Ineligible
Issuer. As of the time of filing of the Registration Statement, the Company was not, and the Company on the date of this Agreement
is not, an “ineligible issuer” as defined in Rule 405 under the Act.
2.38 Emerging
Growth Company. As of the time of filing of the Registration Statement, the Company was an “emerging growth company,”
as defined in the Jumpstart our Business Startups Act of 2012, or the JOBS Act.
2.39 Industry
Data. The statistical and market-related data included in each of the Registration Statement, the Pricing Prospectus and the
Prospectus are based on or derived from sources that the Company reasonably and in good faith believes are reliable and accurate
or represent the Company’s good faith estimates that are made on the basis of data derived from such sources.
2.40 PRC
Matters. The Company makes such additional representations and warranties to, and agrees with, the Underwriter, with respect
to the PRC matters set forth on Schedule I hereto.
3. Representations
and Warranties of the Underwriter. The Underwriter hereby represents and warrants to the Company that:
3.1 10b-5
Representation. At the respective times the Registration Statement, the Prospectus and any post-effective amendments thereto
become effective, and at the Closing Time:
3.1.1. Neither
the Registration Statement nor the Prospectus, nor any amendment or supplement thereto, on such dates, do or will contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading. The representation and warranty made in this
Section 3.1(i) applies only to statements made or statements omitted in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Underwriter expressly for use in the Registration Statement or Prospectus or any
amendment thereof or supplement thereto. The parties acknowledge and agree that such information provided by or on behalf of the
Underwriter consists solely of the Underwriter’s Information.
3.1.2. The
Pricing Prospectus, as supplemented by the Issuer Free Writing Prospectuses, if any, listed on Schedule II attached hereto, taken
together as of the Applicable Time, did not contain an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading; and each Issuer Free Writing Prospectus, if any, listed on Schedule II attached hereto does not conflict
with the information contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus,
and each such Issuer Free Writing Prospectus, as supplemented by and taken together with the Pricing Prospectus as of the Applicable
Time, did not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty applies only to the Underwriter’s Information.
3.2 Licensure
and Good Standing. The Underwriter is a member, in good standing, of FINRA and is duly registered as a broker-dealer under
the Exchange Act, and under the laws of any states in which the Offering contemplated hereby is conducted, and there are no orders
issued or, to the knowledge of the Underwriter, proposed to be issued against the Underwriter by FINRA or any state or other regulatory
authority having jurisdiction over the Underwriter that would prevent it from conducting the Offering contemplated hereby.
3.3 Due
Authorization and Validity. This Agreement has been duly and validly authorized by the Underwriter, and, when executed and
delivered, will constitute, the valid and binding agreement of the Underwriter, enforceable against you in accordance with its
terms, except: (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally; (ii) as enforceability of any indemnification or contribution provision may be limited
under the federal and state securities laws; and (iii) that the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefore
may be brought.
3.4 Compliance
with Laws. The Underwriter has complied with all applicable laws, rules and regulations in connection with the Offering contemplated
hereby, including without limitation, Rule 10b-9 and Rule 15c2-4 under the Exchange Act. In that regard, all checks from investors
shall only be made payable to, and delivered directly to, the Escrow Agent. Any investor checks delivered directly to the Underwriter
shall be returned to the investor within 24 hours of its receipt by the Underwriter to the time the minimum contingency is met.
4. Covenants
of the Company. The Company covenants and agrees as follows:
4.1 Amendments
to Registration Statement. The Company will deliver to the Underwriter, prior to filing, any amendment or supplement to the
Registration Statement or Prospectus proposed to be filed after the Effective Date and not file any such amendment or supplement
to which the Underwriter shall reasonably object in writing.
4.2 Federal
Securities Laws.
4.2.1. Compliance.
The Company will use its best efforts to comply with all requirements imposed upon it by the Act, the Regulations and the Exchange
Act and by the regulations under the Exchange Act, as from time to time in force, so far as necessary to permit the continuance
of sales of or dealings in the Best Efforts Shares in accordance with the provisions hereof and the Prospectus. If at any time
when a Prospectus relating to the Best Efforts Shares is required to be delivered under the Act, any event shall have occurred
as a result of which, in the opinion of counsel for the Company or counsel for the Underwriter, the Prospectus, as then amended
or supplemented, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or if it
is necessary at any time to amend the Prospectus to comply with the Act, the Company will notify the Underwriter promptly and prepare
and file with the Commission, subject to Section 4.1 hereof, an appropriate amendment or supplement in accordance with Section
10 of the Act.
4.2.2. Filing
of Final Prospectus. The Company will file the Prospectus (in form and substance satisfactory to the Underwriter) with the
Commission pursuant to the requirements of Rule 424 of the Regulations.
4.2.3. Exchange
Act Registration. For a period of three years from the Effective Date, the Company will use its best efforts to maintain the
registration of the Shares. The Company will not deregister the Shares under the Exchange Act without the prior written consent
of the Underwriter.
4.2.4. Free
Writing Prospectuses. The Company represents and agrees that it has not made and will not make any offer relating to the Best
Efforts Shares that would constitute an Issuer Free Writing Prospectus, without the prior consent of the Underwriter. Any such
Issuer Free Writing Prospectus consented to by the Underwriter is hereinafter referred to as a “Permitted Free Writing
Prospectus.” The Company represents that it will treat each Permitted Free Writing Prospectus as an “issuer free
writing prospectus” as defined in Rule 433, and has complied and will comply with the applicable requirements of Rule 433
of the Act, including timely Commission filing where required, legending and record keeping.
