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EXHIBIT 2.3
NAM TAI ELECTRONICS, INC.
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STANDBY UNDERWRITING AGREEMENT
October 30, 1997
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Associates, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Nam Tai Electronics, Inc., a British Virgin Islands international
business company (the "Company") is distributing to each holder of its Common
Shares, par value $0.01 per share, on October 10, 1997 (the "Record Date"),
nontransferable rights (the "Rights") to subscribe for one Unit (individually, a
"Unit" and collectively, the "Units") for every three Common Shares outstanding
on the Record Date. Each shareholder who exercises the Rights granted to him
will have the right to oversubscribe for Units (the "Oversubscription Right") in
an amount not exceeding forty percent (40%) of the number of Units initially
subscribed for by that shareholder subject to reduction to an amount not less
than 15% of the Units initially subscribed for by that Shareholder upon the
election (the "Standby Underwriters' Oversubscription Cutback") of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Associates, Inc., as representative (the "Representative") of each of
the persons, firms and corporations listed on Schedule A hereto (herein
collective called the "Standby Underwriters") and, in any event, subject to pro
rata allocation among all oversubscribers if there are insufficient Units to
fill all oversubscriptions. The right to subscribe for Units, including the
Oversubscription Right, is hereinafter referred to as the "Rights Offering." The
Company proposes to issue and sell to the several Standby Underwriters that
number of Units equal to 3,000,000 Units less the number of Units purchased by
the Company's shareholders in the Rights Offering and to sell to you,
individually, and not as Representative, at a price of $0.001 per warrant,
warrants (the "Representative's Warrants") to purchase 120,000 Units, which sale
of Representative's Warrants will be consummated in accordance with the terms
and conditions of the Representative's Warrant Agreement (the "Representative's
Warrant Agreement") filed as an exhibit to the Registration Statement described
below.
The Company has also agreed to sell to Freshman, Marantz, Orlanski,
▇▇▇▇▇▇ & ▇▇▇▇▇, a law corporation, at a price of $0.001 per warrant, warrants
(the "Counsel's Warrants") to purchase 10,000 Units, which sale of Counsel's
Warrants will be consummated in accordance with the terms and conditions of the
Counsel's Warrant Agreement (the "Counsel's Warrant Agreement") filed as an
exhibit to the Registration Statement described below. Each Unit shall consist
of one Common Share, par value $0.01 of the Company (each, a "Common Share" and
collectively, the "Common Shares") and one three-year Common Share purchase
warrant (the "Warrants") exercisable on or before November 24, 2000 in
accordance with the terms and conditions of the Warrant Agreement (the "Warrant
Agreement") in the form attached as an exhibit to the Registration Statement
described below. The Units to be purchased by the Standby Underwriters pursuant
to this Standby Underwriting Agreement will be referred to herein as the
"Underwritten Units." Unless the context otherwise provides, references in this
Agreement to "Unit" shall refer to the Units issuable upon exercise of the
Rights and the Units issuable upon exercise of the Representative's Warrants;
references to "Warrants" shall refer to the Warrants, the Representative's
Warrants and the Counsel's Warrants, references to "Common Shares" shall refer
to the Common Shares of the Company outstanding on the Record Date or underlying
the Units and the Warrants as the context indicates and "Securities" shall refer
to the Units, the Warrants and the Common Shares.
This is to confirm the agreement concerning the Standby Underwriters'
purchase of the Underwritten Units from the Company.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
to, and agrees with, the Underwriter that:
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(a) A registration statement on Form F-3 (File No. 333-36135)
with respect to (i) the Rights, (ii) the Units, (iii) the
Representative's Warrants, (iv) the Counsel's Warrants, and (v) the
Common Shares issuable upon exercise the Warrants, has been prepared by
the Company in conformity with the requirements of the Securities Act of
1933 (the "Securities Act"), and the rules and regulations of the
Securities and Exchange Commission (the "Commission") thereunder and has
been filed with the Commission. Copies of such registration statement
and any amendments, and all forms of the related prospectuses contained
therein, have been delivered to you or will be delivered to you
concurrently with their filing with the Commission. Such registration
statement, including the prospectus constituting a part thereof, Part II
and all financial schedules and exhibits thereto, and any documents
incorporated by reference therein, as amended at the time when it
becomes effective, is herein referred to as the "Registration
Statement," and the prospectus included as part of the Registration
Statement on file with the Commission that discloses all the information
that was omitted from the prospectus on the effective date pursuant to
Rule 430A of the Rules and Regulations (as defined below), with any
changes contained in any prospectus filed with the Commission by the
Company with your consent after the effective date of the Registration
Statement, is herein referred to as the "Final Prospectus." The
prospectus included as part of the Registration Statement on the date
when the Registration Statement became effective and the prospectus
included in any post-effective amendment to such Registration Statement
is referred to herein as the "Effective Prospectus"; any prospectus
included in the Registration Statement and in any amendments thereto
prior to the effective date of the Registration Statement is referred to
herein as a "Pre-Effective Prospectus." The Pre-Effective Prospectus,
the Effective Prospectus and the Final Prospectus may sometimes
hereinafter be referred to collectively as the "Prospectus." For
purposes of this Agreement, "Rules and Regulations" means the rules and
regulations adopted by the Commission under either the Securities Act or
the Securities Exchange Act of 1934 (the "Exchange Act"), as applicable.
(b) No order preventing or suspending the use of any
Pre-Effective Prospectus has been issued by the Commission, and each
Pre-Effective Prospectus, at the time of filing thereof, 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, except that the foregoing shall not apply to statements in,
or omissions from, any Pre-Effective Prospectus in reliance upon, and in
conformity with, written information furnished to the Company by you or
on your behalf specifically for use in the preparation thereof.
(c) When the Registration Statement becomes effective, and at all
times subsequent thereto, the Registration Statement, any post-effective
amendment thereto and the Effective Prospectus and the Final Prospectus,
each as amended or supplemented, shall comply in all material respects
with the requirements of the Securities Act and the Rules and
Regulations. No such document shall contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of
circumstances under which they were made, not misleading, except that
the foregoing shall not apply to statements in, or omissions from, any
such document in reliance upon, and in conformity with, written
information furnished to the Company by you or on your behalf,
specifically for use in the preparation thereof. There is no contract or
document required to be described in the Registration Statement or the
Prospectus, or to be filed as an exhibit to the Registration Statement,
which is not described or filed as required.
