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EXHIBIT
10.1
MEMSIC, Inc.
6,000,000 Shares
Common Stock
(US$0.00001 par
value)
Underwriting
Agreement
New York, New York
December 13, 2007
Citigroup Global Markets Inc.
As Representative of the several
Underwriters
named in Schedule I attached
hereto,
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
MEMSIC, Inc., a corporation
organized under the laws of the State of Delaware (the
“Company”), proposes to sell to the several
underwriters named in Schedule I hereto (the
“Underwriters”), for whom you (the
“Representative”) are acting as representative,
6,000,000 shares of common stock, US$0.00001 par value
(“Common Stock”) of the Company, (said shares to be
issued and sold by the Company are hereinafter called the
“Underwritten Securities”). The Company hereto also
propose to grant to the Underwriters an option to purchase up to
900,000 additional shares of Common Stock to cover over-allotments,
if any (the “Option Securities”; the Option Securities,
together with the Underwritten Securities, being hereinafter called
the “Securities”). To the extent there are no
additional Underwriters listed on Schedule I other than you, the
term Representative as used herein shall mean you, as Underwriter,
and the terms Representative and Underwriter shall mean either the
singular or plural as the context requires. The use of the neuter
in this Agreement shall include the feminine and masculine wherever
appropriate. Certain terms used herein are defined in
Section 20 hereof.
1. Representations and
Warranties .
The Company represents and
warrants to, and agrees with, each Underwriter as set forth below
in this Section 1.
(1) The Company has prepared
and filed with the Commission a registration statement (file number
333-146377) on Form S-1, including a related preliminary
prospectus, for registration under the Act of the offering and sale
of the Securities. Such Registration Statement, including any
amendments thereto filed prior to the Execution Time, has become
effective. The Company may have filed one or more amendments
thereto, including a related preliminary prospectus, each of which
has previously been
furnished to you. The Company
will file with the Commission a final prospectus in accordance with
Rule 424(b). As filed, such final prospectus shall contain all
information required by the Act and the rules thereunder and,
except to the extent the Representative shall agree in writing to a
modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in
the latest Preliminary Prospectus) as the Company has advised you,
prior to the Execution Time, will be included or made
therein.
(2) On the Effective Date,
the Registration Statement did, and when the Prospectus is first
filed in accordance with Rule 424(b) and on the Closing Date
(as defined herein) and on any date on which Option Securities are
purchased, if such date is not the Closing Date (a
“settlement date”), the Prospectus (and any supplement
thereto) will, comply in all material respects with the applicable
requirements of the Act and the rules thereunder; no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceeding for that purpose has been initiated or
threatened by the Commission; on the Effective Date and at the
Execution Time, the Registration Statement did not and will not
contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and on the
date of any filing pursuant to Rule 424(b) and on the Closing
Date and any settlement date, the Prospectus (together with any
supplement thereto) will not include any untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided ,
however , that the Company make no representations or
warranties as to the information contained in or omitted from the
Registration Statement, or the Prospectus (or any supplement
thereto) in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any
Underwriter through the Representative specifically for inclusion
in the Registration Statement or the Prospectus (or any supplement
thereto), it being understood and agreed that the only such
information furnished by any Underwriter consists of the
information described as such in Section 8 hereof.
(3) No order preventing or
suspending the use of any Preliminary Prospectus or any Issuer Free
Writing Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in
all material respects to the requirements of the Act and the rules
and regulations of the Commission thereunder, and did 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 light of the circumstances under which they
were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through the
Representative expressly for use therein.
(4) (i) The Disclosure
Package and the price to the public, the number of Underwritten
Securities and the number of Option Securities to be included on
the cover page of the Prospectus, when taken together as a whole
and (ii) each electronic road show
when taken together as a
whole with the Disclosure Package and the price to the public, the
number of Underwritten Securities and the number of Option
Securities to be included on the cover page of the Prospectus
, does not contain any untrue statement of a material fact
or omit 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 the Disclosure Package
based upon and in conformity with written information furnished to
the Company by any Underwriter through the Representative
specifically for use therein, it being understood and agreed that
the only such information furnished by or on behalf of any
Underwriter consists of the information described as such in
Section 8 hereof.
(5) (i) At the time of filing
the Registration Statement and (ii) as of the Execution Time
(with such date being used as the determination date for purposes
of this clause (ii)) the Company was not and is not an Ineligible
Issuer (as defined in Rule 405), without taking account of any
determination by the Commission pursuant to Rule 405 that it is not
necessary that the Company be considered an Ineligible
Issuer.
