2,000,000 Shares of Common Stock LIHUA INTERNATIONAL, INC. UNDERWRITING AGREEMENT August [ ], 2009
Exhibit
1.1
2,000,000
Shares of Common Stock
LIHUA
INTERNATIONAL, INC.
August
[ ], 2009
Broadband
Capital Management LLC
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, LLC
1251
Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇, ▇▇▇▇▇
As
Representatives of the Underwriters
named
on Schedule A
hereto
Ladies
and Gentlemen:
Each of
Lihua International, Inc., a corporation organized and existing under the laws
of Delaware (the “Company”) and Vision
Opportunity China LP (the “Selling Stockholder”),
confirms its agreement, subject to the terms and conditions set forth herein,
with each of the underwriters listed on Exhibit A hereto
(collectively, the “Underwriters”), for whom
Broadband Capital Management LLC (“Broadband”) and ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, LLC are acting as representatives (in such capacity, collectively, the
“Representatives”), to
sell and issue to the Underwriters an aggregate of two 2,000,000 shares of
common stock (the “Firm
Shares”) par value $0.0001 per share (the “Common Stock”).
The
Common Stock is more fully described in the Registration Statement and
Prospectus referred to below. The offering and sale of the Common
Stock contemplated by this underwriting agreement (this “Agreement”) is referred to
herein as the “Offering.”
1.1 Firm Securities;
Over-Allotment Option.
(a) Purchase of Firm
Shares. On the basis of the representations and warranties herein
contained, but subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to the several Underwriters, an aggregate of 2,000,000
Firm Shares at a purchase price (net of discounts and commissions) of $[X.XX]
per Firm Share. The Underwriters, severally and not jointly, agree to
purchase from the Company the number of Firm Shares set forth opposite their
respective names on Schedule A
attached hereto and made a part hereof at a purchase price (net of discounts and
commissions) of $[X.XX] per Firm Share.
Broadband
Capital Management LLC
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& ▇▇▇▇▇▇▇, LLC
August
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(b) Payment and
Delivery. Delivery and payment for the Firm Shares shall be
made at 10:00 A.M., New York time, on the third Business Day following the
effective date (the “Effective
Date”) of the Registration Statement (or the fourth Business Day
following the Effective Date, if the Registration Statement is declared
effective after 4:30 p.m.) or at such earlier time as shall be agreed upon by
Broadband and the Company at the offices of Broadband or at such other place as
shall be agreed upon by Broadband and the Company. The hour and date of
delivery and payment for the Firm Shares is referred to herein as the “Closing
Date.” The closing of the
payment of the purchase price for, and delivery of certificates representing,
the Firm Shares is referred to herein as the “Closing.” Payment for the Firm Shares shall be
made on the Closing Date at Broadband’s election by wire transfer in Federal
(same day) funds or by certified or bank cashier’s check(s) in New York Clearing
House funds. Any remaining proceeds (less commissions, expense
allowance and actual expense payments or other fees payable pursuant to this
Agreement) shall be paid to the order of the Company and the Selling
Stockholder, as the case may be, upon delivery to you of certificates (in form
and substance satisfactory to the Underwriters) representing the Firm Shares (or
through the facilities of the Depository Trust Company (the “DTC”)) for the account of the
Underwriters. The Firm Shares shall be registered in such name or names
and in such authorized denominations as Broadband may request in writing at
least two Business Days prior to the Closing Date. The Company will permit
the Representatives to examine and package the Firm Shares for delivery, at
least one full Business Day prior to the Closing Date. The Company shall
not be obligated to sell or deliver the Firm Shares except upon tender of
payment by the Representatives for all the Firm Shares.
(c) Option Shares.
For the purposes of covering any over-allotments in connection with the
distribution and sale of the Firm Shares, the Selling Stockholder hereby grants
to Broadband, on behalf of the Underwriters, an option to purchase up to an
additional 15% of the number of Firm Shares to be offered solely by the Selling
Stockholder (the “Over-allotment
Option”). The Company shall not receive any proceeds from the
sale by the Selling Stockholder of any Option Shares (as hereinafter
defined). The Option Shares shall be identical in all respects to the
Firm Shares and are hereinafter referred to as “Option Shares.” The Firm
Shares and the Option Shares are hereinafter collectively referred to as the
“Shares.” The
Shares and the Representatives’ Securities (as hereinafter defined) are referred
to herein as (the “Securities”). The
purchase price to be paid for the Option Shares (net of discounts and
commissions) will be $[X.XX] per share. The Option Shares are to be
offered initially to the public at the offering price of $[X.XX] per
share.
Broadband
Capital Management LLC
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& ▇▇▇▇▇▇▇, LLC
August
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(d) Exercise of
Option. The Over-allotment Option granted pursuant to
Section 1.1(b) hereof may be exercised by Broadband as to all (at any time)
or any part (from time to time) of the Option Shares within 45 days after the
Effective Date. The Underwriters will not be under any obligation to
purchase any Option Shares prior to the exercise of the Over-allotment
Option. The Over-allotment Option granted hereby may be exercised by the
giving of oral notice to the Company and the Selling Stockholder from Broadband,
which must be confirmed in writing by overnight mail or facsimile transmission
setting forth the number of Option Shares to be purchased and the date and time
for delivery of and payment for the Option Shares, which will not be later than
five Business Days
after the date of the notice or such other time as shall be agreed upon by the
Company, the Selling Stockholder and Broadband, at the offices of Broadband or
at such other place as shall be agreed upon by the Company, the Selling
Stockholder and Broadband. If such delivery and payment for the Option
Shares does not occur on the Closing Date, the date and time of the closing for
such Option Shares will be as set forth in the notice (hereinafter the “Option Closing Date”).
Upon exercise of the Over-allotment Option, the Selling Stockholder will become
obligated to convey to the Underwriters, and, subject to the terms and
conditions set forth herein, the Underwriters will become obligated to purchase,
the number of Option Shares specified in such notice.
(e) Payment and Delivery of
Option Shares. Payment for the Option Shares shall be made on the
Option Closing Date at Broadband’s election by wire transfer in Federal (same
day) funds or by certified or bank cashier’s check(s) in New York Clearing House
funds, by deposit of the sum of $[X.XX] per Option Share to the Selling
Stockholder upon delivery to the Underwriters of certificates (in form and
substance satisfactory to the Underwriters) representing the Option Shares (or
through the facilities of DTC) for the account of the Underwriters.
The certificates representing the Option Shares to be delivered will
be in such denominations and registered in such names as Broadband requests not
less than two Business Days prior to the Closing Date or the Option Closing
Date, as the case may be, and will be made available to Broadband for
inspection, checking and packaging at the aforesaid office of the Company’s
transfer agent or correspondent not less than one full Business Day prior to
such Closing Date or Option Closing Date.
(f) Representatives’
Warrant. As additional consideration, the Company hereby agrees to
issue and sell to the Representatives (and/or their respective designees) on the
Effective Date Common Stock purchase warrants (the “Representatives’ Warrants”) for the purchase of
an aggregate of 6% of the Shares sold in this Offering (120,000 shares of Common
Stock or up to 138,000 shares of Common Stock if the over-allotment is exercised
in full) (the “Representatives’
Shares”) for an aggregate purchase price of $100.00. The
Representatives’ Warrants shall be exercisable, in whole or in part, commencing
on the date that is six months from the Effective Date and expiring on the
five-year anniversary of the Effective Date at an initial exercise price per
share of $[X.XX], which is equal to one hundred and twenty percent (120%) of the
initial public offering price per Firm Share. The Representatives’
Warrants and the shares of Common Stock issuable upon exercise of the Warrants
are hereinafter referred to collectively as the “Representatives’
Securities.” The Representatives understand and agree there
are significant restrictions against transferring the Representatives’ Warrants
during the first six months after the Effective Date.
2. Representations and
Warranties of the Company.
2.1 The
Company represents, warrants and covenants to, and agrees with, each of the
Underwriters that, as of the date hereof and as of the Closing
Date:
Broadband
Capital Management LLC
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& ▇▇▇▇▇▇▇, LLC
August
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(a) The
Company has filed with the Securities and Exchange Commission (the “Commission”) a registration
statement on Form S-1 (Registration No. 333-159705), and amendments thereto, and
related preliminary prospectuses for the registration under the Securities Act
of 1933, as amended (the “Securities Act”), of the
Securities which registration statement, as so amended (including post-effective
amendments, if any), has been declared effective by the Commission and copies of
which have heretofore been delivered to the Underwriters. The
registration statement, as amended at the time it became effective, including
the prospectus, financial statements, schedules, exhibits and other information
(if any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Securities Act, is hereinafter
referred to as the “Registration
Statement.” If the Company has filed or is required pursuant
to the terms hereof to file a registration statement pursuant to Rule 462(b)
under the Securities Act registering additional shares of Common Stock (a “Rule 462(b) Registration
Statement”), then, unless otherwise specified, any reference herein to
the term “Registration Statement” shall be deemed to include such Rule 462(b)
Registration Statement. Other than a Rule 462(b) Registration
Statement, which, if filed, becomes effective upon filing, no other document
with respect to the Registration Statement has heretofore been filed with the
Commission. All of the Securities have been registered under the
Securities Act pursuant to the Registration Statement or, if any Rule 462(b)
Registration Statement is filed, will be duly registered under the Securities
Act with the filing of such Rule 462(b) Registration Statement. Based
on communications from the Commission, no stop order suspending the
effectiveness of either the Registration Statement or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission. The
Company, if required by the Securities Act and the rules and regulations of the
Commission (the “Rules and
Regulations”), proposes to file the Prospectus with the Commission
pursuant to Rule 424(b) under the Securities Act (“Rule 424(b)”). The
prospectus, in the form in which it is to be filed with the Commission pursuant
to Rule 424(b), or, if the prospectus is not to be filed with the Commission
pursuant to Rule 424(b), the prospectus in the form included as part of the
Registration Statement at the time the Registration Statement became effective,
is hereinafter referred to as the “Prospectus,” except that if
any revised prospectus or prospectus supplement shall be provided to the
Underwriters by the Company for use in connection with the Offering which
differs from the Prospectus (whether or not such revised prospectus or
prospectus supplement is required to be filed by the Company pursuant to Rule
424(b)), the term “Prospectus” shall also refer to such revised prospectus or
prospectus supplement, as the case may be, from and after the time it is first
provided to the Underwriters for such use. Any preliminary prospectus
or prospectus subject to completion included in the Registration Statement or
filed with the Commission pursuant to Rule 424 under the Securities Act is
hereafter called a “Preliminary
Prospectus.” Any reference herein to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the exhibits incorporated by reference therein pursuant to the
Rules and Regulations on or before the effective date of the Registration
Statement, the date of such Preliminary Prospectus or the date of the
Prospectus, as the case may be. Any reference herein to the terms
“amend”, “amendment” or “supplement” with respect to the Registration Statement,
any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include: (i) the filing of any document under the Securities Exchange Act of
1934, as amended, and together with the Rules and Regulations promulgated
thereunder (the “Exchange
Act”) after the effective date of the Registration Statement, the date of
such Preliminary Prospectus or the date of the Prospectus, as the case may be,
which is incorporated therein by reference, and (ii) any such document so
filed. All references in this Agreement to the Registration
Statement, the Rule 462(b) Registration Statement, a Preliminary Prospectus and
the Prospectus, or any amendments or supplements to any of the foregoing shall
be deemed to include any copy thereof filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval System (“▇▇▇▇▇”)
system.
Broadband
Capital Management LLC
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& ▇▇▇▇▇▇▇, LLC
August
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(b) The
Company has filed with the Commission a Form 8-A (File Number 001-________)
providing for the registration under the Securities Exchange Act of 1934, as
amended (the “Exchange
Act”), of the Shares. The registration of the Shares under the
Exchange Act has been declared effective by the Commission on the date
hereof.
(c) At
the time of the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement or the effectiveness of any post-effective amendment to
the Registration Statement, when the Prospectus is first filed with the
Commission pursuant to Rule 424(b), when any supplement to or amendment of the
Prospectus is filed with the Commission, when any document filed under the
Exchange Act was or is filed and at the Closing Date (as hereinafter defined),
if any, the Registration Statement and the Prospectus and any amendments thereof
and supplements or exhibits thereto complied or will comply in all material
respects with the applicable provisions of the Securities Act, the Exchange Act
and the Rules and Regulations, and did not and will not contain an untrue
statement of a material fact and did not and will not omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein: (i) in the case of the Registration Statement, not misleading, and (ii)
in the case of the Prospectus or any related Preliminary Prospectus in light of
the circumstances under which they were made, not misleading. When
any Preliminary Prospectus was first filed with the Commission (whether filed as
part of the registration statement for the registration of the Securities or any
amendment thereto or pursuant to Rule 424(a) under the Securities Act) and when
any amendment thereof or supplement thereto was first filed with the Commission,
such Preliminary Prospectus and any amendments thereof and supplements thereto
complied in all material respects with the applicable provisions of the
Securities Act, the Exchange Act and the Rules and Regulations and did not
contain an untrue statement of a material fact and did not omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. No representation and warranty is made in this
subsection (b), however, with respect to any information contained in or omitted
from the Registration Statement or the Prospectus or any related Preliminary
Prospectus or any amendment thereof or supplement thereto in reliance upon and
in conformity with information furnished in writing to the Company by or on
behalf of any Underwriter through the Representatives specifically for use
therein. The parties acknowledge and agree that such information
provided by or on behalf of any Underwriter consists solely of the subsections
of the “Underwriting” section of the Prospectus captioned “Stabilization,”
“Foreign Regulatory Restrictions on Purchase of Shares” and “European Economic
Area”(the “Underwriters’
Information”).
