2,222,222 Shares of Common Stock UNIVERSAL TRAVEL GROUP PLACEMENT AGENT AGREEMENT
2,222,222
Shares of Common Stock
December
10, 2009
▇▇▇▇▇
▇▇▇▇▇▇, Carret & Co., LLC
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
Dear
Sirs:
1. Introductory. Universal
Travel Group, a Nevada corporation (the “Company”), proposes to issue and sell
to certain purchasers, pursuant to the terms and conditions of a subscription
agreement in the form of Exhibit A attached
hereto (the “Subscription Agreement”) to be entered into with such purchasers
(each a “Purchaser” and collectively, the “Purchasers”), up to an aggregate of
2,222,222 shares of common stock, $0.001 par value (the “Common
Stock”). The aggregate 2,222,222 shares of Common Stock so proposed
to be sold is hereinafter referred to as the “Stock” or the
“Securities.” The Company hereby confirms that ▇▇▇▇▇ ▇▇▇▇▇▇, Carret
& Co., LLC, (“BMC” or the “Placement Agent”) acted as Placement Agent in the
sale of the Stock in accordance with the terms and conditions of this Placement
Agent Agreement (this “Agreement”) and the Subscription Agreement.
2. Agreement
to Act as Placement Agent; Placement of Securities. On the
basis of the representations, warranties and agreements of the Company contained
herein, and subject to all the terms and conditions of this
Agreement:
a. The
Company hereby acknowledges that the Placement Agent acted as its sole agent to
solicit offers for the purchase of all or part of the Stock from the Company in
connection with the proposed offering of the Stock (the
“Offering”). Until the Closing Date (as defined in Section 7 hereof),
the Company shall not, without the prior written consent of the Placement Agent,
solicit or accept offers to purchase the Stock otherwise than through the
Placement Agent.
b. The
Company hereby acknowledges that the Placement Agent, as agent of the Company,
used its best efforts to solicit offers to purchase the Stock from the Company
on the terms and subject to the conditions set forth in the Prospectus (as
defined below). The Placement Agent shall use reasonable efforts to
assist the Company in obtaining performance by each Purchaser whose offer to
purchase the Stock was solicited by the Placement Agent and accepted by the
Company, but the Placement Agent shall not, except as otherwise provided in this
Agreement, be obligated to disclose the identity of any potential purchaser or
have any liability to the Company in the event any such purchase is not
consummated for any reason. Under no circumstances will the Placement
Agent be obligated to underwrite or purchase any Stock for its own account and,
in soliciting purchases of Stock, the Placement Agent acted solely as the
Company’s agent and not as principal. Notwithstanding the foregoing
and except as otherwise provided in this Section 2.b, it is understood and
agreed that the Placement Agent (or its affiliates) may, solely at its
discretion and without any obligation to do so, purchase the Stock as
principal.
c. Offers
for the purchase of Stock were solicited by the Placement Agent as agent for the
Company at such times and in such amounts as the Placement Agent deemed
advisable. The Placement Agent communicated to the Company, orally or
in writing, each reasonable offer to purchase Stock received by it as agent of
the Company. The Company shall have the sole right to accept offers
to purchase the Stock and may reject any such offer, in whole or in
part. The Placement Agent has the right, in its discretion, without
notice to the Company, to reject any offer to purchase Stock received by it, in
whole or in part, and any such rejection shall not be deemed a breach of this
Agreement.
d. The
Stock is being sold to the Purchasers at a price of US$9.00 per
share. The purchases of the Stock by the Purchasers shall be
evidenced by the execution of Subscription Agreements by each of the Purchasers
and the Company.
e. As
compensation for services rendered, on the Closing Date, the Company shall pay
to the Placement Agent by wire transfer of immediately available funds to an
account or accounts designated by the Placement Agent, an aggregate amount equal
to 5% of the gross proceeds received by the Company from the Sale of the
Stock. The fees set forth above shall supersede any and all fees
payable to BMC pursuant to the terms of the engagement letter between BMC and
the Company, dated November 28, 2009, as amended (the “Engagement
Letter”).
f. No
share of Stock which the Company has agreed to sell pursuant to this Agreement
and the Subscription Agreements shall be deemed to have been purchased and paid
for, or sold by the Company, until such share of Stock shall have been delivered
to the Purchaser thereof against payment by such Purchaser. If the
Company shall default in its obligations to deliver Stock to a Purchaser whose
offer it has accepted, the Company shall indemnify and hold the Placement Agent
harmless against any loss, claim, damage or expense arising from or as a result
of such default by the Company in accordance with the procedures set forth in
Section 11 herein.
3. Registration
Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-3 (File No. 333-161139) 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, as amended (including post effective amendments thereto), the
exhibits and any schedules thereto 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, 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 will file with the Commission pursuant to Rule
424 under the Securities Act a prospectus supplement relating to the Stock to
the form of prospectus included in the Registration Statement. The
prospectus filed as part of the registration statement in the form in which it
has most recently been filed with the Commission on or prior to the date of this
Agreement, is hereinafter called the “Base Prospectus” and any prospectus
subject to completion included in the Registration Statement or any preliminary
prospectus (including any preliminary prospectus supplement) relating to the
Stock filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations is hereinafter called a “Preliminary Prospectus.” The
final prospectus supplement as filed, along with the Base Prospectus, is
hereinafter called the “Final Prospectus.”
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For
purposes of this Agreement, all references to the Registration Statement, the
Rule 462 Registration Statement, the Base Prospectus, a Preliminary Prospectus,
the Final 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
Next-Generation ▇▇▇▇▇ system. All references in this Agreement to
financial statements and schedules and other information which is “described,”
“contained,” “included” or “stated” in the Registration Statement, the Rule 462
Registration Statement, the Base Prospectus, a Preliminary Prospectus or the
Final Prospectus (or other references of like import) shall be deemed to mean
and include all such financial statements, pro forma financial information and
schedules and other information which is incorporated by reference in or
otherwise deemed by the Rules and Regulations to be a part of or included in the
Registration Statement, the Rule 462 Registration Statement, the Base
Prospectus, a Preliminary Prospectus or the Final Prospectus, as the case may
be; and all references in this Agreement to amendments or supplements to the
Registration Statement, the Rule 462 Registration Statement, the Base
Prospectus, a Preliminary Prospectus or the Final 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.
4. Representations
and Warranties Regarding the Offering. The Company represents
and warrants to the Placement Agent and the Purchasers, as of the date hereof
and as of the Closing Date, and agrees with the Placement Agent and the
Purchasers, that:
a. At
each time of effectiveness, at the date hereof and at the Closing Date, the
Registration Statement and any post-effective amendment 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 not
misleading. The General Disclosure Package (as defined below) as of
the Applicable Time (as defined below), at 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 post-effective amendment
thereto or the Final Prospectus in reliance upon, and in conformity with,
written information furnished to the Company by the Placement Agent specifically
for use in the preparation thereof. The Registration Statement
(including each document incorporated by reference therein) 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 the Final 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.
b. The
documents incorporated by reference in the Registration Statement, the General
Disclosure Package and the Final Prospectus, when they became effective or were
filed with the Commission, as the case may be, conformed in all material
respects to the requirements of the Securities Act or the Exchange Act, as
applicable, were filed on a timely basis with the Commission and none of such
documents, when they were filed (or, if amendments to such documents were filed,
when such amendments were filed), contained an untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. Any further documents so filed and incorporated by
reference in the Registration Statement, the General Disclosure Package or the
Final Prospectus, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange Act, and
will not contain 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 under which they were made, not misleading. The
Prospectus contains all required information under the Securities Act with
respect to the Stock and the distribution of the Stock. As used in
this Agreement, “General Disclosure Package” means the Base Prospectus, the
Prospectus most recently filed with the Commission before the time of this
Agreement (including a Preliminary Prospectus, if applicable), any subscription
agreement or securities purchase agreement between the Company and the
Investors, and any issuer free writing prospectus as defined in Rule 433 of the
Act (an “Issuer Free Writing Prospectus”), if any, that the parties hereto shall
hereafter expressly agree in writing to treat as part of the General Disclosure
Package. As used in this Agreement, “Applicable Time” means 11:00
P.M., New York time on the date of this Agreement or such other time as agreed
to by the Company and the Placement Agent.
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c. The
financial statements of the Company, together with the related notes, included
or incorporated by reference in the Registration Statement, the General
Disclosure Package and the Final Prospectus comply in all material respects with
the applicable requirements of the Securities Act and the Exchange Act and
fairly present the financial condition of the Company as of the dates indicated
and the results of operations and changes in cash flows for the periods therein
specified in conformity with generally accepted accounting principles
consistently applied throughout the periods involved; and the supporting
schedules included in the Registration Statement present fairly the information
required to be stated therein. The financial statements, together
with the related notes, included or incorporated by reference in the General
Disclosure Package and the Final Prospectus comply in all material respects with
Regulation S-X.
d. The
summary and selected financial data included or incorporated by reference in the
General Disclosure Package, the Final Prospectus and the Registration Statement
fairly present the information shown therein as at their respective dates and
for the respective periods specified and are derived from the consolidated
financial statements set forth or incorporated by reference in the Registration
Statement, the General Disclosure Package, and the Final Prospectus and other
financial information. All information contained in the Registration Statement,
the General Disclosure Package and the Final Prospectus regarding “non-GAAP
financial measures” (as defined in Regulation G) complies with Regulation G and
Item 10 of Regulation S-K, to the extent applicable.
e. To
the Company’s knowledge, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇ CPA’s P.C., which has
expressed its opinion with respect to the financial statements and schedules
filed as a part of the Registration Statement and included in the Registration
Statement, the General Disclosure Package and the Final Prospectus is an
independent registered public accounting firm with respect to the Company within
the meaning of the Securities Act and the Rules and Regulations and the rules
and regulations of the Public Company Accounting Oversight Board (United States)
(the “PCAOB”).
f.
