FUQI INTERNATIONAL, INC. [_______] Shares of Common Stock (Par Value $0.001 Per Share) UNDERWRITING AGREEMENT
[_______]
Shares of Common Stock
(Par
Value $0.001 Per Share)
___________
___, 2007
▇▇▇▇▇▇▇▇
Curhan Ford & Co.
c/▇
▇▇▇▇▇▇▇▇ Curhan Ford & Co.
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear
Sirs:
Fuqi
International, Inc., a Delaware corporation (the “Company”),
proposes to issue and sell to the several underwriters named in Schedule
A
hereto
(the “Underwriters”),
pursuant to this underwriting agreement (the “Agreement”),
an
aggregate of [___________] ([________]) shares of common stock of the Company,
par value $0.001 per share (the “Common
Stock”).
In
addition, the Company has granted to the Underwriters the option referred to
in
Section 2(d) hereof to purchase an aggregate of not more than an additional
[___________] ([________]) shares of Common Stock, if requested by the
Underwriters in accordance with Section 2(d) hereof. It is understood that
the Underwriters propose to offer the “Shares” (as hereinafter defined) to be
purchased hereunder to the public upon the terms and conditions set forth in
the
“Registration Statement” (as defined below) after the “Effective Date” (as
defined below) of the Registration Statement. As used in this Agreement,
(a) the term “Firm
Shares”
shall
mean the Common Stock to be issued and sold to the Underwriters at the “First
Closing Date” (as defined in Section 2(b) below); (b) the term
“Option
Shares”
shall
mean any of the additional up to [___________] ([________]) shares of Common
Stock purchased pursuant to the option referred to in Section 2(d) hereof;
and (c) the term “Shares”
shall
mean the Firm Shares and the Option Shares collectively.
As
the
representative of the Underwriters, ▇▇▇▇▇▇▇▇ Curhan Ford & Co. has informed
the Company that ▇▇▇▇▇▇▇▇ Curhan Ford & Co. is authorized to enter into this
Agreement on behalf of the several Underwriters, and that the several
Underwriters are willing, on the basis of the representations, warranties and
agreements of the Company herein contained, and upon the terms but subject
to
the conditions herein set forth, acting severally and not jointly, to purchase
the number of Firm Shares set forth opposite their respective names in
Schedule
A
hereto,
plus their pro rata portion of the Option Shares if ▇▇▇▇▇▇▇▇ Curhan Ford &
Co. elects to exercise the over-allotment option in whole or in part for the
account of the several Underwriters.
1
As
the
representative of the Underwriters, ▇▇▇▇▇▇▇▇ Curhan Ford & Co. has also
informed the Company that (i) the Underwriters have or will orally provide
the pricing information set forth in Schedule
B
to
prospective purchasers prior to confirming sales of the Shares, and
(ii) each Underwriter has represented and agreed that, without the prior
written consent of the Company and ▇▇▇▇▇▇▇▇ Curhan Ford & Co., it has not
made and will not make any offer relating to the Shares that would constitute
a
free writing prospectus, and any such free writing prospectus, the use of which
has been consented to by the Company and ▇▇▇▇▇▇▇▇ Curhan Ford & Co., is
listed in Schedule
B
hereto.
The
Company hereby confirms its agreement with respect to the purchase of the Shares
by the Underwriters as follows:
1. Representations
and Warranties of the Company.
The
Company hereby represents and warrants to, and agrees with, the Underwriters
that, as of the Effective Date, the First Closing Date and each Option Closing
Date (as defined below):
(a) A
registration statement on Form S-1 (File No. 333-144290) relating to the
offering of the Shares has been prepared by the Company in conformity with
the
requirements of the Securities Act of 1933, as amended (the “Act”),
and
the rules and regulations of the United States Securities and Exchange
Commission (the “Commission”)
promulgated pursuant to the Act (the “Rules
and Regulations”),
and
said registration statement has been filed with the Commission under the Act.
Amendments to said registration statement have been similarly prepared and
filed
with the Commission covering the registration of the Shares under the Act
including the related preliminary prospectus or preliminary prospectuses (each
being hereinafter referred to as a “Preliminary
Prospectus”
as
further defined below), each of which has been furnished to the Underwriters.
Each Preliminary Prospectus was endorsed with the legend required by Item 501(b)
of Regulation S-K. As used in this Agreement and unless the context indicates
otherwise, the term “Registration
Statement”
refers
to and means said registration statement, all exhibits, financial statements
and
schedules included therein and the Prospectus (as defined below) included
therein, as finally amended and revised on or prior to the Effective Date (as
defined below) and, in the event of any post-effective amendment thereto or
if
any Rule 462(b) Registration Statement becomes effective prior to the Closing
Date (as hereinafter defined), shall also mean such registration statement
as so
amended or such Rule 462(b) Registration Statement, as the case may be, and
shall also include any Rule 430A Information (as defined below) to be included
in the Prospectus included therein at the Effective Date, as provided by Rule
430A. The term “Effective
Date”
shall
mean each date and time that the Registration Statement, any post-effective
amendment or amendments thereto and any Rule 462(b) Registration Statement
became or becomes effective. The term “Preliminary
Prospectus”
refers
to and means a preliminary prospectus filed with the Commission and included
in
said Registration Statement before the Effective Date and any preliminary
prospectus included in the Registration Statement at the Effective Date that
omits Rule 430A Information; the term “Pricing
Prospectus”
shall
mean the Preliminary Prospectus included in the Registration Statement
immediately prior to the Applicable Time; the term “Applicable
Time”
shall
mean [__:___] New York time on the date of this Agreement; the term
“Issuer
Free Writing Prospectus”
shall
mean any “issuer free writing prospectus” as defined in Rule 433 under the Act;
the term “Rule
430A Information”
shall
mean information with respect to the Shares and the offering thereof permitted
to be omitted from the Registration Statement when it becomes effective pursuant
to Rule 430A; and, the term “Prospectus”
refers
to and means the prospectus relating to the Shares that is first filed pursuant
to Rule 424(b) or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of final prospectus relating to the Shares included in
the
Registration Statement at the Effective Date. If the Registration Statement
is
amended or such Prospectus is supplemented after the Effective Date and prior
to
the Option Closing Date, then the terms “Registration
Statement”
and
“Prospectus”
shall
include such documents as so amended or supplemented. Each Preliminary
Prospectus and the Prospectus delivered to the Underwriters for use in
connection with the offer and sale of the Shares was identical to the electronic
version filed with the Commission via ▇▇▇▇▇, except to the extent permitted
by
Regulation S-T.
2
(b) (i) The
Pricing Prospectus as supplemented by any Issuer Free Writing Prospectus, other
documents and pricing information listed in Schedule B
hereto,
taken together (collectively, the “Pricing
Disclosure Package”)
as of
the Applicable Time did not include any untrue statement of a material fact
or
omit to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not
misleading, (ii) each Issuer Free Writing Prospectus listed in Schedule B
hereto
does not conflict
with
the information contained in the Registration Statement, the Pricing Prospectus
or the Prospectus, and each such Issuer Free Writing Prospectus, as supplemented
by and taken together with the Pricing Disclosure Package as of the Applicable
Time, did not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in light
of
the circumstances under which they were made, not misleading; provided, however,
that the foregoing representations and warranties shall not apply to statements
or omissions made in the Pricing Prospectus or in an Issuer Free Writing
Prospectus in reliance upon and conformity with written information furnished
to
the Company through ▇▇▇▇▇▇▇▇ Curhan Ford & Co. by or on behalf of any
Underwriter expressly for inclusion therein. Each of the Registration Statement,
any Rule 462(b) Registration Statement and any post-effective amendment to
the Registration Statement or the Rule 462(b) Registration Statement, as the
case may be, at the time it became effective and at all subsequent times through
the First Closing Date and the Option Closing Date, complied and will comply
in
all material respects with the Act and the applicable Rules and Regulations
and
did not at the time it became effective contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or
necessary to make the statements therein not misleading. Each Preliminary
Prospectus, as of its date, and the Prospectus, as amended or supplemented,
as
of its date and at all subsequent times through the First Closing Date and
the
Option Closing Date, did not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The representations and warranties set forth in the two
immediately preceding paragraphs do not apply to statements in or omissions
from
the Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment to the Registration Statement or the Rule 462(b)
Registration Statement, as the case may be, or the Prospectus, or any amendments
or supplements thereto, made in reliance upon and in conformity with information
furnished to the Company in writing through ▇▇▇▇▇▇▇▇ Curhan Ford & Co. by or
on behalf of any of the Underwriters expressly for inclusion therein.
(c) Neither
the Commission nor any state regulatory authority has issued an order preventing
or suspending the use of any Preliminary Prospectus nor has the Commission
or
any such authority instituted or, to the Knowledge of the Company (as defined
below), threatened to institute any proceedings with respect to such an order.
When representations or warranties in this Agreement are qualified to the
“Knowledge of the Company” or “Company’s Knowledge,” they are given by the
Company to the extent of and qualified in all respects by the facts actually
known to any of the executive officers or directors of the Company, with an
obligation of reasonable inquiry on the part of such executive officers and
directors, prior to the date such representations or warranties are made.
3
(d) The
Company has delivered to the Underwriters one complete conformed copy of the
Registration Statement and of each consent and certificate of experts filed
as a
part thereof, and conformed copies of the Registration Statement (without
exhibits) and Preliminary Prospectus, any Issuer Free Writing Prospectus and
the
Prospectus, as amended or supplemented, in such quantities and at such places
as
the Underwriters have reasonably requested.
(e) The
Company has not distributed and will not distribute, prior to the later of
the
Option Closing Date and the completion of the Underwriters’ distribution of the
Shares, any offering material in connection with the offering and sale of the
Shares other than a Preliminary Prospectus, the Prospectus, the Registration
Statement or, following receipt of written consent of ▇▇▇▇▇▇▇▇ Curhan Ford
&
Co., which shall not be unreasonably withheld or delayed, any Issuer Free
Writing Prospectus.
(f) This
Agreement has been duly authorized, executed and delivered by, and assuming
due
authorization, execution and delivery by the other parties hereto, is a valid
and binding agreement of, the Company, enforceable against the Company in
accordance with its terms, except as rights to indemnification and contribution
hereunder may be limited by applicable law and except as the enforcement hereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors
or by
general equitable principles. All corporate action and approvals (including
by
the stockholders of the Company) necessary for the Company to consummate the
transactions contemplated in this Agreement have been obtained and are in
effect.
(g) The
Company has been duly incorporated and is now, and at the First Closing Date
(as
defined below) and each Option Closing Date (as defined below) will be, validly
existing as a corporation and in good standing under the laws of the State
of
Delaware, and has the corporate power and authority (i) to own or lease, as
the case may be, its properties, whether tangible or intangible, and conduct
its
business as presently conducted and as described in the Pricing Prospectus
(the “Business”)
and
(ii) to execute, deliver and perform this Agreement and consummate the
transactions contemplated hereby and thereby. The Company has no subsidiaries
other than those subsidiaries set forth on Exhibit 21.1 of the Registration
Statement (each, a “Subsidiary”
and
collectively, the “Subsidiaries”).
Each
of the Subsidiaries has been duly incorporated and is now, and at the Closing
Dates (as defined below) will be, validly existing as a corporation in good
standing under the laws of its respective jurisdiction as set forth on such
Exhibit. Each of the Subsidiaries has the corporate power and authority to
own
or lease, as the case may be, its properties, whether tangible or intangible,
and to conduct its business as presently conducted and described in the Pricing
Prospectus. Each of the Company and its Subsidiaries is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which the nature of the business transacted by it or the
character or location of its properties, in each case taken as a whole, makes
such qualification necessary, except where the failure to so qualify or be
in
good standing would not reasonably be expected to have a material adverse effect
upon the condition (financial or otherwise), results of operations, prospects,
income, shareholders’ equity, net worth, business, assets or properties of the
Company and the Subsidiaries, taken as a whole (a “Material
Adverse Effect”).
The
Company owns, directly or indirectly, all of the issued and outstanding shares
of capital stock or other equity and ownership and/or voting interests of each
of the Subsidiaries, free and clear of any security interests, liens,
encumbrances, claims and charges other than as disclosed in the Registration
Statement and the Pricing Prospectus, and all of such shares or other interests
have been duly authorized and validly issued and are fully paid and
non-assessable. There are no options or warrants for the purchase of, or other
rights to purchase or acquire, or outstanding securities convertible into or
exchangeable for, any capital stock or other securities or interests of the
Subsidiaries. Other than the Subsidiaries, the Company has no equity interests
in any entity. Each of the Company and its Subsidiaries holds such permits,
licenses, certifications, registrations, approvals, consents, orders, franchises
and other authorizations (collectively, “Permits”)
from
state, federal, foreign or other regulatory authorities necessary for the
conduct of its Business and is in compliance with all laws and regulations
and
all orders and decrees applicable to it or to such Business, except where the
failure to hold such Permits or comply with such laws, regulations, orders
or
decrees would not reasonably be expected to result in a Material Adverse Effect,
and there are no proceedings pending or, to the Knowledge of the Company,
threatened, seeking to cancel, terminate or limit such Permits.
