Ordinary Shares in the Form of American Depositary Shares OSSEN INNOVATION CO., LTD. Ordinary Shares in the Form of American Depositary Shares UNDERWRITING AGREEMENT
Exhibit
1.1
_________
Ordinary Shares in the Form of American Depositary Shares
OSSEN
INNOVATION CO., LTD.
Ordinary
Shares in the Form of American Depositary Shares
________,
2010
Global
Hunter Securities, LLC
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Knight
Capital Markets LLC
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Ladies
and Gentlemen:
Ossen Innovation Co., Ltd., a
company incorporated under the laws of the British Virgin Islands (the “Company”), proposes,
subject to the terms and conditions stated herein, to issue and sell to Global
Hunter Securities, LLC (“GHS”) and Knight
Capital Markets LLC (“Knight” and, together
with GHS, the “Underwriters”),
severally and not jointly, an aggregate of __________ authorized but unissued
ordinary shares (the “Underwritten
Shares”), par value $0.01 per share (the “Ordinary Shares”), of
the Company, and to grant the Underwriters the option to purchase an aggregate
of up to ___________ additional Ordinary Shares (the “Additional Shares”)
as may be necessary to cover over-allotments made in connection with this
offering. The Underwritten Shares and Additional Shares are
collectively referred to as the “Shares.”
The
Underwriters will take delivery of the Shares in the form of American Depositary
Shares (“ADSs”). The
ADSs are to be issued pursuant to a Deposit Agreement dated as of
_________________, 2010 (the “Deposit Agreement”)
among the Company, _______________ as Depositary (the “Depositary”) and all
Holders and Beneficial Owners (each as defined therein) from time to time of
ADSs evidenced by American Depositary Receipts (“ADRs”) issued by the
Depositary.
Each ADS
will initially represent the right to receive __________ Ordinary Shares
deposited pursuant to the Deposit Agreement.
The
Company and the Underwriters hereby confirm their agreement as
follows:
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1. Registration
Statement and Prospectus.
(a) The
Company has prepared and filed with the Securities and Exchange Commission (the
“Commission”) a
registration statement on Form F-1 (File No. 333-168496) relating to the Shares
under the Securities Act of 1933, as amended (the “Securities Act”), and
the rules and regulations (the “Rules and
Regulations”) of the Commission thereunder, and such amendments to such
registration statement (including post effective amendments) as may have been
required to the date of this Agreement. Such registration statement,
as amended (including any post effective amendments), has been declared
effective by the Commission. Such registration statement, including
amendments thereto (including post effective amendments thereto) at such time,
the exhibits and any schedules thereto at such time and the documents and
information otherwise deemed to be a part thereof or included therein by the
Securities Act or otherwise pursuant to the Rules and Regulations at such time,
is herein called the “Registration
Statement.” If the Company has filed or files an abbreviated
registration statement pursuant to Rule 462(b) under the Securities Act (the
“Rule 462 Registration
Statement”), then any reference herein to the term Registration Statement
shall include such Rule 462 Registration Statement.
The
Company is filing with the Commission pursuant to Rule 424 under the Securities
Act a final prospectus supplement relating to the Shares to a form of prospectus
included in the Registration Statement. Such prospectus in the form
in which it appears in the Registration Statement is hereinafter called the
“Base
Prospectus,” and such final prospectus supplement as filed, along with
the Base Prospectus, is hereinafter called the “Final
Prospectus.” Such Final Prospectus and any preliminary
prospectus supplement or “red ▇▇▇▇▇▇▇,” in the form in which they shall be filed
with the Commission pursuant to Rule 424(b) under the Securities Act (including
the Base Prospectus as so supplemented) is hereinafter called a “Prospectus.”
(b) The
Company and the Depositary have filed with the Commission a registration
statement, and amendments thereto, on Form F-6 (No. 333-_________) for the
registration under the Securities Act of the ADSs, which registration statement,
as so amended, has been declared effective by the Commission and copies of which
have heretofore been delivered to the Underwriters. Such registration
statement, as amended at the time it became effective is hereinafter referred to
as the “ADS
Registration Statement.”
(c) A
registration statement on Form 8-A (File No. 000-*) in respect of the
registration of the Shares under the Exchange Act was filed with the Commission
on __________, 2010, such registration statement in the form thereof delivered
to the Underwriters was declared effective by the Commission in such form; no
other document with respect to such registration statement has theretofore been
filed with the Commission (the “Form 8-A Registration
Statement”).
For
purposes of this Agreement, all references to the Registration Statement, the
Rule 462 Registration Statement, the ADS Registration Statement, the Form 8-A
Registration Statement, the Base Prospectus, the Final Prospectus, the
Prospectus or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Interactive
Data Electronic Applications system. All references in this Agreement
to amendments or supplements to the Registration Statement, the Rule 462
Registration Statement, the ADS Registration Statement, the Form 8-A
Registration Statement, the Base Prospectus, the Final Prospectus or the
Prospectus shall be deemed to mean and include the subsequent filing of any
document under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that
is deemed to be incorporated therein by reference therein or otherwise deemed by
the Rules and Regulations to be a part thereof.
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2. Representations
and Warranties of the Company Regarding the Offering.
(a) The
Company represents and warrants to, and agrees with, the Underwriters, as of the
date hereof and as of the Closing Date (as defined in Section 5(c) below),
except as otherwise indicated, as follows:
(i) At
each time of effectiveness, at the date hereof and at the Closing Date, the
Registration Statement, the ADS Registration Statement, the Form 8-A
Registration Statement, and any post-effective amendments thereto complied or
will comply in all material respects with the requirements of the Securities Act
and the Rules and Regulations and did not and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading. The Base
Prospectus, the Prospectus most recently filed with the Commission before
the time of this Agreement, including any preliminary prospectus supplement
deemed to be a part thereof (the “Time of Sale Disclosure
Package”) as of the date hereof and at the Closing Date, and the Final
Prospectus, as amended or supplemented, at the time of filing pursuant to Rule
424(b) under the Securities Act and at the Closing Date, did not and will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. The representations and warranties set forth in the two
immediately preceding sentences shall not apply to statements in or omissions
from, the Registration Statement or any Prospectus in reliance upon, and in
conformity with, written information furnished to the Company by the
Underwriters specifically for use in the preparation thereof. Each of
the Registration Statement, the ADS Registration Statement and the Form 8-A
Registration Statement contains all exhibits and schedules required to be filed
by the Securities Act or the Rules and Regulations. No order
preventing or suspending the effectiveness or use of the Registration Statement
or any Prospectus is in effect and no proceedings for such purpose have been
instituted or are pending, or, to the knowledge of the Company, are contemplated
or threatened by the Commission, and the Company has complied in all material
respects with all requests by the Commission for additional information in
connection therewith.
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(ii) The
Company has not distributed any prospectus or other offering material in
connection with the offering and sale of the Shares or the ADSs other than the
Time of Sale Disclosure Package or other materials permitted by the Act to be
distributed by the Company. The Company has not made and will not
make any offer relating to the Shares or the ADSs that would constitute an
“issuer free writing prospectus”, as defined in Rule 433 under the Act, or that
would otherwise constitute a “free writing prospectus”, as defined in Rule 405
under the Act, required to be filed with the Commission, to which the
Underwriters have not previously consented.
(iii) The
financial statements of the Company, together with the related notes, included
or incorporated by reference in the Registration Statement, the Time of Sale
Disclosure Package and the Final Prospectus comply in all material respects with
the applicable requirements of the Securities Act and the Rules and Regulations
and fairly present the financial condition of the Company and its Subsidiaries
(as hereinafter defined) as of the dates indicated and the results of operations
and changes in cash flows for the periods therein specified in conformity with
U.S. generally accepted accounting principles consistently applied throughout
the periods involved; and the supporting schedules included in the Registration
Statement, if any, present fairly the information required to be stated
therein. No other financial statements, pro forma financial
information or schedules are required under the Securities Act to be included or
incorporated by reference in the Registration Statement, the Time of Sale
Disclosure Package or the Final Prospectus. Sherb & Co., LLP,
which has expressed its opinion with respect to the annual financial statements
and schedules filed as a part of the Registration Statement and included in the
Registration Statement, the Time of Sale Disclosure Package and the Final
Prospectus is an independent public accounting firm with respect to the Company
within the meaning of the Securities Act and the Rules and
Regulations.
(iv) The
Company had a reasonable basis for, and made in good faith, each
“forward-looking statement” (within the meaning of Section 27A of the Act or
Section 21E of the Exchange Act) contained or incorporated by reference in the
Registration Statement, the Time of Sale Disclosure Package or the Final
Prospectus.
(v) All
statistical or market-related data included or incorporated by reference in the
Registration Statement, the Time of Sale Disclosure Package or the Final
Prospectus are based on or derived from sources that the Company reasonably
believes to be reliable and accurate, and the Company has obtained the written
consent to the use of such data from such sources, to the extent
required.
(vi) The
Ordinary Shares are registered pursuant to Section 12(b) of the Exchange Act,
the ADSs are registered pursuant to the ADS Registration Statement and the
Company has applied to list the ADSs on the NASDAQ Global Market. There is no
action pending by the Company or, to the Company’s knowledge, the NASDAQ Global
Market to withdraw or deny the application to list the ADSs on the NASDAQ Global
Market.