(d) Price Waterhouse, whose report appears in the Effective
Prospectus, are independent public accountants as required by the
Securities Act and the Rules and Regulations. The consolidated financial
statements (including the related notes) included in the Registration
Statement or any Prospectus, present fairly, on the basis stated
therein, the financial condition, the results of the operations and
statements of cash flows of the entities purported to be shown thereby
at the dates and for the periods indicated and have been prepared in
accordance with generally accepted accounting principles in the United
States of America ("GAAP"), applied on a consistent basis throughout the
periods indicated. The selected consolidated financial data and summary
consolidated financial information included in the Registration
Statement and any Prospectus present fairly the information shown
therein and have been compiled on a basis consistent with
the audited financial statements included in the Registration Statement
and the Prospectus.
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(e) Each of the Company and its Subsidiaries (as defined in
Section 12 hereof) has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
organization, with full power and authority (corporate and other) to own
or lease its properties and conduct its business as described in the
Prospectus, and is duly qualified to do business and is in good standing
in each jurisdiction in which the character of the business conducted by
it or the location of the properties owned or leased by it makes such
qualification necessary, except to the extent that the failure to so
qualify will not have a material adverse effect upon the business,
condition (financial or other), operations or prospects upon the Company
and its Subsidiaries taken as a whole (a "Material Adverse Effect"), and
each of the Company and its Subsidiaries holds all material licenses,
certificates, permits, consents, orders and approvals or other
authorizations from governmental authorities necessary to lease or own,
as the case may be, and to operate their property and conduct their
business as now conducted. Except as set forth in the Prospectus, the
expiration of any such licenses, certificates and permits would not
materially affect the operation of the Company and its Subsidiaries,
taken as a whole. None of the activities or businesses of the Company or
any of its Subsidiaries is in violation of any law, rule, regulation or
order of the United States, Canada, the Special Administrative Region of
Hong Kong, the British Virgin Islands, the People's Republic of China,
or any state, county, province, municipality or locality thereof, or of
any agency or body of the United States, Canada, the Special
Administrative Region of Hong Kong, the British Virgin Islands, the
People's Republic of China, or of any state, county, province,
municipality or locality thereof or of any other foreign jurisdiction of
which the Company or any of its Subsidiaries may be subject, other than
violations which would not have a Material Adverse Effect.
(f) The capitalization of the Company as of June 30, 1997 is as
set forth under the caption "Capitalization" in the Prospectus, and the
Rights, the Units, the Warrants and the Common Shares conform to the
descriptions thereof contained under the caption "Description of
Securities" in the Final Prospectus; the outstanding Common Shares of
the Company have been, and the Common Shares underlying the Warrants,
upon issuance and delivery to the holders thereof and payment therefor
in the manner described in the Effective and Final Prospectus will be,
duly authorized, validly issued, fully paid and nonassessable, free and
clear of any liens, encumbrances, equities and claims. Except as
disclosed in or contemplated by this Agreement or the Lock-Up Agreement
(as defined in Section 4(f) hereof), there are no preemptive rights or
other rights to subscribe for or to purchase from the Company, or any
restriction upon the voting or transfer of, any Common Shares of the
Company pursuant to the Company's Memorandum of Association, Articles of
Association or other governing documents or any agreement or other
instrument to which the Company is a party or by which it is bound.
Except as contemplated by this Agreement, the Warrant Agreement, the
Representative's Warrant Agreement or the Counsel's Warrant Agreement,
none of the filing of the Registration Statement, the distribution of
the Rights nor the offering or sale of the Securities as contemplated by
this Agreement, the Warrant Agreement, the Representative's Warrant
Agreement or the Counsel's Warrant Agreement gives rise to any rights,
other than those which have been waived or satisfied, for or relating to
the registration of any shares of capital stock of the Company, or any
warrants, options or rights to acquire such capital stock. The Company
owns directly or indirectly all of the issued and outstanding shares of
capital stock of each of the Subsidiaries and there are no rights to
subscribe for or to purchase from the Company or any of its Subsidiaries
any shares of capital stock of any of the Subsidiaries. Each of the
Company's Subsidiaries is a Significant Subsidiary (as defined in
Section 12 hereof) except for Nam Tai Electronics (Canada) Ltd., a
Canadian Federal Company.
(g) Except as described in or contemplated by the Effective and
Final Prospectus, there has not been any material adverse change in, or
any adverse development that materially affects, the business,
properties, financial condition, results of operations or prospects of
the Company and its Subsidiaries, taken as a whole, from the date as of
which information is given in the applicable Prospectus; and except as
described in or contemplated by the Effective and Final Prospectus,
neither the Company nor any Subsidiary has, directly or indirectly,
incurred any material liabilities or obligations, direct or contingent,
not in the ordinary course of business, other than obligations related
to the offer and sale of the Securities, or entered into any
transactions not in the ordinary course of business, which are material
to the business of the Company or such Subsidiary and required to be
disclosed in the Prospectus. Except as described in or contemplated by
the Final Prospectus, there has not been any material change in the
capital stock of, or any incurrence of long-term debt by, the Company or
its Subsidiaries, or any issuance or grant of options,
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warrants or rights to purchase the capital stock of the Company, or any
declaration or payment of any dividend on the capital stock of the
Company from the date as of which information is given in the
Prospectus.
(h) Neither the Company nor any of its Subsidiaries is, nor with
the giving of notice or lapse of time or both would be, in violation of
or in default under, nor will the execution or delivery of this
Agreement, the Warrant Agreement, the Representative's Warrant Agreement
or the Counsel's Warrant Agreement or consummation of the transactions
contemplated hereby or thereby result in a violation of, or constitute a
default under, the Memorandum of Association, Articles of Association or
other governing documents of the Company or any of its Subsidiaries, or
any agreement, indenture or other instrument, to which the Company or
any of its Subsidiaries is a party or by which any of them is bound, or
to which any of their respective properties is subject, nor will the
performance by the Company of its obligations hereunder, under the
Warrant Agreement, the Representative's Warrant Agreement or the
Counsel's Warrant Agreement violate any law, rule, administrative
regulation or decree of any court or any governmental agency or body
have jurisdiction over the Company, its Subsidiaries or any of their
properties, or result in the creation or imposition of any lien, charge,
claim or encumbrance upon any property or asset of the Company or any of
its Subsidiaries, other than a lien, claim or encumbrance that would not
have a Material Adverse Effect. Except for permits and similar
authorizations required under the Securities Act and the securities or
"blue sky" laws of certain jurisdictions and the determination by the
National Association of Securities Dealers, Inc. (the "NASD") that it
has no objection to the terms and conditions of the Rights Offering or
the sale of the Representative's Warrants pursuant to this Agreement and
that the Standby Underwriters meet the "net capital" requirements to
effectuate the transactions contemplated by this Agreement, and for such
permits and authorizations which have been obtained, no consent,
approval, authorization or order of any court, governmental agency or
body or financial institution is required in connection with the
consummation of the transactions contemplated by this Agreement, the
Warrant Agreement, the Representative's Warrant Agreement or the
Counsel's Warrant Agreement.
