LIZHAN ENVIRONMENTAL CORPORATION UNDERWRITING AGREEMENT
Exhibit
1.1
[·] ORDINARY
SHARES
LIZHAN
ENVIRONMENTAL CORPORATION
[·],
2010
MAXIM
GROUP LLC
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▇▇▇ ▇▇▇▇,
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As
Representative of the Underwriters
named
on Schedule A
hereto
Ladies
and Gentlemen:
Lizhan
Environmental Corporation, a company organized and existing under the laws of
the Cayman Islands (the “Company”), confirms its
agreement, subject to the terms and conditions set forth herein, with each of
the underwriters listed on Schedule A hereto
(collectively, the “Underwriters”), for whom Maxim
Group LLC is acting as representative (in such capacity, the “Representative”), to sell and
issue to the Underwriters an aggregate of [·] ordinary
shares, par value $0.20 per share (the “Firm Shares”). In addition,
the Company proposes to sell to the Underwriters, upon the terms and conditions
set forth herein, the Over-allotment Shares (as hereinafter
defined). The ordinary shares are more fully described in the
Registration Statement and Prospectus referred to below.
The
offering and sale of the ordinary shares contemplated by this underwriting
agreement (this “Agreement”) is referred to
herein as the “Offering.”
1. Firm Shares; Over-Allotment
Option.
(1) Purchase of Firm
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 issue and sell to the several Underwriters, an aggregate of [·] Firm
Shares at a purchase price (net of discounts and commissions) of $[·] per Firm
Share. 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 A
attached hereto and made a part hereof at a purchase price (net of discounts and
commissions) of $[·] per Firm
Share. The Firm Shares are to be offered initially to the public at the offering
price of $[·] per Firm
Share.
(2) Payment and
Delivery. Delivery and payment for the Firm Shares shall be
made at 10:00 A.M., New York time, on the third Business Day following the
effective date (the “Effective
Date”) of the Registration Statement (or the fourth Business Day
following the Effective Date, if the Registration Statement is declared
effective after 4:00 p.m.) or at such earlier time as shall be agreed upon by
the Representative and the Company at the offices of the Representative or at
such other place as shall be agreed upon by the Representative and the
Company. “Business Day”
means any day except Saturday, Sunday and any day which is a federal legal
holiday or a day on which banking institutions in the State of New York are
authorized or required by law or other governmental action to close. The hour
and date of delivery and payment for the Firm Shares is referred
to herein as 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.” 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 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.
(3) Over-allotment
Shares. For the purposes of covering any over-allotments in
connection with the distribution and sale of the Firm Shares, the Representative
on behalf of the Underwriters is, hereby granted, an option to purchase up to an
additional 15% of the number of Firm Shares, or [·] ordinary
shares (the “Over-allotment
Shares”) to be offered by the Company in the Offering (the “Over-allotment
Option”). The Firm Shares, the Over-allotment Shares and the
Warrant Shares (as defined below) are hereinafter, collectively, referred to as
the “Shares”. The Shares
and the Representative’s Warrants (as hereinafter defined) are referred to
herein as (the “Securities”). The
purchase price to be paid for the Over-allotment Shares (net of discounts and
commissions) will be $[·] per
Over-allotment Share. The Over-allotment Shares are to be offered initially to
the public at the offering price of $[·] per
Over-allotment Share.
(4) Exercise of
Option. The Over-allotment Option granted pursuant to
Section 1(3) hereof may be exercised by the Representative as to all (at
any time) or any part (from time to time) of the Over-allotment Shares within 45
days after the Effective Date. The Underwriters will not be under any
obligation to purchase any Over-allotment 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 transmission
setting forth the number of Over-allotment Shares to be purchased and the date
and time for delivery of and payment for the Over-allotment Shares, which will
not be later than five 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 the Representative or at such other place
as shall be agreed upon by the Company and the Representative. If such
delivery and payment for the Over-allotment Shares does not occur on the Closing
Date, the date and time of the closing for such Over-allotment Shares will be as
set forth in the notice (hereinafter, the “Option Closing Date”).
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
Over-allotment Shares specified in such notice.
(5) Payment and Delivery of
Over-allotment Shares. Payment for the Over-allotment Shares shall
be made on the Option 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, by deposit of [·] per
share to the Company upon delivery to the Underwriters of certificates (in form
and substance satisfactory to the Underwriters) representing the Over-allotment
Shares (or through the full fast transfer facilities of DTC) for the account of
the Underwriters. The certificates representing the Over-allotment
Shares to be delivered will be in such denominations and registered in such
names as the Representative requests not less than two Business Days prior to
the Closing Date or the Option Closing Date, as the case may be, and will be
made available to the Representative for inspection, checking and packaging at
the aforesaid office of the Company’s transfer agent or correspondent not less
than one full Business Day prior to such Closing Date or Option Closing
Date.
(6) Representative’s
Warrants. As additional consideration, the Company hereby agrees to
issue and sell to the Representative (and/or its designees) on the Closing Date
non-redeemable ordinary share purchase warrants (the “Representative’s Warrants”) for the purchase of
an aggregate of [·] ordinary
shares for an aggregate purchase price of $100.00. The
Representative’s Warrants shall be exercisable, in whole or in part, commencing
on the Effective Date and expiring on the five-year anniversary of
the Effective Date at an initial exercise price per share of $[·], which
is equal to one hundred and thirty percent (130%) of the initial public offering
price per Firm Share. The Representative’s Warrants and the ordinary
shares issuable upon exercise of the Representative’s Warrants (the “Warrant Shares”) are
hereinafter referred to collectively as the “Representative’s
Securities.” The Representative understands and agrees there
are significant restrictions against transferring the Representative’s Warrants
during the first six months after the Effective Date.
2. Representations and
Warranties of the Company.
2.1 The
Company represents, warrants and covenants to, and agrees with, each of the
Underwriters that, as of the date hereof and as of the Closing Date (for
purposes of this Section 2, the terms “Closing Date” and “Closing” shall refer
to the Closing Date for the Firm Shares or Over-allotment Shares, as the case
may be,):
(1) The
Company has filed with the Securities and Exchange Commission (the “Commission”) a registration
statement on Form F-1 (Registration No. [ ]), and
amendments thereto, and related preliminary prospectuses for the registration
under the Securities Act of 1933, as amended (the “Securities Act”), of the Firm
Shares, which registration statement, as so amended (including post-effective
amendments, if any), has been declared effective by the Commission and copies of
which have heretofore been delivered to the Underwriters. Promptly
after execution and delivery of this Agreement, the Company will prepare and
file a prospectus in accordance with the provisions of Rule 430A (“Rule 430A”) of the rules and
regulations of the Commission (the “Rules and Regulations”) and
paragraph (b) of Rule 424 (“Rule 424(b)”) of the Rules and
Regulations. The information included in such prospectus that was
omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective pursuant to paragraph (b) of Rule 430A is referred to as “Rule 430A Information.” The
registration statement, as amended at the time it became effective, including
the prospectus, financial statements, schedules, exhibits and other information
(if any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Securities Act, is hereinafter
referred to as the “Registration
Statement.” If the Company has filed or is required pursuant
to the terms hereof to file a registration statement pursuant to Rule 462(b)
under the Securities Act registering additional ordinary shares (a “Rule 462(b) Registration
Statement”), then, unless otherwise specified, any reference herein to
the term “Registration Statement” shall be deemed to include such Rule 462(b)
Registration Statement. Other than a Rule 462(b) Registration
Statement, which, if filed, becomes effective upon filing, no other document
with respect to the Registration Statement has heretofore been filed with the
Commission. All of the Shares have been registered under the
Securities Act pursuant to the Registration Statement or, if any Rule 462(b)
Registration Statement is filed, will be duly registered under the Securities
Act with the filing of such Rule 462(b) Registration Statement. The
Company has responded to all requests of the Commission for additional or
supplemental information. Based on communications from the
Commission, no stop order suspending the effectiveness of either the
Registration Statement or the Rule 462(b) Registration Statement, if any, has
been issued and no proceeding for that purpose has been initiated or threatened
by the Commission. The Company, if required by the Securities Act and
Rules and Regulations, proposes to file the Prospectus with the Commission
pursuant to Rule 424(b). The prospectus, in the form in which it is
to be filed with the Commission pursuant to Rule 424(b), or, if the prospectus
is not to be filed with the Commission pursuant to Rule 424(b), the prospectus
in the form included as part of the Registration Statement at the time the
Registration Statement became effective, is hereinafter referred to as the
“Prospectus,” except
that if any revised prospectus or prospectus supplement shall be provided to the
Underwriters by the Company for use in connection with the Offering which
differs from the Prospectus (whether or not such revised prospectus or
prospectus supplement is required to be filed by the Company pursuant to Rule
424(b)), the term “Prospectus” shall also refer to such revised prospectus or
prospectus supplement, as the case may be, from and after the time it is first
provided to the Underwriters for such use. Any preliminary prospectus
or prospectus subject to completion included in the Registration Statement or
filed with the Commission pursuant to Rule 424 under the Securities Act,
including the preliminary prospectus dated [ ] which was
included in the Registration Statement at the Time of Sale, is hereafter called
a “Preliminary
Prospectus.” Any reference herein to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the exhibits incorporated by reference therein pursuant to the
Rules and Regulations on or before the Effective Date, the date of such
Preliminary Prospectus or the date of the Prospectus, as the case may be. All
references in this Agreement to the Registration Statement, the Rule 462(b)
Registration Statement, a Preliminary Prospectus and the Prospectus, or any
amendments or supplements to any of the foregoing shall be deemed to include any
copy thereof filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval System (“▇▇▇▇▇”).
(2) The
Company has filed with the Commission a Form 8-A (File Number 001-[·])
providing for the registration under the Securities Exchange Act of 1934, as
amended (the “Exchange
Act”) of its ordinary shares. The registration of the
Company’s ordinary shares under the Exchange Act has been declared effective by
the Commission on the date hereof.
(3) At
the time of the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement or the effectiveness of any post-effective amendment to
the Registration Statement, when the Prospectus is first filed with the
Commission pursuant to Rule 424(b), and when any supplement to or amendment of
the Prospectus is filed with the Commission, the Registration Statement and the
Prospectus and any amendments thereof and supplements or exhibits thereto
complied or will comply in all material respects with the applicable provisions
of the Securities Act, the Exchange Act and the Rules and Regulations, and 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
or any related Preliminary 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 Securities 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 Securities Act, the
Exchange Act and the Rules and 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 subsection
(c), 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 subsections
of the “Underwriting” section of the Prospectus captioned “Stabilization,”
“Pricing of Securities,” the last sentence of “Other Matters” and the
penultimate paragraph on the cover page of the Preliminary Prospectus and the
Prospectus (the “Underwriters’
Information”).
(4) Neither:
(i) any Issuer-Represented General Free Writing Prospectus(es) (as defined
below) issued at or prior to the Time of Sale (as defined below) and the
Statutory Prospectus (as defined below), all considered together (collectively,
the “General Disclosure
Package”), nor (ii) any individual Issuer-Represented Limited-Use Free
Writing Prospectus(es) (as defined below), when considered together with the
General Disclosure Package, includes or included as of the Time of Sale, any
untrue statement of a material fact or omits or omitted as of the Time of Sale
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-Represented Free Writing Prospectus (as defined below) based upon and in
conformity with written information furnished to the Company by the
Representative specifically for use therein.
(5) No
forward-looking statement (within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act) contained in the
General Disclosure Package, Preliminary Prospectus or the Prospectus has been
made or reaffirmed without a reasonable basis or has been disclosed other than
in good faith.
(6) Nothing
has come to the attention of the Company that has caused the Company to believe
that the statistical and market-related data included in the General Disclosure
Package, Preliminary Prospectus or the Prospectus is not based on or derived
from sources that the Company believes to be reliable and accurate in all
material respects.
(7) Each
Issuer-Represented 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 the next sentence, did not, does not and will not
include any information that conflicted, conflicts or will conflict with the
information contained in the Registration Statement, General Disclosure Package,
Preliminary Prospectus or the Prospectus. If at any time following
issuance of an Issuer-Represented Free Writing Prospectus there occurred or
occurs an event or development as a result of which such Issuer-Represented Free
Writing Prospectus conflicted or would conflict with the information contained
in the Registration Statement, any Statutory Prospectus or the Prospectus
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, the Company has notified or
will notify promptly the Representative so that any use of such
Issuer-Represented Free Writing Prospectus may cease until it is promptly
amended or supplemented by the Company, at its own expense, to eliminate or
correct such conflict, untrue statement or omission. The foregoing
two sentences do not apply to statements in or omissions from any
Issuer-Represented Free Writing Prospectus based upon and in conformity with the
Underwriters’ Information (as defined above).
(8) The
Company has not distributed and will not distribute any prospectus or other
offering material in connection with the offering and sale of the Securities
other than the General Disclosure Package, Preliminary Prospectus or the
Prospectus or other materials permitted by the Securities Act to be distributed
by the Company. Unless the Company obtains the prior consent of the
Representative, the Company has not made and will not make any offer relating to
the Securities that would constitute an “issuer free writing prospectus,” as
defined in Rule 433 under the Securities Act, or that would otherwise constitute
a “free writing prospectus,” as defined in Rule 405 under the Securities Act,
required to be filed with the Commission. The Company has complied
and will comply with the requirements of Rules 164 and 433 under the Securities
Act applicable to any Issuer-Represented Free Writing Prospectus.
(9) Each
Underwriter agrees that, unless it obtains the prior written consent of the
Company, it will not make any offer relating to the Securities that would
constitute an Issuer-Represented Free Writing Prospectus (as defined below) or
that would otherwise (without taking into account any approval, authorization,
use or reference thereto by the Company) constitute a “free writing prospectus”
required to be filed by the Company with the Commission (as defined herein) or
retained by the Company under Rule 433 of the Securities Act; provided that the
prior written consent of the Company hereto shall be deemed to have been given
in respect of any Issuer-Represented General Free Writing Prospectuses
referenced on Schedule
C attached hereto.