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(vii) The
Company has not taken, directly or indirectly, any action that is designed to or
that has constituted or that would reasonably be expected to cause or result in
the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares or the ADSs.
(viii) The
Company is not and, after giving effect to the offering and sale of the Shares,
will not be an “investment company,” as such term is defined in the Investment
Company Act of 1940, as amended.
(b) Any
certificate signed by any officer of the Company and delivered to the
Underwriters or to the Underwriters’ counsel shall be deemed a representation
and warranty by the Company to the Underwriters as to the matters covered
thereby.
3. Representations
and Warranties Regarding the Company.
(a) The
Company represents and warrants to, and agrees with, the Underwriters, as
follows:
(i) The
Company and each of its Subsidiaries has been duly incorporated or organized and
is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation or organization. The Company and each of its
Subsidiaries has the corporate power and authority to own or lease its
properties and conduct its business as currently being carried on and as
described in the Registration Statement, the Time of Sale Disclosure Package and
the Prospectus, and is duly qualified to do business as a foreign corporation in
good standing under the laws of each other jurisdiction in which it owns or
leases properties or conducts business so as to require such qualification and
in which the failure to so qualify would have or is reasonably likely to result
in a Material Adverse Effect. The Company does not own, control or
have, directly or indirectly, any interest in any other corporation,
partnership, joint venture, association or entity other than those subsidiaries
set forth on Schedule
3(a)(i) to this Agreement (the “Subsidiaries”).
(ii) The
Company has the power and authority to enter into this Agreement, the Deposit
Agreement and all other agreements, documents, certificates and instruments
required to be delivered pursuant hereto and thereto, and to authorize, issue
and sell the Shares and the ADSs as contemplated by this
Agreement. This Agreement and the Deposit Agreement have been duly
authorized, executed and delivered by the Company, and constitute valid, legal
and binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, except as rights to indemnity hereunder
may be limited by federal or state securities laws and except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the rights of creditors generally and subject to general
principles of equity.
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(iii) The
execution, delivery and performance of this Agreement, the Deposit Agreement and
all other agreements, documents, certificates and instruments required to be
delivered pursuant hereto and thereto, and the consummation of the transactions
hereby and thereby contemplated will not (A) result in a breach or violation of
any of the terms and provisions of, or constitute a default under, any law,
rule, regulation, ordinance, directive, judgment, decree or order of any
judicial, regulatory or other legal or governmental agency or body, domestic or
foreign, or regulation to which the Company or any Subsidiary is subject, or by
which any property or asset of the Company or any Subsidiary is bound or
affected, (B) conflict with, result in any violation or breach of, or constitute
a default (or an event that with notice or lapse of time or both would become a
default) under, or give to others any right of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement, lease, credit facility, debt, note, bond, mortgage, indenture or
other instrument (the “Contracts”) or
obligation or other understanding to which the Company or any Subsidiary is a
party or by which any property or asset of the Company or any Subsidiary is
bound or affected, except, in the case of subsection (A) and (B) hereof, to the
extent that such breach, violation, conflict, default, termination, amendment,
acceleration or cancellation right is not reasonably likely to result in a
material adverse effect upon the business, prospects, properties, operations,
condition (financial or otherwise) or results of operations of the Company and
its Subsidiaries taken as a whole, or in its ability to perform its obligations
under this Agreement or the Deposit Agreement (“Material Adverse
Effect”), or (C) result in a breach or violation of any of the terms and
provisions of, or constitute a default under, the Company’s or any Subsidiary’s
certificate of incorporation, articles of association, bylaws or other
equivalent organizational or governing documents.
(iv) Neither
the Company nor any of its Subsidiaries (A) is in violation of its certificates,
licenses, permits or authorizations issued by competent governmental, regulatory
or judicial authorities or (B) is in violation, breach or default under its
memorandum of association, articles of association or other equivalent
organizational or governing documents, except, in the case of clause (A), where
the violation, breach or default in the case of a Subsidiary is not reasonably
likely to result in a Material Adverse Effect.
(v)
All consents, approvals, orders, authorizations and filings required
on the part of the Company and its Subsidiaries in connection with the
execution, delivery or performance of this Agreement and the Deposit Agreement
have been obtained or made.
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(vi) All
of the issued and outstanding shares of capital stock of the Company are duly
authorized and validly issued, fully paid and non-assessable, and have been
issued in compliance with all applicable securities laws, and conform to the
description thereof in the Registration Statement, the ADS Registration
Statement, Form 8-A Registration Statement, the Time of Sale Disclosure Package
and the Prospectus. Except for the issuances of options or restricted
stock as contemplated by and described in the Registration Statement, the Time
of Sale Disclosure Package and the Prospectus, since the respective dates as of
which information is provided in the Registration Statement, the Time of Sale
Disclosure Package or the Prospectus, neither the Company nor any Subsidiary has
entered into or granted any convertible or exchangeable securities, options,
warrants, agreements, contracts or other rights to purchase or acquire from the
Company or any Subsidiary, as applicable, any shares of the capital stock of the
Company or any Subsidiary, as applicable. The Shares, when issued,
will be duly authorized and validly issued, fully paid and non-assessable, will
be issued in compliance with all applicable securities laws, and will be free of
preemptive, registration or similar rights other than such rights as have been
duly waived or satisfied. The Underwriters will acquire good and
marketable title to the Shares to be sold by the Company, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or other
claim. None of the outstanding shares of capital stock of the Company
or of any Subsidiary was issued in violation of the preemptive or similar rights
of any securityholder arising by operation of law, under the formation or
organizational documents of the Company or any Subsidiary or under any agreement
or obligation to which the Company or any Subsidiary is a party or by which any
of them are bound.
(vii) The
ADSs, when issued by the Depositary against the deposit of Shares in respect
thereof in accordance with the provisions of the Deposit Agreement, will be duly
authorized and validly issued and the persons in whose names such ADSs are
registered will be entitled to the rights of registered holders of ADSs
specified therein and in the Deposit Agreement.
(viii) The
Deposit Agreement, the ADSs and the ADRs conform to the descriptions thereof
contained in the Registration Statement, the Time of Sale Disclosure Package and
the Prospectus.
(ix) The
Shares and the ADSs are freely transferable by the Company to or for the account
of the Underwriters and (to the extent described in the Prospectus) the initial
holders thereof; and, except as disclosed in the Registration Statement, the
Time of Sale Disclosure Package and the Prospectus, there are no restrictions on
subsequent transfers of the Shares or the ADSs under the laws of the British
Virgin Islands, the People’s Republic of China (the “PRC”) or the United
States. No holder of the Shares or ADSs is or will be subject to
personal liability solely by reason of being such a holder.
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(x) The
Company and each of its Subsidiaries has timely filed all foreign, federal,
state and local returns (as hereinafter defined) required to be filed with
taxing authorities prior to the date hereof or has duly obtained extensions of
time for the filing thereof. The Company and each of its Subsidiaries
has timely paid all taxes (as hereinafter defined) shown as due on such returns
that were filed and has timely paid all taxes imposed on or assessed against the
Company or such Subsidiary. The provisions for taxes payable, if any,
shown on the consolidated financial statements filed with or as part of the
Registration Statement are sufficient for all accrued and unpaid taxes, whether
or not disputed, and for all periods to and including the dates of such
consolidated financial statements. Except as disclosed in writing to
the Underwriters, (A) no issues have been raised (and are currently pending) by
any taxing authority in connection with any of the returns of or taxes asserted
as due from the Company or any Subsidiary, and (B) no waivers of statutes of
limitation with respect to the returns or collection of taxes have been given by
or requested from the Company or any Subsidiary. The term “taxes” means all
federal, state, local, foreign, and other net income, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease,
service, service use, withholding, payroll, employment, excise, severance,
stamp, occupation, premium, property, windfall profits, customs, duties or other
taxes, fees, assessments, or charges of any kind whatever, together with any
interest and any penalties, additions to tax, or additional amounts with respect
thereto. The term “returns” means all
returns, declarations, reports, statements, and other documents required to be
filed in respect to taxes.
(xi) Since
the respective dates as of which information is given in the Registration
Statement, the Time of Sale Disclosure Package or the Prospectus, (A) neither
the Company nor any of its Subsidiaries has incurred any material liabilities or
obligations, direct or contingent, or entered into any material transactions,
other than in the ordinary course of business, (B) the Company has not declared
or paid any dividends or made any distribution of any kind with respect to its
capital stock; (C) there has not been any change in the capital stock of the
Company or any of its Subsidiaries (other than a change in the number of
outstanding Ordinary Shares due to the issuance of shares upon the exercise of
outstanding options or warrants or the issuance of
restricted stock awards or restricted stock units under the Company’s existing
stock awards plan, or any new grants thereof in the ordinary course of
business), (D) there has not been any material change in the Company’s long-term
debt, and (E) there has not been the occurrence of any Material Adverse
Effect.
(xii) There
is not pending or, to the knowledge of the Company, threatened, any action, suit
or proceeding to which the Company or any of its Subsidiaries is a party or of
which any property or assets of the Company or any of its Subsidiaries is the
subject before or by any court or governmental agency, authority or body, or any
arbitrator or mediator, which is reasonably likely to result in a Material
Adverse Effect.