4.3 Delivery
to the Underwriter of Prospectuses. The Company will deliver to the Underwriter, without charge, from time to time during the
period when the Prospectus is required to be delivered under the Act or the Exchange Act such number of copies of each Prospectus
as the Underwriter may reasonably request and, as soon as the Registration Statement or any amendment or supplement thereto becomes
effective, deliver to you one original executed Registration Statements including exhibits, and all post-effective amendments thereto,
including exhibits.
4.4 Effectiveness
and Events Requiring Notice to the Underwriter. The Company will use its best efforts to cause the Registration Statement to
remain effective with a current prospectus for at least nine (9) months from the Applicable Time and will notify the Underwriter
immediately and confirm the notice in writing: (i) of the effectiveness of the Registration Statement and any amendment thereto;
(ii) of the issuance by the Commission of any stop order or of the initiation, or the threatening, of any proceeding for that
purpose; (iii) of the issuance by any state securities commission of any proceedings for the suspension of the qualification
of the Best Efforts Shares for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding
for that purpose; (iv) of the mailing and delivery to the Commission for filing of any amendment or supplement to the Registration
Statement or Prospectus; (v) of the receipt of any comments or request for any additional information from the Commission;
and (vi) of the happening of any event during the period described in this Section 4.4 hereof that, in the judgment of the
Company, makes any statement of a material fact made in the Registration Statement, the Pricing Prospectus and the Prospectus untrue
or that requires the making of any changes in the Registration Statement, the Pricing Prospectus and the Prospectus in order to
make the statements therein, in light of the circumstances under which they were made, not misleading. If the Commission or any
state securities commission shall enter a stop order or suspend such qualification at any time, the Company will make every reasonable
effort to obtain promptly the lifting of such order.
4.5 Reports
to the Underwriter. For a period of three (3) years from the Effective Date, the Company will use its best efforts to file
with the Commission periodic and special reports as required by the Exchange Act and will also promptly furnish to the Underwriter
such additional documents and information with respect to the Company and the affairs of any future Subsidiaries of the Company
as the Underwriter may from time to time reasonably request; provided the Underwriter shall sign, if requested by the Company,
a Regulation FD compliant confidentiality agreement which is reasonably acceptable to the Underwriter and Mei & Xxxx LLP in
connection with the Underwriter’s receipt of such information.
4.5.1. Transfer
Sheets. For a period of three (3) years from the Effective Date, the Company shall retain a transfer and registrar agent acceptable
to the Underwriter (the “Transfer Agent”). Island Stock Transfer is acceptable to the Underwriter to act as
Transfer Agent for the Best Efforts Shares. If needed, Underwriter shall get transfer sheets of the Company’s securities,
including the daily and monthly consolidated transfer sheets of the Transfer Agent and DTC, directly from Island Stock Transfer
without the cost and expense of the Company.
4.5.2. Trading
Reports. During such time as the Best Efforts Shares are listed on NASDAQ, the Company shall provide to the Underwriter, at
the Underwriter’s expense, such reports published by NASDAQ relating to price trading of the Best Efforts Shares, as the
Underwriter shall reasonably request.
4.6 Payment
of Expenses.
4.6.1. General
Expenses Related to the Offering. The Company hereby agrees to pay at the Closing Time to the extent not paid at the Closing
Time, all expenses incident to the performance of the obligations of the Company under this Agreement, including, but not limited
to: (a) all filing fees and communication expenses relating to the registration of the Best Efforts Shares to be sold in the Offering
with the Commission; (b) all Public Offering System filing fees associated with the review of the Offering by FINRA; (c) all fees
and expenses relating to the listing of such Shares on NASDAQ; (d) all fees, expenses and disbursements relating to the registration
or qualification of such Best Efforts Shares under the “blue sky” securities laws of such states and other jurisdictions
as the Underwriter may reasonably designate (including, without limitation, all filing and registration fees, and the reasonable
fees and disbursements of “blue sky” counsel); (e) all fees, expenses and disbursements relating to the registration,
qualification or exemption of such Best Efforts Shares under the securities laws of such foreign jurisdictions as the Underwriter
may reasonably designate; (f) the costs of all mailing and printing of the placement documents (including, without limitation,
the Placement Agreement, any Blue Sky Surveys and, if appropriate, any Selected Dealers’ Agreement), Registration Statements,
Prospectuses and all amendments, supplements and exhibits thereto and as many preliminary and final Prospectuses as the Underwriter
may reasonably deem necessary; (g) the costs and expenses of the public relations firm; (h) the costs of preparing, printing and
delivering certificates representing the Best Efforts Shares; (i) the fees and expenses of the transfer agent for the Best Efforts
Shares; (j) all stock transfer and/or stamp taxes, if any, payable upon the transfer of securities from the Company to the Underwriter;
(k) the fees and expenses of the Company’s accountants; (l) the costs associated with CD forms of the Offering materials;
(m) the fees and expenses of the Company’s legal counsel and other agents and representatives; (n) the Underwriter’s
reasonable travel and out-of-pocket expenses as incurred in connection with its services up to an aggregate amount of $25,000,
and (o) reasonable fees and disbursements of counsel(s) and advisors retained by the Underwriter, up to an aggregate amount of
the lesser of $200,000 and such amount.
4.7 Application
of Net Proceeds. The Company will apply the net proceeds from the Offering received by it in a manner consistent with the application
described under the caption “Use Of Proceeds” in the Registration Statement, the Pricing Prospectus and the Prospectus.