(6) A registration statement
on Form 8-A (File No.001-33813) in respect of the registration of
the Securities under the U.S. Securities Exchange Act of 1934, as
amended (the “Exchange Act”), has been filed with the
Commission; such registration statement in the form heretofore
delivered to you and, excluding exhibits, to you for each of the
other Underwriters, has been declared effective by the Commission
in such form; no other document with respect to such registration
statement has heretofore been filed with the Commission; no stop
order suspending the effectiveness of such registration statement
has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission (the various parts of
such registration statement, including all exhibits thereto, each
as amended at the time such part of the registration statement
became effective, being hereinafter called the “Form 8-A
Registration Statement”); and the Form 8-A Registration
Statement when it became effective conformed, and any further
amendments thereto will conform, in all material respects to the
requirements of the Exchange Act and the rules and regulations of
the Commission thereunder, and did not and will not, as of the
applicable 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.
(7) Each Issuer Free Writing
Prospectus does not include any information that conflicts with the
information contained in the Registration Statement, including any
document incorporated by reference therein that has not been
superseded or modified. The foregoing sentence does not apply to
statements in or omissions from any Issuer Free Writing Prospectus
based upon and in conformity with written information furnished to
the Company by any Underwriter through the Representative
specifically for use therein, it being understood and agreed that
the only such information furnished by or on behalf of any
Underwriter consists of the information described as such in
Section 8 hereof.
(8) As of the date of this
Agreement, except for Memsic (Wuxi) Semiconductors Ltd. (“the
Subsidiary”), the Company has no other subsidiaries and the
Subsidiary does not own or control, directly or indirectly, any
equity or other ownership interest in any corporation, partnership,
joint venture or any other person.
(9) Each of the Company and
the Subsidiary has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized with full
corporate power and authority to own or lease, as the case may be,
and to operate its properties and conduct its business as described
in the Disclosure Package and the Prospectus, and is duly qualified
to do business as a foreign corporation and is in good standing
under the laws of each jurisdiction which requires such
qualification, except where the failure to be so qualified would
not, individually or in the aggregate, have a material adverse
effect on the condition (financial or otherwise), general affairs,
management, prospects, results of operations, financial position,
business or properties of the Company and the Subsidiary, taken as
a whole (a “Material Adverse Effect”).
(10) All the outstanding
shares of capital stock of each of the Company and the Subsidiary
have been duly and validly authorized and issued and are fully paid
and nonassessable; the Company duly and validly owns the equity
interest of the Subsidiary in the percentage set forth in the
Disclosure Package and the Prospectus, free and clear of any
perfected security interest or any other security interests,
claims, liens or encumbrances.
(11) All of the Common Stock
issuable upon the mandatory conversion of the outstanding
convertible preferred stock as described in the Preliminary
Prospectus and the Prospectus have been duly authorized and
reserved for issuance.
(12) Each of the Company and
the Subsidiary has good and marketable title to all personal
property owned by it, and has good and valid title to all real
property or the beneficial interests in and the right to transfer,
lease and mortgage the land use rights and building ownership
rights over all of the real properties as owned by it, in each case
free and clear of all liens, charges, encumbrances, and defects,
except such as do not, individually or in the aggregate, have a
Material Adverse Effect; each lease to which any of the Company or
the Subsidiary is a party, is legal, valid, binding and enforceable
in accordance with its terms and, to the best of its knowledge,
against the other parties thereto, and no default (or event which
with notice or lapse of time, or both, would constitute a default)
by the Company or the Subsidiary has occurred and is continuing
under any such lease, except such as do not have, individually or
in the aggregate, a Material Adverse Effect; the use of any
premises occupied by the Company or the Subsidiary is in accordance
with that provided for the lease, land use rights, tenancy,
license, concession or agreement of whatsoever nature relating to
such occupation and the relevant above entity has observed and
performed the terms and conditions thereof on the part of the
tenant to be observed and performed, except such as do not have,
individually or in the aggregate, a Material Adverse Effect; and
none of the Company and the Subsidiary has received any claim for
liabilities in respect of any properties previously occupied by it
or in which it owned or held any interests, including without
limitation, leasehold premises assigned, surrendered or otherwise
disposed of, except such as do not have, individually or in the
aggregate, a Material Adverse Effect.
(13) Except as described in
the Registration Statement (excluding the exhibits thereto), the
Disclosure Package and the Prospectus, (A) no person has any
preemptive rights, resale rights, rights of first refusal or other
rights to purchase any of the Securities; and (B) no person
has the right to act as an underwriter or as a financial advisor to
the Company in connection with the offer and sale of the
Securities.
(14) Except as disclosed in
the Disclosure Package and the Prospectus, there are no contracts,
agreements or understandings between the Company and any person
granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities
of the Company owned or to be owned by such person or to require
the Company to include such securities in the securities registered
pursuant to the Registration Statement, or in any securities being
registered pursuant to any other registration statement filed by
the Company under the Act.