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(xiii)
The Company and each of its Subsidiaries holds, and is in compliance with,
all franchises, grants, authorizations, licenses, permits, easements, consents,
certificates and orders (“Permits”) of any
governmental or self-regulatory agency, authority or body required for the
conduct of its business, and all such Permits are in full force and
effect.
(xiv) The
Company and its Subsidiaries have good and marketable title, or land use rights,
to all property (whether real or personal) described in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus as being owned
by them that are material to the business of the Company, in each case free and
clear of all liens, claims, security interests, other encumbrances or defects,
except those that are not reasonably likely to result in a Material Adverse
Effect. The property described in the Registration Statement, the
time of Sale Disclosure Package and the Prospectus as held under lease by the
Company and its Subsidiaries is held by them under valid, subsisting and
enforceable leases with only such exceptions with respect to any particular
lease as do not interfere in any material respect with the conduct of the
business of the Company and its Subsidiaries. Neither the Company nor any of its
Subsidiaries has received any notice of any claim adverse to its ownership of
any real or personal property or any claim against the continued possession of
any real property, whether owned or held under lease or sublease by the Company
or any Subsidiary. The Company and/or its Subsidiaries have valid
ownership to, or land use rights or leasehold interests in, the offices and
manufacturing facilities built by any of them as described in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus, and have
obtained all Permits related to the construction therefore, if
applicable.
(xv) The
Company and its Subsidiaries own or possess or have valid right to use all
patents, patent applications, trademarks, service marks, trade names, trademark
registrations, service ▇▇▇▇ registrations, copyrights, licenses, formulae,
inventions, customer lists, know-how, trade secrets and similar rights (“Intellectual
Property”) necessary for the conduct of the business of the Company and
each of its Subsidiaries as currently carried on and as described in the
Registration Statement, the Time of Sale Disclosure Package and the
Prospectus. To the knowledge of the Company, no action or use by the
Company or any of its Subsidiaries will involve or give rise to any infringement
of, or license or similar fees for, any Intellectual Property of
others. Neither the Company nor any of its Subsidiaries has received
any notice alleging any such infringement or fee. There is no pending
nor, to the knowledge of the Company, threatened, action, suit or proceeding by
any person challenging the rights of the Company or any of its Subsidiaries in
or to any such Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such claim.
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(xvi) The
Company and each of its Subsidiaries have complied with, are not in violation
of, and have not received any notice of violation relating to, any law, rule or
regulation relating to the conduct of its business, or the ownership or
operation of its property and assets, including, without limitation, (A) the
Currency and Foreign Transactions Reporting Act of 1970, as amended, or any
money laundering laws, rules or regulations, (B) any laws, rules or regulations
related to health, safety or the environment, including those relating to the
regulation of hazardous substances, and (C) the Foreign Corrupt Practices Act of
1977 and the rules and regulations thereunder, in each case except where the
failure to be in compliance is not reasonably likely to result in a Material
Adverse Effect.
(xvii) Neither
the Company nor any of its Subsidiaries nor, to the knowledge of the Company,
any director, officer, employee, representative, agent or affiliate of the
Company or any of its Subsidiaries is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”); and the
Company will not directly or indirectly use the proceeds of the offering of the
Shares and the ADSs contemplated hereby, or lend, contribute or otherwise make
available such proceeds to any person or entity, for the purpose of financing
the activities of any person currently subject to any U.S. sanctions
administered by OFAC.
(xviii) The
Company and each of its Subsidiaries carries, or is covered by, insurance in
such amounts and covering such risks as is adequate for the conduct of its
business and the value of its properties and as is customary for companies
engaged in similar businesses in similar industries in the People’s Republic of
China (the “PRC”).
(xix) The
Company and each of its Subsidiaries has complied in all material respects with
all applicable employment and labor laws with respect to its
employees. No labor dispute with the employees of the Company or any
of its Subsidiaries exists or, to the knowledge of the Company, is imminent that
is reasonably likely to result in a Material Adverse Effect.
(xx) Neither
the Company nor any of its Subsidiaries, nor to the Company’s knowledge, any
other party, is in violation, breach or default of any Contract that is
reasonably likely to result in a Material Adverse Effect.
(xxi) No
supplier, customer, distributor or sales agent of the Company or any of its
Subsidiaries has notified the Company or any of its Subsidiaries that it intends
to discontinue or materially decrease the rate of business
done with the Company or any of its Subsidiaries to the extent that
such event is reasonably likely to result in a Material Adverse
Effect.
(xxii) There
are no claims, payments, issuances, arrangements or understandings for services
in the nature of a finder’s, consulting or origination fee with respect to the
introduction of the Company to the Underwriters or the sale of the Shares and
the ADSs hereunder or any other arrangements, agreements, understandings,
payments or issuances withy respect to the company that may affect the
Underwriters’ compensation, as determined by FINRA.
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(xxiii) Except
as disclosed in the Registration Statement, the Time of Sale Disclosure Package
and the Prospectus, neither the Company nor any of its Subsidiaries is in
violation of any statute, rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to the
use, disposal or release of hazardous or toxic substances (collectively,
“environmental laws”), owns or operates any real property contaminated with any
substance that is subject to any environmental laws, is liable for any off-site
disposal or contamination pursuant to any environmental laws, or is subject to
any claim relating to any environmental laws; and neither the Company nor any
Subsidiary is aware of any pending investigation that might lead to such a
claim.
(xxiv) Except
as disclosed to the Underwriters in writing, the Company has not made any direct
or indirect payments (in cash, securities or otherwise) to (A) any person, as a
finder’s fee, investing fee or otherwise, in consideration of such person
raising capital for the Company or introducing to the Company persons who
provided capital to the Company, (B) any FINRA member, or (C) any person or
entity that has any direct or indirect affiliation or association with any FINRA
member within the 12-month period prior to the date on which the Registration
Statement was filed with the Commission (“Filing Date”) or
thereafter.
(xxv) None
of the net proceeds of this offering will be paid by the Company to any
participating FINRA member or any affiliate or associate of any participating
FINRA member, except as specifically authorized herein.
(xxvi) No
(A) officer or director of the Company or any Subsidiary, (B) owner of 5% or
more of any class of the Company’s securities or (C) owner of any amount of the
Company’s securities acquired within the 180-day period prior to the Filing
Date, has any direct or indirect affiliation or association with any FINRA
member. The Company will advise the Underwriters and their counsel if
it becomes aware that any officer, director or stockholder of the Company or any
Subsidiary is or becomes an affiliate or associated person of a FINRA member
participating in this offering.
(xxvii) Other
than the Underwriters, or as otherwise disclosed in writing to the Underwriters,
no person has the right to act as an underwriter or as a financial advisor to
the Company in connection with the transactions contemplated
hereby.
(xxviii) All
information contained in the questionnaires completed by each of the Company’s
directors and officers immediately prior to this offering and provided to the
Underwriters, as well as the biographies of such individuals in the Registration
Statement, is true and correct in all material respects, and the Company has not
become aware of any information that would cause the information disclosed in
such questionnaires to become inaccurate and incorrect.
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(xxix) The
Board of Directors of the Company is comprised of the persons set forth under
the heading of the Prospectus captioned “Management.” The
qualifications of the persons serving as Board members and the overall
composition of the Board comply with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the
rules promulgated thereunder applicable to the Company and the rules of the
Nasdaq Global Market. At least one member of the Board of Directors
of the Company qualifies as a “financial expert” as such term is defined under
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules promulgated thereunder and the
rules of the Nasdaq Global Market. In addition, at least a majority
of the persons serving on the Board of Directors qualify as “independent” as
defined under the rules of the Nasdaq Global Market.
4. Representations
and Warranties of the Company Regarding the PRC.
(a) The
Company represents and warrants to, and agrees with, the Underwriters, as of the
date hereof and as of the Closing Date, as follows:
(i) The
Company conducts substantially all of its operations and generates substantially
all of its revenue through its indirect, majority-owned subsidiaries, Ossen
Innovation Materials Co., Ltd. and Ossen (Jiujiang) Steel & Wire Cable Co.,
Ltd. (such subsidiaries being referred to herein collectively as the “PRC Entities”), each
of which was formed under the laws of the PRC.
(ii) The
description of the corporate structure of the Company and of any contracts or
arrangements between the Company and any of the PRC Entities, as described in
the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus, is true and accurate and nothing has been omitted from such
description which would make it misleading in any respect. There are
no other agreements, contracts or other documents relating to the corporate
structure of the Company, its Subsidiaries and the PRC Entities which has not
been previously disclosed or made available to the Underwriters and, to the
extent material to the Company, disclosed in the Registration Statement, the
Time of Sale Disclosure Package and the Prospectus.
(iii) There
are no outstanding rights, warrants or options to acquire, or instruments
convertible into or exchangeable for, any equity interest in any of the PRC
Entities, and there is no security interest, mortgage, pledge, lien,
encumbrance, claim or any third party right, the exercise of which may lead to
the change of shareholdings or the amount of the registered capital of any of
the PRC Entities.
12
(iv) Any
previous restructuring (i.e., equity transfer) of the PRC Entities complied with
the then-effective PRC laws and regulations.
(v) No
dispute between any of the PRC Entities and the Company or any of its
Subsidiaries (other than the PRC Entities) exists, or to the knowledge of the
Company, is imminent, that is reasonably likely to result in a Material Adverse
Effect.