4.8 Delivery
of Earnings Statements to Security Holders. The Company will make generally available to its security holders as soon as practicable,
but not later than the first day of the fifteenth (15th) full calendar month following the Effective Date, an earnings statement
(which need not be certified by independent public or independent certified public accountants unless required by the Act or the
Regulations, but which shall satisfy the provisions of Rule 158(a) under Section 11(a) of the Act) covering a period of at least
twelve (12) consecutive months beginning after the Effective Date.
4.9 Stabilization.
Neither the Company, nor, to its knowledge, any of its employees, directors or shareholders has taken or will take, directly or
indirectly, any action designed to or that has constituted or that might reasonably be expected to cause or result in, under the
Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or
resale of the Shares.
4.10 Internal
Controls. The Company will maintain 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 in order to permit preparation of financial statements in accordance with GAAP 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.
4.11 Accountants.
As of the Effective Date, the Company shall retain independent public accountants reasonably acceptable to the Underwriter, and
the Company shall continue to retain a nationally recognized independent certified public accounting firm for a period of at least
three (3) years after the Effective Date. The Underwriter acknowledges that Xxxxxxxx LLP is acceptable to the Underwriter.
4.12 FINRA.
The Company shall advise the Underwriter (who shall make an appropriate filing with FINRA) if it is aware that any 5% or greater
shareholder of the Company becomes an affiliate or associated person of an FINRA member participating in the distribution of the
Best Efforts Shares.
4.13 No
Fiduciary Duties. The Company acknowledges and agrees that the Underwriter’s responsibility to the Company is solely
contractual in nature and that none of the Underwriter or its affiliates or any selling agent shall be deemed to be acting in a
fiduciary capacity, or otherwise owes any fiduciary duty to the Company or any of its affiliates in connection with the Offering
and the other transactions contemplated by this Agreement.
4.14 Lock
Up.
4.14.1. The
Company, on behalf of itself and any successor entity, has agreed that, without the prior written consent of the Underwriter, it
will not, for a period of one hundred eighty (180) days from the effective date of the Registration Statement (the “Lock-Up
Period”), (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital
stock of the Company; (ii) file or caused to be filed any registration statement with the Commission relating to the offering of
any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital
stock of the Company or (iii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of capital stock of the Company, whether any such transaction described in clause (i), (ii)
or (iii) above is to be settled by delivery of shares of capital stock of the Company or such other securities, in cash or otherwise.
The restrictions contained
in this paragraph 4.14.1 shall not apply to (i) the Best Efforts Shares to be sold hereunder, (ii) the issuance by the Company
of Shares upon the exercise of an option or warrant or the conversion of a security outstanding on the date hereof and disclosed
in the Registration Statement, the Pricing Prospectus and the Prospectus as outstanding or (iii) the issuance by the Company of
an option or shares of capital stock of the Company under any stock compensation plan of the Company disclosed in the Registration
Statement, the Pricing Prospectus and the Prospectus, or upon approval of the Company’s board of directors, to any officer,
director, employee or consultant of the Company as compensation for services.
4.14.2. Notwithstanding
the foregoing, if (i) the Company issues an earnings release, or material news or a material event relating to the Company occurs,
during the last 17 days of the Lock-Up Period, or (ii) prior to the expiration of the Lock-Up Period, the Company announces that
it will release earnings results during the 16-day period beginning on the last day of the Lock-Up Period, the restrictions imposed
by paragraph 4.14.1 shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings
release or the occurrence of the material news or material event, unless the Underwriter waives such extension.
5. Covenants
of the Underwriter. The Underwriter covenants and agrees as follows:
5.1 Information
Provided. You have not provided and will not provide to the purchasers of Shares any written or oral information regarding
the business of the Company, including any representations regarding the Company’s financial condition or financial prospects,
other than such information as is contained in the Registration Statement, Pricing Prospectus or Prospectus.
5.2 Prospectus
Supplement. Until the Closing Time, if any event affecting the Registration Statement, Pricing Prospectus or Prospectus, the
Company or the Underwriter shall occur, which in the opinion of counsel to the Company, should be set forth in a supplement to
the Prospectus, you agree to distribute each supplement of the Prospectus to each person who has previously received a copy of
the Registration Statement, Pricing Prospectus or Prospectus from you and you further agree to include such supplement in all future
deliveries of the Registration Statement, Pricing Prospectus or Prospectus. You agree that following notice from the Company that
a supplement to the Prospectus is necessary, you will cease further efforts to sell the Shares until such supplement is prepared
and delivered to you.
5.3 Compliance
with Laws. The Underwriter will comply with all applicable laws, rules and regulations in connection with the Offering contemplated
hereby, including without limitation, Rule 10b-9 and Rule 15c2-4 under the Exchange Act. In that regard, all checks from investors
shall only be made payable to, and delivered directly to, the Escrow Agent. Any investor checks delivered directly to the Underwriter
shall be returned to the investor within 24 hours of its receipt by the Underwriter to the time the minimum contingency is met.
6. Conditions
of Underwriter’s Obligations. The obligations of the Underwriter hereunder are subject to (i) the continuing accuracy
of the representations and warranties of the Company as of the date hereof and as of the Closing Time; (ii) the accuracy of the
statements of officers of the Company made pursuant to the provisions hereof; (iii) the performance by the Company of its obligations
hereunder and (iv) the following conditions:
6.1 Regulatory
Matters.