(15) The Securities to be
issued and sold by the Company to the Underwriters hereunder have
been duly and validly authorized and, when issued and delivered
against payment therefor as provided herein, will be duly and
validly issued and fully paid and non-assessable and will conform
in all material respects to the description of the Common Stock
contained in the Registration Statement, the Disclosure Package,
the Preliminary Prospectus and the Prospectus.
(16) There is no franchise,
contract or other document of a character required to be described
in the Registration Statement or Prospectus, or to be filed as an
exhibit thereto, which is not described or filed as required (and
the Preliminary Prospectus contains in all material respects the
same description of the foregoing matters contained in the
Prospectus); and the statements in the Preliminary Prospectus and
the Prospectus under the headings “Risk Factors”,
“Business”, “Regulations”,
“Compensation Discussion and Analysis”, “Certain
Relationships and Related Party Transactions”,
“Description of Capital Stock”, “Shares Eligible
For Future Sale”, “United States Federal Income Tax
Consequences to Non-United States Stockholders” and
“Underwriting”, insofar as such statements summarize
legal matters, agreements, documents or proceedings discussed
therein, are accurate and fair summaries of such legal matters,
agreements, documents or proceedings.
(17) None of the Company and
the Subsidiary has sent or received any communication regarding
termination of, or intent not to renew, any of the contracts or
agreements referred to or described in the Disclosure Package or
the Prospectus, or referred to or described in, or filed as an
exhibit to, the Registration Statement, and no such termination or
non-renewal has been threatened by the Company or any of its
subsidiaries or, to the Company’s knowledge after due
inquiry, any other party to any such contract or
agreement;
(18) The Company is not and,
after giving effect to the offering and sale of the Securities and
the application of the proceeds thereof as described in the
Disclosure Package and the Prospectus, will not be an
“investment company” as defined in the Investment
Company Act of 1940, as amended.
(19) No consent, approval,
authorization, filing with or order of any court or governmental
agency or body is required in connection with the transactions
contemplated herein, except such as have been obtained under the
Act or under the rules of FINRA and such as may be required under
the blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the Underwriters in
the manner contemplated herein and in the Disclosure Package and
the Prospectus.
(20) Except as described in
the Registration Statement, the Preliminary Prospectus and
Prospectus, the Company has not sold, issued or distributed any
shares during the six-month period preceding the date hereof,
including any sales pursuant to Rule 144A, Regulation D or
Regulation S promulgated under the Act, other than shares issued
pursuant to employee benefit plans, qualified share option plans or
other employee compensation plans or pursuant to outstanding
options, rights or warrants;
(21) Neither the issue and
sale of the Securities nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms
hereof nor the application of the net proceeds from the sale of the
securities will conflict with, result in a breach or violation of,
or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or the Subsidiary pursuant to,
(i) the charter or by-laws of the Company or the Subsidiary,
(ii) the terms of any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the Company
or the Subsidiary is a party or bound or to which its or their
property is subject, except where such conflict, breach or
violation would not reasonably be expected to have a Material
Adverse Effect, or (iii) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or the
Subsidiary of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having
jurisdiction over the Company or the Subsidiary or any of its or
their properties.
(22) The Securities have been
approved for listing on the Nasdaq Global Market, subject to notice
of issuance.
(23) Neither the Company nor
the Subsidiary is engaged in any trading activities involving
commodity contracts or other trading contracts which are not
currently traded on a securities or commodities exchange and for
which the market value cannot be determined.
(24) This Agreement has been
duly authorized, executed and delivered by the Company.
(25) No stamp or other
issuance or transfer taxes or duties and no capital gains, income,
withholding or other taxes are payable by or on behalf of the
Underwriters to the government of the United States or the
People’s Republic of China, or any political subdivision or
taxing authority thereof or therein in connection with:
(A) the execution and delivery of this Agreement, (B) the
sale and delivery by the Company of the Securities to or for the
respective accounts of the several Underwriters, or (C) the
sale and delivery by the Underwriters of the Securities to the
initial purchasers thereof in the manner contemplated by this
Agreement.
(26) The consolidated
historical financial statements and schedules of the Company and
the Subsidiary included in the Preliminary Prospectus, the
Prospectus, the Disclosure Package, and the Registration Statement
present fairly the financial condition, results of operations and
cash flows of the Company as of the dates and for the periods
indicated, comply as to form with the applicable accounting
requirements of the Act and have been prepared in conformity with
generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as otherwise noted
therein). The selected financial data set forth under the caption
“Selected Consolidated Financial Information” in the
Preliminary Prospectus, the Prospectus, the Disclosure Package and
Registration Statement fairly present in all material respects, on
the basis stated in the Preliminary Prospectus, the Prospectus, the
Disclosure Package and the Registration Statement, the information
included therein. The pro forma financial statements included in
the Preliminary Prospectus, the Prospectus, the Disclosure Package
and the Registration Statement include assumptions that provide a
reasonable basis for presenting the significant effects directly
attributable to the transactions and events described therein, the
related pro forma adjustments give appropriate effect to those
assumptions, and the pro forma adjustments reflect the proper
application of those adjustments to the historical financial
statement amounts in the pro forma financial statements included in
the Preliminary Prospectus, the Prospectus, the Disclosure Package
and the Registration Statement. The pro forma financial statements
included in the Preliminary Prospectus, the Prospectus, the
Disclosure Package and the Registration Statement comply as to form
in all material respects with the applicable accounting
requirements under the Act and the pro forma adjustments have been
properly applied to the historical amounts in the compilation of
those statements.