(vi) Except
as disclosed in the Registration Statement, the Time of Sale Disclosure Package
and the Prospectus, all filings and registrations with the PRC governmental
authorities required in respect of each of the PRC Entities and its respective
capital structure and operations, including, without limitation, the
registration with local divisions of the Ministry of Commerce, the State
Administration of Foreign Exchange and tax bureau have been duly completed in
accordance with the relevant PRC rules and regulations and none of the PRC
Entities has received any letter or notice from any relevant PRC government
authority notifying it of revocation of any licenses or qualifications issued to
it by any PRC government authority for non-compliance with the terms thereof or
with applicable PRC laws, or the lack of compliance or remedial actions in
respect of the activities carried out by the PRC Entities.
(vii) Except
pursuant to applicable PRC laws, rules and regulations, no PRC Entity is
currently prohibited, directly or indirectly, from paying any dividends to the
Company (or the Company’s Subsidiary that holds the outstanding equity interest
of such PRC Entity). Except pursuant to applicable PRC laws, rules
and regulations, no PRC Entity is prohibited, directly or indirectly, from
making any other distribution on such PRC Entity’s equity capital, from repaying
to the Company any loans or advances to such PRC Entity from the Company or any
of the Company’s Subsidiaries.
13
(viii) Each
PRC Entity has been duly established, is validly existing as a company in good
standing under the laws of the PRC, has the corporate power and authority to
own, lease and operate its property and to conduct its business as described in
the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus, and is duly qualified and is in good standing to conduct its
business operation, enforce its agreements and transact business in the PRC in
each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification. Each PRC Entity has
applied for and obtained all requisite business licenses, approvals, consents,
clearances and permits required under PRC law and regulations as necessary for
the conduct of its businesses as currently being conducted and as described in
the Registration Statement, and each PRC Entity has complied in all
respects with all PRC laws and regulations in connection with foreign exchange,
including without limitation, carrying out all relevant filings, registrations
and applications for relevant permits with the relevant branch of the PRC State
Administration of Foreign Exchange and any other
relevant authorities, and all such permits are validly subsisting,
and as to business licenses, clearances and permits subject to periodic renewal,
the Company has no knowledge of any reasons related to each of the PRC Entities
for which such requisite renewals will not be granted by the relevant PRC
governmental authorities. The registered capital of each PRC Entity
has been fully paid up in accordance with the schedule of payment stipulated in
its respective articles of association, approval document, certificate of
approval and legal person business license (hereinafter referred to as the
“Establishment
Documents”) and in compliance with PRC laws and regulations, and there is
no outstanding capital contribution commitment for any PRC
Entity. With respect to any increase of registered capital, the
relevant PRC Entity has duly filed the application documents with the competent
PRC government authorities for approval. The Establishment Documents
of the PRC Entities have been duly approved in accordance with the laws of the
PRC and are valid and enforceable. The business scope specified in
the Establishment Documents of each PRC Entity complies with the requirements of
all relevant PRC laws and regulations. The outstanding equity
interests of each PRC Entity is owned of record by the respective entities or
individuals identified as the registered holders thereof in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus, free of any
charges, pledges, security or third party rights and there are no outstanding
commitments made by the Company or any of its Subsidiaries to sell any equity
interest in any of the PRC Entities. Except for the PRC Entities, the
Company does not presently own, control or have, directly or indirectly, any
interest in any other corporation, partnership, trust, joint venture,
association, branch offices or other entity in the PRC.
(ix) None
of the PRC Entities nor any of their properties, assets or revenues are entitled
to any right of immunity on the grounds of sovereignty from any legal action,
suit or proceeding, from set-off or counterclaim, from the jurisdiction of any
court, from services of process, from attachment prior to or in aid of execution
of judgment, or from any other legal process or proceeding for the giving of any
relief or for the enforcement of any judgment.
(x) It
is not necessary that this Agreement, the Registration Statement, the Time of
Sale Disclosure Package, the Prospectus or any other document be filed or
recorded with any governmental agency, court or other authority in the
PRC.
(xi)
No transaction, stamp, capital or other issuance, registration, transaction,
transfer, income, capital gains, withholding or other taxes or duties are
payable by or on behalf of the Underwriters to the government of the PRC or to
any political subdivision or taxing authority thereof or therein in connection
with (A) the execution and delivery of this Agreement, (B) the issuance,
sale and delivery of the Shares and the ADSs by the Company and the delivery of
the Shares and the ADSs to or for the account of the Underwriters, (C) the
purchase from the Company and the initial sale and delivery by the Underwriters
of the Shares and the ADSs to purchasers thereof, or (D) the consummation
of any other transaction contemplated in this Agreement.
14
(xii) The
Company has taken all necessary steps to comply with, and to ensure compliance
by all of the Company’s direct or indirect shareholders and option holders who
are PRC residents with, any applicable rules and regulations of the PRC State
Administration of Foreign Exchange of the PRC(the “SAFE Rules and
Regulations”), including without limitation, taking reasonable steps to
require each of its shareholders and option holders that is, or is directly or
indirectly owned or controlled by, a PRC resident to complete any registration
and other procedures required under applicable SAFE Rules and
Regulations.
(xiii) The
Company is aware of, and has been advised as to, the content of the Rules on
Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, as in
effect on the date hereof, jointly promulgated by the PRC Ministry of Commerce,
the PRC State Assets Supervision and Administration Commission, the PRC State
Administration of Taxation, the PRC State Administration of Industry and
Commerce, the China Securities Regulatory Commission (the “CSRC”) and the PRC
State Administration of Foreign Exchange of the PRC and amended Rules on Mergers
and Acquisitions of Domestic Enterprises by Foreign Investors promulgated on
June 22, 2009 by the PRC Ministry of Commerce (the “M&A Rules”), in
particular the relevant provisions thereof that purport to require offshore
special purpose vehicles controlled directly or indirectly by PRC-incorporated
companies or PRC residents and established for the purpose of obtaining a stock
exchange listing outside of the PRC to obtain the approval of the CSRC prior to
the listing and trading of their securities on any stock exchange located
outside of the PRC. The Company has received legal advice
specifically with respect to the M&A Rules from its PRC counsel and the
Company understands such legal advice. In addition, the Company has
communicated such legal advice in full to each of its directors that signed the
Registration Statement and each such director has confirmed that he or she
understands such legal advice.
(xiv) The
issuance and sale of the Shares, the listing and trading of the ADSs on the
NASADAQ Global Market and the consummation of the transactions contemplated by
this Agreement, the Deposit Agreement, the Registration Statement, the Time of
Sale Disclosure Package and the Prospectus are not and will not be, as of the
date hereof and on the Closing Date, subject to the M&A Rules or any
official clarifications, guidance, interpretations or implementation rules in
connection with or related to the M&A Rules, including the guidance and
notices issued by the CSRC on September 8 and September 21, 2006 (together with
the M&A Rules, the “M&A Rules and Related
Clarifications”).
15
(xv) The
Company has taken all necessary steps to ensure compliance by each of its
shareholders, option holders, directors, officers and employees that is, or is
directly or indirectly owned or controlled by, a PRC resident or citizen with
any applicable rules and regulations of the relevant PRC government agencies
(including but not limited to the PRC Ministry of Commerce, the PRC National
Development and Reform Commission and the PRC State Administration of Foreign
Exchange) relating to overseas investment by PRC residents and citizens (the
“PRC Overseas
Investment and Listing Regulations”), including, requesting each
shareholder, option holder, director, officer, employee and participant that is,
or is directly or indirectly owned or controlled by, a PRC resident or citizen
to complete any registration and other procedures required under applicable PRC
Overseas Investment and Listing Regulations.
(xvi) As
of the date hereof, the M&A Rules and Related Clarifications do not require
the Company to obtain the approval of the CSRC prior to the issuance and sale of
the Shares and the ADSs, the listing and trading of the ADSs on the NASDAQ
Global Market, or the consummation of the transactions contemplated by this
Agreement, the Registration Statement, the Time of Sale Disclosure Package or
the Prospectus.
(xvii) Each
of the PRC Entities is in compliance with all requirements under all applicable
PRC laws and regulations to qualify for their exemptions from enterprise income
tax or other income tax benefits (the “Tax Benefits”) as
described in the Registration Statement, the Time of Sale Disclosure Package and
the Prospectus, and the actual operations and business activities of each such
PRC Entity are sufficient to meet the qualifications for the Tax
Benefits. No submissions made to any PRC government authority in
connection with obtaining the Tax Benefits contained any misstatement or
omission that would have affected the granting of the Tax
Benefits. No PRC Entity has received notice of any deficiency in its
respective applications for the Tax Benefits, and the Company is not aware of
any reason why any such PRC Entity might not qualify for, or be in compliance
with the requirements for, the Tax Benefits.
(xviii) All
local and national PRC governmental tax holidays, exemptions, waivers, financial
subsidies, and other local and national PRC tax relief, concessions and
preferential treatment enjoyed by any PRC Entity as described in the
Registration Statement, the Time of Disclosure Package and the Prospectus are
valid, binding and enforceable and do not violate any laws, regulations, rules,
orders, decrees, guidelines, judicial interpretations, notices or other
legislation of the PRC.