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 General
Disclosure Package or the Final Prospectus.
g. All
statistical or market-related data included or incorporated by reference in the
Registration Statement, the General 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.
h. The
Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is
included or approved for inclusion on the New York Stock Exchange. There is no
action pending by the Company or, to the Company’s knowledge, the New York Stock
Exchange to delist the Common Stock from the New York Stock Exchange, nor has
the Company received any notification that the New York Stock Exchange is
contemplating terminating such listing. When issued, the Stock will
be listed on the New York Stock Exchange.
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i.
The Stock has been or will be
qualified for sale under the securities laws of the United States, or is or will
be exempt from the qualification and broker-dealer requirements of such
jurisdiction.
j.
Neither the Company
nor any of its officers, directors or affiliates has 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 Stock.
k. The
Company is not and during the past three years neither the Company nor any
predecessor was: (A) a blank check company as defined in Rule 419(a)(2) of the
Securities Act, (B) a shell company, other than a business combination shell
company, each as defined in Rule 405 of the Securities Act, or (C) an issuer for
an offering of ▇▇▇▇▇ stock as defined in Rule 3a51-1 of the Exchange
Act.
l. The
Company is not an “ineligible issuer,” as defined in Rule 405 of the Securities
Act. Subject to Section 8.b. below, the Company represents and
warrants that it has not prepared or had prepared on its behalf or used or
referred to any Issuer Free Writing Prospectus in connection with the
Offering. Subject to Section 8.b. below, the Company has not
distributed and the Company will not distribute, prior to the completion of the
distribution of the Securities, any offering material in connection with the
Offering other than Subscription Agreements between the Company and the
Investors and the Base Prospectus, the Final Prospectus, the Registration
Statement, and copies of the documents, if any, incorporated by reference
therein.
m. The
Company is not and, after giving effect to the offering and sale of the
Securities, will not be an “investment company,” as such term is defined in the
Investment Company Act of 1940, as amended.
n. The
Company was at the time of filing the Registration Statement, and at the date
hereof, remains eligible to use Form S-3 under the Securities Act. In
addition, at the time of filing of the Registration Statement and at the date
hereof, the Company had or has (A) a non-affiliate public float of (1) $150
million, or (2) $100 million and an annual trading volume of at least 3 million
shares, (B) filed all the material required to be filed by the Company pursuant
to the Exchange Act for a period of at least 36 calendar months, and (C) filed
in a timely manner all reports required to be filed during the past 12 calendar
months, and, in the case of (B) and (C), any portion of a month immediately
preceding such dates. For purposes of this subsection (n),
“non-affiliate public float” shall mean the number of shares held by
non-affiliates of the Company multiplied by the price at which the Common
Stock was last sold before the filing of the Registration Statement or the
applicable Closing Date, as applicable, and “annual trading volume” shall mean
the volume of Company stock traded in any continuous 12 month period ended
within 60 days prior to the filing of the Registration Statement or each Closing
Date, as applicable.
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Any
certificate signed by any officer of the Company and delivered to the Placement
Agent or to the Placement Agent’s counsel shall be deemed a representation and
warranty by the Company to the Placement Agent as to the matters covered
thereby.
5. Representations
and Warranties Regarding the Company. The Company represents
and warrants to the Placement Agent and the Purchasers, as of the date hereof
and as of the Closing Date, and agrees with the Placement Agent and the
Purchasers, that:
a. The
Company and each of its subsidiaries has been duly organized and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation. Each of the Company and its subsidiaries has the corporate power
and authority to own its properties and conduct its business as currently being
carried on and as described in the Registration Statement, the General
Disclosure Package and the Final Prospectus, and is duly qualified to do
business as a foreign corporation in good standing in each jurisdiction in which
it owns or leases real property or in which the conduct of its business makes
such qualification necessary and in which the failure to so qualify would have
or is 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, the General
Disclosure Package or the Final Prospectus (“Material Adverse
Effect”).
b. The
Company has the power and authority to enter into this Agreement and each of the
Subscription Agreements and to authorize, issue and sell the Securities as
contemplated by this Agreement. This Agreement and each of the
Subscription Agreements has been duly authorized, executed and delivered by the
Company, and constitutes a valid, legal and binding obligation of the Company,
enforceable in accordance with its 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.
c. The
execution, delivery and performance of this Agreement and each of the
Subscription Agreements and the consummation of the transactions herein and
therein 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 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 of by which any property or asset of the
Company or any subsidiary is bound or affected, or (C) result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
the Company’s charter or by-laws.
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d. Neither
the Company nor any of its subsidiaries is in violation, breach or default under
its certificate of incorporation, by-laws or other equivalent organizational or
governing documents.
e. All
of the issued and outstanding shares of capital stock of the Company have been
duly authorized and validly issued, are fully paid and nonassessable, have been
issued in compliance with all applicable securities laws, and conform to the
description thereof in the Registration Statement, the General Disclosure
Package and the Final Prospectus. Except as provided for by this
Agreement and for the issuances of options or restricted stock in the ordinary
course of business, since the respective dates as of which information is
provided in the Registration Statement, the General Disclosure Package or the
Final Prospectus, the Company has not entered into or granted any convertible or
exchangeable securities, options, warrants, agreements, contracts or other
rights in existence to purchase or acquire from the Company any shares of the
capital stock of the Company. The Stock, when issued, will be duly
authorized and validly issued, fully paid and nonassessable, will be issued in
compliance with all applicable securities laws, and will be free of preemptive,
registration or similar rights. None of the outstanding shares of
Common Stock was issued in violation of any preemptive rights, rights of first
refusal or other similar rights to subscribe for or purchase securities of the
Company. There are no authorized or outstanding shares of capital
stock, options, warrants, preemptive rights, rights of first refusal or other
rights to purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the Company or any of its
subsidiaries other than those described above or accurately described in the
Registration Statement, the General Disclosure Package and the Final
Prospectus. The description of the Company’s stock option, stock
bonus and other stock plans or arrangements, and the options or other rights, as
described in the Registration Statement, General Disclosure Package and the
Final Prospectus, accurately and fairly present the information required to be
shown with respect to such plans, arrangements, options and rights.
f.
All the
outstanding shares of capital stock (if any) of each subsidiary of the Company
have been duly authorized and validly issued, are fully paid and nonassessable
and, except to the extent set forth in the General Disclosure Package and the
Final Prospectus, are owned by the Company directly or indirectly through one or
more wholly-owned subsidiaries, free and clear of any claim, lien, encumbrance,
security interest, restriction upon voting or transfer or any other claim of any
third party.
g. Except
for the registration of the Securities under the Securities Act, Exchange Act
and applicable state securities laws, the Financial Industry Regulatory
Authority, Inc. and the New York Stock Exchange in connection with the purchase
of the Stock by the Purchasers and the listing of the Stock on the New York
Stock Exchange, no consent, approval, authorization or order of, or filing,
qualification or registration (each an “Authorization”) with, any court,
governmental or non-governmental agency or body, foreign or domestic, which has
not been made, obtained or taken and is not in full force and effect, is
required for the execution, delivery and performance of this Agreement or the
Subscription Agreements by the Company, the offer or sale of the Stock or the
consummation of the transactions contemplated hereby or thereby; and no event
has occurred that allows or results in, or after notice or lapse of time or both
would allow or result in, revocation, suspension, termination or invalidation of
any such authorization or any other impairment of the rights of the holder or
maker of any such authorization. All corporate approvals (including those of
stockholders) necessary for the Company to consummate the transactions
contemplated by this Agreement and the Subscription Agreements have been
obtained and are in effect.
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h. Each
of the Company and its subsidiaries has filed all returns (as hereinafter
defined) required to be filed with taxing authorities prior to the date hereof
or has duly obtained extensions of time for the filing thereof. Each
of the Company and its subsidiaries has paid all taxes (as hereinafter defined)
shown as due on such returns that were filed and has paid all taxes imposed on
or assessed against the Company or such respective subsidiary. The
provisions for taxes payable, if any, shown on the financial statements filed
with or as part of the Registration Statement 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. No issues have been
raised (and are currently pending) by any taxing authority in connection with
any of the returns or taxes asserted as due from the Company or its
subsidiaries, and no waivers of statutes of limitation with respect to the
returns or collection of taxes have been given by or requested from the Company
or its subsidiaries. The term “taxes” mean all federal, state, local,
foreign, and other net income, gross income, gross receipts, sales, use, ad
valorem, transfer, franchise, profits, license, lease, service, service use,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
property, windfall profits, customs, duties or other taxes, fees, assessments,
or charges of any kind whatever, together with any interest and any penalties,
additions to tax, or additional amounts with respect thereto. The
term “returns” means all returns, declarations, reports, statements, and other
documents required to be filed in respect to taxes.
i. Since
the respective dates as of which information is given in the Registration
Statement, the General Disclosure Package or the Final 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 shares of Common Stock 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 or short-term debt, and (e)
there has not been the occurrence of any Material Adverse Effect.
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j. 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 is the subject before or by any
court or governmental agency, authority or body, or any arbitrator or
mediator.
k. 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.
l. The
Company and its subsidiaries have good and marketable title to all property
(whether real or personal) described in the Registration Statement, the General
Disclosure Package and the Final 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. The
property 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.
m. The
Company and each of its subsidiaries owns or possesses or has valid right to use
all patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service ▇▇▇▇ registrations, copyrights, licenses,
inventions, trade secrets and similar rights (“Intellectual Property”) necessary
for the conduct of the business of the Company and its subsidiaries as currently
carried on and as described in the Registration Statement, the General
Disclosure Package and the Final 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.
n. The
Company and each of its Subsidiaries has complied with, is not in violation of,
and has 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, (C) the Foreign Corrupt Practices Act of
1977 and the rules and regulations thereunder, and (D) the Employment Retirement
Income Security Act of 1974 and the rules and regulations
thereunder.