Broadband
Capital Management LLC
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& ▇▇▇▇▇▇▇, LLC
August
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(d) ▇▇▇▇,
Inc. (“▇▇▇▇”), whose
reports relating to the Company are included in the Registration Statement, is
an independent registered public accounting firm as required by the Securities
Act and the Rules and Regulations and the Public Company Accounting Oversight
Board (United States) (the “PCAOB”). Except as
disclosed in the Registration Statement and as pre-approved in accordance with
the requirements set forth in Section 10A of the Exchange Act, ▇▇▇▇ has not
been engaged by the Company to perform any “prohibited activities”(as defined in
Section 10A of the Exchange Act). The Company has had no
material disagreements with ▇▇▇▇ for the period from its initial engagement by
the Company through the Closing Date that were not satisfied in a manner
mutually satisfactory to both the Company and ▇▇▇▇.
(e) Subsequent
to the respective dates as of which information is presented in the Registration
Statement and the Prospectus, and except as disclosed in the Registration
Statement and the Prospectus: (i) the Company has not declared, paid or made any
dividends or other distributions of any kind on or in respect of its capital
stock, and (ii) there has been no material adverse change (or, to the knowledge
of the Company, any development which has a high probability of involving a
material adverse change in the future), whether or not arising from transactions
in the ordinary course of business, in or affecting: (A) the business, condition
(financial or otherwise), results of operations, shareholders’ equity,
properties or prospects of the Company and each direct or indirect subsidiary or
joint venture of the Company listed on Exhibit 21.1 of the Registration
Statement hereto (the “Subsidiaries”), taken as a
whole; (B) the long-term debt or capital stock of the Company or any of its
Subsidiaries; or (C) the Offering or consummation of any of the other
transactions contemplated by this Agreement, the Registration Statement or the
Prospectus (a “Material Adverse
Change”). Since the date of the latest balance sheet presented
in the Registration Statement and the Prospectus, neither the Company nor any
Subsidiary has incurred or undertaken any liabilities or obligations, whether
direct or indirect, liquidated or contingent, matured or unmatured, or entered
into any transactions, including any acquisition or disposition of any business
or asset, which are material to the Company and the Subsidiaries taken as a
whole, except for liabilities, obligations and transactions which are disclosed
in the Registration Statement and the Prospectus.
(f) As
of the dates indicated in the Prospectus, the authorized, issued and outstanding
shares of capital stock of the Company were as set forth in the Prospectus in
the column headed “Actual” under the section thereof captioned “Capitalization”
and, after giving effect to the Offering and the other transactions contemplated
by this Agreement, the Registration Statement and the Prospectus, will be as set
forth in the column headed “As Adjusted” in such section. After
giving effect to the Offering, the other transactions contemplated by this
Agreement, the Registration Statement and the Prospectus, the authorized, issued
and outstanding shares of capital stock of the Company will be as set forth in
the column headed “Pro Forma As Adjusted” in the section of the Prospectus
captioned “Capitalization.” All of the issued and outstanding shares
of capital stock of the Company are fully paid and non-assessable and have been
duly and validly authorized and issued, in compliance with all applicable state,
federal and foreign securities laws and not in violation of or subject to any
preemptive or similar right that does or will entitle any Person (as defined
below), upon the issuance or sale of any security, to acquire from the Company
or any Subsidiary any Relevant Security. As used herein, the term
“Relevant Security”
means any Common Stock or other security of the Company or any Subsidiary that
is convertible into, or exercisable or exchangeable for Common Stock or equity
securities, or that holds the right to acquire any Common Stock or equity
securities of the Company or any Subsidiary or any other such Relevant Security,
except for such rights as may have been fully satisfied or waived prior to the
effectiveness of the Registration Statement. As used herein,
the term “Person” means
any foreign or domestic individual, corporation, trust, partnership, joint
venture, limited liability company or other entity.
Broadband
Capital Management LLC
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& ▇▇▇▇▇▇▇, LLC
August
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(g) The
Securities have been duly and validly authorized and, when issued, delivered and
paid for in accordance with this Agreement and as described in the Prospectus on
the Closing Date, will be duly and validly issued, fully paid and
non-assessable, will have been issued in compliance with all applicable state,
federal and foreign securities laws and will not have been issued in violation
of or subject to any preemptive or similar right that does or will entitle any
Person to acquire any Relevant Security from the Company or any Subsidiary upon
issuance or sale of Securities in the Offering. The Common Stock
conform to the descriptions thereof contained in the Registration Statement and
the Prospectus. Except as disclosed in the Registration Statement and
the Prospectus, neither the Company nor any Subsidiary has outstanding warrants,
options to purchase, or any preemptive rights or other rights to subscribe for
or to purchase, or any contracts or commitments to issue or sell, any Relevant
Security.
(h) The
Representatives’ Shares will conform to the description thereof in the
Registration Statement and in the Prospectus and have been validly reserved for
future issuance and will, upon exercise of the Representatives’ Warrants and
payment of the exercise price thereof, be duly and validly issued, fully paid
and non-assessable and, to our knowledge, will not have been issued in violation
of or subject to preemptive or similar rights to subscribe for or purchase
securities of the Company. The issuance of such securities is not
subject to any statutory preemptive rights under the Delaware General Corporate
Law (the “DGCL”) or the
Certificate of Incorporation as in effect at the time of issuance or, to our
knowledge, other similar rights of any securityholder of the Company (except for
such preemptive or contractual rights as were waived).
(i) The
Subsidiaries are the only subsidiaries of the Company within the meaning of Rule
405 under the Securities Act. Except for the Subsidiaries and as
otherwise disclosed in the Registration Statement and the Prospectus, the
Company holds no ownership or other interest, nominal or beneficial, direct or
indirect, in any corporation, partnership, joint venture or other business
entity. All of the issued and outstanding shares of capital stock of,
or other ownership interests in, each Subsidiary have been duly and validly
authorized and issued and are fully paid and non-assessable and are owned,
directly or indirectly, by the Company, free and clear of any lien, charge,
mortgage, pledge, security interest, claim, equity, trust or other encumbrance,
preferential arrangement, defect or restriction of any kind whatsoever (any
“Lien”). No
director, officer or key employee of the Company named in the Prospectus holds
any direct equity, debt or other pecuniary interest in any Subsidiary or any
Person with whom the Company or any Subsidiary does business or is in privity of
contract with, other than, in each case, indirectly through the ownership by
such individuals of shares of Common Stock.
Broadband
Capital Management LLC
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& ▇▇▇▇▇▇▇, LLC
August
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(j) Each
of the Company and the Subsidiaries has been duly incorporated, formed or
organized, and validly exists as a corporation, partnership or limited liability
company in good standing under the laws of its jurisdiction of incorporation,
formation or organization. Each of the Company and the Subsidiaries
has all requisite power and authority to carry on its business as it is
currently being conducted and as described in the Prospectus, and to own, lease
and operate its respective properties. Each of the Company and the
Subsidiaries is duly qualified to do business and is in good standing as a
foreign corporation, partnership or limited liability company in each
jurisdiction in which the character or location of its properties (owned, leased
or licensed) or the nature or conduct of its business makes such qualification
necessary, except, in each case, for those failures to be so qualified or in
good standing which (individually and in the aggregate) could not reasonably be
expected to have a material adverse effect on: (i) the business, condition
(financial or otherwise), results of operations, shareholders’ equity,
properties or prospects of the Company and the Subsidiaries, taken as a whole;
(ii) the long-term debt or capital stock of the Company or any Subsidiary; or
(iii) the Offering or consummation of any of the other transactions contemplated
by this Agreement, the Registration Statement or the Prospectus (any such effect
being a “Material Adverse
Effect”).
(k) Neither
the Company nor any Subsidiary: (i) is in violation of its certificate or
articles of incorporation, by-laws, certificate of formation, limited liability
company agreement, joint venture agreement, partnership agreement or other
organizational documents, (ii) is in default under, and no event has occurred
which, with notice or lapse of time or both, would constitute a default under or
result in the creation or imposition of any Lien upon any of its property or
assets pursuant to, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by which it is bound or
to which any of its property or assets is subject or (iii) is in violation in
any respect of any law, rule, regulation, ordinance, directive, judgment, decree
or order of any judicial, regulatory or other legal or governmental agency or
body, foreign or domestic, except (in the case of clause (ii) above) for any
lien, charge or encumbrance disclosed in the Registration Statement and the
Prospectus.
(l) The
Company, through its wholly owned Subsidiaries, Ally Profit Investments Limited,
corporation organized under the laws of the British Virgin Islands, and Lihua
Holdings Limited, a corporation organized under the laws of Hong Kong, owns 100%
of the Subsidiaries. The Subsidiaries are corporations organized
under the laws of the People’s Republic of China (“PRC”) and operates in
compliance with all the laws of regulations of the PRC.
(m) The
Company has full right, power and authority to execute and deliver this
Agreement and all other agreements, documents, certificates and instruments
required to be delivered pursuant to this Agreement. The Company has
duly and validly authorized this Agreement and each of the transactions
contemplated by this Agreement. This Agreement has been duly and
validly executed and delivered by the Company and constitutes the legal, valid
and binding obligation of the Company and is enforceable against the Company in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally and except as enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
Broadband
Capital Management LLC
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& ▇▇▇▇▇▇▇, LLC
August
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(n) The
execution, delivery, and performance of this Agreement and all other agreements,
documents, certificates and instruments required to be delivered pursuant to
this Agreement, and consummation of the transactions contemplated by this
Agreement do not and, to the knowledge of the Company, will not: (i) conflict
with, require consent under or result in a breach of any of the terms and
provisions of, or constitute a default (or an event which with notice or lapse
of time, or both, would constitute a default) under, or result in the creation
or imposition of any Lien upon any property or assets of the Company or any
Subsidiary pursuant to, any indenture, mortgage, deed of trust, loan agreement
or other agreement, instrument, franchise, license or permit to which the
Company or any Subsidiary is a party or by which the Company or any Subsidiary
or their respective properties, operations or assets may be bound or (ii)
violate or conflict with any provision of the certificate or articles of
incorporation, by-laws, certificate of formation, limited liability company
agreement, partnership agreement or other organizational documents of the
Company or any Subsidiary, or (iii) violate or conflict with any law, rule,
regulation, ordinance, directive, judgment, decree or order of any judicial,
regulatory or other legal or governmental agency or body, domestic or
foreign.
(o) Each
of the Company and the Subsidiaries has all material consents, approvals,
authorizations, orders, registrations, qualifications, licenses, filings and
permits of, with and from all judicial, regulatory and other legal or
governmental agencies and bodies and all third parties, foreign and domestic
(collectively, the “Consents”), to own, lease and
operate its properties and conduct its business as it is now being conducted and
as disclosed in the Registration Statement and the Prospectus, and each such
Consent is valid and in full force and effect. Neither the Company
nor any Subsidiary has received notice of any investigation or proceedings which
results in or, if decided adversely to the Company or any Subsidiary, could
reasonably be expected to result in, the revocation of, or imposition of a
materially burdensome restriction on, any Consent. No Consent
contains a materially burdensome restriction not adequately disclosed in the
Registration Statement and the Prospectus.
(p) Each
of the Company and the Subsidiaries is in compliance with all applicable laws,
rules, regulations, ordinances, directives, judgments, decrees and orders,
foreign and domestic. Neither the Company, nor any of its Affiliates
(within the meaning of Rule 144 under the Securities Act) (“Affiliates”) has received any
notice or other information from any regulatory or other legal or governmental
agency relating to any default or potential decertification by the Company, or
any of its Affiliates.
Broadband
Capital Management LLC
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& ▇▇▇▇▇▇▇, LLC
August
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(q) No
Consent of, with or from any judicial, regulatory or other legal or governmental
agency or body or any third party, foreign or domestic is required for the
execution, delivery and performance of this Agreement, or consummation of each
of the transactions contemplated by this Agreement, including the issuance, sale
and delivery of the Securities to be issued, sold and delivered hereunder,
except the registration under the Securities Act of the Securities, which has
become effective, and such Consents as may be required under state securities or
blue sky laws or the by-laws and rules of the NYSE AMEX LLC (“NYSE AMEX”), where the Common
Stock has been approved for listing and the Financial Industry
Regulatory Authority, Inc. (“FINRA”) in connection with the
purchase and distribution of the Securities by the Underwriters, each of which
has been obtained and is in full force and effect.
(r) Except
as disclosed in the Registration Statement and the Prospectus, there is no
judicial, regulatory, arbitral or other legal or governmental proceeding or
other litigation or arbitration, domestic or foreign, pending to which the
Company or any Subsidiary is a party or of which any property, operations or
assets of the Company or any Subsidiary is the subject which, individually or in
the aggregate, if determined adversely to the Company or any Subsidiary, could
reasonably be expected to have a Material Adverse Effect. To the
Company’s knowledge, no such proceeding, litigation or arbitration is threatened
or contemplated; and the defense of all such proceedings, litigation and
arbitration against or involving the Company or any Subsidiary could not
reasonably be expected to have a Material Adverse Effect.