As used
in this Agreement, the terms set forth below shall have the following
meanings:
(i) “Time of Sale” means [—]
(Eastern time) on the date of this Agreement.
(ii) “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 or 430B shall be
considered to be included in the Statutory Prospectus as of the actual time that
form of prospectus is filed with the Commission pursuant to Rule 424(b) under
the Securities Act.
(iii) “Issuer-Represented Free Writing
Prospectus” means any “issuer free writing prospectus,” as defined in
Rule 433 under the Securities Act, 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) under the Securities Act 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 Rules and 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) under the
Securities Act.
(iv) “Issuer-Represented General Free
Writing Prospectus” means any Issuer-Represented Free Writing Prospectus
that is intended for general distribution to prospective investors, as evidenced
by its being specified in Schedule C to this
Agreement.
(v) “Issuer-Represented Limited-Use Free
Writing Prospectus” means any Issuer-Represented Free Writing Prospectus
that is not an Issuer-Represented General Free Writing
Prospectus. The term Issuer-Represented Limited-Use Free Writing
Prospectus also includes any “bona fide electronic road show,” as defined in
Rule 433 of the Rules and Regulations, that is made available without
restriction pursuant to Rule 433(d)(8)(ii), even though not required to be filed
with the Commission.
(10) At
the time of filing the Registration Statement and any post-effective amendment
thereto, at the earliest time thereafter that the Company or any offering
participant made a bona fide offer (within the meaning of
Rule 164(h)(2) under the Securities Act) of the Shares and at the date
hereof, the Company was not and is not an “ineligible issuer,” as defined in
Rule 405 under the Securities Act. The Company has paid the
registration fee for this offering pursuant to Rule 456(b)(1) under
the Securities Act or will pay such fee within the time period required by such
rule (without giving effect to the proviso therein) and in any event prior
to the Closing Date.
(11) The
description of the corporate structure of the Company and the various contracts
between the Company and the Subsidiaries set forth in the Registration
Statement, the General Disclosure Package and the Prospectus in the section
entitled “Corporate Structure and Organization” is accurate, complete and fair
in all material respects; and each of the events and transactions set forth
therein has been duly authorized and does not (A) to the knowledge of the
Company, contravene any provision of applicable law or statute, rule or
regulation of any governmental agency having jurisdiction over the Company or
any Subsidiaries or any of their properties (including but not limited to the
Ministry of Commerce, the State Administration of Industry and Commerce and the
State Administration of Foreign Exchange of the People’s Republic of China
(“PRC”)) to the extent
that such contravention is reasonably likely, individually or in the aggregate,
to have a Material Adverse Effect, (B) contravene the articles of
association, business license or other constitutive documents of the Company or
any Subsidiaries, or (C) to the knowledge of the Company, conflict with or
result in a breach of 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 the
Company or any Subsidiaries is a party or by which the Company or any
Subsidiaries is bound or to which any of the property or assets of the Company
or any Subsidiaries is subject to the extent that such conflict or breach is
reasonably likely, individually or in the aggregate, to have a Material Adverse
Effect.
(12) The
execution, delivery and performance by the Company of this Agreement and the
consummation of the transactions herein contemplated will not (i) conflict with
or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary is bound or to
which any of the property or assets of the Company or any Subsidiary is subject
to the extent that such conflict or breach is reasonably likely, individually or
in the aggregate, to have a Material Adverse Effect; (ii) result in any
violation of the provisions of the Certificate of Incorporation, By-laws or
other constituent documents of the Company or any Subsidiary; or
(iii) result in any violation of any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any Subsidiary or any of their properties (including but not
limited to the Ministry of Commerce, the State Administration of Industry and
Commerce and the State Administration of Foreign Exchange of the PRC) to the
extent that such violation is reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect. Each consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body that is required for the consummation by the Company
and its Subsidiaries of the transactions contemplated herein has been made or
obtained unconditionally in writing, and has not been withdrawn or is subject to
any condition precedent which has not been fulfilled, performed or waive, unless
the failure to obtain any such consent, approval, authorization, order,
registration or qualification is not reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect.
(13) The
Shares have been duly and validly authorized and, when issued, delivered and
paid for in accordance with this Agreement and as described in the Prospectus on
the Closing Date, will be duly and validly issued, fully paid and
non-assessable, will have been issued in compliance with all applicable state,
federal and foreign securities laws and will not have been issued in violation
of or subject to any preemptive or similar right that does or will entitle any
Person to acquire any Relevant Security from the Company or any Subsidiary upon
issuance or sale of the Securities in the Offering. The ordinary
shares conform to the descriptions thereof contained in the Registration
Statement, the General Disclosure Package and the Prospectus. Except
as set forth in, or contemplated by, the Registration Statement, the General
Disclosure Package and the Prospectus, on the Effective Date and on the Closing
Date, neither the Company nor any Subsidiary has outstanding options, warrants,
or other rights to purchase or otherwise acquire any authorized but unissued
ordinary shares or any security convertible into ordinary shares, or any
contracts or commitments to issue or sell ordinary shares or any such options,
warrants, rights or convertible securities. Except as set forth in, or
contemplated by, the Registration Statement, the General Disclosure Package and
the Prospectus, on the Effective Date and on the Closing Date, no Person has the
right to require the Company to register any Relevant Security of the Company
under the Securities Act, whether on a demand basis or in connection with the
registration of securities of the Company for its own account or for the account
of any other Person.
(14) The
Warrant Shares will conform to the description thereof in the Registration
Statement, the General Disclosure Package and the Prospectus and have been
validly reserved for future issuance and will, upon exercise of the
Representative’s Warrants and payment of the exercise price thereof, be duly and
validly issued, fully paid and non-assessable and will not have been issued in
violation of or subject to preemptive or similar rights to subscribe for or
purchase securities of the Company. The issuance of such securities
is not subject to any statutory preemptive rights under the laws of the Cayman
Islands or the Company’s organization documents as in effect at the time of
issuance, rights of first refusal or other similar rights of any securityholder
of the Company (except for such preemptive or contractual rights as were
waived).
(15) The
direct or indirect subsidiaries of the Company, listed on Exhibit 21.1 of the
Registration Statement (the “Subsidiaries”) are the only
subsidiaries of the Company within the meaning of Rule 405 under the Securities
Act. Except for the Subsidiaries, the Company holds no ownership or
other interest, nominal or beneficial, direct or indirect, in any other foreign
or domestic, corporation, trust, general or limited partnership, joint venture,
limited liability company or other entity. Except as disclosed in the
Registration Statement, the General Disclosure Package and the Prospectus, 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 permitted or allowed any of their material
properties to be subjected to any lien, charge, mortgage, pledge, security
interest, claim, equity, trust or other encumbrance, preferential arrangement,
defect or restriction of any kind whatsoever (“Lien”). Except as
disclosed in the Registration Statement, the General Disclosure Package and the
Prospectus, no director, officer or key employee of the Company or any
Subsidiary 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 ordinary
shares.
(16) Each
of the Company and the Subsidiaries has been duly incorporated, formed or
organized, and validly exists as a corporation, joint venture, partnership or
limited liability company in good standing under the laws of its jurisdiction of
incorporation, formation or organization. Each of the Company and the
Subsidiaries has all requisite power and authority to carry on its business as
it is currently being conducted and as described in the Registration Statement,
the General Disclosure Package and the Prospectus, and to own, lease and operate
its respective properties. Each of the Company and the Subsidiaries
is duly qualified to do business and is in good standing as a foreign
corporation, joint venture, partnership or limited liability company in each
jurisdiction in which the character or location of its properties (owned, leased
or licensed) or the nature or conduct of its business makes such qualification
necessary, except, in each case, for those failures to be so qualified or in
good standing which (individually and in the aggregate) would not reasonably be
expected to have a Material Adverse Effect on: (i) the business, condition
(financial or otherwise), results of operations, shareholders’ equity,
properties or prospects of the Company and the Subsidiaries, taken as a whole as
such prospects are disclosed or described in the Registration Statement, the
General Disclosure Package and the Prospectus; (ii) the long-term debt or
capital stock of the Company or any Subsidiary; or (iii) the Offering or
consummation of any of the other transactions contemplated by this Agreement,
the Registration Statement, the General Disclosure Package and the Prospectus.
No proceeding has been instituted in any such jurisdiction revoking, limiting or
curtailing or seeking to revoke, limit or curtail such power and authority or
qualification.
(17) Neither
the Company nor any Subsidiary: (i) is in violation of its certificate or
articles of incorporation, memorandum and articles of association, by-laws,
certificate of formation, limited liability company agreement, joint venture
agreement, partnership agreement or other organizational documents including
shareholders’ voting or similar agreements, (ii) is in default under, and no
event has occurred which, with notice or lapse of time or both, would constitute
a default under or result in the creation or imposition of any Lien upon any of
its property or assets pursuant to, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party or by which it
is bound or to which any of its property or assets is subject, or (iii) is in
violation in any respect of any law, rule, regulation, ordinance, directive,
judgment, decree or order of any judicial, regulatory or other legal or
governmental agency or body, foreign or domestic, except (in the case of clause
(ii) above) for any Lien disclosed in the Registration Statement, the General
Disclosure Package and the Prospectus.
(18) Other
than the restrictions disclosed in the General Disclosure Package, Preliminary
Prospectus or the Prospectus, no Subsidiary is currently prohibited, directly or
indirectly, under any agreement or other instrument to which it is a party or is
subject, from paying any dividends to the Company (or the Subsidiary that holds
the outstanding equity interests of the relevant Subsidiary).
(19) Subsequent
to the respective dates as of which information is presented in the Registration
Statement, General Disclosure Package, Preliminary Prospectus or the Prospectus,
and except as disclosed in the Registration Statement, General Disclosure
Package, Preliminary Prospectus or the Prospectus, (i) the Company has not
declared, paid or made any dividends or other distributions of any kind on or in
respect of its capital stock, and (ii) there has been [no material adverse
change (or, to the knowledge of the Company, any development which has a high
probability of involving a material adverse change in the future), whether or
not arising from transactions in the ordinary course of business, in or
affecting: (A) the business, condition (financial or otherwise), results of
operations, shareholders’ equity, properties or prospects of the Company and its
Subsidiaries taken as a whole; (B) the long-term debt or capital stock of the
Company or any of its Subsidiaries; or (C) the Offering or consummation of any
of the other transactions contemplated by this Agreement, the Registration
Statement, General Disclosure Package, Preliminary Prospectus or the Prospectus]
(a “Material Adverse
Change”).
(20) Any
previous restructuring (i.e. equity transfer) of the Company and the
Subsidiaries complied with the then effective PRC laws and
regulations.
(21) As
of the dates indicated in the Registration Statement, the General Disclosure
Package, the Preliminary Prospectus and the Prospectus, the authorized, issued
and outstanding shares of capital stock of the Company were as set forth in the
Registration Statement, the General Disclosure Package, the Preliminary
Prospectus and the Prospectus in the column headed “Actual” under the section
thereof captioned “Capitalization” and, after giving effect to the Offering and
the other transactions (excluding the offer and sale of the Over-allotment
Shares) contemplated by this Agreement, the Registration Statement, the General
Disclosure Package, the Preliminary Prospectus and the Prospectus, will be as
set forth in the column headed “As Adjusted” in such section. All of
the issued and outstanding shares of capital stock of the Company are fully paid
and non-assessable and have been duly and validly authorized and issued, in
compliance with all applicable state, federal and foreign securities laws and
not in violation of or subject to any preemptive or similar right that does or
will entitle any Person (as defined below), upon the issuance or sale of any
security, to acquire from the Company or any Subsidiary any Relevant
Security. As used herein, the term “Relevant Security” means any
ordinary shares or other security of the Company or any Subsidiary that is
convertible into, or exercisable or exchangeable for ordinary shares or equity
securities, or that holds the right to acquire any ordinary shares 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. As used herein,
the term “Person” means
any foreign or domestic individual, corporation, trust, partnership, joint
venture, limited liability company or other entity.
(22) The
Company, through its wholly owned subsidiaries, Illigate Development Limited, a
corporation organized under the laws of the British Virgin Islands, and Li Zhan
Resources Recycling Technology Development Co., Ltd., a corporation organized
under the laws of Hong Kong, owns 100% of Lizhan Textile (Zhejiang) Co., Ltd.
and 87% of Zhejiang Hongzhan New Material Co. Ltd, each a limited liability
company organized under the laws of PRC (collectively the “PRC
Subsidiaries”). The PRC Subsidiaries operate in compliance
with all of the laws and regulations of the PRC.
(23) There
are no outstanding (i) securities of the Company or any Subsidiary
convertible into or exchangeable for shares of capital stock or voting
securities of any Subsidiary or (ii) options or other rights to
acquire from the Company or any Subsidiary, or other obligation of the Company
or any Subsidiary to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of any
Subsidiary (the items in clauses (i) and (ii) being referred to collectively as
the “Subsidiary
Securities”). There are no outstanding obligations of the
Company or any Subsidiary to repurchase, redeem or otherwise acquire any
outstanding Subsidiary Securities.