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o. 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 Stock 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.
p. 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.
q. No
labor dispute with the employees of the Company or any of its subsidiaries
exists or, to the knowledge of the Company, is imminent.
r. Neither
the Company, its subsidiaries nor, to its knowledge, any other party is in
violation, breach or default of any Contract that is reasonably likely to result
in a Material Adverse Effect.
s. No
supplier, customer, distributor or sales agent of the Company
has notified the Company that it intends to discontinue
or decrease the rate of business done with the Company, except
where such decrease is not reasonably likely to result in a Material Adverse
Effect.
t. Other
than as contemplated by this Agreement, the Company has not incurred any
liability for any finder’s or broker’s fee or agent’s commission in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
u. The
Company and each of its subsidiaries have made and keep books, records and
accounts, which, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the Company and its subsidiaries
in all material respects.
v. The
Company maintains disclosure controls and procedures (as such is defined in Rule
13a-15 of the Exchange Act Rules) that comply with the requirements of the
Exchange Act; such disclosure controls and procedures have been designed to
ensure that information required to be disclosed by the Company and its
subsidiaries is accumulated and communicated to the Company’s management,
including the Company’s principal executive officer and principal financial
officer by others within those entities, such disclosure controls and procedures
are effective.
w. No
person or entity has the right to require registration of shares of Common Stock
or other securities of the Company or any of its subsidiaries because of the
filing or effectiveness of the Registration Statement or otherwise, except for
persons and entities who have expressly waived such right in writing or who have
been given timely and proper written notice and have failed to exercise such
right within the time or times required under the terms and conditions of such
right. Except as described in the General Disclosure Package, there are no
persons with registration rights or similar rights to have any securities
registered by the Company or any of its subsidiaries under the Securities
Act.
-10-
x. The
Company is in compliance in all material respects with all applicable provisions
of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and all rules and regulations promulgated
thereunder or implementing the provisions thereof (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act”)
that are then in effect and is actively taking steps to ensure that it will be
in compliance in all material respects with other applicable provisions of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act not currently in effect upon it and at all times after the
effectiveness of such provisions.
y. The
Company is in compliance in all material respects with all applicable corporate
governance requirements set forth in the rules of the New York Stock
Exchange.
z. No
approval of the shareholders of the Company is required for the Company to issue
and deliver the Stock to the Purchasers or the listing of the Stock on the New
York Stock Exchange.
6. Representations
and Warranties of the Company Regarding the PRC. The Company
represents and warrants to the Placement Agent and the Purchasers, as of the
date hereof and as of the Closing Date, and agrees with the Placement Agent and
the Purchasers, that:
a. The
Company conducts substantially all of its operations and generates substantially
all of its revenue through (i) Shenzhen Yuzhilu Aviation Service Co., Ltd, a
wholly owned foreign-owned enterprise formed under the laws of the People’s
Republic of China (the “PRC”)(“YZL”), (ii) Xian Golden Net Travel Serve Services
(“XGN”), a wholly owned foreign-owned enterprise formed under the laws of the
PRC, (iii) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Travel Service Co., Ltd (“SLB”) a wholly owned
foreign-owned enterprise formed under the laws of the PRC, (iv) Foshan Overseas
International Travel Service Co., Ltd (“FOI”), a wholly owned foreign-owned
enterprise formed under the laws of the PRC, Chongqing Universal Travel
E-Commerce Co., Ltd (“CUT”), a wholly owned foreign-owned enterprise formed
under the laws of the PRC, and (v) Shenzhen Universal Travel Agency
Co., Ltd., (“SUT”), a wholly owned foreign-owned enterprise formed under the
laws of the PRC (YZL, XGN, SLB, FOI, CUT and SUT shall collectively be referred
as the “PRC Entities”).
b. Each
of the PRC Entities has been duly established, is validly existing as a company
in good standing under the laws of the PRC, has the corporate power and
authority to own, lease and operate its property and to conduct its business as
described in the Registration Statement, the General Disclosure Package and the
Final Prospectus, and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification. Each
PRC Entity has applied for and obtained all requisite business licenses,
clearance and permits required under PRC law as necessary for the conduct of its
businesses, and each PRC Entity has complied in all material respects
with all PRC Laws in connection with foreign exchange, including without
limitation, carrying out all relevant filings, registrations and applications
for relevant permits with the State Administration of Foreign Exchange and any
other relevant authorities, and all such permits are validly
subsisting. The registered capital of each PRC Entity has been fully
paid up in accordance with the schedule of payment stipulated in its respective
articles of association, approval document, certificate of approval and legal
person business license (hereinafter referred to as the “Establishment
Documents”) and in compliance with PRC laws and regulations, and there is no
outstanding capital contribution commitment for any PRC Entity. The
Establishment Documents of the PRC Entities have been duly approved in
accordance with the laws of the PRC and are valid and
enforceable. The business scope specified in the Establishment
Documents of each PRC Entity complies with the requirements of all relevant PRC
laws and regulations. The outstanding equity interests of each PRC
Entity is owned of record by the respective entities or individuals identified
as the registered holders thereof in the Registration Statement, the General
Disclosure Package and the Final Prospectus.
-11-
c. 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) other than prohibitions as may exist under
applicable laws and regulations of the PRC. 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 other
than prohibitions as may exist under applicable laws and regulations of the
PRC.
d. 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.
e. It
is not necessary that this Agreement, the Registration Statement, the General
Disclosure Package, the Final Prospectus or any other document be filed or
recorded with any governmental agency, court or other authority in the
PRC.
f.
No transaction,
stamp, capital or other issuance, registration, transaction, transfer or
withholding taxes or duties are payable in the PRC by or on behalf of the
Placement Agent to any PRC taxing authority in connection with (i) the
issuance, sale and delivery of the Securities by the Company and the delivery of
the Stock or (ii) the execution and delivery of this
Agreement.
-12-
g. The
Company has taken all necessary steps to comply with, and all reasonable steps
to ensure compliance by all of the Company’s direct or indirect principal
shareholders and principal option holders who are PRC residents with, any
applicable rules and regulations of the State Administration of Foreign Exchange
of the PRC (the “SAFE Rules and Regulations”), including, without limitation,
requiring each principal shareholder and principal option holder 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.
h. The
Company is aware of, and has been advised as to, the content of the Rules on
Mergers and Acquisitions of Domestic Enterprises by Foreign Investors jointly
promulgated on August 8, 2006 by the PRC Ministry of Commerce, the State Assets
Supervision and Administration Commission, the State Administration of Taxation,
the State Administration of Industry and Commerce, the China Securities
Regulatory Commission (“CSRC”) and the State Administration of Foreign Exchange
of the PRC (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.
i.
The issuance
and sale of the Securities, the listing and trading of the Stock on the New York
Stock Exchange and the consummation of the transactions contemplated by this
Agreement, the Registration Statement, the General Disclosure Package and the
Final Prospectus are not and will not be, as of the date hereof and on the
Closing Date, affected by the M&A Rules or any official clarifications,
guidance, interpretations or implementation rules in connection with or related
to the M&A Rules, including the guidance and notices issued by the CSRC on
September 8 and September 21, 2006 (together with the M&A Rules, the
“M&A Rules and Related Clarifications”).
j.
The Company has
taken all commercially reasonable steps to ensure compliance by each of its
principal 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 State Administration of
Foreign Exchange) relating to overseas investment by PRC residents and citizens
(the “PRC Overseas Investment and Listing Regulations”), including, requesting
each principal 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.
-13-
k. 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 Securities, the listing and trading of the Stock on the New York Stock
Exchange, or the consummation of the transactions contemplated by this
Agreement, the Registration Statement, the General Disclosure Package or the
Final Prospectus.
l.
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 General Disclosure Package and the Final 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.
m. 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 Final Prospectus
are valid, binding and enforceable.
7. The
Closing. The time and date of closing and delivery of the
documents required to be delivered to the Placement Agent pursuant to Sections 8
and 10 hereunder shall be at 5:00 P.M., New York time, on December [14], 2009
(the “Closing Date”), or at such other time on such date as agreed by the
parties, at the office of ▇▇▇▇▇ ▇▇▇▇▇▇, Carret & Co., LLC, ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
8. Further
Agreements Of The Company The Company agrees with the
Placement Agent and the Purchasers:
a. to
prepare the Rule 462(b) Registration Statement, if necessary, in a form approved
by the Placement Agent and file such Rule 462(b) Registration Statement with the
Commission by 10:00 P.M., New York time, on the date hereof, and the Company
shall at the time of filing either pay to the Commission the filing fee for the
Rule 462(b) Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Rules and Regulations; to
prepare the Final Prospectus in a form approved by the Placement Agent
containing information previously omitted at the time of effectiveness of the
Registration Statement in reliance on Rules 430A, 430B or 430C of the Rules and
Regulations and to file such Final Prospectus pursuant to Rule 424(b) of the
Rules and Regulations not later than the second business (2nd) day
following the execution and delivery of this Agreement or, if applicable, such
earlier time as may be required by Rule 430A of the Rules and Regulations; to
notify the Placement Agent immediately of the Company’s intention to file or
prepare any supplement or amendment to the Registration Statement or to the
Final Prospectus and to make no amendment or supplement to the Registration
Statement, the General Disclosure Package or to the Final Prospectus to which
the Placement Agent shall reasonably object by notice to the Company after a
reasonable period to review; to advise the Placement Agent, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the General
Disclosure Package or the Final Prospectus or any amended Prospectus has been
filed and to furnish the Placement Agent with copies thereof; to file promptly
all material required to be filed by the Company with the Commission pursuant to
Rules 433(d) or 163(b)(2) of the Rules and Regulations, as the case may be; to
file promptly all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the
Final Prospectus and for so long as the delivery of a prospectus (or in lieu
thereof, the notice referred to in Rule 173(a) of the Rules and Regulations) is
required in connection with the offering or sale of the Stock; to advise the
Placement Agent, promptly after it receives notice thereof, of the issuance by
the Commission of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus, any Issuer Free Writing Prospectus, the Base
Prospectus or the Final Prospectus, of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statement, the
General Disclosure Package or the Final Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus, any Issuer Free
Writing Prospectus, the Base Prospectus or the Final Prospectus or suspending
any such qualification, promptly to use its best efforts to obtain the
withdrawal of such order.
