UNDERWRITING AGREEMENT
Exhbit
1.1
[●],
2010
Xxxxx
Xxxxxx, Carret & Co., LLC
000
Xxxxxxxxx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
As
Representative of the Underwriters
named
on Schedule I
hereto
Ladies
and Gentlemen:
The
undersigned, China SLP Filtration Technology, Inc., a company formed under the
laws of the State of Delaware (collectively with its subsidiaries and
affiliates, including, without limitation, all entities disclosed or described
in the Registration Statement (as hereinafter defined) as being subsidiaries or
affiliates of the Company, the “Company”), confirms its
agreement, subject to the terms and conditions set forth herein, with each of
the underwriters listed on Schedule I hereto
(collectively, the “Underwriters”), for whom Xxxxx
Xxxxxx, Carret & Co., LLC is acting as representative (hereinafter referred
to as the “Representative” or “you” (including its
correlatives)), to sell and issue to the Underwriters an aggregate of [ ] shares of
common stock, $0.001 par value per share (the “Common Stock”) of the Company
(the “Firm
Shares”). The Firm Shares are more fully described in the
Registration Statement and Prospectus referred to below.
The
offering and sale of the Common Stock contemplated by this underwriting
agreement (the “Underwriting
Agreement”) is referred to herein as the “Offering.”
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1.
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Purchase
and Sale of Securities.
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1.1 Firm
Securities.
1.1.1. Nature and Purchase of Firm
Securities.
(i) On
the basis of the representations and warranties herein contained, but subject to
the terms and conditions herein set forth, the Company agrees to issue and sell,
severally and not jointly, to the several
Underwriters, an aggregate of [●] Firm Shares at a purchase price (net of
discounts and commissions) of $[●] per Firm Share (93.0% of the per Firm Share
public offering price).
(ii) The
Underwriters, severally and not jointly, agree to purchase from the Company the
number of Firm Shares set forth opposite their respective names on Schedule I
attached hereto and made a part hereof at a purchase price (net of discounts and
commissions) of $[●] per Firm Share (93.0% of the per Firm Share public offering
price). The Firm Shares are to be offered to the public at the offering price
set forth on the cover page of the Prospectus (as defined in Section 2.1.1
hereof).
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1.1
1.1.2. Shares Payment and
Delivery.
(i) Delivery
of and payment for the Firm Shares shall be made at [10:00] a.m., Eastern time,
on the third (3rd)
Business Day following the date hereof (or if the Firm Shares are priced as
contemplated by Rule 15c6-1(c) under the Exchange Act after 4:30 p.m. Eastern
time, the fourth (4th)
Business Day following the date hereof) or at such earlier time as shall be
agreed upon by the Representative and the Company at the offices of Pillsbury
Xxxxxxxx Xxxx Xxxxxxx LLP, counsel to the Underwriters (“Pillsbury”), or at such other
place (or remotely by facsimile or other electronic transmission) as shall be
agreed upon by the Representative and the Company. The hour and date of delivery
and payment for the Firm Shares is called the “Closing Date.” The closing of
the payment of the purchase price for, and delivery of certificates
representing, the Firm Shares is referred to herein as the “Closing.”
(ii) Payment
for the Firm Shares shall be made on the Closing Date at the Representative’s
election by wire transfer in Federal (same day) funds or by certified or bank
cashier’s check(s) in New York Clearing House funds. Any remaining
proceeds (less commissions, expense allowance and actual expense payments or
other fees payable pursuant to this Agreement) shall be paid to the order of the
Company upon delivery to you of certificates (in form and substance satisfactory
to the Underwriters) representing the Firm Shares (or through the full fast
transfer facilities of the Depository Trust Company (the “DTC”)) for the account of the
Underwriters. The Firm Shares shall be registered in such name or names
and in such authorized denominations as the Representative may request in
writing at least two Business Days prior to the Closing Date. The Company
will permit the Representative to examine and package the Firm Shares for
delivery, at least one full Business Day prior to the Closing Date. The
Company shall not be obligated to sell or deliver the Firm Shares except upon
tender of payment by the Representative for all the Firm Shares. The term “Business Day” means any day
other than a Saturday, a Sunday or a legal holiday or a day on which banking
institutions are authorized or obligated by law to close in New York
City.
1.2
Over-allotment
Option.
1.2.1. Option
Shares. On the basis of the representations and warranties
herein contained, but subject to the terms and conditions herein set forth, the
Company agrees to grant the Underwriters, for the purposes of covering any
over-allotments in connection with the distribution and sale of the Firm Shares,
an option (the “Over-allotment
Option”) to purchase up to [●] shares of the Common Stock (the “Option Shares”) representing
fifteen percent (15%) of the Firm Shares sold in the offering from the Company.
The purchase price to be paid for the Option Shares will be the same price per
Option Share as the price per Firm Share set forth in Section 1.1.1(ii) hereof;
provided, however, that the purchase price for any Option Shares shall be
reduced by an amount per share equal to any dividends or distributions declared
by the Company and payable on the Firm Shares but not payable on the Option
Shares. The Firm Shares and the Option Shares are hereinafter referred to
collectively as the “Public Securities.”
1.2.2. Exercise of
Option. The Over-allotment Option granted pursuant to Section
1.2.1 hereof may be exercised by the Underwriters as to all (at any time) or any
part (from time to time) of the Option Shares within forty-five (45) days after
the date hereof. The Underwriters will not be under any obligation to purchase
any Option Shares prior to the exercise of the Over-allotment Option. The
Over-allotment Option granted hereby may be exercised by the giving of oral
notice to the Company from the Representative, which must be confirmed in
writing by overnight mail or facsimile or other electronic transmission setting
forth the number of Option Shares to be purchased and the date and time for
delivery of and payment for the Option Shares (the “Option Closing Date”), which
will not be sooner than the Closing Date or later than five (5) full Business
Days after the date of the notice or such other time as shall be agreed upon by
the Company and the Representative, at the offices of Pillsbury or at such other place
(including remotely by facsimile or other electronic transmission) as shall be
agreed upon by the Company and the Representative. If such delivery and payment
for the Option Shares does not occur on the Closing Date, the Option Closing
Date will be as set forth in the notice. Upon exercise of the Over-allotment
Option, the Company will become obligated to convey to the Underwriters, and,
subject to the terms and conditions set forth herein, the Underwriters will
become obligated to purchase, the number of Option Shares specified in such
notice.
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1.1
1.2.3. Payment and
Delivery. Payment for and delivery of the Option Shares will
be made on the Option Closing Date in the same manner as the payment for and
delivery for the Firm Shares as set forth in Section 1.1.2(ii)
hereof.
1.3 Underwriter’s
Warrants.
1.3.1. Warrant Terms. The
Company hereby agrees to issue to the Representative (and/or its permitted
designees) on the Closing Date one or more warrants (“Underwriter’s Warrants”) for
the purchase of an aggregate of [●] shares of Common Stock. Each
Underwriter’s Warrant, in substantially the form attached hereto as Exhibit A, shall
be exercisable, in whole or in part, commencing on a date which is one year from
the Applicable Time (as defined below) and expiring on the five-year anniversary
of the Applicable Time at an initial exercise price per share of
$[ ],
which is equal to 125.0% of the public offering price of the Firm Shares. The
shares of Common Stock issuable upon exercise of the Underwriter’s Warrants are
hereinafter referred to as the “Underwriter’s Warrant
Shares”. The Underwriter’s Warrants and the Underwriter’s
Warrant Shares are hereinafter referred to collectively as the “Underwriter’s Securities,” and
together with the Public Securities, the “Securities.” The
Representative understands and agrees that there are significant restrictions
pursuant to the Financial Industry Regulatory Authority, Inc. (“FINRA”) Rule 5110 against
transferring the Underwriter’s Warrants and the Underwriter’s Warrant Shares
during the first year after the effective date of the Registration Statement (as
defined below) (the “Effective
Date”) and, effective upon the Company’s delivery of the Underwriter’s
Warrants, agrees that it will not, sell, transfer, assign, pledge or hypothecate
the Underwriter’s Warrants or Underwriter’s Warrant Shares, or any portion
thereof, or be the subject of any hedging, short sale, derivative, put or call
transaction that would result in the effective economic disposition of the
Underwriter’s Warrants or the Underwriter’s Warrant Shares for a period of 180
days following the Effective Date to anyone other than (i) a Selected
Dealer (as defined below) in connection with the Offering, or (ii) a bona
fide officer or partner of an Underwriter or of such Selected Dealer; and only
if any such transferee agrees to the foregoing lock-up
restrictions.
1.3.2. Delivery. Delivery
of the Underwriter’s Warrants shall be made on the Closing Date and shall be
issued in the name or names and in such authorized denominations as the
Representative may request at least two (2) full Business Days prior to the
Closing Date.
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2.
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Representations and
Warranties of the Company. The Company represents and
warrants to each of the Underwriters as of the Applicable Time, as of the
Closing Date and as of the Option Closing Date, if any, as
follows:
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2.1
Filing of Registration
Statement.
2.1.1.
Registration
Statement and Prospectus. A registration statement on Form S-1
(File No. 333-168028) with
respect to the Securities, including a preliminary form of prospectus, has been
prepared by the Company in conformity with the requirements of the Securities
Act of 1933, as amended (the “Act”), and the rules and
regulations (“Regulations”) of the
Securities and Exchange Commission (the “Commission”) thereunder and
has been filed with the Commission; one or more amendments to such registration
statement have also been so prepared and have been, or will be, so filed; and,
if the Company has elected to rely upon Rule 462(b) of the Regulations to
increase the size of the offering registered under the Act, the Company will
prepare and file with the Commission a registration statement with respect to
such increase pursuant to Rule 462(b) of the Regulations. Copies of such
registration statement(s) and amendments and each related preliminary prospectus
have been delivered to you.
Exhbit
1.1
If the
Company has elected not to rely upon Rule 430A of the Regulations, the
Company has prepared and will promptly file an amendment to the registration
statement and an amended prospectus. If the Company has elected to rely upon
Rule 430A of the Regulations, it will prepare and file a prospectus
pursuant to Rule 424(b) of the Regulations that discloses the information
previously omitted from the prospectus in reliance upon Rule 430A of the
Regulations. Each part of such registration statement as amended at the time it
is or was declared effective by the Commission, and, in the event of any
amendment thereto after the effective date, each part of such registration
statement as so amended (but only from and after the effectiveness of such
amendment, including a registration statement (if any) filed pursuant to Rule
462(b) of the Regulations increasing the size of the offering registered under
the Act, and information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rules 430A(b) of the
Regulations, is hereinafter called the “Registration Statement.” The
prospectus included in the Registration Statement at the time it is or was
declared effective by the Commission is hereinafter called the “Prospectus,” except that if
any prospectus filed by the Company with the Commission pursuant to Rule 424(b)
of the Regulations or any other such prospectus provided to the Underwriters by
the Company for use in connection with the offering of the Securities (whether
or not required to be filed by the Company with the Commission pursuant to Rule
424(b) of the Regulations, but not including a “free writing prospectus” as
defined in Rule 405 of the Regulations) differs from the prospectus on file
at the time the Registration Statement is or was declared effective by the
Commission, the term “Prospectus” shall refer to such differing prospectus from
and after the time such prospectus is filed with the Commission or transmitted
to the Commission for filing pursuant to such Rule 424(b) of the Regulations or
from and after the time of its first use within the meaning of the Regulations.
The term “Preliminary
Prospectus” as used herein means any preliminary prospectus included in
the Registration Statement prior to the time it becomes or became effective
under the Act and any prospectus subject to completion as described in
Rule 430A of the Regulations. All references in this Agreement to the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement to any of the foregoing, shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System (“XXXXX”).
2.1.2. Registration under the
Exchange Act. The Company has filed with the Commission a Form
10-SB (File Number 000-53010) providing for the registration under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), of the Common
Stock. The registration of the Common Stock under the Exchange Act has been
declared effective by the Commission on or prior to the date
hereof.
2.2 No Stop Orders,
etc.
2.2.1. 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
Prospectus or the Registration Statement or has instituted or, to the best of
the Company’s knowledge, threatened to institute any proceedings with respect to
such an order. The Company is not the subject of a pending proceeding
under Section 8A of the Act in connection with the offering of the
Securities.
2.2.2. (i)
The Registration Statement, in the form in which it became effective, and also
in such form as it may be when any post-effective amendment thereto shall become
effective, and (ii) the Prospectus, including any supplement or amendment
thereto or any preliminary form thereof, each when filed with the Commission
pursuant to Rule 424(b) under the Act, complied and will comply in all material
respects with the provisions of the Act and the Exchange Act. The Company did
not and has not received from the Commission any notice pursuant to Rule 401(g)
under the Act objecting to the use of the Registration Statement or any
amendments or supplements thereto.
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1.1
2.3 Disclosures in Registration
Statement.
2.3.1. 10b-5
Representation. As of the time any part of the Registration
Statement (or any post-effective amendment thereto, including a registration
statement (if any) filed pursuant to Rule 462(b) of the Regulations
increasing the size of the offering registered under the Act) became effective,
upon the filing or first use (within the meaning of the Regulations) of the
Prospectus (or any supplement to the Prospectus) and at the Closing Date and
Option Closing Date, if any:
(i) The
Registration Statement, the Prospectus and the Disclosure Package, including any
amendments thereof and supplements or exhibits thereto, did and will conform in
all material respects to the requirements of the Act and the
Regulations;
(ii) The
Registration Statement and the Prospectus, including any amendment thereof and
supplements or exhibits thereto, on such dates, did not and will not contain an
untrue statement of a material fact and did not and will not omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein: (i) in the case of the Registration Statement, not
misleading, and (ii) in the case of the Prospectus in light of the circumstances
under which they were made, not misleading. When any Preliminary
Prospectus was first filed with the Commission (whether filed as part of the
registration statement for the registration of the Securities or any amendment
thereto or pursuant to Rule 424(a) under the Act) and when any amendment thereof
or supplement thereto was first filed with the Commission, such Preliminary
Prospectus and any amendments thereof and supplements thereto complied in all
material respects with the applicable provisions of the Act and the Regulations
and did not contain an untrue statement of a material fact and did not omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. No representation and warranty is made in this
section 2.3.1(ii), however, with respect to any information contained in or
omitted from the Registration Statement or the Prospectus or any related
Preliminary Prospectus or any amendment thereof or supplement thereto in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any Underwriter through the Representative
specifically for use therein. The parties acknowledge and agree that
such information provided by or on behalf of any Underwriter consists solely of
the statements with respect to the public offering of the Securities by the
Underwriters regarding the names and corresponding share amounts set forth in
the table of the Underwriters under the caption “Underwriting” and the
concession and reallowance figures and the paragraph relating to stabilization
by the Underwriters appearing under the caption “Underwriting” in the Prospectus
(the “Underwriters’
Information”).
(iii) Each
Issuer Free Writing Prospectus (as defined below), if any, as of its issue date
and at all subsequent times through the completion of the public offer and sale
of the Public Securities, did not, does not and will not include any information
that conflicted, conflicts or will conflict with the information contained in
the Registration Statement, the Prospectus or the Disclosure Package, including
any document incorporated by reference therein and any preliminary or other
prospectus deemed to be a part thereof that has not been superseded or modified.