16
(xix) The
entry into, and performance or enforcement of, this Agreement in accordance with
its terms will not subject the Underwriters to any requirement to be licensed or
otherwise qualified to do business in the PRC, nor will the Underwriters be
deemed to be resident, domiciled, carrying on business or subject to taxation
through an establishment or place in the PRC or in breach of any laws or
regulations of the PRC by reason of its execution, delivery, performance or
enforcement of, or the consummation of any transaction contemplated by, this
Agreement, the Deposit Agreement, the Registration Statement, the Time of Sale
Disclosure Package or the Prospectus.
(xx) All
descriptions in the Registration Statement, the Time of Sale Disclosure Package
and the Prospectus of PRC laws or regulations and contracts, documents and
matters governed by or under PRC law are accurate in all material
respects. Any statements in the Registration Statement, the Time of
Sale Disclosure Package and the Prospectus, insofar as such statements
constitute summaries of the laws or regulations of the PRC or documents governed
by PRC law as of the date hereof, fairly present the information called for with
respect to such legal matters and documents and fairly summarize matters
referred to therein.
(xxi) The
application of the net proceeds from this offering, as contemplated by the
Registration Statement, the Time of Sale Disclosure Package and the Prospectus,
will not (A) contravene any provision of applicable PRC law, rule or regulation,
or the articles of association or any other constituent documents of any of the
PRC Entities or (B) contravene the terms or provisions of, or constitute a
default under, (1) any mortgage, loan agreement, lease or other agreement
binding upon any of the PRC Entities, (2) any mortgage, loan agreement, lease or
other agreement governed by PRC law by which the Company or any of the PRC
Entities are bound or to which any of the properties or assets of any of the PRC
Entities are subject or (3) any judgment, order or decree of any governmental
body, agency or court in the PRC.
(xxii) The
contribution to the PRC Entities of the proceeds from the sale of the Shares,
subject, however, to customary and ordinary administrative approvals under the
existing laws and regulations of the PRC, and the compliance by the Company with
all of the provisions of this Agreement and the consummation of the transactions
contemplated hereby does not result in any violation of the provisions of the
articles of association or any other constituent documents of the PRC Entities
or any applicable laws and regulations of the PRC, including, without
limitation, the New M&A Rules, of any governmental agency having
jurisdiction over each of the PRC entities or any of its
properties.
(xxiii) Except
as disclosed in the Registration Statement, the Time of Sale Disclosure Package
and the Prospectus, none of the PRC Entities is in violation of any applicable
statute, law or regulation relating to the environment or occupational health
and safety and no material expenditures are or will be required in order to
comply with any such existing statute, law or regulation.
17
5. Purchase,
Sale and Delivery of Shares and ADSs.
(a) On
the basis of the representations, warranties and agreements herein contained,
but subject to the terms and conditions herein set forth, the Company agrees to
issue and sell the Underwritten Shares, in the form of ADSs, to the
Underwriters, severally and not jointly, and the Underwriters agree, severally
and not jointly, to purchase the Underwritten Shares. The purchase
price to the Underwriters for each Underwritten Share (net of discounts and
commissions) shall be $_______ per share (93% of the offering price to the
public per Underwritten Share) (the “Per Share
Price”).
(b) The
Company hereby grants to the Underwriters the option to purchase some or all of
the Additional Shares, in the form of ADSs, and, upon the basis of the
warranties and representations and subject to the terms and conditions herein
set forth, the Underwriters shall have the right to purchase all or any portion
of the Additional Shares at the Per Share Price as may be necessary to cover
over-allotments made in connection with the transactions contemplated
hereby. This option may be exercised by the Underwriters at any time
or times on or before the forty-fifth (45th) day
following the date hereof, by written notice to the Company (the “Option
Notice”). The Option Notice shall set forth the aggregate
number of Additional Shares and ADSs as to which the option is being exercised,
and the date and time when the Additional Shares are to be delivered (such date
and time being herein referred to as the “Option Closing
Date”); provided, however, that the Option
Closing Date shall not be earlier than the Closing Date (as defined below) nor
earlier than the first business day after the date on which the option shall
have been exercised nor later than the fifth business day after the date on
which the option shall have been exercised unless the Company and the
Underwriters otherwise agree.
Payment of the purchase price for and
delivery of the Additional Shares shall be made at the Option Closing Date in
the same manner and at the same office as the payment for the Underwritten
Shares as set forth
in subparagraph (c) below. For the purpose of expediting the checking
of the certificate for the Additional Shares by the Underwriters, the Company
agrees to make a form of such certificate available to the Underwriters for such
purpose at least one full business day preceding the Option Closing
Date.
(c) The
Underwritten Shares, in the form of ADSs, will be delivered by the Company to
the Underwriters against payment of the purchase price therefor by wire transfer
of immediately available funds payable to the order of the Company at the
offices of Global Hunter Securities, LLC, _____________________________, or such
other location as may be mutually acceptable, at 9:00 a.m. EST, on the third (or
if the Underwritten Shares are priced, as contemplated by Rule 15c6-1(c) under
the Exchange Act, after 4:30 p.m. Eastern time, the fourth) full business day
following the date hereof, or at such other time and date as the Underwriters
and the Company determine pursuant to Rule 15c6-1(a) under the Exchange Act, or,
in the case of the Additional Shares, at such date and time set forth in the
Option Notice. The time and date of delivery of the Underwritten
Shares or the Additional Shares, as applicable, is referred to herein as the
“Closing
Date.” If the Underwriters so elect, delivery of the
Underwritten Shares and Additional Shares, each in the form of ADSs, may be made
[by credit through full fast transfer] to the account at The Depository Trust
Company designated by the Underwriters. Certificates representing the
ADSs, in definitive form and in such denominations and registered in such names
as the Underwriters may request upon at least two business days’ prior notice to
the Company, will be made available for checking and packaging not later than
9:00 a.m. EST on the business day next preceding the Closing Date at the above
addresses, or such other location as may be mutually
acceptable.
18
6. Covenants.
(a) Company
Covenants. The Company covenants and agrees with the
Underwriters as follows:
(i) During
the period beginning on the date hereof and ending on the later of the Closing
Date or such date as determined by the Underwriters the Prospectus is no longer
required by law to be delivered in connection with sales by an underwriter or
dealer (the “Prospectus Delivery
Period”), prior to amending or supplementing the Registration Statement,
including any Rule 462 Registration Statement, the Time of Sale Disclosure
Package or the Prospectus, the Company shall furnish to the Underwriters for
review and comment a copy of each such proposed amendment or supplement, and the
Company shall not file any such proposed amendment or supplement to which the
Underwriters reasonably object.
(ii) From
the date of this Agreement until the end of the Prospectus Delivery Period, the
Company shall promptly advise the Underwriters in writing (A) of the receipt of
any comments of, or requests for additional or supplemental information from,
the Commission, (B) of the time and date of any filing of any post-effective
amendment to the Registration Statement or any amendment or supplement to the
Time of Sale Disclosure Package or the Prospectus, (C) of the time and date that
any post-effective amendment to the Registration Statement becomes effective and
(D) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending its use or the use of the Time of Sale Disclosure Package, or of any
proceedings to remove, suspend or terminate from listing or quotation the
Ordinary Shares from any securities exchange upon which it is listed for trading
or included or designated for quotation, or of the threatening or initiation of
any proceedings for any of such purposes. If the Commission shall
enter any such stop order at any time during the Prospectus Delivery Period, the
Company will use its reasonable efforts to obtain the lifting of such order as
soon as possible. Additionally, the Company agrees that it shall
comply with the provisions of Rules 424(b), 430A and 430B, as applicable, under
the Securities Act and will use its reasonable efforts to confirm that any
filings made by the Company under Rule 424(b) or Rule 433 were received in a
timely manner by the Commission (without reliance on Rule 424(b)(8) or Rule
164(b) of the Securities Act).
19
(iii) During
the Prospectus Delivery Period, the Company will comply with all requirements
imposed upon it by the Securities Act, as now and hereafter amended, and by the
Rules and Regulations, as from time to time in force, and by the Exchange Act,
as now and hereafter amended, so far as necessary to permit the continuance of
sales of or dealings in the Shares as contemplated by the provisions hereof, the
Time of Sale Disclosure Package, the Registration Statement and the
Prospectus. If during such period any event occurs the result of
which the Prospectus (or if the Prospectus is not yet available to prospective
purchasers, the Time of Sale Disclosure Package ) would include an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances then existing, not
misleading, or if during such period it is necessary or appropriate in the
opinion of the Company or its counsel or the Underwriters or their counsel to
amend the Registration Statement or supplement the Prospectus (or if the
Prospectus is not yet available to prospective purchasers, the Time of Sale
Disclosure Package ) to comply with the Securities Act, the Company will
promptly notify the Underwriters and will amend the Registration Statement or
supplement the Prospectus (or if the Prospectus is not yet available to
prospective purchasers, the Time of Sale Disclosure Package) so as to correct
such statement or omission or effect such compliance.
(iv) The
Company shall take or cause to be taken all necessary action to cause the ADSs
to be listed on the NASDAQ Global Market and to qualify the ADSs for sale under
the securities laws of such jurisdictions as the Underwriters reasonably
designate and to continue such qualifications in effect so long as required for
the distribution of the ADSs, except that the Company shall not be required in
connection therewith to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified, to execute a
general consent to service of process in any state or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise subject.