(24) Each
of the Company and its Subsidiaries is in compliance with all applicable PRC and
Cayman Islands laws, rules, regulations, ordinances, directives, judgments,
decrees and orders (including, without limitation, all securities and tax laws,
rules and regulations of PRC and Cayman Islands), except for such non-compliance
as would not have a Material Adverse Effect. As of the date hereof
and as of the Closing Date, and except as contemplated by this Agreement,
neither the Company nor its Subsidiaries operate within the jurisdiction of the
United States or any state or territory thereof in such a manner so as to
subject the Company and its Subsidiaries or its operations or businesses to
registration as a foreign company doing business in any state within the United
States or to any of the following laws in any material respect: (i) the Bank
Secrecy Act, as amended, (ii) the Uniting and Strengthening of America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, as amended, (iii) the Foreign Corrupt Practices Act of 1977, as amended,
(iv) the Currency and Foreign Transactions Reporting Act of 1970, as amended,
(v) the Employee Retirement Income Security Act of 1974, as amended, (vi) the
Money Laundering Control Act of 1986, as amended (vii) the rules and regulations
promulgated under any such law, or any successor law, or any judgment, decree or
order of any applicable administrative or judicial body relating to such law and
(viii) any corresponding law, rule, regulation, ordinance, judgment, decree or
order of any state or territory of the United States or any administrative or
judicial body thereof.
(25) The
operations of the Company and its Subsidiaries are and have been conducted at
all times in compliance with applicable financial record keeping and reporting
requirements and money laundering statutes of the U.S., PRC and, to the
Company’s knowledge, all other jurisdictions to which the Company and its
Subsidiaries are subject, the rules and regulations thereunder and any related
or similar rules, regulations or guidelines, issued, administered or enforced by
any applicable 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 and its Subsidiaries
with respect to the Money Laundering Laws is pending or, to the best knowledge
of the Company, threatened.
(26) The
Company has full right, power and authority to execute and deliver this
Agreement, the Representative’s Warrants and all other agreements, documents,
certificates and instruments required to be delivered pursuant to this Agreement
(collectively, the “Transaction
Documents”) and to perform its obligations hereunder and thereunder and
to consummate each of the transactions contemplated by each of the Transaction
Documents. The Company has duly and validly authorized each of the
Transaction Documents and each of the transactions contemplated by the
Transaction Documents and no further action is required by the Company, its
board of directors or its shareholders in connection therewith. Each
of the Transaction Documents has been or will be duly and validly executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company and is enforceable against the Company in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’
rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(27) When
issued the Representative’s Warrants will constitute valid and binding
obligations of the Company to issue and sell, upon exercise thereof and payment
of the respective exercise prices therefor, the number and type of securities of
the Company called for thereby in accordance with the terms thereof and such
Representative’s Warrants are enforceable against the Company in accordance with
their 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 foreign, 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 therefor may be brought.
(28) The
execution, delivery, and performance of the Transaction Documents and the
consummation of the transactions contemplated thereby do not and will not: (i)
conflict with, require consent under or result in a breach of any of the terms
and provisions of, or constitute a default (or an event which with notice or
lapse of time, or both, would constitute a default) under, or result in the
creation or imposition of any Lien upon any property or assets of the Company or
Subsidiaries pursuant to any indenture, mortgage, deed of trust, loan agreement
or other agreement, instrument, franchise, license or permit to which the
Company or its Subsidiaries is a party or by which the Company, its Subsidiaries
or its properties, operations or assets may be bound or (ii) violate or conflict
with any provision of the certificate or articles of incorporation, by-laws,
certificate of formation, limited liability company agreement, partnership
agreement or other organizational documents of the Company or Subsidiaries, or
(iii) violate or conflict with any law, rule, regulation, ordinance, directive,
judgment, decree or order of any judicial, regulatory or other legal or
governmental agency or body, domestic or foreign, except (in the case of clauses
(i) and (iii) above) violations or defaults that could not reasonably be
expected to have a Material Adverse Effect.
(29) The
Company is aware of and has been advised as to, the content of the Rules on
Mergers and Acquisitions of Domestic Enterprises by Foreign Investors jointly
promulgated by the Ministry of Commerce, the State Assets Supervision and
Administration Commission, the State Tax Administration, the State
Administration of Industry and Commerce, the China
Securities Regulatory Commission (“CSRC”) and the State Administration of
Foreign Exchange of 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; 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. 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.
(30) The
issuance and sale of the Shares, the listing and trading of the Shares on the
NASDAQ Global Market or the consummation of the transactions contemplated by
this Agreement is not and will not be, as of the date hereof adversely affected
by the M&A Rules or any official clarifications, guidance, interpretations
or implementation rules in connection with or related to the M&A Rules
(collectively, the “M&A
Rules and Related Clarifications”).
(31) Each
of the Company and Subsidiaries that were incorporated outside of the PRC has
taken, or is in the process of taking, reasonable steps to ensure compliance by
each of its shareholders, option holders, directors, officers, and employees
that is, or is directly or indirectly owned or controlled by, a PRC resident or
citizen with any applicable rules and regulations of the relevant PRC government
agencies (including but not limited to the Ministry of Commerce, the National
Development and Reform Commission and the State Administration of Foreign
Exchange) relating to overseas investment by PRC residents and citizens or the
repatriation of the proceeds from overseas offering and listing by offshore
special purpose vehicles controlled directly or indirectly by PRC companies and
individuals, such as the Company, (the “PRC Overseas Investment and Listing
Regulations”), including without limitation, requesting each shareholder,
option holder, director, officer, and employees that is, or is directly or
indirectly owned or controlled by, a PRC resident or citizen to complete any
registration and other procedures required under applicable PRC Overseas
Investment and Listing Regulations.
(32) The
Company has taken all reasonable steps to comply with, and to ensure compliance
by all of the Company’s shareholders who are PRC residents with any applicable
rules and regulations of the PRC State Administration of Foreign Exchange (the
“SAFE Rules and
Regulations”), including without limitation, taking reasonable steps to
require each of its shareholders and option holders that is, or is directly or
indirectly owned or controlled by, a PRC resident to complete any registration
and other procedures required under applicable SAFE Rules and
Regulations.
(33) Except
as disclosed in the Registration Statement, the General Disclosure Package, the
Preliminary Prospectus and the Prospectus, each of the Company and the
Subsidiaries has all material consents, approvals, authorizations, orders,
registrations, qualifications, licenses, filings and permits of, with and from
all judicial, regulatory and other legal or governmental agencies and bodies and
all third parties, foreign and domestic (collectively, the “Consents”), to own, lease and
operate its properties and conduct its business as it is now being conducted and
as disclosed in the Registration Statement, the General Disclosure Package, the
Preliminary Prospectus and the Prospectus, and each such Consent is valid and in
full force and effect. Neither the Company nor any Subsidiary has
received notice of any investigation or proceedings which results in or, if
decided adversely to the Company or any Subsidiary, could reasonably be expected
to result in, the revocation of, or imposition of a materially burdensome
restriction on, any Consent. No Consent contains a materially
burdensome restriction not adequately disclosed in the Registration Statement,
the General Disclosure Package, the Preliminary Prospectus and the
Prospectus.
(34) Each
of the Company and the Subsidiaries is in compliance with all applicable laws,
rules, regulations, ordinances, directives, judgments, decrees and orders,
foreign and domestic relating to transactions with Affiliates (as such term is
defined in Rule 144 under the Securities Act, “Affiliates”). Neither
the Company, nor any of its Affiliates has received any notice or other
information from any regulatory or other legal or governmental agency which
could reasonably be expected to result in any default or potential
decertification by the Company, or any of its Affiliates.
(35) Neither
the Company nor any Subsidiary is required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing or
registration with, any judicial, regulatory or other legal or governmental
agency or body or any third party, foreign or domestic or other Person in
connection with the execution, delivery and performance by the Company of any of
the Transaction Documents, including the issuance, sale and delivery of the
Shares to be issued, sold and delivered hereunder, except the registration under
the Securities Act of the Shares and the approval for listing of the Company’s
ordinary shares on the NASDAQ Global Market or such other exchange or quotation
systems as the Company’s securities are listed or quoted on, each of which has
become effective, and such Consents as may be required under state securities or
blue sky laws or the by-laws and rules of the NASDAQ Global Market or such other
exchange or quotation systems as the Company’s securities are listed or quoted
on, where the ordinary shares has been approved for listing, and the Financial
Industry Regulatory Authority, Inc. (“FINRA”) in connection with the
purchase and distribution of the Securities by the Underwriters, each of which
has been obtained and is in full force and effect.
(36) Except
as disclosed in the Registration Statement, the General Disclosure Package, the
Preliminary Prospectus and the Prospectus, there is no judicial, regulatory,
arbitral or other legal or governmental action, suit, inquiry, notice of
violation, proceeding or investigation or other litigation or arbitration,
domestic or foreign, pending or, to the knowledge of the Company, threatened or
contemplated, to which the Company or any Subsidiary is a party or of which any
property, operations or assets of the Company or any Subsidiary is the subject
which, individually or in the aggregate, if determined adversely to the Company
or any Subsidiary, would reasonably be expected to have a Material Adverse
Effect (collectively, an “Action”). To the
Company’s knowledge, the defense of all such proceedings, litigation and
arbitration against or involving the Company or any Subsidiary would not
reasonably be expected to have a Material Adverse Effect. Neither the Company
nor any Subsidiary, nor any director or officer thereof, is or has been the
subject of any Action involving a claim of violation of or liability under
federal or state securities laws or a claim of breach of fiduciary
duty. There has not been and is not pending or contemplated, any
investigation by the Commission involving the Company, its Subsidiaries or any
current or former director or officer of the Company and its
Subsidiaries.
(37) The
documents, exhibits or other materials incorporated or deemed to be incorporated
by reference in the Preliminary Prospectus or the Prospectus, at the time they
were or hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the Securities Act, the Exchange Act
and the Rules and Regulations, and, when read together with the other
information in the Preliminary Prospectus or the Prospectus, do not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading. There
are no contracts or other documents (including, without limitation, any voting
agreement), which are required to be described in the Registration Statement,
the General Disclosure Package, the Preliminary Prospectus and the Prospectus or
filed as exhibits to the Registration Statement by the Securities Act, the
Exchange Act or the Rules and Regulations and which have not been so described,
filed or incorporated by reference.
(38) UHY
Vocation HK CPA Limited (“UHY”), whose reports relating to
the Company are included in the Registration Statement, is an independent
registered public accounting firm as required by the Securities Act, the
Exchange Act, the Rules and Regulations and the Public Company Accounting
Oversight Board (United States) (the “PCAOB”). UHY is
duly registered and in good standing with the PCAOB. UHY has not,
during the periods covered by the financial statements included in the
Registration Statement, the General Disclosure Package, the Preliminary
Prospectus and the Prospectus, provided to the Company any “non-audit services”,
or has not been engaged by the Company to perform any “prohibited
activities” as such terms are used in Section 10A(g) of the Exchange
Act. The Company has had no material disagreements with UHY for the
period from its initial engagement by the Company through the Closing Date and
Over-allotment Closing Date that were not satisfied in a manner mutually
satisfactory to both the Company and UHY. And to the Company’s knowledge, such
accountants are not in violation of the auditor independence requirements of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (“Sarb-Ox”).
(39) The
financial statements, including the notes thereto, and the supporting schedules
included in the Registration Statement, the General Disclosure Package, the
Preliminary Prospectus and the Prospectus comply in all material respects with
the requirements of the Securities Act, the Exchange Act and present fairly the
financial position as of the dates indicated and the cash flows and results of
operations for the periods specified of the Company and its consolidated
Subsidiaries. Except as otherwise stated in the Registration
Statement, the General Disclosure Package, the Preliminary Prospectus and the
Prospectus, said financial statements have been prepared in conformity with U.S.
GAAP applied on a consistent basis throughout the periods involved, except in
the case of unaudited financials which are subject to normal year end
adjustments and do not contain certain footnotes. The supporting
schedules included in the Registration Statement, the General Disclosure
Package, the Preliminary Prospectus and the Prospectus present fairly the
information required to be stated therein. No other financial
statements or supporting schedules are required to be included or incorporated
by reference in the Registration Statement, the General Disclosure Package, the
Preliminary Prospectus or the Prospectus. The other financial and
statistical information included in the Registration Statement, the General
Disclosure Package, the Preliminary Prospectus and the Prospectus present fairly
the information included therein and have been prepared on a basis consistent
with that of the financial statements that are included in the Registration
Statement, the General Disclosure Package, the Preliminary Prospectus and the
Prospectus and the books and records of the respective entities presented
therein.
(40) There
are no pro forma or as adjusted financial statements which are required to be
included in the Registration Statement, the General Disclosure Package, the
Preliminary Prospectus and the Prospectus in accordance with Regulation S-X
which have not been included as so required. The pro forma and pro
forma as adjusted financial information included in the Registration Statement,
the General Disclosure Package, the Preliminary Prospectus and the Prospectus
has been properly compiled and prepared in accordance with the applicable
requirements of the Securities Act and the Rules and Regulations and include all
adjustments necessary to present fairly in accordance with U.S. GAAP the pro
forma and as adjusted financial position of the respective entity or entities
presented therein at the respective dates indicated and their cash flows and the
results of operations for the respective periods specified. The
assumptions used in preparing the pro forma and pro forma as adjusted financial
information included in the Registration Statement, the General Disclosure
Package, the Preliminary Prospectus and the Prospectus provide a reasonable
basis for presenting the significant effects directly attributable to the
transactions or events described therein. The related pro forma and
pro forma as adjusted adjustments give appropriate effect to those assumptions;
and the pro forma and pro forma as adjusted financial information reflect the
proper application of those adjustments to the corresponding historical
financial statement amounts.
(41) The
statistical, industry-related and market-related data included in the
Registration Statement, the General Disclosure Package, the Preliminary
Prospectus and the Prospectus are based on or derived from sources which the
Company reasonably and in good faith believes are reliable and accurate, and
such data agree with the sources from which they are derived.
(42) Except
as disclosed in the Registration Statement, the General Disclosure Package, the
Preliminary Prospectus and the Prospectus, the Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance with
management’s general or specific authorization; (B) transactions are recorded as
necessary to permit preparation of financial statements in conformity with U.S.