The representations and warranties set forth in the immediately preceding
sentence shall not apply to any statement made or omitted in reliance upon and
in conformity with written information furnished to the Company by the
Underwriter expressly for use therein. Neither (A) the Issuer General Free
Writing Prospectus(es) issued at or prior to the Applicable Time (as defined
below) and the Statutory Prospectus, all considered together (collectively, the
“Disclosure Package”),
nor (B) any individual Issuer Limited-Use Free Writing Prospectus, when
considered together with the Disclosure Package, includes or included as of the
Applicable Time any untrue statement of a material fact or omit or omitted as of
the Applicable Time to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The preceding sentence does not apply to statements in or
omissions from any Statutory Prospectus included in the Registration Statement
or any Issuer Free Writing Prospectus based upon and in conformity with the
Underwriters’ Information. As used in this paragraph and elsewhere in this
Underwriting Agreement.
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1.1
(1)
“Applicable Time” means [__ ] (Eastern
time) on the date of this Underwriting Agreement.
(2)
“Statutory
Prospectus” as of any time means
the prospectus that is included in the Registration Statement immediately prior
to that time. For purposes of this definition, information contained in a form
of prospectus that is deemed retroactively to be a part of the Registration
Statement pursuant to Rule 430A of the Regulations shall be considered to
be included in the Statutory Prospectus as of the actual time that form of
prospectus is filed with the Commission pursuant to Rule 424(b) of the
Regulations.
(3)
“Issuer Free Writing
Prospectus” means any “issuer free
writing prospectus,” as defined in Rule 433 of the Regulations, relating to
the Securities that (A) is required to be filed with the Commission by the
Company, or (B) is exempt from filing pursuant to Rule 433(d)(5)(i) of
the Regulations because it contains a description of the Securities or of the
offering that does not reflect the final terms or pursuant to
Rule 433(d)(8)(ii) because it is a “bona fide electronic road show,” as
defined in Rule 433 of the Regulations which is made available without
restriction, in each case in the form filed or required to be filed with the
Commission or, if not required to be filed, in the form retained in the
Company’s records pursuant to Rule 433(g) of the Rules and
Regulations.
(4)
“Issuer General Free Writing
Prospectus” means any Issuer Free
Writing Prospectus that is intended for general distribution to prospective
investors, as evidenced by its being specified in Schedule II
hereto.
(5)
“Issuer Limited-Use Free
Writing Prospectus” means any Issuer Free
Writing Prospectus that is not an Issuer General Free Writing Prospectus. The
term Issuer Limited-Use Free Writing Prospectus also includes any “bona fide
electronic road show,” as defined in Rule 433 of the Regulations, that is
made available without restriction pursuant to Rule 433(d)(8)(ii), even
though not required to be filed with the Commission.
2.3.2. Disclosure of
Agreements. The agreements and documents described in the
Registration Statement, the Prospectus and the Disclosure Package, including any
post-effective amendments or supplements thereto, 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 Prospectus or the Disclosure Package, or to be filed with the
Commission as exhibits to the Registration Statement, that have not been so
described or filed. Each agreement or other instrument (however characterized or
described) to which the Company or any of its Subsidiaries (as defined below) is
a party or by which it is or may be bound or affected and (i) that is
referred to in the Registration Statement, the Prospectus or the Disclosure
Package, including any amendment or supplement thereto, or (ii) is material
to the Company or any Subsidiary’s business, has been duly authorized and
validly executed by the Company or any Subsidiary, as the case may be, is in
full force and effect in all material respects and is enforceable against the
Company or any Subsidiary and, to the Company’s knowledge, the other parties
thereto, in accordance with its terms, except (x) as such enforceability
may be limited by bankruptcy, insolvency, reorganization or similar laws
affecting creditors’ rights generally, (y) as enforceability of any
indemnification or contribution provision may be limited under the federal and
state securities laws, and (z) 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. None of such agreements or instruments has been
assigned by the Company or any Subsidiary, and neither the Company nor, to the
best of the Company’s knowledge, any other party is in default 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. To the best of the Company’s knowledge, performance by the Company
and any Subsidiary 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 Subsidiary or any of its
assets or businesses, including, without limitation, those relating to
environmental laws and regulations.
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1.1
2.3.3.
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 Prospectus or the Disclosure
Package, including any amendments or supplements thereto.
2.3.4.
Regulations. The
disclosures in the Registration Statement, the Prospectus or the Disclosure
Package concerning the effects of federal, state, local and all foreign
regulation on the Company and its Subsidiaries’ business as currently
contemplated are correct in all material respects.
2.3.5.
Free Writing
Prospectus. (A) Each Issuer Free Writing Prospectus, as
of its issue date and at all subsequent times through the completion of the
public offer and sale of the Securities or until any earlier date that the
Company notified or notifies the Representative as described in Section 3.4
hereof, did not, does not and will not include any information that conflicted,
conflicts or will conflict with the information contained in the Registration
Statement, any Statutory Prospectus or the Prospectus. The foregoing sentence
does not apply to statements in or omissions from any Issuer Free Writing
Prospectus in reliance upon and in conformity with written information furnished
to the Company by you or by any Underwriter through you specifically for use
therein; (B) (1) At the time of filing the Registration Statement and
(2) at the date hereof, the Company was not and is not an “ineligible
issuer,” as defined in Rule 405 of the Regulations, including the Company
or any Subsidiary in the preceding three years not having been convicted of a
felony or misdemeanor or having been made the subject of a judicial or
administrative decree or order as described in Rule 405 of the Regulations
(without taking account of any determination by the Commission pursuant to
Rule 405 of the Regulations that it is not necessary that the Company be
considered an ineligible issuer), nor an “excluded issuer” as defined in
Rule 164 of the Regulations. (C) Each Issuer Free Writing Prospectus
satisfied, as of its issue date, and will satisfy at all subsequent times
through the completion of the public offer and sale of the Securities, all other
conditions to use thereof as set forth in Rules 164 and 433 of the
Regulations.
2.3.6.
Forward-Looking
Statements. No forward-looking statement (within the meaning of
Section 27A of the Act and Section 21E of the Exchange Act) (a “Forward-Looking Statement”)
contained in the Registration Statement, the Prospectus or the Disclosure
Package, including any amendment or supplement thereto, has been made or
reaffirmed without a reasonable basis or has been disclosed other than in good
faith.
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1.1
2.4 Changes After Dates in
Registration Statement.
2.4.1.
No Material Adverse
Change. Since the respective dates as of which information is
given in the Registration Statement, the Prospectus, or the Disclosure Package,
except as otherwise specifically stated therein: (i) there has been no
material adverse change in the condition, financial or otherwise, or business
prospects of the Company and its Subsidiaries, take as a whole; (ii) there
have been no material transactions (including any off-balance sheet arrangements
or guarantees) entered into by the Company or its Subsidiaries, other than as
contemplated pursuant to this Underwriting Agreement; (iii) there has been no
dividend or distribution of any kind declared, paid or made by any of the
Company and its Subsidiaries on any class of capital stock or repurchase or
redemption by the Company or its Subsidiaries of any class of capital stock; and
(iv) no officer or director of the Company or any Subsidiary has resigned
from any position with the Company or any Subsidiary.
2.4.2.
Recent Transactions,
etc. Subsequent to the respective dates as of which
information is given in the Registration Statement, the Prospectus and the
Disclosure Package, and except as may otherwise be indicated or contemplated
herein or disclosed in the Registration Statement and the Prospectus, the
Company has not: (i) issued any securities or incurred any liability or
obligation (including any off-balance sheet arrangements or guarantees), direct,
indirect or contingent, for borrowed money or otherwise; or (ii) declared
or paid any dividend or made any other distribution on or in respect to its
capital stock.
2.5 Disclosures in Commission
Filings. None of the Company’s filings with the Commission
contain any untrue statement of a material fact or omitted to state any material
fact necessary in order to make the statements, in the light of the
circumstances under which they were made, not misleading. The Company has timely
made all filings with the Commission as required under the Exchange
Act.
2.6 Independent
Accountants. To the knowledge of the Company, Child, Xxx
Xxxxxxx & Xxxxxxxx, PLLC (“Child, Xxx Xxxxxxx”), who has
certified or shall certify certain financial statements and schedules included
in and whose report is filed with the Commission as part of the Registration
Statement and Prospectus, is and was, during the periods covered by such
financial statements, an independent registered public accounting firm with
respect to the Company as required by the Act, the Regulations, the Public
Company Accounting Oversight Board and Section 2(a)(12) of the Xxxxxxxx-Xxxxx
Act, and is not, and was not, in violation of the auditor independence
requirements of the Xxxxxxxx-Xxxxx Act. Child, Xxx Xxxxxxx has not been engaged
by the Company to perform any “prohibited activities” (as defined in Section 10A
of the Exchange Act).
2.7 Financial Statements,
etc. The financial statements, including the notes thereto and
supporting schedules, included in the Registration Statement, the Prospectus and
the Disclosure Package 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 generally
accepted accounting principles (“GAAP”) of the United States,
consistently applied throughout the periods involved; and the supporting
schedules included in the Registration Statement present fairly the information
required to be stated therein. All non-GAAP financial information included in
the Registration Statement, the Prospectus and the Disclosure Package, complies
with the requirements of Regulation G and Item 10 of Regulation S-K under the
Act, to the extent applicable. The Registration Statement, Prospectus and
Disclosure Package 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 Prospectus
and the Disclosure Package, (a) neither the Company nor any of its direct and
indirect subsidiaries, including each entity (corporation, partnership, joint
venture, association or other business organization) controlled directly or
indirectly by the Company (each a “Subsidiary” and collectively
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 stock compensation plan, and (d) there has not been any
material adverse change in the Company’s long-term or short-term
debt. All pro forma financial statements, data or information, if
any, included in the Registration Statement, the Prospectus or the Disclosure
Package, including any amendments or supplements thereto, comply in all material
respects with the requirements of the Act and the Exchange Act, and the
assumptions used in the preparation of such pro forma financial statements, data
or information are reasonable, the pro forma adjustments used therein are
appropriate to give effect to the transactions or circumstances described
therein and the pro forma adjustments have been properly applied to the
historical amounts in the compilation of those statements, data or information.
The Company has filed with the Commission all financial statements, together
with notes thereto and supporting schedules, required to be filed pursuant to
Regulation S-X under the Act.
Exhbit
1.1
2.8 Authorized Capital; Options,
etc. The Company had, at the date or dates indicated in the
Prospectus, the duly authorized, issued and outstanding capitalization as set
forth in the Registration Statement, the Prospectus and the Disclosure Package.
Based on the assumptions stated in the Registration Statement, the Prospectus
and the Disclosure Package, the Company will have on the Closing Date the
adjusted stock capitalization set forth therein. Except as set forth in, or
contemplated by, the Registration Statement, the Prospectus and the Disclosure
Package, on the date hereof and on the Closing Date, there will be no options,
warrants, or other rights to purchase or otherwise acquire any authorized, but
unissued Common Stock of the Company or any security convertible into Common
Stock of the Company, or any contracts or commitments to issue or sell Common
Stock or any such options, warrants, rights or convertible securities. Further,
the exercise price of each option to acquire Common Stock (each, a “Company Stock Option”) is no
less than the fair market value of a share of Common Stock as determined on the
date of grant of such Company Stock Option. All grants of Company Stock Options
were validly issued and properly approved by the Board of Directors of the
Company in compliance with (i) all applicable laws and (ii) the terms
of the plans under which such Company Stock Options were issued and were
recorded on the Company’s financial statements in accordance with GAAP, and no
such grants involved any “back dating,” “forward dating,” “spring loading” or
similar practices with respect to the effective date of grant.
Exhbit
1.1
2.9 Valid Issuance of
Securities, etc.
2.9.1.
Outstanding
Securities. All issued and outstanding securities of the
Company issued prior to the transactions contemplated by this Underwriting
Agreement have been duly authorized and validly issued and are fully paid and
non-assessable; the holders thereof have no rights of rescission with respect
thereto, and are not subject to personal liability by reason of being such
holders; and none of such 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 of Common Stock conform in
all material respects to all statements relating thereto contained in the
Registration Statement, the Prospectus and the Disclosure Package. The offers
and sales of the outstanding securities of the Company 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 securities, exempt from such registration requirements.
Except as disclosed in the Registration Statement, the Disclosure Package and
the Prospectus, neither the Company nor any Subsidiary has outstanding warrants,
options to purchase, or any preemptive rights or other rights to subscribe for
or to purchase, or any contracts or commitments to issue or sell, any Relevant
Security. As used herein, the term “Relevant Security” means any
Common Stock or other security of the Company or any Subsidiary that is
convertible into, or exercisable or exchangeable for Common Stock or equity
securities, or that holds the right to acquire any shares of Common Stock or
equity securities of the Company or any Subsidiary or any other such Relevant
Security, except for such rights as may have been fully satisfied or waived
prior to the effectiveness of the Registration Statement.
2.9.2. Securities Sold Pursuant to
this Underwriting Agreement. The Securities have been duly
authorized for issuance and sale and, when issued and paid for, will be validly
issued, fully paid and non-assessable; the holders thereof are not and will not
be subject to personal liability by reason of being such holders; the Securities
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;
and all corporate action required to be taken for the authorization, issuance
and sale of the Securities has been duly and validly taken. The Securities
conform in all material respects to all statements with respect thereto
contained in the Registration Statement, the Prospectus and the Disclosure
Package. The Securities are freely transferable to and for the account of the
several Underwriters; there are no restrictions on subsequent transfers of the
Securities under the laws of the United States, Hong Kong or the PRC, except as
described in the Registration Statement, the Prospectus and the Disclosure
Package.
2.10 Subsidiaries. The
descriptions of the ownership structure of the Company and its Subsidiaries as
set forth in the Registration Statement and the restructurings set forth in the
Registration Statement under the caption “Our Corporate Structure and History”
are accurate and complete. The ownership structure of the Company and
Subsidiaries, both currently and after giving effect to the offering of the
Securities (the “Corporate
Structure”), are in material compliance with existing laws and
regulations of the People’s Republic of China (“PRC”). All consent,
approval, authorization or order of, or registration or filing with any
Governmental Authority required for the restructuring transactions resulting
into the Corporate Structure (collectively, the “Restructuring”), including
without limitation the share exchange transaction between the Company, Hong Hui
Holdings Limited (“Hong
Hui”) and shareholders of Hong Hui, have been duly obtained, and none of
such governmental authorizations has been withdrawn or revoked nor, to the
Company’s knowledge, are there circumstances which may give rise to such
governmental authorizations being withdrawn or revoked, or is subject to any
condition precedent which has not been fulfilled or performed. The Restructuring
did not and/or does not (A) contravene or conflict with any provision of any
applicable PRC laws and regulations, (B) contravene or conflict with the
respective articles of association, business license or other constitutional
documents of any of the Company and its Subsidiaries, or (C) conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any license, indenture, mortgage, deed of trust,
loan agreement, note, lease or other agreement or instrument to which any of the
Company and its Subsidiaries is a party or by which any of the Company and its
Subsidiaries is bound or to which any of the property or assets of any of the
Company and its Subsidiaries is subject, except in the case of (c) where
non-compliance would not reasonably be expected to have a Material Adverse
Effect. The Company’s PRC subsidiary Foshan S.L.P. Special Materials Co., Ltd.
(“Foshan S.L.P”)
operates its business in material compliance with all PRC laws and regulations.