(v) The
Company will furnish to the Underwriters and counsel for the Underwriters copies
of the Registration Statement, each Prospectus, the ADS Registration Statement,
the Deposit Agreement and the Form 8-A Registration Statement and all amendments
and supplements to such documents, in each case as soon as available and in such
quantities as the Underwriters may from time to time reasonably
request.
(vi) The
Company will make generally available to its security holders as soon as
practicable, but in any event not later than 15 months after the end of the
Company’s current fiscal quarter, an earnings statement (which need not be
audited) covering a 12-month period that shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 of the Rules and
Regulations.
20
(vii) Whether
or not the transactions contemplated by this Agreement, the Registration
Statement and the Prospectus are consummated or this Agreement is terminated,
the Company hereby agrees to pay all costs and expenses incident to the
performance of its obligations hereunder, including the following: (A) all
expenses in connection with the preparation, printing, formatting for ▇▇▇▇▇ and
filing of the Registration Statement and the Prospectus and any and all
amendments, supplements or exhibits thereto, the mailing and delivering of as
many copies thereof to the Underwriters and dealers as the Underwriters may
reasonably request, and the costs of mailing such materials to prospective
investors; (B) all fees and expenses in connection with the filing of Corporate
Offerings Business & Regulatory Analysis filings with FINRA; (C) all fees
and expenses in connection with filing of the Registration Statement and
Prospectus with the Commission; (D) the fees, disbursements and expenses of the
Company’s counsel, accountants and other agents and representatives in
connection with the transactions contemplated by this Agreement, including
registration fees to the Commission; (E) all expenses in connection with the
qualifications of the Shares for offering and sale under state and foreign
securities or blue sky laws, including the fees and disbursements of counsel for
the Underwriters in connection with such qualification and in connection with
any blue sky survey undertaken by such counsel; (F) all Nasdaq Global Market
fees and expenses; (G) all travel expenses of the Company’s officers and
employees and any other expense of the Company incurred in connection with
attending or hosting meetings with prospective purchasers; (H) all stock
transfer and/or stamp taxes incurred in connection with this Agreement or this
offering; (I) the cost of preparing, printing and delivering certificates
representing the Shares and the ADSs; (J) the fees and expenses of any transfer
agent or registrar; (K) any costs and expenses in conducting a satisfactory due
diligence investigation and analysis of the Company’s officers, directors,
employees and affiliates; (L) all fees and expenses of counsel to the
Underwriters; (M) the cost of two (2) “tombstone” advertisements to be placed in
appropriate daily or weekly periodicals of the Underwriters’ choice (i.e., the
Wall Street Journal or the New York Times); (N) the cost of three (3) bound
volumes of the offering documents and five (5) offering commemorative Lucite (or
other reasonable form) memorabilia, both to be supplies to the Underwriters; and
(O) all other costs and expenses incident to the performance of the Company’s
obligations hereunder that are not otherwise specifically provided for in this
Section 6(a)(vii). All relevant expenses incurred by the Underwriters
will be borne by the Company, up to but not more than $250,000. The
Underwriters may also deduct from the net proceeds of this offering payable to
the Company on the Closing Date the expenses set forth herein to be paid by the
Company to the Underwriters.
(viii) The
Company will apply the net proceeds from this offering for the purposes set
forth in the Time of Sale Disclosure Package and in the Final
Prospectus.
21
(ix) The
Company has not taken and will not take, directly or indirectly, during the
Prospectus Delivery Period, any action designed to or which might reasonably be
expected to cause or result in, or that has constituted, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares.
(x) Prior
to the consummation of this offering, the Company will engage or continue to
engage (for no less than two (2) years from the Closing Date) a financial public
relations firm mutually acceptable to the Company and the
Underwriters. The Company further agrees to consult with the
Underwriters as is customary within the securities industry prior to
distribution to third parties of any financial information, news releases and/or
other publicity regarding the Company, its business or any terms of the proposed
offering.
(xi) The
Company has or will retain ____________________ (or a transfer agent of similar
competence and quality) as transfer agent and shall continue to retain such
transfer agent or another transfer agent of similar competence and quality for a
period of three (3) years following the Closing Date.
(xii) The
Company will maintain a system of internal accounting controls sufficient to
provide reasonable assurances that: (i) transactions are executed in accordance
with management’s general or specific authorization; (ii) transactions are
recorded as necessary in order to permit preparation of financial statements in
accordance with U.S. generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xiii) The
Company hereby agrees that, without the prior written consent of the
Underwriters, it will not, during the period ending 90 days after the date
hereof (“Lock-Up
Period”), (A) 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 Ordinary Shares or any securities convertible into
or exercisable or exchangeable for or representing the right to receive Ordinary
Shares, including ADSs; or (B) file or cause to be filed any registration
statement with the Commission relating to the offering of any Shares or any
securities convertible into or exercisable or exchangeable for or representing
the right to receive Ordinary Shares, including ADSs; or (C) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of Ordinary Shares, whether any such
transaction described in clause (A), (B) or (C) above is to be settled by
delivery of Ordinary Shares or such other securities, in cash or
otherwise. The restrictions contained in the preceding sentence shall
not apply to (1) the Shares and ADSs to be sold hereunder, (2) the issuance of
Ordinary Shares upon the exercise of options or warrants disclosed as
outstanding in the Registration Statement (excluding exhibits thereto) or the
Prospectus, and (3) the issuance of employee stock options not exercisable
during the Lock-Up Period and the grant of restricted stock awards or restricted
stock units pursuant to equity incentive plans described in the Registration
Statement (excluding exhibits thereto) and the
Prospectus. Notwithstanding the foregoing, if (x) the Company issues
an earnings release or material news, or a material event relating to the
Company occurs, during the last 17 days of the Lock-Up Period, or (y) prior to
the expiration of the Lock-Up Period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the
Lock-Up Period, the restrictions imposed by this clause shall continue to apply
until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event,
unless the Underwriters waive such extension in writing.
22
(xiv) [The
Company hereby grants GHS the right of participation to act as lead underwriter
or minimally as co-manager for a period of twelve (12) months from the Closing
Date, for any and all public and private equity and debt offerings for the
Company or any of its Subsidiaries, excluding ordinary course of business
financings such as bank lines of credit, accounts receivable and factoring
arrangements. The Company shall provide written notice to GHS with
terms of such offering and if GHS fails to accept in writing any such proposal
for such public or private sale within twenty (20) days after receipt of a
written notice from the Company containing such proposal, then GHS will have no
claim or right with respect to any such sale contained in any such
notice.]
(b) Underwriter
covenants. The Underwriters, severally and not jointly,
covenant and agree with the Company as follows:
(i) Each
Underwriter represents and agrees that it has not made and will not make any
offer relating to the Shares or the ADSs that would constitute an “issuer free
writing prospectus”, as defined in Rule 433 under the Act, or that would
otherwise constitute a “free writing prospectus”, as defined in Rule 405 under
the Act.
7. Conditions of the
Underwriters’ Obligations. The obligations of the Underwriters
hereunder to purchase the Shares and the ADSs are subject to the accuracy, as of
the date hereof and at the Closing Date (as if made at the Closing Date), of and
compliance with all representations, warranties and agreements of the
Company contained
herein, the performance by the Company of its obligations hereunder and the
following additional conditions:
23
(a) If
filing of the Prospectus, or any amendment or supplement thereto, is required
under the Securities Act or the Rules and Regulations, the Company shall have
filed the Prospectus (or such amendment or supplement) with the Commission in
the manner and within the time period so required (without reliance on Rule
424(b)(8) or Rule 164(b) under the Securities Act); the Registration Statement
shall remain effective; no stop order suspending the effectiveness of the
Registration Statement or any part thereof, any Rule 462 Registration Statement,
or any amendment thereof, nor suspending or preventing the use of the Time of
Sale Disclosure Package or the Prospectus shall have been issued; no proceedings
for the issuance of such an order shall have been initiated or threatened; any
request of the Commission or the Underwriters for additional information (to be
included in the Registration Statement, the Time of Sale Disclosure Package, the
Prospectus or otherwise) shall have been complied with to the Underwriters’
satisfaction.
(b) FINRA
shall have raised no objection to the fairness and reasonableness of the
underwriting terms and arrangements.
(c) The
Underwriters shall not have reasonably determined,
and advised the Company, that the Registration Statement, the Time of
Sale Disclosure Package or the Prospectus, or any amendment thereof or
supplement thereto, contains an untrue statement of fact which, in the
Underwriters’ opinion, is material, or omits to state a fact which, in the
Underwriters’ opinion, is material and is required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading.
(d) On
or after the date hereof (i) no downgrading shall have occurred in the rating
accorded any of the Company’s securities by any “nationally recognized
statistical organization,” as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Securities Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company’s
securities.
(e) On
the Closing Date, there shall have been furnished to the Underwriters the
opinion of ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, dated the Closing Date and
addressed to the Underwriters, in form and substance reasonably satisfactory to
the Underwriters.
(f) On
the Closing Date, there shall have been furnished to the Underwriters the
opinion of ▇▇▇▇▇▇▇ BVI, the Company’s BVI counsel, dated the Closing Date and
addressed to the Underwriters, in form and substance reasonably satisfactory to
the Underwriters.