GAAP and to maintain accountability for assets; (C) access to assets is
permitted only in accordance with management’s general or specific
authorization; and (D) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15 under the Exchange Act) that
are effective in ensuring that information required to be disclosed by the
Company in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the rules and forms of the Commission, including, without limitation,
controls and procedures designed to ensure that information required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the Company’s management,
including its principal executive officer or officers and its principal
financial officer or officers, as appropriate, to allow timely decisions
regarding required disclosure. Except as described in the Registration
Statement, the General Disclosure Package, the Preliminary Prospectus or in the
Prospectus, since the date of the Company’s formation, there has been no change
in the Company’s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting.
(43) Except
as disclosed in the Registration Statement, the General Disclosure Package, the
Preliminary Prospectus and the Prospectus, the Company’s Board of Directors has
validly appointed an audit committee, compensation committee, and nominating
committee whose composition satisfies the requirements of the rules and
regulations of the NASDAQ Stock Market and the Board of Directors and/or each of
the audit committee, compensation committee, and nominating committee has
adopted a charter that satisfies the requirements of the rules and regulations
of the NASDAQ Stock Market. The audit committee has reviewed the
adequacy of its charter within the past twelve months. Except as
disclosed in the Registration Statement, the General Disclosure Package, the
Preliminary Prospectus and the Prospectus, the Board of Directors nor the audit
committee has been informed, nor is any director of the Company aware, of: (i)
any significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to
adversely affect the Company’s ability to record, process, summarize and report
financial information; or (ii) any fraud, whether or not material, that involves
management or other employees who have a significant role in the Company’s
internal control over financial reporting.
(44) As
of the Effective Date: (i) all members of the Company’s Board of Directors who
are required to be “independent” (as that term is defined under applicable laws,
rules and regulations), including, without limitation, all members of the audit
committee of the Company’s Board of Directors, meet the qualifications of
independence as set forth under applicable laws, rules and regulations and (ii)
the audit committee of the Company’s Board of Directors has at least one member
who is an “audit committee financial expert” (as that term is defined under
applicable laws, rules and regulations).
(45) Neither
the Company nor any of its Affiliates has taken, directly or indirectly, any
action which constitutes or is designed to cause or result in, or which could
reasonably be expected to constitute, cause or result in, the stabilization or
manipulation of the price of any security to facilitate the sale or resale of
the Securities.
Neither
the Company nor any of its Affiliates has, prior to the date hereof, made any
offer or sale of any securities which are required to be “integrated” pursuant
to the Securities Act or the Rules and Regulations with the offer and sale of
the Securities pursuant to the Registration Statement. Except as
disclosed in the Registration Statement, the General Disclosure Package, the
Preliminary Prospectus or the Prospectus, neither Company nor any of its
Affiliates has sold or issued any Relevant Security since the date of the
Company’s formation.
(46)
All information contained in the questionnaires completed by each of the
Company’s and any Subsidiary’s officers and directors immediately prior to the
Offering and provided to the Representative as well as the biographies of such
individuals in the Registration Statement is true and correct in all material
respects and the Company has not become aware of any information which would
cause the information disclosed in the questionnaires completed by the directors
and officers to become inaccurate and incorrect.
(47) No
director or officer of the Company or any Subsidiary is subject to any
non-competition agreement or non-solicitation agreement with any employer or
prior employer which could materially affect his ability to be and act in his
respective capacity of the Company or any Subsidiary.
(48) The
conditions for use of Form F-1 to register the Offering under the Securities
Act, as set forth in the General Instructions to such Form, have been
satisfied.
(49) The
Company is not and, at all times up to and including consummation of the
transactions contemplated by this Agreement, and after giving effect to
application of the net proceeds of the Offering, will not be, subject to
registration as an “investment company” under the Investment Company Act of
1940, as amended, and is not and will not be an entity “controlled” by an
“investment company” within the meaning of such act.
(50) No
relationship, direct or indirect, exists between or among any of the Company or
any Affiliate of the Company, on the one hand, and any director, officer,
shareholder, customer or supplier of the Company or any Affiliate of the
Company, on the other hand, which is required by the Securities Act, the
Exchange Act or the Rules and Regulations to be described in the Registration
Statement or the Prospectus which is not so described as
required. There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or guarantees
of indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of their respective family members, except as
described in the Registration Statement, the General Disclosure Package and the
Prospectus. The Company has not, in violation of the Sarb-Ox directly
or indirectly, including through a Subsidiary (other than as permitted under the
Sarb-Ox for depositary institutions), extending or maintaining credit, arranged
for the extension of credit, or renewing an extension of credit, in the form of
a personal loan to or for any director or executive officer of the Company or
any Subsidiary.
(51) Except
as disclosed in the Registration Statement, the General Disclosure Package and
the Prospectus, there are no contracts, agreements or understandings between the
Company and any Person that would give rise to a valid claim against the Company
or any Underwriter for a brokerage commission, finder’s fee or other like
payment in connection with the transactions contemplated by this Agreement or,
to the Company’s knowledge, any arrangements, agreements, understandings,
payments or issuance with respect to the Company or any of its officers,
directors, shareholders, partners, employees, Subsidiaries or Affiliates that
may affect the Underwriters’ compensation as determined by FINRA.
(52) The
Company and each Subsidiary owns or leases all such properties as are necessary
to the conduct of its business as presently operated and as proposed to be
operated as described in the Registration Statement and the
Prospectus. Except as disclosed in the Registration Statement and the
Prospectus, which describes the rights by which the Company and the Subsidiaries
have rights to the real property under PRC law, the Company and the Subsidiaries
have good and marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each case free and
clear of all Liens except such as are described in the Registration Statement,
the General Disclosure Package, the Preliminary Prospectus and the Prospectus or
such as do not (individually or in the aggregate) materially affect the business
or prospects of the Company or any of the Subsidiaries. Any real
property and buildings held under lease or sublease by the Company and the
Subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material to, and do not interfere with, the use
made and proposed to be made of such property and buildings by the Company and
the Subsidiaries. Neither the Company nor any Subsidiary has received
any notice of any claim adverse to its ownership of any real or personal
property or of any claim against the continued possession of any real property,
whether owned or held under lease or sublease by the Company or any
Subsidiary.
(53) Except
as disclosed in the Registration Statement, the General Disclosure Package, the
Preliminary Prospectus and the Prospectus, the Company and each Subsidiary: (i)
owns or possesses adequate right to use all Intellectual Property necessary for
the conduct of their respective businesses as being conducted and as described
in the Registration Statement, the General Disclosure and Prospectus; and (ii)
have no knowledge that the conduct of their respective businesses do or will
conflict with, and they have not received any notice of any claim of conflict
with, any such right of others. “Intellectual Property” means the Company’s or a
Subsidiary’s patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service ▇▇▇▇ registrations, copyrights, licenses
and similar rights. To the Company’s knowledge, all material technical
information developed by and belonging to the Company or any Subsidiary which
has not been patented (including, without limitation, the trade secrets referred
to in the Prospectus) has been kept confidential so as, among other things, all
such information may be deemed proprietary to the Company.
(54) Except
as set forth in the Registration Statement, the General Disclosure Package, the
Preliminary Prospectus, and the Prospectus: (A) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding, or claim by others
challenging the Company’s or any Subsidiary’s rights in or to any Intellectual
Property rights, and the Company is unaware of any facts which would form a
reasonable basis for any such claim; (B) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding, or claim by others
that the Company or any Subsidiary infringes, misappropriates, or otherwise
violates any Intellectual Property rights of others, and the Company is unaware
of any facts which would form a reasonable basis for any such claim; (C) there
is no pending or, to the Company’s knowledge, threatened action, suit,
proceeding, or claim by others challenging the validity or scope of any such
Intellectual Property rights owned by the Company and any Subsidiary and the
Company is unaware of any facts which would form a reasonable basis for any such
claim; (D) the operation of Company or any Subsidiary’s business as now
conducted and in connection with the development and commercialization of the
patents described in the Registration Statement, the General Disclosure Package
and the Prospectus, as being under development by the Company or any Subsidiary
(either independently or in collaboration with third parties), does not infringe
any claim of any patent or published patent application; (E) there is no prior
art of which the Company is aware that may render any patent owned or licensed
by the Company or any Subsidiary invalid or any patent application owned or
licensed by the Company or any Subsidiary unpatentable which has not been
disclosed to the applicable government patent office; and (F) the patents,
trademarks, and copyrights granted, issued or licensed to the Company and any
Subsidiary have been duly maintained and are in full force and in effect, and
none of such patents, trademarks and copyrights have been adjudged invalid or
unenforceable in whole or in part. Neither the Company nor any
Subsidiary is a party to or bound by any options, licenses or agreements with
respect to the Intellectual Property rights of any other person or entity that
are required to be set forth in the Registration Statement, the General
Disclosure Package and the Prospectus and are not described therein in all
material respects.
(55) (ii)
The Company and its Subsidiaries have duly and properly filed or caused to be
filed with the State Intellectual Property Office of the PRC (the “SIPO”) and applicable foreign
and international patent authorities all patent applications owned by the
Company and its Subsidiaries (the “Company Patent
Applications”). NeitherThe Company and its Subsidiaries have
complied in all material repsects with the SIPO’s duty of candor and disclosure
for the Company Patent Applications and has made no material misrepresentation
in the Company Patent Applications. The Company Patent Applications disclose
patentable subject matters, and neither the Company nor its Subsidiaries have
been notified of any inventorship challenges nor has any interference been
declared or provoked nor is any material fact known by the Company that would
preclude the issuance of patents with respect to the Company Patent Applications
or would render such patents invalid or unenforceable, in each case to the
extent that such event is reasonably likely, individually or in the aggregate,
to have a Material Adverse Effect. No third party possesses rights to
the Company’s or a Subsidiary’s Intellectual Property rights that, if exercised,
could enable such party to develop products competitive to those that the
Company or any Subsidiary intends to develop as described in the Preliminary
Prospectus and the Prospectus.
(56) Except
as disclosed in the Registration Statement, the General Disclosure Package, the
Preliminary Prospectus, and the Prospectus, the Company and the Subsidiaries
have at all times operated their respective businesses in material compliance
with all Environmental Laws, and no material expenditures are or will be
required in order to comply therewith. Neither the Company nor any
Subsidiary has received any notice or communication that relates to or alleges
any actual or potential violation or failure to comply with any Environmental
Laws that will result in a Material Adverse Effect. As used herein,
the term “Environmental Laws” means all applicable laws and regulations,
including any licensing, permits or reporting requirements, and any action by a
federal state or local PRC government entity or any applicable foreign and
international patent authorities, pertaining to the protection of the
environment, protection of public health, protection of worker health and
safety, or the handling of hazardous materials.
(57) Each
of the Company and the Subsidiaries has accurately prepared and timely filed all
federal, state, foreign and other tax returns that are required to be filed by
it and has paid or made provision for the payment of all taxes, assessments,
governmental or other similar charges, including without limitation, all sales
and use taxes and all taxes which the Company or any Subsidiary is obligated to
withhold from amounts owing to employees, creditors and third parties, with
respect to the periods covered by such tax returns (whether or not such amounts
are shown as due on any tax return). No deficiency assessment with
respect to a proposed adjustment of the Company’s or any Subsidiary’s federal,
state, local or foreign taxes is presently in effect or is pending or, to the
Company’s knowledge, threatened. The accruals and reserves on the
books and records of the Company and the Subsidiaries in respect of tax
liabilities for any taxable period not finally determined are adequate to meet
any assessments and related liabilities for any such period and, since the date
of the Company’s most recent audited financial statements, the Company and the
Subsidiaries have not incurred any liability for taxes other than in the
ordinary course of its business. There is no tax lien, whether
imposed by any federal, state, foreign or other taxing authority, outstanding
against the assets, properties or business of the Company or any
Subsidiary.
(58) The
Company has no employees in the U.S. and is not subject to Retirement Income
Security Act of 1974 (“ERISA”).
(59) The
application of the net proceeds from this Offering, as described in the
Prospectus, will not contravene any provision of any current and applicable laws
or the current constituent documents of the Company or any Subsidiary or
contravene the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument currently binding upon the Company or any Subsidiary or
any governmental authorization applicable to any of the Company or any
Subsidiary.
(60) The
Company and its Subsidiaries maintain insurance of the types and in the amounts
which are customary for companies engaged in similar businesses in similar
industries in the People’s Republic of China.
(61) Under
the laws of their respective jurisdiction of incorporation, neither the Company
nor any Subsidiary, is, nor are any of their respective properties, assets or
revenues, entitled to any right of immunity on the grounds of sovereignty from
any legal action, suit or proceeding, from set-off or counterclaim, from the
jurisdiction of any court, from service of process, from attachment prior to or
in aid of execution of judgment, or from other legal process or proceeding for
the giving of any relief or for the enforcement of any judgment.
(62) Based
on the Company’s current and anticipated operations and composition of its
earnings and assets, including the current and expected valuation of its assets,
the Company does not expect to be a Passive Foreign Investment Company (“PFIC”)
within the meaning of Section 1297 of the United States Internal Revenue
Code of 1986, as amended, for the year ending December 31, 2010 and does
not expect to become a PFIC in the future.
(63) Other
than as set forth in the Registration Statement, the General Disclosure Package
and the Prospectus, no stamp or other issuance or transfer taxes or duties and
no capital gains, income, withholding or other taxes are payable by or on behalf
of the Underwriters to the government of the Cayman Islands or the PRC, or any
political subdivision or taxing.
(64) Neither
the Company nor any Subsidiary is a party to or bound by any collective
bargaining agreements or other agreements with labor organizations.
(65) Except
as disclosed in the Registration Statement, the General Disclosure Package, the
Preliminary Prospectus and the Prospectus, the Company has no material
obligation to provide health, retirement, death or disability benefits to any of
the present or past employees of the Company or any Subsidiaries, or to any
other person.