(s) The
financial statements, including the notes thereto, and the supporting schedules
included in the Registration Statement and the Prospectus present fairly the
financial position as of the dates indicated and the cash flows and results of
operations for the periods specified of the Company and its consolidated
Subsidiaries. Except as otherwise stated in the Registration
Statement and the Prospectus, said financial statements have been prepared in
conformity with United States generally accepted accounting principles applied
on a consistent basis throughout the periods involved. The supporting
schedules included in the Registration Statement and the Prospectus present
fairly the information required to be stated therein. No other
financial statements or supporting schedules are required to be included or
incorporated by reference in the Registration Statement. The other
financial and statistical information included in the Registration Statement and
the Prospectus present fairly the information included therein and have been
prepared on a basis consistent with that of the financial statements that are
included in the Registration Statement and the Prospectus and the books and
records of the respective entities presented therein.
(t) There
are no pro forma or as adjusted financial statements which are required to be
included in the Registration Statement and the Prospectus in accordance with
Regulation S-X which have not been included as so required. The pro
forma and pro forma as adjusted financial information included in the
Registration Statement and the Prospectus has been properly compiled and
prepared in accordance with the applicable requirements of the Securities Act
and the Rules and Regulations and include all adjustments necessary to present
fairly in accordance with generally accepted accounting principles the pro forma
and as adjusted financial position of the respective entity or entities
presented therein at the respective dates indicated and their cash flows and the
results of operations for the respective periods specified. The
assumptions used in preparing the pro forma and pro forma as adjusted financial
information included in the Registration Statement and the Prospectus provide a
reasonable basis for presenting the significant effects directly attributable to
the transactions or events described therein. The related pro forma
and pro forma as adjusted adjustments give appropriate effect to those
assumptions; and the pro forma and pro forma as adjusted financial information
reflect the proper application of those adjustments to the corresponding
historical financial statement amounts.
Broadband
Capital Management LLC
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& ▇▇▇▇▇▇▇, LLC
August
[ ], 2009
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(u) The
statistical, industry-related and market-related data included in the
Registration Statement and the Prospectus are based on or derived from sources
which the Company reasonably and in good faith believes are reliable and
accurate, and such data agree with the sources from which they are
derived.
(v) The
Company is subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act and files reports with the Commission on the ▇▇▇▇▇
system. The Common Stock is registered pursuant to Section 12(b) or
12(g) of the Exchange Act and the outstanding shares of Common Stock are, and
the Shares and Representatives’ Shares will be as of the Closing Date, listed on
the NYSE AMEX, the New York Stock Exchange, or the NASDAQ. The
Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
de-listing the Common Stock from the NYSE AMEX, nor has the Company received any
notification that the Commission or NYSE AMEX is contemplating terminating such
registration or listing.
(w) The
Company and the Subsidiaries maintain a system of internal accounting and other
controls sufficient to provide reasonable assurances that: (i) transactions are
executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with United States generally accepted accounting
principles and to maintain accountability for assets, (iii) access to assets is
permitted only in accordance with management’s general or specific
authorization, and (iv) the recorded accounting for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(x) The
Company’s Board of Directors has validly appointed an audit committee whose
composition satisfies the requirements of Section 803 of the NYSE AMEX
Company Guide and the Board of Directors and/or audit committee has adopted a
charter that satisfies the requirements of Section 801 through 803 of the NYSE
AMEX Company Guide. The audit committee has reviewed the adequacy of
its charter within the past twelve months. Neither the Board of Directors
nor the audit committee has been informed, nor is any director of the Company
aware, of: (i) any significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the Company’s ability to record, process,
summarize and report financial information; or (ii) any fraud, whether or not
material, that involves management or other employees who have a significant
role in the Company’s internal control over financial reporting.
(y) Neither
the Company nor any of its Affiliates has taken, directly or indirectly, any
action which constitutes or is designed to cause or result in, or which could
reasonably be expected to constitute, cause or result in, the stabilization or
manipulation of the price of any security to facilitate the sale or resale of
the Securities.
Broadband
Capital Management LLC
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& ▇▇▇▇▇▇▇, LLC
August
[ ], 2009
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(z) Neither
the Company nor any of its Affiliates has, prior to the date hereof, made any
offer or sale of any securities which are required to be “integrated” pursuant
to the Securities Act or the Rules and Regulations with the offer and sale of
the Securities pursuant to the Registration Statement. Except as
disclosed in the Registration Statement, the Prospectus or in any public filings
relating to the Company filed with the Commission, neither Company nor any of
its Affiliates has sold or issued any Relevant Security during the six-month
period preceding the date of the Prospectus, including but not limited to any
sales pursuant to Rule 144A or Regulation D or S under the Securities Act, other
than shares of Common Stock issued pursuant to employee benefit plans, qualified
stock option plans or the employee compensation plans or pursuant to outstanding
options, rights or warrants as described in the Registration Statement and the
Prospectus.
(aa) All
information contained in the questionnaires completed by each of the Company’s
officers and directors immediately prior to the Offering and provided to the
Representatives as well as the biographies of such individuals in the
Registration Statement is true and correct in all material respects and the
Company has not become aware of any information which would cause the
information disclosed in the questionnaires completed by the directors and
officers to become inaccurate and incorrect.
(bb) No
director or officer of the Company is subject to any non-competition agreement
or non-solicitation agreement with any employer or prior employer which could
materially affect his ability to be and act in his respective capacity of the
Company.
(cc) Except
as disclosed in the Registration Statement and the Prospectus, no holder of any
Relevant Security has any rights to require registration of any Relevant
Security as part or on account of, or otherwise in connection with, the offer
and sale of the Securities contemplated hereby, and any such rights so disclosed
have either been fully complied with by the Company or effectively waived by the
holders thereof, and any such waivers remain in full force and
effect.
(dd) The
documents, exhibits or other materials incorporated or deemed to be incorporated
by reference in the Prospectus, at the time they were or hereafter are filed
with the Commission, complied and will comply in all material respects with the
requirements of the Securities Act, the Exchange Act and the Rules and
Regulations, and, when read together with the other information in the
Prospectus, do not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(ee)
The conditions for use of Form S-1 to register the Offering under the
Securities Act, as set forth in the General Instructions to such Form, have been
satisfied.
Broadband
Capital Management LLC
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& ▇▇▇▇▇▇▇, LLC
August
[ ], 2009
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(ff) The
Company is not and, at all times up to and including consummation of the
transactions contemplated by this Agreement, and after giving effect to
application of the net proceeds of the Offering, will not be, subject to
registration as an “investment company” under the Investment Company Act of
1940, as amended, and is not and will not be an entity “controlled” by an
“investment company” within the meaning of such act.
(gg) There
are no contracts or other documents (including, without limitation, any voting
agreement), which are required to be described in the Registration Statement and
the Prospectus or filed as exhibits to the Registration Statement by the
Securities Act, the Exchange Act or the Rules and Regulations and which have not
been so described, filed or incorporated by reference.
(hh)
No relationship, direct or
indirect, exists between or among any of the Company or any Affiliate of the
Company, on the one hand, and any director, officer, shareholder, customer or
supplier of the Company or any affiliate of the Company, on the other hand,
which is required by the Securities Act, the Exchange Act or the Rules and
Regulations to be described in the Registration Statement or the Prospectus
which is not so described and described as required. There are no
outstanding loans, advances (except normal advances for business expenses in the
ordinary course of business) or guarantees of indebtedness by the Company to or
for the benefit of any of the officers or directors of the Company or any of
their respective family members, except as disclosed in the Registration
Statement and the Prospectus. The Company is not in violation of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (“Sarb-Ox”), directly or indirectly, including
through a Subsidiary (other than as permitted under the Sarb-Ox for depositary
institutions), extended or maintained credit, arranged for the extension of
credit, or renewed an extension of credit, in the form of a personal loan to or
for any director or executive officer of the Company.
(ii) The
Company is in material compliance with the provisions of Sarb-Ox and the Rules
and Regulations promulgated thereunder and related or similar rules and
regulations promulgated by NYSE AMEX or any other governmental or self
regulatory entity or agency, except for such violations which, singly or in the
aggregate, would not have a Material Adverse Effect. Without limiting
the generality of the foregoing: (i) all members of the Company’s board of
directors who are required to be “independent” (as that term is defined under
applicable laws, rules and regulations), including, without limitation, all
members of the audit committee of the Company’s board of directors, meet the
qualifications of independence as set forth under applicable laws, rules and
regulations and (ii) the audit committee of the Company’s board of directors has
at least one member who is an “audit committee financial expert” (as that term
is defined under applicable laws, rules and regulations).
(jj) Except
as disclosed in the Registration Statement and the Prospectus, there are no
contracts, agreements or understandings between the Company and any Person that
would give rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder’s fee or other like payment in connection with the
transactions contemplated by this Agreement or, to the Company’s knowledge, any
arrangements, agreements, understandings, payments or issuance with respect to
the Company or any of its officers, directors, shareholders, partners,
employees, Subsidiaries or Affiliates that may affect the Underwriters’
compensation as determined by FINRA.
Broadband
Capital Management LLC
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& ▇▇▇▇▇▇▇, LLC
August
[ ], 2009
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(kk) The
Company and each Subsidiary owns or leases all such properties as are necessary
to the conduct of its business as presently operated and as proposed to be
operated as described in the Registration and the Prospectus. The
Company and the Subsidiaries have good and marketable title in fee simple to all
real property and good and marketable title to all personal property owned by
them, in each case free and clear of all Liens except such as are described in
the Registration Statement and the Prospectus or such as do not (individually or
in the aggregate) materially affect the business or prospects of the Company or
any of the Subsidiaries. Any real property and buildings held under
lease or sublease by the Company and the Subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material to, and do not interfere with, the use made and proposed to be made of
such property and buildings by the Company and the
Subsidiaries. Neither the Company nor any Subsidiary has received any
notice of any claim adverse to its ownership of any real or personal property or
of any claim against the continued possession of any real property, whether
owned or held under lease or sublease by the Company or any
Subsidiary.
(ll) The
Company and each Subsidiary: (i) owns or possesses adequate right to use all
patents, patent applications, trademarks, service marks, trade names, trademark
registrations, service ▇▇▇▇ registrations, copyrights, licenses, formulae,
customer lists, and know-how and other intellectual property (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures, “Intellectual Property”)
necessary for the conduct of their respective businesses as being conducted and
as described in the Registration Statement and Prospectus and (ii) have no
knowledge that the conduct of their respective businesses do not or will not
conflict with, and they have not received any notice of any claim of conflict
with, any such right of others. To the Company’s knowledge, all
material technical information developed by and belonging to the Company or any
Subsidiary which has not been patented (including, without limitation, the
Internet-based, proprietary referral system referred to in the Prospectus) has
been kept confidential so as, among other things, all such information may be
deemed proprietary to the Company. Except as set forth in the
Registration Statement, the Prospectus or the Company Filings (as defined
below), neither the Company nor any Subsidiary has granted or assigned to any
other Person any right to sell the current products and services of the Company
and its Subsidiaries or those products and services described in the
Registration Statement and Prospectus. To the Company’s best
knowledge, there is no infringement by third parties of any such Intellectual
Property; there is no pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by others challenging the Company’s or any
Subsidiary’s rights in or to any such Intellectual Property, and the Company is
unaware of any facts which would form a reasonable basis for any such claim; and
there is no pending or, to the Company’s knowledge, threatened action, suit,
proceeding or claim by others that the Company or any Subsidiary infringes or
otherwise violates any patent, trademark, copyright, trade secret or other
proprietary rights of others, and the Company is unaware of any other fact which
would form a reasonable basis for any such claim. As used herein, the
term “Company Filings”
means all of the Company’s filings with the Commission prior to the date hereof
via ▇▇▇▇▇.
Broadband
Capital Management LLC
▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, LLC
August
[ ], 2009
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(mm)
The agreements and documents described in the Registration Statement, and the
Prospectus conform to the descriptions thereof contained therein and there are
no agreements or other documents required to be described in the Registration
Statement or the Prospectus or to be filed with the Commission as exhibits to
the Registration Statement, that have not been so described or
filed. Each agreement or other instrument (however characterized or
described) to which the Company is a party or by which its property or business
is or may be bound or affected and (i) that is referred to in the Registration
Statement or attached as an exhibit thereto, or (ii) is material to the
Company’s business, has been duly and validly executed by the Company, is in
full force and effect in all material respects and is enforceable against the
Company and, to the Company’s knowledge, the other parties thereto, in
accordance with its terms, except (x) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally, (y) as enforceability of any indemnification or contribution
provision may be limited under the foreign, federal and state securities laws,
and (z) that the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought, and
none of such agreements or instruments has been assigned by the Company, and
neither the Company nor, to the Company’s knowledge, any other party is in
breach or default thereunder and, to the Company’s knowledge, no event has
occurred that, with the lapse of time or the giving of notice, or both, would
constitute a breach or default thereunder. To the Company’s
knowledge, performance by the Company of the material provisions of such
agreements or instruments will not result in a violation of any existing
applicable law, rule, regulation, judgment, order or decree of any governmental
agency or court, domestic or foreign, having jurisdiction over the Company or
any of its assets or businesses, including, without limitation, those relating
to environmental laws and regulations.
(nn) No
securities of the Company have been sold by the Company or by or on behalf of,
or for the benefit of, any person or persons controlling, controlled by, or
under common control with the Company since the date of the Company’s formation,
except as disclosed in the Registration Statement.
(oo) The
disclosures in the Registration Statement, the Sale Preliminary Prospectus and
the Prospectus concerning the effects of foreign, federal, state and local
regulation on the Company’s business as currently contemplated are correct in
all material respects and do not omit to state a material fact necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading.