(27) No action, suit or
proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or the Subsidiary
or its or their property is pending or, to the best knowledge of
the Company, threatened that could reasonably be expected to have
(i) a Material Adverse Effect, or (ii) a material adverse
effect on the performance of this Agreement or the consummation of
any of the transactions contemplated hereby, except as set forth in
or contemplated in the Disclosure Package and the
Prospectus.
(28) Each of the Company and
the Subsidiary owns or leases all such properties as are necessary
to the conduct of its operations as presently conducted, except
such as would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.
(29) Neither the Company nor
the Subsidiary is in violation or default of (i) any provision
of its charter or bylaws, (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or
instrument to which it is a party or bound or to which its property
is subject, or (iii) any statute, law, rule, regulation,
judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or
other
authority having jurisdiction
over the Company or such Subsidiary or any of their respective
properties, as applicable, except in the case of clauses
(ii) and (iii), for such violations or defaults as would not
reasonably be expected to have a Material Adverse
Effect.
(30) Ernst & Young
LLP, who have certified certain financial statements of the Company
and the Subsidiary and delivered their report with respect to the
audited consolidated financial statements and schedules included in
the Disclosure Package and the Prospectus, are independent public
accountants with respect to the Company within the meaning of the
Act and the applicable published rules and regulations
thereunder.
(31) Except as described in
the Disclosure Package and the Prospectus, no material indebtedness
(actual or contingent) and no material contract or arrangement is
outstanding between the Company or the Subsidiary and any director
or executive officer of the Company or the Subsidiary or any person
connected with such director or executive officer (including
his/her spouse, children, any company or undertaking in which
he/she holds a controlling interest); and there are no material
relationships or transactions between the Company or the Subsidiary
on the one hand and its affiliates, officers and directors or their
stockholders, customers or suppliers on the other hand except as
disclosed in the Disclosure Package and the Prospectus.
(32) The Company has filed
all tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to
file would not have a Material Adverse Effect, and has paid all
taxes required to be paid by it and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing
is due and payable, except for such non-compliance as would not
reasonably be expected to have a Material Adverse
Effect.
(33) No labor problem or
dispute with the employees of the Company or the Subsidiary exists
or is threatened or imminent, except for such problems or disputes
which could not reasonably be expected to have a Material Adverse
Effect, and the Company is not aware of any existing or imminent
labor disturbance by the employees of any of its or the
Subsidiary’s principal suppliers, contractors or customers,
that could have a Material Adverse Effect.
(34) The Company has provided
or made available to you true, correct, and complete copies of all
documentation pertaining to any extension of credit in the form of
a personal loan made, directly or indirectly, by the Company or the
Subsidiary to any director or executive officer of the Company or
the Subsidiary; and except as described in the Registration
Statement, the Disclosure Package and the Prospectus, none of the
Company or the Subsidiary has, directly or indirectly,
(A) extended credit, arranged to extend credit, or renewed any
extension of credit, in the form of a personal loan, to or for any
director or executive officer of the Company or the Subsidiary, or
to or for any family member or affiliate of any director or
executive officer of the Company or the Subsidiary; or
(B) made any material modification, including any renewal
thereof, to any term of any personal loan to any director or
executive officer of the Company or the Subsidiary, or any family
member or affiliate of any director or executive officer, which
loan was outstanding on December 31, 2006, that (x) is
outstanding on the date hereof and (y) constitutes a violation
of any applicable law or regulation.
(35) Any statistical and
market-related data included in the Disclosure Package and the
Prospectus are based on or derived from sources that the Company
believes to be reliable and accurate, and the Company has obtained
the written consent for the use of such data from such sources to
the extent required.
(36) 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 issuance and sale of the
Securities.