(66) As
set forth in the Registration Statement, the General Disclosure Package, the
Preliminary Prospectus or the Prospectus, neither the Company nor any Subsidiary
is a party to or subject to any employment contract or arrangement providing for
annual future compensation, or the opportunity to earn annual future
compensation (whether through fixed salary, bonus, commission, options or
otherwise) of more than $120,000 to any officer, or director.
(67) The
execution of this Agreement, the Representative’s Warrants, or
consummation of the Offering does not constitute a triggering event under any
Employee Plan or any other employment contract, whether or not legally
enforceable, which (either alone or upon the occurrence of any additional or
subsequent event) will or may result in any payment (of severance pay or
otherwise), acceleration, increase in vesting, or increase in benefits to any
current or former participant, employee or director of the Company or any
Subsidiary other than an event that is not material to the financial condition
or business of the Company or any Subsidiary, either individually or taken as a
whole.
(68) Each
of the Company and the Subsidiaries, are in compliance with the requirements of
the insurance laws and regulations of their respective states of incorporation
or organization and the insurance laws and regulations of other jurisdictions
including, but not limited to, the PRC, which are applicable to the Company or
such Subsidiaries, and each have filed all notices, reports, documents or other
information required to be filed thereunder, except where the failure to comply
with such requirement could not reasonably be expected to have a Material
Adverse Effect.
(69) Neither
the Company, any Subsidiary nor, to the Company’s knowledge, any of their
respective employees or agents has at any time during the last five (5) years:
(i) made any unlawful contribution to any candidate for foreign office, or
failed to disclose fully any contribution in violation of law, or (ii) made any
payment to any federal or state governmental officer or official or other Person
charged with similar public or quasi-public duties, other than payments that are
not prohibited by the laws of the United States of any jurisdiction or its
foreign equivalents including, but not limited to, the PRC,
thereof.
(70) The
Company has not offered, or caused the Underwriters to offer, the ordinary
shares to any Person or entity with the intention of unlawfully influencing: (i)
a customer or supplier of the Company or any Subsidiary to alter the customer’s
or supplier’s level or type of business with the Company or any Subsidiary or
(ii) a journalist or publication to write or publish favorable information about
the Company, any Subsidiary or its products or services.
(71) Except
as set forth in the Registration Statement and the Prospectus, there are no
outstanding loans or indebtedness of the Company and the
Subsidiaries.
(72) Except
as disclosed in the Registration Statement, the General Disclosure Package, the
Preliminary Prospectus and the Prospectus, no material indebtedness (actual or
contingent) and no Material Contract or arrangement is outstanding between the
Company or any of its Subsidiaries and any director or executive officer of the
Company or any of its Subsidiaries or any person connected with such director or
executive officer (including his/her spouse, infant children or any company or
enterprise in which he/she holds a controlling interest); there are no material
relationships or transactions between the Company or any of its Subsidiaries on
the one hand and their respective affiliates, officers, directors or
shareholders on the other hand, which are not disclosed in the Registration
Statement, the General Disclosure Package and the Prospectus.
(73) Neither
the Company nor, to the knowledge of the Company, any director, officer, agent,
employee or Affiliate is currently subject to any U.S. sanctions administered by
the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and neither the
Company nor its Subsidiaries will directly or indirectly use the proceeds of the
Offering, or lend, contribute or otherwise make available such proceeds to any
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.
(74) Representations
and Warranties Relating to the PRC Subsidiaries.
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(i)
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The
constitutional documents of the PRC Subsidiaries are valid and have been
duly approved in accordance with the laws of the
PRC.
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(ii)
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All
material consents, approvals, authorizations, permits and licenses
required under PRC law for the due and proper establishment and operation
of each PRC Subsidiary have been duly obtained; neither the Company nor
any Subsidiary is in receipt of any letter or notice notifying it of
revocation or non-renewal of any such consents, approvals, authorizations,
permits and licenses; and the Company has no knowledge of any grounds on
which renewals of such consents, approvals, authorizations, permits and
licenses will not be granted by the relevant PRC Governmental
Bodies.
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(iii)
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All
material filings and registrations required in respect of each PRC
Subsidiary and its operations including, without limitation, the
registrations with the Ministry of Commerce, with the State Administration
of Industry and Commerce, the State Administration for Foreign Exchange
(the “SAFE”), tax bureau and customs authorities have been duly completed
in accordance with the relevant PRC laws, rules, regulations and
guidelines.
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(iv)
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All
material filings and registrations required in respect of each PRC
Subsidiary and its operations with the State Administration of Industry
and Commerce, the State Administration for Foreign Exchange have been duly
completed in accordance with the relevant PRC laws, rules, regulations and
guidelines.
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(v)
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The
registered capital stock of each PRC Subsidiary has been fully paid in
accordance with relevant PRC laws and regulations and the payment schedule
approved by the relevant PRC government body. With respect to
any increase of registered capital, each Subsidiary has duly filed the
application documents with the competent PRC government authorities for
approval. There are no outstanding or commitments made by the Company or
any Subsidiary to sell any equity interest in any PRC Subsidiary to sell
any equity interest in any PRC
Subsidiary.
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(vi)
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Each
of the Company and the Subsidiaries has conducted its business activities
within the permitted scope of business or has otherwise operated its
business in compliance with all relevant legal requirements and with all
requisite licenses, permits and approvals granted under PRC
law.
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(vii)
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With
regard to employment, staff and labor matters, each of the PRC
Subsidiaries has complied with all applicable PRC laws and regulations in
all material respects, including without limitation, laws and regulations
pertaining to welfare funds, social benefits, medical benefits, insurance,
retirement benefits or pensions.
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(75) Except
as described in the Registration Statement and the Prospectus, 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
Affiliate with respect to the sale of the Shares hereunder or any other
arrangements, agreements or understandings of the Company or, to the Company’s
knowledge, any of its shareholders that may affect the Underwriter’s
compensation, as determined by FINRA. Except as described in the Registration
Statement and the Prospectus, the Company has not made any direct or indirect
payments (in cash, securities or otherwise) to: (i) any person, as a
finder’s fee, consulting fee or otherwise, in consideration of such person
raising capital for the Company or introducing to the Company persons who raised
or provided capital to the Company; (ii) any FINRA member; or
(iii) any person or entity that has any direct or indirect affiliation or
association with any FINRA member, within the 180 days prior to the Effective
Date, other than the prior payment of $40,000 to the Underwriter as provided
hereunder in connection with the Offering. None of the net proceeds of the
Offering will be paid by the Company to any participating FINRA member or its
affiliates, except as specifically authorized herein. No Affiliate has any
direct or indirect affiliation or association with any FINRA member (as
determined in accordance with the rules and regulations of FINRA); no person to
whom securities of the Company have been privately issued within 180-day period
prior to the initial filing date of the Registration Statement has any
relationship or affiliation or association with any member of
FINRA.
(76) Any
certificate signed by or on behalf of the Company and delivered to the
Underwriters or to Ellenoff ▇▇▇▇▇▇▇▇ & Schole LLP (“Underwriters’ Counsel”)
shall be deemed to be a representation and warranty by the Company to each
Underwriter listed on Schedule A hereto as to the matters covered
thereby.
As used
in this Agreement, references to matters being “material” with respect to the
Company or its Subsidiaries shall mean a material event, change, condition,
status or effect related to the condition (financial or otherwise), properties,
assets (including intangible assets), liabilities, business, prospects,
operations or results of operations of the Company or the Subsidiaries, either
individually or taken as a whole, as the context requires. As used in this
Agreement, the term “knowledge of the Company” (or similar language) shall mean
the knowledge of the officers and directors of the Company and the Subsidiaries
who are named in the Prospectus, with the assumption that such officers and
directors shall have made reasonable and diligent inquiry of the matters
presented (with reference to what is customary and prudent for the applicable
individuals in connection with the discharge by the applicable individuals of
their duties as officers, directors or managers of the Company or the
Subsidiaries).
3. Offering. Upon
authorization of the release of the Firm Shares and the Over-allotment Shares,
as applicable, by the Representative, the Underwriters propose to offer the Firm
Shares and the Over-allotment Shares, as applicable, for sale to the public upon
the terms and conditions set forth in the Prospectus.
4. Covenants of the
Company. The Company acknowledges, covenants and agrees with
the Underwriters that:
(1) The
Registration Statement and any amendments thereto have been declared effective,
and if Rule 430A is used or the filing of the Prospectus is otherwise required
under Rule 424(b), the Company will file the Prospectus (properly completed if
Rule 430A has been used) pursuant to Rule 424(b) within the prescribed time
period and will provide evidence satisfactory to the Representative of such
timely filing.
(2) During
the period beginning on the date hereof and ending on the later of the Closing
Date or such date, as in the opinion of Underwriters’ Counsel, the Prospectus is
no longer required by law to be delivered (or in lieu thereof the notice
referred to in Rule 173(a) under the Securities Act is no longer required to be
provided), in connection with sales by an underwriter or dealer (the “Prospectus Delivery Period”),
prior to amending or supplementing the Registration Statement, the General
Disclosure Package or the Prospectus, the Company shall furnish to the
Representative for review a copy of each such proposed amendment or supplement
at least 48 hours before the Company shall file any such proposed amendment or
supplement.
(3) The
Company will notify the Representative immediately (and, if requested by the
Representative, will confirm such notice in writing): (i) when the Registration
Statement and any amendments thereto become effective, (ii) of any request by
the Commission for any amendment of or supplement to the Registration Statement,
the General Disclosure Package, the Preliminary Prospectus or the Prospectus or
for any additional information, (iii) of the Company’s intention to file or
prepare any supplement or amendment to the Registration Statement or the
Prospectus, (iv) of the mailing or the delivery to the Commission for filing of
any amendment of or supplement to the Registration Statement, the General
Disclosure Package, the Preliminary Prospectus or the Prospectus, including but
not limited to Rule 462(b) under the Securities Act, (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto or of any order preventing or
suspending its use or the use of any Prospectus, the General Disclosure Package,
the Prospectus or any Issuer Represented Free Writing Prospectus, or of any
proceedings to remove, suspend or terminate from listing the ordinary shares
from any securities exchange upon which it is listed for trading, or of the
threatening or initiation of any proceedings for any of such purposes the
initiation, or the threatening, of any proceedings therefor, it being understood
that the Company shall make every effort to avoid the issuance of any such stop
order, (vi) of the receipt of any comments from the Commission, and (vii) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the initiation
or threatening of any proceeding for that purpose. If the Commission
shall propose or enter a stop order at any time, the Company will make every
reasonable effort to prevent the issuance of any such stop order and, if issued,
to obtain the lifting of such order as soon as
possible. Additionally, the Company agrees that it shall comply with
provisions of Rules 424(b), 430A and 430B, as applicable, under the Securities
Act and will use its reasonable efforts to confirm that any filings made by the
Company under rule 424(b) or Rule 433 were received in a timely manner by the
Commission (without reliance on Rule 424(b)(8) or Rule 164(b)). The Company will
not file any amendment to the Registration Statement or any amendment of or
supplement to the Preliminary Prospectus or the Prospectus (including the
Prospectus required to be filed pursuant to Rule 424(b)) that differs from the
Prospectus on file at the time of the effectiveness of the Registration
Statement or file any document under the Exchange Act if such document would be
deemed to be incorporated by reference into the Prospectus to which the
Representative shall object in writing after being timely furnished in advance a
copy thereof. The Company will provide the Representative with copies
of all such amendments, filings and other documents a sufficient time prior to
any filing or other publication thereof to permit the Representative a
reasonable opportunity to review and comment thereon.
(4) The
Company shall comply with the Securities Act, the Exchange Act and all
applicable Rules and Regulations to permit completion of the distribution as
contemplated in this Agreement, the Registration Statement and the
Prospectus. If, at any time when a Prospectus relating to the
Securities is required to be delivered under the Securities Act, the Exchange
Act and all applicable Rules and Regulations in connection with the sales of
Securities, any event shall have occurred as a result of which the Prospectus as
then amended or supplemented would, in the judgment of the Underwriters or the
Company, include an 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 the light of the circumstances existing at the time of delivery to
the purchaser, not misleading, or if, to comply with the Securities Act, the
Exchange Act or the Rules and Regulations, it shall be necessary at any time to
amend or supplement the Prospectus or Registration Statement, or to file any
document which is an exhibit to the Registration Statement or the Prospectus or
in any amendment thereof or supplement thereto, the Company will notify the
Representative promptly and prepare and file with the Commission, subject to
Section 4(1) hereof, an appropriate amendment or supplement (in form and
substance reasonably satisfactory to the Representative) which will correct such
statement or omission or which will effect such compliance and will use its best
efforts to have any amendment to the Registration Statement declared effective
as soon as possible.
(5) If
at any time following issuance of an Issuer-Represented Free Writing Prospectus
there occurred or occurs an event or development as a result of which such
Issuer-Represented Free Writing Prospectus conflicted or would conflict with the
information contained in the Registration Statement, the Statutory Prospectus or
the Prospectus 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, the Company has promptly notified or
promptly will notify the Underwriter and has promptly amended or will promptly
amend or supplement, at its own expense, such Issuer-Represented Free Writing
Prospectus to eliminate or correct such conflict, untrue statement or
omission.
(6) The
Company will promptly deliver to the Underwriters and Underwriters’ Counsel a
signed copy of the Registration Statement, as initially filed and all amendments
thereto, including all consents and exhibits filed therewith, and will maintain
in the Company’s files manually signed copies of such documents for at least
five (5) years after the date of filing thereof. The Company will
promptly deliver to each of the Underwriters such number of copies of any
Preliminary Prospectus, the Prospectus, the Registration Statement, and all
amendments of and supplements to such documents, if any, and all documents which
are exhibits to the Registration Statement and Prospectus or any amendment
thereof or supplement thereto, as the Underwriters may reasonably
request. Prior to 10:00 A.M., New York time, on the Business Day next
succeeding the date of this Agreement and from time to time thereafter, the
Company will furnish the Underwriters with copies of the Prospectus in New York
City in such quantities as the Underwriters may reasonably request.