Except for the Subsidiaries as set forth in Exhibit 21 to the Registration
Statement, the Company holds no ownership or other interest, nominal or
beneficial, direct or indirect, in any corporation, partnership, joint venture
or other business entity. All of the issued and outstanding shares of
capital stock of, or other ownership interests in, each Subsidiary have been
duly and validly authorized and issued and are fully paid and non-assessable and
are owned, directly or indirectly, by the Company, free and clear of any lien,
charge, mortgage, pledge, security interest, claim, equity, trust or other
encumbrance, preferential arrangement, defect or restriction of any kind
whatsoever (any “Lien”). No
director, officer or key employee of the Company named in the Prospectus holds
any direct equity, debt or other pecuniary interest in any Subsidiary or any
Person with whom the Company or any Subsidiary does business or is in privity of
contract with, other than, in each case, indirectly through the ownership by
such individuals of Common Stock.
Exhbit
1.1
2.11 Registration Rights of Third
Parties. Except as set forth in the Registration Statement,
the Prospectus and the Disclosure Package, 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. Each director and
officer of the Company and each stockholder of the Company listed on Schedule III hereto
has delivered to the Representative his or her enforceable written lock-up
agreement in the form attached to this Agreement as Exhibit B hereto
(“Lock-Up
Agreement”).
2.12 Validity and Binding Effect
of Agreements. Each of this Underwriting Agreement and the
Underwriter’s Warrants 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 respective 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.
2.13 No Conflicts,
etc. The execution, delivery, and performance by the Company
of this Underwriting Agreement, the Underwriter’s Warrants, 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 or its
Subsidiaries pursuant to the terms of any agreement or instrument to which the
Company or any of its Subsidiaries is a party; (ii) result in any violation
of the provisions of the Certificate of Incorporation, certificate of
formation, partnership agreement or other organizational documents of
the Company or any of its subsidiaries (as the same may be amended, restated or
supplemented from time to time, the “Charter Documents”); 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 Subsidiaries or any of its
properties or business constituted as of the date hereof.
Exhbit
1.1
2.14 No Defaults;
Violations. No material default exists in the due performance
and observance of any term, covenant or condition of any material license,
contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or
any other agreement or instrument evidencing an obligation for borrowed money,
or any other material agreement or instrument to which any of the Company or its
Subsidiaries is a party or by which the Company or any of its Subsidiaries may
be bound or to which any of the properties or assets of the Company or any of
its Subsidiaries is subject. Neither the Company nor any of its Subsidiaries is
in violation of any term or provision of its Charter Documents, or in violation
of any franchise, license, permit, applicable law, rule, regulation, judgment or
decree of any governmental agency or court, domestic or foreign, having
jurisdiction over the Company or its Subsidiaries or any of its properties or
businesses.
2.15 Corporate Power; Licenses;
Consents.
2.15.1.
Conduct of
Business. Except as described in the Registration Statement,
the Prospectus and the Disclosure Package, each of the Company and the
Subsidiaries has all requisite corporate power and authority, and has all
necessary authorizations, approvals, orders, licenses, certificates and permits
of and from all governmental regulatory officials and bodies (collectively, its
“permits”), that it
needs as of the date hereof to conduct its business purpose as described in the
Prospectus. Each of the Company and the Subsidiaries has fulfilled and performed
all of its material obligations with respect to its permits, and no event has
occurred that allows, or after notice of lapse of time would allow, revocation
or termination thereof or that would result in any other material impairment of
the rights of the holder of any of its permits. The disclosures in the
Registration Statement, the Prospectus and the Disclosure Package, concerning
the effects of federal, state, local and foreign regulation on this Offering and
the Company and the Subsidiaries’ business purpose as currently contemplated are
correct in all material respects.
2.15.2.
Transactions
Contemplated Herein. The Company has all corporate power and
authority to enter into this Underwriting Agreement and the Underwriter’s
Warrants and to carry out the provisions and conditions hereof and thereof, and
all consents, authorizations, approvals and orders required in connection
therewith have been obtained. 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 Securities and the consummation of the
transactions and agreements contemplated by this Underwriting Agreement and as
contemplated by the Prospectus, except with respect to applicable federal and
state securities laws, the rules and regulations of FINRA and the [Nasdaq/NYSE
Amex/OTCBB].
2.16 D&O
Questionnaires. To the Company’s knowledge, all information
contained in the questionnaires (the “Questionnaires”) completed by
each of the Company’s directors, officers, [Bestyield Group Limited, Proudlead
Limited, Newise Holdings, Pilot Link International Limited, High Swift Limited
and Primary Capital, LLC] immediately prior to the Offering (the “Insiders”) as well as in the
Lock-Up Agreements provided to the Representative 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.
2.17 Litigation; Governmental
Proceedings. There is no legal or governmental action, suit,
proceeding, inquiry, arbitration, investigation or litigation pending or, to the
Company’s knowledge, threatened against, or involving the Company or any of its
Subsidiaries or, to the Company’s knowledge, any executive officer or director
that has not been disclosed in the Registration Statement, the Prospectus and
the Disclosure Package [or in connection with the
Company’s listing application for the listing of the Common Stock on the NYSE
Amex/Nasdaq Capital Market].
Exhbit
1.1
2.18 Good
Standing. Each of the Company and the Subsidiaries has been
duly organized and is validly existing as corporation, partnership or limited
liability company in good standing under the laws of its jurisdiction of
incorporation, formation or organization, and is duly 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 and its subsidiaries considered as a whole
(“Material Adverse
Effect”).
2.19 Transactions Affecting
Disclosure to FINRA.
2.19.1.
Finder’s
Fees. Except as described in the Registration Statement, the
Prospectus and the Disclosure Package, 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 Securities 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.
2.19.2.
Payments Within Twelve
Months. Except as described in the Registration Statement, the
Prospectus and the Disclosure Package, neither the Company nor any of its
Subsidiaries has 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 the
prior payment of $50,000 to Xxxxxx & Xxxxxxx, LLC (“Xxxxxx”) or its legal counsel
pursuant to an engagement letter dated April 6, 2010 among the Company, the
Representative and Xxxxxx that was terminated prior to the date hereof pursuant
to a letter dated July 2, 2010 among the Company, the Representative and
Xxxxxx.
2.19.3.
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 or
associates, except as specifically authorized herein.
2.19.4.
FINRA
Affiliation. Except as described in the Registration
Statement, the Prospectus and the Disclosure Package, no officer, director, any
beneficial owner of at least 5% of any class of the Company’s securities, 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
Representative and Pillsbury immediately if it learns that any officer,
director, beneficial owner of at least 5% of any class of the Company’s
securities, or beneficial owner of the Company’s unregistered securities, is or
becomes an affiliate or associated person of any FINRA member except as
described in the Registration Statement, the Prospectus and the Disclosure
Package.
2.20 Foreign Corrupt Practices
Act. Neither the Company nor any of the directors, employees
or officers of the Company or any other person acting on behalf of the Company
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 Prospectus,
(iii) if not continued in the future, might adversely affect the assets,
business, operations or prospects of the Company or (iv) might have violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”). The Company has taken
reasonable steps to ensure that its accounting controls, policies and procedures
are sufficient to cause the Company to comply in all material respects with the
FCPA.
Exhbit
1.1
2.21 Money Laundering
Laws. The operations of the Company are and have been
conducted at all times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the money laundering statutes of all jurisdictions, the rules
and regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the
Company with respect to the Money Laundering Laws is pending or, to the
Company’s knowledge, threatened.
2.22 OFAC. Neither the
Company nor any of its subsidiaries nor, to the Company’s knowledge, any
director, officer, agent, employee or affiliate of the Company is currently
subject to any sanctions administered by the Office of Foreign Assets Control of
the U.S. Treasury Department (“OFAC”); and the Company will
not directly or indirectly use the proceeds of the offering, or lend, contribute
or otherwise make available such proceeds to any subsidiary, joint venture
partner or other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered by
OFAC.
2.23 Officer’s
Certificates. Any certificate signed by any duly authorized
officer of the Company and delivered to you or to Pillsbury shall be deemed a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby.
2.24 Related Party
Transactions. No transaction has occurred between or among the
Company and any of its officers or directors, five percent (5%) shareholders or
any affiliate or affiliates of any such officer or director or five percent (5%)
shareholder that is required to be described in and is not described in the
Registration Statement, the Prospectus and the Disclosure Package.
2.25 Board of
Directors. The Board of Directors of the Company is comprised
of the persons set forth under the heading of 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 (the
“Xxxxxxxx-Xxxxx Act”)
and the rules promulgated thereunder applicable to the Company and the rules of
[NYSE Amex/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 and the rules promulgated thereunder and
the rules of [NYSE
Amex/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 [NYSE Amex/Nasdaq].
2.26 Xxxxxxxx-Xxxxx
Compliance.
2.26.1.
Disclosure
Controls. The Company has developed and currently maintains
disclosure controls and procedures that will comply with Rule 13a-15 or 15d-15
of the Exchange Act, and such controls and procedures are effective to ensure
that all information required to be disclosed concerning the Company will be
made known on a timely basis, as required, to the individuals responsible for
the preparation of the Company’s Exchange Act filings and other public
disclosure documents.
Exhbit
1.1
2.26.2.
Internal Control Over
Financial Reporting. The Company maintains a system of internal control
over financial reporting sufficient to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with GAAP. Based on the most
recent evaluation of its internal control over financial reporting, the Company
is not aware of (i) any material weaknesses in the design or operation of
internal control over financial reporting or (ii) any fraud that involves
management or other employees who have a significant role in the Company’s
internal control over financial reporting. There has been no change in the
Company’s internal control over financial reporting that has occurred since the
date of the latest auditing financial statements of the Company that has
materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting.
2.26.3.
Compliance. The
Company is, or on the date hereof will be, in compliance with the provisions of
the Xxxxxxxx-Xxxxx Act applicable to it, and has implemented such programs and
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.
2.27 No Investment Company
Status. The Company is not and, after giving effect to the
Offering and sale of the Securities and the application of the proceeds thereof
as described in the Registration Statement, the Prospectus and the Disclosure
Package, will not be, an “investment company” as defined in the Investment
Company Act of 1940, as amended (the “Investment Company
Act”).
2.28 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
threatened or imminent.
2.29 Intellectual
Property. Each of the Company and 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
Prospectus and the Disclosure Package. 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. Neither the Company nor any of its
Subsidiaries has received any notice alleging any such infringement or
fee.
2.30 Title; Liens. Each of
the Company and its Subsidiaries has good and marketable title to all property,
real and personal, described in the Registration Statement, the Prospectus and
the Disclosure Package as being owned by it, free and clear of all liens,
claims, security interests or other encumbrances that would materially and
adversely affect the value thereof or materially interfere with the use made or
presently contemplated to be made thereof by them as described in the
Prospectus, except such as are described in the Registration Statement, the
Prospectus and the Disclosure Package, and each property described in the
Registration Statement, the Prospectus and the Disclosure Package as being held
under lease by the Company or the respective Subsidiary is held by it under a
valid, subsisting and enforceable lease.
Exhbit
1.1
2.31 Distribution of Materials;
Stabilizing Actions; etc. The Company has not distributed and,
prior to the later to occur of (i) the Closing Date and (ii) completion of the
distribution of the Securities, will not distribute any offering material in
connection with the offering and sale of the Securities other than the
Registration Statement, the Prospectus and the Disclosure Package. The Company
has not, director or indirectly: (x) taken any action designed to cause or to
result in, or that has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities; or (y) since the
filing of the Registration Statement, (1) sold, bid for, purchased or paid
anyone any compensation for soliciting purchases of, the Securities or (2) paid
or agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company.
2.32 Environmental Laws.
Each of the Company and its Subsidiaries (i) is in material compliance with
any and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”),
(ii) has received all material permits, licenses or other approvals
required of it under applicable Environmental Laws to conduct its respective
businesses and (iii) is in material compliance with all terms and
conditions of any such permit, license or approval. To the Company’s knowledge,
no facts currently exist that will require the Company or any of its
Subsidiaries to make future material capital or other expenditures to comply
with Environmental Laws.
2.33 ERISA. Each
of the Company and its Subsidiaries has fulfilled its obligations, if any, under
the minimum funding standards of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Employee
Retirement Income Security Act of 1974 (“ERISA”) and the regulations
and published interpretations thereunder with respect to each “plan” (as defined
in Section 3(3) of ERISA and such regulations and published
interpretations) in which its employees are eligible to
participate. Each such plan is in compliance in all material respects
with the presently applicable provisions of ERISA and such regulations and
published interpretations. Neither the Company nor any of the Subsidiaries has
incurred any unpaid liability to the Pension Benefit Guaranty Corporation (other
than for the payment of premiums in the ordinary course) or to any such plan
under Title IV of ERISA
2.34 Insurance. Each
of the Company and its Subsidiaries is insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
are prudent and customary in the business in which it is engaged. All policies
of insurance and fidelity or surety bonds insuring the Company, each of its
Subsidiaries, or the Company’s or any Subsidiary’s business, assets, employees,
officers and directors are in full force and effect. Each of the Company and its
Subsidiaries is in compliance with the terms of such policies and instruments in
all material respects and there are no claims by the Company or any of its
Subsidiaries under any such policy or instrument as to which any insurance
company is denying liability or defending under a reservation of rights clause.
Neither the Company nor any of its Subsidiaries has been refused any insurance
coverage sought or applied for, and neither the Company nor any of its
Subsidiaries has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a material adverse effect.
2.35 Retirement Benefit.
Except as disclosed in the Registration Statement, the Prospectus and the
Disclosure Package, the Company has no obligation to provide retirement, death
or disability benefits to any of the present or past employees of the Company or
any Subsidiary, or to any other person.
2.36 Contingent Liability.
Except as disclosed in the Registration Statement, the Prospectus and the
Disclosure Package, there are no outstanding guarantees or other contingent
obligations of the Company or any of its subsidiaries that could reasonably be
expected to have a Material Adverse Effect.
Exhbit
1.1
2.37 Dividend
Distribution. Except as disclosed in the Registration Statement, the
Prospectus and the Disclosure Package (i) none of the Company’s Subsidiaries in
the PRC is currently prohibited, directly or indirectly, from paying any
dividends to the Company or from making any other distribution on such
Subsidiary’s capital stock, from repaying to the Company any loans or advances
to such subsidiary from the Company or from transferring any of such
Subsidiary’s property or assets to the Company and (ii) all dividends declared
by any of the Subsidiaries in the PRC may under the current laws and regulations
of the PRC be freely transferred out of the PRC and may be paid in U.S. dollars,
subject to the successful completion of PRC formalities required for such
remittance, and all such dividends and other distributions will not be subject
to withholding or other taxes under the laws and regulations of the PRC and are
otherwise free and clear of any other tax, withholding or deduction in the PRC,
and without the necessity of obtaining any governmental authorization in the
PRC.
2.38 Taxes. Each
of the Company and its Subsidiaries has filed all returns (as hereinafter
defined) required to be filed with taxing authorities prior to the date hereof
or has duly obtained extensions of time for the filing thereof. Each
of the Company and its Subsidiaries has paid all taxes (as hereinafter defined)
shown as due on such returns that were filed and has paid all taxes imposed on
or assessed against the Company or such respective Subsidiary. The
provisions for taxes payable, if any, shown on the financial statements filed
with or as part of the Registration Statement, the Prospectus and the Disclosure
Package 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
Underwriters, (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.
2.39 Data and Information.
Statistical, industry-related and market-related data and information included
or incorporated by reference in the Registration Statement, the Prospectus and
the Disclosure Package, including any amendment or supplement thereto, are based
on or derived from sources that the Company reasonably and in good faith
believes are reliable and accurate in all material respects.