Broadband
Capital Management LLC
▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, LLC
August
[ ], 2009
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(pp) Each
of the Company and the Subsidiaries has accurately prepared and timely filed all
federal, state, foreign and other tax returns that are required to be filed by
it and has paid or made provision for the payment of all taxes, assessments,
governmental or other similar charges, including without limitation, all sales
and use taxes and all taxes which the Company or any Subsidiary is obligated to
withhold from amounts owing to employees, creditors and third parties, with
respect to the periods covered by such tax returns (whether or not such amounts
are shown as due on any tax return). No deficiency assessment with
respect to a proposed adjustment of the Company’s or any Subsidiary’s federal,
state, local or foreign taxes is pending or, to the Company’s knowledge,
threatened. The accruals and reserves on the books and records of the
Company and the Subsidiaries in respect of tax liabilities for any taxable
period not finally determined are adequate to meet any assessments and related
liabilities for any such period and, since the date of the Company’s most recent
audited financial statements, the Company and the Subsidiaries have not incurred
any liability for taxes other than in the ordinary course of its
business. There is no tax lien, whether imposed by any federal,
state, foreign or other taxing authority, outstanding against the assets,
properties or business of the Company or any Subsidiary.
(qq) No
labor disturbance by the employees of the Company or any Subsidiary currently
exists or, to the Company’s knowledge, is likely to occur.
(rr)
The Company and each Subsidiary have at all times operated
their respective businesses in material compliance with all Environmental Laws,
and no material expenditures are or will be required in order to comply
therewith. Neither the Company nor any Subsidiary has received any
notice or communication that relates to or alleges any actual or potential
violation or failure to comply with any Environmental Laws that will result in a
Material Adverse Effect. As used herein, the term “Environmental Laws” means all
applicable laws and regulations, including any licensing, permits or reporting
requirements, and any action by a federal state or local government entity
pertaining to the protection of the environment, protection of public health,
protection of worker health and safety, or the handling of hazardous materials,
including without limitation, the Clean Air Act, 42 U.S.C. § 7401, et seq., the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. § 9601, et seq., the Federal Water Pollution Control Act, 33 U.S.C. §
1321, et seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 1801, et
seq., the Resource Conservation and Recovery Act, 42 U.S.C. § 690-1, et seq.,
and the Toxic Substances Control Act, 15 U.S.C. § 2601, et seq. or similar laws
and regulations, to the extent applicable, under the Peoples Republic of China
(“PRC”)
(ss) Except
as set forth in the Registration Statement, the Prospectus or the Company
Filings, neither the Company nor any Subsidiary is a party to an “employee
benefit plan,” as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974 (“ERISA”) which: (i) is subject
to any provision of ERISA and (ii) is or was at any time maintained,
administered or contributed to by the Company or any Subsidiary and covers any
employee or former employee of the Company or any Subsidiary or any ERISA
Affiliate (as defined hereafter). These plans are referred to
collectively herein as the “Employee
Plans.” For purposes of this Section, “ERISA Affiliate” of any person
or entity means any other person or entity which, together with that person or
entity, could be treated as a single employer under Section 414(m) of the
Internal Revenue Code of 1986, as amended (the “Code”), or is an “affiliate,”
whether or not incorporated, as defined in Section 407(d)(7) of ERISA, of the
person or entity.
Broadband
Capital Management LLC
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& ▇▇▇▇▇▇▇, LLC
August
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(tt) The
Registration Statement and the Prospectus identify each employment, severance or
other similar agreement, arrangement or policy and each material plan or
arrangement providing for insurance coverage (including any self-insured
arrangements), workers’ compensation, disability benefits, severance benefits,
supplemental unemployment benefits, vacation benefits, retirement benefits or
for deferred compensation, profit-sharing, bonuses, stock options, stock
appreciation or other forms of incentive compensation, or post-retirement
insurance, compensation or benefits which: (i) is not an Employee Plan, (ii) is
entered into, maintained or contributed to, as the case may be, by the Company
or any Subsidiary or any of their respective ERISA Affiliates, and (iii) covers
any employee or former employee of the Company or any Subsidiary or any of their
respective ERISA Affiliates. These contracts, plans and arrangements
are referred to collectively in this Agreement as the “Benefit Arrangements.” Each
Benefit Arrangement has been maintained in substantial compliance with its terms
and with requirements prescribed by any and all statutes, orders, rules and
regulations that are applicable to that Benefit Arrangement.
(uu) Except
as set forth in the Registration Statement, the Prospectus or the Company
Filings, there is no liability in respect of post-retirement health and medical
benefits for retired employees of the Company or any Subsidiary or any of their
respective ERISA Affiliates other than medical benefits required to be continued
under applicable law, determined using assumptions that are reasonable in the
aggregate, over the fair market value of any fund, reserve or other assets
segregated for the purpose of satisfying such liability (including for such
purposes any fund established pursuant to Section 40 1(h) of the
Code). With respect to any of the Company’s or any Subsidiaries’
Employee Plans which are “group health plans” under Section 4980B of the Code
and Section 607(1) of ERISA, there has been material compliance with all
requirements imposed there under such that the Company or any Subsidiary or
their respective ERISA Affiliates have no (and will not incur any) loss,
assessment, tax penalty, or other sanction with respect to any such
plan.
(vv) Except
for the Company’s Controller and Chief Accounting Officer as of the Execution
Date, neither the Company nor any Subsidiary is a party to or subject to any
employment contract or arrangement providing for annual future compensation, or
the opportunity to earn annual future compensation (whether through fixed
salary, bonus, commission, options or otherwise) of more than $120,000 to any
officer, consultant, director or employee.
(ww)
The execution of this Agreement, or consummation of the Offering does not
constitute a triggering event under any Employee Plan or any other employment
contract, whether or not legally enforceable, which (either alone or upon the
occurrence of any additional or subsequent event) will or may result in any
payment (of severance pay or otherwise), acceleration, increase in vesting, or
increase in benefits to any current or former participant, employee or director
of the Company or any Subsidiary other than an event that is not material to the
financial condition or business of the Company or any Subsidiary, either
individually or taken as a whole.
Broadband
Capital Management LLC
▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, LLC
August
[ ], 2009
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(xx) No
“prohibited transaction” (as defined in either Section 406 of the ERISA or
Section 4975 of Code), “accumulated funding deficiency” (as defined in Section
302 of ERISA) or other event of the kind described in Section 4043(b) of ERISA
(other than events with respect to which the 30-day notice requirement under
Section 4043 of ERISA has been waived) has occurred with respect to any employee
benefit plan for which the Company or any Subsidiary would have any liability;
each employee benefit plan of the Company or any Subsidiary is in compliance in
all material respects with applicable law, including (without limitation) ERISA
and the Code; the Company has not incurred and does not expect to incur
liability under Title IV of ERISA with respect to the termination of, or
withdrawal from any “pension plan”; and each employee benefit plan of the
Company or any Subsidiary that is intended to be qualified under Section 401(a)
of the Code is so qualified and nothing has occurred, whether by action or by
failure to act, which could cause the loss of such qualification.
(yy) Each of the Company and the Subsidiaries, are in
compliance with the requirements of the insurance laws and regulations of their
respective states of incorporation or organization and the insurance laws and
regulations of other jurisdictions which are applicable to the Company or such
Subsidiaries, and each have filed all notices, reports, documents or other
information required to be filed thereunder, except where the failure to comply
with such requirement could not reasonably be expected to have a Material
Adverse Effect.
(zz) Neither
the Company, any Subsidiary nor, to the Company’s knowledge, any of their
respective employees or agents has at any time during the last five (5) years:
(i) made any unlawful contribution to any candidate for foreign office, or
failed to disclose fully any contribution in violation of law, or (ii) made any
payment to any federal or state governmental officer or official, or other
Person charged with similar public or quasi-public duties, other than payments
that are not prohibited by the laws of the United States of any jurisdiction
thereof.
(aaa) The Company has not offered, or caused the Underwriters
to offer, the Firm Shares to any Person or entity with the intention of
unlawfully influencing: (i) a customer or supplier of the Company or any
Subsidiary to alter the customer’s or
supplier’s level or type of business with the Company or any
Subsidiary or (ii) a journalist or publication to write or publish favorable
information about the Company, any Subsidiary or its products or
services.
(bbb)
The Company is in compliance with all applicable Chinese and other foreign and
U.S. laws, rules, regulations, ordinances, directives, judgments, decrees and
orders (including, without limitation, all securities and tax laws, rules and
regulations of the Country of China), except for such non-compliance as would
not have a Material Adverse Effect. As of the date hereof and as of
the Closing Date, and except as contemplated by this Agreement, the Company does
not operate within the jurisdiction of United States or any state or territory
thereof in such a manner so as to subject the Company or its operations or
businesses to registration as a foreign company doing business in any state
within the United States or to any of the following laws in any material
respect: (i) the Bank Secrecy Act, as amended, (ii) the Uniting and
Strengthening of America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001, as amended, (iii) the Foreign Corrupt
Practices Act of 1977, as amended, (iv) the Currency and Foreign Transactions
Reporting Act of 1970, as amended, (v) the Employee Retirement Income Security
Act of 1974, as amended, (vi) the Money Laundering Control Act of 1986, as
amended (vii) the rules and regulations promulgated under any such law, or any
successor law, or any judgment, decree or order of any applicable administrative
or judicial body relating to such law and (viii) any corresponding law, rule,
regulation, ordinance, judgment, decree or order of any state or territory of
the United States or any administrative or judicial body
thereof.
Broadband
Capital Management LLC
▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, LLC
August
[ ], 2009
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(ccc)
The operations of the Company are and have been conducted at all times in
compliance with applicable financial record keeping and reporting requirements
and money laundering statutes of the PRC and, to the Company’s knowledge, all
other jurisdictions to which the Company is subject, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any applicable governmental agency (collectively,
the “Money Laundering
Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
with respect to the Money Laundering Laws is pending or, to the best knowledge
of the Company, threatened.
(ddd) The
Company had at the date or dates indicated in each of the Registration Statement
and the Prospectus, as the case may be, duly authorized, issued and outstanding
capitalization as set forth in the Registration Statement and the
Prospectus. Based on the assumptions stated in the Registration
Statement and the Prospectus, the Company will have on the Closing Date the
adjusted stock capitalization set forth therein. Except as set forth
in, or contemplated by, the Registration Statement and the Prospectus, on the
Effective Date and on the Closing Date, there will be no options, warrants, or
other rights to purchase or otherwise acquire any authorized, but unissued
Common Stock or any security convertible into Common Stock, or any contracts or
commitments to issue or sell Common Stock or any such options, warrants, rights
or convertible securities.
(eee) Except
as set forth in the Registration Statement and the Prospectus, no holders of any
securities of the Company or any rights exercisable for or convertible or
exchangeable into securities of the Company have the right to require the
Company to register any such securities of the Company under the Act or to
include any such securities in a registration statement to be filed by the
Company.
(fff) Except
as set forth in the Registration Statement and the Prospectus, there are no
outstanding loans or indebtedness of the Company and the
Subsidiaries.
(ggg) The
description of the Company and the Subsidiaries business and products as set
forth in the Registration Statement and Prospectus, and the description of such
in the Registration Statement and Prospectus do not contain any material
omissions or puffery that would make the description of the Company’s business
and/or products false or misleading.
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(hhh) Other
than as set forth in the Registration Statement and Prospectus, there are no
related party transactions between the Company, the Subsidiaries and any related
party.
(iii) Neither
the Company nor, to the knowledge of the Company, any director, officer, agent,
employee or affiliate of the Company (as such term is defined under Rule 144
under the Securities Act, an “Affiliate”) is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”); and the Company will
not directly or indirectly use the proceeds of the offering, or lend, contribute
or otherwise make available such proceeds to any joint venture partner or other
person or entity, for the purpose of
financing the activities of any person currently subject
to any U.S. sanctions administered by OFAC.
(jjj) As
used in this Agreement, references to matters being “material” with respect to the
Company or its Subsidiaries shall mean a material event, change, condition,
status or effect related to the condition (financial or otherwise), properties,
assets (including intangible assets), liabilities, business, prospects,
operations or results of operations of the Company or the applicable
Subsidiaries, either individually or taken as a whole, as the context
requires.
(kkk)
As used in this Agreement, the term “knowledge of the Company” (or
similar language) shall mean the knowledge of the officers and directors of the
Company and the applicable Subsidiaries who are named in the Prospectus, with
the assumption that such officers and directors shall have made reasonable and
diligent inquiry of the matters presented (with reference to what is customary
and prudent for the applicable individuals in connection with the discharge by
the applicable individuals of their duties as officers, directors or managers of
the Company or the applicable Subsidiaries).
Any
certificate signed by or on behalf of the Company and delivered to the
Underwriters or to Ellenoff ▇▇▇▇▇▇▇▇ & Schole LLP (“Underwriters’ Counsel”) shall
be deemed to be a representation and warranty by the Company to each Underwriter
listed on Schedule
A hereto as to the matters covered thereby.
2.2 Representations of the
Selling Stockholder. The Selling Stockholder represents, warrants and
agrees that:
(a) neither
the Selling Stockholder nor any person acting on behalf of the Selling
Stockholder (other than, if applicable, the Company and the Underwriters) has
used or referred to any “free writing prospectus” (as defined in Rule 405),
relating to the Common Stock;
(b) the
Selling Stockholder has good and valid title to the shares of Common Stock to be
sold by the Selling Stockholder hereunder on such Closing Date, or any
Additional Closing Date as applicable, free and clear of all liens,
encumbrances, equities or claims under the Custody Agreement, as hereinafter
defined.