(37) Each of the Company and
the Subsidiary are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses in which they are
engaged; all policies of insurance insuring the Company or the
Subsidiary or their respective businesses, assets, employees,
officers and directors are in full force and effect; the Company
and the Subsidiary are in compliance with the terms of such
policies and instruments in all material respects; and there are no
claims by the Company or the Subsidiary under any such policy or
instrument as to which any insurance company is denying liability
or defending under a reservation of rights clause, except for such
claims the denial of which would not reasonably be expected to have
a Material Adverse Effect; neither the Company nor the Subsidiary
has been refused any insurance coverage sought or applied for; and
neither the Company nor the Subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business
at a cost that would not have a Material Adverse Effect.
(38) There is currently no
prohibition on the Subsidiary, directly or indirectly, from paying
any dividends to the Company, from making any other distribution on
the Subsidiary’s capital stock, from repaying to the Company
any loans or advances to the Subsidiary from the Company or from
transferring the Subsidiary’s property or assets to the
Company, except as described in or contemplated by the Disclosure
Package and the Prospectus (exclusive of any supplement
thereto).
(39) The Company and the
Subsidiary possess all licenses, certificates, permits and other
authorizations issued by all applicable authorities necessary to
conduct their respective businesses, except as could not reasonably
be expected to have a Material Adverse Effect, and neither the
Company nor the Subsidiary has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, could
reasonably be expected to have a Material Adverse
Effect.
(40) Each of the Company and
the Subsidiary maintains a system of internal accounting controls
sufficient to provide reasonable assurance that
(i) transactions are
executed in accordance with
management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. The
Company’s and the Subsidiary’s internal controls over
financial reporting are effective and the Company and the
Subsidiary are not aware of any material weakness in their internal
controls over financial reporting.
(41) The Company and the
Subsidiary maintain internal control over financial reporting (as
such term is defined in Rule 13a-15(f) under the Exchange Act);
such disclosure controls and procedures are effective, comply with
the requirements of the Exchange Act and have been designed by the
Company’s principal executive officer and principal financial
officer, or under their supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with US GAAP; all material weaknesses, if any, in
internal controls have been identified to the Company’s
independent auditors; since the date of the latest audited
financial statements included in the Disclosure Package and the
Prospectus, there has been no change in the Company’s
internal control over financial reporting or in other factors that
could significantly affect internal controls, including any
corrective actions with regard to significant deficiencies and
material weaknesses, and, except as described in the Disclosure
Package and the Prospectus, the Company’s independent
accountants have not notified the Company of any “reportable
conditions” (as that term is defined under standards
established by the American Institute of Certified Public
Accountants) in the Company’s internal accounting controls,
or other weaknesses or deficiencies in the design or operation of
the Company’s internal accounting controls, that have
materially affected, or are reasonably likely to materially affect,
the Company’s internal control over financial reporting, or
could adversely affect the Company’s ability to record,
process, summarize and report financial data consistent with the
assertions of the Company’s management in the financial
statements; and the Company has taken all necessary actions to
ensure that, upon and at all times after the filing of the
Registration Statement, the Company and the Subsidiary and their
respective officers and directors, in their capacities as such,
will be in compliance in all material respects with the applicable
provisions of the Sarbanes-Oxley Act of 2002 (the
“Sarbanes-Oxley Act”) and the rules and regulations
promulgated thereunder. The Company has established and maintains
and evaluates disclosure controls and procedures (as such term is
defined in Rule 13a-15(e) of the Exchange Act) that comply with the
requirements of the Exchange Act, such disclosure controls and
procedures have been designed to ensure that material information
relating to the Company and the Subsidiary is made known to the
Company’s principal executive officer and principal financial
officer by others within those entities; and such disclosure
controls and procedures are effective to perform the functions for
which they were established.
(42) Except as described in
the Disclosure Package and the Prospectus, neither the Company nor
the Subsidiary has any material obligation to provide retirement,
healthcare, death or disability benefits to any of the present or
past employees of the Company or the Subsidiary, or to any other
person.
(43) The section entitled
“Management’s Discussion and Analysis of Financial
Condition and Results of Operations – Critical Accounting
Policies” in the Disclosure Package and the Prospectus
accurately and fully in all material respects describes:
(A) accounting policies which the Company believes are the
most important in the portrayal of the financial condition and
results of operations of the Company and the Subsidiary
(“Critical Accounting Policies”); (B) judgments
and uncertainties affecting the application of Critical Accounting
Policies; and (C) the likelihood that materially different
amounts would be reported under different conditions or using
different assumptions; and the Company’s board of directors
and management have reviewed and agreed with the selection,
application and disclosure of Critical Accounting Policies and have
consulted with its legal counsel and independent accountants with
regard to such disclosure.
(44) Since the date of the
latest audited financial statements included in the Disclosure
Package and the Prospectus, neither the Company nor the Subsidiary
has: (A) entered into or assumed any contract,
(B) incurred or agreed to incur any liability (including any
contingent liability) or other obligation, (C) acquired or
disposed of or agreed to acquire or dispose of any business or any
other asset or (D) assumed or acquired or agreed to assume or
acquire any liabilities (including contingent liabilities), that
would, in any of clauses (A) through (D) above, be
material to the Company and the Subsidiary and that are not
otherwise described in the Disclosure Package and the
Prospectus.