(i) Each of this Agreement, the Warrant Agreement, the
Representative's Warrant Agreement and the Counsel's Warrant Agreement
has been duly authorized by the Company; this Agreement has been duly
executed and delivered by the Company; this Agreement constitutes and,
when executed and delivered, the Warrant Agreement, the Representative's
Warrant Agreement and the Counsel's Warrant Agreement will constitute,
the valid and binding agreement of the Company and each are enforceable
against the Company in accordance with their respective terms except as
rights to indemnity and/or contribution may be limited by federal or
state securities laws or the public policy underlying such laws, and
except as enforcement (i) may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting creditor's rights
generally and (ii) is subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding
in equity or at law).
(j) The Company and its Subsidiaries have good and marketable
title to all real and personal property owned by them free and clear of
all liens, encumbrances and defects except such as are described or
referred to in the Prospectus or such as do not materially affect the
value of such property or do not materially interfere with the use made
or proposed to be made of such property by the Company or such
Subsidiaries. Any real property and buildings held under lease by the
Company or any of its Subsidiaries and which are material to the
business of the Company are held by them under valid and existing and
enforceable leases subject to such exceptions as are not material or do
not interfere with the use made or proposed to be made of such property
and buildings by the Company or such Subsidiaries or such exceptions
that take into account the inherent difficulties of enforcing them
because of the nature of the legal system governing the leases.
(k) The Company and the Subsidiaries, taken as a whole, have not
sustained since June 30, 1997 any material loss or interference with its
business from fire, explosion, flood or other calamity, whether
or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Effective Prospectus and the Final Prospectus; and,
since the respective dates as of which information is given in the
Registration Statement and the Effective Prospectus and the Final
Prospectus, there has not been any material adverse change, or any
development
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involving a prospective material adverse change, in or affecting the
general affairs, management, business prospects, financial position,
shareholders' equity or results of operations of the Company and the
Subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Effective Prospectus and the Final Prospectus.
(l) Except as described in the Prospectus, there is no litigation
or governmental proceeding to which the Company or any of its
Subsidiaries is a party or to which any property of the Company or such
Subsidiaries is subject or which is pending in which the Company has
been served or, to the knowledge of the Company, is otherwise pending or
threatened against the Company or any of its Subsidiaries which would
have a Material Adverse Effect, or which is required to be disclosed in
the Prospectus, and to the Company's knowledge no labor disturbance by
the employees of the Company or any of its Subsidiaries exists or is
imminent which would have a Material Adverse Effect, or which is
required to be disclosed in the Effective Prospectus and the Final
Prospectus.
(m) Neither the Company nor any Subsidiary is in violation of any
law, ordinance, governmental rule or regulation or court decree to which
any of them may be subject which violation would have a Material Adverse
Effect.
(n) The Company has not taken and shall not take, directly or
indirectly, any action resulting in a violation of Regulation M under
the Exchange Act, or designed to cause or result in, or which has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Common Shares of the
Company to facilitate the sale of or resale of the Units or Securities
covered thereby.
(o) The Company and its Subsidiaries have timely (giving effect
to permitted extensions) and properly prepared and filed all necessary
income, franchise and other required tax returns whether required by the
United States, Canada, the British Virgin Islands, the Special
Administrative Region of Hong Kong or the People's Republic of China or
any other jurisdiction, and has paid all taxes shown as due thereon
(other than such taxes, if any, owing by certain of the Subsidiaries
that are dormant and without assets, the nonpayment of which would not
have a Material Adverse Effect), and the Company has no knowledge of any
tax deficiency that has been or might be asserted against the Company or
its Subsidiaries which would have a Material Adverse Effect.
(p) None of the Company, any of its Subsidiaries, nor to the
Company's knowledge any officer, director, employee or agent acting on
behalf of the Company or any of its Subsidiaries has at any time (i)
made any contributions to any candidate for political office in
violation of applicable law, or failed to disclose fully any
contributions to any candidate for political office in accordance with
any applicable statute, rule, regulation or ordinance requiring such
disclosure, (ii) made any payment to any local, state, federal or
foreign governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments required or
allowed by applicable law, (iii) made any payment outside the ordinary
course of business to any purchasing or selling agent or person charged
with similar duties of any entity to which the Company or any of its
Subsidiaries sells or from which the Company or any of its Subsidiaries
buys products for the purpose of influencing such agent or person to buy
products from or sell products to the Company or any of its
Subsidiaries, or (iv) except as set forth in the Prospectus, engaged in
any transaction, maintained any bank account or used any corporate funds
except for transactions, bank accounts and funds which have been and are
reflected in the normally maintained books and records of the Company.
(q) Except as set forth in the Prospectus, the Company does not
know of any claims for services in the nature of a finder's fee,
consulting fee or brokerage fee with respect to this offering for which
the Company, its Subsidiaries or the Standby Underwriter may be
responsible.
(r) The properties of the Company and its Subsidiaries are
adequately insured against loss or damage by fire and there is
maintained on such properties such other insurance as is prudent or
customarily maintained by companies in the same or similar business and
in the same or similar locality.
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(s) Except as described in the Effective and Final Prospectus,
the Company or its Subsidiaries owns or possesses adequate rights to use
all material patents, patent rights, inventions, trademarks, service
marks, trade names and copyrights necessary for the conduct of its
business as described in the Effective and Final Prospectus; except as
set forth in the Effective and Final Prospectus, neither the Company nor
such Subsidiaries have received any notice of infringement of or
conflict with, and to the best knowledge of the Company neither the
Company nor its Subsidiaries is infringing or in conflict with, asserted
rights of others with respect to any patents, patent fights, inventions,
trademarks, service marks, trade names or copyrights which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a Material Adverse Effect.
(t) The Warrants, the Representative's Warrants and the Counsel's
Warrants have been duly and validly authorized by the Company and upon
delivery to you in accordance herewith will be duly issued and legal,
valid and binding obligations of the Company.
(u) The Common Shares underlying the Warrants, the
Representative's Warrants and the Counsel's Warrants have been duly
authorized and reserved for issuance upon the exercise of the Warrants,
the Representative's Warrants and the Counsel's Warrants and when issued
upon payment of the exercise price therefor will be validly issued,
fully paid and nonassessable Common Shares, free and clear of all liens,
encumbrances, equities and claims.
(v) There are no outstanding loans or advances or guarantees of
indebtedness by the Company or any of its Subsidiaries to or for the
benefit of any of the officers or directors of the Company or any of its
Subsidiaries, or any of the members of the families of any of them,
which are required by the Rules and Regulations to be described in the
Registration Statement, Effective Prospectus and Final Prospectus except
such that are so described.