2.40 PFIC. The Company
does not expect to be a Passive Foreign Investment Company (“PFIC”) within the meaning of
Section 1297(a) of the United States Internal Revenue Code of 1986, as
amended, and the regulations and published interpretations thereunder for the
year ending December 31, 2010, and has no plan or intention to conduct its
business in a manner that would be reasonably expected to result in the Company
becoming a PFIC in the future under current laws and regulations.
2.41 PRC and Other
Matters.
2.41.1.
The Company does not have direct or indirect control of any entity through a
variable interest entity relationship or in any manner other than by direct or
indirect ownership of its Subsidiaries.
2.41.2.
It is not necessary that this Agreement, the Registration Statement, the
Prospectus or any other document be filed or recorded with any court, regulatory
body, administrative agency or other governmental authority in the
PRC.
Exhbit
1.1
2.41.3.
Except as disclosed in the Registration Statement, the Prospectus and the
Disclosure Package, the Company has taken all steps to comply with, and to cause
compliance by all of the Company’s principal shareholders (as disclosed in the
Registration Statement, the General Disclosure Package and the Prospectus),
directors and officers who are PRC residents or PRC citizens with any applicable
rules and regulations of the State Administration of Foreign Exchange (the
“SAFE Rules and
Regulations”), including without limitation, requiring such shareholder,
director and officer that is, or is directly or indirectly owned or controlled
by, a PRC resident or PRC citizen to complete any registration and other
procedures required under applicable SAFE Rules and Regulations.
2.41.4.
Each of the Company and each of the Company’s directors that signed the
Registration Statement is aware of and has been advised as to, the content of
the Rules on Mergers and Acquisitions of Domestic Enterprises by Foreign
Investors jointly promulgated by the Ministry of Commerce (the “MOFCOM”), the State Assets
Supervision and Administration Commission, the State Tax Administration, the
State Administration of Industry and Commerce, the China Securities Regulatory
Commission (the “CSRC”)
and the State Administration of Foreign Exchange of the PRC on August 8, 2006
(the “M&A Rules”),
in particular the relevant provisions thereof which purport to require offshore
special purpose vehicles, or SPVs, formed for listing purposes and controlled
directly or indirectly by PRC companies or individuals, to obtain the approval
of the CSRC prior to the listing and trading of their securities on an overseas
stock exchange, and the relevant provisions thereof which purport to require
foreign companies acquiring PRC companies to obtain the approval of MOFCOM prior
to the acquisition by the foreign company of such PRC company; 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; and the Company has
fully communicated such legal advice from its PRC counsel to each of its
directors that signed the Registration Statement and each director has confirmed
that he or she understands such legal advice; and as of the date of the
Prospectus and as of the date of this Agreement, the M&A Rules did not and
do not apply to the issuance and sale of the Securities, the Restructuring, the
listing and trading of the Securities on the [NYSE AMEX/Nasdaq Capital Market],
the consummation of the transactions contemplated by this Agreement, nor is the
CSRC, MOFCOM or other PRC governmental approval required in connection with the
above. The Company and its Subsidiaries have received all proper and
necessary approvals, permits and authorizations from government bodies for its
business transactions.
2.41.5.
Nothing has come to the attention of the Company that would lead it to believe
that the CSRC is taking any action to require the Company to seek its approval
for the consummation of the transactions contemplated under this Agreement or
that would otherwise have a Material Adverse Effect.
2.42 Choice of Laws. The
choice of laws of the State of New York as the governing law of this
Underwriting Agreement is a valid choice of law under the laws of Delaware and
will be honored by courts in Delaware. The Company has the power to
submit, and pursuant to Section 9.6 of this Underwriting Agreement, has legally,
validly, effectively and irrevocably submitted, to the personal jurisdiction of
each United States federal court and New York state court located in the Borough
of Manhattan, in The City of New York, New York, U.S.A. (each, a “New York Court”), and the
Company has the power to designate, appoint and authorize, and pursuant to
Section 9.6 of this Agreement, has legally, validly, effectively and irrevocably
designated, appointed an authorized agent for service of process in any action
arising out of or relating to this Underwriting Agreement, the Underwriter’s
Securities, or the Shares in any New York Court, and service of process effected
on such authorized agent will be effective to confer valid personal jurisdiction
over the Company as provided in Section 9.6 hereof.
Exhbit
1.1
2.43 Immunity. Neither the
Company nor any of the Subsidiaries, nor any of their respective properties,
assets or revenues has any right of immunity from any legal action, suit or
proceeding, from the giving of any relief in any such legal action, suit or
proceeding, from set-off or counterclaim, from the jurisdiction of any court,
from service of process, attachment upon or prior to judgment, or attachment in
aid of execution of judgment, or from execution of a judgment, or from other
legal process or proceeding for the giving of any relief or for the enforcement
of a judgment, with respect to its obligations, liabilities or any other matter
under or arising out of or in connection with this Underwriting
Agreement. Each of the Company and its Subsidiaries waives or will
waive such right to the extent permitted by law and has consented to such relief
and enforcement as provided in Section 9 of this Underwriting
Agreement. The irrevocable and unconditional waiver and agreement of
each of the Company and its Subsidiaries not to plead or claim any such immunity
in any legal action, suit or proceeding based on this Underwriting Agreement is
valid and binding under the laws of the PRC, the Hong Kong Special
Administrative Region (“Hong
Kong”), the British Virgin Islands (“BVI”), and the United
States.
|
3.
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Covenants of the
Company. The Company covenants and agrees with the
several Underwriters as follows:
|
3.1 Amendments to Registration
Statement. The Company will deliver to the Representative,
prior to filing, any amendment or supplement to the Registration Statement, the
Prospectus or the Disclosure Package proposed to be filed and not file any such
amendment or supplement to which the Underwriter shall reasonably object in
writing.
3.2 Federal Securities
Laws.
3.2.1. Compliance. During
the time when a Prospectus is required to be delivered under the Act, 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 Securities in accordance with the
provisions hereof and the Prospectus. If at any time when a Prospectus relating
to the Securities 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 Underwriters, 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 Representative promptly and prepare and file with the
Commission, subject to Section 3.1 hereof, an appropriate amendment or
supplement in accordance with Section 10 of the Act.
3.2.2. Xxxxxxxx-Xxxxx. The
Company will comply with all the provisions of the Xxxxxxxx-Xxxxx Act, and will
use its best efforts to cause the Company’s directors and officers, in their
capacities as such, to comply with such provisions of the Xxxxxxxx-Xxxxx
Act.
3.2.3. Filing of Final
Prospectus. If the Company has elected to rely on
Rule 430A of the Regulations, the Company will prepare and file a
Prospectus (in form and substance satisfactory to the Representative) containing
the information omitted therefrom pursuant to Rule 430A of the Regulations
with the Commission within the time period required by, and otherwise in
accordance with the provisions of, Rules 424(b) and 430A of the Regulations; if
the Company has elected to rely upon Rule 462(b) of the Regulations to increase
the size of the offering registered under the Act, the Company will prepare and
file a registration statement with respect to such increase with the Commission
within the time period required by, and otherwise in accordance with the
provisions of, Rule 462(b) of the Regulations.
3.2.4. Exchange Act
Registration. For a period of three (3) years from the date
hereof, the Company will use its best efforts to maintain the registration of
the Common Stock. The Company will not deregister the Common Stock under the
Exchange Act without the prior written consent of the
Representative.
Exhbit
1.1
3.2.5. Free Writing
Prospectuses. The Company represents and agrees that it has
not made and will not make any offer relating to the Securities that would
constitute an Issuer Free Writing Prospectus (or would otherwise constitute a
“free writing prospectus” under Rule 405 of the Regulations) without the prior
consent of the Representative. Any such free writing prospectus consented to by
the Representative is hereinafter referred to as a “Permitted Free Writing
Prospectus” and is listed on Schedule II hereto.
The Company represents that it will treat each Permitted Free Writing Prospectus
as an Issuer Free Writing Prospectus, and has complied and will comply with the
applicable requirements of Rule 433 of the Regulations, including timely
Commission filing where required, legending and record keeping.
3.3 Delivery to the Underwriters
of Prospectuses. The Company will deliver to the Underwriters,
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 two original executed Registration Statements, including
exhibits, and all post-effective amendments thereto and copies of all exhibits
filed therewith or incorporated therein by reference and all original executed
consents of certified experts.
3.4 Effectiveness and Events
Requiring Notice to the Representative. 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 Representative 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 Securities 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; (vi) of the happening of any
event during the period described in this Section 3.4 hereof that, in the
judgment of the Company, makes any statement of a material fact made in the
Registration Statement or the Prospectus untrue or that requires the making of
any changes in the Registration Statement or the Prospectus in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; and (vii) of the occurrence of an event or development as a
result of which an Issuer Free Writing Prospectus that has been issued
conflicted or would conflict with the information contained in the Registration
Statement, the Prospectus and the Disclosure Package relating to the Securities
or included or would include an untrue statement of a material fact or omitted
or would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances prevailing at that subsequent time,
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 the withdrawal of such order at the earliest
possible time. In case of subclauses (vi) and (vii), the Company will promptly
amend or supplement, at its own expense, such Issuer Free Writing Prospectus,
the Registration Statement and Prospectus to eliminate or correct such conflict,
untrue statement or omission.
3.5 Review of Financial
Statements. For a period of five (5) years from the date
hereof, the Company, at its expense, shall cause its regularly engaged
independent certified public accounting firm to review (but not audit) the
Company’s financial statements for each of the first three fiscal quarters prior
to the announcement of quarterly financial information.
Exhbit
1.1
3.6 Secondary Market Trading and
Standard & Poor’s. The Company will apply to be
included in Standard & Poor’s Daily News and Corporation Records Corporate
Descriptions for a period of five (5) years immediately after the date
hereof.
3.7 Reports to the
Underwriter.
3.8.1 Periodic Reports,
etc. For a period of three (3) years from the Effective Date,
the Company will furnish to the Underwriter copies of such financial statements
and other periodic and special reports as the Company from time to time
furnishes generally to holders of any class of its securities and also promptly
furnish to the Underwriter: (i) a copy of each periodic report the Company shall
be required to file with the Commission; (ii) a copy of every press release and
every news item and article with respect to the Company or its affairs which was
released by the Company; (iii) a copy of each Form 8-K prepared and filed by the
Company; (iv) five (5) copies of each registration statement filed by the
Company under the Act; (v) 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 Representative
and Pillsbury in connection with the Underwriters’ receipt of such information.
Documents filed with the Commission pursuant to its XXXXX system shall be deemed
to have been delivered to the Underwriters pursuant to this Section
3.8.1.
3.8.2. Transfer
Sheets. For a period of three (3) years from the Effective
Date, the Company, at its own expense, shall retain a transfer and registrar
agent acceptable to the Representative (the “Transfer Agent”) and will
furnish to the Underwriter at the Company’s sole cost and expense such transfer
sheets of the Company’s securities as the Underwriter may reasonably request,
including the daily and monthly consolidated transfer sheets of the Transfer
Agent and DTC. StockTrans, Inc. is acceptable to the Underwriter to act as
Transfer Agent for the Company’s Common Stock.
3.8.3. Trading
Reports. During such time as the Common Stock are listed on the [NYSE Amex/Nasdaq] the Company shall provide to
the Representative, at the Company’s expense, such reports published by the
[NYSE Amex/Nasdaq] relating to price trading of
the Common Stock, as the Underwriter shall reasonably request.
Exhbit
1.1
3.8 Payment of General Expenses
Related to the Offering. The Company hereby agrees to pay on
each of the Closing Date and the Option Closing Date, if any, to the extent not
paid at the Closing Date, all expenses incident to the performance of the
obligations of the Company under this Underwriting Agreement, including, but not
limited to: (a) all filing fees and communication expenses relating to the
registration of the Securities with the Commission; (b) all COBRADesk filing
fees associated with the review of the Offering by FINRA and all reasonable fees
and disbursements of Pillsbury in connection with such review; all fees and
expenses relating to the listing of the Securities on the [NYSE Amex/Nasdaq] and such other stock
exchanges as the Company and the Representative together determine; (c) all
fees, expenses and disbursements relating to background checks of the Company’s
officers and directors in an amount not to exceed $5,000 per individual; (d) all
fees, expenses and disbursements relating to the registration or qualification
of the Securities under the “blue sky” securities laws of such states and other
jurisdictions as the Representative may reasonably designate (including, without
limitation, all filing and registration fees, and the reasonable fees and
disbursements of Pillsbury in connection with such registration or
qualification, [it being agreed that (i) if the Offering is commenced on
the Nasdaq Global Market or the NYSE Amex, the Company will make a payment of
$5,000 to such counsel on the Closing Date, or (ii) if the Offering is
commenced on the [Nasdaq
Capital Market] or on
the [OTC Bulletin
Board], the Company will
make a payment of $15,000 to such counsel upon the commencement of “blue sky”
work by such counsel (or, if “blue sky” work by such counsel was commenced prior
to the execution of this Underwriting Agreement, no later than the date of this
Underwriting Agreement) and an additional $5,000 on the Closing Date]; (e) all
fees, expenses and disbursements relating to the registration, qualification or
exemption of the Securities under the securities laws of such foreign
jurisdictions as the Representative may reasonably designate; (f) the costs of
all mailing and printing of the underwriting documents (including, without
limitation, the Underwriting Agreement, any blue sky surveys and, if
appropriate, any agreement among underwriters, selected dealers’ agreement,
underwriter’s questionnaire and power of attorney), Registration Statements,
Prospectuses and all amendments, supplements and exhibits thereto and as many
preliminary and final Prospectuses as the Representative may reasonably deem
necessary, (g) the costs and expenses of the Company’s public relations firm;
(h) the costs of preparing, printing and delivering certificates representing
the Securities; (i) fees and expenses of the transfer agent for the Common
Stock; (j) stock transfer and/or stamp taxes, if any, payable upon the transfer
of securities from the Company to the Representative; (k) the costs associated
with advertising the Offering in the national editions of the Wall Street
Journal and New York Times after the Closing Date; (1) the costs associated with
bound volumes of the public offering materials as well as commemorative mementos
and lucite tombstones, each of which the Company or its designee will provide
within a reasonable time after the Closing in such quantities as the
Representative may reasonably request; (m) the fees and expenses of the
Company’s accountants; (n) the fees and expenses of the Company’s legal counsel
and other agents and representatives; (o) the $10,000 cost associated with the
Representative’s use of i-Deal’s book-building, prospectus tracking and
compliance software for the Offering; (p) the Representative’s actual “road
show” expenses for the Offering up to $10,000. The Representative may
deduct from the net proceeds of the Offering payable to the Company on the
Closing Date, or the Option Closing Date, if any, the expenses set forth herein
to be paid by the Company to the Representative to the extent not paid before
the Closing Date.
3.9 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 Prospectus.
3.10 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 full calendar month following the date
hereof, 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) of the
Regulation and Section 11(a) of the Act) covering a period of at least twelve
consecutive months beginning after the Effective Date.
3.11 Stabilization. Neither
the Company, nor, to its knowledge, any of its employees, directors or
shareholders (without the consent of the Representative) 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.
3.12 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.
Exhbit
1.1
3.13 Accountants. As
of the Effective Date, the Company shall retain an independent public accounting
firm reasonably acceptable to the Representative, 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 date hereof. The
Representative acknowledges that Child, Xxx Xxxxxxx is acceptable to the
Representative.