4
(h) The
consolidated financial statements of the Company and the financial statements
of
its Subsidiaries, including the schedules and related notes, filed with the
Commission as part of the Registration Statement and included in the Pricing
Prospectus are correct in all material respects and fairly present the financial
position of the Company and its Subsidiaries, or that of the applicable
Subsidiary, as the case may be, as of and at the respective dates thereof and
the results of operations and cash flows of the Company or that of the
applicable Subsidiary, as the case may be, for the respective periods indicated
therein and comply as to form in all material respects with the applicable
accounting requirements included in Regulations S-K and S-X, as well as any
other applicable Rules and Regulations. Such financial statements have been
prepared in accordance with generally accepted accounting principles of the
United States (“GAAP”)
applied on a consistent basis throughout the periods involved, except as
otherwise stated in the Registration Statement and the Pricing Prospectus;
provided, however, that financial statements that are unaudited are subject
to
year-end adjustments and do not contain footnotes required under GAAP. The
selected consolidated financial data set forth in the Registration Statement
and
the Pricing Prospectus fairly present the information shown therein at the
respective dates thereof and for the respective periods covered thereby and
have
been presented on a basis consistent with that of the audited and unaudited
financial statements included in the Registration Statement and the Pricing
Prospectus. Except as included in the Registration Statement and the Pricing
Prospectus, no other financial statement or supporting schedules are required
to
be included in the Registration Statement.
(i) The
accounting firm of Stonefield ▇▇▇▇▇▇▇▇▇, Inc., which has audited the financial
statements filed and to be filed with the Commission as part of the Registration
Statement and Pricing Prospectus, are registered independent public accountants
with the Public Company Accounting Oversight Board as required by the Act and
the Rules and Regulations, and the Securities Exchange Act of 1934, as amended
(the “1934
Act”)
and
the rules and regulations thereunder. Except as described in the Pricing
Prospectus and as pre-approved in accordance with the requirements set forth
in
Section 10A of the 1934 Act, Stonefield ▇▇▇▇▇▇▇▇▇, Inc. has not been
engaged by the Company to perform any “prohibited activities” (as defined in
Section 10A of the 1934 Act).
5
(j) Subsequent
to the respective dates as of which information is given in the Registration
Statement and the Pricing Prospectus and the Company’s latest financial
statements filed with the Commission as a part thereof, and except as described
in the Registration Statement and the Pricing Prospectus, (i) neither the
Company nor any Subsidiary has incurred any material liability or obligation,
direct or contingent, or entered into any material transactions whether or
not
incurred in the ordinary course of business; (ii) neither the Company nor
any Subsidiary has sustained any material loss or interference with its business
from fire, storm, explosion, flood or other casualty (whether or not such loss
is insured against), or from any labor dispute or court or governmental action,
order or decree; (iii) there have not been, and through and including the
First Closing Date, there will not be, any changes in the capital stock or
any
material increases in the long-term debt or other securities of the Company;
(iv) the Company has not paid or declared any dividend or other
distribution on its Common Stock or its other securities or redeemed or
repurchased any of its Common Stock or other securities, and (v) no change,
event, development or circumstance has occurred which would reasonably be
expected to result in a Material Adverse Effect.
(k) No
Permits of or filing with any government or governmental instrumentality,
agency, body or court, except as have been obtained or made under the Act,
the
“blue sky” or securities laws of any state or the rules of the National
Association of Securities Dealers, Inc. (“NASD”)
(including approval of underwriting compensation) or in connection with the
listing of the Common Stock on the NASDAQ Global Market, are required
(i) for the valid authorization, issuance, sale and delivery of the Firm
Shares and the Option Shares to the Underwriters pursuant to this Agreement,
and
(ii) the consummation by the Company of the transactions contemplated by
this Agreement.
(l) Except
as
disclosed in the Registration Statement and Pricing Prospectus, there is neither
pending nor, to the Knowledge of the Company, threatened in writing, against
the
Company or any Subsidiary any claim, action, suit, or proceeding at law or
in
equity, arbitration, investigation or inquiry to which the Company or any of
its
respective officers, directors or 5% or greater securityholders is a party
and
involving the Company’s or any Subsidiary’s properties or businesses, before or
by any court, arbitration tribunal or governmental instrumentality, agency,
or
body.
(m) There
is
no contract or other document which is required by the Act or by the Rules
and
Regulations to be described in the Registration Statement or the Pricing
Prospectus or to be filed as an exhibit to the Registration Statement which
has
not been so described or filed as required and each contract or document which
has been described in the Registration Statement and Pricing Prospectus has
been
described accurately, in all material respects, and presents fairly, in all
material respects, the information required to be described and each such
contract or document which is filed as an exhibit to the Registration Statement
is and shall be in full force and effect at the Closing Date or shall have
been
terminated in accordance with its terms or as set forth in the Registration
Statement and Pricing Prospectus, and no party to any such contract has given
notice to the Company or any Subsidiary of the cancellation of or, to the
Knowledge of the Company, has threatened to cancel, any such contract, and
except as described in the Registration Statement and Pricing Prospectus,
neither the Company nor any Subsidiary is in material default thereunder. Except
as described in the Registration Statement and the Pricing Prospectus, there
is
no voting or other stockholder agreement between the Company and any of its
stockholders or, to the Knowledge of the Company, between or by and among any
stockholders of the Company. There are and, as of the Closing Date, there will
be, no loans to the Company from any officers, directors, securityholders or
consultants, or any affiliates thereof, except as described in the Registration
Statement and Pricing Prospectus.
6
(n) The
Company and the Subsidiaries have good and marketable title to, or a valid
leasehold interest in, all real property described in the Registration Statement
or the Pricing Prospectus as being occupied by the Company or any Subsidiary.
Each of the Company and the Subsidiaries has good title to all of its personal
property (tangible and intangible) and assets reflected as owned in the
financial statements referred to in Section 1(i) above, including any
licenses, trademarks and copyrights, described in the Registration Statement
and
Pricing Prospectus as owned by it, free and clear of all security interests,
liens, charges, mortgages, encumbrances and restrictions other than as disclosed
in the Registration Statement and the Pricing Prospectus and other than such
security interests, liens, charges, mortgages, encumbrances and restrictions
that do not materially affect the value of such property or materially interfere
with the use made or proposed to be made of such property by the Company or
its
Subsidiaries. The material leases, subleases and licenses under which the
Company or a Subsidiary is entitled to lease, hold or use any real or personal
property, are valid and enforceable by the Company and the Subsidiaries, all
rentals, royalties or other payments accruing thereunder which became due prior
to the date of this Agreement have been duly paid and none of the Company,
any
Subsidiary, or, to the Knowledge of the Company, any other party, is in default
in respect of any of the terms or provisions of any such material leases,
subleases and licenses and no claim of any sort has been asserted by anyone
against the Company or any Subsidiary under any such leases, subleases or
licenses affecting or questioning the rights of the Company or any Subsidiary
to
the continued use or enjoyment of the rights and property covered thereby.
Neither the Company nor any Subsidiary has received notice of any violation
of
any applicable law, ordinance, regulation, order or requirement relating to
its
owned or leased properties, except for any such violation that would not
reasonably be expected to result in a Material Adverse Effect. Each of the
Company and each Subsidiary owns or leases all such properties as are necessary
to its operations as now conducted and as proposed to be conducted as set forth
in the Registration Statement and Prospectus.
(o) Except
as
disclosed in the Registration Statement and the Pricing Prospectus, each of
the
Company and its Subsidiaries has filed with the appropriate federal, state
and
local governmental agencies, and all appropriate foreign countries and political
subdivisions thereof, all tax returns, including franchise tax returns, which
are required to be filed by it or has duly obtained extensions of time for
the
filing thereof and has paid all taxes required to be paid by it as shown on
such
returns and all other material assessments against it, to the extent that the
same have become due and are not being contested in good faith; and the
provisions for income taxes payable, if any, shown on the financial statements
filed with or as part of the Registration Statement and the Pricing Prospectus
are sufficient for all accrued and unpaid foreign and domestic taxes, whether
or
not disputed, and for all periods to and including the dates of such
consolidated financial statements. Except as disclosed in the Registration
Statement and the Pricing Prospectus, none of the Company nor any Subsidiary
has
executed or filed with any taxing authority, foreign or domestic, any agreement
extending the period for assessment or collection of any income taxes and,
to
the Knowledge of the Company, is not a party to any pending action or proceeding
by any foreign or domestic governmental agency for assessment or collection
of
taxes; and no claims for assessment or collection of taxes have been asserted
in
writing against the Company. To the Company’s Knowledge, there is no material
tax deficiency that has been or might be asserted or threatened against the
Company or its Subsidiaries. All
local
and national governmental tax exemptions in the People’s Republic of China (the
“PRC”)
and
all other local and national PRC tax relief, concession and preferential
treatment claimed or obtained by the Company or its Subsidiaries and described
in the Registration Statement or the Pricing Prospectus are valid, binding
and
enforceable.
7
(p) Each
of
the Company and its Subsidiaries are insured by recognized, financially sound
and reputable institutions with policies in such amounts, with such deductibles
and covering such risks as reasonably adequate and customary, in the Company’s
judgment, for their businesses including, but not limited to, policies covering
real and personal property owned or leased by the Company and its Subsidiaries
against theft, damage, destruction, acts of vandalism, general liability and
directors and officers liability. The Company believes that it or any Subsidiary
will be able (i) to renew its existing insurance coverage as and when such
policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its business as
now
conducted without incurring a material additional cost to the Company. Neither
of the Company nor any Subsidiary has been denied any insurance coverage which
it has sought or for which it has applied. To the Knowledge of the Company,
there are no facts or circumstances which would require it or a Subsidiary
to
notify its insurers of any material claim of which notice has not been made
or
will not be made in a timely manner. To the Knowledge of the Company, there
are
no facts or circumstances under any of its or any Subsidiary’s existing
insurance policies which would relieve any insurer of its obligation to satisfy
in full any existing valid claim of the Company or a Subsidiary under any such
policies.
(q) Except
as
disclosed in the Registration Statement and the Pricing Prospectus, each of
the
Company and its Subsidiaries owns or otherwise possesses adequate, and to the
Knowledge of the Company, enforceable, and unrestricted rights to use all
patents, patent applications, patent rights, licenses, inventions, collaborative
research agreements, trade secrets, know-how, trademarks, trademark
registrations, service marks, service ▇▇▇▇ registrations, trade names,
copyrights, works of authorship, formulae, customer lists, designs, technical
data and other proprietary rights and intellectual property (including other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures) which are necessary to or used in the conduct of its businesses
as now conducted or as proposed to be conducted as described in the Registration
Statement and Pricing Prospectus (collectively, the “Intellectual
Property”).
Except as described in the Registration Statement and Pricing Prospectus,
(i) the Company or one of its Subsidiaries is the beneficial and record
owner of all right, title and interest in, to and under the Intellectual
Property, free and clear of all liens, security interests, charges, encumbrances
or other adverse claims and has the right to use the Intellectual Property
without payment to a third party; (ii) there is no pending or, to the
Knowledge of the Company, threatened action, suit, proceeding or claim by others
challenging the Company’s or any Subsidiary’s rights in or to, or the validity
or scope of, any Intellectual Property, nor, to the Knowledge of the Company,
do
there exist any facts which would form a reasonable basis for any such claim;
(iii) to the Knowledge of the Company, neither the Company nor any
Subsidiary has infringed, is infringing upon, or is otherwise in conflict with
the intellectual property rights of others; (iv) none of the Company nor
any Subsidiary has received any notice that it has or may have infringed, is
infringing upon, or is in conflict with the intellectual property rights of
others; (v) there is no pending or, to the Knowledge of the Company,
threatened action, suit, proceeding or claim by others alleging that the Company
or any Subsidiary infringes, is in conflict with, or otherwise violates any
patent, trademark, copyright, trade secret or other proprietary rights of
others, nor, to the Knowledge of the Company, do there exist any facts which
would form a reasonable basis for any such claim; (vi) to the Knowledge of
the Company, no others have infringed upon the Intellectual Property of the
Company or any Subsidiary; (vii) neither the Company nor any Subsidiary is
obligated or under any liability whatsoever to make any payment by way of
royalties, fees or otherwise to any owner or licensee of, or other claimant
to,
intellectual property rights not owned or controlled by the Company or such
Subsidiary or in connection with the conduct of the Business; (viii) the
expiration of any patents, patent rights, trade secrets, trademarks, service
marks, trade names or copyrights would not result in a Material Adverse Effect
that is not otherwise disclosed in the Pricing Prospectus; (ix) none of the
patents owned or licensed by either the Company or any Subsidiary is
unenforceable or invalid, and the Company and its Subsidiaries are unaware
of
any facts which would form a reasonable basis for any claim that the patent
applications owned or licensed by the Company would be unenforceable or invalid
if issued as patents; (x) the Company has taken reasonable security
measures to protect the secrecy, confidentiality and value of all material
proprietary technical information developed by and belonging to the Company
which has not been patented; (xi) neither the Company nor its Subsidiaries
is obligated to pay a royalty, grant a license or provide other consideration
to
any third person in connection with the Intellectual Property; and
(xii) neither the Company nor its Subsidiaries has granted or assigned to
any other person or entity any right to manufacture, have manufactured, assemble
or sell the current products and services of the Company or those products
and
services described in the Registration Statement and the Pricing
Prospectus.