(45) The section entitled
“Management’s Discussion and Analysis of Financial
Condition and Results of Operations – Liquidity and Capital
Resources” in the Disclosure Package and the Prospectus
accurately and fully describes: (A) all material trends,
demands, commitments, events, uncertainties and risks, and the
potential effects thereof, that the Company believes would
materially affect liquidity and are reasonably likely to occur; and
(B) all off-balance sheet transactions, arrangements, and
obligations that are reasonably likely to have a material effect on
the liquidity of the Company or the Subsidiary or the availability
thereof or the requirements of the Company or the Subsidiary for
capital resources.
(46) Except as set forth in
the Disclosure Package and the Prospectus, neither the Company nor
the Subsidiary is engaged in any material transactions with its
directors, officers, management, stockholders, or any other
affiliate, including any persons who formerly held positions as
directors, officers, managers and/or stockholders, on terms that
are not available from unrelated third parties on an
arm’s-length basis.
(47) No holder of any of the
Securities after the consummation of the transactions contemplated
by this Agreement is or will be subject to any personal liability
in respect of any liability of the Company by virtue only of its
holding of any such Securities; and except as set forth in the
Disclosure Package and the Prospectus, there are no limitations on
the rights of holders of the Securities to hold, vote or transfer
their securities.
(48) Neither the Company nor
the Subsidiary has taken, directly or indirectly, any action
designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(49) The Company and the
Subsidiary are (i) in compliance with any and all applicable
foreign, national, federal, state, provincial and local laws and
regulations relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes,
pollutants or contaminants (“Environmental Laws”),
(ii) have received and are in compliance with all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and
(iii) have not received notice of any actual or potential
liability under any Environmental Laws, except where such
non-compliance with Environmental Laws, failure to receive required
permits, licenses or other approvals, or liability would not,
individually or in the aggregate, have a Material Adverse Effect.
Except as set forth in the Disclosure Package and the Prospectus,
neither the Company nor the Subsidiary has been named as a
“potentially responsible party” under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended.
(50) There are no past,
present or reasonably anticipated future events, conditions,
circumstances, activities, practices, actions, omissions or plans
that could reasonably be expected to give rise to any costs or
liabilities (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties
or compliance with Environmental Laws, or any permit, license or
approval, any related constraints on operating activities and any
potential liabilities to third parties) to the Company or the
Subsidiary under, or to interfere with or prevent compliance by the
Company or the Subsidiary with, Environmental Laws except as would
not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(51) None of the following
events has occurred or exists: (i) a failure to fulfill the
obligations, if any, under the minimum funding standards of
Section 302 of the United States Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), and the
regulations and published interpretations thereunder with respect
to a Plan, determined without regard to any waiver of such
obligations or extension of any amortization period that could have
a Material Adverse Effect; (ii) an audit or investigation by
the Internal Revenue Service, the U.S. Department of Labor, the
Pension Benefit Guaranty Corporation or any other federal or state
governmental agency or any foreign regulatory agency with respect
to the employment or compensation of employees by the Company or
the Subsidiary that could have a Material Adverse Effect;
(iii) any breach of any contractual obligation, or any
violation of law or applicable qualification standards, with
respect to the employment or compensation of employees by the
Company or the Subsidiary that could have a material adverse
effect. None of the following events has occurred or is reasonably
likely to occur: (i) a material increase in the aggregate
amount of contributions required to be made to all Plans in the
current
fiscal year of the Company
and the Subsidiary compared to the amount of such contributions
made in the most recently completed fiscal year of the Company and
the Subsidiary; (ii) a material increase in the
“accumulated post-retirement benefit obligations”
(within the meaning of Statement of Financial Accounting Standards
106) of the Company and the Subsidiary compared to the amount of
such obligations in the most recently completed fiscal year of the
Company and the Subsidiary; (iii) any event or condition
giving rise to a liability under Title IV of ERISA that could have
a Material Adverse Effect; or (iv) the filing of a claim by
one or more employees or former employees of the Company or the
Subsidiary related to their employment that could have a Material
Adverse Effect. For purposes of this paragraph, the term
“Plan” means a plan (within the meaning of
Section 3(3) of ERISA) subject to Title IV of ERISA with
respect to which the Company or the Subsidiary may have any
liability.
(52) There is and has been no
failure on the part of the Company and any of the Company’s
directors or officers, in their capacities as such, to comply with
any provision of the Sarbanes-Oxley Act and the rules and
regulations promulgated in connection therewith, including
Section 402 relating to loans.