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(c) the
Common Stock to be sold by the Selling Stockholder hereunder, which is
represented by the certificates held in custody for the Selling Stockholder, is
subject to the interest of the Underwriters thereunder, and the obligations of
the Selling Stockholder hereunder shall not be terminated by any act of the
Selling Stockholder, by operation of law, by the death or incapacity of any
individual Selling Stockholder or, in the case of a trust, by the death or
incapacity of any executor or trustee or the termination of such trust, or the
occurrence of any other event.
(d) Upon
delivery of the Common Stock to be sold by the Selling Stockholder, payment
therefor pursuant hereto and assuming no Underwriter has notice of any “adverse
claim” (within the meaning of Section 8-102 of the Uniform Commercial Code
(the “UCC”))
(i) the Underwriters shall be “protected purchasers” of such Common Stock
within the meaning of Section 8-303 of the UCC, (ii) under
Section 8-501 of the UCC, the Underwriters will acquire good and valid
title and a valid security entitlement in respect of such Common Stock and
(iii) no action based on any “adverse claim,” within the meaning of Section
8-102 of the UCC, to such Common Stock may be asserted against the Underwriters
with respect to such security entitlement.
(e) The
Selling Stockholder has placed in custody under a custody agreement (the “Custody Agreement” with
American Stock Transfer & Trust Company, as custodian (the “Custodian”), for delivery
under this Agreement, certificates in negotiable form (with signature guaranteed
by a participant in the Securities Transfer Agents Medallion Program, the New
York Stock Exchange Medallion Signature Program or the Stock Exchange Medallion
Program) representing the shares of Common Stock to be sold by the Selling
Stockholder hereunder.
(f)
The Selling Stockholder has duly and irrevocably executed and delivered a power
of attorney (the “Power of
Attorney” appointing
[ ]
as attorney-in-fact, with full power of substitution, and with full authority
(exercisable by any one or more of them) to take such action as may be necessary
or desirable to carry out the provisions of the Custody Agreement on behalf of
the Selling Stockholder in accordance with the provisions of the Custody
Agreement and Power of Attorney.
(g) The
Selling Stockholder has full right, power and authority, corporate or otherwise,
to enter into this Agreement, the Custody Agreement and the Power of
Attorney.
(h) This
Agreement has been duly and validly authorized, executed and delivered by or on
behalf of the Selling Stockholder.
(i) The
Power of Attorney and the Custody Agreement have been duly and validly
authorized, executed and delivered by or on behalf of the Selling Stockholder
and constitute valid and legally binding obligations of the Selling Stockholder
enforceable against the Selling Stockholder in accordance with their terms,
subject to (i) the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally, (ii) general equitable principles
(whether considered in a proceeding in equity or at law) and (iii) an
implied covenant of good faith and fair dealing.
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Capital Management LLC
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(j)
The execution, delivery and
performance of this Agreement, the Custody Agreement and the Power of Attorney
by the Selling Stockholder and the consummation by the Selling Stockholder of
the transactions contemplated hereby and thereby do not and will not
(i) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement, license or other agreement or instrument to which the
Selling Stockholder is a party or by which the Selling Stockholder is bound or
to which any of the property or assets of the Selling Stockholder is subject,
(ii) result in any violation of the provisions of the charter or by-laws
(or similar organizational documents) of the Selling Stockholder,
(iii) result in any violation of the provisions of the deed of trust (or
similar organizational documents) of the Selling Stockholder or (iv) result
in any violation of any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Selling Stockholder or
the property or assets of the Selling Stockholder.
(k) No
consent, approval, authorization or order of, or filing or registration with,
any court or governmental agency or body having jurisdiction over the Selling
Stockholder or the property or assets of the Selling Stockholder is required for
the execution, delivery and performance of this Agreement, the Custody Agreement
or the Power of Attorney by the Selling Stockholder and the consummation by the
Selling Stockholder of the transactions contemplated hereby and thereby, except
for the registration of the Common Stock under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state or foreign securities laws
in connection with the purchase and sale of the Common Stock by the
Underwriters.
(l) The
Registration Statement did not, as of the Effective Date, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; provided that the
representation in this paragraph is limited to statements or omissions made in
reliance upon and in conformity with information relating to such Selling
Stockholder furnished to the Company in writing by such Selling Stockholder
expressly for use in the Registration Statement.
(m) The
Prospectus will not, as of its date and on the applicable Delivery Date, contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that the
representation in this paragraph is limited to statements or omissions made in
reliance upon and in conformity with information relating to such Selling
Stockholder furnished to the Company in writing by such Selling Stockholder
expressly for use in the Prospectus.
(n) The
Selling Stockholder has not taken and will not take, directly or indirectly, any
action that is designed to or that has constituted or that could reasonably be
expected to cause or result in the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the shares of
the Common Stock.
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Capital Management LLC
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(o) The
Selling Stockholder has reviewed this Agreement, the Registration Statement and
the General Disclosure Package and has no reason to believe (i) the
Registration Statement, as of its effective date, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
(ii) the General Disclosure Package, as of the Applicable Time, contained
an untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that no
representation or warranty is made as to information contained in or omitted
from the Registration Statement or Pricing Disclosure Package in reliance upon
and in conformity with the Underwriters’ Information.
(p) Any
certificate signed by any Selling Stockholder and delivered to the
Representatives or Underwriters’ Counsel in connection with the offering of the
Common Stock shall be deemed a representation and warranty by such Selling
Stockholder, as to matters covered thereby, to each Underwriter.
2.3 Free Writing
Prospectus. Additionally, the Company hereby represents,
warrants and covenants as to the following:
(a) Neither:
(i) any Issuer-Represented General Free Writing Prospectus(es) issued at or
prior to the Time of Sale and the Statutory Prospectus, all considered together
(collectively, the “General
Disclosure Package”), nor (ii) any individual Issuer-Represented
Limited-Use Free Writing Prospectus(es) (as defined below), when considered
together with the General Disclosure Package, includes or included as of the
Time of Sale any untrue statement of a material fact or omits or omitted as of
the Time of Sale to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The preceding sentence does not apply to statements in or
omissions from any Statutory Prospectus included in the Registration Statement
or any Issuer-Represented Free Writing Prospectus based upon and in conformity
with written information furnished to the Company by the Representatives
specifically for use therein.
(b) Each
Issuer-Represented Free Writing Prospectus, as of its issue date and at all
subsequent times through the completion of the public offer and sale of the
Securities or until any earlier date that the Company notified or notifies the
Representatives as described in the next sentence, did not, does not and will
not include any information that conflicted, conflicts or will conflict with the
information contained in the Registration Statement, any Statutory Prospectus or
the Prospectus. If at any time following issuance of an
Issuer-Represented Free Writing Prospectus there occurred or occurs an event or
development as a result of which such Issuer-Represented Free Writing Prospectus
conflicted or would conflict with the information contained in the Registration
Statement, any Statutory Prospectus or the Prospectus relating to the Securities
or included or would include an untrue statement of a material fact or omitted
or would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances prevailing at that subsequent time,
not misleading, the Company has notified or will notify promptly the
Representatives so that any use of such Issuer-Represented Free Writing
Prospectus may cease until it is promptly amended or supplemented by the
Company, at its own expense, to eliminate or correct such conflict, untrue
statement or omission. The foregoing two sentences do not apply to
statements in or omissions from any Issuer-Represented Free Writing Prospectus
based upon and in conformity with the Underwriters’
Information.
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Capital Management LLC
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(c) The
Company has not distributed and will not distribute any prospectus or other
offering material in connection with the offering and sale of the Public
Securities other than any Preliminary Prospectus, the General Disclosure Package
or the Prospectus or other materials permitted by the Act to be distributed by
the Company. Unless the Company obtains the prior consent of
Broadband, and except as set forth on Exhibit D attached
hereto, the Company has not made and will not make any offer relating to the
Securities that would constitute an “issuer free writing prospectus,” as defined
in Rule 433 under the Act, or that would otherwise constitute a “free writing
prospectus,” as defined in Rule 405 under the Act, required to be filed with the
Commission. The Company has complied and will comply with the
requirements of Rules 164 and 433 under the Act applicable to any
Issuer-Represented Free Writing Prospectus as of its issue date and at all
subsequent times through the completion of the public offer and sale of the
Securities, including timely filing with the Commission where required,
legending and record keeping. The Company has satisfied and will
satisfy the conditions in Rule 433 under the Act to avoid a requirement to file
with the Commission any electronic road show.
2.4 Free Writing
Prospectus. Each Underwriter agrees that, unless it obtains
the prior written consent of the Company, it will not make any offer relating to
the Securities that would constitute an Issuer-Represented Free Writing
Prospectus (as defined in Section 2.2 hereof) or that would otherwise (without
taking into account any approval, authorization, use or reference thereto by the
Company) constitute a “free writing prospectus” required to be filed by the
Company with the Commission (as defined herein) or retained by the Company under
Rule 433 of the Act (as defined herein); provided that the prior written consent
of the Company hereto shall be deemed to have been given in respect of any
Issuer-Represented General Free Writing Prospectuses (as defined in Section
2.2.5 hereof) referenced on Exhibit D attached
hereto
2.5 Definitions. As used
in this Agreement, the terms set forth below shall have the following
meanings:
(i) “Time of Sale” means 10:00 a.m.
(Eastern time) on the date of this Agreement.
(ii) “Statutory Prospectus” as of
any time means the prospectus that is included in the Registration Statement
immediately prior to that time. For purposes of this definition,
information contained in a form of prospectus that is deemed retroactively to be
a part of the Registration Statement pursuant to Rule 430A shall be considered
to be included in the Statutory Prospectus as of the actual time that form of
prospectus is filed with the Commission pursuant to Rule 424(b) under the
Act.
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Capital Management LLC
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(iii) “Issuer-Represented Free Writing
Prospectus” means any “issuer free writing prospectus,” as defined in
Rule 433 under the Act, relating to the Securities that (A) is required to be
filed with the Commission by the Company, or (B) is exempt from filing pursuant
to Rule 433(d)(5)(i) under the Act because it contains a description of the
Securities or of the offering that does not reflect the final terms or pursuant
to Rule 433(d)(8)(ii) because it is a “bona fide electronic road show,” as
defined in Rule 433 of the Regulations which is made available without
restriction, in each case in the form filed or required to be filed with the
Commission or, if not required to be filed, in the form retained in the
Company’s records pursuant to Rule 433(g) under the Act.
(iv) “Issuer-Represented General Free
Writing Prospectus” means any Issuer-Represented Free Writing Prospectus
that is intended for general distribution to prospective investors.
(v) “Issuer-Represented Limited-Use Free
Writing Prospectus” means any Issuer-Represented Free Writing Prospectus
that is not an Issuer-Represented General Free Writing
Prospectus. The term Issuer-Represented Limited-Use Free Writing
Prospectus also includes any “bona fide electronic road show,” as defined in
Rule 433 of the Regulations, that is made available without restriction pursuant
to Rule 433(d)(8)(ii), even though not required to be filed with the
Commission.
3. Purchase, Sale and Delivery
of the Securities.
(a) On
the basis of the representations, warranties, covenants and agreements herein
contained, but subject to the terms and conditions herein set forth, the Company
agrees to sell to each Underwriter and each Underwriter, severally and not
jointly, agrees to purchase from the Company, at a purchase price per share of
$[X.XX], the number of Firm Shares set forth opposite their respective names on
Schedule A
hereto together with any additional number of Shares which such Underwriter may
become obligated to purchase pursuant to the provisions of Section 10
hereof.
(b) Payment
of the purchase price for the Firm Shares shall be made by wire transfer in
immediately available funds to or as directed by the Company, as the case may be
for the respective Securities which it is offering, upon delivery of
certificates for the Firm Shares to Broadband through the facilities of The
Depository Trust Company for the respective accounts of the several
Underwriters. Certificates for the Firm Shares shall be registered in
such name or names and shall be in such denominations as Broadband may request
at least two (2) business days before the Closing Date. The Company
will permit the Representatives to examine and package such certificates for
delivery at least one (1) full business day prior to the Closing
Date.
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Capital Management LLC
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(c) Payment
of the purchase price for the Option Shares shall be made by wire transfer in
immediately available funds to or as directed by the Selling Stockholder upon
delivery of certificates for the Option Shares to Broadband through the
facilities of The Depository Trust Company for the respective accounts of the
several Underwriters. The date and time, as reasonably determined by
Broadband, when the Option Shares are to be delivered is hereinafter referred to
as an “Additional Closing
Date.” Certificates for the Option Shares shall be registered in such
name or names and shall be in such denominations as the Representatives may
request at least two (2) business days before the Additional Closing
Date. The Company will permit the Representatives to examine and
package such certificates for delivery at least one full business day prior to
the Additional Closing Date.
4. Offering. Upon
authorization of the release of the Firm Shares by Broadband, the Underwriters
propose to offer the Shares for sale to the public upon the terms and conditions
set forth in the Prospectus.