8
(r) Except
as
described in the Registration Statement and Pricing Prospectus, neither the
Company nor any officer, director or any other affiliate of the Company (as
such
term is defined in Rule 405 promulgated under the Rules and Regulations) has
incurred any liability for or entered into any agreement providing for a
finder’s fee or similar fee in connection with the transactions contemplated by
this Agreement.
(s) Neither
the Company nor any of its officers, directors, or to the Knowledge of the
Company, other affiliates (as such term is defined in Rule 405 promulgated
under
the Rules and Regulations) has taken, and each officer or director has agreed
that he will not take, and the Company has used reasonable efforts to cause
each
of its affiliates not to have taken or take, directly or indirectly, any action
designed to constitute or which has constituted or which might cause or result
in the stabilization or manipulation of the price of any security of the Company
or other violation under Regulation M promulgated under the 1934 Act or
otherwise, to facilitate the sale or resale of the Shares.
(t) Except
as
disclosed in the Registration Statement and Pricing Prospectus under the caption
“Certain Relationships and Related Transactions,” no person related to the
Company as described in Item 404(a) of Regulation S-K promulgated
under the Act has or has had during the past three (3) fiscal years of the
Company, either directly or indirectly, (i) a material interest in any
person or entity which (A) furnishes or sells products which are furnished
or sold or are proposed to be furnished or sold by the Company or any
Subsidiary, or (B) purchases from or sells or furnishes to the Company or
any Subsidiary any goods or services, or (ii) a beneficial interest in any
contract or agreement to which the Company or any Subsidiary is a party or
by
which it may be bound or affected. There are no existing agreements,
arrangements, or transactions, between or among the Company or any Subsidiary
and any officer, director of the Company or any Subsidiary which are required
to
be described in the Registration Statement and the Pricing Prospectus under
the
caption “Certain Relationships and Related Transactions” and which are not so
described.
(u) The
minute books of the Company have been provided to the Underwriters through
DLA
Piper US LLP, counsel for the Underwriters (“Underwriters’
Counsel”)
and
contain accurate summaries of all meetings and actions of the directors, all
committees of the Board of Directors and stockholders of the Company since
January 1, 2002, and reflect all transactions referred to in such minutes
accurately in all material respects. The
minute books of each Subsidiary have been provided to the Underwriters through
Underwriters’ Counsel and contain accurate summaries of all meetings and actions
of the directors, all committees of the board of directors and stockholders
of
such Subsidiary since January 1, 2002, and reflect all transactions
referred to in such minutes accurately in all material respects.
(v) The
Company had at the date or dates indicated in the Registration Statement and
Pricing Prospectus a duly authorized, issued and outstanding capitalization
as
set forth in the Registration Statement and the Pricing Prospectus. Based on
the
assumptions stated in the Registration Statement and the Pricing Prospectus,
the
Company will have on the Closing Date the as-adjusted stock capitalization
set
forth therein. Except as set forth in the Registration Statement or the Pricing
Prospectus, on the Effective Date and on the Closing Date, there will be no
options to purchase, warrants or other rights to subscribe for, or any
securities or obligations convertible into, or any contracts or commitments
or
preemptive rights or rights of first refusal to issue or sell shares of the
Company’s or any Subsidiary’s capital stock or any such warrants, convertible
securities or obligations. Except as set forth in the Registration Statement
or
the Pricing Prospectus, no holder of any of the Company’s securities has any
rights, “demand,” “piggyback” or otherwise, to have such securities registered
under the Act, and all holders with any such rights have agreed not to exercise
such rights with respect to the Registration Statement. The Company has the
right under the terms of its agreements with the holders of its securities
to
exclude from the Registration Statement (by amendment or otherwise) any
securities held by such holders.
(w) The
Shares and the other securities of the Company conform in all material respects
to all descriptions and statements in relation thereto in the Registration
Statement and Pricing Prospectus; the outstanding shares of Common Stock of
the
Company have been duly authorized and validly issued and are fully paid and
non-assessable; the outstanding options and warrants to purchase Common Stock
have been duly authorized and validly issued and constitute the valid and
binding obligations of the Company, and none of such outstanding shares of
Common Stock or outstanding warrants or options to purchase Common Stock were
issued in violation of the pre-emptive rights, rights of first refusal or
similar rights to subscribe for or purchase securities of the Company of any
stockholder of the Company. The offers and sales of the outstanding Common
Stock
and outstanding options and warrants to purchase Common Stock were at all
relevant times either registered under the Act and the applicable state
securities or “blue sky” laws or exempt from such registration requirements.
None of the offers and sales of the outstanding Common Stock or outstanding
options or warrants to purchase Common Stock are required to be integrated
(within the meaning of the Act) with the offered sale of the Shares.
9
(x) The
issuance and sale of the Shares to be purchased by the Underwriters from the
Company have been duly authorized and, upon delivery against payment therefor
as
contemplated by this Agreement, will be validly issued, fully paid and
non-assessable.
(y) Each
officer and director of the Company and each owner of record of capital stock
or
options or warrants to acquire capital stock of the Company has agreed to sign
an agreement substantially in the form attached hereto as Exhibit A
(the
“Lock-up
Agreements”).
The
Company has provided to Underwriters’ Counsel true, accurate and complete copies
of all of the Lock-up Agreements presently in effect or effected
hereby.
(z) Neither
the Company, nor any Subsidiary or any agent of the Company or any Subsidiary,
acting on behalf of the Company, has at any time (i) made any contributions
to any candidate for political office in violation of law, or failed to disclose
fully any such contributions in violation of law, (ii) made any payment to
any state, federal or foreign governmental officer or official, or any other
person charged with similar public or quasi-public duties, other than payments
required or allowed by applicable law or (iii) made any payment of funds of
the Company or any Subsidiary or received or retained any funds in violation
of
any law, rule or regulation and under circumstances requiring the disclosure
of
such payment, receipt or retention of funds in the Registration Statement and
Pricing Prospectus. The Company’s and the Subsidiaries’ internal accounting
controls and procedures are sufficient to cause the Company and the Subsidiaries
to comply in all material respects with the Foreign Corrupt Practices Act of
1977, as amended.
(aa) The
Company is not an “investment company” or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940,
as amended. After giving effect to the offering and sale of the Shares and
the
application of the proceeds thereof as described in the Registration Statement
and Pricing Prospectus, the Company will not be an “investment company” within
the meaning of the Investment Company Act of 1940, as amended, and the rules
and
regulations of the Commission thereunder.
(bb) The
confidentiality agreements between the Company or the Subsidiaries and their
officers, employees and consultants are binding and enforceable obligations
upon
the other parties thereto in accordance with their terms, except to the extent
enforceability may be limited by any applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or similar laws affecting
creditors’ rights generally and to the extent that the remedy of specific
performance and injunction or other forms of equitable relief may be subject
to
equitable defenses and the discretion of the court before which any proceeding
therefor may be brought.
10
(cc) Except
as
set forth in the Registration Statement and Pricing Prospectus, none of the
Company or any Subsidiary has employee benefit plans (including, without
limitation, profit sharing and welfare benefit plans) or deferred compensation
arrangements that are subject to the provisions of the United States Employee
Retirement Income Security Act of 1974 (“ERISA”),
it
being understood that neither the Registration Statement nor the Pricing
Prospectus disclose that such employee benefit plans are subject to ERISA.
The
Company has fulfilled its obligations, if any, under the minimum funding
standards of Section 302 of ERISA and the regulations and published
interpretations thereunder with respect to each “plan” (as defined in
Section 3(3) of ERISA and such regulations and published interpretations)
in which employees of the Company or any Subsidiary are eligible to participate
and each such plan subject to ERISA is in compliance in all material respects
with the presently applicable provisions of ERISA and such regulations and
published interpretations. None of the Company or any Subsidiary has incurred
any unpaid liability to the Pension Benefit Guaranty Corporation (other than
for
the payment of premiums in the ordinary course) or to any such plan under Title
IV of ERISA.
(dd) The
Company has filed a registration statement on Form 10 with respect to its
Common Stock under Section 12(b) of the 1934 Act and such registration
statement has become effective under applicable rules of the Commission. The
Company has filed listing applications with respect to its Common Stock with
The
NASDAQ Stock Market (“NASDAQ”),
such
listing applications have been accepted by, and the Shares have been approved
for listing on, the NASDAQ Global Market, subject to
official notices of issuance.
The
Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the 1934 Act, nor has
the
Company received any notification that the Commission or NASDAQ is contemplating
terminating such registration or listing.
(ee) None
of
the Company nor any Subsidiary is involved in any labor disputes with any of
its
employees and, to the Knowledge of the Company, no employee has threatened
the
commencement of any labor disputes with the Company or any Subsidiary, which,
in
either case, would reasonably be expected to result in a Material Adverse
Effect, nor has the Company or any Subsidiary received any notice of any
bankruptcy, labor disturbance or other event affecting any of its principal
suppliers or customers, which would reasonably be expected to result in a
Material Adverse Effect. Each of the Company and each Subsidiary is in
compliance in all material respects with all federal, state, local, and foreign
laws and regulations respecting employment and employment practices, terms
and
conditions of employment and wages and hours that are applicable to them.
Neither the Company nor any Subsidiary has received notice of any pending
investigations involving the Company or any Subsidiary, by the U.S. Department
of Labor, any PRC labour bureau, or any other governmental agency responsible
for the enforcement of such federal, state, local, or foreign laws and
regulations. There is no unfair labor practice charge or complaint against
the
Company or any Subsidiary pending before the National Labor Relations Board
or
any PRC labour bureau, or, to the Knowledge of the Company, any strike,
picketing, boycott, labor dispute, slowdown or stoppage pending or threatened
against or involving the Company or any Subsidiary. No collective bargaining
representation question exists respecting the employees of the Company or any
Subsidiary, and no collective bargaining agreement or modification thereof
is
currently being negotiated by the Company or any Subsidiary. Neither the Company
nor any Subsidiary has received notice that any grievance or arbitration
proceeding is pending under any expired or existing collective bargaining
agreements of the Company or any Subsidiary.
11
(ff) The
Company has provided to Underwriters’ Counsel, complete and accurate copies of
all agreements, certificates, correspondence and other items, documents and
information requested by such counsel, including in such counsel’s due diligence
request memorandum of May 22, 2007.
(gg) The
Company's board of directors has validly appointed an audit committee whose
composition satisfies the requirements of the 1934 Act and the rules and
regulations of the Commission adopted thereunder, and Rules 4200 and 4350
of the rules of NASDAQ. The Company's audit committee has adopted a charter
that
satisfies the 1934 Act and the rules and regulations of the Commission adopted
thereunder, and Rules 4200 and 4350 of NASDAQ.
(hh) The
Company and each of its Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences. The
Company has taken all necessary actions to ensure that, upon and at all times
after effectiveness of the Registration Statement, it has established and
maintains disclosure controls and procedures (as such term is defined in Rule
13a-15 and 15d-15 under the ▇▇▇▇ ▇▇▇) that: (A) are designed to ensure that
material information relating to the Company, including its consolidated
subsidiaries, is made known to the Company’s principal executive officer and its
principal financial officer by others within those entities, particularly during
the periods in which the periodic reports required under the 1934 Act will
be
prepared; and (B) are effective to perform the functions for which they are
established. The
Company is not aware of (x) any significant deficiency or material weakness
in the design or operation of internal controls over financial reporting; or
(y) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company’s internal controls over
financial reporting. Since
the
date of the Company’s most recent audited fiscal year, there has been no change
in the Company’s internal controls that has materially affected, or is
reasonably likely to materially affect, the Company’s internal controls,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
(ii) The
Company is in material compliance with all provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act
of 2002 and the rules and regulations promulgated by the Commission thereunder
that are applicable, or will be applicable as of the date of payment for and
delivery of the Firm Shares and Option Shares pursuant hereto, to the
Company.