(g) On
the Closing Date, there shall have been furnished to the Underwriters the
opinion of Grandall Legal Group, the Company’s PRC counsel, dated the Closing
Date and addressed to the Underwriters, in form and substance reasonably
satisfactory to the Underwriters.
(h) The
Underwriters shall have received a “cold comfort” letter from Sherb & Co.,
LLP, on the date hereof and on the Closing Date addressed to the Underwriters,
confirming that they are independent public accountants within the meaning of
the Securities Act and are in compliance with the applicable requirements
relating to the qualifications of accountants under Rule 2-01 of Regulation S-X
of the Commission, and confirming, as of the date of each such letter (or, with
respect to matters involving changes or developments since the respective dates
as of which specified financial information is given in the Time of Sale
Disclosure Package, as of a date not prior to the date hereof or more than five
days prior to the date of such letter), the conclusions and findings of said
firm with respect to the financial information and other matters required by the
Underwriters.
24
(i) On
or before the date hereof, the Underwriters shall have received duly executed
“lock-up” agreements, in the form set forth on Schedule II, between the
Underwriters and those persons set forth on Schedule I.
(j) On
the Closing Date, there shall have been furnished to the Underwriters a
certificate, dated the Closing Date and addressed to the Underwriters, signed by
the chief executive officer and the chief financial officer of the Company, in
their capacity as officers of the Company, to the effect that:
(i) The
representations and warranties of the Company in this Agreement are true and
correct, in all material respects, as if made at and as of the Closing Date, 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 Closing
Date;
(ii) No
stop order or other order (A) suspending the effectiveness of the Registration
Statement or any part thereof or any amendment thereof, the ADS Registration
Statement, or any part thereof or any amendment thereto or the Form 8-A
Registration Statement, or any part thereof or any amendment thereto, (B)
suspending the qualification of the Shares or the ADSs for offering or sale, or
(C) suspending or preventing the use of the Time of Sale Disclosure Package or
the Prospectus, has been issued, and no proceeding for that purpose has been
instituted or, to their knowledge, is contemplated by the Commission or any
state or regulatory body; and
(iii) There
has been no occurrence of any event resulting or reasonably likely to result in
a Material Adverse Effect during the period from and after the date of this
Agreement and prior to the Closing Date.
(k) At
the Closing Date, the ADSs shall have been approved for listing on the Nasdaq
Global Market.
(l) The
Depositary shall have delivered to the Company at such Closing Date certificates
satisfactory to the Underwriters evidencing the deposit with the Depositary or
its nominee of the Shares being so deposited against issuance of ADRs evidencing
the ADSs to be delivered by the Company at the Closing Date, and the execution,
countersignature (if applicable), issuance and delivery of ADRs evidencing such
ADSs pursuant to the Deposit Agreement.
25
(m) The
Company shall have furnished to the Underwriters and counsel for the
Underwriters such additional documents, certificates and evidence as the
Underwriters or counsel for the Underwriters may have reasonably
requested.
If any
condition specified in this Section 7 shall not have been fulfilled when and as
required to be fulfilled, this Agreement may be terminated by the Underwriters
by notice to the Company at any time at or prior to the Closing Date and such
termination shall be without liability of any party to any other party, except
that Section 6(a)(vii), Section 8 and Section 9 shall survive any such
termination and remain in full force and effect.
8. Indemnification
and Contribution.
(a) The
Company agrees to indemnify, defend and hold harmless each Underwriter,
its affiliates, directors and officers and employees, and each
person, if any, who controls such Underwriter within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, from and against any
losses, claims, damages or liabilities to which such Underwriter or such person
may become subject, under the Securities Act or otherwise (including in
settlement of any litigation if such settlement is effected with the written
consent of the Company), insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon (i) an untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, including the information deemed to be a part of the
Registration Statement at the time of effectiveness and at any subsequent time
pursuant to Rules 430A and 430B of the Rules and Regulations, the Time of Sale
Disclosure Package, the Prospectus, the ADS Registration Statement, the Form 8-A
Registration Statement or any amendment or supplement thereto (including any
documents filed under the Exchange Act and deemed to be incorporated by
reference into the Registration Statement or the Prospectus), or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, (ii) in
whole or in part, any inaccuracy in the representations and warranties of the
Company contained herein, or (iii) in whole or in part, any failure of the
Company to perform its obligations hereunder or under law, and will reimburse
such Underwriter for any legal or other expenses reasonably incurred by it in
connection with evaluating, investigating or defending against such loss, claim,
damage, liability or action; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, the Time of Sale Disclosure Package, the Prospectus,
or any amendment or supplement thereto, in reliance upon and in conformity with
written information furnished to the Company by such Underwriter specifically
for use in the preparation thereof.
26
(b) Each
Underwriter, severally and not jointly, will indemnify, defend and hold harmless
the Company, its affiliates, directors, officers and employees, and each person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any losses,
claims, damages or liabilities to which the Company may become subject, under
the Securities Act or otherwise (including in settlement of any litigation, if
such settlement is effected with the written consent of such Underwriter),
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the Time
of Sale Disclosure Package, the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in the Registration Statement, the Time of Sale
Disclosure Package, the Prospectus, or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter specifically for use in the preparation thereof, and
will reimburse the Company for any legal or other expenses reasonably incurred
by the Company in connection with defending against any such loss, claim,
damage, liability or action.
(c) Promptly
after receipt by an indemnified party under subsection (a) or (b) above of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the commencement
thereof; but the failure to notify the indemnifying party shall not relieve the
indemnifying party from any liability that it may have to any indemnified party
except to the extent such indemnifying party has been materially prejudiced by
such failure. In case any such action shall be brought against any
indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of the indemnifying party’s election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof; provided,
however, that if (i)
the indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party,
(ii) a conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party), or (iii) the indemnifying
party has not in fact employed counsel reasonably satisfactory to the
indemnified party to assume the defense of such action within a reasonable time
after receiving notice of the commencement of the action, the indemnified party
shall have the right to employ a single counsel to represent it in any claim in
respect of which indemnity may be sought under subsection (a) or (b) of this
Section 8, in which event the reasonable fees and expenses of such separate
counsel shall be borne by the indemnifying party or parties and reimbursed to
the indemnified party as incurred.
27
The
indemnifying party under this Section 8 shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party against any loss, claim, damage,
liability or expense by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement, compromise or consent to the entry of judgment in
any pending or threatened action, suit or proceeding in respect of which any
indemnified party is a party or could be named and indemnity was or would be
sought hereunder by such indemnified party, unless such settlement, compromise
or consent (a) includes an unconditional release of such indemnified party from
all liability for claims that are the subject matter of such action, suit or
proceeding and (b) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified
party.
(d) If
the indemnification provided for in this Section 8 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above, (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company, on
the one hand, and the Underwriters, on the other hand, from the offering and
sale of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total net proceeds from this offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Final Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the
Underwriters and the parties’ relevant intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or
omission. The Company and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this subsection (d) were to be
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in the first
sentence of this subsection (d). The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending against any action or claim that is the subject
of this subsection (d). Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount of such Underwriter’s commissions referenced in Section
5(a) of this Agreement actually received by such Underwriter pursuant to this
Agreement. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
28
(e) The
obligations of the Company under this Section 8 shall be in addition to any
liability that the Company may otherwise have; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability that the
Underwriters may otherwise have.
(f) For
purposes of this Agreement, the Underwriters confirm, and the Company
acknowledges, that there is no information concerning the Underwriters furnished
in writing to the Company by the Underwriters specifically for preparation of or
inclusion in the Registration Statement, the Time of Sale Disclosure Package,
the Prospectus, other than the statements set forth in the last paragraph on the
cover page of the Prospectus and the statements set forth in the “Underwriting”
section of the Prospectus and Time of Sale Disclosure Package, [only insofar as
such statements relate to the amount of selling concession and re-allowance or
to over-allotment and related activities that may be undertaken by the
Underwriters].
9. Representations
and Agreements to Survive Delivery. All representations,
warranties, and agreements of the Company herein or in certificates delivered
pursuant hereto, including, but not limited to, the agreements of the
Underwriters and the Company contained in Section 6(a)(vii) and Section 8
hereof, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Underwriters or any controlling person
thereof, or the Company or any of its officers, directors, or controlling
persons, and shall survive delivery of, and payment for, the Shares to and by
the Underwriters hereunder.
10. Termination of
this Agreement.
(a) The
Underwriters shall have the right to terminate this Agreement by giving notice
to the Company as hereinafter specified at any time at or prior to the Closing
Date, if (i) trading in the Company’s ADSs shall have been suspended by the
Commission or the NASDAQ Global Market or trading in securities generally on the
NASDAQ Global Market, New York Stock Exchange or NYSE Amex shall have been
suspended, (ii) minimum or maximum prices for trading shall have been fixed on
the NASDAQ Global Market, New York Stock Exchange or NYSE Amex, by such exchange
or by order of the Commission or any other governmental authority having
jurisdiction, (iii) a banking moratorium shall have been declared by federal,
state or the PRC authorities, (iv) there shall have occurred any attack on,
outbreak or escalation of hostilities or act of terrorism involving the United
States or the PRC, any declaration by the United States or the PRC of a national
emergency or war, any change in financial markets, any substantial change or
development involving a prospective substantial change in United States, the PRC
or other international political,
financial or economic conditions or any other calamity or crisis, or (v) the
Company suffers any loss by fire, flood, earthquake, accident or other calamity,
whether or not covered by insurance, the effect of which, in each case described
in this subsection (a), in the Underwriters’ judgment is material and adverse
and makes it impractical or inadvisable to proceed with the completion of the
sale of and payment for the Shares. Any such termination shall be
without liability of any party to any other party except that the provisions of
Section 6(a)(vii) and Section 8 hereof shall at all times be effective and shall
survive such termination.