(w) The Company maintains a system of internal accounting
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 GAAP and
to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorizations; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
2. PURCHASE BY THE UNDERWRITERS.
(a) On the basis of the representations, warranties, covenants
and agreements herein contained, and subject to the terms and conditions
herein set forth, the Company agrees to issue and sell to the Standby
Underwriters and the Standby Underwriters agree to purchase from the
Company, the Underwritten Units, at a price per Underwritten Unit equal
to the lesser of (x) $17.00 per Unit, and (y) the per share closing bid
price of the Common Shares on the Nasdaq National Market System on
November 24, 1997, the Expiration Date of the Rights Offering (the
"Expiration Date") provided, however, if the Representative exercises
the Standby Underwriters' Oversubscription Cutback, the purchase price
per Underwritten Unit shall be $17.00 per Unit. The Standby Underwriters
agree to offer the Underwritten Units to the public as set forth in the
Final Prospectus.
(b) On the Closing Date, simultaneously with the purchase of the
Underwritten Units, if any, by the Standby Underwriters, the Company
shall pay to the Standby Underwriters a standby fee equal to four
percent (4%) of the total gross proceeds (before payment of any fees or
commissions payable hereunder or to any other third party) received by
the Company from the sale of Units in the Rights Offering and from the
sale of the Underwritten Units pursuant to this Agreement.
3. DELIVERY OF AND PAYMENT FOR UNITS. Delivery of certificates for the
securities composing the Units to be purchased by the Standby Underwriters from
the Company and payments therefor, shall be made at the offices of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Associates, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or such
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other place as mutually may be agreed upon), before 7:00 A.M., California time,
on the fourth full Business Day following the Expiration Date or at such other
date, not later than ten Business Days after such date, as shall be determined
by agreement of the Company and the Standby Underwriter (the "Closing Date").
Delivery of certificates representing the securities composing the
Underwritten Units shall be made by or on behalf of the Company to you, against
payment of the purchase price therefor by certified or official bank check or
wire transfer payable immediately available funds. The certificates shall be
registered in such names and denominations as you shall have requested at least
two full Business Days prior to the Closing Date, and shall be made available
for checking and packaging at a location as may be designated by you at least
one full Business Day prior to the Closing Date. Time shall be of the essence,
and delivery at the time and place specified in this Agreement is a further
condition to the obligations of the Standby Underwriters.
4. COVENANTS. The Company covenants and agrees with the Standby
Underwriters that:
(a) The Company shall use its best efforts to comply with the
provisions of and make all requisite filings with the Commission
pursuant to the Rules and Regulations and to notify you promptly (in
writing, if requested) of all such filings. The Company shall notify you
promptly of any request by the Commission for any amendment of or
supplement to the Registration Statement or the Effective or Final
Prospectus or for additional information; the Company shall prepare and
file with the Commission, promptly upon your request, any amendments of
or supplements to the Registration Statement or Effective or Final
Prospectus which, in your reasonable opinion, may be necessary or
advisable in connection with the distribution of the Units; the Company
shall prepare and file with the Commission from time to time any
amendments of or supplements to the Registration Statement or Effective
or Final Prospectus (or in lieu thereof, at the Company's option, a
separate registration statement) which may be necessary or advisable to
comply with the requirements imposed upon it by the Securities Act, as
now and hereafter amended, and by the Rules and Regulations as from time
to time in force, so far as is necessary to permit the continuance of
sales of Common Shares upon exercise of the Warrants and Standby
Underwritten Warrants, until such time as all of the Warrants have been
exercised or redeemed and all of the Units underlying the
Representative's Warrants and Counsel's Warrants have been issued and
sold (but not more than three years, six months after the Closing Date);
and the Company shall not file any amendment of or supplement to the
Registration Statement or the Effective or Final Prospectus which is not
approved by you after reasonable notice thereof, such approval not to be
unreasonably withheld or delayed. The Company shall advise you promptly
of the issuance by the Commission or any state or other regulatory body
of and stop order or other order suspending the effectiveness of the
Registration Statement, suspending or preventing the use of any
Pre-Effective Prospectus or the Effective or Final Prospectus or
suspending the qualification of the Securities for offering or sale in
any jurisdiction, or of the institution of any proceedings for any such
purpose, and the Company shall use its best efforts to prevent the
issuance of any stop order or other such order and, should a stop order
or other such order be issued, to obtain as soon as possible the lifting
thereof.
(b) The Company shall furnish to the Standby Underwriter, from
time to time and without charge, a reasonable number of copies of the
Registration Statement of which one for the Standby Underwriter and one
for counsel to the Standby Underwriter shall be signed and shall include
exhibits and all amendments and supplements to any such Registration
Statement, in each case as soon as available and in such quantities as
you may from time to time reasonably request.
(c) Within the time during which a Final Prospectus relating to
the Securities is required to be delivered under the Securities Act, the
Company shall comply with all requirements imposed upon it by the
Securities Act, as now and hereafter amended, and by the Rules and
Regulations as from time to time in force, so far as is necessary to
permit the continuance of sales of or dealings in the Securities as
applicable, as contemplated by the provisions hereof and the Final
Prospectus. If during such period any event occurs as a result of which
the Final Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances then existing, not misleading, or if during such period it
is necessary to amend the Registration Statement or supplement the Final
Prospectus to comply with Securities Act, the Company shall promptly
notify you and the Company shall amend the Registration Statement or
supplement the Final Prospectus (at
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the expense of the Company) so as to correct such statement or omission
or effect such compliance.
(d) The Company shall take or cause to be taken all necessary
action and furnish to whomever you may direct such information as may be
required in qualifying the Securities for sale under the laws of such
jurisdictions which you shall designate and to continue such
qualifications in effect for as long as may be necessary for the
distribution of the Securities, 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 for service of process, or
subject itself to taxation as doing business in such jurisdiction.
(e) The Company shall make generally available to its security
holders, in the manner contemplated by Rule 158(b) under the Securities
Act, as soon as practicable but in any event not later than 45 days
after the end of its fiscal quarter in which the first anniversary date
of the effective date of the Registration Statement occurs, an earnings
statement satisfying the requirements of Section 11(a) of the Securities
Act covering a period of at least 12 consecutive months beginning after
the effective date of the Registration Statement.
(f) At or before the Closing Date, you shall receive from the
directors of the Company, a written agreement (the "Lock-Up Agreement")
not to offer, sell, transfer or otherwise dispose of, directly or
indirectly, any of the Common Shares or other equity securities of the
Company now owned, for a period of 90 days following the Closing Date,
without your prior written consent or as required to satisfy such
person's obligations under a margin loan entered into prior to the date
of this Agreement; provided, however, that such persons may make private
dispositions or gifts of such securities if such securities constitute
"restricted securities" within the meaning of Rule 144 of the Rules and
Regulations, in the hands of the acquiring persons, and if the acquiring
persons agree in writing to be bound by the foregoing restrictions on
transfer.