6.1.1. Effectiveness
of Registration Statement. The Registration Statement shall have become effective not later than 5:00 P.M., Eastern time, on
the date of this Agreement or such later date and time as shall be consented to in writing by you, and, at the Closing Time, no
stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose
shall have been instituted or shall be pending or contemplated by the Commission and any request on the part of the Commission
for additional information shall have been complied with to the reasonable satisfaction of Mei & Xxxx LLP.
6.1.2. FINRA
Clearance. By the Effective Date, the Underwriter shall have received clearance from FINRA as to the amount of compensation
allowable or payable to the Underwriter as described in the Registration Statement.
6.1.3. NASDAQ
Stock Market Clearance. At the Closing Time, the Company’s Shares, including the Shares and Option Shares, if any, shall
have been approved for listing on NASDAQ.
6.1.4. Free
Writing Prospectuses. The Underwriter covenants with the Company that the Underwriter will not use, authorize the use of, refer
to, or participate in the planning for the use of a “free writing prospectus” as defined in Rule 405 under the Act,
which term includes use of any written information furnished by the Commission to the Company and not incorporated by reference
into the Registration Statement, without the prior written consent of the Company. Any such free writing prospectus consented to
by the Company is hereinafter referred to as an “Underwriter Free Writing Prospectus.”
6.2 Legal
Opinion Matters.
6.2.1. Closing
Time Opinion of U.S. Securities Counsel. At the Closing Time, the Underwriter shall have received the written opinion of Xxxxxxx
& Xxxxxxx, P.C., U.S. securities counsel to the Company, dated the Closing Time, addressed to the Underwriter, in form and
substance reasonably satisfactory to the Underwriter.
6.2.2. Closing
Time Opinion of PRC Counsel. At the Closing Time, the Underwriter shall have received the written opinion of Yunnan Weizhen
Law Offices, PRC counsel to the Company, dated the Closing Time, addressed to the Underwriter, in form and substance reasonably
satisfactory to the Underwriter.
6.2.3. Closing
Time Opinion of PRC Underwriter’s Counsel. At the Closing Time, the Underwriter shall have received the written opinion
of Mei & Xxxx LLP, counsel to the Underwriter, dated the Closing Time, addressed to the Underwriter, in form and substance
reasonably satisfactory to the Underwriter.
6.2.4. Reliance.
In rendering such opinions, such counsel may rely: (i) as to matters involving the application of laws other than the laws
of the United States and jurisdictions in which they are admitted, to the extent such counsel deems proper and to the extent specified
in such opinion, if at all, upon an opinion or opinions (in form and substance reasonably satisfactory to the Underwriter) of other
counsel reasonably acceptable to the Underwriter, familiar with the applicable laws; and (ii) as to matters of fact, to the
extent they deem proper, on certificates or other written statements of officers of the Company and officers of departments of
various jurisdiction having custody of documents respecting the corporate existence or good standing of the Company, provided that
copies of any such statements or certificates shall be delivered to Mei & Xxxx LLP if requested. The opinions and any opinion
relied upon shall include a statement to the effect that it may be relied upon by counsel for the Underwriter in its opinion delivered
to the Underwriter.
6.3 Comfort
Letter. At the time this Agreement is executed, and at the Closing Time you shall have received a comfort letter, addressed
to the Underwriter and in form and substance satisfactory in all respects to you and to Mei & Xxxx LLP from Xxxxxxxx LLP dated,
respectively, as of the date of this Agreement and as of the Closing Time.
6.4 Officer’s
Certificates.
6.4.1. Chief
Executive Officer’s Certificate. At the Closing Time the Underwriter shall have received a certificate of the Company
signed by the Chief Executive Officer of the Company, dated the Closing Time respectively, to the effect that the Company has performed
all covenants and complied with all conditions required by this Agreement to be performed or complied with by the Company prior
to and as of the Closing Time as the case may be, and that the conditions set forth in Section 6.5 hereof have been satisfied as
of such date and that, as of the Closing Time the representations and warranties of the Company set forth in Section 2 hereof are
true and correct. In addition, the Underwriter will have received such other and further certificates of officers of the Company
as the Underwriter may reasonably request.
6.4.2. Chief
Financial Officer’s Certificate. At the Closing Time the Underwriter shall have received a certificate of the Company
signed by the Chief Financial Officer of the Company, dated the Closing Time respectively, certifying: (i) that the Charter
is true and complete, has not been modified and is in full force and effect; (ii) that the resolutions of the Company’s
Board of Directors relating to the Offering contemplated by this Agreement are in full force and effect and have not been modified;
(iii) as to the accuracy and completeness of all correspondence between the Company or its counsel and the Commission; and (iv) as
to the incumbency of the officers of the Company. The documents referred to in such certificate shall be attached to such certificate.
6.5 No
Material Changes. Prior to and on the Closing Time: (i) there shall have been no material adverse change or development
involving a prospective material adverse change in the condition or prospects or the business activities, financial or otherwise,
of the Company from the latest dates as of which such condition is set forth in the Registration Statement, the Pricing Prospectus
and the Prospectus; (ii) no action suit or proceeding, at law or in equity, shall have been pending or threatened against
the Company or any Insider before or by any court or Federal or state commission, board or other administrative agency wherein
an unfavorable decision, ruling or finding may materially adversely affect the business, operations, prospects or financial condition
or income of the Company, except as set forth in the Registration Statement, the Pricing Prospectus and the Prospectus; (iii) no
stop order shall have been issued under the Act and no proceedings therefore shall have been initiated or threatened by the Commission;
and (iv) the Registration Statement, the Pricing Prospectus and the Prospectus and any amendments or supplements thereto shall
contain all material statements which are required to be stated therein in accordance with the Act and the Regulations and shall
conform in all material respects to the requirements of the Act and the Regulations, and neither the Registration Statement nor
the Pricing Prospectus nor the Prospectus nor any amendment or supplement thereto shall contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
6.6 Delivery
of Agreements.