(53) Neither the Company nor
the Subsidiary nor, to the knowledge of the Company, any director,
officer, agent, employee or affiliate of the Company or the
Subsidiary is aware of or has taken any action, directly or
indirectly, that would result in a violation by such persons of the
Foreign Corrupt Practices Act of 1977, as amended, and the rules
and regulations thereunder (the “FCPA”), including,
without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of
an offer, payment, promise to pay or authorization of the payment
of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the
FCPA) or any foreign political party or official thereof or any
candidate for foreign political office, in contravention of the
FCPA; and the Company, the Subsidiary and, to the knowledge of the
Company, its affiliates have conducted their businesses in
compliance with the FCPA and have instituted and maintain policies
and procedures designed to ensure, and which are reasonably
expected to continue to ensure, continued compliance
therewith.
(54) The operations of the
Company and the Subsidiary are and have been conducted at all times
in compliance with applicable financial recordkeeping and reporting
requirements and the money laundering statutes and the rules and
regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any
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 or the Subsidiary with respect to the Money
Laundering Laws is pending or, to the best knowledge of the
Company, threatened.
(55) (A) Neither the Company
nor the Subsidiary nor, to the knowledge of the Company, any
director, officer, agent, employee or affiliate of the Company or
the Subsidiary: (i) is currently subject to any sanctions
administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”); (ii) the Company
will not
directly or indirectly use
the proceeds of the offering, or lend, contribute or otherwise make
available such proceeds to any subsidiary, 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; (iii) does or plans to conduct or otherwise get
involved with any business with or involving the government of, or
any person or project located in, any country targeted by any of
the economic sanctions promulgated by any Executive Order issued by
the OFAC; (iv) supports or facilitates or plans to support or
facilitate or otherwise get involved with any such business or
project; (B) the Company is not controlled (within the meaning
of the Executive Orders or regulations promulgating such economic
sanctions or the laws authorizing such promulgation) by any such
government or person; and (C) the Company maintains and has
implemented adequate internal controls and procedures to monitor
and audit transactions that are reasonably designed to detect and
prevent any use of the proceeds from the offering of the Securities
contemplated hereby that is inconsistent with any of the
Company’s representations and obligations under this
paragraph or in the Disclosure Package or the
Prospectus.
(56) Neither the Company nor
the Subsidiary has entered into any memorandum of understanding,
letter of intent, definitive agreement or any similar agreements
with respect to a merger or consolidation or a material acquisition
or disposition of assets, technologies, business units or
businesses.
(57) There are no
affiliations or associations between any member of the Financial
Industry Regulatory Authority (“FINRA”) and the
Company; except as described in the Registration Statement
(excluding the exhibits thereto), each of the Disclosure Package
and the Prospectus, there are no affiliations or associations
between (A) any member of the FINRA and (B) any of the
Company’s officers, directors or 5% or greater security
holders or any beneficial owner of the Company’s unregistered
equity securities that were acquired at any time on or after the
180 th
day immediately preceding the
date the Registration Statement was initially filed with the
Commission.
(58) There are no business
relationships or related-party transactions involving the Company
or the Subsidiary or any other person required to be described in
the Registration Statement, the Disclosure Package or the
Prospectus which have not been described as required.
(59) Each
“forward-looking statement” (within the meaning of
Section 27A of the Act or Section 21E of the Exchange
Act) contained in the Registration Statement, the Disclosure
Package and the Prospectus, if any, has been made or reaffirmed
with a reasonable basis and in good faith.
(60) The Company and the
Subsidiary own, possess, license or have other rights to use, on
reasonable terms, all patents, patent applications, trade and
service marks, trade and service mark registrations, trade names,
copyrights, licenses, inventions, trade secrets, technology,
know-how and other intellectual property (collectively, the
“Intellectual Property”) necessary for the conduct of
the Company’s business as now conducted or as proposed in the
Prospectus to be conducted. Except as set forth in the Preliminary
Prospectus and the Prospectus under the caption
“Business—Intellectual
Property,”
(a) there are no rights of third parties to any such
Intellectual Property; (b) there is no material infringement
by third parties of any such Intellectual Property; (c) there
is no material pending, or to the best knowledge of the Company,
threatened action, suit, proceeding or claim by others challenging
the Company’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; (d) there is no material
pending, or to the best knowledge of the Company, threatened
action, suit, proceeding or claim by others challenging the
validity or scope of any such Intellectual Property, and the
Company is unaware of any facts which would form a reasonable basis
for any such claim; (e) there is no material pending, or to
the best knowledge of the Company, threatened action, suit,
proceeding or claim by others that the Company 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; (f) to the best knowledge of the Company, there is no
U.S. patent or published U.S. patent application which contains
claims that dominate or may dominate any Intellectual Property
described in the Disclosure Package and the Prospectus as being
owned by or licensed to the Company or that interferes with the
issued or pending claims of any such Intellectual Property; and
(g) there is no prior art of which the Company is aware that
may render any U.S. patent held by the Company invalid or any U.S.
patent application held by the Company unpatentable which has not
been disclosed to the U.S. Patent and Trademark Office.