(jj) Except
as
set forth in the Registration Statement and Pricing Prospectus (exclusive of
any
supplement thereto), the Company and each of the Subsidiaries (A) are in
compliance in all material respects with any and all applicable foreign,
federal, state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants applicable to its Business (“Environmental
Laws”),
(B) have received and is in compliance with all Permits required under
applicable Environmental Laws to conduct its Business, and (C) have not
received notice of any actual or potential liability for the investigation
or
remediation of any disposal or release of hazardous or toxic substances or
wastes, pollutants or contaminants.
12
(kk) Each
of
the Company and its Subsidiaries complies in all respects with PRC advertising
laws and regulations, except where the failure to comply with such laws and
regulations would not individually or in the aggregate have a Material Adverse
Effect.
(ll) To
the
Knowledge of the Company, after reasonable investigation under the
circumstances, there are no affiliations or associations between any member
of
the NASD and any Company officer, director or holder of five percent (5%) or
more of the Company’s securities, except as set forth in the Registration
Statement and the Pricing Prospectus.
(mm) The
choice of laws of the State of New York as the governing law of this Agreement
is a valid choice of law under the laws of the British Virgin Islands (the
“BVI”)
and
the PRC and will be honored by courts in the BVI and the PRC. The Company has
the power to submit, and pursuant to Section 15 of this Agreement, has legally,
validly, effectively and irrevocably submitted, to the personal jurisdiction
of
the State courts of the State of New York, County of New York and the United
States District Court for the Southern District of New York.
(nn) Neither
the Company, nor any Subsidiary nor any of their respective properties, assets
or revenues has any right of immunity under BVI or PRC law, from any legal
action, suit or proceeding, from the giving of any relief in any such legal
action, suit or proceeding, from set-off or counterclaim, from the jurisdiction
of any BVI, PRC, New York or U.S. federal court, from service of process,
attachment upon or prior to judgment, or attachment in aid of execution of
judgment, or from execution of a judgment, or other legal process or proceeding
for the giving of any relief or for the enforcement of a judgment, in any such
court, with respect to its obligations, liabilities or any other matter under
or
arising out of or in connection with this Agreement; and, to the extent that
the
Company, or any Subsidiary or any of their respective properties, assets or
revenues may have or may hereafter become entitled to any such right of immunity
in any such court in which proceedings may at any time be commenced, each of
the
Company and the Subsidiaries waives or will waive such right to the extent
permitted by law and has consented to such relief and enforcement as provided
in
Section 15 of this Agreement;
(oo) Except
as
set forth in the Registration Statement and the Pricing Disclosure Package,
the
Company’s indirect wholly-owned subsidiary, Shenzhen Fuqi Jewelry Co., Ltd., a
company established under the laws of the PRC (“Fuqi
China”)
is not
currently prohibited, directly or indirectly, from paying any dividends to
its
sole shareholder, Fuqi International Holdings Co., Ltd., a BVI company,
(“Fuqi
BVI”),
nor
is it so prohibited, from making any other distribution on Fuqi China’s share
capital, from repaying to Fuqi BVI or the Company any loans or advances to
Fuqi
China or from transferring any of Fuqi China’s property or assets to the Company
or to any other Subsidiary of the Company. Except as set forth in the
Registration Statement and the Pricing Disclosure Package, any dividends and
other distributions declared with respect to after-tax retained earnings on
the
equity interests of Fuqi China may lawfully be paid to Fuqi BVI in Renminbi
that
may be converted into U.S. dollars and freely transferred out of the PRC, and
all such dividends and other distributions are not and will not be subject
to
withholding or other taxes in the PRC are otherwise free and clear of any other
tax, withholding or deduction in the PRC, and without the necessity of obtaining
any governmental authorization in the PRC except for the routine PRC foreign
exchange procedures and tax withholding procedures.
13
(pp) It
is not
necessary that this Agreement, the Registration Statement, the Prospectus or
any
other document be filed or recorded with any court or other authority in the
BVI
or the PRC.
(qq) There
are
no material off-balance sheet arrangements (as defined in Item 303 of Regulation
S-K) that have or are reasonably likely to have a current or future effect
on
the Company’s financial condition, changes in financial condition, results of
operations, liquidity, capital expenditures or capital resources or components
or revenue or expenses.
(rr) Any
certificate signed by an officer of the Company in his capacity as such and
delivered to the Underwriters or Underwriters’ Counsel pursuant to this
Agreement shall be deemed a representation and warranty by the Company to the
Underwriters as to the matters set forth in such certificate.
(ss) The
issue
and sale of the Shares and the compliance by the Company with this Agreement
and
the consummation of the transactions herein contemplated will not conflict
with
or result in a breach or violation of any of the terms or provisions of, or
constitute a default under (i) any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries
is
bound or to which any of the property or assets of the Company or any of its
Subsidiaries is subject; (ii) the provisions of the Certificate of
Incorporation or By-laws of the Company or the comparable organizational
documents of any Subsidiary; or (iii) any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over
the Company or any of its Subsidiaries or any of their properties, except,
in
the case of clauses (i) and (iii) above, for such conflicts, breaches
or violations as would not, individually or in the aggregate, be reasonably
expected to result in a Material Adverse Effect.
(tt) Neither
the Company nor any of its Subsidiaries is (i) in violation of its charter
or by-laws or (ii) in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement
or
instrument to which it is a party or by which it or any of its properties may
be
bound.
(uu) The
Company and the Subsidiaries have materially complied with, are not in material
violation of, and have not received any written notices of violation with
respect to, any statutes, rules, or regulations applicable to the ownership,
testing, development, manufacture, packaging, processing, use, distribution,
marketing, labeling, promotion, sale, offer for sale, reimbursement, storage,
import, export or disposal of any product manufactured or distributed by the
Company or the Subsidiaries (“Applicable
Laws”),
or
any license, certificate, approval, clearance, authorization, permit, supplement
or amendment required by any Applicable Laws (“Authorizations”).
The
Company and the Subsidiaries possess all material Authorizations and such
material Authorizations are in full force and effect. The Company and the
Subsidiaries are, and their products are, in compliance in all material respects
with all Authorizations and Applicable Laws, including, but not limited to,
all
laws, statutes, rules, regulations, or orders administered, issued or enforced
by any PRC or other governmental authority having authority over the Company,
the Subsidiaries or any of their products (“Governmental
Authority”).
The
Company and the Subsidiaries have not received notice of any claim, action,
suit, proceeding, hearing, enforcement, investigation, arbitration or other
similar action from any Governmental Authority alleging that any product
operation or activity is in material violation of any Applicable Laws or
Authorizations and, to the Knowledge of the Company, no such Governmental
Authority is considering any such claim, litigation, arbitration, action, suit,
investigation or proceeding. Each regulatory submission for the Company’s or the
Subsidiaries’ products has been filed, cleared, approved and maintained in
compliance in all material respects with all Applicable Laws and Authorizations,
including without limitation applicable PRC statutes, rules, regulations or
orders. To the Knowledge of the Company, there are no facts which are reasonably
likely to cause (A) the withdrawal, or recall of any products sold or
intended to be sold by the Company or the Subsidiaries, or (B) a suspension
or revocation of any of the Company’s or Subsidiaries Authorizations. The
Company or the Subsidiaries have not received notice (whether complete or
pending) of any proceeding seeking recall, suspension or seizure of any products
sold or intended to be sold by the Company or the Subsidiaries.
14
(vv) The
Company (A) is in compliance, in all material respects, with any and all
applicable PRC and other foreign, federal, state and local laws, rules,
regulations, treaties, statutes and codes promulgated by any and all
governmental authorities relating to the protection of human health and safety
in the workplace (“Occupational
Laws”);
(B) has received all material permits, licenses or other approvals required
of it under applicable Occupational Laws to conduct its business as currently
conducted; and (C) is in compliance, in all material respects, with all
terms and conditions of such permit, license or approval. No action, proceeding,
revocation proceeding, writ, injunction or claim is pending or, to the Company’s
Knowledge, threatened against the Company relating to Occupational Laws, and
to
the Company’s Knowledge there are no facts, circumstances or developments
relating to its operations or cost accounting practices that could reasonably
be
expected to form the basis for or give rise to such actions, suits,
investigations or proceedings.
(ww) Each
of
the Company and each of the Company’s directors that signed the Registration
Statement is aware of and has been advised as to, the content of the Rules
on
Mergers and Acquisitions of Domestic Enterprises by Foreign Investors jointly
promulgated by the Ministry of Commerce, the State Assets Supervision and
Administration Commission, the State Tax Administration, the State
Administration of Industry and Commerce, the China Securities Regulatory
Commission (the “CSRC”)
and
the State Administration of Foreign Exchange of the PRC on August 8, 2006 (the
“M&A
Rules”),
in
particular the relevant provisions thereof which purport to require offshore
special purpose vehicles, or SPVs, formed for listing purposes and controlled
directly or indirectly by PRC companies or individuals, to obtain the approval
of the CSRC prior to the listing and trading of their securities on an overseas
stock exchange; the Company has received legal advice specifically with respect
to the M&A Rules from its PRC counsel and the Company understands such legal
advice; and the Company has fully communicated such legal advice from its PRC
counsel to each of its directors that signed the Registration Statement and
each
director has confirmed that he or she understands such legal
advice.
15
(xx) The
Company has taken all reasonable steps to comply with, and to ensure compliance
by each of its stockholders, 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, without limitation, the Ministry of Commerce,
National Development and Reform Commission and the State Administration of
Foreign Exchange) relating to overseas investment by PRC residents and citizens
or overseas 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 that each stockholder, option holder,
director, officer and employee that is, or is directly or indirectly owned
or
controlled by, a PRC resident or citizen, complete any registration and other
procedures required under applicable PRC Overseas Investment and Listing
Regulations;
(yy) The
statements set forth in the Prospectus under the caption “Risk Factors--Recent
PRC regulations relating to acquisitions of PRC companies by foreign entities
may create regulatory uncertainties that could restrict or limit our ability
to
operate. Our failure to obtain the prior approval of the China Securities
Regulatory Commission, or the CSRC, for this offering and the listing and
trading of our common stock could have a material adverse effect on our
business, operating results, reputation and trading price of our common stock,
and may also create uncertainties for this offering” represent fair and accurate
summaries of the matters described therein, and (i) no material information
has
been omitted from such summaries which would make the same misleading in any
material respect, and (ii) nothing has come to the attention of the Company
that
would lead it to believe that the CSRC is taking any action to require the
Company to seek its approval for the consummation of the transactions
contemplated under this Agreement or that would otherwise have a Material
Adverse Effect.
(zz) Except
as
set forth in the Registration Statement and the Pricing Prospectus, the Company
has not granted rights to develop, manufacture, produce, assemble, distribute,
license, market or sell its products to any other person and is not bound by
any
agreement that affects the Company’s exclusive right to develop, manufacture,
produce, assemble, distribute, license, market or sell its
products.
(aaa) 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 Registration
Statement and the Pricing Prospectus is not based on or derived from sources
that are reliable and accurate in all material respects.
In
addition, the certificates signed by an officer of the Company and delivered
to
the Underwriters or counsel for the Underwriters pursuant to Section 7(i) hereof
shall be deemed to be representations and warranties by the Company, as to
matters covered thereby, to each Underwriter.
16
2. Purchase,
Delivery and Sale of the Shares.
(a) Upon
the
basis of the representations and warranties of ▇▇▇▇▇▇▇▇ Curhan Ford & Co.
herein contained, and subject to the terms and conditions herein set forth,
the
Company agrees to issue and sell to the several Underwriters the respective
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule
A
hereto.
On the basis of the representations, warranties and agreements of the Company
herein contained, and upon the terms but subject to the conditions herein set
forth, the Underwriters agree, severally and not jointly, to purchase from
the
Company the respective number of Firm Shares set forth opposite their names
on
Schedule A,
subject
to adjustment in accordance with Section 8 hereof. The purchase price per
Share to be paid by the several Underwriters to the Company shall be U.S.$[____]
per share.
Payment
for the Firm Shares to be sold by the Company shall be made at the First Closing
Date (and, in the case of the Option Shares, if applicable, at the Option
Closing Date) by wire transfer of immediately available funds to the order
of
the Company.
(b) Delivery
by the Company of the Firm Shares to be purchased by the Underwriters and
payment therefor by the Underwriters shall be made by the Company and the
Underwriters at 9:00 a.m. New York time, at the offices of DLA Piper US LLP,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the “DLA
Piper Office”),
or at
such other place as may be agreed upon among the Underwriters and the Company,
on the third (3rd) full business day following the date of this Agreement,
or,
if this Agreement is executed and delivered after 1:30 P.M., New York time,
on
the fourth (4th) full business day following the date of this Agreement, or
at
such other time and date not later than seven (7) full business days following
the first day that Shares are traded as the Underwriters and the Company may
determine (or at such time and date to which payment and delivery shall have
been postponed pursuant to this Section 2), such time and date of payment
and delivery being herein called the “First
Closing Date”;
provided, however, that if the Company has not made available to the
Underwriters copies of the Prospectus within the time provided in this
Agreement, the Underwriters may, in their sole discretion, postpone the First
Closing Date until no later than two (2) full business days following delivery
of copies of the Prospectus to the Underwriters.