6.6.1. Effective
Date Deliveries. On the Effective Date, the Company shall have delivered to the Underwriter executed copies of this Agreement.
7. Indemnification.
7.1 Indemnification
of the Underwriter.
7.1.1. General.
Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless the Underwriter and each of their
respective directors, officers and employees and each person, if any, who controls the Underwriter (each a “Controlling
Person”) within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, against any and all loss, liability,
claim, damage and expense whatsoever (including but not limited to any and all legal or other expenses reasonably incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, whether arising out of any action
between the Underwriter and the Company or between the Underwriter and any third party or otherwise) to which they or any of them
may become subject under the Act, the Exchange Act or any other statute or at common law or otherwise or under the laws of foreign
countries, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in (i) any
Registration Statement, Pricing Prospectus, Prospectus or Issuer Free Writing Prospectus (as from time to time each may be amended
and supplemented); (ii) 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 Best Efforts Shares, including any “road show” or investor presentations
made to investors by the Company (whether in person or electronically); or (iii) any application or other document or written communication
(in this Section 7, collectively called “application”) executed by the Company or based upon written information
furnished by the Company in any jurisdiction in order to qualify the Best Efforts Shares under the securities laws thereof or filed
with the Commission, any state securities commission or agency, NASDAQ or any securities exchange; or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, unless such statement or omission was made in reliance upon and in conformity with
written information furnished to the Company by or on behalf of the Underwriter expressly for use in any Registration Statement,
Pricing Prospectus or Prospectus, or any amendment or supplement thereof, or in any application, as the case may be. The Company
agrees promptly to notify the Underwriter of the commencement of any litigation or proceedings against the Company or any of its
officers, directors or Controlling Persons in connection with the issue and sale of the Best Efforts Shares or in connection with
the Registration Statement, the Pricing Prospectus or the Prospectus.
7.1.2. Procedure.
If any action is brought against the Underwriter or a Controlling Person in respect of which indemnity may be sought against the
Company pursuant to Section 7.1.1, the Underwriter or Controlling Person, as the case may be, shall promptly notify the Company
in writing of the institution of such action and the Company shall assume the defense of such action, including the employment
and fees of counsel (subject to the reasonable approval of the Underwriter or Controlling Person, as the case may be) and payment
of actual expenses. The Underwriter or Controlling Person shall have the right to employ its or their own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of the Underwriter or Controlling Person unless (i) the employment
of such counsel at the expense of the Company shall have been authorized in writing by the Company in connection with the defense
of such action, or (ii) the Company shall not have employed counsel to have charge of the defense of such action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different
from or additional to those available to the Company (in which case the Company shall not have the right to direct the defense
of such action on behalf of the indemnified party or parties), in any of which events the reasonable fees and expenses of not more
than one additional firm of attorneys selected by the Underwriter (in addition to local counsel) and/or Controlling Person shall
be borne by the Company. Notwithstanding anything to the contrary contained herein, if any Underwriter or Controlling Person shall
assume the defense of such action as provided above, the Company shall have the right to approve the terms of any settlement of
such action which approval shall not be unreasonably withheld.
7.2 Indemnification
of the Company. The Underwriter agrees to indemnify and hold harmless the Company, its directors, officers and employees and
agents who control the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act against any and all
loss, liability, claim, damage and expense described in the foregoing indemnity from the Company to the Underwriter, as incurred,
but only with respect to (i) untrue statements or omissions, or alleged untrue statements or omissions made in any Registration
Statement, Pricing Prospectus or Prospectus or any amendment or supplement thereto or in any application, in reliance upon, and
in strict conformity with, written information furnished to the Company by or on behalf of the Underwriter expressly for use in
such Registration Statement, Pricing Prospectus or Prospectus or any amendment or supplement thereto or in any such application
or (ii) by reason of improper selling practices (including failure to comply with, or a violation of, any law or regulation by
the Underwriter). In case any action shall be brought against the Company or any other person so indemnified based on any Registration
Statement, Pricing Prospectus or Prospectus or any amendment or supplement thereto or any application, and in respect of which
indemnity may be sought against the Underwriter, the Underwriter shall have the rights and duties given to the Company, and the
Company and each other person so indemnified shall have the rights and duties given to the Underwriter by the provisions of Section
7.1.2.
7.3 Contribution.
7.3.1. Contribution
Rights. In order to provide for just and equitable contribution under the Act in any case in which (i) any person entitled
to indemnification under this Section 7 makes claim for indemnification pursuant hereto but it is judicially determined (by the
entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section
7 provides for indemnification in such case, or (ii) contribution under the Act, the Exchange Act or otherwise may be required
on the part of any such person in circumstances for which indemnification is provided under this Section 7, then, and in each such
case, the Company and the Underwriter shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the
nature contemplated by said indemnity agreement incurred by the Company and the Underwriter, as incurred; provided, that, no person
guilty of a fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. Notwithstanding the provisions of this Section 7.3.1, the Underwriter
shall not be required to contribute any amount in excess of the amount by which the total price at which the Best Efforts Shares
underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that the Underwriter
has otherwise been required to pay in respect of such losses, liabilities, claims, damages and expenses. For purposes of this Section,
each director, officer and employee of the Underwriter or the Company, as applicable, and each person, if any, who controls the
Underwriter or the Company, as applicable, within the meaning of Section 15 of the Act shall have the same rights to contribution
as the Underwriter or the Company, as applicable.