29
(b) If
the Underwriters elect to terminate this Agreement as provided in this Section,
the Company shall be notified promptly by the Underwriters by telephone,
confirmed by letter.
11. Notices. Except
as otherwise provided herein, all communications hereunder shall be in writing
and, if to GHS, shall be mailed, delivered or telecopied to Global Hunter
Securities, LLC, ▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, telecopy number:
(▇▇▇) ▇▇▇-▇▇▇▇, Attention: Managing Director, with a copy to ▇▇▇▇▇
▇▇▇▇▇▇▇ LLP, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, telecopy number: (▇▇▇)
▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇; if to Knight, shall be mailed, delivered or
telecopied to Knight Capital Markets LLC, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇, Attention Managing
Director, with a copy to ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, telecopy number (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇; and if to the
Company, shall be mailed, delivered or telecopied to it at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇, People’s Republic of China 200120, telecopy number:
86-21-6888-8886, Attention: _____________, with a copy to the
Company’s counsel at ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇; or in
each case to such other address as the person to be notified may have requested
in writing. Any party to this Agreement may change such address for
notices by sending to the parties to this Agreement written notice of a new
address for such purpose.
12. Persons Entitled
to Benefit of Agreement. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns and the controlling persons, officers and directors
referred to in Section 8. Nothing in this Agreement is intended or
shall be construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision
herein contained. The term “successors and assigns” as herein used
shall not include any purchaser, as such purchaser, of any of the Shares or ADSs
from the Underwriters.
13. Absence of
Fiduciary Relationship. The Company acknowledges and agrees
that: (a) the Underwriters have been retained solely to act as underwriter in
connection with the sale of the Shares and that no fiduciary, advisory or agency
relationship between the Company and the Underwriters has been created in
respect of any of the transactions contemplated by this Agreement, irrespective
of whether the Underwriters have advised or are advising the Company on other
matters; (b) the price and other terms of the Shares set forth in this Agreement
were established by the Company following discussions and arms-length
negotiations with the Underwriters and the Company is capable of evaluating and
understanding and understands and accepts the terms, risks and conditions of the
transactions contemplated by this Agreement; (c) it has been advised that the
Underwriters and their affiliates are engaged in a broad range of transactions
that may involve interests that differ from those of the Company and that the
Underwriters have no obligation to disclose such interest and transactions to
the Company by virtue of any fiduciary, advisory or agency relationship; and (d)
it has been advised that the Underwriters are acting, in respect of the
transactions contemplated by this Agreement, solely for the benefit of the
Underwriters, and not on behalf of the Company.
30
14. Amendments and
Waivers. No supplement, modification or waiver of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby. The failure of a party to exercise any right or remedy shall
not be deemed or constitute a waiver of such right or remedy in the
future. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (regardless of
whether similar), nor shall any such waiver be deemed or constitute a continuing
waiver unless otherwise expressly provided.
15. Partial
Unenforceability. The invalidity or unenforceability of any
section, paragraph, clause or provision of this Agreement shall not affect the
validity or enforceability of any other section, paragraph, clause or
provision.
16. Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
17. Counterparts. This
Agreement may be executed and delivered (including by facsimile transmission or
electronic mail attaching a portable document file (.pdf)) in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original and all such counterparts
shall together constitute one and the same instrument.
[Signature
page follows]
31
Please
sign and return to the Company the enclosed duplicates of this letter whereupon
this letter will become a binding agreement between the Company and the
Underwriters in accordance with its terms.
|
Very
truly yours,
|
||
|
OSSEN
INNOVATION CO., LTD.
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
Confirmed
as of the date first above-
mentioned
by the Underwriters.
GLOBAL
HUNTER SECURITIES, LLC
|
By:
|
||
|
Name:
|
||
|
Title:
|
KNIGHT
CAPITAL MARKETS LLC
|
By:
|
||
|
Name:
|
||
|
Title:
|
[Signature
page to Underwriting Agreement]
SCHEDULE
I
Persons
Subject to Lock-Up Agreements
Effectual
Strength Enterprises Limited
Fascinating
Acme Development Limited
Gross
Inspiration Development Limited
Century
Creator Limited
Ocean
Skill Holdings Limited
New Asset
International Ltd.
Dragon
Winner Investments Ltd.
SCHEDULE
II
Form
of Lock-Up Agreement
___________
__, 2010
Global
Hunter Securities, LLC
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
The
undersigned understands that Global Hunter Securities, LLC (“GHS”) and Knight Capital
Markets LLC (“Knight”
and, together with GHS, the “Underwriters”) propose to
enter into an Underwriting Agreement (the “Underwriting Agreement”) with
Ossen Innovation Co., Ltd., a company incorporated under the laws of the British
Virgin Islands (the “Company”), providing for the
public offering (the “Public
Offering”) by the Underwriters of ordinary shares, par value $0.01 per
share (the “Ordinary Shares”), of the
Company. The Underwriters will take delivery of the Shares in the
form of American Depositary Shares (“ADSs”). Each ADS
will initially represent the right to receive __________ Ordinary Shares
deposited pursuant to the Deposit Agreement dated as of _________________, 2010
among the Company, _________________________ as Depositary (the “Depositary”) and all Holders
and Beneficial Owners (each as defined therein) from time to time of ADSs
evidenced by American Depositary Receipts (“ADRs”) issued by the
Depositary.
To induce
the underwriters that may participate in the Public Offering to continue their
efforts in connection with the Public Offering, the undersigned hereby agrees
that, without the prior written consent of the Underwriters, he will not, during
the period commencing on the date hereof and ending 90 days after the date of
the final prospectus supplement relating to the Public Offering (the “Prospectus”) (the “Lock-Up Period”), (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
Ordinary Shares, ADSs, or any securities convertible into or exercisable or
exchangeable for Ordinary Shares or ADSs, 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 Ordinary Shares or ADSs, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Ordinary Shares or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (a) transactions relating to Ordinary
Shares, ADSs or other securities acquired in open market transactions after the
completion of the Public Offering or (b) transfers of Ordinary Shares, ADSs or
any security convertible into Ordinary Shares or ADSs as a bona fide gift, by
will or intestacy or to a family member or trust for the benefit of a family
member; provided that
in the case of any transfer or distribution pursuant to clause (b), each
donee or distributee shall sign and deliver a lock-up letter substantially in
the form of this letter. In addition, the undersigned agrees that,
without the prior written consent of the Underwriters, it will not, during the
period commencing on the date hereof and ending 90 days after the date of the
Prospectus, make any demand for or exercise any right with respect to, the
registration of any Ordinary Shares, ADSs or any security convertible into or
exercisable or exchangeable for Ordinary Shares or ADSs. The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company’s transfer agent and registrar against the transfer of the
undersigned’s Ordinary Shares and ADSs except in compliance with the
foregoing restrictions.
If (i)
the Company issues an earnings release or material news, or a material event
relating to the Company occurs, during the last 17 days of the Lock-Up Period,
or (ii) prior to the expiration of the Lock-Up Period, the Company announces
that it will release earnings results during the 16-day period beginning on the
last day of the Lock-Up Period, the restrictions imposed by this agreement shall
continue to apply until the expiration of the 18-day period beginning on the
issuance of the earnings release or the occurrence of the material news or
material event, unless the Underwriters waive such extension.
No
provision in this agreement shall be deemed to restrict or prohibit the exercise
or exchange by the undersigned of any option or warrant to acquire Ordinary
Shares, ADSs, or securities exchangeable or exercisable for or convertible into
Ordinary Shares or ADSs, provided that the undersigned
does not transfer the Ordinary Shares or ADSs acquired on such exercise or
exchange during the Lock-Up Period, unless otherwise permitted pursuant to the
terms of this agreement. In addition, no provision herein shall be
deemed to restrict or prohibit the entry into or modification of a so-called
“10b5-1” plan at any time (other than the entry into or modification of such a
plan in such a manner as to cause the sale of any Ordinary Shares or ADSs or any
securities convertible into or exercisable or exchangeable for Ordinary Shares
or ADSs within the Lock-Up Period).
The
undersigned understands that the Company and the Underwriters are relying upon
this agreement in proceeding toward consummation of the Public
Offering. The undersigned further understands that this agreement is
irrevocable and shall be binding upon the undersigned’s heirs, legal
representatives, successors and assigns.
The
undersigned understands that, if the Underwriting Agreement is not executed by
_________, 2010, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Ordinary Shares and ADSs to be sold thereunder,
the undersigned shall be released from all obligations under this letter
agreement.
Whether
or not the Public Offering actually occurs depends on a number of factors,
including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
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Very
truly yours,
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_________________________
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Name
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_________________________
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Address
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