3.14 FINRA. The
Company shall advise the Representative and Pillsbury (who shall make any
appropriate filing with FINRA based upon such advice) if it is aware that any
beneficial owner of 5% or more of any class of the Company’s securities or
beneficial holder of any unregistered securities of the Company becomes an
affiliate or associated person of any FINRA member.
3.15 Environmental Laws.
The Company will comply in all material respects with all applicable
Environmental Laws.
3.16 [NYSE Amex/Nasdaq]
Listing. The Company has completed all required filings with the [NYSE
Amex/Nasdaq] and other necessary actions in order to cause the Securities to be
listed and admitted and authorized for trading on the [NYSE Amex/Nasdaq] and to
use its best efforts to maintain such listing.
3.17 SAFE Filings. The
Company will comply with the SAFE Rules and Regulations, and will use best
efforts to cause its shareholders and option holders that are, or that are
directly or indirectly owned or controlled by, PRC residents or PRC citizens, to
comply with the SAFE Rules and Regulations applicable to them in connection with
the Company, including without limitation, requesting each shareholder and
option holder, that is, or is directly or indirectly owned or controlled by, a
PRC resident or PRC citizen to complete any registration and other procedures
required under applicable SAFE Rules and Regulations.
3.18 OFAC. The Company
will not directly or indirectly use the proceeds from the sale of Securities
hereunder, or lend, contribute or otherwise make available such proceeds to any
of its subsidiaries, joint venture partner or other person or entity, for the
purpose of financing the activities of any person currently subject to any U.S.
sanctions administered by OFAC.
3.19 FCPA. The Company,
including any parent, subsidiary, affiliate, employee or agent thereof, will use
its best efforts to comply with the FCPA.
3.20 Regulation M. Until
the Representative shall have notified the Company of the completion of the
offering of the Securities, that the Company will not, and will cause its
affiliated purchasers (as defined in Regulation M under the Exchange Act) not
to, either alone or with one or more other persons, bid for or purchase, for any
account in which it or any of its affiliated purchasers has a beneficial
interest, any Securities, or attempt to induce any person to purchase any
Securities; and not to, and to cause its affiliated purchasers not to, make bids
or purchase for the purpose of creating actual, or apparent, active trading in
or of raising the price of the Securities.
Exhbit
1.1
3.21 Lock-Up. Without the
prior written consent of the Representative, for a period of 90 days after the
date of this Underwriting Agreement, the Company and each director, officer and
stockholder listed on Schedule III hereto
shall not issue, sell or register with the Commission (other than on Form S-8 or
on any successor form), or otherwise dispose of, directly or indirectly, any
equity securities of the Company (or any securities convertible into,
exercisable for or exchangeable for equity securities of the Company), except
for (i) the issuance of the Securities pursuant to the Registration Statement,
(ii) the issuance of shares pursuant to the Company’s existing stock option plan
or bonus plan as described in the Registration Statement, the Statutory
Prospectus and the Prospectus, and (iii) issuances of Common Stock pursuant to
valid exercises or conversions of options, warrants, convertible securities or
rights outstanding on the date hereof. In the event that during this
period, (A) any shares are issued pursuant to the Company’s existing stock
option plan or bonus plan that are exercisable during such 90-day period or (B)
any registration is effected on Form S-8 or on any successor form relating to
shares that are exercisable during such 90-day period, the Company shall obtain
the written agreement of such grantee or purchaser or holder of such registered
securities that, for a period of 90 days after the date of this Agreement, such
person will not, without the prior written consent of the Representative, offer
for sale, sell, distribute, grant any option for the sale of, or otherwise
dispose of, directly or indirectly, or exercise any registration rights with
respect to, any shares of Common Stock (or any securities convertible into,
exercisable for, or exchangeable for any shares of Common Stock) owned by such
person. Notwithstanding the foregoing, (i) the Company represents and
warrants that each such grantee or purchaser or holder of such registered
securities shall be subject to similar lockup restrictions as set forth on Exhibit B attached
hereto and the Company shall enforce such rights and impose stop-transfer
restrictions on any such sale or other transfer or disposition of such shares
until the end of the 90-day period and (ii) if (x) during the last 17 days of
the 90-day period described in this Section 4(a)(ix) the Company issues an
earnings release results or material news or a material event relating to the
Company occurs; or (y) prior to the expiration of such 90-day period, the
Company announces that it will release earnings results during the 16 day period
beginning on the last day of the 90-day period; the restrictions imposed during
this Section 4(a)(ix) shall continue to apply until the expiration of the 18-day
period beginning on the release of the earnings results or the occurrence of the
material news or material event; provided, however, that this sentence shall not
apply if the research published or distributed on the Company is compliant under
Rule 139 of the Securities Act and the Company’s securities are actively traded
as defined in Rule 101(c)(1) of Regulation M of the Exchange Act.
3.22 Transfer
Restrictions. The Company will at all times maintain transfer
restrictions (including the inclusion of legends in share certificates, as may
be required) with respect to the Common Stock which are subject to transfer
restrictions pursuant to this Underwriting Agreement and the Lock-Up Agreements
and shall ensure compliance with such restrictions on transfer of restricted
Common Stock. The Company shall retain all share certificates which
are by their terms subject to transfer restrictions until such time as such
transfer restrictions are no longer applicable to such securities.
3.23 Right of First
Refusal. For a period of twelve (12) months from the Closing,
the Representative shall have the right of first refusal to act as, in the
Company’s discretion, leading underwriter or nominally as a co-manager with at
least 50% of the economics, or, in the case of a three-underwriter or placement
agent transaction, 33% of the economics, for each and every future public and
private equity offerings and public debt offerings of the Company, or any
successor to or any subsidiary of the Company.
3.24 Press Releases and Public
Announcements. The Company will not issue press releases or
engage in any other publicity, without the Representative’s prior written
consent, for a period ending at 5:00 p.m. Eastern time on the first business day
following the 40th day following the Closing Date, other than normal and
customary releases issued in the ordinary course of the Company’s
business.
3.25 No Fiduciary
Duties. The Company acknowledges and agrees that the
Underwriters’ responsibility to the Company is solely contractual in nature and
that neither the Underwriters nor 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 Underwriting
Agreement.
Exhbit
1.1
4.
Conditions of Underwriters’
Obligations. The obligations of the Underwriters to purchase
and pay for the Securities, as provided herein, shall be subject to (i) the
continuing accuracy of the representations and warranties of the Company as of
the date hereof and as of each of the Closing Date and the Option Closing Date,
if any; (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:
4.1 Regulatory
Matters.
4.1.1.
Effectiveness of
Registration Statement. The Registration Statement shall have
become effective prior to the date of this Underwriting Agreement, and, at each
of the Closing Date and the Option Closing Date, if any, 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 the Representative.
4.1.2.
Prospectuses.
The Prospectus, and any supplement thereto, shall have been filed with the
Commission in the manner and within the time period required by Rules 424(b) and
Rule 430A of the Regulations and in accordance with the provisions hereof; all
material required to be filed by the Company pursuant to Rule 433(d) of the
Regulations shall have been filed with the Commission within the applicable time
period prescribed for such filing by Rule 433; and any request of the Commission
for additional information (to be included in the Registration Statement or
Prospectus or otherwise) shall have been complied with to the satisfaction of
the Representative.
4.1.3.
FINRA
Clearance. By the Effective Date, the Representative shall
have received clearance from FINRA as to the amount of compensation allowable or
payable to the Underwriters as described in the Registration
Statement.
4.1.4.
[NYSE Amex/Nasdaq]Stock Market
Clearance. On the Closing Date, the Common Stock, including
the Public Securities, shall have been approved for listing on the [NYSE Amex/Nasdaq].
4.2 Company Counsel
Matters.
4.2.1.
Closing Date Opinion
of Counsel. On the Closing Date, the Representative shall have
received the favorable opinion of Guzov Ofsink, LLC, counsel to the Company
(“Guzov Ofsink”), dated
the Closing Date, addressed to the Representative, in substantially the form
attached as Exhibit C-1 hereto.
4.2.2.
Closing Date Opinion
of PRC Counsel. On the Closing Date, the Representative shall
have received the favorable opinion of Han Kun Law Firm, PRC counsel to the
Company, dated the Closing Date, addressed to the Representative, in
substantially the form attached as Exhibit C-2 hereto.
4.2.3.
Closing Date Opinion
of HK Opinion. On the Closing Date, the Representative shall
have received the favorable opinion of Yung and Young, Hong Kong counsel to the
Company, dated the Closing Date, addressed to the Representative, in
substantially the form attached as Exhibit C-3 hereto.
4.2.4.
Closing Date Opinion
of BVI Opinion. On the Closing Date, the Representative shall
have received the favorable opinion of [________], BVI counsel to the Company,
dated the Closing Date, addressed to the Representative, in substantially the
form attached as Exhibit C-4 hereto.
Exhbit
1.1
4.2.5.
Option Closing Date
Opinions of Counsel. On the Option Closing Date, if any, the
Representative shall have received the favorable opinions of each counsel listed
in Sections 4.2.1 through 4.2.4, dated the Option Closing Date, addressed to the
Representative and in form and substance reasonably satisfactory to the
Representative, confirming as of the Option Closing Date, the statements made by
such counsels in their respective opinions delivered on the Closing
Date.
4.3 Comfort
Letter. At the time this Underwriting Agreement is executed,
and at each of the Closing Date and the Option Closing Date, if any, you shall
have received a comfort letter, addressed to you and in form and substance
satisfactory in all respects to you from Child, Xxx Xxxxxxx dated, respectively,
as of the date of this Underwriting Agreement and as of the Closing Date and the
Option Closing Date, if any; provided, however, that the
comfort letter shall use a “cut-off” date no more than three (3) days prior to
the Closing Date or the Option Closing Date, as the case may be.
4.4 Company
Certificates.
4.4.1.
Officers’
Certificate. At each of the Closing Date and the Option
Closing Date, if any, the Representative shall have received a certificate of
the Company signed by the President and Chief Executive Officer and another
authorized officer of the Company, dated the Closing Date or the Option Closing
Date, as the case may be, respectively, to the effect that the Company has
performed all covenants and complied with all conditions required by this
Underwriting Agreement to be performed or complied with by the Company prior to
and as of the Closing Date, or the Option Closing Date, as the case may be, and
that the conditions set forth in Section 4.5 hereof have been satisfied as of
such date and that, as of the Closing Date and the Option Closing Date, as the
case may be, the representations and warranties of the Company set forth in this
Agreement are true and correct. In addition, the Representative will have
received such other and further certificates of officers of the Company as the
Representative may reasonably request.
4.4.2.
Secretary’s
Certificate. At each of the Closing Date and the Option
Closing Date, if any, the Representative shall have received a certificate of
the Company signed by the Secretary or Assistant Secretary of the Company, dated
the Closing Date or the Option Date, as the case may be, respectively,
certifying: (i) that the Charter Documents are true and complete, have not
been modified and are in full force and effect; (ii) that the resolutions
of the Company’s Board of Directors relating to the public offering contemplated
by this Underwriting 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; (iv) as to the form of
specimen certificate of the Common Stock; and (v) as to the incumbency of
the officers of the Company. The documents referred to in such certificate shall
be attached to such certificate.
4.5 No Material
Changes. Prior to and on each of the Closing Date and the
Option Closing Date, if any: (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 Prospectus and the Disclosure Package; (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,
state or other 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 Prospectus and the
Disclosure Package; (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 Prospectus and the
Disclosure Package, including 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 the
Registration Statement, the Prospectus and the Disclosure Package, including any
amendment or supplement thereto, shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
Exhbit
1.1
4.6 Delivery of
Agreements.
4.6.1.
Deliveries at
Applicable Time. On or prior to the Applicable Time, the
Company shall have delivered to the Representative executed copies of this
Underwriting Agreement and the Lock-Up Agreements from each person or entity set
forth on Schedule III
hereto.
4.6.2.
Closing Date
Deliveries. On the Closing Date, the Company shall have
delivered to the Representative executed copies of the Underwriter’s Warrants
and such further certificates and documents as you may have reasonably
requested.
4.7 Other.
4.7.1.
Public Relations
Firm. On or prior to the Closing Date, the Company shall have
engaged a financial public relations firm experienced in assisting U.S. public
companies in public offerings of securities and in their relationship with their
security holders.
4.7.2.
[NYSE
Amex/Nasdaq]. The Securities have been approved for listing on
the [NYSE Amex/Nasdaq] upon official notice of issuance and, on the date the
Registration Statement became or becomes effective, the Company’s Registration
Statement on Form 8-A or other applicable form under the Exchange Act, became or
will become effective.
4.7.3.
Transfer
Agent. On or prior to the Closing Date, the Company shall have
retained a Transfer Agent for the Common Stock.
|
5.
|
Indemnification.
|
5.1 Indemnification of the
Underwriters.
5.1.1.
General. Subject
to the conditions set forth below, the Company agrees to indemnify and hold
harmless the Underwriters, and each dealer selected by the Representative that
participates in the offer and sale of the Securities (each a “Selected Dealer”) and each of
their respective directors, officers and employees and each person, if any, who
controls an Underwriter (“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
an Underwriter and the Company or between an 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 Preliminary
Prospectus, the Registration Statement, the Prospectus and the Disclosure
Package (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 Securities,
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 5, collectively called
“application”) executed by the Company or based upon written information
furnished by the Company in any jurisdiction in order to qualify the Securities
under the securities laws thereof or filed with the Commission, any state
securities commission or agency, [NYSE Amex/Nasdaq/OTCBB] or
FINRA 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 the Underwriter’s Information. With respect to any
untrue statement or omission or alleged untrue statement or omission made in the
Preliminary Prospectus, the indemnity agreement contained in this Section 5.1.1
shall not inure to the benefit of any Underwriter to the extent that any loss,
liability, claim, damage or expense of the Underwriter results from the fact
that a copy of the Prospectus was not given or sent to the person asserting any
such loss, liability, claim or damage at or prior to the written confirmation of
sale of the Securities to such person as required by the Act and the
Regulations, and if the untrue statement or omission has been corrected in the
Prospectus, unless such failure to deliver the Prospectus was a result of
non-compliance by the Company with its obligations under Section 3.3 hereof. The
Company agrees promptly to notify the Representative 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 Public
Securities or in connection with the Registration Statement, the Prospectus or
the Disclosure Package.
Exhbit
1.1
5.1.2.
Procedure. If
any action is brought against an Underwriter, a Selected Dealer or a Controlling
Person in respect of which indemnity may be sought against the Company pursuant
to Section 5.1.1, such Underwriter, such Selected Dealer 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 such Selected Dealer, as the case may be) and
payment of actual expenses. Such Underwriter, such Selected Dealer 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, such Selected Dealer 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), Selected
Dealer and/or Controlling Person shall be borne by the Company. Notwithstanding
anything to the contrary contained herein, if any Underwriter, Selected Dealer
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.
5.2 Indemnification of the
Company. Each Underwriter, severally and not jointly, 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 several Underwriters, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions made in any
Preliminary Prospectus, the Registration Statement, the Prospectus or the
Disclosure Package, or any amendment or supplement thereto, or in any
application, in reliance upon, and in strict conformity with, the Underwriter’s
Information; provided, however, that the obligation of each Underwriter to
indemnify the Company (including 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) shall be limited to the amount of underwriting
discount and commission applicable to the Public Securities to be purchased by
such Underwriter hereunder. In case any action shall be brought against the
Company or any other person so indemnified based on any Preliminary Prospectus,
the Registration Statement, the Prospectus or the Disclosure Package, or any
amendment or supplement thereto, or any application, and in respect of which
indemnity may be sought against any Underwriter, such 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 several Underwriter by
the provisions of Section 5.1.2.