7.3.2. Contribution
Procedure. Within ten (10) days after receipt by any party to this Agreement (or its representative) of notice of the commencement
of any action, suit or proceeding, such party will, if a claim for contribution in respect thereof is to be made against another
party (“contributing party”), notify the contributing party of the commencement thereof, but the failure to
so notify the contributing party will not relieve it from any liability which it may have to any other party other than for contribution
hereunder. In case any such action, suit or proceeding is brought against any party, and such party notifies a contributing party
or its representative of the commencement thereof within the aforesaid ten (10) days, the contributing party will be entitled to
participate therein with the notifying party and any other contributing party similarly notified. Any such contributing party shall
not be liable to any party seeking contribution on account of any settlement of any claim, action or proceeding affected by such
party seeking contribution on account of any settlement of any claim, action or proceeding affected by such party seeking contribution
without the written consent of such contributing party. The contribution provisions contained in this Section 7.3.2 are intended
to supersede, to the extent permitted by law, any right to contribution under the Act, the Exchange Act or otherwise available.
Each Underwriter’s obligations to contribute pursuant to this Section 7.3 are several and not joint.
8. Additional
Covenants.
8.1 Board
Composition and Board Designations. The Company shall ensure that: (i) the qualifications of the persons serving as board
members and the overall composition of the board comply with the Xxxxxxxx-Xxxxx Act of 2002 and the rules promulgated thereunder
and with the listing requirements of NASDAQ or any other national securities exchange or national securities association, as the
case may be, in the event the Company seeks to have its Shares listed on another exchange or quoted on an automated quotation system,
and (ii) if applicable, at least one member of the board of directors qualifies as a “financial expert” as such
term is defined under the Xxxxxxxx-Xxxxx Act of 2002 and the rules promulgated thereunder.
8.2 Prohibition
on Press Releases and Public Announcements. The Company will not issue press releases or engage in any other publicity, without
the Underwriter’s prior written consent, for a period ending at 5:00 P.M., Eastern Time, on the first (1st) business day
following the fortieth (40th) day following the Closing Time, other than normal and customary releases issued in the ordinary course
of the Company’s business.
9. Effective
Date of this Agreement and Termination Thereof.
9.1 Effective
Date. This Agreement shall become effective when both the Company and the Underwriter have executed the same and delivered
counterparts of such signatures to the other party.
9.2 Termination.
You shall have the right to terminate this Agreement at any time prior to the Closing Time (i) if any domestic or international
event or act or occurrence has materially disrupted, or in your opinion will in the immediate future materially disrupt, general
securities markets in the United States; or (ii) if trading on the New York Stock Exchange, the NASDAQ Global Market or the
NASDAQ Capital Market shall have been suspended or materially limited, or minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for securities shall have been required by FINRA or by order of the Commission or any other
government authority having jurisdiction, or (iii) if the United States shall have become involved in a new war or an increase
in major hostilities, or (iv) if a banking moratorium has been declared by a New York State or Federal authority, or (v) if
a moratorium on foreign exchange trading has been declared which materially adversely impacts the United States securities markets,
or (vi) if the Company shall have sustained a material loss by fire, flood, accident, hurricane, earthquake, theft, sabotage
or other calamity or malicious act which, whether or not such loss shall have been insured, will, in your opinion, make it inadvisable
to proceed with the delivery of the Best Efforts Shares, or (vii) if the Company is in material breach of any of its representations,
warranties or covenants hereunder, or (viii) if the Underwriter shall have become aware after the date hereof of such a material
adverse change in the conditions or prospects of the Company, or such adverse material change in general market conditions as in
the Underwriter’s judgment would make it impracticable to proceed with the offering, sale and/or delivery of the Best Efforts
Shares or to enforce contracts made by the Underwriter for the sale of the Best Efforts Shares.
9.3 Expenses.
In the event that this Agreement shall not be carried out for any reason whatsoever other than a breach of Underwriter’s
obligations hereunder, within the time specified herein or any extensions thereof pursuant to the terms herein, the Company shall
be obligated to pay to the Underwriter its actual and accountable out of pocket expenses related to the transactions contemplated
herein then due and payable (including the fees and disbursements of Mei & Xxxx LLP); provided, however, that such expense
reimbursement in no way limits or impairs the indemnification and contribution provisions of this Agreement.
9.4 Indemnification.
Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement,
and whether or not this Agreement is otherwise carried out, the provisions of Section 7 shall not be in any way effected by, such
election or termination or failure to carry out the terms of this Agreement or any part hereof.
10. Miscellaneous.
10.1 Notices.
All communications hereunder, except as herein otherwise specifically provided, shall be in writing and shall be mailed (registered
or certified mail, return receipt requested), personally delivered or sent by facsimile transmission and confirmed and shall be
deemed given when so delivered or faxed and confirmed or if mailed, upon return of the receipt or confirmation by the recipient
of receipt.
If to the Underwriter:
Spartan Securities Group, Ltd.
00000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxx
Fax No.: 000.000.0000
Copy to:
Xxxx Xxx
Attorney at Law
Mei & Xxxx LLP
000 00xx Xxxxxx XX, Xxxxx 000
Xxxxxxxxxx, XX 00000
Fax No.: | 000-000-0000
If to the Company:
Dogness (International) Corporation
Xxxxxxx Xxxxxxxxxx Xxxxxx, Xxxx Xxxxxxxx
Xxxxxxxx, Xxxxxxxxx
People’s Republic of China 523217
Attn: Xxxxxx Xxxx, Chief Executive Officer
FAX: x00-000 00000000
Copy to:
Xxxxxxx & Xxxxxxx, P.C.