-14-
b. The
Company represents and agrees that, unless it obtains the prior consent of the
Placement Agent, it has not made and will not, hereof, make any offer relating
to the Stock that would constitute a “free writing prospectus” as defined in
Rule 405 of the Rules and Regulations unless the prior written consent of the
Placement Agent has been received (each, a “Permitted Free Writing
Prospectus”). The Company represents that it has treated and agrees
that it will treat each Permitted Free Writing Prospectus as an Issuer Free
Writing Prospectus, comply with the requirements of Rules 164 and 433 of the
Rules and Regulations applicable to any Issuer Free Writing Prospectus,
including the requirements relating to timely filing with the Commission,
legending and record keeping and will not take any action that would result in
the Placement Agent or the Company being required to file with the Commission
pursuant to Rule 433(d) of the Rules and Regulations a free writing prospectus
prepared by or on behalf of the Placement Agent that the Placement Agent
otherwise would not have been required to file thereunder.
c. If
at any time prior to the expiration of nine (9) months after the date of the
Final Prospectus, when a prospectus relating to the Stock is required to be
delivered (or in lieu thereof, the notice referred to in Rule 173(a) of the
Rules and Regulations) any event occurs or condition exists as a result of which
the Final Prospectus as then amended or supplemented would include any untrue
statement of a material fact, or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made when the Prospectus is delivered (or in lieu thereof, the notice referred
to in Rule 173(a) of the Rules and Regulations), not misleading, or if it is
necessary at any time to amend or supplement any Registration Statement or the
Final Prospectus or to file under the Exchange Act any document incorporated by
reference in the Final Prospectus to comply with the Securities Act or the
Exchange Act, that the Company will promptly notify the Placement Agent thereof
and upon their request will prepare an appropriate amendment or supplement or
upon their request make an appropriate filing pursuant to Section 13 or 14
of the Exchange Act in form and substance satisfactory to the Placement Agent
which will correct such statement or omission or effect such compliance and will
use its best efforts to have any amendment to any Registration Statement
declared effective as soon as possible. The Company will furnish
without charge to the Placement Agent and to any dealer in securities as many
copies as the Placement Agent may from time to time reasonably request of such
amendment or supplement. In case the Placement Agent is required to
deliver a prospectus (or in lieu thereof, the notice referred to in Rule 173(a)
of the Rules and Regulations) relating to the Stock nine (9) months or more
after the date of the Final Prospectus, the Company upon the request of the
Placement Agent will prepare promptly an amended or supplemented prospectus as
may be necessary to permit compliance with the requirements of Section 10(a)(3)
of the Securities Act and deliver to the Placement Agent as many copies as the
Placement Agent may request of such amended or supplemented prospectus complying
with Section 10(a)(3) of the Securities Act.
d. If
the General Disclosure Package is being used to solicit offers to buy the Stock
at a time when the Final Prospectus is not yet available to prospective
purchasers and any event shall occur as a result of which, in the judgment of
the Company or in the reasonable opinion of the Placement Agent, it becomes
necessary to amend or supplement the General Disclosure Package in order to make
the statements therein, in the light of the circumstances then prevailing, not
misleading, or to make the statements therein not conflict with the information
contained or incorporated by reference in the Registration Statement then on
file and not superseded or modified, or if it is necessary at any time to amend
or supplement the General Disclosure Package to comply with any law, the Company
promptly will either (i) prepare, file with the Commission (if required) and
furnish to the Placement Agent and any dealers an appropriate amendment or
supplement to the General Disclosure Package or (ii) prepare and file with the
Commission an appropriate filing under the Exchange Act which shall be
incorporated by reference in the General Disclosure Package so that the General
Disclosure Package as so amended or supplemented will not, in the light of the
circumstances then prevailing, be misleading or conflict with the Registration
Statement then on file, or so that the General Disclosure Package will comply
with law.
-15-
e. If
at any time following issuance of an Issuer Free Writing Prospectus there
occurred or occurs an event or development as a result of which such Issuer Free
Writing Prospectus conflicted or will conflict with the information contained in
the Registration Statement, the General Disclosure Package or the Final
Prospectus, including any document incorporated by reference therein and any
prospectus supplement deemed to be a part thereof and not superseded or modified
or included or would include an untrue statement of a material fact or omitted
or would omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances prevailing at the subsequent time, not misleading, the Company has
promptly notified or will promptly notify the Placement Agent so that any use of
the Issuer Free Writing Prospectus may cease until it is amended or supplemented
and has promptly amended or will promptly amend or supplement, at its own
expense, such Issuer Free Writing Prospectus to eliminate or correct such
conflict, untrue statement or omission.
f. To
deliver promptly to the Placement Agent such number of the following documents
as the Placement Agent shall reasonably request: (i) conformed copies
of the Registration Statement as originally filed with the Commission (in each
case excluding exhibits), (ii) each Preliminary Prospectus, if any, (iii) any
Issuer Free Writing Prospectus, (iv) the Final Prospectus (the delivery of the
documents referred to in clauses (i), (ii), (iii) and (iv) of this
paragraph f to be made not later than 10:00 A.M., New York time, on the
business day following the execution and delivery of this Agreement), (v)
conformed copies of any amendment to the Registration Statement (excluding
exhibits), (vi) any amendment or supplement to the General Disclosure Package or
the Final Prospectus (the delivery of the documents referred to in clauses (v)
and (vi) of this paragraph f to be made not later than 10:00 A.M., New York
City time, on the business day following the date of such amendment or
supplement) and (vii) any document incorporated by reference in the General
Disclosure Package or the Final Prospectus (excluding exhibits thereto) (the
delivery of the documents referred to in clause (vii) of this paragraph f
to be made not later than 10:00 A.M., New York City time, on the business day
following the date of such document)].
g. To
make generally available to its shareholders as soon as practicable, but in any
event not later than sixteen (16) months after the effective date of each
Registration Statement (as defined in Rule 158(c) of the Rules and Regulations),
an earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Securities Act and the Rules and
Regulations (including, at the option of the Company, Rule 158).
h. To
take promptly from time to time such actions as the Placement Agent may
reasonably request to qualify the Securities for offering and sale under the
securities or Blue Sky laws of such jurisdictions (domestic or foreign) as the
Placement Agent may designate and to continue such qualifications in effect, and
to comply with such laws, for so long as required to permit the offer and sale
of Securities in such jurisdictions; provided that the Company and
its subsidiaries shall not be obligated to qualify as foreign corporations in
any jurisdiction in which they are not so qualified or to file a general consent
to service of process in any jurisdiction.
-16-
i.
Upon request, during the period of
five (5) years from the date hereof, to deliver to the Placement Agent, (i) as
soon as they are available, copies of all reports or other communications
furnished to shareholders, and (ii) as soon as they are available, copies of any
reports and financial statements furnished or filed with the Commission or any
national securities exchange on which the Stock is listed. However,
so long as the Company is subject to the reporting requirements of either
Section 13 or Section 15(d) of the Exchange Act and is timely filing reports
with the Commission on its Electronic Data Gathering, Analysis and Retrieval
system (“▇▇▇▇▇”), it is not required to furnish such reports or statements to
the Placement Agent.
j.
That the Company will not,
for a period of sixty (60) days from the date of this Agreement, (the “Lock-Up
Period”) without the prior written consent of the Placement Agent, directly or
indirectly offer, sell, assign, transfer, pledge, contract to sell, or otherwise
dispose of, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, other than the Company’s sale of
the Stock hereunder and the issuance of restricted Common Stock or options to
acquire Common Stock pursuant to the Company’s employee benefit plans, qualified
stock option plans or other employee compensation plans as such plans are in
existence on the date hereof and described in the Final Prospectus and the
issuance of Common Stock pursuant to the valid exercises of options, warrants or
rights outstanding on the date hereof. The Company will cause ▇▇.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, the Company’s Chief Executive Officer, to furnish to the
Placement Agent, on or prior to the date of this Agreement, a letter,
substantially in the form of Exhibit B hereto,
pursuant to which she shall agree, among other things, not to directly or
indirectly offer, sell, assign, transfer, pledge, contract to sell, or otherwise
dispose of, or announce the intention to otherwise dispose of, any shares of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock, not to engage in any swap, hedge or similar agreement or
arrangement that transfers, in whole or in part, directly or indirectly, the
economic risk of ownership of Common Stock or any such securities and not to
engage in any short selling of any Common Stock or any such securities, during
the Lock-Up Period, without the prior written consent of the Placement
Agent. The Company also agrees that during such period, other than
for the sale of the Stock hereunder, the Company will not file any registration
statement, preliminary prospectus or prospectus, or any amendment or supplement
thereto, under the Securities Act for any such transaction or which registers,
or offers for sale, Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, except for a registration
statement on Form S-8 relating to employee benefit plans.
k. To
supply the Placement Agent with copies of all correspondence to and from, and
all documents issued to and by, the Commission in connection with the
registration of the Securities under the Securities Act or any of the
Registration Statement, any Preliminary Prospectus or the Final Prospectus, or
any amendment or supplement thereto or document incorporated by reference
therein.