(c) The
Company shall deliver, or cause to be delivered, a credit representing the
Firm
Shares to an account or accounts at The Depository Trust Company (“DTC”)
for the
accounts of the Underwriters at the First Closing Date, against the irrevocable
release of a wire transfer of immediately available funds for the amount of
the
purchase price therefor. The Company shall also deliver, or cause to be
delivered, a credit representing the Option Shares to an account or accounts
at
DTC for the accounts of the Underwriters, at the First Closing Date or the
Option Closing Date, as the case may be, against the irrevocable release of
a
wire transfer of immediately available funds for the amount of the purchase
price therefor. Time shall be of the essence, and delivery at the time and
place
specified in this Agreement is a further condition to the obligations of the
Underwriters. Not later than 12:00 noon, New York time, on the second business
day following the date the Shares are released by the Underwriters for sale
to
the public, the Company shall deliver or cause to be delivered copies of the
Prospectus in such quantities and at such places as the Underwriters shall
request.
17
(d) Subject
to the terms and conditions of this Agreement, and on the basis of the
representations, warranties and agreements contained herein, for the purposes
of
covering any over-allotments in connection with the distribution and sale of
the
Firm Shares as described in the Registration Statement and Pricing Prospectus,
the Underwriters are hereby granted an option to purchase all or any part of
the
Option Shares from the Company for up to ________ Option Shares. The purchase
price to be paid per share for the Option Shares will be the same price as
the
price per Firm Share set forth in Section 2(a) hereof. The option granted
hereby may be exercised by notice from the Underwriters to the Company as to
all
or any part of the Option Shares at any time within thirty (30) days after
the
Effective Date. The Underwriters will not be under any obligation to purchase
any Option Shares.
(e) The
option granted pursuant to Section 2(d) hereof may be exercised by ▇▇▇▇▇▇▇▇
Curhan Ford & Co. by giving notice to the Company, which must be confirmed
by a letter or facsimile setting forth the number of Option Shares to be
purchased by the Underwriters, the date and time for delivery of and payment
for
the Option Shares to be purchased and stating that the Option Shares referred
to
therein are to be used for the sole purpose of covering over-allotments in
connection with the distribution and sale of the Firm Shares by the
Underwriters. If such notice is given prior to the First Closing Date, the
date
set forth therein for such delivery and payment will be the First Closing Date.
If such notice is given on or after the First Closing Date, the date set forth
therein for such delivery and payment will not be earlier than two (2) full
business days thereafter. In either event, the date so set forth will not be
more than fifteen (15) full business days after the date of such notice. The
date and time set forth in such notice is herein called the “Option
Closing Date.”
Upon
exercise of such option, through the Underwriters’ delivery of the
aforementioned notice, the Company will become obligated to convey to the
Underwriters, and, subject to the terms and conditions set forth in this
Section 2(e), the Underwriters will become obligated to purchase, the
number of Option Shares specified in such notice. If any Option Shares are
to be
purchased, (i) each Underwriter agrees, severally and not jointly, to
purchase the number of Option Shares (subject to such adjustments to eliminate
fractional shares as the Underwriters may determine) that bears the same
proportion to the total number of Option Shares to be purchased as the number
of
Firm Shares set forth on Schedule A
opposite
the name of such Underwriter bears to the total number of Firm Shares, subject
to any adjustment in accordance with Section 8 hereof and (ii) the
Company agrees to sell up to ______ Option Shares. The Underwriters may cancel
the option at any time prior to its expiration by giving written notice of
such
cancellation to the Company.
(f) Payment
for any Option Shares purchased will be made to the Company by wire transfer
in
immediately-available funds to the order of the Company, against delivery of
the
Option Shares purchased by the Underwriters at the DLA Piper Office (or at
such
other location as the Underwriters and the Company may agree).
(g) Unless
the Shares are to be delivered by a “fast” transfer, the Company will make the
certificates for the Shares to be purchased by the Underwriters hereunder
available to the Underwriters for inspection, checking and packaging at the
office of the Company’s transfer agent or correspondent in San Francisco, CA,
not less than one (1) full business day prior to the First Closing Date and the
Option Closing Date, as the case may be (both of which are collectively referred
to herein as the “Closing
Dates”).
The
certificates representing the Shares shall be in such names and denominations
as
the Underwriters may request at least two (2) full business days prior to the
respective Closing Dates. In the event that the Underwriters determine to
utilize DTC, the parties will use their best efforts to make the offering of
the
Shares “DTC eligible” and to comply with the procedures thereof.
18
3. Public
Offering by the Underwriters.
The
Underwriters agree to cause the Shares to be offered to the public initially
at
the price and under the terms set forth in the Registration Statement and
Prospectus as soon, on or after the effective date of this Agreement, as the
Underwriters deem advisable, but no more than five (5) full business days after
such effective date. The Company is advised by the Underwriters that the Shares
are to be offered to the public initially at U.S.$[___] a share (the
“Public
Offering Price”).
4. Agreements
of the Company.
The
Company covenants and agrees with the Underwriters that:
(a) If
the
Registration Statement has not been declared effective prior to the time of
execution of this Agreement, the Company will use its best efforts to cause
the
Registration Statement to become effective as promptly as possible, or, if
the
procedure in Rule 430A of the Act is followed, to prepare and timely file
with the Commission under Rule 424(b) under the Act a Prospectus in a form
approved by the Underwriters containing information previously omitted at the
time of effectiveness of the Registration Statement in reliance on
Rule 430A of the Act, and will not at any time, whether before or after the
Effective Date, file any amendment or supplement to the Registration Statement,
(i) which shall not have been previously submitted to, and approved by, the
Underwriters or Underwriters’ Counsel within a reasonable time prior to the
filing thereof, (ii) to which the Underwriters or Underwriters’ Counsel
shall have reasonably objected as not being in compliance with the Act or the
Rules and Regulations or (iii) which is not in compliance with the Act or
the Rules and Regulations. If the Company elects to rely on Rule 462(b)
under the Act, the Company shall file a Rule 462(b) Registration Statement
with the Commission in compliance with Rule 462(b) under the Act prior to
the time confirmations are sent or given, as specified by Rule 462(b)(2)
under the Act, and shall pay the applicable fees in accordance with
Rule 111 under the Act. The Company further agrees to file promptly all
material required to be filed by the Company with the Commission pursuant to
Rule 433(d) under the Act.
(b) The
Company will, promptly after it shall have received notice, notify the
Underwriters (i) of the receipt of any comments on, or requests for
amendment of, the Registration Statement, for supplement of the Prospectus,
or
for additional or supplemental information, by or from the Commission, and
(ii) of the time and date when the Registration Statement or any
post-effective amendment thereto has become effective or any supplement to
the
Prospectus has been filed.
(c) The
Company will advise the Underwriters promptly of any request of the Commission
for an amendment or supplement to the Registration Statement or the Prospectus,
or for any additional information, or of the issuance by the Commission of
any
stop order suspending the effectiveness of the Registration Statement, or of
any
judgment, order, injunction or decree preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, or of the institution of any
proceedings for any of such purposes, of which it has Knowledge, and will use
its best efforts to prevent the issuance of any stop order, and, if issued,
to
obtain as promptly as possible the lifting thereof.
19
(d) If
at any
time when a Prospectus relating to the Shares is required, in the opinion of
Underwriters’ Counsel, to be delivered under the Act by the Underwriters (the
“Prospectus
Delivery Period”),
any
event shall have occurred as a result of which, in the reasonable opinion of
counsel for the Company or Underwriters’ Counsel, the Prospectus, as then
amended or supplemented, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary
to
make the statements therein, in the light of the circumstances under which
they
were made when the Prospectus is delivered, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act, the
Company will notify the Underwriters promptly and, at the request of ▇▇▇▇▇▇▇▇
Curhan Ford & Co., prepare and file with the Commission an appropriate
amendment or supplement in accordance with Section 10 of the Act, which
will correct such statement or omission, or effect such compliance, each such
amendment or supplement to be reasonably satisfactory to Underwriters’ Counsel,
and the Company will furnish to the Underwriters copies of such amendment or
supplement as soon as available and in such quantities as the Underwriters
may
reasonably request, provided that, if any Underwriter is required to deliver
a
Prospectus in connection with sales of Shares at any time more than nine (9)
months after the date hereof, all costs and expenses in connection with the
furnishing of copies of such amended or supplemented Prospectus will be at
the
expense of such Underwriter.
(e) Within
the Prospectus Delivery Period, or pursuant to the undertakings of the Company
in the Registration Statement, the Company, at its own expense, will comply
in
all material respects with all requirements imposed upon it by the Act, the
Rules and Regulations, the 1934 Act and the rules and regulations of the
Commission promulgated under the 1934 Act, each as now or hereafter amended
or
supplemented, and by any order of the Commission so far as necessary to permit
the continuance of sales of, or dealings in, the Shares.
(f) The
Company will furnish to the Underwriters, without charge, a signed copy of
the
Registration Statement and of any amendment or supplement thereto which has
been
filed prior to the date of this Agreement, together with each exhibit filed
therewith, and three (3) conformed copies of such Registration Statement and
as
many amendments thereto (unsigned and exclusive of exhibits) as the Underwriters
may reasonably request. The signed copies of the Registration Statement so
furnished to the Underwriters will include signed copies of any and all consents
and reports of the independent public auditors as to the financial statements
included in the Registration Statement and Pricing Prospectus, and signed copies
of any and all consents and certificates of any other person whose profession
gives authority to statements made by them and who are named in the Registration
Statement or Pricing Prospectus as having prepared, certified or reviewed any
parts thereof.
(g) The
Company will deliver to the Underwriters, without charge, (i) prior to the
Effective Date, copies of each Preliminary Prospectus filed with the Commission
bearing in red ink the statement required by Item 501 of Regulation S-K of
the
Rules and Regulations; (ii) on and from time to time after the Effective
Date, copies of the Prospectus; and (iii) as soon as they are available,
and from time to time thereafter, copies of each amended or supplemented
Prospectus, and the number of copies to be delivered in each such case will
be
such as the Underwriters may reasonably request. The Company has consented
and
hereby consents to the use of each Preliminary Prospectus for the purposes
permitted by the Act and the Rules and Regulations. The Company authorizes
the
Underwriters to use the Prospectus in connection with the sale of the Shares
during the Prospectus Delivery Period. Notwithstanding the foregoing, the
Underwriters shall not use any Preliminary Prospectus or the Prospectus if
the
Company has given the Underwriters written notice of the occurrence, or
imminently potential occurrence, of any development that could cause such
Preliminary Prospectus or Prospectus, as the case may be, to include an untrue
statement of a material fact or to omit to state any material fact required
to
be stated therein or necessary to make the statements therein, in the light
of
the circumstances, not misleading.
20
(h) The
Company shall promptly from time to time take such action as the Underwriters
may reasonably request to qualify or register the Shares for offering and sale
under (or obtain exemptions from the application of) the securities laws of
such
jurisdictions as the Underwriters may request and comply with such laws so
as to
permit the continuance of sales and dealings therein in such jurisdictions
for
as long as may be necessary to complete the distribution of the Shares; provided
that, notwithstanding the foregoing, the Company will not be required to
(i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this paragraph or where it would be
subject to taxation as a foreign corporation, or (ii) consent to general
service of process in any such jurisdiction. The Company will advise ▇▇▇▇▇▇▇▇
Curhan Ford & Co. promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Shares for offering,
sale or trading in any jurisdiction or any initiation of threat of any
proceeding for any such purpose, and in the event of the issuance of any order
suspending such qualification, registration or exemption, the Company shall
use
its reasonable best efforts to obtain the withdrawal thereof at the earliest
possible date.
(i) During
the period commencing on the date hereof and ending 180 days after the date
of
the Prospectus (the “Lock-Up
Period”),
the
Company shall not (1) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, lend, or otherwise transfer or dispose
of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or
(2) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (1) or (2) above is
to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise, without the prior written consent of ▇▇▇▇▇▇▇▇ Curhan Ford & Co.
(such consent not to be unreasonably withheld).
The
foregoing paragraph shall not apply to the issuance of securities pursuant
to
the Company’s stock option plans in the form and amount approved for issuance as
described in the Registration Statement and the Prospectus or the exercise
of
options or warrants or the conversion of a security outstanding on the date
of
the Prospectus and which is described in the Registration Statement; provided,
however, that the Company agrees that such issuances shall be made subject
to
the terms of the form of Lock-Up Agreement attached hereto as Exhibit A.