Two Xxxxx Center
0000 Xxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Fax No.: 000.000.0000
10.2 Headings.
The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Agreement.
10.3 Amendment.
This Agreement may only be amended by a written instrument executed by each of the parties hereto.
10.4 Entire
Agreement. This Agreement (together with the other agreements and documents being delivered pursuant to or in connection with
this Agreement) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof, and
supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.
10.5 Binding
Effect. This Agreement shall inure solely to the benefit of and shall be binding upon the Underwriter, the Company and the
Controlling Persons, directors and officers referred to in Section 7 hereof, and their respective successors, legal representatives
and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect
of or by virtue of this Agreement or any provisions herein contained. The term “successors and assigns” shall not include
a purchaser, in its capacity as such, of securities from the Company.
10.6 Governing
Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without
giving effect to conflict of laws principles thereof. The Company hereby agrees that any action, proceeding or claim against it
arising out of, or relating in any way to this Agreement shall be brought and enforced in the New York Supreme Court, County of
New York, or in the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts
represent an inconvenient forum. Any such process or summons to be served upon the Company may be served by transmitting a copy
thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in
Section 10.1 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action,
proceeding or claim. The Company agrees that the prevailing party(ies) in any such action shall be entitled to recover from the
other party(ies) all of its reasonable attorneys’ fees and expenses relating to such action or proceeding and/or incurred
in connection with the preparation therefore.
10.7 Execution
in Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered
to each of the other parties hereto. Delivery of a signed counterpart of this Agreement by facsimile or email/pdf transmission
shall constitute valid and sufficient delivery thereof.
10.8 Waiver,
etc. The failure of any of the parties hereto to at any time enforce any of the provisions of this Agreement shall not be deemed
or construed to be a waiver of any such provision, nor to in any way effect the validity of this Agreement or any provision hereof
or the right of any of the parties hereto to thereafter enforce each and every provision of this Agreement. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this Agreement shall be effective unless set forth in a written instrument
executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance
or non-fulfillment.
[SIGNATURE PAGE FOLLOWS]
If the foregoing correctly
sets forth the understanding between the Underwriter and the Company, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between us.
| Accepted on the date first above written. |
|
| |
|
| Spartan Securities Group Ltd |
|
| |
|
| By: |
|
|
| |
Name: Xxxxx Xxxxxx |
|
| |
Title: CEO |
|
SCHEDULE I
(i) The
Company conducts substantially all of its PRC operations and generates substantially all of its PRC revenue through Dongguan Intelligent
Technology (Dongguan) Co., Ltd. and Dogness Jiasheng Enterprise Co., Ltd, wholly owned enterprises, formed under the laws of the
People’s Republic of China (the “PRC”) (collectively referred to hereinafter as the “PRC Entities”).
(ii) Each
of the PRC Entities has been duly established, is validly existing as a company in good standing under the laws of the PRC, has
the corporate power and authority to own, lease and operate its property and to conduct its business as described in the Prospectus,
and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be
in good standing would not, singly or in the aggregate, reasonably be expected to result in a material adverse change in the general
affairs, business or prospects, assets, management, financial position, shareholders’ equity or results of operations of
the Company and its subsidiaries taken as a whole (a “Material Adverse Effect”). Except as disclosed in the
Prospectus, each PRC Entity has applied for and obtained all requisite business licenses, clearance and permits required under
PRC law as necessary for the conduct of its businesses as described in the Registration Statement, the Pricing Prospectus and the
Prospectus, and each PRC Entity has complied in all material respects with all PRC laws in connection with foreign exchange, including
without limitation, carrying out all relevant filings, registrations and applications for relevant permits with the PRC State Administration
of Foreign Exchange and any other relevant authorities, and all such permits are validly subsisting. The registered capital of
each PRC Entity has been fully paid up in accordance with the schedule of payment stipulated in its respective articles of association,
governance documents, approval document, certificate of approval and legal person business license (hereinafter referred to as
the “Establishment Documents”) and in compliance with PRC laws and regulations, and there is no outstanding
capital contribution commitment for any PRC Entity. The Establishment Documents of the PRC Entities have been duly approved in
accordance with the laws of the PRC and are valid and enforceable. The business scope specified in the Establishment Documents
of each PRC Entity complies with the requirements of all relevant PRC laws and regulations. The outstanding equity interests of
each PRC Entity is owned of record by the respective entities or individuals identified as the registered holders thereof in the
Prospectus.
(iii) None
of the PRC Entities nor any of their properties, assets or revenues are entitled to any right of immunity on the grounds of sovereignty
from any legal action, suit or proceeding, from set-off or counterclaim, from the jurisdiction of any court, from services of process,
from attachment prior to or in aid of execution of judgment, or from any other legal process or proceeding for the giving of any
relief or for the enforcement of any judgment.
(iv) It
is not necessary that this Agreement, the Registration Statement, the Prospectus or any other document be filed or recorded with
any governmental agency, court or other authority in the PRC.
(v) No
transaction, stamp, capital or other issuance, registration, transaction, transfer or withholding taxes or duties are payable in
the PRC by or on behalf of the Underwriter to any PRC taxing authority in connection with (i) the issuance, sale and delivery of
the Best Efforts Shares by the Company and the delivery of the Best Efforts Shares to or for the account of the Underwriter, (ii)
the purchase from the Company and the initial sale and delivery by the Underwriter of the Best Efforts Shares to purchasers thereof,
or (iii) the execution and delivery of this Agreement.