5. Covenants of the
Company. The Company acknowledges, covenants and agrees with
the Underwriters that:
(a) The
Registration Statement and any amendments thereto have been declared effective,
and if Rule 430A is used or the filing of the Prospectus is otherwise required
under Rule 424(b), the Company will file the Prospectus (properly completed if
Rule 430A has been used) pursuant to Rule 424(b) within the prescribed time
period and will provide evidence satisfactory to the Representatives of such
timely filing. The Company will notify the Representatives immediately (and, if
requested by the Representatives, will confirm such notice in writing): (i) when
the Registration Statement and any amendments thereto become effective, (ii) of
any request by the Commission for any amendment of or supplement to the
Registration Statement or the Prospectus or for any additional information,
(iii) of the Company’s intention to file or prepare any supplement or amendment
to the Registration Statement or the Prospectus, (iv) of the mailing or the
delivery to the Commission for filing of any amendment of or supplement to the
Registration Statement or the Prospectus, including but not limited to Rule
462(b) under the Securities Act, (v) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of the initiation, or the threatening, of
any proceedings therefor, it being understood that the Company shall make every
effort to avoid the issuance of any such stop order, (vi) of the receipt of any
comments from the Commission, and (vii) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for that purpose. If the Commission shall propose or enter
a stop order at any time, the Company will make every reasonable effort to
prevent the issuance of any such stop order and, if issued, to obtain the
lifting of such order as soon as possible. The Company will not file
any amendment to the Registration Statement or any amendment of or supplement to
the Prospectus (including the prospectus required to be filed pursuant to Rule
424(b)) that differs from the prospectus on file at the time of the
effectiveness of the Registration Statement or file any document under the
Exchange Act if such document would be deemed to be incorporated by reference
into the Prospectus to which the Representatives shall object in writing after
being timely furnished in advance a copy thereof. The Company will
provide the Representatives with copies of all such amendments, filings and
other documents a sufficient time prior to any filing or other publication
thereof to permit the Representatives a reasonable opportunity to review and
comment thereon.
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(b) The
Company shall comply with the Securities Act, the Exchange Act and all
applicable Rules and Regulations to permit completion of the distribution as
contemplated in this Agreement, the Registration Statement and the
Prospectus. If, at any time when a prospectus relating to the
Securities is required to be delivered under the Securities Act, the Exchange
Act and all applicable Rules and Regulations in connection with the sales of
Shares, any event shall have occurred as a result of which the Prospectus as
then amended or supplemented would, in the judgment of the Underwriters or the
Company, include an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances existing at the time of delivery to
the purchaser, not misleading, or if, to comply with the Securities Act, the
Exchange Act or the Rules and Regulations, it shall be necessary at any time to
amend or supplement the Prospectus or Registration Statement, or to file any
document which is an exhibit to the Registration Statement or the Prospectus or
in any amendment thereof or supplement thereto, the Company will notify the
Representatives promptly and prepare and file with the Commission, subject to
Section 5(a) hereof, an appropriate amendment or supplement (in form and
substance satisfactory to the Representatives) which will correct such statement
or omission or which will effect such compliance and will use its best efforts
to have any amendment to the Registration Statement declared effective as soon
as possible.
(c) The
Company will promptly deliver to the Underwriters and Underwriters’ Counsel a
signed copy of the Registration Statement, as initially filed and all amendments
thereto, including all consents and exhibits filed therewith, and will maintain
in the Company’s files manually signed copies of such documents for at least
five (5) years after the date of filing thereof. The Company will
promptly deliver to each of the Underwriters such number of copies of any
Preliminary Prospectus, the Prospectus, the Registration Statement, and all
amendments of and supplements to such documents, if any, and all documents which
are exhibits to the Registration Statement and Prospectus or any amendment
thereof or supplement thereto, as the Underwriters may reasonably
request. Prior to 10:00 A.M., New York time, on the business day next
succeeding the date of this Agreement and from time to time thereafter, the
Company will furnish the Underwriters with copies of the Prospectus in New York
City in such quantities as the Underwriters may reasonably request.
(d) The
Company consents to the use and delivery of the Preliminary Prospectus by the
Underwriters in accordance with Rule 430 and Section 5(b) of the Securities
Act.
(e) If
the Company elects to rely on Rule 462(b) under the Securities Act, the Company
shall both file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with Rule
111 of the Act by the earlier of: (i) 10:00 p.m., New York City time, on the
date of this Agreement, and (ii) the time that confirmations are given or sent,
as specified by Rule 462(b)(2).
Broadband
Capital Management LLC
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August
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(f)
The Company will use its best efforts, in cooperation
with the Representatives, at or prior to the time of effectiveness of the
Registration Statement, to qualify the Securities for offering and sale under
the securities laws relating to the offering or sale of the Securities of such
jurisdictions, domestic or foreign, as the Representatives may designate and to
maintain such qualification in effect for so long as required for the
distribution thereof; except that in no event shall the Company be obligated in
connection therewith to qualify as a foreign corporation or to execute a general
consent to service of process.
(g) The
Company will make generally available to its security holders and to the
Underwriters as soon as practicable, but in any event not later than twelve (12)
months after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Securities Act), an audited earnings statement of the
Company and the Subsidiaries complying with Section 11(a) of the Securities Act
and the Rules and Regulations (including, at the option of the Company, Rule
158).
(h) Following
the Closing Date, the Company and any of the individuals listed on Schedule B hereto
(the “Lock-Up Parties”)
shall not sell or otherwise dispose of any securities of the Company, whether
publicly or in a private placement during the period that their respective
lock-up agreements are in effect. The Company will deliver to the
Representatives the agreements of Lock-Up Parties to the foregoing effect prior
to the Closing Date, which agreements shall be substantially in the form
attached hereto as Annex II. For purposes of this Section 5, the term
“Fair Market Value”
shall mean the last sale price of the Common Stock, during normal operating
hours, as reported on NYSE AMEX.
(i)
For a period of one (1) year from the effective date of the
Registration Statement, the Company, at its expense, shall provide the
Representatives on a weekly basis with a copy of the Company’s weekly transfer
sheets from the previous week and securities positions listings.
(j)
If the Company fails to maintain the listing of
its Common Stock on a nationally recognized exchange, for a period of two (2)
years from the effective date of the Registration Statement, the Company, at its
expense, shall obtain and keep current a listing in the Standard & Poor’s
Corporation Records Services or the ▇▇▇▇▇’▇ Industrial Manual; provided that
▇▇▇▇▇’▇ OTC Industrial Manual is not sufficient for these purposes.
(k) During
the period of three (3) years from the effective date of the Registration
Statement, the Company will furnish to the Underwriters copies of all reports or
other communications (financial or other) furnished to security holders or from
time to time published or publicly disseminated by the Company, and will deliver
to the Underwriters: (i) as soon as they are available, copies of any reports,
financial statements and proxy or information statements furnished to or filed
with the Commission or any national securities exchange on which any class of
securities of the Company is listed; and (ii) such additional information
concerning the business and financial condition of the Company as the
Representatives may from time to time reasonably request (such financial
information to be on a consolidated basis to the extent the accounts of the
Company and the Subsidiaries are consolidated in reports furnished to its
security holders generally or to the Commission).
Broadband
Capital Management LLC
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(l)
The Company will not issue press
releases or engage in any other publicity, without Broadband’s prior written
consent, for a period ending at 5:00 p.m. Eastern time on the first business day
following the forty-fifth (45th) day following the Closing Date, other than
normal and customary releases issued in the ordinary course of the Company’s
business.
(m) Prior
to the consummation of the Offering, the Company will engage or continue to
engage (for no less than two (2) years from the date of the Closing Date) a
financial public relations firm mutually acceptable to the Company and the
Representatives. The Company further agrees to consult with the
Representatives as is customary within the securities industry prior to
distribution to third parties of any financial information, news releases,
and/or other publicity regarding the Company, its business, or any terms of the
proposed Offering, it being agreed that the Company shall give the
Representatives no less than twelve (12) hours prior notice of any such
distribution and a reasonable opportunity during or prior to such period to
review the contents of the proposed distribution.
(n) The
Company has or will retain Corporate Stock Transfer as transfer agent for the
Securities and shall continue to retain such transfer agent for a period of two
(2) years following the Closing Date.
(o) The
Company will apply the net proceeds from the sale of the Securities as set forth
under the caption “Use of Proceeds” in the Prospectus. Without the
written consent of Broadband, no proceeds of the Offering will be used to pay
outstanding loans from officers, directors or shareholders or to pay any accrued
salaries or bonuses to any employees or former employees.
(p) The
Company will use its best efforts to effect and maintain the listing of the
Securities on the NYSE AMEX for at least three (3) years after the Closing
Date.
(q) The
Company, during the period when the Prospectus is required to be delivered under
the Securities Act or the Exchange Act, will file all documents required to be
filed with the Commission pursuant to the Securities Act, the Exchange Act and
the Rules and Regulations within the time periods required thereby.
(r)
The Company will use its best efforts to do and perform all
things required to be done or performed under this Agreement by the Company
prior to the Closing Date, and to satisfy all conditions precedent to the
delivery of the Firm Shares.
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(s) The
Company will not take, and will cause its Affiliates not to take, directly or
indirectly, any action which constitutes or is designed to cause or result in,
or which could reasonably be expected to constitute, cause or result in, the
stabilization or manipulation of the price of any security to facilitate the
sale or resale of the Securities.
(t) The
Company shall cause to be prepared and delivered to the Representatives, at its
expense, within one (1) business day from the effective date of this Agreement,
an Electronic Prospectus to be used by the Underwriters in connection with the
Offering. As used herein, the term “Electronic Prospectus” means a
form of prospectus, and any amendment or supplement thereto, that meets each of
the following conditions: (i) it shall be encoded in an electronic format,
satisfactory to the Representatives, that may be transmitted electronically by
the other Underwriters to offerees and purchasers of the Securities for at least
the period during which a Prospectus relating to the Securities is required to
be delivered under the Securities Act; (ii) it shall disclose the same
information as the paper prospectus and prospectus filed pursuant to ▇▇▇▇▇,
except to the extent that graphic and image material cannot be disseminated
electronically, in which case such graphic and image material shall be replaced
in the electronic prospectus with a fair and accurate narrative description or
tabular representation of such material, as appropriate; and (iii) it shall be
in or convertible into a paper format or an electronic format, satisfactory to
the Representatives, that will allow recipients thereof to store and have
continuously ready access to the prospectus at any future time, without charge
to such recipients (other than any fee charged for subscription to the Internet
as a whole and for on-line time). The Company hereby confirms that it has
included or will include in the Prospectus filed pursuant to ▇▇▇▇▇ or otherwise
with the Commission and in the Registration Statement at the time it was
declared effective an undertaking that, upon receipt of a request by an investor
or his or her representative within the period when a prospectus relating to the
Securities is required to be delivered under the Securities Act, the Company
shall transmit or cause to be transmitted promptly, without charge, a paper copy
of the Prospectus.
(u) The
Company shall not take any action that would result in the Underwriters or the
Company being required to file with the Commission pursuant to Rule 433(d) under
the Act a Free Writing Prospectus prepared by or on behalf of the Underwriters
that the Underwriters otherwise would not have been required to
file.
(v) For
a period equal to seven years from the
date hereof, the Company will not take any action or actions which may prevent
or disqualify the Company’s use of Form F-1 or F-3 and/or Form S-1 and S-3 (or
other appropriate form) for the registration of the Shares under the
Act.
(w) The
Company shall have filed with the Commission all Issuer-Represented Free Writing
Prospectuses or other information required to be filed by the Company under the
Act and the Regulations.
(x) For
a period of 3 years from the Closing Date the Company agrees to hold all special
and annual meetings of its shareholders within the United
States.
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(y) The
Company acknowledges that the purchasers of the Firm Shares or the Option Shares
in the Offering shall be deemed to be third party beneficiaries of this Section
3.31.
(z) The
Company will reserve and keep available that maximum number of its authorized
but unissued securities which are issuable upon exercise of the Representatives’
Warrants outstanding from time to time.
6. Consideration; Payment of
Expenses.
(a) In
consideration of the services to be provided for hereunder, the Company shall
pay to the Underwriters or their respective designees their pro rata portion
(based on the Securities purchased) of the following compensation with respect
to the Firm Shares which they are offering:
(i) An
underwriting discount of seven percent (7%); and
(ii) An
non-accountable expense allowance equal to one percent (1%) of the gross
proceeds of the Offering.
(b) In
consideration of the services to be provided for hereunder, the Selling
Stockholder shall pay to the Underwriters or their respective designees their
portion, as determined by the Representatives, of an underwriting discount of
seven percent (7%) with respect to the Option Shares:
(c) The
Representatives reserve the right to reduce any item of compensation or adjust
the terms thereof as specified herein in the event that a
determination shall be made by FINRA to the effect that the Underwriters’
aggregate compensation is in excess of FINRA Rules or that the terms thereof
require adjustment.
(d) Whether
or not the transactions contemplated by this Agreement, the Registration
Statement and the Prospectus are consummated or this Agreement is terminated,
the Company hereby agrees to pay all costs and expenses incident to the
performance of its obligations hereunder, including the following:
(i) all
expenses in connection with the preparation, printing, formatting for ▇▇▇▇▇ and
filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and any and all amendments and supplements thereto and the mailing
and delivering of copies thereof to the Underwriters and dealers;
(ii) all
fees and expenses in connection with the filing of Corporate Offerings Business
& Regulatory Analysis (“COBRADesk”) filings with
FINRA;
(iii) all
fees and expenses in connection with filing of the Registration Statement and
Prospectus with the Commission;
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(iv) the
fees, disbursements and expenses of the Company’s counsel and accountants in
connection with the registration of the Securities under the Securities Act and
the Offering;
(v) all
expenses in connection with the qualifications of the Shares for offering and
sale under state or foreign securities or blue sky laws, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with any blue by survey undertaken by such
counsel
(vi) all
fees and expenses in connection with listing the Securities on NYSE
AMEX;
(vii) all
travel expenses of the Company’s officers and employees and any other expense of
the Company incurred in connection with attending or hosting meetings with
prospective purchasers of the Shares (“Road Show
Expenses”);
(viii) any
stock transfer taxes incurred in connection with this Agreement or the
Offering
(ix) the
cost of preparing stock certificates representing the Securities;
(x) the
cost and charges of any transfer agent or registrar for the
Securities;
(xi) any
cost and expenses in conducting satisfactory due diligence investigation and
analysis of the Company’s officers, directors, employees, and affiliates;
and
(xii) all
other costs and expenses incident to the performance of the Company obligations
hereunder which are not otherwise specifically provided for in this Section
6.