The
Company also agrees that during such period, the Company will not file any
registration statement, preliminary prospectus or prospectus, or any amendment
or supplement thereto, under the Act for any such transaction or which
registers, or offers for sale, Common Stock or any securities convertible into
or exercisable or exchangeable for Common Stock (except for a registration
statement on Form S-8 relating to employee benefit plans), without the prior
written consent of ▇▇▇▇▇▇▇▇ Curhan Ford & Co. (such consent not to be
unreasonably withheld). The Company agrees that if (a) during the last 17
days of the Lock-Up Period, the Company issues an earnings release or material
news or a material event relating to the Company occurs, or (b) prior to
the expiration of the Lock-Up Period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the
Lock-Up Period, the restrictions set forth herein shall continue to apply until
the expiration of the 18-day period beginning on the issuance of the earnings
release or the occurrence of the material news or material event, as applicable,
unless ▇▇▇▇▇▇▇▇ Curhan Ford & Co. waives, in writing, such extension.
21
(j) As
soon
as practicable, but in any event not later than forty five (45) days after
the
end of the 12-month period beginning on the day after the end of the fiscal
quarter of the Company during which the effective date of the Registration
Statement is deemed to occur pursuant to Rule 158(c), the Company will make
generally available to its security holders (within the meaning of
Section 11(a) of the Act) an earnings statement of the Company meeting the
requirements of Rule 158(a) under the Act covering a period of at least twelve
(12) months beginning after the Effective Date, and advise the Underwriters
that
such statement has been so made available.
(k) The
Company will apply the net proceeds (“Proceeds”)
it
realizes from the sale of the Shares in the manner set forth under the caption
“Use of Proceeds” in the Pricing Prospectus.
(l) During
the course of the distribution of the Shares, the Company will not and the
Company will cause its officers and directors not to take, directly or
indirectly, any action designed to or which might, in the future, cause or
result in stabilization or manipulation of the price of the Shares.
(m) The
Company will use its reasonable best efforts, at its cost and expense, to take
all necessary and appropriate action to list the Shares on the NASDAQ Global
Market and maintain such listing for as long as the Shares are so qualified.
(n) The
Company will file with the NASD, the NASDAQ Global Market, the Commission and
any other governmental or regulatory agency, authority or instrumentality in
the
BVI, the United States and the PRC, as may be required, such reports, documents,
agreements and other information which the Company may from time to time be
required to file.
(o) The
Company will file with the Commission such information on Form 10-Q or Form
10-K
as may be required by Rule 463 under the Act.
(p) The
Company will, upon request of any Underwriter, furnish, or cause to be
furnished, to such Underwriter an electronic version of the Company’s
trademarks, servicemarks and corporate logo for use on the website, if any,
operated by such Underwriter for the purpose of facilitating the on-line
offering of the Shares (the “License”);
provided,
however,
that
the License shall be used solely for the purpose described above, shall be
granted without any fee and shall not be assigned or transferred.
22
(q) On
the
Closing Dates, all transfer or other taxes (other than income taxes) which
are
required to be paid in connection with the sale and transfer of the Shares
will
have been fully paid by the Company and all laws imposing such taxes, if any,
will have been fully complied with.
(r) Subsequent
to the dates as of which information is given in the Registration Statement
and
Pricing Prospectus and prior to the Closing Dates, except as disclosed in or
contemplated by the Registration Statement and Pricing Prospectus, (i) the
Company will not have incurred any material liabilities or obligations, direct
or contingent, or entered into any material transactions other than in the
ordinary course of business; (ii) there shall not have been any change in
the capital stock, funded debt (other than regular repayments of principal
and
interest on existing indebtedness) or other securities of the Company (except
as
contemplated in the Registration Statement), or any Material Adverse Effect;
and
(iii) the Company shall not have paid or declared any dividend or other
distribution on its Common Stock or its other securities or redeemed or
repurchased any of its Common Stock or other securities.
(s) The
Company agrees that it has not made and, without the prior written consent
of
▇▇▇▇▇▇▇▇ Curhan Ford & Co., it will not make any offer relating to the
Shares that would constitute a “free writing prospectus” as defined in Rule 433
under the Act.
(t) The
Company has complied with and will comply with the requirements of Rule 433
under the Act applicable to any Issuer Free Writing Prospectus, including timely
filing with the Commission or retention where required and
legending.
(u) The
Company agrees that if at any time following issuance of an Issuer Free Writing
Prospectus any event occurred or occurs as a result of which such Issuer Free
Writing Prospectus would conflict with the information in the Registration
Statement, the Pricing Prospectus or the Prospectus or would include an untrue
statement of material fact or omit to state any material fact necessary in
order
to make the statements therein, in light of the circumstances then prevailing,
not misleading, the Company will give prompt notice thereof to ▇▇▇▇▇▇▇▇ Curhan
Ford & Co., will prepare and furnish without charge to each Underwriter an
Issuer Free Writing Prospectus that will correct such statement or omission.
(v) Prior
to
the latest of the First Closing Date and the Option Closing Date, the Company
will not issue any press release or other communication directly or indirectly
or hold any press conference with respect to the Company, its condition,
financial or otherwise, or earnings, business affairs or business prospects
(except for routine oral communications in the ordinary course of business
and
consistent with past practices of the Company and of which ▇▇▇▇▇▇▇▇ Curhan
Ford
& Co. are notified in advance), without the prior written consent of
▇▇▇▇▇▇▇▇ Curhan Ford & Co., unless in the judgment of the Company and its
counsel, and after notification of ▇▇▇▇▇▇▇▇ Curhan Ford & Co., such press
release or communication is required by law.
▇▇▇▇▇▇▇▇
Curhan Ford & Co., on behalf of the several Underwriters, may, in its sole
discretion, waive in writing the performance by the Company of any one or more
of the foregoing covenants or extend the time for their performance.
Notwithstanding the foregoing, ▇▇▇▇▇▇▇▇ Curhan Ford & Co., for the benefit
of each of the other Underwriters, agrees not to consent to any action proposed
to be taken by the Company or any other holder of the Company’s securities that
would otherwise be prohibited by, or to waive compliance by the Company or
any
such other security holder with the provisions of, any Lock-Up Agreement
delivered in accordance with Section 4(i) hereof without giving each
of the other Underwriters at least 17 days prior notice (or such shorter notice
as each of the other Underwriters may deem acceptable to permit compliance
with
applicable provisions of NASD Conduct Rule 2711(f) restricting publication
and
distribution of research and public appearance by research analysts before
and
after the expiration, waiver or termination of a lock-up
agreement).
23
5. Indemnity
and Contribution by the Company and the Underwriters.
(a) The
Company shall indemnify, defend and hold harmless each Underwriter and any
person who controls any Underwriter within the meaning of Section 15 of the
Act or Section 20 of the 1934 Act, from and against any loss, expense,
liability, damage or claim (including the reasonable cost of investigation)
which the Underwriters or any such controlling person may incur insofar as
such
loss, expense, liability, damage or claim arises out of or, is based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof by the Company) or the
Prospectus (the term Prospectus for the purpose of this Section 5 being
deemed to include any Preliminary Prospectus, Pricing Prospectus, Issuer Free
Writing Prospectus, the Prospectus and any Prospectus supplements, in each
case
as amended or supplemented by the Company), (ii) any application or other
document, or any amendment or supplement thereto, executed by the Company or
based upon written information furnished by or on behalf of the Company filed
in
any jurisdiction (domestic or foreign) in order to qualify the Shares under
the
securities or “blue sky” laws thereof or filed with the Commission or any
securities association or securities exchange (each an “Application”),
or
(iii) any omission or alleged omission to state a material fact required to
be stated in any such Registration Statement, Prospectus or Application or
necessary to make the statements made therein in light of the circumstances
under which they were made, not misleading; except, in the case of each of
clauses (i), (ii) or (iii), to the extent that any such loss, expense,
liability, damage or claim arises out of or is based upon (x) any such
untrue statement or omission of a material fact contained in and in conformity
with information furnished in writing by or on behalf of the Underwriters to
the
Company expressly for use in such Registration Statement, Prospectus or
Application, or (y) sales to any person asserting any such loss, expense,
liability, damage or claim incurred from purchasing the Shares, if a copy of
the
Pricing Disclosure Package or the Prospectus (in each case, as then amended
or
supplemented if the Company shall have timely furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law to have been delivered, at or prior to the
written confirmation of the sale of the Shares to such person, and if the
Pricing Disclosure Package or the Prospectus (in each case, as so amended or
supplemented), as applicable, would have cured the defect giving rise to such
loss, expense, liability, damage or claim, unless such failure is the result
of
noncompliance by the Company.
(b) Each
of
the Underwriters shall, severally and not jointly, indemnify, defend and hold
harmless the Company and its directors, officers, employees and agents, each
person who controls the Company, as the case may be, within the meaning of
Section 15 of the Act or Section 20 of the 1934 Act from and against
any loss, expense, liability, damage or claim (including the reasonable cost
of
investigation) which, jointly or severally, the Company, or any such person
may
incur but only insofar as such loss, expense, liability, damage or claim arises
out of or is based upon (i) any untrue statement of a material fact
contained in the Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof by the Company) or the
Prospectus in reliance upon and in conformity with information furnished in
writing by or on behalf of such Underwriter to the Company expressly for
inclusion in the Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof by the Company) or the
Prospectus, as specified in the last sentence of this Section 5(b), or
(ii) any omission to state a material fact regarding such Underwriter
required to be stated in such Registration Statement or the Prospectus or
necessary to make such statement not misleading. The obligation of each of
the
Underwriters to indemnify the Company (including any director, officer,
employee, agent or control person thereof) shall only relate to any untrue
statement or omission which applies to the Underwriter. The Company and the
Underwriters acknowledge that the information set forth (x) on the cover
page of the Prospectus concerning the Underwriters, relating to the delivery
of
the Shares, and (y) under the caption “Underwriting” in the Prospectus,
with respect to passive market and stabilization activities by the Underwriters,
constitute
the only information furnished by or on behalf of the Underwriters to the
Company for purposes of this Section 5.
24
(c) Promptly
after receipt by an indemnified party under subsection (a) or (b) 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 in writing each party against whom
indemnification is to be sought of the claim or the commencement thereof (but
the failure so to notify an indemnifying party shall not (i) relieve the
indemnifying party from any liability which it may have under this
Section 5, to the extent that it did not otherwise learn of such action and
such failure does not materially prejudice the indemnifying party as a result
thereof, and (ii) 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). The indemnifying party shall be entitled to appoint
counsel of the indemnifying party’s choice at the indemnifying party’s expense
to represent the indemnified party in any action for which indemnification
is
sought (in which case the indemnifying party shall not thereafter be responsible
for the fees and expenses of any separate counsel retained by the indemnified
party or parties except as set forth below); provided, however, that such
counsel shall be reasonably satisfactory to the indemnified party. The
indemnifying party may participate in the defense of such action at its own
expense, 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, the indemnifying party may assume the defense thereof with
counsel reasonably 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 reasonably satisfactory 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 based on the advice of the advice of counsel 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 the fees and expenses of one counsel selected by all of the
indemnified parties to represent them all shall be borne by the indemnifying
parties. In the case of any separate counsel for the Company and its officers,
directors and control persons, such counsel shall be designated in writing
by
the Company. In the case of any separate counsel for the Underwriters and their
respective officers, directors and control persons, such counsel shall be
designated in writing by ▇▇▇▇▇▇▇▇ Curhan Ford & Co. 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 litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever in respect
of
which indemnification or contribution could have been sought under this
Section 5 (whether or not the indemnified parties are actual or potential
parties thereto), unless (x) such settlement, compromise or consent
(I) includes an unconditional release of the indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim
and
(II) does not include a statement as to, or an admission of, fault,
culpability or a failure to act, by or on behalf of the indemnified party,
and
(y) the indemnifying party reaffirms its indemnification obligations
pursuant to this Agreement.
25
(d) If
the
indemnification provided for in this Section 5 is unavailable to an
indemnified party under subsections (a), (b) or (c) of this Section 5 in
respect of any losses, expenses, liabilities, damages or claims referred to
therein, then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, expenses, liabilities, damages
or
claims (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Shares and (ii) in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and
the Underwriters on the other with respect to the statements or omissions which
resulted in such losses, expenses, liabilities, damages or claims, as well
as
any other relevant equitable considerations. The relative benefits received
by
the Company on the one hand and the Underwriters on the other with respect
to
such offering shall be deemed to be in the same proportion as the total proceeds
(net of underwriting discounts and commissions but before deducting expenses)
received by the Company from the Shares sold under this Agreement, on the one
hand, and the total underwriting discounts and commissions received by the
Underwriters with respect to the Shares purchased under this Agreement, on
the
other hand, bear to the total gross proceeds from the offering of the Shares
under this Agreement, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault of the Company on the one hand and the
Underwriters on the other shall be determined by reference to, among other
things, (i) whether the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission relates to information supplied
by
the Company or by the Underwriters, (ii) the intent of the parties, and
(iii) their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by
a
party as a result of the losses, claims, damages and liabilities referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any claim
or action.