(vi) The
Company has taken all necessary steps to strive to comply with, and to ensure compliance by all of the Company’s direct or
indirect shareholders and option holders who are PRC residents with, any applicable rules and regulations of the PRC State Administration
of Foreign Exchange of the PRC (the “SAFE Rules and Regulations”).
(vii) The
Company is aware of, and has been advised as to, the content of the Rules on Mergers and Acquisitions of Domestic Enterprises by
Foreign Investors jointly promulgated on August 8, 2006 (as amended on June 22, 2009) by the PRC Ministry of Commerce, the PRC
State Assets Supervision and Administration Commission, the PRC State Administration of Taxation, the PRC State Administration
of Industry and Commerce, the China Securities Regulatory Commission (“CSRC”) and the PRC State Administration
of Foreign Exchange (the “M&A Rules”), in particular the relevant provisions thereof that purport to require
offshore special purpose vehicles controlled directly or indirectly by PRC-incorporated companies or PRC residents and established
for the purpose of obtaining a stock exchange listing outside of the PRC to obtain the approval of the CSRC prior to the listing
and trading of their securities on any stock exchange located outside of the PRC. The Company has received legal advice specifically
with respect to the M&A Rules from its PRC counsel and the Company understands such legal advice. In addition, the Company
has communicated such legal advice in full to each of its directors that signed the Registration Statement and each such director
has confirmed that he or she understands such legal advice.
(viii) The
issuance and sale of the Best Efforts Shares, the listing and trading of the Shares on The NASDAQ Global Market and the consummation
of the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are not and will not be, as of
the date hereof and at the Closing Time, affected by the M&A Rules or any official clarifications, guidance, interpretations
or implementation rules in connection with or related to the M&A Rules, including the guidance and notices issued by the CSRC
on September 8 and September 21, 2006 (together with the M&A Rules, the “M&A Rules and Related Clarifications”).
(ix) The
Company has taken all necessary steps to ensure compliance by each of its shareholders, option holders, directors, officers and
employees that is, or is directly or indirectly owned or controlled by, a PRC resident or citizen with any applicable rules and
regulations of the relevant PRC government agencies (including but not limited to the PRC Ministry of Commerce, the PRC National
Development and Reform Commission and the PRC State Administration of Foreign Exchange) relating to overseas investment by PRC
residents and citizens (the “PRC Overseas Investment and Listing Regulations”), including, requesting each shareholder,
option holder, director, officer, employee and participant that is, or is directly or indirectly owned or controlled by, a PRC
resident or citizen to complete any registration/filing and other procedures required under applicable PRC Overseas Investment
and Listing Regulations.
(x) As
of the date hereof, the M&A Rules and Related Clarifications as well as SAFE Rules and Regulation, do not require the Company,
its majority shareholder or its directors to obtain the approvals of the CSRC and SAFE prior to the issuance and sale of the Best
Efforts Shares, the listing and trading of the Shares on The NASDAQ Global Market, or the consummation of the transactions contemplated
by this Agreement, the Registration Statement or the Prospectus.
(xi) Each
of the PRC Entities is in compliance with all requirements under all applicable PRC laws and regulations to qualify for their exemptions
from enterprise income tax or other income tax benefits (the “Tax Benefits”) as described in the Registration
Statement and the Prospectus, and the actual operations and business activities of each such PRC Entity are sufficient to meet
the qualifications for the Tax Benefits. No submissions made to any PRC government authority in connection with obtaining the Tax
Benefits contained any misstatement or omission that would have affected the granting of the Tax Benefits. No PRC Entity has received
notice of any deficiency in its respective applications for the Tax Benefits, and the Company is not aware of any reason why any
such PRC Entity might not qualify for, or be in compliance with the requirements for, the Tax Benefits.
(xii) The
corporate structure of the Company and the PRC Entities (the “Corporate Structure”) complies, and after the
consummation of the offering and sale of the Shares will comply, with all applicable laws, regulations, rules, orders, decrees,
guidelines, notices or other legislation of the PRC, except as disclosed in the Registration Statement and the Prospectus; the
Corporate Structure has not been challenged by any PRC governmental agency and there are no legal, arbitration, governmental or
other proceedings (including, without limitation, governmental investigations or inquiries) pending before or, to the Company’s
knowledge, threatened or contemplated by any PRC governmental agency in respect of the Corporate Structure; and the Company reasonably
believes that after the consummation of the offering and sale of the Shares, the Corporate Structure will not be challenged by
any PRC governmental agency.
(xiii) No
PRC Entity is currently prohibited, directly or indirectly, from paying any dividends to the Company (or the Company’s subsidiary
that holds the outstanding equity interest of such PRC Entity), subject to compliance with the relevant procedures, approval and
rules for such distribution, and approval stipulated by the appropriate government authorities. No PRC Entity is prohibited, directly
or indirectly, from making any other distribution on any PRC Entity’s equity capital, from repaying to the Company any loans
or advances to such PRC Entity from the Company or any of the Company’s subsidiaries.
(xiv) All
local and national PRC governmental tax holidays, exemptions, waivers, financial subsidies, and other local and national PRC tax
relief, concessions and preferential treatment enjoyed by any PRC Entity as described in the Registration Statement and the Prospectus
are valid, binding and enforceable and do not violate any laws, regulations, rules, orders, decrees, guidelines, judicial interpretations,
notices or other legislation of the PRC.
SCHEDULE II
Free Writing Prospectus
None.