-17-
l.
Prior to the
Closing Date, to furnish to the Placement Agent, as soon as they have been
prepared, copies of any unaudited interim consolidated financial statements of
the Company for any periods subsequent to the periods covered by the financial
statements appearing in the Registration Statements and the Final
Prospectus.
m. Prior
to the Closing Date, not to issue any press release or other communication
directly or indirectly or hold any press conference with respect to the Company,
its condition, financial or otherwise, or earnings, business affairs or business
prospects (except for routine oral marketing communications in the ordinary
course of business and consistent with the past practices of the Company and of
which the Placement Agent is notified), without the prior written consent of the
Placement Agent, unless in the judgment of the Company and its counsel, and
after notification to the Placement Agent, such press release or communication
is required by law.
n. Until
the Placement Agent shall notify the Company of the completion of the Offering,
the Company will not, and will cause its affiliated purchasers (as defined in
Regulation M under the Exchange Act) not to, either alone or with one or more
other persons, bid for or purchase, for any account in which it or any of its
affiliated purchasers has a beneficial interest, any Common Stock, or attempt to
induce any person to purchase any Common Stock; and not to, and to cause its
affiliated purchasers not to, make bids or purchase for the purpose of creating
actual, or apparent, active trading in or of raising the price of the Common
Stock.
o. Not
to take any action prior to the Closing Date which would require the Final
Prospectus to be amended or supplemented.
p. To
at all times comply with all applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act in
effect from time to time.
q. To
maintain, at its expense, a registrar and transfer agent for the Common
Stock.
r.
To apply the
net proceeds from the sale of the Stock as set forth in the Registration
Statement, the General Disclosure Package and the Final Prospectus under the
heading “Use of Proceeds.”
s. To
use its best efforts to list, subject to notice of issuance, and to maintain the
listing of the Stock on the New York Stock Exchange.
t. To
use its best efforts to do and perform all things required to be done or
performed under this Agreement by the Company prior to the Closing Date and to
satisfy all conditions precedent to the delivery of the Stock.
9. Payment of
Expenses. The Company agrees to pay, or reimburse if paid by
the Placement Agent, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated: (a) the costs incident
to the authorization, issuance, sale, preparation and delivery of the Stock to
the Purchasers and any taxes payable in that connection; (b) the costs incident
to the registration of the Securities under the Securities Act; (c) the costs
incident to the preparation, printing and distribution of the Registration
Statement, the Base Prospectus, any Preliminary Prospectus, any Issuer Free
Writing Prospectus, the General Disclosure Package, the Final Prospectus, any
amendments, supplements and exhibits thereto or any document incorporated by
reference therein and the costs of printing, reproducing and distributing this
Agreement, the Subscription Agreements and any closing documents by mail, telex
or other means of communications; (d) any applicable listing or other fees; (e)
the fees and expenses (including related fees and expenses of counsel to the
Placement Agent) of qualifying the Securities under the securities laws of the
several jurisdictions as provided in Section 8.h and of preparing, printing and
distributing wrappers, Blue Sky Memoranda and Legal Investment Surveys; (f) the
cost of preparing and printing stock certificates; (g) all fees and expenses of
the registrar and transfer agent of the Stock; (h) the fees, disbursements and
expenses of counsel to the Placement Agent (i) the costs and expenses of the
Company relating to investor presentations on any “road show” undertaken in
connection with the marketing of the offering of the Stock, including, without
limitation, expenses associated with the preparation or dissemination of any
electronic road show, expenses associated with the production of road show
slides and graphics, fees and expenses of any consultants engaged in connection
with the road show presentations with the prior approval of the Company, travel
and lodging expenses of the officers of the Company and such consultants,
including the cost of any aircraft chartered in connection with the road show,
and (j) all other costs and expenses incident to the offering of the Stock or
the performance of the obligations of the Company under this Agreement
(including, without limitation, the fees and expenses of the Company’s counsel
and the Company’s independent accountants); provided that any payment of
expenses to be reimbursed by the Company in excess of $5,000 to Placement Agent
shall be pre-approved and agreed to by the Company in writing.
-18-
10. Conditions
to the obligations of the Placement Agent and the Purchasers, and the Sale of
the Stock. The respective obligations of the Placement Agent
hereunder and the Purchasers under the Subscription Agreements are subject to
the accuracy, when made and as of the Closing Date, of the representations and
warranties of the Company contained herein, to the accuracy of the statements of
the Company made in any certificates pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder, and to each of the
following additional terms and conditions:
a. The
Registration Statement is effective under the Securities Act, and no stop order
suspending the effectiveness of any Registration Statement or any part thereof,
preventing or suspending the use of any Base Prospectus, any Preliminary
Prospectus, the Final Prospectus or any Permitted Free Writing Prospectus or any
part thereof shall have been issued and no proceedings for that purpose or
pursuant to Section 8A under the Securities Act shall have been initiated or
threatened by the Commission, and all requests for additional information on the
part of the Commission (to be included or incorporated by reference in the
Registration Statement or the Final Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of the Placement Agent; and the
Rule 462(b) Registration Statement, if any, each Issuer Free Writing Prospectus
(except for a “road show”) and the Final Prospectus shall have been filed with,
the Commission within the applicable time period prescribed for such filing by,
and in compliance with, the Rules and Regulations, and the Rule 462(b)
Registration Statement, if any, shall have become effective immediately upon its
filing with the Commission; and, if applicable, FINRA shall have raised no
objection to the fairness and reasonableness of the terms of this Agreement or
the transactions contemplated hereby.
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b. The
Placement Agent shall not have discovered and disclosed to the Company on or
prior to the Closing Date that the Registration Statement or any amendment or
supplement thereto contains an untrue statement of a fact which, in the opinion
of counsel for the Placement Agent, is material or omits to state any fact
which, in the opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading, or that
the General Disclosure Package, any Issuer Free Writing Prospectus or the Final
Prospectus or any amendment or supplement thereto contains an untrue statement
of fact which, in the opinion of such counsel, is material or omits to state any
fact which, in the opinion of such counsel, is material and is necessary in
order to make the statements, in the light of the circumstances in which they
were made, not misleading.
c. All
corporate proceedings and other legal matters incident to the authorization,
form and validity of each of this Agreement, the Subscription Agreements, the
Stock, the Registration Statement, the General Disclosure Package, each Issuer
Free Writing Prospectus and the Final Prospectus and all other legal matters
relating to this Agreement and the transactions contemplated hereby shall be
reasonably satisfactory in all material respects to counsel for the Placement
Agent, and the Company shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon such
matters.
▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP shall have furnished to the Placement Agent such
counsel’s written opinion and negative assurance letter, as counsel to the
Company, addressed to the Placement Agent and dated the Closing Date, in form
and substance reasonably satisfactory to the Placement Agent.
▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP (or such other law firm as may be reasonably
acceptable to the Placement Agent) shall have furnished to the Placement Agent
such counsel’s written opinion, as Nevada counsel to the Company, addressed to
the Placement Agent and dated the Closing Date, in form and substance reasonably
satisfactory to the Placement Agent.
f. China
Commercial Law Firm shall have furnished to the Placement Agent such counsel’s
written opinion, as PRC counsel to the Company, addressed to the Placement Agent
and dated the Closing Date, in form and substance reasonably satisfactory to the
Placement Agent.
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g. Intentionally
Omitted
h. At
the time of the execution of this Agreement, the Placement Agent shall have
received from ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇ CPA’s P.C. a letter, addressed to
the Placement Agent, executed and dated such date, in form and substance
satisfactory to the Placement Agent (i) confirming that they are an independent
registered accounting firm with respect to the Company and its subsidiaries
within the meaning of the Securities Act and the Rules and Regulations and PCAOB
and (ii) stating the conclusions and findings of such firm, of the type
ordinarily included in accountants’ “comfort letters” to underwriters, with
respect to the financial statements and certain financial information contained
or incorporated by reference in the Registration Statement, the General
Disclosure Package and the Final Prospectus.
i. On
the effective date of any post-effective amendment to the Registration Statement
and on the Closing Date, the Placement Agent shall have received a letter (the
“bring-down letter”) from ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇ CPA’s P.C. addressed
to the Placement Agent and dated the Closing Date confirming, as of the date of
the bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the General Disclosure Package and the Final Prospectus,
as the case may be, as of a date not more than three (3) business days prior to
the date of the bring-down letter), the conclusions and findings of such firm,
of the type ordinarily included in accountants’ “comfort letters” to
underwriters, with respect to the financial information and other matters
covered by its letter delivered to the Placement Agent concurrently with the
execution of this Agreement pursuant to Section 10.h.
j. The
Company shall have furnished to the Placement Agent and the Purchasers a
certificate, dated the Closing Date, of its Chairman of the Board or President
and its Chief Financial Officer stating that (i) such officers have carefully
examined the Registration Statement, the General Disclosure Package, any
Permitted Free Writing Prospectus and the Final Prospectus and, in their
opinion, the Registration Statement and each amendment thereto, as of the date
of this Agreement and as of the Closing Date did not include any untrue
statement of a material fact and did not omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and the General Disclosure Package, as of the Closing Date, any Permitted Free
Writing Prospectus as of its date and as of the Closing Date, the Final
Prospectus and each amendment or supplement thereto, as of the respective date
thereof and as of the Closing Date, did not include any untrue statement of a
material fact and did not omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances in which they
were made, not misleading, (ii) since the effective date of the Registration
Statement, no event has occurred which should have been set forth in a
supplement or amendment to the Registration Statement, the General Disclosure
Package or the Final Prospectus, that was not so set forth, (iii) to their
Knowledge, as of the Closing Date, the representations and warranties of the
Company in this Agreement are true and correct and the Company has complied with
all agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date, and (iv) there has not
been, subsequent to the date of the most recent audited financial statements
included or incorporated by reference in the General Disclosure Package, any
material adverse change in the financial position or results of operations of
the Company and its subsidiaries, or any change or development that, singularly
or in the aggregate, would involve a material adverse change or a prospective
material adverse change, in or affecting the condition (financial or otherwise),
results of operations, business, assets or prospects of the Company and its
subsidiaries taken as a whole, except as set forth in the Final
Prospectus.