26
(e) The
Company and the Underwriters agree that it would not be just and equitable
if
contribution pursuant to Section 5(d) were determined by pro rata
allocation or by any other method of allocation which does not take account
of
the equitable considerations referred to in Section 5(d)(i) and, if
applicable, Section 5(d)(ii), above. Notwithstanding the provisions of this
Section 5, (i) none of the Underwriters shall be required to
contribute any amount in excess of the underwriting discounts and commissions
applicable to the Shares purchased by the Underwriters and, (ii) no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Underwriters’ obligations in
Section 5(d) shall be several in proportion to their respective
underwriting obligations and not joint.
The
indemnity and contribution contained in this Section 5 shall remain
operative and in full force and effect regardless of (i) any termination of
this Agreement and (ii) any investigation made by or on behalf of the
Underwriters or the Company or the Subsidiaries and such party’s officers or
directors or any person controlling such parties.
6. Survival
of Agreements, etc.
All
statements contained in any certificate delivered by or on behalf of the parties
in connection with this Agreement shall be deemed to be representations and
warranties hereunder. Notwithstanding any investigations made by or on behalf
of
the parties to this Agreement, all representations, warranties, indemnities
and
agreements made by the parties to this Agreement or pursuant hereto shall remain
in full force and effect and will survive delivery of and payment for the
Shares. The provisions of Sections 5, 11 and 15 shall survive the termination
or
cancellation of this Agreement.
7. Conditions
of Underwriters’ Obligations.
The
respective obligations of the Underwriters to purchase and pay for the Firm
Shares as provided herein on the First Closing Date and, with respect to the
Option Shares, the Option Closing Date, shall be subject to the accuracy of
the
representations and warranties on the part of the Company set forth in
Section 1 hereof as of the date hereof and as of the First Closing Date as
though then made and, with respect to the Option Shares, as of the Option
Closing Date as though then made, to the timely performance by the Company
of
its covenants and obligations hereunder, and to each of the following additional
conditions:
(a) The
Registration Statement shall have become effective prior to the execution of
this Agreement, or at such later date as shall be consented to in writing by
the
Underwriters; no stop order suspending the effectiveness thereof shall have
been
issued and no proceedings for that purpose shall have been initiated or, to
the
Knowledge of the Company or any Underwriter, threatened by the Commission;
any
request of the Commission for additional information (to be included in the
Registration Statement, any Preliminary Prospectus, any Pricing Prospectus,
the
Prospectus or otherwise) shall have been complied with to the satisfaction
of
Underwriters’ Counsel; the NASD shall have raised no objection to the fairness
and reasonableness of the underwriting terms and arrangements; and no amendment
to the Registration Statement, any Preliminary Prospectus, any Pricing
Prospectus, or the Prospectus to which the Underwriters or Underwriters’ Counsel
shall have reasonably objected, after having received reasonable notice of
a
proposal to file the same, shall have been filed.
27
(b) All
corporate proceedings and other legal matters in connection with this Agreement,
the form of Registration Statement, any Preliminary Prospectus, any Pricing
Prospectus, and the Prospectus and the registration, authorization, issue,
sale
and delivery of the Shares, shall have been reasonably satisfactory to
Underwriters’ Counsel, and such counsel shall have been furnished with such
papers and information as they may reasonably have requested to enable them
to
pass upon the matters referred to in this Section 7.
(c) Subsequent
to the execution and delivery of this Agreement and prior to the First Closing
Date, and on the Option Closing Date, as the case may be, there shall not have
occurred any change, or any development involving a prospective change, in
the
condition, financial or otherwise, or in the earnings, business or operations
of
the Company, taken as a whole, from that set forth in the Pricing Disclosure
Package that, in the sole judgment of ▇▇▇▇▇▇▇▇ Curhan Ford & Co., is
material and adverse and that makes it, in the sole judgment of ▇▇▇▇▇▇▇▇ Curhan
Ford & Co., impracticable or inadvisable to market the Shares on the terms
and in the manner contemplated in the Pricing Disclosure Package.
(d) At
the
First Closing Date and on the Option Closing Date, as the case may be, the
Underwriters shall have received from ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ LLP, counsel for the Company (“Company
Counsel”),
a
signed opinion dated as of such Closing Date, reasonably satisfactory to
Underwriters’ Counsel, in the form and substance of Exhibit B
annexed
hereto, including a signed negative assurance statement dated as of such Closing
Date, reasonably satisfactory to Underwriters’ Counsel, in the form and
substance reflected in Exhibit B.
(e) At
the
First Closing Date and on the Option Closing Date, as the case may be, the
Underwriters shall have received from Shujin Law Firm, PRC counsel for the
Company (“PRC
Counsel”),
a
signed opinion dated as of such Closing Date, in a form and substance reasonably
satisfactory to Underwriters’ Counsel.
(f) At
the
First Closing Date and on the Option Closing Date, as the case may be, the
Underwriters shall have received from ▇▇▇▇▇▇, Westwood & Riegels, BVI
counsel for the Company (“BVI
Counsel”),
a
signed opinion dated as of such Closing Date, in a form and substance reasonably
satisfactory to Underwriters’ Counsel.
(g) At
the
First Closing Date, and on the Option Closing Date, as the case may be, the
Underwriters shall have received from Underwriters’ Counsel a signed opinion
dated as of such Closing Date in a form and substance reasonably satisfactory
to
the Underwriters.
(h) The
Underwriters shall have received, on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may be,
in
form and substance satisfactory to the Underwriters, from Stonefield
▇▇▇▇▇▇▇▇▇, Inc.,
independent public accountants,
containing statements and information of the type ordinarily included in
accountants’ “comfort letters” with respect to the financial statements and
certain financial information contained in the Registration Statement, any
Preliminary Prospectus, any Pricing Prospectus, and the Prospectus; provided,
however, that the letter delivered on the Closing Date shall use a “cut-off
date” not earlier than two business days before the Closing Date.
28
(i) The
Underwriters shall have received on the First Closing Date and on the Option
Closing Date, as the case may be, a certificate of the Company dated the First
Closing Date or the Option Closing Date, as the case may be, signed by the
Chief
Executive Officer and Chief Financial Officer of the Company, to the effect
that, and ▇▇▇▇▇▇▇▇ Curhan Ford & Co. shall be satisfied that:
(i) The
representations and warranties of the Company in this Agreement are true and
correct, as if made on and as of the First Closing Date or the Option Closing
Date, as the case may be, and the Company has complied with all the agreements
and satisfied all the conditions on its part to be performed or satisfied at
or
prior to the First Closing Date or the Option Closing Date, as the case may
be;
(ii) When
the
Registration Statement became effective and at all times subsequent thereto
up
to the delivery of such certificate, the Registration Statement, the Pricing
Prospectus and the Prospectus, and any amendments or supplements thereto,
contained all material information required to be included therein by the Act
and the applicable rules and regulations of the Commission thereunder, as the
case may be, and in all material respects conformed to the requirements of
the
Act and the applicable Rules and Regulations thereunder, the Registration
Statement,
any
Preliminary Prospectus, any Pricing Prospectus,
and the
Prospectus, and any amendments or supplements thereto, did not and does not
include any untrue statement of a material fact or omit to state a material
fact
required to be stated therein or necessary to make the statements therein,
in
light of the circumstances under which they were made (except with respect
to
the Registration Statement), not misleading; and, since the effective date
of
the Registration Statement, there has occurred no event required to be set
forth
in an amended or supplemented Prospectus which has not been so set forth;
and
(iii) Subsequent
to the respective dates as of which information is given in the Registration
Statement,
any
Preliminary Prospectus, any Pricing Prospectus,
and the
Prospectus, there has not been or occurred, as the case may be: (A) any
Material Adverse Effect; (B) any transaction that is material to the
Company and its Subsidiaries considered as a whole, except transactions entered
into in the ordinary course of business; (C) any obligation, direct or
contingent, that is material to the Company and its Subsidiaries considered
as a
whole, incurred by the Company or its subsidiaries, except obligations incurred
in the ordinary course of business; (D) any change in the capital stock or
outstanding indebtedness of the Company or any of its Subsidiaries that is
material to the Company and its Subsidiaries considered as a whole; (E) any
dividend or distribution of any kind declared, paid or made on the capital
stock
of the Company or any of its Subsidiaries; or (F) any loss or damage
(whether or not insured) to the property of the Company or any of its
Subsidiaries which has been sustained or will have been sustained which has
a
Material Adverse Effect.
(j) The
Company shall have obtained and delivered to the Underwriters an agreement,
substantially in the form of Exhibit A
attached
hereto, from each officer and director of the Company and each owner of record
of capital stock or options or warrants to acquire capital stock of the Company.
All of the certificates representing the Shares shall have been tendered for
delivery in accordance with the terms and provisions of this Agreement.
29
(k) The
Shares shall be listed on the NASDAQ Global Market, subject only to official
notice of issuance.
(l) The
Company shall have complied with the provisions of this Agreement with respect
to the furnishing of Prospectuses.
(m) On
or
before each of the First Closing Date and the Option Closing Date, as the case
may be, the Underwriters and Underwriters’ Counsel shall have received such
information, documents and opinions as they may reasonably require for the
purposes of enabling them to pass upon the issuance and sale of the Shares
as
contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions
or
agreements, herein contained.
(n) At
least
two business days prior to the date hereof, the Company shall have furnished
for
review by the Underwriters copies of certificates and documents as the
Underwriters may reasonably request.
If
any
condition specified in this Section 7 is not satisfied when and as required
to be satisfied, this Agreement may be terminated by the Underwriters by written
notice to the Company at any time on or prior to the First Closing Date and,
with respect to the Option Shares, at any time prior to the Option Closing
Date,
which termination shall be without liability on the part of any party to any
other party, except for the expenses described in Section 11 of this
Agreement.
8. Default
of One or More of the Underwriters.
Subject
to Sections 7 and 10 hereof, if, on the First Closing Date or the Option Closing
Date, as the case may be, any one or more of the Underwriters shall fail or
refuse to purchase Shares that it or they have agreed to purchase hereunder
on
such date, and the aggregate number of Shares which such defaulting Underwriter
or Underwriters agreed but failed or refused to purchase does not exceed 10%
of
the aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated, severally, in the proportions that the number
of Firm Shares set forth opposite their respective names on Schedule A
bears to
the aggregate number of Firm Shares set forth opposite the names of all such
non-defaulting Underwriters, to purchase the Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date. If, on the First Closing Date or the Option Closing Date, as the case
may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
and the aggregate number of Shares with respect to which such default occurs
exceeds 10% of the aggregate number of Shares to be purchased on such date,
and
arrangements satisfactory to the Company and the other Underwriters for the
purchase of such Shares are not made within 48 hours after such default, this
Agreement shall terminate without liability of any non-defaulting Underwriter
or
the Company, except that the provisions of Sections 5, 11 and 15 shall at
all times be effective and shall survive such termination. In any such case
either the Underwriters or the Company shall have the right to postpone the
First Closing Date or the Option Closing Date, as the case may be, but in no
event for longer than seven (7) days in order that the required changes, if
any,
to the Registration Statement and the Prospectus or any other documents or
arrangements may be effected.
30
As
used
in this Agreement, the term “Underwriter”
shall
be deemed to include any person substituted for a defaulting Underwriter under
this Section 8. Any action taken under this Section 8 shall not
relieve any defaulting Underwriter from liability in respect of any default
of
such Underwriter under this Agreement.
9. Effective
Date.
This
Agreement will become effective upon the later of when (i) the Underwriters
and the Company shall have received notification of the effectiveness of the
Registration Statement or (ii) the execution of this Agreement.