Exhbit
1.1
5.3 Contribution.
5.3.1.
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 5 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 5 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 5, then, and in each
such case, the Company and the Underwriters 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 Underwriters, as
incurred, in such proportions that the Underwriters are responsible for that
portion represented by the percentage that the underwriting discount appearing
on the cover page of the Prospectus bears to the initial offering price
appearing thereon and the Company is responsible for the balance; 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 5.3.1, no Underwriter shall be required to contribute
any amount in excess of the underwriting discounts and commissions applicable to
the Public Securities purchased by such Underwriter. For purposes of this
Section, each director, officer and employee of an Underwriter or the Company,
as applicable, and each person, if any, who controls an 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.
5.3.2.
Contribution
Procedure. Within fifteen days after receipt by any party to
this Underwriting 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 fifteen 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 5.3.2 are intended to
supersede, to the extent permitted by law, any right to contribution under the
Act, the Exchange Act or otherwise available.
Exhbit
1.1
|
6.
|
Substitution of
Underwriters.
|
6.1 Not Exceeding 10% of Firm
Shares or Option Shares. If any Underwriter or Underwriters shall default
in its or their obligations to purchase the Firm Shares or the Option Shares, if
the Over-Allotment Option is exercised, hereunder, and if the number of the Firm
Shares or Option Shares with respect to which such default relates does not
exceed in the aggregate 10% of the number of Firm Shares or Option Shares that
all Underwriters have agreed to purchase hereunder, then such Firm Shares or
Option Shares to which the default relates shall be purchased by the
non-defaulting Underwriters in proportion to their respective commitments
hereunder.
6.2 Exceeding 10% of Firm Shares
or Option Shares. In the event that the default addressed in
Section 6.1 relates to more than 10% of the Firm Shares or Option Shares,
you may in your discretion arrange for yourself or for another party or parties
to purchase such Firm Shares or Option Shares to which such default relates on
the terms contained herein. If, within one (1) Business Day after such
default relating to more than 10% of the Firm Shares or Option Shares, you do
not arrange for the purchase of such Firm Shares or Option Shares, then the
Company shall be entitled to a further period of one (1) Business Day
within which to procure another party or parties satisfactory to you to purchase
said Firm Shares or Option Shares on such terms. In the event that neither you
nor the Company arrange for the purchase of the Firm Shares or Option Shares to
which a default relates as provided in this Section 6, this Agreement will
automatically be terminated by you or the Company without liability on the part
of the Company (except as provided in Section 5 hereof) or the several
Underwriters (except as provided in Section 5 hereof); provided, however,
that if such default occurs with respect to the Option Shares, this Agreement
will not terminate as to the Firm Shares; and provided further that nothing
herein shall relieve a defaulting Underwriter of its liability, if any, to the
other Underwriters and to the Company for damages occasioned by its default
hereunder.
6.3 Postponement of Closing
Date. In the event that the Firm Shares or Option Shares to which the
default relates are to be purchased by the non-defaulting Underwriter, or are to
be purchased by another party or parties as aforesaid, you or the Company shall
have the right to postpone the Closing Date or Option Closing Date for a
reasonable period, but not in any event exceeding five (5) Business Days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment to the
Registration Statement or the Prospectus that in the opinion of counsel for the
Underwriter may thereby be made necessary. The term “Underwriter” as used in
this Agreement shall include any party substituted under this Section 6
with like effect as if it had originally been a party to this Agreement with
respect to such Public Securities.
|
7.
|
Representations and
Agreements to Survive Delivery. All representations, warranties,
and agreements of the Company herein or in certificates delivered pursuant
hereto, and the agreements of the several Underwriters and the Company
contained in Section 5 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of
any Underwriter or any controlling person thereof, or the Company or any
of its officers, directors and shall survive delivery of, and payment for,
the Securities to and by the Underwriters
hereunder.
|
|
8.
|
Effective Date of this
Underwriting Agreement and Termination
Thereof.
|
8.1 Effective
Date. This Underwriting Agreement shall become effective when
both the Company and the Representative have executed the same and delivered
counterparts of such signatures to the other party.
Exhbit
1.1
8.2 Termination. You
shall have the right to terminate this Underwriting Agreement at any time prior
to any Closing Date, (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;
(ii) if trading on the New York Stock Exchange, the NASDAQ Global Selected
Market, the NASDAQ Global Market, the NASDAQ Capital Market or the NYSE Amex
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, (iii) if the United States shall
have become involved in a new war or an increase in major hostilities,
(iv) if a banking moratorium has been declared by a New York State or
federal authority, (v) if a moratorium on foreign exchange trading has been
declared which materially adversely impacts the United States securities
markets, (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 Firm
Shares or Option Shares, (vii) if the Company is in material breach of any
of its representations, warranties or covenants hereunder, or (viii) if the
Underwriters 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 Representative’s judgment
would make it impracticable to proceed with the offering, sale and/or delivery
of the securities or to enforce contracts made by the Underwriters for the sale
of the Securities. Notice of such termination shall be given in writing or may
be given to the Company by telegram, telecopy or telephone and shall be
subsequently confirmed by letter.
8.3 Expenses. In
the event that this Underwriting Agreement shall not be carried out for any
reason whatsoever, within the time specified herein or any extensions thereof
pursuant to the terms herein, the Company shall be obligated to pay to the
Underwriters their actual and accountable out of pocket expenses related to the
transactions contemplated herein then due and payable (including the fees and
disbursements of their legal counsel).
8.4 Indemnification. Notwithstanding
any contrary provision contained in this Underwriting Agreement, any election
hereunder or any termination of this Underwriting Agreement, and whether or not
this Underwriting Agreement is otherwise carried out, the provisions of Section
5 shall not be in any way effected by, such election or termination or failure
to carry out the terms of this Underwriting Agreement or any part
hereof.
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9.
|
Miscellaneous.
|
9.1 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, two days after such mailing.
If to the
Representative:
Xxxxx
Xxxxxx, Carret & Co., LLC
000
Xxxxxxxxx Xxxxxx
Xxx Xxxx,
XX 00000
Attn:
[_____________]
Fax No.:
[_____________]
Exhbit
1.1
Copy
to:
Pillsbury
Xxxxxxxx Xxxx Xxxxxxx LLP
0000 X
Xxxxxx, XX
Xxxxxxxxxx,
X.X. 00000
Attn:
Xxxxxx X. Xxxxx, Xx.
Fax No.:
000-000-0000
If to the
Company:
Shishan
Industrial Park
Nanhai
District, Foshan City
Guangdong
Province, PRC
Attn:
[_____________]
Fax No.:
[_____________]
Copy
to:
Guzov
Ofsink, LLC
000
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx Xxxx,
XX 00000
Attn:
[_____________]
Fax No.:
[_____________]
9.2 Headings. The
headings contained herein are for the sole purpose of convenience of reference,
and shall not in any way limit or affect the meaning or interpretation of any of
the terms or provisions of this Underwriting Agreement.
9.3 Amendment. This
Underwriting Agreement may only be amended by a written instrument executed by
each of the parties hereto.
9.4 Entire
Agreement. This Underwriting Agreement (together with the
other agreements and documents being delivered pursuant to or in connection with
this Underwriting 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.
9.5 Binding
Effect. This Underwriting Agreement shall inure solely to the
benefit of and shall be binding upon the Underwriters, the Company and the
Controlling Persons, directors and officers referred to in Section 5 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 Underwriting 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
Underwriters.
9.6 Governing
Law. This Underwriting 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 Underwriting 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 9.1 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.
Exhbit
1.1
9.7 Execution in
Counterparts. This Underwriting 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 Underwriting Agreement by facsimile or email/pdf
transmission shall constitute valid and sufficient delivery
thereof.
9.8 Waiver,
etc. The failure of any of the parties hereto to at any time
enforce any of the provisions of this Underwriting 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 Underwriting Agreement or any provision hereof or the right of
any of the parties hereto to thereafter enforce each and every provision of this
Underwriting Agreement. No waiver of any breach, non-compliance or
non-fulfillment of any of the provisions of this Underwriting 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]
Exhbit
1.1
If the
foregoing correctly sets forth the understanding between the Underwriter and the
Company, please so indicate by signing in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between
us.
.
|
Very
truly yours,
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
Accepted
on the date first above written, as
Representative
of the Underwriters.
|
XXXXX
XXXXXX, CARRET & CO., LLC
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
Exhbit
1.1
Schedule
I
UNDERWRITERS
|
Name of Underwriter
|
Number of
Initial Securities
|
|||
|
Xxxxx
Xxxxxx, Carret & Co., LLC
|
||||
|
Total
|
||||
Exhbit
1.1
Schedule
II
ISSUER
FREE WRITING PROSPECTUSES
None.
EXHIBIT
A
FORM
OF UNDERWRITER’S WARRANT
(See
attached)
WARRANT
[________]
Shares of Common Stock
[________],
2010
This
WARRANT (this “Warrant”) of China SLP
Filtration Technology, Inc., a company duly organized and validly existing under
the laws of Delaware (the “Company”), is being issued
pursuant to that certain Underwriting Agreement, dated as of [_________], 2010,
by and between the Company and Xxxxx Xxxxxx, Carret & Co., LLC, the
Representative of the Underwriters (the “Representative”) relating to a
firm commitment public offering (the “Offering”) of [________]
shares of common stock, $0.001 par value (the “Shares”), of the
Company.
FOR VALUE RECEIVED, the
Company hereby grants to [________] and its permitted successors and assigns
(collectively, the “Holder”) the right to purchase
from the Company up to [________] ([________])1 Shares (such Shares underlying this Warrant, the “Warrant Shares”), at a per
share purchase price equal to $[________]2 (the “Exercise Price”), subject to
the terms, conditions and adjustments set forth below in this
Warrant.
1. Vesting of
Warrant. This Warrant shall vest and become exercisable on the
Base Date. For purposes of this Warrant, the “Base Date” shall mean
[________], 2011.3 Except as otherwise
provided for herein or as permitted by applicable rules of the Financial
Industry Regulatory Authority, Inc. (“FINRA”), this Warrant and the
Warrant Shares shall not be sold, transferred, assigned, pledged or
hypothecated, or be the subject of any hedging, short sale, derivative, put, or
call transaction that would result in the effective economic disposition of the
Warrant or the Warrant Shares, for the 180 days following the Base
Date. The Warrant and the Warrant Shares are subject to a 180-day
lock-up pursuant to Section 9 hereof in accordance with FINRA Rule
5110(g)(1).
2. Expiration of
Warrant. This Warrant shall expire on the four (4) year
anniversary of the Base Date (the “Expiration
Date”).
3. Exercise of
Warrant. This Warrant shall be exercisable pursuant to the
terms of this Section 3.
3.1 Manner of
Exercise.
(a) This
Warrant is exercisable in whole or in part at any time and from time to
time. Such exercise shall be effectuated by submitting to the Company
(either by delivery to the Company or by facsimile transmission as provided in
Section 12 hereof) a completed and duly executed Notice of Exercise
(substantially in the form attached to this Warrant) as provided in this
paragraph. The date such Notice of Exercise is faxed to the Company
shall be the “Exercise
Date,” provided that the Holder of this Warrant tenders this Warrant
Certificate to the Company within five (5) business days
thereafter. The Notice of Exercise shall be executed by the Holder of
this Warrant and shall indicate the number of Warrant Shares then being
purchased pursuant to such exercise. Upon surrender of this Warrant Certificate,
together with appropriate payment of the Exercise Price for the Warrant Shares
purchased, the Holder shall be entitled to receive a certificate or certificates
for the Shares so purchased. The Exercise Price may be paid in a
“cashless” or “cash” exercise or a combination thereof pursuant to Section
3.1(b) and/or Section 3.1(c) below.
(b) If
the Notice of Exercise form elects a “cashless” exercise, the Holder shall
thereby be entitled to receive a number of Shares determined as
follows:
X = Y [(A
– B)/A]
where:
X = the
number of Warrant Shares to be issued to the Holder.
Y = the
number of Warrant Shares with respect to which this Warrant is being
exercised.
A = the
Fair Market Value
B = the
Exercise Price.
For
purposes of this Section 3.1(b), “Fair Market Value” shall be the closing price
of the Shares as reported by the [Nasdaq Capital Market/NYSE Amex], or if quoted
on an automated quotation service, such automated quotation service, on the date
immediately prior to the Exercise Date. If the Shares
are not then listed on a national stock exchange or such other quotation system
or association, the Fair Market Value of one Share as of the date of
determination, shall be as determined in good faith by the Board of Directors of
the Company and the Holder. If the Shares are not then listed on a
national securities exchange or such other quotation system or association, the
Board of Directors of the Company shall respond promptly, in writing, to an
inquiry by the Holder prior to the exercise hereunder as to the fair market
value of a Share as determined by the Board of Directors of the
Company. In the event that the Board of Directors of the Company and
the Holder are unable to agree upon the fair market value, the Company and the
Holder shall jointly select an appraiser, who is experienced in such
matters. The decision of such appraiser shall be final and
conclusive, and the cost of such appraiser shall be borne equally by the Company
and the Holder. Such adjustment shall be made successively whenever
such a payment date is fixed.
(c) If
the Notice of Exercise form elects a “cash” exercise, the Exercise Price per
Share for the shares then being exercised shall be payable in cash or by
certified or official bank check.
3.2 When Exercise
Effective. Each exercise of this Warrant shall be deemed to
have been effected immediately prior to the close of business on the Business
Day on which this Warrant shall have been duly surrendered to the Company as
provided in Sections 3.1 and 12 hereof, and, at such time, the Holder in whose
name any certificate or certificates for Warrant Shares shall be issuable upon
exercise as provided in Section 3.3 hereof shall be deemed to have become the
holder or holders of record thereof of the number of Warrant Shares purchased
upon exercise of this Warrant.
3.3 Delivery of Share
Certificates and New Warrant. As soon as reasonably
practicable after each exercise of this Warrant, in whole or in part, and in any
event within three (3) Business Days thereafter, the Company, at its expense
(including the payment by it of any applicable issue taxes), will cause the name
of the Holder (or as Holder may direct) to be entered in the register of members
in respect of the Warrant Shares and further cause to be issued in the name of
and delivered to the Holder hereof or, subject to Sections 9 and 10 hereof, as
the Holder (upon payment by the Holder of any applicable transfer taxes) may
direct:
(a) a
certificate or certificates for the number of duly authorized, validly issued,
fully paid and nonassessable Warrant Shares to which the Holder shall be
entitled upon exercise; and
(b) in
case exercise is in part only, a new Warrant document of like tenor, dated the
date hereof, for the remaining number of Warrant Shares issuable upon exercise
of this Warrant after giving effect to the partial exercise of this Warrant
(including the delivery of any Warrant Shares as payment of the Exercise Price
for such partial exercise of this Warrant).