(g) The Company shall not solicit Warrant exercises other than
through the Representative. Upon exercise of any Warrant by the holder
thereof, the Company shall pay to the Standby Underwriter a fee in an
amount equal to one percent (1%) of the aggregate exercise price of the
Warrants so exercised, provided, that, (i) the market price of the
Common Shares on the date the Warrant is exercised is greater than the
then exercise price of the Warrants; (ii) the exercise of the Warrants
was solicited by a member of the National Association of Securities
Dealers, Inc.; (iii) the Warrant being exercised is not held in a
discretionary account; (iv) disclosure of the compensation arrangements
was made both at the time of the Rights Offering and at the time of the
exercise of the Warrant; and (v) the solicitation of the exercise of the
Warrant was not in violation of Regulation M promulgated under the
Exchange Act.
(h) The Company shall apply the net proceeds of the sale of the
Units as set forth in the Effective and Final Prospectus.
(i) The Company shall pay or cause to be paid (i) all expenses
(including stock transfer taxes) incurred in connection with the
distribution of the Rights and the purchase, sale and delivery of the
Units to its shareholders and the Standby Underwriter, as applicable,
(ii) all fees and expenses (including, without limitation, fees and
expenses of the Company's accountants and counsel, but excluding fees
and expenses of counsel for the Standby Underwriter not related to the
matters set forth in Section 4(i)(iii) below)) in connection with the
preparation, printing, filing, delivery and shipping of the Registration
Statement (including the financial statements therein and all amendments
and exhibits thereto), each Pre-Effective Prospectus, the Effective and
Final Prospectus as amended or supplemented and the printing, delivery
and shipping of this Standby Underwriting Agreement, the Agreement among
Standby Underwriters and Selected Dealer Agreements and any letters
transmitting the offering material to the Standby Underwriter or selling
group members (including costs of mailing and shipment), (iii) all
filing fees and up to $2,500 for the payment of fees and disbursements
of counsel to the Standby Underwriter incurred in connection with the
qualification of the Units and the Securities under state securities
laws as provided in Section 4(d) hereof; (iv) the filing fee of the
National Association of Securities Dealers, Inc., (v) any applicable
listing fees, (vi) the cost of printing certificates representing the
Warrants and the Common Shares, (vii) the cost and charges of any
transfer agent or registrar, (viii) the costs of a tombstone
advertisement relating to the Rights Offering
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in the Wall Street Journal, national edition and The Investment
Reporter, in each case in form and substance satisfactory to the Standby
Underwriter, and of advertising undertaken at the Company's request,
including all graphic slide costs (ix) the costs of preparing, printing
and distributing bound volumes for the Standby Underwriter and its
counsel, (x) all costs and expenses incurred by the Company in
connection with traveling and attending meetings on the "road show" or
other marketing expenses incurred in connection with distribution of the
Rights and the Securities, (xi) the fee set forth in Section 2(b), and
(xii) all other costs and expenses incident to the performance of the
obligations of the Company hereunder which are not otherwise provided
for in this section. In addition, the Company shall also pay to you, at
the Closing Date, a nonaccountable expense allowance equal to one
percent (1%) of the total gross proceeds received by the Company from
the Sale of Units in the Rights Offering and from the Sale of
Underwritten Units pursuant to this Agreement. If the sale of the
Underwritten Units provided for herein is not consummated for any
reason, the Company shall reimburse the Standby Underwriter for all
reasonable out-of-pocket disbursements (including reasonable fees and
disbursements of counsel) actually incurred by the Standby Underwriter
in connection with the investigation, preparing to market and marketing
of the Units or in contemplation of performing their obligations
hereunder up to a maximum of $40,000. The Company shall not in any event
be liable to the Standby Underwriters for loss of anticipated profits
from the transactions covered by this Standby Underwriting Agreement. It
is understood and agreed, however, that except as provided in this
Section 4, the Standby Underwriter shall pay all of its expenses and
costs, including the fees of its own counsel and advertising expenses or
other expenses connected with any offers and/or sales of Underwritten
Units they may make.
(j) The Company, at its expense, shall furnish its shareholders
with an annual report containing audited financial statements prepared
in accordance with GAAP that have been reported on by its independent
accountants, and, as soon as practicable after the end of each of the
first three quarters of each fiscal year, a balance sheet, a statement
of the Company's cash flows for such quarter, and a statement of the
Company's operations for such quarter (which may be in condensed form),
all in reasonable detail.
(k) So long as the Company has an active subsidiary or
subsidiaries, the financial statements provided for in Section 4(j) will
be on a consolidated basis to the extent the accounts of the Company and
its Subsidiary or Subsidiaries are consolidated in reports furnished to
its shareholders generally, separate financial statements shall be
furnished for all Subsidiaries whose accounts are not consolidated but
which at the time are "Significant Subsidiaries."
(l) The Company maintains and shall continue to maintain a system
of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary in order to permit preparation of financial
statements in accordance with generally accepted accounting principles
and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(m) The Company shall comply with all registration, filing and
reporting requirements of the Exchange Act which may from time to time
be applicable to the Company.
(n) The Company shall make all filings required, including
registration under the Exchange Act, to obtain and maintain the listing
of the Warrants and the Common Shares on the Nasdaq National Market
System, in each case upon the effectiveness of the Registration
Statement.
5. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. The obligations of the
Standby Underwriter hereunder to purchase and pay for the Underwritten
Units, and to perform each of its other obligations set forth herein,
are subject to the accuracy, as of the date hereof and the Closing Date
(as if made at the Closing Date), of the representations and warranties
of the Company contained herein, to the performance by the Company of
its obligations hereunder and to the following additional conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become
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effective and all filings required by Rule 424 and Rule 430A of the
Rules and Regulations shall have been made within the time period
required by the Rules and Regulations; no stop order suspending the
effectiveness of the Registration Statement or any amendment or
supplement thereto shall have been issued; no proceedings for the
issuance of such an order shall have been initiated or threatened; and
any request of the Commission for additional information (to be included
in the Registration Statement or the Final Prospectus or otherwise)
shall have been disclosed to you and complied with to your satisfaction.
(b) You shall not have advised the Company that the Registration
Statement or Effective or Final Prospectus, or any amendment or
supplement thereto, contains an untrue statement of fact which, in your
opinion, is material, or omits to state a fact which, in your opinion,
is material and is required to be stated therein or is necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading.
(c) On or prior to the Closing Date, you shall have received from
Troop ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, counsel for the Standby
Underwriters, such opinion or opinions with respect to the sufficiency
of all corporate proceedings and other legal matters relating to this
Agreement and the transactions contemplated hereby as you reasonably may
require, and such counsel shall have received such papers and
information as they request to enable them to pass upon such matters.