(7) The
Company consents to the use and delivery of the Preliminary Prospectus by the
Underwriters in accordance with Rule 430 and Section 5(b) of the Securities
Act.
(8) If
the Company elects to rely on Rule 462(b) under the Securities Act, the Company
shall both file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with Rule
111 of the Securities Act by the earlier of: (i) 10:00 p.m., New York City time,
on the date of this Agreement, and (ii) the time that confirmations are given or
sent, as specified by Rule 462(b)(2).
(9) The
Company will use its best efforts, in cooperation with the Representative, at or
prior to the time of effectiveness of the Registration Statement, to qualify the
Securities for offering and sale under the securities laws relating to the
offering or sale of the Securities of such jurisdictions, domestic or foreign,
as the Representative may designate and to maintain such qualification in effect
for so long as required for the distribution thereof; except that in no event
shall the Company be obligated in connection therewith to qualify as a foreign
corporation or to execute a general consent to service of process under the laws
of any such state where it is not presently qualified or where it would be
subject to taxation as a foreign corporation
(10) The
Company will make generally available to its security holders and to the
Underwriters as soon as practicable, but in any event not later than twelve (12)
months after the Effective Date, an audited earnings statement of the Company
and the Subsidiaries complying with Section 11(a) of the Securities Act and Rule
158 of the Rules and Regulations.
(11) Following
the Closing Date, the Company and any of the individuals listed on Schedule B hereto
(the “Lock-Up Parties”)
shall not sell or otherwise dispose of any securities of the Company, whether
publicly or in a private placement during the period that their respective
lock-up agreements are in effect, provided, however, that the holders of options
to purchase ordinary shares shall be entitled to exercise their outstanding
options, subject to a written agreement by the recipient of the lock-up terms
contained in this section. The Company will deliver to the Representative the
agreements of Lock-Up Parties to the foregoing effect prior to the Closing Date,
which agreements shall be substantially in the form attached hereto as Annex I.
(12) For
a period of three (3) years from the Closing Date, the Company agrees to (i)
hold all special and annual meetings of its shareholders within the United
States or (ii) make attendance to such shareholder meetings permissible from
within the United States telephonically or via video conference.
(13) For
a period of two (2) years from the Closing Date, the Company shall use its best
efforts (which shall include, but shall not be limited to, the solicitation of
proxies, if necessary) to elect a designee of Representative to the Company’s
Board of Directors.
(14) The
Company will retain a nationally recognized firm of independent certified public
accountants acceptable to the Representative for a period of at least three (3)
years after the Closing.
(15) If
the Company fails to maintain the listing of its ordinary shares on a nationally
recognized exchange, for a period of two (2) years from the Effective Date, the
Company, at its expense, shall obtain and keep current a listing in the Standard
& Poor’s Corporation Records Services or the ▇▇▇▇▇’▇ Industrial Manual;
provided that ▇▇▇▇▇’▇ OTC Industrial Manual is not sufficient for these
purposes.
(16) During
the period of three (3) years from Effective Date, the Company will furnish to
the Representative copies of all reports or other communications (financial or
other) furnished to security holders or from time to time published or publicly
disseminated by the Company, and will deliver to the Underwriters: (i) as soon
as they are available, copies of any reports, financial statements and proxy or
information statements furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company is listed;
and (ii) such additional information concerning the business and financial
condition of the Company as the Representative may from time to time reasonably
request (such financial information to be on a consolidated basis to the extent
the accounts of the Company and the Subsidiaries are consolidated in reports
furnished to its security holders generally or to the Commission); provided,
that any such item which is available on the ▇▇▇▇▇ system (or successor thereto)
need not be furnished in physical form.
(17) Each
of the Company and its Affiliates covenant to adhere to all “quiet period” rules
and regulations of the Commission prior to, during and following the filing of
the Registration Statement and the consummation of the Offering. 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 fortieth (40th) day following the
Closing Date, other than normal and customary releases issued in the ordinary
course of the Company’s business, each of which the Representative shall have
the reasonable right to review in advance of publication. The Company further
agrees to consult with the Representative as is customary within the securities
industry prior to distribution to third parties of any financial information,
news releases, and/or other publicity regarding the Company, its business, or
any terms of the proposed Offering, it being agreed that the Company shall give
the Representative no less than twelve (12) hours prior notice of any such
distribution and a reasonable opportunity during or prior to such period to
review the contents of the proposed distribution.
(18) Prior
to the consummation of the Offering, the Company will engage and continue to
engage (for no less than two (2) years from the date of the Closing Date) a
financial public relations firm mutually acceptable to the Company and the
Representative, which firm shall be experienced in assisting issuers in public
offerings of securities and in their relations with their security
holders.
(19) The
Company has or will retain a transfer agent reasonably acceptable to the
Representative for the Shares and shall continue to retain such transfer agent
(or another transfer agent reasonably acceptable to the Representative) for a
period of two (2) years following the Closing Date.
(20) The
Company will apply the net proceeds from the sale of the Securities as set forth
under the caption “Use of Proceeds” in the Prospectus. Without the
written consent of the Representative, no proceeds of the Offering will be used
to pay outstanding loans from officers, directors or shareholders or to pay any
accrued salaries or bonuses to any employees or former employees.
(21) The
Company, during the period when the Prospectus is required to be delivered under
the Securities Act or the Exchange Act, will file all documents required to be
filed with the Commission pursuant to the Securities Act, the Exchange Act and
the Rules and Regulations within the time periods required thereby.
(22) The
Company will use its best efforts to do and perform all things required to be
done or performed under this Agreement by the Company prior to the Closing Date,
and to satisfy all conditions precedent to the delivery of the Firm
Shares.
(23) The
Company will not take, and will cause its Affiliates not to take, directly or
indirectly, any action which constitutes or is designed to cause or result in,
or which could reasonably be expected to constitute, cause or result in, the
stabilization or manipulation of the price of any security to facilitate the
sale or resale of the Securities.
(24) The
Company shall cause to be prepared and delivered to the Representative, at its
expense, within one (1) Business Day from the effective date of this Agreement,
an Electronic Prospectus to be used by the Underwriters in connection with the
Offering. As used herein, the term “Electronic Prospectus” means a
form of prospectus, and any amendment or supplement thereto, that meets each of
the following conditions: (i) it shall be encoded in an electronic format,
satisfactory to the Representative, that may be transmitted electronically by
the other Underwriters to offerees and purchasers of the Securities for at least
the period during which a Prospectus relating to the Securities is required to
be delivered under the Securities Act; (ii) it shall disclose the same
information as the paper prospectus and prospectus filed pursuant to ▇▇▇▇▇,
except to the extent that graphic and image material cannot be disseminated
electronically, in which case such graphic and image material shall be replaced
in the electronic prospectus with a fair and accurate narrative
description or tabular representation of such material, as appropriate; and
(iii) it shall be in or convertible into a paper format or an electronic format,
satisfactory to the Representative, that will allow recipients thereof to store
and have continuously ready access to the prospectus at any future time, without
charge to such recipients (other than any fee charged for subscription to the
Internet as a whole and for on-line time). The Company hereby
confirms that it has included or will include in the Prospectus filed pursuant
to ▇▇▇▇▇ or otherwise with the Commission and in the Registration Statement at
the time it was declared effective an undertaking that, upon receipt of a
request by an investor or his or her representative within the period when a
prospectus relating to the Securities is required to be delivered under the
Securities Act, the Company shall transmit or cause to be transmitted promptly,
without charge, a paper copy of the Prospectus.
(25) The
Company represents and agrees that, unless it obtains the prior written consent
of the Representative, and the Representative represents and agrees that, unless
it obtains the prior written consent of the Company, it has not made and will
not make any offer relating to the Shares that would constitute an “issuer free
writing prospectus,” as defined in Rule 433 under the Securities Act, or that
would otherwise constitute a “free writing prospectus,” as defined in Rule 405
under the Securities Act, required to be filed with the Commission provided that
the prior written consent of the parties hereto shall be deemed to have been
given in respect of the free writing prospectuses included in Schedule
Any such free writing prospectus consented to by the Company
and the Representative is hereinafter referred to as a “Permitted Free Writing
Prospectus.” The Company represents that it has treated or agrees
that it will treat each Permitted Free Writing Prospectus as an “issuer free
writing prospectus,” as defined in Rule 433, and has complied and will comply
with the requirements of Rule 433 applicable to any Permitted Free Writing
Prospectus, including timely Commission filing where required, legending and
record keeping.
(26) The
Company shall not take any action that would result in the Underwriters or the
Company being required to file with the Commission pursuant to Rule 433(d) under
the Securities Act a Free Writing Prospectus prepared by or on behalf of the
Underwriters that the Underwriters otherwise would not have been required to
file.
(27) The
Company shall have filed with the Commission all Issuer-Represented Free Writing
Prospectuses or other information required to be filed by the Company under the
Securities Act and the Regulations.
(28) The
Company shall maintain, for a period of no less than three (3) years from the
Closing Date, a liability insurance policy affording coverage for the acts of
its officers and directors.
(29) The
Company will reserve and keep available that maximum number of its authorized
but unissued securities which are issuable upon exercise of the Representative’s
Warrants outstanding from time to time.
(30) The
Company shall comply with any applicable rules and regulations of the State
Administration of Foreign Exchange (the “SAFE Rules and Regulations”), and
shall use its reasonable best efforts to cause its directors, officers, option
holders and shareholders named in the Company’s share register 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 named in the Company’s share register, option holder, 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.
5. Consideration; Payment of
Expenses.
(1) In
addition to selling the Shares to the Underwriters at a purchase price (net of a
underwriters’ discounts of seven (7) percent) of $[●] per Firm Share and the
issuance to the Representative of the Representative’s Warrants, in
consideration of the services to be provided for hereunder, the Company shall
pay to the Underwriters or their respective designees their pro rata portion
(based on the Firm Shares purchased), at the Closing, a non-accountable expense
allowance equal to one percent (1.0%) of the gross proceeds of the Offering
(exclusive of proceeds from the sale of Over-allotment Shares). The Company has
heretofore paid a $40,000 advance to the Representative, which shall be applied
against its anticipated actual expenses to be incurred (the
“Advance”).
(2) The
Company acknowledges that the Representative has paid the expenses in connection
with the background checks of the Company’s officers and directors on behalf of
the Company and the Company will reimburse such expenses at the
Closing.
(3) The
Company shall be responsible for paying or reimbursing the legal fees for
Representative’s legal counsel, which amount shall not exceed
$125,000.
(4) The
Company grants the Representative the right of first refusal for a period of
twelve (12) months from the Closing Date to act as co-lead manager and book
runner, for any and all transactions where the Company has elected to employ a
banker and any and all public and private equity offerings of the Company or any
successor to or any subsidiary of the Company (excluding (i) sales to employees
under any compensation or stock option plan approved by the shareholders of the
Company, (ii) shares issued in payment of the consideration for an acquisition
and (iii) conventional banking arrangements and commercial debt financing). The
Company shall provide written notice to Representative with terms of such
offering and if Representative fails to accept in writing any such proposal for
such public or private sale within 20 days after receipt of a written notice
from the Company containing such proposal, then Representative will have no
claim or right with respect to any such sale contained in any such
notice.
(5) The
Representative reserves the right to reduce any item of its compensation or
adjust the terms thereof as specified herein in the event that a
determination shall be made by FINRA to the effect that the Underwriters’
aggregate compensation is in excess of FINRA Rules or that the terms thereof
require adjustment.
(6) Whether
or not the transactions contemplated by this Agreement, the Registration
Statement and the Prospectus are consummated or this Agreement is terminated,
the Company hereby agrees to pay all costs and expenses incident to the
performance of its obligations hereunder, including the following:
(i) all
expenses in connection with the preparation, printing, formatting for ▇▇▇▇▇ and
filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and any and all amendments and supplements thereto and the mailing
and delivering of copies thereof to the Underwriters and dealers;
(ii) all
fees and expenses in connection with the filing of Corporate Offerings Business
& Regulatory Analysis (“COBRADesk”) filings with
FINRA;
(iii) all
fees and expenses in connection with filing of the Registration Statement and
Prospectus with the Commission;
(iv) the
fees, disbursements and expenses of the Company’s counsel and accountants in
connection with the registration of the Securities under the Securities Act and
the Offering;
(v) all
expenses in connection with the qualifications of the Shares for offering and
sale under state or foreign securities;
(vi) all
expenses in connection with all mailing and printing of the
prospectus;
(vii) all
fees and expenses in connection with listing the Shares on the NASDAQ Global
Market or any other exchange or electronic quotation system on which the
ordinary shares is then listed or quoted;
(viii) all
travel expenses of the Company’s officers and employees and any other expense of
the Company incurred in connection with attending or hosting meetings with
prospective purchasers of the Shares (“Road Show
Expenses”);
(ix) any
stock transfer taxes incurred in connection with this Agreement or the
Offering;
(x) the
cost of preparing stock certificates representing the Securities;
(xi) the
cost and charges of any transfer agent or registrar for the
Securities;
(xii) any
cost and expenses in conducting satisfactory due diligence investigation and
analysis of the Company’s officers, directors, employees, and
affiliates;
(xiii) all
other costs and expenses incident to the performance of the Company obligations
hereunder which are not otherwise specifically provided for in this Section
5.
(7) In
addition to the costs and expenses set forth in Section 5(4), the Company will
be responsible for: (i) the cost of two (2) “tombstone” advertisements to be
placed in appropriate daily or weekly periodicals of the Representative’s choice
(i.e., The Wall Street Journal and The New York Times); and (ii) the cost of
leather bound volumes of the Offering documents and Offering commemorative
lucite (or other reasonable form) memorabilia, both to be supplied to the
Representative, in such quantities as Representative may reasonably
request.