4. Certain
Adjustments. For so long as this Warrant is
outstanding:
4.1 Mergers or
Consolidations. If at any time after the date hereof there
shall be a capital reorganization (other than a combination or subdivision of
the Shares otherwise provided for herein) resulting in a reclassification to or
change in the terms of securities issuable upon exercise of this Warrant (a
“Reorganization”), or a
merger or consolidation of the Company with another corporation, association,
partnership, organization, business, individual, government or political
subdivision thereof or a governmental agency (a “Person” or the “Persons”) (other than a merger
with another Person in which the Company is a continuing corporation and which
does not result in any reclassification or change in the terms of securities
issuable upon exercise of this Warrant or a merger effected exclusively for the
purpose of changing the domicile of the Company) (a “Merger”), then, as a part of
such Reorganization or Merger, lawful provision and adjustment shall be made so
that the Holder shall thereafter be entitled to receive, upon exercise of this
Warrant, the number of shares of stock or any other equity or debt securities or
property receivable upon such Reorganization or Merger by a holder of the number
of Shares which might have been purchased upon exercise of this Warrant
immediately prior to such Reorganization or Merger. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Warrant with respect to the rights and interests of the Holder after the
Reorganization or Merger to the end that the provisions of this Warrant
(including adjustment of the Exercise Price then in effect and the number of
Warrant Shares) shall be applicable after that event, as near as reasonably may
be, in relation to any shares of stock, securities, property or other assets
thereafter deliverable upon exercise of this Warrant. The provisions
of this Section 4.1 shall similarly apply to successive Reorganizations and/or
Mergers.
4.2 Splits and Subdivisions;
Dividends. In the event the Company should at any time or from
time to time effectuate a split or subdivision of the outstanding Shares or pay
a dividend in or make a distribution payable in additional Shares or other
securities or rights convertible into, or entitling the holder thereof to
receive, directly or indirectly, additional Shares (hereinafter referred to as
the “Share Equivalents”)
without payment of any consideration by such holder for the additional Shares or
Share Equivalents (including the additional Shares issuable upon conversion or
exercise thereof), then, as of the applicable record date (or the date of such
distribution, split or subdivision if no record date is fixed), the per share
Exercise Price shall be appropriately decreased and the number of Warrant Shares
shall be appropriately increased in proportion to such increase (or potential
increase) of outstanding shares; provided, however, that no adjustment shall be
made in the event the split, subdivision, dividend or distribution is not
effectuated.
4.3 Combination of
Shares. If the number of Shares outstanding at any time after
the date hereof is decreased by a combination of the outstanding Shares, the per
share Exercise Price shall be appropriately increased and the number of Warrant
Shares shall be appropriately decreased in proportion to such decrease in
outstanding shares.
4.4 Adjustments for Other
Distributions. In the event the Company shall declare a
distribution payable in securities of other Persons, evidences of indebtedness
issued by the Company or other Persons, assets (excluding cash dividends or
distributions to the holders of Shares paid out of current or retained earnings
and declared by the Company’s board of directors) or options or rights not
referred to in Sections 4.1, 4.2 or 4.3, then, in each such case for the purpose
of this Section 4.4, upon exercise of this Warrant, the Holder shall be entitled
to a proportionate share of any such distribution as though the Holder was the
actual record holder of the number of Warrant Shares as of the record date fixed
for the determination of the holders of Shares of the Company entitled to
receive such distribution.
5. No
Impairment. The Company will not, by amendment of its
certificate of incorporation and bylaws or through any consolidation, merger,
reorganization, transfer of assets, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith assist
in the carrying out of all of the terms and in the taking of all actions
necessary or appropriate in order to protect the rights of the Holder against
impairment.
6. Chief Financial Officer’s
Report as to Adjustments. With respect to each adjustment
pursuant to Section 4 of this Warrant, the Company, at its expense, will
promptly compute the adjustment or re-adjustment in accordance with the terms of
this Warrant and cause its Chief Financial Officer to certify the computation
(other than any computation of the fair value of property of the Company, as the
case may be) and prepare a report setting forth, in reasonable detail, the event
requiring the adjustment or re-adjustment and the amount of such adjustment or
re-adjustment, the method of calculation thereof and the facts upon which the
adjustment or re-adjustment is based, and the Exercise Price and the number of
Warrant Shares or other securities purchasable hereunder after giving effect to
such adjustment or re-adjustment, which report shall be mailed by
first class mail, postage prepaid to the Holder. The Company will
also keep copies of all reports at its office maintained pursuant to Section
10.2(a) hereof and will cause them to be available for inspection at the office
during normal business hours upon reasonable notice by the Holder or any
prospective purchaser of the Warrant designated by the Holder
thereof.
7. Reservation of
Shares. The Company shall, solely for the purpose of effecting
the exercise of this Warrant, at all times during the term of this Warrant,
reserve and keep available out of its authorized Shares, free from all taxes,
liens and charges with respect to the issue thereof and not subject to
preemptive rights or other similar rights of shareholders of the Company, such
number of its Shares as shall from time to time be sufficient to effect in full
the exercise of this Warrant. If at any time the number of authorized
but unissued Shares shall not be sufficient to effect in full the exercise of
this Warrant, in addition to such other remedies as shall be available to
Holder, the Company will promptly take such corporate action as may, in the
opinion of its counsel, be necessary to increase the number of authorized but
unissued Shares to such number of shares as shall be sufficient for such
purposes, including without limitation, using its best efforts to obtain the
requisite shareholder approval necessary to increase the number of authorized
Shares. The Company hereby represents and warrants that all Shares
issuable upon exercise of this Warrant shall be duly authorized and, when issued
and paid for upon exercise, shall be validly issued, fully paid and
nonassessable.
8. Registration and
Listing.
8.1 Definition of Registrable
Securities; Majority. As used herein, the term “Registrable Securities” means
any Shares issuable upon the exercise of this Warrant, until the date (if any)
on which such shares shall have been transferred or exchanged and new
certificates for them not bearing a legend restricting further transfer shall
have been delivered by the Company and subsequent disposition of them shall not
require registration or qualification of them under the Securities Act or any
similar state law then in force. For purposes of this Warrant, the
term “Majority”, in
reference to the holders of Registrable Securities, shall mean in excess of
fifty percent (50%) of the then outstanding Warrant Shares (assuming the
exercise of the entire Warrant) that (i) are not held by the Company, an
affiliate, officer, creditor, employee or agent thereof or any of their
respective affiliates, members of their family, Persons acting as nominees or in
conjunction therewith and (ii) have not be resold to the public pursuant to a
registration statement filed under the Securities Act.
8.2 Required
Registration.
(a) At
any time on or after the Base Date and on or before the five (5) year
anniversary of the Base Date, but in no event on not more than one (1) occasion,
upon the written request of the holders of the Registrable Securities
representing a Majority of such securities, the Company will use its best
efforts to effect the registration of the respective shares of the holders of
Registrable Securities under the Securities Act to the extent requisite to
permit the disposition thereof as expeditiously as reasonably possible, but in
no event later than 120 days from the date of such request.
(b) Registration
of Registrable Securities under this Section 8.2 shall be on such appropriate
registration form: (i) as shall be selected by the Company, and (ii) as shall
permit the disposition of such Registrable Securities in accordance with this
Section 8.2. The Company agrees to include in any such registration
statement all information which the requesting holders of Registrable Securities
shall reasonably request, which is required to be contained
therein. The Company will pay all Registration Expenses in connection
with the effected required registration (as described in Section 8.2(c)) of
Registrable Securities pursuant to this Section 8.2.
(c) A
registration requested pursuant to this Section 8.2 shall not be deemed to have
been effected: (i) unless a registration statement with respect thereto has
become effective or (ii) if, after it has become effective, such registration is
interfered with by any stop order, injunction or other order or requirement of
the Securities and Exchange Commission (the “SEC”) or other governmental
agency or court of competent jurisdiction for any reason, other than by reason
of some act or omission by a holder of Registrable Securities.
8.3 Piggy Back Registration
Rights.
(a) If
the Company, at any time on or before the fourth anniversary of the Base Date,
proposes to register any of its securities under the Securities Act (other than
in connection with a registration on Form S-8 or comparable forms used by
foreign private issuers or any successor forms) whether through a post-effective
amendment or new registration statement, and for its own account or for the
account of any holder or holders of its shares other than Registrable Securities
(any shares of such holder or holders (but not those of the Company and not
Registrable Securities) with respect to any registration are referred to herein
as, “Other Shares”), the
Company shall each such time give prompt (but not less than thirty (30) business
days prior to the anticipated filing thereof) written notice to the holders of
Registrable Securities of its intention to do so. Upon the written
request of any such holder of Registrable Securities made within twenty (20)
days after the receipt of any such notice (which request shall specify the
Registrable Securities intended to be disposed of by such holder), except as set
forth in Section 8.3(b), the Company will use its best efforts to effect the
registration under the Securities Act of all of the Registrable Securities which
the Company has been so requested to register by such holder, to the extent
requisite to permit the disposition of the Registrable Securities so to be
registered, by inclusion of such Registrable Securities in the registration
statement which covers the securities which the Company proposes to register;
provided, however, that
if, at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any reason
in its sole discretion either to not register, to delay or to withdraw
registration of such securities, the Company may, at its election, give written
notice of such determination to such holder and, thereupon, (i) in the case of a
determination not to register, shall be relieved of its obligation to register
any Registrable Securities in connection with such registration (but not from
its obligation to pay the Registration Expenses in connection therewith),
without prejudice, however, to the rights of the holders of Registrable
Securities entitled to request that such registration be effected as a
registration under Section 8.2, (ii) in the case of a determination to delay
registration, shall be permitted to delay registering any Registrable Securities
for the same period as the delay in registering such other securities (including
the Other Shares), without prejudice, however, to the rights of the holders of
Registrable Securities entitled to request that such registration be effected as
a registration under Section 8.2 and (iii) in the case of a determination to
withdraw registration, shall be permitted to withdraw registration, without
prejudice, however, to the rights of the holders of Registrable Securities
entitled to request that such registration be effected as a registration under
Section 8.2. No registration effected under this Section 8.3 shall
relieve the Company of its obligation to effect any registration upon request
under Section 8.2, nor shall any such registration hereunder be deemed to have
been effected pursuant to Section 8.2. The Company will pay all
Registration Expenses in connection with each registration of Registrable
Securities pursuant to this Section 8.3.
(b) If
the Company at any time proposes to register any of its securities under the
Securities Act as contemplated by this Section 8.3 and such securities are to be
distributed by or through one or more underwriters, the Company will, if
requested by a holder of Registrable Securities, use its best efforts to arrange
for such underwriters to include all the Registrable Securities to be offered
and sold by such holder among the securities to be distributed by such
underwriters, provided that if the managing underwriter of such underwritten
offering shall inform the Company by letter of its belief that inclusion in such
distribution of all or a specified number of such securities proposed to be
distributed by such underwriters would interfere with the successful marketing
of the securities being distributed by such underwriters (such letter to state
the basis of such belief and the approximate number of such Registrable
Securities, such Other Shares and shares held by the Company proposed so to be
registered which may be distributed without such effect), then the Company may,
upon written notice to such holder, the other holders of Registrable Securities,
and holders of such Other Shares, reduce pro rata in accordance with the number
of Shares desired to be included in such registration (if and to the extent
stated by such managing underwriter to be necessary to eliminate such effect)
the number of such Registrable Securities and Other Shares the registration of
which shall have been requested by each holder thereof so that the resulting
aggregate number of such Registrable Securities and Other Shares so included in
such registration, together with the number of securities to be included in such
registration for the account of the Company, shall be equal to the number of
shares stated in such managing underwriter’s letter.
8.4 Registration
Procedures. Whenever the holders of Registrable Securities
have properly requested that any Registrable Securities be registered pursuant
to the terms of this Warrant, the Company shall use its best efforts to effect
the registration and the sale of such Registrable Securities in accordance with
the intended method of disposition thereof, and pursuant thereto the Company
shall as expeditiously as possible:
(a) prepare
and file with the SEC a registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration statement to
become effective;
(b) notify
such holders of the effectiveness of each registration statement filed hereunder
and prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to (i) keep such registration statement effective and the prospectus
included therein usable for a period commencing on the date that such
registration statement is initially declared effective by the SEC and ending on
the date when all Registrable Securities covered by such registration statement
have been sold pursuant to the registration statement or cease to be Registrable
Securities, and (ii) comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration
statement;
(c) furnish
to such holders such number of copies of such registration statement, each
amendment and supplement thereto, the prospectus included in such registration
statement (including each preliminary prospectus) and such other documents as
such seller may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such holders;
(d) use
its best efforts to register or qualify such Registrable Securities under such
other securities or blue sky laws of such jurisdictions as such holders
reasonably request and do any and all other acts and things which may be
reasonably necessary or advisable to enable such holders to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
holders; provided, however, that the
Company shall not be required to: (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
subparagraph; (ii) subject itself to taxation in any such jurisdiction; or (iii)
consent to general service of process in any such jurisdiction;
(e) notify
such holders, at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, of the happening of any event as a result of
which the prospectus included in such registration statement contains an untrue
statement of a material fact or omits any material fact necessary to make the
statements therein, in light of the circumstances in which they are made, not
materially misleading, and, at the reasonable request of such holders, the
Company shall prepare a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus shall not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances in which they are made, not materially
misleading;
(f) provide
a transfer agent and registrar for all such Registrable Securities not later
than the effective date of such registration statement;
(g) make
available for inspection by any underwriter participating in any disposition
pursuant to such registration statement, and any attorney, accountant or other
agent retained by any such underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the
Company’s officers, directors, managers, employees and independent accountants
to supply all information reasonably requested by any such underwriter,
attorney, accountant or agent in connection with such registration
statement;
(h) otherwise
use its best efforts to comply with all applicable rules and regulations of the
SEC, and make available to its security holders, as soon as reasonably
practicable, an earnings statement of the Company, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act and, at the
option of the Company, Rule 158 thereunder;
(i) in
the event of the issuance of any stop order suspending the effectiveness of a
registration statement, or of any order suspending or preventing the use of any
related prospectus or suspending the qualification of any Registrable Securities
included in such registration statement for sale in any jurisdiction, the
Company shall use its best efforts promptly to obtain the withdrawal of such
order;
(j) use
its best efforts to cause any Registrable Securities covered by such
registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the sellers
thereof to consummate the disposition of such Registrable Securities;
and
(k) if
the offering is underwritten, use its best efforts to furnish on the date that
Registrable Securities are delivered to the underwriters for sale pursuant to
such registration, an opinion dated such date of counsel representing the
Company for the purposes of such registration, addressed to the underwriters
covering such issues as are reasonably required by such
underwriters.
8.5 Listing. The
Company shall secure the listing of the Common Stock underlying this Warrant
upon each national securities exchange or automated quotation system upon which
Shares are then listed (subject to official notice of issuance) and shall
maintain such listing of Shares. The Company shall at all times
comply in all material respects with the Company’s reporting, filing and other
obligations under the by-laws or rules of the [_____________] (or such other
national securities exchange or market on which the Shares may then be listed,
as applicable).
8.6 Expenses. The
Company shall pay all Registration Expenses relating to the registration and
listing obligations set forth in this Section 8. For purposes of this
Warrant, the term “Registration
Expenses” means: (a) all registration, filing and FINRA fees, (b) all
reasonable fees and expenses of complying with securities or blue sky laws, (c)
all word processing, duplicating and printing expenses, (d) the fees and
disbursements of counsel for the Company and of its independent public
accountants, including the expenses of any special audits or “cold comfort”
letters required by or incident to such performance and compliance, (e) premiums
and other costs of policies of insurance (if any) against liabilities arising
out of the public offering of the Registrable Securities being registered if the
Company desires such insurance, if any, and (f) fees and disbursements of one
counsel for the selling holders of Registrable
Securities. Registration Expenses shall not include any underwriting
discounts and commissions which may be incurred in the sale of any Registrable
Securities and transfer taxes of the selling holders of Registrable
Securities.