(d) On the Closing Date, there shall have been furnished to you
the opinion (addressed to you as Representative of the Standby
Underwriters) of McW, ▇▇▇▇▇▇ & Co., counsel for the Company with respect
to certain matters of the law of the British Virgin Islands, dated the
Closing Date and in form and substance satisfactory to counsel for the
Standby Underwriters and stating that it may be relied upon by counsel
for the Underwriter in giving their opinion, to the effect that:
(i) The Company is a corporation duly organized and
validly existing and in good standing under the laws of the
British Virgin Islands. The Company has all corporate power and
authority, and all material permits of and from all British
Virgin Islands' public, regulatory or governmental officials and
bodies, to own, lease and operate its properties and conduct its
business as now being conducted and as described in the
Prospectus and, to the best knowledge of such counsel, there are
no proceedings pending or threatened relating to the revocation
or modification of any such permit, nor is there any basis
therefor, nor has any event occurred that allows (or which with
notice or lapse of time, or both, would allow) revocation or
termination thereof or result in any other impairment of the
rights of the holder of any such permit.
(ii) The Company has all requisite corporate power and
authority to execute, deliver and perform each of this Agreement,
the Representative's Warrant Agreement and the Warrant Agreement.
Each of this Agreement, the Representative's Warrant Agreement
and the Warrant Agreement have been duly and validly authorized,
executed and delivered by the Company, and constitute the legal,
valid and binding agreement of the Company, enforceable against
the Company in accordance with its respective terms, except as
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors'
rights generally from time to time in effect and the availability
of equitable remedies (regardless of whether enforceability is
considered in a proceeding at law or in equity).
(iii) None of the execution, delivery and performance of
this Agreement, the Representative's Warrant Agreement, the and
the Warrant Agreement, the consummation of the transactions
herein or therein contemplated by the Company, including the
issuance, sale and delivery of the Securities provided for
thereunder, nor compliance with the terms and provisions hereof
and thereof, will: (A) to the best of such counsel's knowledge,
conflict with or result in a breach of any of the terms and
provisions of, or constitute a default (or an event that with
notice or lapse of time, the Counsel's Warrants, or both, would
constitute a default) or require consent under, or result in the
creation or imposition of any lien, encumbrance, security
interest, claim or other restriction of any nature whatsoever
upon any property or assets of the Company or any of the
Subsidiaries, pursuant to the terms of any oral or written
agreement or understanding, instrument
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or permit known to such counsel to which the Company or any of
the Subsidiaries is a party or by which any of their respective
properties or assets may be bound; or (B) violate or conflict
with any provisions of the charter of the Company or any of the
Subsidiaries, or any statute, rule or regulation, or to the best
of such counsel's knowledge, any permit, judgment, decree, order
of any court, arbitrator or similar person or any British Virgin
Islands' public, governmental or other regulatory agency or body
having jurisdiction over the Company or any of the Subsidiaries
or any of their respective properties or assets. No consent,
approval, authorization or permit of or with any court,
arbitrator or similar person or any British Virgin Islands'
public, governmental or regulatory agency or body having
jurisdiction over the Company or any of the Subsidiaries or any
of their respective properties or assets is required for the
execution, delivery and performance of this Agreement, the
Representative's Warrant Agreement, or the Warrant Agreement,
and the consummation of the transactions herein or therein
contemplated, including, without limitation, the issuance, sale
and delivery of any of the Units or the Securities.
(iv) The authorized, issued and outstanding capital
stock of the Company, is as set forth under the caption
"Capitalization" in the Effective Prospectus. The Units, the
Common Shares and the Warrants, the Representative's Warrants,
the and each other authorized class of capital stock of the
Company conforms in all material respects to all statements in
relation thereto contained in the Effective Prospectus. The
Company has a sufficient number of authorized but unissued
Common Shares to enable the Company to issue, without further
stockholder action, all of the Common Shares underlying the
Warrants, the Representative's Warrants and the Counsel's
Warrants. The Company has reserved out of the authorized but
unissued Common Shares all of the shares underlying the Units
and Warrants. All of the issued and outstanding Common Shares
have been duly and validly authorized and issued and are fully
paid and nonassessable, with no personal liability attaching to
the ownership thereof. The shares included in, and underlying
the Warrants included in, the Units to be issued or sold in
accordance with the terms of this Agreement, when paid for in
accordance with this Agreement, and the Warrant Agreement, as
applicable, will be duly and validly issued, fully paid and
nonassessable, with no personal liability attaching to the
ownership thereof. There are no preemptive rights or other
rights to subscribe for or to purchase, or any restrictions upon
the voting or transfer of, any Common Shares pursuant to the
Company's Memorandum or Articles of Association or, to the best
knowledge of such counsel, any other agreement or instrument to
which the Company or any of the Subsidiaries is a party or by
which the Company or any of the Subsidiaries is bound.
(v) To the best of such counsel's knowledge, there is no
litigation, arbitration, action, suit, proceeding or
investigation before or by any court, arbitrator or similar
party or by or before any governmental agency or body, pending
or threatened: (A) to which the Company, or any of the
Subsidiaries is a party or which any property or assets of the
Company, or any of the Subsidiaries is the subject that is
required to be disclosed in the Registration Statement or the
Prospectus that is not described as required; or (B) to which
the Company or any of the Subsidiaries is a party or which any
property or assets of the Company or any of the Subsidiaries is
the subject that, if adversely determined, could individually or
in the aggregate, have a material effect on the business,
operations, earnings, prospects, properties or condition
(financial or otherwise) of the Company, or any of the
Subsidiaries.
(vi) To the best of such counsel's knowledge, neither
the Company, nor any of the Subsidiaries is in violation of, or
in default with respect to, its charter or any British Virgin
Islands' law, rule, permit, regulation, order, judgment or
decree applicable to or binding upon the Company or any
Subsidiary or by which any of their respective assets or
properties may be bound or affected, except such as are
described in the Effective Prospectus and Final Prospectus or
such as, individually or in the aggregate, do not now have, and
in the future do not pose a significant risk of having a
material adverse effect upon the business, operations, earnings,
properties or condition (financial or otherwise) of the Company
or any of the Subsidiaries.
(vii) To the best of such counsel's knowledge, no
default exists, and no event has
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occurred that with notice or lapse of time, or both, would
constitute a default in the due performance and observance of
any term, covenant or condition of any material indenture,
mortgage, deed of trust, note, bank loan or credit agreement,
lease, permit, authorization or any other material oral or
written agreement or instrument to which the Company or any of
the Subsidiaries is a party or by which any of them or any of
their respective properties or assets may be bound or affected.
(viii) The form of certificates for the Warrants
attached to the Registration Statement as an exhibit has been
duly adopted by the Company and conforms to all legal
requirements of the British Virgin Islands.