(e) In
addition to the costs and expenses set forth in Section 6(c), the Company will
be responsible for the cost of bound volumes of the Offering documents and
commemorative lucite memorabilia, both as may be reasonably requested by the
Representatives.
(f) It
is understood, however, that except as provided in this Section, and Sections 7,
8 and 11 hereof, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel. Notwithstanding anything to the
contrary in this Section 6, in the event that this Agreement is terminated
pursuant to Section 6 or 12(b) hereof, or subsequent to a Material Adverse
Change, the Company will pay all accountable out-of-pocket expenses of the
Underwriters (including but not limited to fees and disbursements of counsel to
the Underwriters) incurred in connection herewith which shall be limited to
expenses which are actually incurred as allowed under FINRA Rule
5110.
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7. Conditions of Underwriters’
Obligations. The obligations of the Underwriters to purchase
and pay for the Firm Shares as provided herein shall be subject to: (i) the
accuracy of the representations and warranties of the Company herein contained,
as of the date hereof and as of the Closing Date (ii) the absence from any
certificates, opinions, written statements or letters furnished to the
Representatives or to Underwriters’ Counsel pursuant to this Section 7 of any
misstatement or omission (iii) the performance by the Company of its obligations
hereunder, and (iv) each of the following additional conditions. For
purposes of this Section 7, the terms “Closing Date” and “Closing” shall refer
to the Closing Date for the Firm Shares, and each of the foregoing and following
conditions must be satisfied as of each Closing.
(a) The
Registration Statement shall have become effective and all necessary regulatory
or listing approvals shall have been received not later than 5:30 P.M., New York
time, on the date of this Agreement, or at such later time and date as shall
have been consented to in writing by the Representatives. If the
Company shall have elected to rely upon Rule 430A under the Securities Act, the
Prospectus shall have been filed with the Commission in a timely fashion in
accordance with the terms hereof and a form of the Prospectus containing
information relating to the description of the Securities and the method of
distribution and similar matters shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period; and, at or prior to
the Closing Date or the actual time of the Closing, no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereof shall have been issued and no proceedings therefor shall have been
initiated or threatened by the Commission.
(b) The
Representatives shall have received (i) the favorable written opinion of Loeb
& Loeb LLP, legal counsel for the Company, dated as of the Closing Date
addressed to the Underwriters in the form attached hereto as Annex I, (ii) the
favorable written opinion of Han Kun Law Offices, legal counsel for the Company
with respect to the laws of the People’s Republic of China dated as of the
Closing Date, addressed to the Underwriters in the form attached hereto as Annex
II, (iii) the favorable opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ legal counsel for the
Company with respect to the laws of the British Virgin Islands attached hereto
as Annex III and (iv) the favorable opinion of ▇▇▇▇▇▇▇▇ legal counsel for the
Company with respect to the laws of Hong Kong attached hereto as Annex
IV.
(c) All
proceedings taken in connection with the sale of the Firm Shares herein
contemplated shall be satisfactory in form and substance to the Representatives
and to Underwriters’ Counsel.
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(d) The
Representatives shall have received a certificate of the Chief Executive Officer
and Chief Financial Officer of the Company, dated as of the Closing Date to the
effect that: (i) the condition set forth in subsection (a) of this Section 7 has
been satisfied, (ii) as of the date hereof and as of the applicable Closing
Date, the representations and warranties of the Company set forth in Sections 1
and 2 hereof are accurate, (iii) as of the applicable Closing Date, all
agreements, conditions and obligations of the Company to be performed or
complied with hereunder on or prior thereto have been duly performed or complied
with, (iv) the Company and the Subsidiaries have not sustained any material loss
or interference with their respective businesses, whether or not covered by
insurance, or from any labor dispute or any legal or governmental proceeding,
(v) no stop order suspending the effectiveness of the Registration Statement or
any post-effective amendment thereof has been issued and no proceedings therefor
have been initiated or threatened by the Commission, (vi) there are no pro forma
or as adjusted financial statements that are required to be included or
incorporated by reference in the Registration Statement and the Prospectus
pursuant to the Rules and Regulations which are not so included or incorporated
by reference and (vii) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus there has
not been any Material Adverse Change or any development involving a prospective
Material Adverse Change, whether or not arising from transactions in the
ordinary course of business.
(e) On
the date of this Agreement and on the Closing Date, the Representatives shall
have received a “cold comfort” letter from ▇▇▇▇ as of the date of the date
of delivery and addressed to the Underwriters and in form and substance
satisfactory to the Representatives and Underwriters’ Counsel, confirming that
they are independent registered public accountants with respect to the Company
and its Subsidiaries within the meaning of the Securities Act, the Rules and
Regulations and the PCAOB, and stating, as of the date of delivery (or, with
respect to matters involving changes or developments since the respective dates
as of which specified financial information is given in the Prospectus, as of a
date not more than five (5) days prior to the date of such letter), the
conclusions and findings of such firm with respect to the financial information
and other matters relating to the Registration Statement covered by such
letter.
(f) Subsequent
to the execution and delivery of this Agreement or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement thereto),
there shall not have been any change in the capital stock or long-term debt of
the Company or any Subsidiary or any change or development involving a change,
whether or not arising from transactions in the ordinary course of business, in
the business, condition (financial or otherwise), results of operations,
shareholders’ equity, properties or prospects of the Company and the
Subsidiaries, taken as a whole, including but not limited to the occurrence of
any fire, flood, storm, explosion, accident, act of war or terrorism or other
calamity, the effect of which, in any such case described above, is, in the sole
judgment of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the Offering on the terms and in
the manner contemplated in the Prospectus (exclusive of any
supplement).
(g) The
Representatives shall have received a lock-up agreement from each Lock-Up Party,
duly executed by the applicable Lock-Up Party, in each case substantially in the
form attached as Annex V.
(h) The
Representatives shall have received a duly executed management confirmation
letter from the Company’s directors and officers relating to certain information
appearing in the Registration Statement, which letter shall be in the form
previously delivered to the Representatives in connection with the filing of the
Preliminary Prospectus.
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(i) The
Securities shall have been approved for quotation on NYSE AMEX.
(j) FINRA
shall have confirmed that it has not raised any objection with respect to the
fairness and reasonableness of the underwriting terms and
arrangements.
(k) No
action shall have been taken and no statute, rule, regulation or order shall
have been enacted, adopted or issued by any federal, state or foreign
governmental or regulatory authority that would, as of the Closing Date, prevent
the issuance or sale of the Securities; and no injunction or order of any
federal, state or foreign court shall have been issued that would, as of the
Closing Date, prevent the issuance or sale of the Securities.
(l) The
Company shall have furnished the Underwriters and Underwriters’ Counsel with
such other certificates, opinions or other documents as they may have reasonably
requested.
If any of
the conditions specified in this Section 7 shall not have been fulfilled when
and as required by this Agreement, or if any of the certificates, opinions,
written statements or letters furnished to the Representatives or to
Underwriters’ Counsel pursuant to this Section 7 shall not be reasonably
satisfactory in form and substance to the Representatives and to Underwriters’
Counsel, all obligations of the Underwriters hereunder may be cancelled by the
Representatives at, or at any time prior to, the consummation of the
Closing. Notice of such cancellation shall be given to the Company in
writing, or by telephone. Any such telephone notice shall be
confirmed promptly thereafter in writing.
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8. Indemnification.
(a) The
Company and the Selling Stockholder shall, severally and not jointly indemnify,
and hold harmless each Underwriter and each Person, if any, who controls each
Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, against any and all losses, liabilities, claims, damages
and expenses whatsoever as incurred (including but not limited to attorneys’
fees and any and all expenses whatsoever incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact made by such party contained in the Registration Statement, as
originally filed or any amendment thereof, or any related Preliminary Prospectus
or the Prospectus, or in any supplement thereto or amendment thereof, or arise
out of or are based upon the omission or alleged omission made by such party to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that the
Company and the Selling Stockholder will not be liable in any such case to the
extent but only to the extent that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through the Representatives expressly for use
therein. The parties agree that such information provided by or on
behalf of any Underwriter through the Representatives consists solely of the
Underwriters’ Information. This indemnity agreement will be in
addition to any liability, which the Company or any Selling Stockholder may
otherwise have, including but not limited to other liability under this
Agreement.
(b) Each
Underwriter, severally and not jointly, shall indemnify and hold harmless the
Company, each of the directors of the Company, each of the officers of the
Company who shall have signed the Registration Statement, and each other Person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act and the Selling Stockholder,
against any losses, liabilities, claims, damages and expenses whatsoever as
incurred (including but not limited to attorneys’ fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, as originally filed or any amendment thereof, or any
related Preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with the Underwriters’ Information; provided, however, that in no
case shall any Underwriter be liable or responsible for any amount in excess of
the underwriting discount applicable to the Securities to be purchased by such
Underwriter hereunder. The parties agree that such information
provided by or on behalf of any Underwriter through the Representatives consists
solely of the material referred to in the last sentence of Section 1(b)
hereof.
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(c) Promptly
after receipt by an indemnified party under subsection (a) or (b) above of
notice of any claims or the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification is
to be sought in writing of the claim or the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve the indemnifying
party from any liability which it may have under this Section 8 to the extent
that it is not materially prejudiced as a result thereof and in any event shall
not relieve it from any liability that such indemnifying party may have
otherwise than on account of the indemnity agreement hereunder). In
case any such claim or action is brought against any indemnified party, and it
notifies an indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate, at its own expense in the defense of such
action, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel satisfactory to
such indemnified party; provided however, that counsel to the indemnifying party
shall not (except with the written consent of the indemnified party) also be
counsel to the indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by one of the indemnifying
parties in connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to have charge of the defense of such
action within a reasonable time after notice of commencement of the action,
(iii) the indemnifying party does not diligently defend the action after
assumption of the defense, or (iv) such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
indemnifying parties. No indemnifying party shall, without the prior
written consent of the indemnified parties, effect any settlement or compromise
of, or consent to the entry of judgment with respect to, any pending or
threatened claim, investigation, action or proceeding in respect of which
indemnity or contribution may be or could have been sought by an indemnified
party under this Section 8 or Section 9 hereof (whether or not the indemnified
party is an actual or potential party thereto), unless (x) such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such claim, investigation, action or
proceeding and (ii) does not include a statement as to or an admission of fault,
culpability or any failure to act, by or on behalf of the indemnified party, and
(y) the indemnifying party confirms in writing its indemnification obligations
hereunder with respect to such settlement, compromise or
judgment.
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9. Contribution. In
order to provide for contribution in circumstances in which the indemnification
provided for in Section 8 hereof is for any reason held to be unavailable from
any indemnifying party or is insufficient to hold harmless a party indemnified
thereunder, the Company, the Selling Stockholder and the Underwriters shall
contribute to the aggregate losses, claims, damages, liabilities and expenses of
the nature contemplated by such indemnification provision (including any
investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company, any contribution received by
the Company from Persons, other than the Underwriters, who may also be liable
for contribution, including Persons who control the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, officers
of the Company who signed the Registration Statement and directors of the
Company) as incurred to which the Company, the Selling Stockholder and one or
more of the Underwriters may be subject, in such proportions as is appropriate
to reflect the relative benefits received by the Company, the Selling
Stockholder and the Underwriters from the Offering or, if such allocation is not
permitted by applicable law, in such proportions as are appropriate to reflect
not only the relative benefits referred to above but also the relative fault of
the Company, the Selling Stockholder and the Underwriters in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company, the
Selling Stockholder and the Underwriters shall be deemed to be in the same
proportion as (x) the total proceeds from the Offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Company
and the Selling Stockholder bears to (y) the underwriting discount or
commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault of each of
the Company, the Selling Stockholder and of the Underwriters shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company, the Selling
Stockholder or the Underwriters and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company, the Selling Stockholder and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section. The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by an indemnified party and referred to above in
this Section 9 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any judicial,
regulatory or other legal or governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission. Notwithstanding the
provisions of this Section 9: (i) no Underwriter shall be required to contribute
any amount in excess of the amount by which the discounts and commissions
applicable to the Shares underwritten by it and distributed to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission and (ii) no Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 9, each Person, if
any, who controls an Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Underwriter, and each Person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to clauses (i) and
(ii) of the immediately preceding sentence. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties, notify each party or
parties from whom contribution may be sought, but the omission to so notify such
party or parties shall not relieve the party or parties from whom contribution
may be sought from any obligation it or they may have under this Section 9 or
otherwise. The obligations of the Underwriters to contribute pursuant
to this Section 9 are several in proportion to the respective number of Shares
to be purchased by each of the Underwriters hereunder and not
joint.
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10. Underwriter
Default.