8.7 Restrictions. The
Company shall not be obligated to effect a registration pursuant to Section 8.2
during the period beginning on the date sixty (60) days prior to the Company’s
good faith estimate of the date of filing of, and ending on a date one hundred
twenty (120) days after the effective date of, a Company-initiated registration
(other than a registration pursuant to Form S-8), provided that: (i) if the
holder of Registrable Securities elects to have all or some of its Registrable
Securities included in the registration pursuant to Section 8.3 hereof, such
Registrable Securities are included in the Company-initiated registration
statement to the extent required thereunder and (ii) the Company is actively
employing in best efforts to cause such registration to become
effective.
8.8 Information Provided by
Holders. Any holder of Registrable Securities included in any
registration shall furnish to the Company such information as the Company may
reasonably request in writing to enable the Company to comply with the
provisions hereof in connection with any registration referred to in this
Warrant. In the event that a holder of Registrable Securities fails
to provide such information on a timely basis, and in any event within seven (7)
Business Days of the Company’s written request, then the Company shall be
entitled to exclude the Registrable Securities of such holder from such
registration and the Company shall nevertheless be deemed to have satisfied its
obligations hereunder with respect to such registration.
9. Restrictions on
Transfer. During the 180 days following the Base Date, this Warrant shall
not be transferred, sold, assigned, or hypothecated, or be the subject of any
hedging, short sale, derivative, put, or call transaction that would result in
its effective economic disposition by Holder except (i) to officers, directors,
employees and/or partners of the Representative and members of the underwriting
syndicate; (ii) by will, or (iii) by operation of
law. Notwithstanding any other provisions of this Section 9, this
Warrant or the Warrant Shares may only be transferred or assigned to the persons
permitted under FINRA Rule 5110(g)(2) for the 180 days following the Base
Date.
10. Ownership, Transfer and
Substitution of Warrant.
10.1 Ownership of
Warrant. The Company may treat any Person in whose name this
Warrant is registered in the Warrant Register maintained pursuant to Section
10.2(b) hereof as the owner and holder thereof for all purposes, notwithstanding
any notice to the contrary, except that, if and when any Warrant is properly
assigned in blank, the Company may (but shall not be obligated to) treat the
bearer thereof as the owner of such Warrant for all purposes, notwithstanding
any notice to the contrary. Subject to Sections 9 and 10 hereof, this
Warrant, if properly assigned, may be exercised by a new holder without a new
Warrant first having been issued.
10.2 Office; Exchange of
Warrant.
(a) The
Company will maintain its principal office at the location identified in the
prospectus relating to the Offering or at such other offices as set forth in the
Company’s most current filing (as of the date notice is to be given) under the
Exchange Act or as the Company otherwise notifies the Holder.
(b) The
Company shall cause to be kept at its office maintained pursuant to Section
10.2(a) hereof a Warrant Register for the registration and transfer of the
Warrant. The name and address of the holder of the Warrant, the
transfers thereof and the name and address of the transferee of the Warrant
shall be registered in such Warrant Register. The Person in whose
name the Warrant shall be so registered shall be deemed and treated as the owner
and holder thereof for all purposes of this Warrant, and the Company shall not
be affected by any notice or knowledge to the contrary.
(c) Upon
the surrender of this Warrant, properly endorsed, for registration of transfer
or for exchange at the office of the Company maintained pursuant to Section
10.2(a) hereof, the Company at its expense will (subject to compliance with
Section 9 hereof, if applicable) execute and deliver to or upon the order of the
Holder thereof a new Warrant of like tenor, in the name of such holder or as
such holder (upon payment by such holder of any applicable transfer taxes) may
direct, calling in the aggregate on the face thereof for the number of Shares
called for on the face of the Warrant so surrendered (after giving effect to any
previous adjustment(s) to the number of Warrant Shares).
10.3 Replacement of
Warrant. Upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant and,
in the case of any such loss, theft or destruction of this Warrant, upon
delivery of indemnity reasonably satisfactory to the Company in form and amount
or, in the case of any mutilation, upon surrender of this Warrant for
cancellation at the office of the Company maintained pursuant to Section 10.2(a)
hereof, the Company, at its expense, will execute and deliver, in lieu thereof,
a new Warrant of like tenor and dated the date hereof.
11. No Rights or Liabilities as
Stockholder. No Holder shall be entitled to vote or receive
dividends or be deemed the holder of any Shares or any other securities of the
Company which may at any time be issuable on the exercise hereof for any
purpose, nor shall anything contained herein be construed to confer upon the
Holder, as such, any of the rights of a shareholder of the Company or any right
to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of shares,
reclassification of shares, change of par value, consolidation, merger,
conveyance, or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights or otherwise until the Warrant shall have been
exercised and the Shares purchasable upon the exercise hereof shall have become
deliverable, as provided herein. The Holder will not be entitled to
share in the assets of the Company in the event of a liquidation, dissolution or
the winding up of the Company.
12. Notices. Any
notice or other communication in connection with this Warrant shall be given in
writing and directed to the parties hereto as follows: (a) if to the Holder, c/o
[____________]; or (b) if to the Company, to the attention of its Chief
Executive Officer at its office maintained pursuant to Section 10.2(a) hereof;
provided, that the
exercise of the Warrant shall also be effected in the manner provided in Section
3 hereof. Notices shall be deemed properly delivered and received
when delivered to the notice party (i) if personally delivered, upon
receipt or refusal to accept delivery, (ii) if sent via facsimile, upon
mechanical confirmation of successful transmission thereof generated by the
sending telecopy machine, (iii) if sent by a commercial overnight courier for
delivery on the next Business Day, on the first Business Day after deposit with
such courier service, or (iv) if sent by registered or certified mail, five (5)
Business Days after deposit thereof in the U.S. mail.
13. Payment of
Taxes. The Company will pay all documentary stamp taxes
attributable to the issuance of Shares underlying this Warrant upon exercise of
this Warrant; provided,
however, that the Company shall not be required to pay any tax which may
be payable in respect of any transfer involved in the transfer or registration
of this Warrant or any certificate for Shares underlying this Warrant in a name
other that of the Holder. The Holder is responsible for all other tax
liability that may arise as a result of holding or transferring this Warrant or
receiving Shares underlying this Warrant upon exercise hereof.
14. Miscellaneous. This
Warrant and any term hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party against which enforcement
of the change, waiver, discharge or termination is sought. This Warrant shall be
construed and enforced in accordance with and governed by the laws of the State
of New York. The section headings in this Warrant are for purposes of
convenience only and shall not constitute a part hereof.
[Signature
Pages Follow]
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of the date first above written.
| CHINA SLP FILTRATION TECHNOLOGY, INC. | |||
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By:
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/s/ | |
| Name | |||
| Title | |||
[Signature
Page to Underwriter’s Warrant]
IN WITNESS WHEREOF, the Holder
has caused this Warrant to be duly executed as of the date first above written
and agrees to be bound by the terms and provisions of this Warrant.
| XXXXX XXXXXX, CARRET & CO., LLC | |||
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By:
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/s/ | |
| Name | |||
| Title | |||
[Signature
Page to Underwriter’s Warrant Issued by China SLP Filtration Technology,
Inc.]
EXHIBIT
A
FORM
OF EXERCISE NOTICE
[To be
executed only upon exercise of Warrant]
The
undersigned registered holder of the within Warrant hereby irrevocably exercises
the Warrant pursuant to Section 3.1 of the Warrant with respect to __________
Warrant Shares, at an exercise price per share of $____, and requests that the
certificates for such Warrant Shares be issued, subject to Sections 9 and 10, in
the name of, and delivered to:
______________________________________
______________________________________
______________________________________
______________________________________
The
undersigned is hereby making payment for the Warrant Shares in the following
manner: _______________________ [describe desired payment method as provided for
in 3.1 of the Warrant].
The
undersigned hereby represents and warrants that it is, and has been since its
acquisition of the Warrant, the record and beneficial owner of the
Warrant.
Dated:
_______________
________________________________________
Print or
Type Name
________________________________________
(Signature
must conform in all respects to name of holder as specified on the face of
Warrant)
________________________________________
(Street
Address)
________________________________________
(City) (State) (Zip
Code)
EXHIBIT
B
FORM
OF ASSIGNMENT
[To be
executed only upon transfer of Warrant]
For value
received, the undersigned registered holder of the within Warrant hereby sells,
assigns and transfers unto _____________________ [include name and addresses]
the rights represented by the Warrant to purchase __________ Shares of China SLP
Filtration Technology, Inc. to which the Warrant relates, and appoints
_____________________ Attorney to make such transfer on the books of China SLP
Filtration Technology, Inc. maintained for the purpose, with full power of
substitution in the premises.
Dated: _______________________________________
(Signature
must conform in all respects
to
name of holder as specified on the
face
of Warrant)
________________________________________
(Street
Address)
________________________________________
(City) (State) (Zip
Code)
Signed in
the presence of:
________________________________________
(Signature
of Transferee)
________________________________________
(Xxxxxx
Xxxxxxx)
________________________________________
(City) (State) (Zip
Code)
Signed in
the presence of:
EXHIBIT
B
Lock-Up
Agreement
___________
__, 2010
Xxxxx
Xxxxxx, Carret & Co., LLC
000 Xxxxxxxxx
Xxxxxx
Xxx Xxxx,
XX 00000
Ladies
and Gentlemen:
The
undersigned understands that Xxxxx Xxxxxx, Carret & Co., LLC, as
representative for the underwriters (“Xxxxx Xxxxxx”) proposes to
enter into an Underwriting Agreement (the “Underwriting Agreement”) with
China SLP Filtration Technology, Inc., a Delaware corporation (the “Company”), providing for the
public offering (the “Offering”) by the Company of
shares of common stock, par value $0.001 per share, of the Company (the “Common Stock”).
In
consideration of the foregoing, and in order to induce you and other
underwriters to act as underwriters in the Offering, the undersigned hereby
irrevocably agrees that it will not, without the prior written consent of Xxxxx
Xxxxxx for a period of 90 days from the date that the Registration Statement
becomes effective (the “Lock-Up
Period”), directly or indirectly, (i) offer, sell (including “short”
selling), assign, transfer, encumber, pledge, register, contract to sell, grant
an option, right or warrant to purchase, establish an open “put equivalent
position” within the meaning of Rule 16a-1(h) under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), announce the
intention to sell, sell any option or contract to purchase, purchase any option
or contract to sell, or otherwise dispose of any shares of Common Stock or
securities, options or rights convertible or exchangeable into, or exercisable
for, Common Stock held of record or beneficially owned (within the meaning of
Rule 13d-3 under the Exchange Act); or (ii) enter any swap or other arrangement
that transfers all or a portion of the economic consequences associated with the
ownership of any Common Stock; provided, however, that if (1) during the last 17
days of the initial Lock-Up Period, the Company releases earnings results or
material news or a material event relating to the Company occurs or (2) prior to
the expiration of the initial Lock-Up Period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of
the initial Lock-Up Period, then in either case, the Lock-Up Period will be
extended until the expiration of the 18-day period beginning on the date of
release of the earnings results or the occurrence of the material news or
material event, as applicable, unless Xxxxx Xxxxxx waives, in writing, such
extension.
The
undersigned agrees that, prior to engaging in any transaction or taking any
other action that is subject to the terms of this agreement during the period
from and including the date that the Registration Statement becomes effective
through and including the 34th day following the expiration of the 90-day
period, the undersigned will give prior notice thereof to the Company and will
not consummate any such transaction or take any such action unless it has
received written confirmation from the Company that the Lock-Up Period (as the
same may have been extended pursuant to the previous paragraph) has
expired.
The
undersigned further agrees that it will not, during the Lock-Up Period, make any
demand or request for or exercise any right with respect to the registration of
any shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock. Notwithstanding anything to the
contrary contained herein Xxxxx Xxxxxx acknowledges and agrees that the shares
set forth in Exhibit A are being registered for resale pursuant to the
Registration Statement.
Notwithstanding
the foregoing, the undersigned may transfer any shares of Common Stock or
securities convertible into or exchangeable or exercisable for the Company’s
Common Stock either during his or her lifetime or on death by will or intestacy
to his or her immediate family or to a trust the beneficiaries of which are
exclusively the undersigned and/or a member or members of his or her immediate
family, or if the undersigned is a corporation, company, business trust,
association, limited liability company, partnership, limited liability
partnership, limited liability limited partnership or other entity
(collectively, the “Entities” or, individually,
the “Entity”), the
undersigned may transfer shares of Common Stock to any Entity which is directly
or indirectly controlled by the undersigned; provided, however, that, prior
to any such transfer, each transferee shall execute an agreement, satisfactory
to Xxxxx Xxxxxx pursuant to which each transferee shall agree to receive and
hold such shares of Common Stock, or securities convertible into or exchangeable
or exercisable for the Common Stock, subject to the provisions hereof, and there
shall be no further transfer except in accordance with the provisions
hereof. For the purposes of this paragraph, “immediate family” shall mean
spouse, lineal descendant, father, mother, brother or sister of the
transferor. In addition, for the avoidance of doubt, nothing in this
agreement shall restrict the ability of the undersigned to purchase shares of
Common Stock on the open market or exercise any option to purchase shares of
Common Stock granted under any benefit plan of the Company.
The
undersigned hereby waives any rights of the undersigned to sell shares of Common
Stock or any other security issued by the Company pursuant to the Registration
Statement. The undersigned also hereby waives any notice requirement
concerning the Company’s intention to file the Registration Statement and sell
shares of Common Stock thereunder.
The
undersigned agrees and consents to the entry of stop transfer instructions with
the Company’s transfer agent against the transfer of Common Stock, or securities
convertible into or exchangeable or exercisable for the Common Stock, held by
the undersigned except in compliance with this agreement.
The
undersigned understands that the agreements of the undersigned are irrevocable
and shall be binding upon the undersigned’s heirs, legal representatives,
successors and assigns.
The
undersigned understands and agrees that Xxxxx Xxxxxx shall have the right to
specifically enforce all of the obligations of the undersigned under this
agreement (without posting a bond or other security), in addition to recovering
damages by reason of any breach of any provision of this agreement and to
exercise all other rights granted by law. Furthermore, the
undersigned recognizes that if it fails to perform, observe, or discharge any of
its obligations under this agreement, any remedy at law may prove to be
inadequate relief to Xxxxx Xxxxxx. Therefore, the undersigned agrees
that Xxxxx Xxxxxx shall be entitled to seek temporary and permanent injunctive
relief in any such case without the necessity of proving actual damages and
without posting a bond or other security.
The
undersigned understands that the undersigned shall be released from all
obligations under this agreement if (i) the Company or the Underwriters
inform the other in writing that it does not intend to proceed with the
Offering, (ii) the underwriting agreement providing for the offering (the
“Underwriting
Agreement”) does not become effective before December 31, 2010, (iii) the
Underwriting Agreement (other than the provisions thereof which survive
termination) is terminated prior to payment for and delivery of the Common Stock
to be sold thereunder, or (iv) the Offering is not completed by December
31, 2010.
The
undersigned agrees that if any provision of this agreement is held to be invalid
or unenforceable for any reason, such provision will be conformed to prevailing
law rather than voided, if possible, in order to achieve the intent of the
parties and, in any event, the remaining provisions of this agreement shall
remain in full force and effect and shall be binding upon the
undersigned.
The
undersigned agrees that the terms and provisions of this agreement shall be
construed in accordance with the laws of the State of New York and the federal
laws of the United States of America applicable therein.
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