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k. Since
the date of the latest audited financial statements included in the General
Disclosure Package or incorporated by reference in the General Disclosure
Package as of the date hereof, (i) neither the Company nor any of its
subsidiaries shall have sustained any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth in the General Disclosure Package, and (ii)
there shall not have been any change in the capital stock or long-term debt of
the Company or any of its subsidiaries, or any change, or any development
involving a prospective change, in or affecting the business, general affairs,
management, financial position, stockholders’ equity or results of operations of
the Company and its subsidiaries, otherwise than as set forth in the General
Disclosure Package, the effect of which, in any such case described in clause
(i) or (ii) of this paragraph k, is, in the judgment of the Placement Agent, so
material and adverse as to make it impracticable or inadvisable to proceed with
the sale or delivery of the Stock on the terms and in the manner contemplated in
the General Disclosure Package.
l. No
action shall have been taken and no law, statute, rule, regulation or order
shall have been enacted, adopted or issued by any governmental agency or body
which would prevent the issuance or sale of the Stock or materially and
adversely affect or potentially materially and adversely affect the business or
operations of the Company; and no injunction, restraining order or order of any
other nature by any federal or state court of competent jurisdiction shall have
been issued which would prevent the issuance or sale of the Stock or materially
and adversely affect or potentially materially and adversely affect the business
or operations of the Company.
m. Subsequent
to the execution and delivery of this Agreement (i) no downgrading shall have
occurred in the Company’s corporate credit rating or the rating accorded the
Company’s debt securities by any “nationally recognized statistical rating
organization,” as that term is defined by the Commission for purposes of Rule
436(g)(2) of the Rules and Regulations and (ii) no such organization shall have
publicly announced that it has under surveillance or review (other than an
announcement with positive implications of a possible upgrading), the Company’s
corporate credit rating or the rating of any of the Company’s debt
securities.
n. Subsequent
to the execution and delivery of this Agreement there shall not have occurred
any of the following: (i) trading in securities generally on the New
York Stock Exchange or Nasdaq Global Market or in the over-the-counter market,
or trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or materially limited, or
minimum or maximum prices or maximum range for prices shall have been
established on any such exchange or such market by the Commission, by such
exchange or market or by any other regulatory body or governmental authority
having jurisdiction, (ii) a banking moratorium shall have been declared by
Federal or state authorities or in the PRC or a material disruption has occurred
in commercial banking or securities settlement or clearance services in the
United States or the PRC, (iii) the United States or the PRC shall have become
engaged in hostilities, or the subject of an act of terrorism, or there shall
have been an outbreak of or escalation in hostilities involving the United
States or the PRC, or there shall have been a declaration of a national
emergency or war by the United States or the PRC or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the financial
markets in the United States or the PRC shall be such) as to make it, in the
judgment of the Placement Agent, impracticable or inadvisable to proceed with
the sale or delivery of the Stock on the terms and in the manner contemplated in
the General Disclosure Package and the Prospectus.
-22-
o. The
New York Stock Exchange shall have approved the Stock for listing therein,
subject only to official notice of issuance.
p. The
Placement Agent shall have received on and as of the Closing Date satisfactory
evidence of the good standing of the Company and its subsidiaries in their
respective jurisdictions of organization and their good standing as foreign
entities in such other jurisdictions as the Placement Agent may reasonably
request, in each case in writing or any standard form of telecommunication from
the appropriate governmental authorities of such jurisdictions.
q. The
Placement Agent shall have received the written agreement, substantially in the
form of Exhibit B
hereto, of ▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, the Company’s Chief Executive
Officer.
r. The
Company shall have entered into Subscription Agreements with each of the
Purchasers and such agreement shall be in full force and effect.
s. The
Company shall have prepared and filed with the Commission a Current Report on
Form 8-K including as an exhibit thereto this Agreement.
t. On
or prior to the Closing Date, the Company shall have furnished to the Placement
Agent such further certificates and documents as the Placement Agent may
reasonably request.
All
opinions, letters, evidence and certificates mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Placement Agent.
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11. Indemnification and
Contribution.
a. The
Company shall indemnify and hold harmless the Placement Agent, its directors,
officers, managers, members, employees, representatives and agents and each
person, if any, who controls the Placement Agent within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act (collectively the
“Placement Agent Indemnified Parties,” and each a “Placement Agent Indemnified
Party”) against any loss, claim, damage, expense or liability whatsoever (or any
action, investigation or proceeding in respect thereof), joint or several, to
which such Placement Agent Indemnified Party may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, expense,
liability, action, investigation or proceeding arises out of or is based upon
(A) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any Issuer Free Writing Prospectus, the
Registration Statement, the General Disclosure Package or the Final Prospectus,
or in any amendment or supplement thereto or document incorporated by reference
therein, or (B) the omission or alleged omission to state in any Preliminary
Prospectus, any Issuer Free Writing Prospectus, the Registration Statement, the
General Disclosure Package or the Final Prospectus, or in any amendment or
supplement thereto or document incorporated by reference therein, a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or (C) any breach of the representations and warranties of the
Company contained herein or the failure of the Company to perform its
obligations hereunder or pursuant to any law or any act or failure to act, or
any alleged act or failure to act, by the Placement Agent in connection with, or
relating in any manner to, the Stock or the Offering contemplated hereby, and
which is included as part of or referred to in any loss, claim, damage expense,
liability, action, investigation or proceeding arising out of or based upon
matters covered by subclause (A), (B) or (C) above of this Section 11.a
(provided that the Company shall not be liable in the case of any matter covered
by this subclause (C) to the extent that it is determined in a final judgment by
a court of competent jurisdiction that such loss, claim, damage, expense or
liability resulted primarily from any such act or failure to act undertaken or
omitted to be taken by the Placement Agent through its gross negligence or
willful misconduct) and shall reimburse each Placement Agent Indemnified Party
promptly upon demand for any legal fees or other expenses reasonably incurred by
that Placement Agent Indemnified Party in connection with investigating, or
preparing to defend, or defending against, or appearing as a third party witness
in respect of, or otherwise incurred in connection with, any such loss, claim,
damage, expense, liability, action, investigation or proceeding, as such fees
and expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, expense or liability arises out of or is based upon an untrue statement
or alleged untrue statement in, or omission or alleged omission from any
Preliminary Prospectus, the Registration Statement, the General Disclosure
Package or the Final Prospectus, or any such amendment or supplement thereto, or
any Issuer Free Writing Prospectus made in reliance upon and in conformity with
written information furnished to the Company by the Placement Agent specifically
for use therein, which information the parties hereto agree is limited to the
Placement Agent’s Information (as defined in Section 17). The
indemnity agreement in this Section 11.a. is not exclusive and is in addition to
each other liability which the Company might have under this Agreement or
otherwise, and shall not limit any rights or remedies which may otherwise be
available under this Agreement, at law or in equity to any Placement Agent
Indemnified Party.
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b. The
Placement Agent shall indemnify and hold harmless the Company and its directors,
its officers who signed the Registration Statement 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 (collectively the “Company Indemnified Parties”
and each a “Company Indemnified Party”) against any loss, claim, damage, expense
or liability whatsoever (or any action, investigation or proceeding in respect
thereof), joint or several, to which such Company Indemnified Party may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, expense, liability, action, investigation or proceeding arises out of or
is based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, any Issuer Free Writing
Prospectus, the Registration Statement, the General Disclosure Package or the
Final Prospectus, or in any amendment or supplement thereto, or (ii) the
omission or alleged omission to state in any Preliminary Prospectus, any Issuer
Free Writing Prospectus, the Registration Statement, the General Disclosure
Package or the Final Prospectus, or in any amendment or supplement thereto, a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by the Placement Agent specifically for use therein, which information
the parties hereto agree is limited to the Placement Agent’s Information (as
defined in Section 17), and shall reimburse the Company Indemnified Parties for
any legal or other expenses reasonably incurred by such party in connection with
investigating or preparing to defend or defending against or appearing as third
party witness in connection with any such loss, claim, damage, liability,
action, investigation or proceeding, as such fees and expenses are
incurred. This indemnity agreement is not exclusive and will be in
addition to any liability which the Placement Agent might otherwise have and
shall not limit any rights or remedies which may otherwise be available under
this Agreement, at law or in equity to the Company Indemnified
Parties.