(61) Except as disclosed in
the Registration Statement, the Disclosure Package and the
Prospectus, the Company (i) does not have any material
lending or other relationship with any bank or lending affiliate of
Citigroup Global Markets Holdings Inc. and (ii) does not
intend to use any of the proceeds from the sale of the Securities
hereunder to repay any outstanding debt owed to any affiliate of
Citigroup Global Markets Holdings Inc.
Any certificate signed by any
officer of the Company and delivered to the Representative or
counsel for the Underwriters in connection with the offering of the
Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each
Underwriter.
2. Purchase and Sale
.
(a) Subject to the terms and
conditions and in reliance upon the representations and warranties
herein set forth, the Company agrees to sell to each Underwriter,
and each Underwriter agrees, severally and not jointly, to purchase
from the Company at a purchase price of US$9.30 per share, the
amount of the Underwritten Securities set forth opposite such
Underwriter’s name in Schedule I hereto.
(b) Subject to the terms and
conditions and in reliance upon the representations and warranties
herein set forth, the Company hereby grants an option to the
several Underwriters to purchase, severally and not jointly, up to
900,000 Option Securities at the same purchase price per share as
the Underwriters shall pay for the Underwritten Securities. Said
option may be exercised only to cover over-allotments in the sale
of the Underwritten
Securities by the
Underwriters. Said option may be exercised in whole or in part at
any time on or before the 30 th day
after the date of the Prospectus upon written or telegraphic notice
by the Representative to the Company setting forth the number of
shares of the Option Securities as to which the several
Underwriters are exercising the option and the settlement date. The
number of Option Securities to be purchased by each Underwriter
shall be the same percentage of the total number of shares of the
Option Securities to be purchased by the several Underwriters as
such Underwriter is purchasing of the Underwritten Securities,
subject to such adjustments as you in your absolute discretion
shall make to eliminate any fractional shares.
3. Delivery and
Payment . Delivery of and payment for the Underwritten
Securities and the Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised on or before the
third Business Day immediately preceding the Closing Date) shall be
made at 10:00 AM, New York City time, on December 19,
2007, or at such time on such later date not more than three
Business Days after the foregoing date as the Representative shall
designate, which date and time may be postponed by agreement among
the Representative and the Company, or as provided in
Section 9 hereof (such date and time of delivery and payment
for the Securities being herein called the “Closing
Date”). Delivery of the Securities shall be made to the
Representative for the respective accounts of the several
Underwriters against payment by the several Underwriters through
the Representative of the respective aggregate purchase prices of
the Securities being sold by the Company to or upon the order of
the Company by wire transfer payable in same-day funds to the
accounts specified by the Company. Delivery of the Underwritten
Securities and the Option Securities shall be made through the
facilities of The Depository Trust Company unless the
Representative shall otherwise instruct.
If the option provided for in
Section 2(b) hereof is exercised after the third Business Day
immediately preceding the Closing Date, the Company will deliver
the Option Securities (at the expense of the Company) to the
Representative, at 388 Greenwich Street, New York, New York, on the
date specified by the Representative (which shall be within three
Business Days after exercise of said option) for the respective
accounts of the several Underwriters, against payment by the
several Underwriters through the Representative of the purchase
price thereof to or upon the order of the Company by wire transfer
payable in same-day funds to an account specified by the Company.
If settlement for the Option Securities occurs after the Closing
Date, the Company will deliver to the Representative on the
settlement date for the Option Securities, and the obligation of
the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates
and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to
Section 6 hereof.
4. Offering by
Underwriters . It is understood that the several Underwriters
propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements
.
The Company agrees with the
several Underwriters that:
(1) Prior to the termination
of the offering of the Securities, the Company will not file any
amendment of the Registration Statement or supplement to the
Prospectus or
any Rule 462(b)
Registration Statement unless the Company has furnished you a copy
for your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object. The Company
will cause the Prospectus, properly completed, and any supplement
thereto to be filed in a form approved by the Representative with
the Commission pursuant to the applicable paragraph of
Rule 424(b) within the time period prescribed and will provide
evidence satisfactory to the Representative of such timely filing.
The Company will promptly advise the Representative (i) when
the Prospectus, and any supplement thereto, shall have been filed
(if required) with the Commission pursuant to Rule 424(b) or
when any Rule 462(b) Registration Statement shall have been
filed with the Commission, (ii) when, prior to termination of
the offering of the Securities, any amendment to the Registration
Statement shall have been filed or become effective, (iii) of
any re
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