10. Termination.
The
Underwriters shall have the right by written notice to the Company (which may
be
delivered electronically through email or facsimile) to terminate this Agreement
at any time prior to the First Closing Date or, with respect to the obligations
of the Underwriters to purchase the Option Shares, at any time prior to the
Option Closing Date, as the case may be, if (i) the Company shall have
failed or refused to fully perform or comply with any of the provisions of
this
Agreement on its part to be performed and complied with by it prior to the
applicable Closing Date; (ii) any of the conditions of Underwriters’
obligations as set forth in Section 7 herein shall not have been satisfied
on or prior to the
First
Closing Date or the Option Closing Date, as the case may be;
(iii) trading in securities generally on the New York Stock Exchange,
the
American Stock Exchange or the NASDAQ Global Market will
have
been suspended; (iv) minimum or maximum prices will have been established
on such exchanges by the Commission or the NASD; (v) a general banking
moratorium will have been declared either by federal or New York state
authorities; (vi) any other restrictions on transactions in securities
materially affecting the free market for securities or the payment for such
securities or adversely affecting the distribution of the Firm Shares or the
Option Shares, as the case may be, will be established by any of such exchanges,
by the Commission, by any other federal or state agency, by action of the
Congress or by Executive Order; (vii) the Company will have sustained a
material loss, whether or not insured, by reason of fire, flood, accident or
other calamity of such character as in the sole judgment of ▇▇▇▇▇▇▇▇ Curhan
Ford & Co. may
interfere materially with the conduct of the Business and operations of the
Company or make it impracticable to proceed with the offering, sale and delivery
of the Firm Shares or the Option Shares, as the case may be, on the terms
contemplated by any
Preliminary Prospectus, any Pricing Prospectus,
or the
Prospectus; (viii) any action has been taken by the government of the
United States or any department or agency thereof which, in the sole judgment
of
▇▇▇▇▇▇▇▇ Curhan Ford & Co., has had a material adverse effect upon the
general market for securities and has made it impracticable to proceed with
the
offering, sale and delivery of the Firm Shares or the Option Shares, as the
case
may be, on the terms set forth in
any
Preliminary Prospectus, any Pricing Prospectus,
or the
Prospectus; (ix) there shall have occurred the outbreak of any new war or
any other event or calamity, including without limitation as a result of
terrorist
activities,
which,
in the sole judgment of ▇▇▇▇▇▇▇▇ Curhan Ford & Co., materially disrupts
the financial markets of the United States and makes it impracticable to proceed
with the offering, sale and delivery of the Firm Shares or the Option Shares,
as
the case may be, on the terms set forth in the Prospectus; (x) the general
market for securities or political, legal or financial conditions should
deteriorate so materially from that in effect on the date of this Agreement
that, in the sole judgment of ▇▇▇▇▇▇▇▇ Curhan Ford & Co., it becomes
impracticable for the Underwriters to commence or proceed with the public
offering of the Shares and with the payment for or acceptance thereof;
(xi) trading of any securities of the Company shall have been suspended,
halted or delisted on any exchange or by the Commission; or (xii) in the
sole judgment of ▇▇▇▇▇▇▇▇ Curhan Ford & Co., any change that would result in
a Material Adverse Effect shall have occurred since the date as of which
information is given in the Registration Statement,
any
Preliminary Prospectus, any Pricing Prospectus,
or the
Prospectus. Notwithstanding any contrary provision contained in this Agreement,
any election hereunder or any termination of this Agreement, and whether or
not
this Agreement is otherwise carried out, the provisions of Sections 5, 11 and
15
hereof shall not be in any way affected by such election or termination or
failure to carry out the terms of this Agreement or any part
hereof.
31
11. Expenses.
(a) Whether
or not the offering of the Shares is consummated, the Company agrees to pay
all
costs and expenses incident to the performance of the obligations of the Company
hereunder, including without limiting the generality of the foregoing:
(i) the preparation, printing, filing with the Commission, and copying of
the Registration Statement, each Preliminary Prospectus, the Prospectus, this
Agreement and other underwriting documents, if any, and any drafts, amendments
or supplements thereto, including the cost of all copies thereof supplied to
the
Underwriters in such quantities as reasonably requested by the Underwriters
and
the costs of mailing Prospectuses to offerees and purchasers of the Shares;
(ii) the printing, engraving, issuance and delivery of certificates
representing the Shares, including any transfer or other taxes payable thereon;
(iii) the reasonable fees, expenses and other costs related to the
registration or qualification of the Shares under state securities or “blue sky”
laws, in accordance with the provisions of Section 11(c) below;
(iv) the reasonable fees, costs and disbursements of Underwriters’ Counsel
in connection with the review and analysis of certain “blue sky” matters related
to the offering; (v) all reasonable fees and expenses of Company Counsel,
PRC Counsel, British Virgin Islands Counsel and accountants; (vi) the fees
and expenses of Underwriters’ Counsel, inclusive of all NASD filing fees, in
connection with obtaining clearance of the offering with the NASD;
(vii) all costs and expenses of any listing of the Shares on the NASDAQ
Global Market or any other stock exchange or over-the-counter market, or in
Standard and Poor’s Corporation Records or any other securities manuals;
(viii) the cost of “tombstone” advertisements to be placed in one or more
daily or weekly periodicals as the Underwriter may request; (ix) travel
expenses of the Company in connection with the “road show” presentations;
(x) all other costs and expenses incident to the performance of the
Company’s obligations hereunder which are not otherwise specifically provided
for in this Section 11(a). The Company shall be the primary obligor with
respect to all costs, fees and expenses to be paid by the Company. The
obligations of the Company under this Section 11(a) shall survive any
termination or cancellation of this Agreement.
(b) In
addition to the responsibility of the Company for payment of the foregoing
expenses, the Company shall pay to the Underwriters an expense allowance equal
to fifty thousand dollars ($50,000) for actual, accountable out-of-pocket
expenses, which may include legal fees. The expense allowance has been deposited
in escrow with the Company’s legal counsel. ▇▇▇▇▇▇▇▇ Curhan Ford & Co.
hereby acknowledges prior receipt from escrow of [________________ ($_______)],
which amount shall be applied to the expense allowance due. If the sale of
the
Firm Shares provided for herein is not consummated because the Underwriters
elect to terminate this Agreement in accordance with clauses (i) or (ii) of
Section 10 hereof, then the Company shall reimburse the Underwriters in
full for their actual accountable out-of-pocket expenses incurred in connection
with the proposed purchase and sale of the Firm Shares (including, without
limitation, the fees and disbursements of Underwriters’ Counsel) inclusive of
any amount previously reimbursed out of escrow. In the event the offering is
terminated, each Underwriter will not be entitled to retain or receive more
than
an amount equal to its actual accountable out-of-pocket expenses and shall
reimburse the Company for the remainder, if any. The Underwriters hereby
acknowledge and agree that their expenses in connection with the “road show”
presentations shall be paid from the expense allowance; provided,
however,
that
any Company specific road show costs and expenses of Company management and/or
staff shall not be paid from the expense allowance.
32
(c) Subject
to Section 4(h) hereof, the Underwriters shall determine in which states or
jurisdictions the Shares shall be registered or qualified for sale.
12. Notices.
Any
notice hereunder shall be in writing, unless otherwise expressly provided
herein, and if to the respective persons indicated, will be sufficient if mailed
by certified mail, return receipt requested, postage prepaid, delivered by
national overnight courier service or hand delivered, addressed as respectively
indicated or to such other address as will be indicated by a written notice
similarly given, to the following persons:
(a) If
to the
Underwriters - addressed to ▇▇▇▇▇▇▇▇ Curhan Ford & Co., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Esq., General Counsel & Corporate Secretary; with a copy to DLA Piper US
LLP, 1251 Avenue of the Americas, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attn:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.; provided, however, that such copy to DLA Piper US
LLP shall not constitute notice delivered to the Underwriters.
(b) If
to the
Company - addressed to Fuqi International, Inc., Corporation Service Company,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇. ▇▇ ▇▇▇▇
▇▇▇▇▇, with a copy to ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ LLP, ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Esq.; provided, however, that such copy to ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ LLP shall not constitute notice delivered to the
Company.
13. Successors.
This
Agreement will inure to the benefit of and be binding upon the Underwriters,
the
Company, and their respective successors and assigns. Nothing expressed or
mentioned in this Agreement is intended, or will be construed, to give any
person, corporation or other entity other than the controlling persons,
directors, officers, employees and agents referred to in Section 5 hereof
(to the extent provided for in Section 5), and their respective successors
and assigns, any legal or equitable right, remedy, or claim under or in respect
to this Agreement or any provisions herein contained, this Agreement and all
conditions and provisions hereof being intended to be and being for the sole
and
exclusive benefit of such persons and for the benefit of no other persons.
Notwithstanding anything contained herein to the contrary, no purchaser of
any
of the Shares from the Underwriters will be deemed a successor or assign solely
because of such purchase.
33
14. Finders
and Holders of First Refusal Rights.
(a) The
Company hereby represents and warrants to the Underwriters that it has not
paid
any compensation for services as a finder in connection with any prior financing
of the Company during the twelve-month period immediately preceding the date
hereof and that no person is entitled, directly or indirectly, to compensation
for services as a finder in connection with the proposed transactions. The
Company further represents and warrants, that no person holds a right of first
refusal or similar right in connection with the proposed offering which has
not
been waived. In addition, the Company hereby agrees to indemnify and hold
harmless the Underwriters, their officers, directors, agents and each person,
if
any, who controls such Underwriters within the meaning of Section 15 of the
Act, from and against any loss, liability, claim, damage or expense whatsoever
arising out of a claim by an alleged finder or alleged holder of a right of
first refusal or similar right in connection with the proposed offering by
the
Company, insofar as such loss, liability, claim, damage or expense arises out
of
any action or alleged action of the Company, as the case may be.
(b) Each
of
the Underwriters hereby represents and warrants to the Company that no person
is
entitled, directly or indirectly, to compensation for services as a finder
in
connection with the proposed transactions contemplated by this Agreement; and
the Underwriters hereby agree to indemnify and hold harmless, severally and
not
jointly, the Company and each of its officers, directors and agents, from and
against any loss, liability, claim, damage or expense whatsoever arising out
of
a claim by an alleged finder in connection with the proposed offering, insofar
as such loss, liability, claim, damage or expense arises out of any action
or
alleged action of the Underwriters.
15. Applicable
Law.
This
Agreement shall be a deemed to be a contract made under the laws of the State
of
New York and for all purposes shall be governed by and construed in accordance
with the laws of said State applicable to contracts made and to be performed
entirely within such State. Each of the Company and the Underwriters
(i) agrees that any legal suit, action or proceeding arising out of or
relating to this Agreement shall be instituted exclusively in the State courts
of the State of New York, County of New York, or in the United States District
Court for the Southern District of New York, (ii) waives any objection which
the
Company or the Underwriters, as the case may be, may have now or hereafter
to
the venue of any such suit, action or proceeding, and (iii) irrevocably
consents to the jurisdiction of the State courts of the State of New York,
County of New York, or in the United States District Court for the Southern
District of New York in any such suit, action or proceeding. Each of the Company
and the Underwriters further agrees to accept and acknowledge service of any
and
all process which may be served in any suit, action or proceeding in the State
courts of the State of New York, County of New York, or in the United States
District Court for the Southern District of New York, and agrees that service
of
process upon the Company or the Underwriters, as the case may be, mailed by
certified mail to such party’s address as set forth in Section 12 hereof
shall be deemed in every respect effective service of process upon such party
in
any such suit, action or proceeding. In the event of litigation between the
parties arising hereunder, the prevailing party shall be entitled to costs
and
reasonable attorney’s fees.
34
16. No
Fiduciary Duty.
The
Company hereby acknowledges that (a) the Underwriters are acting as
principals and not as agents or fiduciaries of the Company and (b) the
Company’s engagement of the Underwriters in connection with the offering of
Shares contemplated by the Prospectus is as independent contractors and not
in
any other capacity. Furthermore, the Company agrees that it is solely
responsible for making its own judgments in connection with the offering of
Shares contemplated by the Prospectus (irrespective of whether the Underwriters
have advised or is currently advising the Company on related or other
matters).
17. Headings.
The
headings in this Agreement are for purposes of reference only and shall not
limit or otherwise affect any of the terms or provisions hereof.
18. Counterparts.
This
Agreement may be executed in any number of counterparts which, taken together,
shall constitute one and the same instrument.
19. Entire
Agreement.
This
Agreement sets forth the entire agreement and understanding between the
Underwriters and the Company with respect to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, between them.
20. Terminology.
All
personal pronouns used in this Agreement, whether used in the masculine,
feminine or neuter gender, shall include all other genders and the singular
shall include the plural, and vice versa.
[SIGNATURE
PAGE FOLLOWS]
35
If
the
foregoing correctly sets forth our understanding, please indicate the
Underwriters’ acceptance thereof, as of the day and year first above written, in
the spaces provided below for that purpose, whereupon this letter with the
Underwriters’ acceptance shall constitute a binding agreement among
us.
|
Very
truly yours,
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
36
Confirmed
and accepted on the
day
and
year first above written.
|
THE
UNDERWRITERS:
▇▇▇▇▇▇▇▇
CURHAN FORD & CO.
Acting
severally on behalf
of
itself and as representative of the several
Underwriters
By:
▇▇▇▇▇▇▇▇ CURHAN FORD & CO.
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
37
EXHIBIT
A
(Lock-Up
Letter Agreement)
EXHIBIT
B
(Form
of
Opinion of Company Counsel)
SCHEDULE
A
Underwriters
|
Name
of Underwriter
|
Number
of Firm Shares Purchased
|
|
▇▇▇▇▇▇▇▇
Curhan Ford & Co.
|
[_______]
|
|
[_______]
|
|
|
[_______]
|
|
|
Total
|
[_______]
|
SCHEDULE
B
(List
of
Issuer Free Writing Prospectuses and Other Supplemental Materials)