c. Promptly
after receipt by an indemnified party under this Section 11 of notice of the
commencement of any action, the indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party under this Section 11,
notify such indemnifying party in writing of the commencement of that action;
provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 11 except to the extent it has
been materially prejudiced by such failure; and, provided, further, that the
failure to notify an indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section
11. If any such action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the defense of
such action with counsel reasonably satisfactory to the indemnified party (which
counsel shall not, except with the written consent of the indemnified party, be
counsel to the indemnifying party). After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such action, except as provided herein, the indemnifying party shall
not be liable to the indemnified party under Section 11 for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense of such action other than reasonable costs of investigation; provided, however, that any
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense of such action but the fees and
expenses of such counsel (other than reasonable costs of investigation) shall be
at the expense of such indemnified party unless (i) such indemnified party shall
have been advised by its counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party or (ii) the indemnifying party has failed to assume the
defense of such action and employ counsel reasonably satisfactory to the
indemnified party within a reasonable period of time after notice of the
commencement of the action or the indemnifying party does not diligently defend
the action after assumption of the defense, in which case, if such indemnified
party notifies the indemnifying party in writing that it elects to employ
separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of (or, in the case of a
failure to diligently defend the action after assumption of the defense, to
continue to defend) such action on behalf of such indemnified party and the
indemnifying party shall be responsible for legal or other expenses subsequently
incurred by such indemnified party in connection with the defense of such
action; provided, however, that the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys at any
time for all such indemnified parties (in addition to any local counsel), which
firm shall be designated in writing by BMC if the indemnified parties under this
Section 11 consist of any Placement Agent Indemnified Party or by the Company if
the indemnified parties under this Section 11 consist of any Company Indemnified
Parties. Subject to this Section 11, the amount payable by an
indemnifying party under Section 11 shall include, but not be limited to, (x)
reasonable legal fees and expenses of counsel to the indemnified party and any
other expenses in investigating, or preparing to defend or defending against, or
appearing as a third party witness in respect of, or otherwise incurred in
connection with, any action, investigation, proceeding or claim, and (y) all
amounts paid in settlement of any of the foregoing. No indemnifying
party shall, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of judgment with respect to any
pending or threatened action or any claim whatsoever, in respect of which
indemnification or contribution could be sought under this Section 11 (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party in form and substance reasonably satisfactory to such
indemnified party from all liability arising out of such action or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party. Subject to
the provisions of the following sentence, no indemnifying party shall be liable
for settlement of any pending or threatened action or any claim whatsoever that
is effected without its written consent (which consent shall not be unreasonably
withheld or delayed), but if settled with its written consent, if its consent
has been unreasonably withheld or delayed or if there be a judgment for the
plaintiff in any such matter, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment. In addition, if at any time an
indemnified party shall have requested that an indemnifying party reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Sections 11.a or b. effected without its written consent if (i) such settlement
is entered into more than forty-five (45) days after receipt by such
indemnifying party of the request for reimbursement, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least thirty
(30) days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
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d. If
the indemnification provided for in this Section 11 is unavailable or
insufficient to hold harmless an indemnified party under Section 11.a or b, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid, payable or otherwise incurred by such indemnified
party as a result of such loss, claim, damage, expense or liability (or any
action, investigation or proceeding in respect thereof), as incurred, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Placement Agent on the other
from the offering of the Stock, or (ii) if the allocation provided by clause (i)
of this Section 11.d is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) of this Section 11.d, but also the relative fault of the Company on the one
hand and the Placement Agent on the other with respect to the statements,
omissions, acts or failures to act which resulted in such loss, claim, damage,
expense or liability (or any action, investigation or proceeding in respect
thereof) as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Placement
Agent on the other with respect to such offering shall be deemed to be in the
same proportion as the total net proceeds from the offering of the Stock
purchased pursuant to the Subscription Agreements (before deducting expenses)
received by the Company bear to the total fees received by the Placement Agent
with respect to the Stock purchased pursuant to this Agreement and the
Subscription Agreements, in each case as set forth in the table on the cover
page of the Final Prospectus. The relative fault of the Company on
the one hand and the Placement Agent on the other 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 on the one hand or the Placement
Agent on the other, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such untrue
statement, omission, act or failure to act; provided that the parties
hereto agree that the written information furnished to the Company by the
Placement Agent for use in the Preliminary Prospectus, if any, the Registration
Statement, the General Disclosure Package or the Final Prospectus, or in any
amendment or supplement thereto, consists solely of the Placement Agent’s
Information (as defined in Section 17).
e. The
Company and the Placement Agent agree that it would not be just and equitable if
contributions pursuant to Section 11.d above were to be determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to Section 11.d above. The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage, expense, liability, action, investigation or proceeding referred to in
Section 11.d above shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating, preparing to defend or defending against
or appearing as a third party witness in respect of, or otherwise incurred in
connection with, any such loss, claim, damage, expense, liability, action,
investigation or proceeding. Notwithstanding the provisions of this
Section 11.e, the Placement Agent shall not be required to contribute any amount
in excess of the total compensation received by the Placement Agent in
accordance with Section 2.e less the amount of any damages which the Placement
Agent has otherwise paid or become liable to pay by reason of any untrue or
alleged untrue statement, omission or alleged omission, act or alleged act or
failure to act or alleged failure to act. 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.
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12. Termination. The
obligations of the Placement Agent and the Purchasers hereunder and under the
Subscription Agreements may be terminated by the Placement Agent, in its
absolute discretion by notice given to the Company prior to delivery of and
payment for the Stock if, prior to that time, any of the events described in
Sections 10.k, 10.m, or 10.n have occurred or if the Purchasers shall decline to
purchase the Stock for any reason permitted under this Agreement or the
Subscription Agreements. The Company hereby acknowledges that in the
event that this Agreement is terminated by the Placement Agent pursuant to the
terms hereof, the Subscription Agreements shall automatically terminate without
any further action on the part of the parties thereto.
13. Reimbursement
of Placement Agent’s Expenses. Notwithstanding anything to the
contrary in this Agreement, if (a) this Agreement shall have been terminated
pursuant to Section 12, (b) the Company shall fail to tender the Stock for
delivery to the Purchasers for any reason not permitted under this Agreement or
the Subscription Agreements, (c) the Purchasers shall decline to purchase the
Stock for any reason permitted under this Agreement or the Subscription
Agreements or (d) the sale of the Stock is not consummated because any condition
to the obligations of the Placement Agent or the Purchasers set forth herein is
not satisfied or because of the refusal, inability or failure on the part of the
Company to perform any agreement herein or to satisfy any condition or to comply
with the provisions hereof, then in addition to the payment of amounts in
accordance with Section 9, the Company shall reimburse the Placement Agent for
the fees and expenses of Placement Agent’s counsel and for such other
out-of-pocket expenses as shall have been reasonably incurred by it in
connection with this Agreement and the proposed purchase of the Stock,
including, without limitation, travel and lodging expenses of the Placement
Agent, and upon demand the Company shall pay the full amount thereof to
BMC.
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14. Absence of
Fiduciary Relationship. The Company acknowledges and agrees
that:
a. the
Placement Agent’s responsibility to the Company is solely contractual in nature,
the Placement Agent has been retained solely to act as placement agent in
connection with the sale of the Stock and no fiduciary, advisory or agency
relationship between the Company and the Placement Agent has been created in
respect of any of the transactions contemplated by this Agreement, irrespective
of whether the Placement Agent has advised or is advising the Company on other
matters;
b. the
price of the Stock set forth in this Agreement was established by the Company
following discussions and arms-length negotiations with the Purchasers, 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 Placement Agent and its affiliates are engaged in a
broad range of transactions which may involve interests that differ from those
of the Company and that the Placement Agent has no obligation to disclose such
interests and transactions to the Company by virtue of any fiduciary, advisory
or agency relationship; and
d. it
waives, to the fullest extent permitted by law, any claims it may have against
the Placement Agent for breach of fiduciary duty or alleged breach of fiduciary
duty and agrees that the Placement Agent shall have no liability (whether direct
or indirect) to the Company in respect of such a fiduciary duty claim or to any
person asserting a fiduciary duty claim on behalf of or in right of the Company,
including stockholders, employees or creditors of the Company.
-28-
15. Successors;
Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Placement Agent, the Company and
their respective successors and assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, other than those persons mentioned in the preceding sentence or
otherwise explicitly mentioned in this Agreement, any legal or equitable right,
remedy or claim under or in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person; except that the representations, warranties,
covenants, agreements and indemnities of the Company contained in this Agreement
shall also be for the benefit of the Placement Agent Indemnified Parties, and
the indemnities of the Placement Agent shall be for the benefit of the Company
Indemnified Parties. It is understood that Placement Agent’s
responsibility to the Company is solely contractual in nature and the Placement
Agent does not owe the Company, or any other party, any fiduciary duty as a
result of this Agreement. No Purchaser shall be deemed to be a
successor or assign by reason merely of such purchase.
16. Survival
of Indemnities, Representations, Warranties, etc. The respective
indemnities, covenants, agreements, representations, warranties and other
statements of the Company and the Placement Agent, as set forth in this
Agreement or made by them respectively, pursuant to this Agreement, shall remain
in full force and effect, regardless of any investigation made by or on behalf
of the Placement Agent, the Company, the Purchasers or any person controlling
any of them and shall survive delivery of and payment for the
Stock. Notwithstanding any termination of this Agreement, including
without limitation any termination pursuant to Section 12, the indemnities,
contribution, covenants, agreements, representations, warranties and other
statements forth in Sections 3, 4, 5, 6, 9, 11, and 13 and Sections 14 through
23, inclusive, of this Agreement shall not terminate and shall remain in full
force and effect at all times.
17. Notices. All
statements, requests, notices and agreements hereunder shall be in writing, and
if to the Placement Agent, shall be delivered or sent by mail, telex, facsimile
transmission or email to ▇▇▇▇▇ ▇▇▇▇▇▇, Carret & Co., LLC, Attention: ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, Fax: ▇▇▇-▇▇▇-▇▇▇▇ with a copy to the Compliance Department, Fax:
▇▇▇-▇▇▇-▇▇▇▇; and if to the Company, shall be delivered or sent by mail, telex,
facsimile transmission or email to Universal Travel Group, Shennan Software
Park, Block 11, 5th FLR
south, Zhongke 2nd Road,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇, ▇▇▇▇▇▇, telecopy number: ▇▇-▇▇▇-▇▇▇▇▇▇▇▇,
Attention: Chief Financial Officer; 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.