(a) If
any Underwriter or Underwriters shall default in its or their obligation to
purchase Firm Shares hereunder, and if the Firm Shares with respect to which
such default relates (the “Default Shares”) do not (after
giving effect to arrangements, if any, made by the Representatives pursuant to
subsection (b) below) exceed in the aggregate 10% of the number of Firm Shares,
each non-defaulting Underwriter, acting severally and not jointly, agrees to
purchase from the Company that number of Default Shares that bears the same
proportion of the total number of Default Shares then being purchased as the
number of Firm Shares set forth opposite the name of such Underwriter on Schedule A hereto
bears to the aggregate number of Firm Shares set forth opposite the names of the
non-defaulting Underwriters, subject, however, to such adjustments to eliminate
fractional shares as the Representatives in its sole discretion shall
make.
(b) In
the event that the aggregate number of Default Shares exceeds 10% of the number
of Firm Shares, the Representatives may in their discretion arrange for
themselves or for another party or parties (including any non-defaulting
Underwriter or Underwriters who so agree) to purchase the Default Shares on the
terms contained herein. In the event that within five calendar days
after such a default the Representatives do not arrange for the purchase of the
Default Shares as provided in this Section 10, this Agreement shall thereupon
terminate, without liability on the part of the Company with respect thereto
(except in each case as provided in Sections 5, 7, 8, 10 and 12(d)) or the
Underwriters, but nothing in this Agreement shall relieve a defaulting
Underwriter or Underwriters of its or their liability, if any, to the other
Underwriters and the Company for damages occasioned by its or their default
hereunder.
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(c) In
the event that any Default Shares are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as aforesaid,
the Representatives or the Company shall have the right to postpone the Closing
Date for a period, not exceeding five (5) business days, in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus or in any other documents and arrangements, and the Company
agrees to file promptly any amendment or supplement to the Registration
Statement or the Prospectus which, in the reasonable opinion of Underwriters’
Counsel, may thereby be made necessary or advisable. The term
“Underwriter” as used in this Agreement shall include any party substituted
under this Section 10 with like effect as if it had originally been a party to
this Agreement with respect to such Firm Shares.
11. Survival of Representations
and Agreements. All representations and warranties, covenants
and agreements of the Company and the Underwriters contained in this Agreement
or in certificates of officers of the Company or any Subsidiary submitted
pursuant hereto, including the agreements contained in Section 6, the indemnity
agreements contained in Section 8 and the contribution agreements contained in
Section 9 hereof, shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any Underwriter or any controlling
Person thereof or by or on behalf of the Company, any of its officers and
directors or any controlling Person thereof, and shall survive delivery of and
payment for the Shares to and by the Underwriters. The
representations contained in Section 1 and 2 hereof and the covenants and
agreements contained in Sections 5, 6, 8, 9, this Section 11 and Sections 15 and
16 hereof shall survive any termination of this Agreement, including termination
pursuant to Section 10 or 12 hereof.
12. Effective Date of Agreement;
Termination.
(a) This
Agreement shall become effective upon the later of: (i) receipt by the
Representatives and the Company of notification of the effectiveness of the
Registration Statement or (ii) the execution of this
Agreement. Notwithstanding any termination of this Agreement, the
provisions of this Section 12 and of Sections 1, 5, 7, 8 and 12 through 17,
inclusive, shall remain in full force and effect at all times after the
execution hereof.
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(b) The
Representatives shall have the right to terminate this Agreement at any time
prior to the consummation of the Closing
if: (i) any domestic or international event or act or occurrence has materially
disrupted, or in the opinion of the Representatives will in the immediate future
materially disrupt, the market for the Company’s securities or securities in
general; or (ii) trading on the New York Stock Exchange, the NASDAQ or the NYSE
AMEX shall have been suspended or been made subject to material limitations, or
minimum or maximum prices for trading shall have been fixed, or maximum ranges
for prices for securities shall have been required, on the New York Stock
Exchange, the NASDAQ or the NYSE AMEX or by order of the Commission or any other
governmental authority having jurisdiction; or (iii) a banking moratorium has
been declared by any state or federal authority or if any material disruption in
commercial banking or securities settlement or clearance services shall have
occurred; (iv) any downgrading shall have occurred in the Company’s corporate
credit rating or the rating accorded the Company’s debt securities or trust
preferred stock by any “nationally recognized statistical rating organization”
(as defined for purposes of Rule 436(g) under the Securities Act) or if any such
organization shall have been publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Company’s debt securities; or (v) (A) there shall have occurred any outbreak or
escalation of hostilities or acts of terrorism involving the United States or
there is a declaration of a national emergency or war by the United States or
(B) there shall have been any other calamity or crisis or any change in
political, financial or economic conditions if the effect of any such event in
(A) or (B), in the judgment of the Representatives, is so material and adverse
that such event makes it impracticable or inadvisable to proceed with
the offering, sale and delivery of the Firm Shares on the terms and in the
manner contemplated by the Prospectus.
(c) Any
notice of termination pursuant to this Section 12 shall be in
writing.
(d) If
this Agreement shall be terminated pursuant to any of the provisions hereof
(other than pursuant to Section 10(b) hereof), or if the sale of the Shares
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth herein is not satisfied or because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or comply with any provision hereof, the Company will, subject to demand by the
Representatives, reimburse the Underwriters for only those out-of-pocket
expenses (including the fees and expenses of their counsel), actually incurred
by the Underwriters in connection herewith.
13. Notices. All
communications hereunder, except as may be otherwise specifically provided
herein, shall be in writing, and:
(a) if
sent to the Representatives or any Underwriter, shall be mailed, delivered, or
faxed and confirmed in writing, to Broadband Capital
Management LLC, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention
▇▇▇▇▇▇▇ ▇▇▇▇, with a copy to Underwriters’ Counsel at Ellenoff ▇▇▇▇▇▇▇▇ &
Schole LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.;
and
(b) if
sent to the Company, shall be mailed, delivered, or faxed and confirmed in
writing to the Company and its counsel at the addresses set forth in the
Registration Statement,
(c) if
sent to the Selling Stockholder, shall be mailed, delivered, or faxed and
confirmed in writing to the Selling Stockholder at [ADDRESS].
provided, however, that any
notice to an Underwriter pursuant to Section 8 shall be delivered or sent by
mail or facsimile transmission to such Underwriter at its address set forth in
its acceptance facsimile to the Representatives, which address will be supplied
to any other party hereto by the Representatives upon request. Any
such notices and other communications shall take effect at the time of receipt
thereof.
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14. Parties; Limitation of
Relationship. This Agreement shall inure solely to the benefit
of, and shall be binding upon, the Underwriters, the Company and the controlling
Persons, directors, officers, employees and agents referred to in Sections 7 and
8 hereof, and their respective successors and assigns, and no other Person shall
have or be construed to have any legal or equitable right, remedy or claim under
or in respect of or by virtue of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof
are intended to be for the sole and exclusive benefit of the parties hereto and
said controlling Persons and their respective successors, officers, directors,
heirs and legal Representatives, and it is not for the benefit of any other
Person. The term “successors and assigns” shall not include a
purchaser, in its capacity as such, of Shares from any of the
Underwriters.
15. Governing
Law. This Agreement shall be deemed to have been executed and
delivered in New York and both this Agreement and the transactions contemplated
hereby shall be governed as to validity, interpretation, construction, effect,
and in all other respects by the laws of the State of New York, without regard
to the conflicts of laws principals thereof (other than Section 5-1401 of The
New York General Obligations Law). Each of the Underwriters and the
Company: (a) agrees that any legal suit, action or proceeding arising out of or
relating to this Agreement and/or the transactions contemplated hereby shall be
instituted exclusively in the Supreme Court of the State of New York, New York
County, or in the United States District Court for the Southern District of New
York, (b) waives any objection which it may have or hereafter to the venue of
any such suit, action or proceeding, and (c) irrevocably consents to the
jurisdiction of Supreme Court of the State of New York, New York County, or in
the United States District Court for the Southern District of New York in any
such suit, action or proceeding. Each of the Underwriters and the
Company further agrees to accept and acknowledge service of any and all process
which may be served in any such suit, action or proceeding in the Supreme Court
of the State of New York, New York County, or in the United States District
Court for the Southern District of New York and agrees that service of process
upon the Company mailed by certified mail to the Company’s address or delivered
by Federal Express via overnight delivery shall be deemed in every respect
effective service of process upon the Company, in any such suit, action or
proceeding, and service of process upon the Underwriters mailed by certified
mail to the Underwriters’ address or delivered by Federal Express via overnight
delivery shall be deemed in every respect effective service process upon the
Underwriter, in any such suit, action or proceeding. THE COMPANY (ON
BEHALF OF ITSELF, THE SUBSIDIARIES AND, TO THE FULLEST EXTENT PERMITTED BY LAW,
ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVE ANY RIGHT
THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT
OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT, THE REGISTRATION STATEMENT AND THE PROSPECTUS.
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16. Entire
Agreement. This Agreement, together with the schedule and
exhibits attached hereto and as the same may be amended from time to time in
accordance with the terms hereof, contains the entire agreement among the
parties hereto relating to the subject matter hereof and there are no other or
further agreements outstanding not specifically mentioned herein.
17. Severability. If
any term or provision of this Agreement or the performance thereof shall be
invalid or unenforceable to any extent, such invalidity or unenforceability
shall not affect or render invalid or unenforceable any other provision of this
Agreement and this Agreement shall be valid and enforced to the fullest extent
permitted by law.
18. Amendment. This
Agreement may only be amended by a written instrument executed by each of the
parties hereto.
19. Waiver, etc.
The failure of any of the parties hereto to at any time enforce any of the
provisions of this Agreement shall not be deemed or construed to be a waiver of
any such provision, nor to in any way effect the validity of this Agreement or
any provision hereof or the right of any of the parties hereto to thereafter
enforce each and every provision of this Agreement. No waiver of any
breach, non-compliance or non-fulfillment of any of the provisions of this
Agreement shall be effective unless set forth in a written instrument executed
by the party or parties against whom or which enforcement of such waiver is
sought; and no waiver of any such breach, non-compliance or non-fulfillment
shall be construed or deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.
20. No Fiduciary
Relationship. The Company and the Selling Stockholder hereby acknowledges
that the Underwriters are acting solely as underwriters in connection with the
offering of the Company’s securities. The Company and the Selling Stockholder
further acknowledge that the Underwriters are acting pursuant to a contractual
relationship created solely by this Agreement entered into on an arm’s length
basis and in no event do the parties intend that the Underwriters act or be
responsible as a fiduciary to the Company, its management, shareholders,
creditors or any other person in connection with any activity that the
Underwriters may undertake or have undertaken in furtherance of the offering of
the Company’s securities, either before or after the date hereof, or to the
Selling Stockholder. The Underwriters hereby expressly disclaim any fiduciary or
similar obligations to the Company and the Selling Stockholder, either in
connection with the transactions contemplated by this Agreement or any matters
leading up to such transactions, and the Company and the Selling Stockholder
hereby confirms its understanding and agreement to that effect. The Company and
the Selling Stockholder hereby further confirms its understand that no
Underwriter has assumed an advisory or fiduciary responsibility in favor of the
Company or the Selling Stockholder with respect to the Offering contemplated
hereby or the process leading thereto, including any negotiation related to the
pricing of the Shares; and the Company and the Selling Stockholder has consulted
its own legal and financial advisors to the extent it has deemed appropriate in
connection with this Agreement and the Offering. The Company, the Selling
Stockholder and the Underwriters agree that they are each responsible for making
their own independent judgments with respect to any such transactions, and that
any opinions or views expressed by the Underwriters to the Company and the
Selling Stockholder regarding such transactions, including but not limited to
any opinions or views with respect to the price or market for the Company’s
securities, do not constitute advice or recommendations to the Company and the
Selling Stockholder. The Company and the Selling Stockholder hereby waives and
releases, to the fullest extent permitted by law, any claims that the Company
and the Selling Stockholder may have against the Underwriters with respect to
any breach or alleged breach of any fiduciary or similar duty to the Company and
the Selling Stockholder in connection with the transactions contemplated by this
Agreement or any matters leading up to such transactions.
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21. Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument. Delivery of a signed counterpart of this
Agreement by facsimile transmission shall constitute valid and sufficient
delivery thereof.
22. Headings. The
headings herein are inserted for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this
Agreement.
23. Time is of the
Essence. Time shall be of the essence of this
Agreement. As used herein, the term “business day” shall mean any day
other than a Saturday, Sunday or any day on which the major stock exchanges in
New York, New York are not open for business.
[Signature
Pages Follow]
Broadband
Capital Management LLC
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If the
foregoing correctly sets forth your understanding, please so indicate in the
space provided below for that purpose, whereupon this letter shall constitute a
binding agreement among us.
|
Very
truly yours,
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||
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LIHUA
INTERNATIONAL, INC.
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By:
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Name:
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Title:
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VISION
OPPORTUNITY CHINA LP, as Selling Stockholder
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By:
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Name:
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Title:
|
||
Accepted
by the Representatives, acting for themselves and as Representatives
of the Underwriters named on Schedule A attached
hereto, as
of the date first written above:
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BROADBAND
CAPITAL MANAGEMENT LLC
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By:
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Name:
▇▇▇▇▇▇▇ ▇▇▇▇
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Title: Chairman
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▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, LLC
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By:
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Name:
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title: Head
of Global Capital
Markets
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SCHEDULE
A
Underwriters
|
Underwriter
|
Number of Firm
Shares to be
Purchased
|
Number of Option
Shares to be
Purchased
|
||||||
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Broadband
Capital Management LLC
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▇▇▇▇▇▇
& ▇▇▇▇▇▇▇ LLC
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TOTAL
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||||||||
V-1
SCHEDULE
B
Lock-Up
Parties
V-2