(8) It
is understood, however, that except as provided in this Section 5, and Sections
6, 7 and 11(4) hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel. Notwithstanding
anything to the contrary in this Section 5, in the event that this Agreement is
terminated pursuant to Section 5 or 11(2) hereof, or subsequent to a Material
Adverse Change, the Representative shall return any portion of the Advance
previously paid not offset by its accountable out-of-pocket expenses actually
incurred as allowed under FINRA Rule 1550.
6. Conditions of Underwriters’
Obligations. The obligations of the Underwriters to purchase
and pay for the Firm Shares or Over-allotment Shares, as the case may be, as
provided herein shall be subject to: (i) the accuracy of the representations and
warranties of the Company herein contained, as of the date hereof and as of the
Closing Date; (ii) the absence from any certificates, opinions, written
statements or letters furnished to the Representative or to Underwriters’
Counsel pursuant to this Section 6 of any misstatement or omission; (iii) the
performance by the Company of its obligations hereunder, and (iv) each of the
following additional conditions. For purposes of this Section 6, the
terms “Closing Date” and “Closing” shall refer to the Closing Date for the Firm
Shares or Over-allotment Shares, as the case may be, and each of the foregoing
and following conditions must be satisfied as of each
Closing.
(1) The
Registration Statement shall have become effective and all necessary regulatory
or listing approvals shall have been received not later than 5:30 P.M., New York
time, on the date of this Agreement, or at such later time and date as shall
have been consented to in writing by the Representative. If the
Company shall have elected to rely upon Rule 430A under the Securities Act, the
Prospectus shall have been filed with the Commission in a timely fashion in
accordance with the terms hereof and a form of the Prospectus containing
information relating to the description of the Securities and the method of
distribution and similar matters shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period; and, at or prior to
the Closing Date or the actual time of the Closing, no stop order suspending the
effectiveness of the Registration Statement or any part thereof, or any
amendment thereof, nor suspending or preventing the use of the General
Disclosure Package, the Preliminary Prospectus, the Prospectus or any Issuer
Free Writing Prospectus shall have been issued; no proceedings for the issuance
of such an order shall have been initiated or threatened; any request of the
Commission for additional information (to be included in the Registration
Statement, the General Disclosure Package, the Preliminary Prospectus, the
Prospectus, any Issuer Free Writing Prospectus or otherwise) shall have been
complied with to the Representative’s satisfaction.
(2) The
Representative shall not have reasonably determined, and advised the Company,
that the Registration Statement, the General Disclosure Package or the
Prospectus, or any amendment thereof or supplement thereto, or any Issuer Free
Writing Prospectus, contains an untrue statement of fact which, in the
Representative’s reasonable opinion, is material, or omits to state a fact
which, in the Representative’s reasonable opinion, is material and is required
to be stated therein or necessary to make the statements therein not
misleading.
(3) The
Representative shall have received a lock-up agreement from each Lock-Up Party,
duly executed by the applicable Lock-Up Party, in each case substantially in the
form attached as Annex
I.
(4) The
Representative shall have received the favorable written opinion
of ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, the U.S. legal counsel
for the Company regarding certain the validity of the ordinary shares, U.S. tax
matters and certain other legal matters as to the U.S. federal law and New York
law in connection with this Offering, dated as of the Closing Date addressed to
the Representative in the form attached hereto as Annex
II.
(5) The
Representative shall have received the favorable written opinion of ▇▇▇▇▇▇▇▇▇
Law, the PRC legal counsel for the Company, dated as of the Closing Date
addressed to the Representative in the form attached hereto as Annex III.
(6) The
Representative shall have received the favorable written opinion of ▇▇▇▇▇▇ and
▇▇▇▇▇▇, the Cayman Islands legal counsel for the Company, dated as of the
Closing Date addressed to the Representative in the form attached hereto as
Annex IV.
(7) The
Representative shall have received the favorable written opinion of
[ ],
the Hong Kong legal counsel for the Company, dated as of the Closing Date
addressed to the Representative in the form attached hereto as Annex V.
(8) The
Representative shall have received on and as of the Closing Date satisfactory
evidence of the good standing of the Company and its subsidiaries in their
respective jurisdictions of organization and their good standing as foreign
entities in such other jurisdictions as the Representative may reasonably
request, in each case in writing or any standard form of telecommunication from
the appropriate governmental authorities of such jurisdictions.
(9) All
proceedings taken in connection with the sale of the Firm Shares and the
Over-allotment Shares as herein contemplated shall be satisfactory in form and
substance to the Representative and to Underwriters’ Counsel.
(10) The
Company shall have registered the Shares under the provisions of Section 12(b)
or 12(g), as applicable, of the Exchange Act on or prior to the Effective
Date.
(11) The
Company shall have retained a financial public relations firm reasonably
acceptable to the Representative, which firm shall be experienced in assisting
issuers in public offerings of securities and in their relations with their
security holders.
(12) The
Representative shall have received a certificate of the Chief Executive Officer
and Chief Financial Officer of the Company, dated as of each Closing Date to the
effect that: (i) the condition set forth in subsection (a) of this Section 6 has
been satisfied, (ii) as of the date hereof and as of the applicable Closing
Date, the representations and warranties of the Company set forth in Sections 1
and 2 hereof are accurate, (iii) as of the applicable Closing Date, all
agreements, conditions and obligations of the Company to be performed or
complied with hereunder on or prior thereto have been duly performed or complied
with, (iv) the Company and the Subsidiaries have not sustained any material loss
or interference with their respective businesses, whether or not covered by
insurance, or from any labor dispute or any legal or governmental proceeding,
(v) no stop order suspending the effectiveness of the Registration Statement or
any post-effective amendment thereof has been issued and no proceedings therefor
have been initiated or threatened by the Commission, (vi) there are no pro forma
or as adjusted financial statements that are required to be included or
incorporated by reference in the Registration Statement and the Prospectus
pursuant to the Rules and Regulations which are not so included or incorporated
by reference, and (vii) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus there has
not been any Material Adverse Change or any development involving a prospective
Material Adverse Change, whether or not arising from transactions in the
ordinary course of business.
(13) On
the date of this Agreement and on the Closing Date, the Representative shall
have received a “cold comfort” letter from UHY as of the date of the date of
delivery and addressed to the Underwriters and in form and substance
satisfactory to the Representative and Underwriters’ Counsel, confirming that
they are independent certified public accountants with respect to the Company
and its Subsidiaries within the meaning of the Securities Act and the Rules and
Regulations and the PCAOB, and stating, as of the date of delivery (or, with
respect to matters involving changes or developments since the respective dates
as of which specified financial information is given in the Prospectus, as of a
date not more than five (5) days prior to the date of such letter), the
conclusions and findings of such firm with respect to the financial information
and other matters relating to the Registration Statement covered by such
letter.
(14)
Subsequent to the execution and delivery of this Agreement or, if earlier, the
dates as of which information is given in the Registration Statement (exclusive
of any amendment thereof) and the Prospectus (exclusive of any supplement
thereto), there shall not have been any change in the capital stock or long-term
debt of the Company or any Subsidiary or any change or development involving a
change, whether or not arising from transactions in the ordinary course of
business, in the business, condition (financial or otherwise), results of
operations, shareholders’ equity, properties or prospects of the Company and the
Subsidiaries, taken as a whole, including but not limited to the occurrence of
any fire, flood, storm, explosion, accident, act of war or terrorism or other
calamity, the effect of which, in any such case described above, is, in the sole
judgment of the Representative, so material and adverse as to make it
impracticable or inadvisable to proceed with the Offering on the terms and in
the manner contemplated in the Prospectus (exclusive of any
supplement).
(15)
The Representative shall have received a duly executed management confirmation
letter from the Company’s directors and officers relating to certain information
appearing in the Registration Statement, which letter shall be in the form
previously delivered to the Representative in connection with the filing of the
Preliminary Prospectus.
(16)
The ordinary shares shall have been approved for quotation on the NASDAQ Global
Market.
(17) FINRA
shall have confirmed that it has not raised any objection with respect to the
fairness and reasonableness of the underwriting terms and
arrangements.
(18) No
action shall have been taken and no statute, rule, regulation or order shall
have been enacted, adopted or issued by any federal, state or foreign
governmental or regulatory authority that would, as of the Closing Date, prevent
the issuance or sale of the Securities; and no injunction or order of any
federal, state or foreign court shall have been issued that would, as of the
Closing Date, prevent the issuance or sale of the Securities.
(19) The
Company shall have furnished the Underwriters and Underwriters’ Counsel with
such other certificates, opinions or other documents as they may have reasonably
requested.
If any of
the conditions specified in this Section 6 shall not have been fulfilled when
and as required by this Agreement, or if any of the certificates, opinions,
written statements or letters furnished to the Representative or to
Underwriters’ Counsel pursuant to this Section 6 shall not be reasonably
satisfactory in form and substance to the Representative and to Underwriters’
Counsel, all obligations of the Underwriters hereunder may be cancelled by the
Representative at, or at any time prior to, the consummation of the
Closing. Notice of such cancellation shall be given to the Company in
writing, or by telephone. Any such telephone notice shall be
confirmed promptly thereafter in writing.
7. Indemnification.
(1) The
Company agrees to indemnify and hold harmless the Underwriters and each Person,
if any, who controls each Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any and all losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
not limited to attorneys’ fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon (i) an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement,
including the information deemed to be a part of the Registration Statement at
the time of effectiveness and at any subsequent time pursuant to Rules 430A and
430B of the Rules and Regulations, the General Disclosure Package, the
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto
or any Issuer Free Writing Prospectus or in any materials or information
provided to investors by, or with the approval of, the Company in connection
with the marketing of the offering of the ordinary shares Offering (“Marketing Materials”),
including any road show or investor presentations made to investors by the
Company (whether in person or electronically) or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse such indemnified party for any legal or other expenses reasonably
incurred by it in connection with investigating or defending against such loss,
liability, claim, damage, liability or action; or (ii) in whole or in part upon
any inaccuracy in the representations and warranties of the Company contained
herein; or (iii) in whole or in part upon any failure of the Company to perform
its obligations hereunder or under law; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with the Underwriters’ Information. This
indemnity agreement will be in addition to any liability, which the Company may
otherwise have, including but not limited to other liability under this
Agreement.
(2) Each
Underwriter, severally and not jointly, shall indemnify and hold harmless the
Company, each of the directors of the Company, each of the officers of the
Company who shall have signed the Registration Statement, and each other Person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
not limited to attorneys’ fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, as
originally filed or any amendment thereof, or any related Preliminary Prospectus
or the Prospectus, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
any such loss, liability, claim, damage or expense arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with the
Underwriters’ Information. The parties agree that such information
provided by or on behalf of any Underwriter through the Representative consists
solely of the material referred to in the last sentence of Section 2.1(3)
hereof.
(3)
Promptly after receipt by an indemnified party under subsection (1) or (2) above
of notice of any claims or the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the claim or the commencement
thereof (but the failure so to notify an indemnifying party shall not relieve
the indemnifying party from any liability which it may have under this Section 7
to the extent that it is not materially prejudiced as a result thereof and in
any event shall not relieve it from any liability that such indemnifying party
may have otherwise than on account of the indemnity agreement
hereunder). In case any such claim or action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate, at its own
expense in the defense of such action, and to the extent it may elect by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
satisfactory to such indemnified party; provided however, that counsel to the
indemnifying party shall not (except with the written consent of the indemnified
party) also be counsel to the indemnified party. Notwithstanding the
foregoing, the indemnified party or parties 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 such indemnified party or parties unless (i) the
employment of such counsel shall have been authorized in writing by one of the
indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to have charge of the
defense of such action within a reasonable time after notice of commencement of
the action, (iii) the indemnifying party does not diligently defend the action
after assumption of the defense, or (iv) 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 one or all of the
indemnifying parties (in which case the indemnifying parties 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 such fees and expenses shall be borne by the
indemnifying parties. No indemnifying party shall, without the prior
written consent of the indemnified parties, effect any settlement or compromise
of, or consent to the entry of judgment with respect to, any pending or
threatened claim, investigation, action or proceeding in respect of which
indemnity or contribution may be or could have been sought by an indemnified
party under this Section 7 or Section 8 hereof (whether or not the indemnified
party is an actual or potential party thereto), unless (x) such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such claim, investigation, action or
proceeding and (ii) does not include a statement as to or an admission of fault,
culpability or any failure to act, by or on behalf of the indemnified party, and
(y) the indemnifying party confirms in writing its indemnification obligations
hereunder with respect to such settlement, compromise or
judgment.
8. Contribution. In
order to provide for contribution in circumstances in which the indemnification
provided for in Section 8 hereof is for any reason held to be unavailable from
any indemnifying party or is insufficient to hold harmless a party indemnified
thereunder, the Company and the Underwriters shall contribute to the aggregate
losses, claims, damages, liabilities and expenses of the nature contemplated by
such indemnification provision (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claims asserted, but after deducting in the
case of losses, claims, damages, liabilities and expenses suffered by the
Company, any contribution received by the Company from Persons, other than the
Underwriters, who may also be liable for contribution, including Persons who
control the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, officers of the Company who signed the
Registration Statement and directors of the Company) as incurred to which the
Company and one or more of the Underwriters may be subject, in such proportions
as is appropriate to reflect the relative benefits received by the Company and
the Underwriters from the Offering or, if such allocation is not permitted by
applicable law, in such proportions as are appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Company
and the Underwriters in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits
received by the Company and the Underwriters shall be deemed to be in the same
proportion as (x) the total proceeds from the Offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Company
bears to (y) the underwriting discount or commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of each of the Company and of the
Underwriters shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Underwriters and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 8 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section
8. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
8 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any judicial, regulatory or
other legal or governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission. Notwithstanding the provisions of this
Section 8: (i) no Underwriter shall be required to contribute any amount in
excess of the amount of the Underwriter’s discounts and commissions and (ii) no
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 8, each Person, if any, who controls an Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
shall have the same rights to contribution as such Underwriter, and each Person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, each officer of the Company
who shall have signed the Registration Statement and each director of the
Company shall have the same rights to contribution as the Company, subject in
each case to clauses (i) and (ii) of the immediately preceding
sentence. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties, notify each party or parties from whom contribution may be
sought, but the omission to so notify such party or parties shall not relieve
the party or parties from whom contribution may be sought from any obligation it
or they may have under this Section 8 or otherwise. The obligations
of the Underwriters to contribute pursuant to this Section 8 are several in
proportion to the respective number of Shares to be purchased by each of the
Underwriters hereunder and not joint.