18. Definition
of Certain Terms. For purposes of this Agreement, (a)
“business day” means any day on which the New York Stock Exchange is open for
trading and (b) “subsidiary” has the meaning set forth in Rule 405 of the
Rules and Regulations.
19. Governing
Law, Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, including
without limitation Section 5-1401 of the New York General
Obligations. The Company irrevocably (a) submits to the non-exclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The
City of New York for the purpose of any suit, action or other proceeding arising
out of this Agreement or the transactions contemplated by this Agreement, the
Registration Statement and any Preliminary Prospectus or the Final Prospectus,
(b) agrees that all claims in respect of any such suit, action or proceeding may
be heard and determined by any such court, (c) waives to the fullest extent
permitted by applicable law, any immunity from the jurisdiction of any such
court or from any legal process, (d) agrees not to commence any such suit,
action or proceeding other than in such courts, and (e) waives, to the fullest
extent permitted by applicable law, any claim that any such suit, action or
proceeding is brought in an inconvenient forum.
-29-
20. Placement
Agent’s Information. The parties
hereto acknowledge and agree that, for all purposes of this Agreement, the
Placement Agent’s Information consists solely of the following information in
the Final Prospectus: (i) the last paragraph on the front cover page
concerning the terms of the offering; and (ii) the statements concerning the
Placement Agent contained on the cover page of the Prospectus and the statements
set forth in the “Plan of Distribution” section of the Final
Prospectus.
21. 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
hereof. If any section, paragraph, clause or provision of this
Agreement is for any reason determined to be invalid or unenforceable, there
shall be deemed to be made such minor changes (and only such minor changes) as
are necessary to make it valid and enforceable.
22. General. This
Agreement constitutes the entire agreement of the parties to this Agreement and
supersedes all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter
hereof. In this Agreement, the masculine, feminine and neuter genders
and the singular and the plural include one another. The section
headings in this Agreement are for the convenience of the parties only and will
not affect the construction or interpretation of this Agreement. This
Agreement may be amended or modified, and the observance of any term of this
Agreement may be waived, only by a writing signed by the Company and the
Placement Agent.
23. Counterparts. This
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.
[Signature
page follows]
-30-
If the
foregoing is in accordance with your understanding of the agreement between the
Company and the Placement Agent, kindly indicate your acceptance in the space
provided for that purpose below.
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Very
truly yours,
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By:
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/s/
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Name:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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|||||
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Title:
Chief
Executive Officer
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|||||
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Accepted
as of
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|||||
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the
date first above written:
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|||||
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▇▇▇▇▇
▇▇▇▇▇▇, Carret & Co., LLC
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By:
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/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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||||
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Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title:
Managing Director
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[Signature
page to Placement Agency Agreement]
-31-
EXHIBIT
A
FORM
OF SUBSCRIPTION AGREEMENT
A-1
-32-
EXHIBIT
B
FORM
OF LOCK UP AGREEMENT
December
10, 2009
▇▇▇▇▇
▇▇▇▇▇▇, Carret & Co., LLC
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Universal
Travel Group - Registration Statement on Form S-3
Dear
Sirs:
This
Agreement is being delivered to you in connection with the proposed Placement
Agent Agreement (the “Placement Agent Agreement”) between Universal Travel
Group, a Nevada corporation (the “Company”) and ▇▇▇▇▇ ▇▇▇▇▇▇, Carret & Co.,
LLC (“BMC” or the “Placement Agent”), relating to the proposed public offering
of shares of common stock, par value $0.001 per share of the Company (the
“Common Stock”). Defined terms used but not defined herein shall have
the meaning ascribed to them in the Placement Agent Agreement.
In order
to induce the Placement Agent to enter into the Placement Agent Agreement, and
in light of the benefits that the offering of the Stock will confer upon the
undersigned in its capacity as a securityholder and/or an officer, director or
employee of the Company, and for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the undersigned agrees with
the Placement Agent that, during the period beginning on and including the date
of the Placement Agent Agreement through and including the date that is the 60th
day after the date of the Placement Agent Agreement (the “Lock-Up Period”), the
undersigned will not, without the prior written consent of BMC, directly or
indirectly, (i) offer, sell, assign, transfer, pledge, contract to sell, or
otherwise dispose of, or announce the intention to otherwise dispose of, any
shares of Common Stock (including, without limitation, Common Stock which may be
deemed to be beneficially owned by the undersigned in accordance with the rules
and regulations promulgated under the Securities Act of 1933, as the same may be
amended or supplemented from time to time (such shares, the “Beneficially Owned
Shares”)) or securities convertible into or exercisable or exchangeable for
Common Stock, (ii) enter into any swap, hedge or similar agreement or
arrangement that transfers in whole or in part, the economic risk of ownership
of the Beneficially Owned Shares or securities convertible into or exercisable
or exchangeable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition, or (iii) engage in any short selling of the Common
Stock or securities convertible into or exercisable or exchangeable for Common
Stock.
-33-
The
restrictions set forth in the immediately preceding paragraph shall not apply
to:
(1) if
the undersigned is a natural person, any transfers made by the undersigned
(a) as a bona fide gift to any member of the immediate family (as defined
below) of the undersigned or to a trust the beneficiaries of which are
exclusively the undersigned or members of the undersigned’s immediate family,
(b) by will or intestate succession upon the death of the undersigned or
(c) as a bona fide gift to a charity or educational
institution,
(2) if
the undersigned is a corporation, partnership, limited liability company or
other business entity, any transfers to any shareholder, partner or member of,
or owner of a similar equity interest in, the undersigned, as the case may be,
if, in any such case, such transfer is not for value, and
(3) if
the undersigned is a corporation, partnership, limited liability company or
other business entity, any transfer made by the undersigned (a) in connection
with the sale or other bona fide transfer in a single transaction of all or
substantially all of the undersigned’s capital stock, partnership interests,
membership interests or other similar equity interests, as the case may be, or
all or substantially all of the undersigned’s assets, in any such case not
undertaken for the purpose of avoiding the restrictions imposed by this
agreement or (b) to another corporation, partnership, limited liability company
or other business entity so long as the transferee is an affiliate (as defined
below) of the undersigned and such transfer is not for value;
provided,
however, that in the case of any transfer described in clause (1), (2) or
(3) above, it shall be a condition to the transfer that (A) the
transferee executes and delivers to BMC, not later than one business day prior
to such transfer, a written agreement, in substantially the form of this
agreement (it being understood that any references to “immediate family” in the
agreement executed by such transferee shall expressly refer only to the
immediate family of the undersigned and not to the immediate family of the
transferee) and otherwise satisfactory in form and substance to BMC, and
(B) if the undersigned is required to file a report under
Section 16(a) of the Securities Exchange Act of 1934, as amended, reporting
a reduction in beneficial ownership of shares of Common Stock or Beneficially
Owned Shares or any securities convertible into or exercisable or exchangeable
for Common Stock or Beneficially Owned Shares during the Lock-Up Period, the
undersigned shall include a statement in such report to the effect that, in the
case of any transfer pursuant to clause (1) above, such transfer is being
made as a gift or by will or intestate succession or, in the case of any
transfer pursuant to clause (2) above, such transfer is being made to a
shareholder, partner or member of, or owner of a similar equity interest in, the
undersigned and is not a transfer for value or, in the case of any transfer
pursuant to clause (3) above, such transfer is being made either (a) in
connection with the sale or other bona fide transfer in a single transaction of
all or substantially all of the undersigned’s capital stock, partnership
interests, membership interests or other similar equity interests, as the case
may be, or all or substantially all of the undersigned’s assets or (b) to
another corporation, partnership, limited liability company or other business
entity that is an affiliate of the undersigned and such transfer is not for
value. For purposes of this paragraph, “immediate family” shall mean
a spouse, child, grandchild or other lineal descendant (including by adoption),
father, mother, brother or sister of the undersigned; and “affiliate” shall have
the meaning set forth in Rule 405 under the Securities Act of 1933, as
amended.
-34-
In order
to enable this covenant to be enforced, the undersigned hereby consents to the
placing of legends or stop transfer instructions with the Company’s transfer
agent with respect to any Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock.
The
undersigned further agrees that (i) it will not, during the Lock-Up Period,
make any demand or request for or exercise any right with respect to the
registration under the Securities Act of 1933, as amended, of any shares of
Common Stock or other Beneficially Owned Shares or any securities convertible
into or exercisable or exchangeable for Common Stock or other Beneficially Owned
Shares, and (ii) the Company may, with respect to any Common Stock or other
Beneficially Owned Shares or any securities convertible into or exercisable or
exchangeable for Common Stock or other Beneficially Owned Shares owned or held
(of record or beneficially) by the undersigned, cause the transfer agent or
other registrar to enter stop transfer instructions and implement stop transfer
procedures with respect to such securities during the Lock-Up
Period.
The
undersigned hereby represents and warrants that the undersigned has full power
and authority to enter into this agreement and that this agreement has been duly
authorized (if the undersigned is not a natural person), executed and delivered
by the undersigned and is a valid and binding agreement of the
undersigned. This agreement and all authority herein conferred are
irrevocable and shall survive the death or incapacity of the undersigned (if a
natural person) and shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
[Signature
page follows]
-35-
The
undersigned acknowledges and agrees that whether or not any public offering of
Stock actually occurs depends on a number of factors, including market
conditions.
|
Very
truly yours,
|
||
|
(Name
of Stockholder - Please Print)
|
||
|
(Signature)
|
||
|
(Name
of Signatory if Stockholder is an entity - Please
Print)
|
||
|
(Title
of Signatory if Stockholder is an entity - Please
Print)
|
||
|
Address:
|
||
[Signature
page to Lock-Up Agreement]
-36-