(ix) To the best of such counsel's knowledge, there are
no outstanding options, warrants, calls, rights or other
agreements or commitments with respect to the purchase of any
capital shares of the Company, other than as disclosed in the
Registration Statement.
(x) The descriptions contained in the Registration
Statement of British Virgin Islands statutes, British Virgin
Islands legal and governmental proceedings or British Virgin
Islands laws are accurate and complete in all material respects.
(xi) Under the laws of the British Virgin Islands, the
submission by the Company to the jurisdiction of any Federal or
State court sitting in the State of California, and the
designation of the law of the State of California to apply to
this Agreement is binding upon the Company and would be
enforceable in any judicial or administrative proceeding in the
British Virgin Islands if properly brought to the attention of
the Court or administrative body in accordance with the laws of
the British Virgin Islands.
(xii) Any judgment obtained in the Federal Courts of the
United States or any State Court in the United States against
the Company for a definite sum would be treated by the High
Court of the British Virgin Islands as a cause of action in
itself so that no retrial of the issues would be necessary
provided that:
(A) the Federal Court of or the State court in
the United States had jurisdiction in the
matter:
(B) the judgment given by the Federal Court of
or the State Court in the United States was
final and conclusive;
(C) the judgment given by the Federal Court of
or the State Court in the United States was
not in respect of penalties, taxes, fines or
similar fiscal or revenue obligations;
(D) in obtaining the judgment there was no fraud
on the part of the person in whose favor the
judgment was given or on the part of the
Federal Court of or the State Court in the
United States;
(E) recognition or enforcement of the judgment
in the British Virgin Islands would not be
contrary to public policy; and
(F) the proceedings pursuant to which judgment
was obtained were not contrary to natural
justice.
In rendering such opinion, such counsel may rely, as to matters of fact,
to the extent it deems proper, on statements or certificates of responsible
officers of the Company or the Subsidiaries, certificates of public officials,
and certificates or other written statements of officers of departments of
various jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company and the Subsidiaries, provided that
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copies of any such statements or certificates shall be delivered to the Standby
Underwriter's counsel upon request.
(e) On the Closing Date, there shall have been furnished to you
the opinion (addressed to you as Representative of the Standby
Underwriters) of ▇▇▇▇▇▇▇▇▇ & Grist, counsel for the Company with respect
to certain matters of Hong Kong law, dated the Closing Date and in form
and substance satisfactory to counsel for the Standby Underwriters and
stating that it may be relied upon by counsel for the Standby
Underwriters in giving their opinion, to the effect that:
(i) Nam Tai Electronic & Electrical Products Limited ("Nam
Tai HK") is a corporation duly organized and validly existing
under the laws of the Special Administrative Region of Hong Kong,
has full corporate power and authority, and all material permits
of and from all Hong Kong public, regulatory or governmental
officials or bodies, to own, lease and operate its properties and
conduct its business in the manner currently conducted and as
proposed to be conducted and, to the best of our knowledge, there
are no proceedings pending or threatened relating to the
revocation or modification of any such permit, nor is there any
basis therefor, nor has any event occurred that allows (or which
with notice or lapse of time, or both, would allow) revocation or
termination thereof or result in any other impairment of the
right of the holder of any such permit.
(ii) All of the issued and outstanding capital stock of
Nam Tai HK has been duly and validly authorized and issued, is
fully paid and nonassessable, has not been issued and is not
owned or held in violation of any preemptive rights contained in
the Articles of Association of Nam Tai HK and is owned directly
by the Company, to the best of our knowledge, free and clear of
any lien, encumbrance, claim security interest, restriction on
transfer (except for restrictions imposed under the Securities
Act or applicable state or foreign securities laws).
(iii) The descriptions contained in the Registration
Statement of Hong Kong statutes, Hong Kong legal and governmental
proceedings or Hong Kong laws are accurate and complete in all
material respects.
(iv) Under the laws of the Special Administrative Region
of Hong Kong, the submission by the Company or any HK Subsidiary
to the jurisdiction of any Federal or State court sitting in the
State of California, and the designation of the law of the State
of California to apply to the Standby Underwriting Agreement is
binding upon the Company and each HK Subsidiary and would be
enforceable in any judicial or administrative proceeding in the
Special Administrative Region of Hong Kong if properly brought to
the attention of the Court or administrative body in accordance
with the laws of the Special Administrative Region of Hong Kong.
(v) To the best of our knowledge (based upon examination
of each of the HK Subsidiaries' statutory books, records
maintained by the Registrar of Companies and available for
inspection in respect of each of the HK Subsidiaries, and our
files), there are no outstanding options, warrants, calls, fights
or other agreements or commitments with respect to the purchase
of any capital stock of any of the HK Subsidiaries, other than as
disclosed in the Registration Statement.
In rendering such opinion, such counsel may rely, as to matters of fact,
to the extent it deems proper on statements or certificates of responsible
officers of the Company or the Subsidiaries, certificates of public officials,
and certificates or other written statements of officers of departments of
various jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company and the Subsidiaries, provided that
copies of any such statements or certificates shall be delivered to the Standby
Underwriter's counsel upon request.
(f) On the Closing Date, there shall have been furnished to you
the opinion (addressed to you as Representative of the Standby
Underwriters) of counsel for the Company licensed in the People's
Republic of China, dated the Closing Date and in form and substance
satisfactory to counsel for the Standby Underwriters and covering such
matters concerning the Company's Chinese subsidiaries, assets and
property, as well as matters of Chinese law, as may be reasonably
requested by the Standby Underwriters.
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In rendering such opinion, such counsel for the Company shall state that
it has reviewed the Registration Statement and the Prospectus, and no facts have
come to the attention of such counsel to give such counsel reason to believe
that the Registration Statement, at the time it became effective (or if any
amendment thereof or supplement thereto is made prior to the Closing Date, as of
the date of such amendment or supplement), 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 that the
Prospectus, at the time the Registration Statement became effective (or if any
amendment thereof is made prior to the Closing Date, as of the date of such
amendment) and at the Closing Date contained an untrue statement of a material
fact or omitted to state a material fact necessary, in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading (it being understood that such counsel need express no belief or
opinion with respect to the financial statements and schedules and other
financial statistical data included therein).
In rendering such opinion, such counsel may rely, as to matters of fact,
to the extent it deems proper, on statements or certificates of responsible
officers of the Company or the Subsidiaries, certificates of public officials,
and certificates or other written statements of officers of departments of
various jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company and the Subsidiaries, provided that
copies of any such statements or certificates shall be delivered to the Standby
Underwriter's counsel upon request.