9. Underwriter
Default.
(1) If
any Underwriter or Underwriters shall default in its or their obligation to
purchase Firm Shares hereunder, and if the Firm Shares with respect to which
such default relates (the “Default Shares”) do not (after
giving effect to arrangements, if any, made by the Representative pursuant to
subsection (2) below) exceed in the aggregate 10% of the number of Firm Shares,
each non-defaulting Underwriter, acting severally and not jointly, agrees to
purchase from the Company that number of Default Shares that bears the same
proportion of the total number of Default Shares then being purchased as the
number of Firm Shares set forth opposite the name of such Underwriter on Schedule A hereto
bears to the aggregate number of Firm Shares set forth opposite the names of the
non-defaulting Underwriters, subject, however, to such adjustments to eliminate
fractional shares as the Representative in its sole discretion shall
make.
(2) In
the event that the aggregate number of Default Shares exceeds 10% of the number
of Firm Shares, the Representative may in their discretion arrange for
themselves or for another party or parties (including any non-defaulting
Underwriter or Underwriters who so agree) to purchase the Default Shares on the
terms contained herein. In the event that within five calendar days
after such a default the Representative do not arrange for the purchase of the
Default Shares as provided in this Section 9, this Agreement shall thereupon
terminate, without liability on the part of the Company with respect thereto
(except in each case as provided in Sections 4, 6, 7, 9 and 11(d)) or the
Underwriters, but nothing in this Agreement shall relieve a defaulting
Underwriter or Underwriters of its or their liability, if any, to the other
Underwriters and the Company for damages occasioned by its or their default
hereunder.
(3) In
the event that any Default Shares are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as aforesaid,
the Representative or the Company shall have the right to postpone the Closing
Date for a period, not 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 or supplement to the Registration
Statement or the Prospectus which, in the reasonable opinion of Underwriters’
Counsel, may thereby be made necessary or advisable. The term
“Underwriter” as used in this Agreement shall include any party substituted
under this Section 9 with like effect as if it had originally been a party to
this Agreement with respect to such Firm Shares.
10. Survival of Representations
and Agreements. All representations and warranties, covenants
and agreements of the Company and the Underwriters contained in this Agreement
or in certificates of officers of the Company or any Subsidiary submitted
pursuant hereto, including the agreements contained in Section 5, the indemnity
agreements contained in Section 7 and the contribution agreements contained in
Section 8 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 by or on behalf of the Company, any of its officers and
directors or any controlling Person thereof, and shall survive delivery of and
payment for the Shares to and by the Underwriters. The
representations contained in Section 2 hereof and the covenants and agreements
contained in Sections 4, 5, 7, 8, this Section 10 and Sections 14 and 15 hereof
shall survive any termination of this Agreement, including termination pursuant
to Section 9 or 11 hereof.
11. Effective Date of Agreement;
Termination.
(1) This
Agreement shall become effective upon the later of: (i) receipt by the
Representative and the Company of notification of the effectiveness of the
Registration Statement or (ii) the execution of this
Agreement. Notwithstanding any termination of this Agreement, the
provisions of this Section 11 and of Sections 1, 4, 6, 7 and 12 through 16,
inclusive, shall remain in full force and effect at all times after the
execution hereof.
(2) The
Representative shall have the right to terminate this Agreement at any time
prior to the consummation of the Closing if: (i) any domestic or international
event or act or occurrence has materially disrupted, or in the opinion of the
Representative will in the immediate future materially disrupt, the market for
the Company’s securities or securities in general; or (ii) trading on the New
York Stock Exchange, NYSE AMEX or NASDAQ shall have been suspended, or minimum
or maximum prices for trading shall have been fixed, or maximum ranges for
prices for securities shall have been fixed, or maximum ranges for prices for
securities shall have been required on the New York Stock Exchange, NYSE AMEX or
NASDAQ or by order of the Commission or any other government authority having
jurisdiction; or (iii) 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 the opinion of the Representative, make it inadvisable to
proceed with the delivery of the Firm Shares, or (iv) a banking moratorium has
been declared by any state or federal authority or if any material disruption in
commercial banking or securities settlement or clearance services shall have
occurred; or (v) (A) there shall have occurred any outbreak or escalation of
hostilities or acts of terrorism involving the United States or there is a
declaration of a national emergency or war by the United States or (B) there
shall have been any other calamity or crisis or any change in political,
financial or economic conditions if the effect of any such event in (A) or (B),
in the judgment of the Representative, is so material and adverse
that such event makes it impracticable or inadvisable to proceed with
the offering, sale and delivery of the Firm Shares on the terms and in the
manner contemplated by the Prospectus.
(3) Any
notice of termination pursuant to this Section 11 shall be in
writing.
(4) If
this Agreement shall be terminated pursuant to any of the provisions hereof
(other than pursuant to Section 9(2) hereof), or if the sale of the Shares
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth herein is not satisfied or because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or comply with any provision hereof, the Company will, subject to demand by the
Representative, reimburse the Underwriters for only those out-of-pocket expenses
actually incurred by the Underwriters in connection herewith, less the Advance
and any other amounts previously paid to the Representative or the Underwriters
in conducting its due diligence, including background checks of the Company’s
officers and directors, or in reimbursement for any of the Underwriter’s
expenses, or the Representative shall return any portion of the Advance not
offset by such accountable out-of-pocket expenses actually
incurred.
12. Notices. All
communications hereunder, except as may be otherwise specifically provided
herein, shall be in writing, and:
if sent
to the Representative or any Underwriter, shall be mailed, delivered, or faxed
and confirmed in writing, to Maxim Group LLC, ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, Executive Managing Director of Investment Banking, with a
copy to Underwriters’ Counsel at Ellenoff ▇▇▇▇▇▇▇▇ & Schole LLP, ▇▇▇ ▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.; and if sent to the
Company, shall be mailed, delivered, or faxed and confirmed in writing to the
Company and its counsel at the addresses set forth in the Registration
Statement,
provided, however, that any
notice to an Underwriter pursuant to Section 7 shall be delivered or sent by
mail or facsimile transmission to such Underwriter at its address set forth in
its acceptance facsimile to the Representative, which address will be supplied
to any other party hereto by the Representative upon request. Any
such notices and other communications shall take effect at the time of receipt
thereof.
13. Parties; Limitation of
Relationship. This Agreement shall inure solely to the benefit
of, and shall be binding upon, the Underwriters, the Company and the controlling
Persons, directors, officers, employees and agents referred to in Sections 6 and
7 hereof, and their respective successors and assigns, and no other Person shall
have or be construed to have any legal or equitable right, remedy or claim under
or in respect of or by virtue of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof
are intended to be for the sole and exclusive benefit of the parties hereto and
said controlling Persons and their respective successors, officers, directors,
heirs and legal Representative, and it is not for the benefit of any other
Person. The term “successors and assigns” shall not include a
purchaser, in its capacity as such, of Shares from any of the
Underwriters.
14. Governing
Law. This Agreement shall be deemed to have been executed and
delivered in New York and both this Agreement and the transactions contemplated
hereby shall be governed as to validity, interpretation, construction, effect,
and in all other respects by the laws of the State of New York, without regard
to the conflicts of laws principals thereof (other than Section 5-1401 of The
New York General Obligations Law). Each of the Underwriters and the
Company: (a) agrees that any legal suit, action or proceeding arising out of or
relating to this Agreement and/or the transactions contemplated hereby shall be
instituted exclusively in the Supreme Court of the State of New York, New York
County, or in the United States District Court for the Southern District of New
York, (b) waives any objection which it may have or hereafter to the venue of
any such suit, action or proceeding, and (c) irrevocably consents to the
jurisdiction of Supreme Court of the State of New York, New York County, or in
the United States District Court for the Southern District of New
York in any such suit, action or proceeding. Each of the Underwriters
and the Company further agrees to accept and acknowledge service of any and all
process which may be served in any such suit, action or proceeding in the
Supreme Court of the State of New York, New York County, or in the United States
District Court for the Southern District of New York and agrees that service of
process upon the Company mailed by certified mail to the Company’s address or
delivered by Federal Express via overnight delivery shall be deemed in every
respect effective service of process upon the Company, in any such suit, action
or proceeding, and service of process upon the Underwriters mailed by certified
mail to the Underwriters’ address or delivered by Federal Express via overnight
delivery shall be deemed in every respect effective service process upon the
Underwriters, in any such suit, action or proceeding. THE COMPANY (ON
BEHALF OF ITSELF, THE SUBSIDIARIES AND, TO THE FULLEST EXTENT PERMITTED BY LAW,
ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVE ANY RIGHT
THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT
OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT, THE REGISTRATION STATEMENT AND THE PROSPECTUS.
15. Entire
Agreement. This Agreement, together with the schedule and
exhibits attached hereto and as the same may be amended from time to time in
accordance with the terms hereof, contains the entire agreement among the
parties hereto relating to the subject matter hereof and there are no other or
further agreements outstanding not specifically mentioned herein.
16. Severability. If
any term or provision of this Agreement or the performance thereof shall be
invalid or unenforceable to any extent, such invalidity or unenforceability
shall not affect or render invalid or unenforceable any other provision of this
Agreement and this Agreement shall be valid and enforced to the fullest extent
permitted by law.
17. Amendment. This
Agreement may only be amended by a written instrument executed by each of the
parties hereto.
18. Waiver, etc.
The failure of any of the parties hereto to at any time enforce any of the
provisions of this Agreement shall not be deemed or construed to be a waiver of
any such provision, nor to in any way effect the validity of this Agreement or
any provision hereof or the right of any of the parties hereto to thereafter
enforce each and every provision of this Agreement. No waiver of any
breach, non-compliance or non-fulfillment of any of the provisions of this
Agreement shall be effective unless set forth in a written instrument executed
by the party or parties against whom or which enforcement of such waiver is
sought; and no waiver of any such breach, non-compliance or non-fulfillment
shall be construed or deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.
19. No Fiduciary
Relationship. The Company hereby acknowledges that the Underwriters are
acting solely as underwriters in connection with the offering of the Company’s
securities. The Company further acknowledge that the Underwriters are acting
pursuant to a contractual relationship created solely by this Agreement entered
into on an arm’s length basis and in no event do the parties intend that the
Underwriters act or be responsible as a fiduciary to the Company, its
management, shareholders, creditors or any other person in connection with any
activity that the Underwriters may undertake or have undertaken in furtherance
of the offering of the Company’s securities, either before or after the date
hereof. The Underwriters hereby expressly disclaim any fiduciary or similar
obligations to the Company, either in connection with the transactions
contemplated by this Agreement or any matters leading up to such transactions,
and the Company hereby confirms its understanding and agreement to that effect.
The Company hereby further confirms its understanding that no Underwriter has
assumed an advisory or fiduciary responsibility in favor of the Company with
respect to the Offering contemplated hereby or the process leading thereto,
including any negotiation related to the pricing of the ordinary shares; and the
Company has consulted its own legal and financial advisors to the extent it has
deemed appropriate in connection with this Agreement and the Offering. The
Company and the Underwriters agree that they are each responsible for making
their own independent judgments with respect to any such transactions, and that
any opinions or views expressed by the Underwriters to the Company regarding
such transactions, including but not limited to any opinions or views with
respect to the price or market for the Company’s securities, do not constitute
advice or recommendations to the Company. The Company hereby waives and
releases, to the fullest extent permitted by law, any claims that the Company
may have against the Underwriters with respect to any breach or alleged breach
of any fiduciary or similar duty to the Company in connection with the
transactions contemplated by this Agreement or any matters leading up to such
transactions.
20. Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument. Delivery of a signed counterpart of this
Agreement by facsimile transmission shall constitute valid and sufficient
delivery thereof.
21. Headings. The
headings herein are inserted for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this
Agreement.
[Signature
Pages Follow]
If the
foregoing correctly sets forth your understanding, please so indicate in the
space provided below for that purpose, whereupon this letter shall constitute a
binding agreement among us.
|
Very
truly yours,
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||
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LIZHAN
ENVIRONMENTAL CORPORATION
|
||
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By:
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||
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Name:
|
||
|
Title:
|
||
Accepted
by the Representative, acting for itself and as
Representative
of the Underwriters named on Schedule A attached
hereto,
as
of the date first written above:
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MAXIM
GROUP LLC
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By:
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Name:
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Title:
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SCHEDULE
A
Underwriters
|
Underwriter
|
Number of Firm Shares to be
Purchased from the Company
|
Number of Over-allotment
Shares to be Purchased from
the Company
|
||
|
Maxim
Group LLC
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||||
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Total
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V-1
SCHEDULE
B
Reorganization
Agreements
V-2
SCHEDULED
C
Lock-Up
Parties
V-3
SCHEDULE
D
Issuer-Represented
General Free Writing Prospectus
V-4
ANNEX
I
Form
of Lock-Up Agreement
V-5
ANNEX
II
Form
of Legal Opinion by ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
V-6
ANNEX III
Form
of Legal Opinion by ▇▇▇▇▇▇▇▇▇ Law
V-7
ANNEX
IV
Form
of Legal Opinion by ▇▇▇▇▇▇ and ▇▇▇▇▇▇
V-8