(g) On the Closing Date, there shall have been furnished to you
the opinion (addressed to you as Representative of the Standby
Underwriters) of Freshman, Marantz, Orlanski, ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel
for the Company, dated the Closing Date and in form and substance
satisfactory to counsel for the Standby Underwriters and stating that it
may be relied upon by counsel for the Standby Underwriters in giving
their opinion, to the effect that:
(i) Each of the Company and each of its Significant
Subsidiaries is duly qualified to do business as a foreign
corporation and is in good standing in all jurisdictions in the
United States, if any, in which the ownership or leasing of its
properties or the conduct of its business requires such
qualification, except where the failure so to qualify would not
have a material adverse effect on the condition (financial or
otherwise), earnings, operations, business or business prospects
of the Company and its subsidiaries considered as one
enterprise;
(ii) To the best of such counsel's knowledge, based upon
telephonic advice from the Commission, the Registration
Statement has become effective under the Securities Act and, to
the best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued, and
no proceedings for that purpose have been instituted or are
pending or threatened under the Securities Act;
(iii) The Registration Statement and the Prospectus, and
each amendment or supplement thereto (other than the financial
statements, financial and statistical data included therein or
omitted therefrom, as to which such counsel need express no
opinion) as of the effective date of the Registration Statement,
complied as to form in all material respects with the
requirements of the Securities Act and the applicable Rules and
Regulations;
(iv) To the best of such counsel's knowledge, the Units,
Common Shares and the Warrants conform in all material respects
to all statements in relation thereto contained in the
Prospectus;
(v) The description in the Registration Statement and
the Prospectus of the Memorandum or Articles of Association or
Bylaws of the Company and of statutes and contracts are accurate
in all material respects and fairly present in all material
respects the information required to be presented by the
Securities Act and the Rules and Regulations;
(vi) To the best knowledge of such counsel, there are no
agreements, contracts, licenses, leases or documents of a
character required to be described or referred to in the
Registration Statement or Prospectus or to be filed as an
exhibit to the Registration Statement that
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are not described or referred to therein and filed as required;
(vii) To the best of such counsel's knowledge, the
performance of the Agreement, the Warrant Agreement and the
Representatives' Warrant Agreement and the consummation of the
transactions contemplated thereby will not result in the breach
or violation of any of the terms and provisions of the Company's
Memorandum or Articles of Association or Bylaws, or to the best
of such counsel's knowledge, result in the breach or violation
of any of the terms and provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement,
bond, debenture, note agreement or other evidence of
indebtedness, or any lease, license, contract or other agreement
or instrument known to such counsel to which the Company is a
party or by which any of its properties are bound, or to the
best of such counsel's knowledge, (other than performance of the
Company's indemnification and contribution obligations under
such agreements, concerning which no opinion need be expressed)
any applicable statute, rule or regulation or, to its knowledge,
any order, writ or decree of any court or governmental agency or
body having jurisdiction over the Company or over any of its
properties or operations; provided, however, that no opinion
need be rendered concerning state securities or Blue Sky laws;
(viii) No authorization, approval or consent of any
governmental authority or agency of the United States of America
is necessary in connection with the consummation of the
transactions contemplated by the Agreement, the Warrant
Agreement and the Representatives' Warrant Agreement, except
such as have been obtained under the Securities Act or such as
may be required under the rules and regulations of the National
Association of Securities Dealers, Inc., or under state
securities or Blue Sky laws in connection with the purchase and
the distribution of the Securities by the Underwriters;
(ix) To the best knowledge of such counsel, there are no
legal or governmental proceedings pending or threatened against
the Company or any of its subsidiaries of a character which are
required to be disclosed in the Registration Statement or the
Prospectus by the Securities Act or the applicable Rules and
Regulations, other than those described therein;
(x) To the best knowledge of such counsel, neither the
Company nor any of its Significant Subsidiaries is presently in
breach of, or in default under, any bond, debenture, note or
other evidence of indebtedness or any contract, indenture,
mortgage, deed of trust, loan agreement, lease, license or other
agreement or instrument to which the Company or any of its
subsidiaries is a party or by which any of their properties are
bound which is material to the financial condition, earnings,
operations, business or business prospects of the Company and
its Significant Subsidiaries considered as one enterprise;
(xi) To the best knowledge of such counsel, except as
set forth in the Registration Statement and Prospectus, no
holders of Common Stock or other securities of the Company have
registration rights with respect to securities of the Company;
and
(xii) The submission to Jurisdiction and Waiver of
Immunity and Inconvient Forum clause of Section 14 of the
Agreement is valid and binding upon the Company.
In rendering such opinion, such counsel for the Company shall state that
in participating in the preparation of the Registration Statement and the Final
Prospectus, and in conferences with the officers and other representatives of
and accountants for the Company and with the Representatives and Underwriter's
Counsel, at which conferences the contents of the Registration Statement and the
Final Prospectus and related matters were discussed, no facts have come to the
attention of such counsel to give such counsel reason to believe that the
Registration Statement, at the time it became effective (or if any amendment
thereof is made prior to the Closing Date, as of the date of such amendment),
and at the Closing 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, in light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
belief or opinion with respect to the financial statements and schedules and
other financial statistical data included therein).
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In rendering such opinion, such counsel may rely, as to matters of fact (except
such firm's knowledge), to the extent it deems proper, on statements or
certificates of responsible officers of the Company or the Subsidiaries,
certificates of public officials, and certificates or other written statements
of officers of departments of various jurisdictions having custody of documents
respecting the corporate existence or good standing of the Company and the
Subsidiaries, provided that copies of any such statements or certificates shall
be delivered to the Standby Underwriter's counsel upon request.
(h) There shall have been furnished to you a certificate, dated
the Closing Date and addressed to you, signed by the Chairman of the
Board and Chief Financial Officer of the Company to the effect that (i)
the representations and warranties of the Company contained in this
Standby Underwriting Agreement are true and correct as if made at and as
of the Closing Date, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to the Closing Date; (ii) no stop order
suspending the effectiveness of the Registration Statement has been
issued, and no proceedings for that purpose have been initiated or
threatened; (iii) all filings required by Rule 424 and Rule 430A of the
Rules and Regulations have been made; (iv) the signers of said
certificate have carefully examined the Registration Statement and the
Effective Prospectus and the Final Prospectus, and any amendments or
supplements thereto, and such documents contain all statements and
information required to be included therein, and do not include any
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 light of the circumstances under which they were made, not
misleading;, and (v) since the effective date of the Registration
Statement, there has occurred no event required to be set forth in an
amendment or supplement to the Registration Statement or the Effective
Prospectus and the Final Prospectus which has not been so set forth.
(i) Since the effective date of the Registration Statement, the
Company shall not have sustained any loss by fire, flood, accident or
other calamity, nor shall it have become a party to or the subject of
any litigation, individually or in the aggregate, which is material to
the Company, nor shall there have been a material adverse change in the
general affairs, business, key personnel, capitalization, financial
position or net worth of the Company, whether or not arising in the
ordinary course of business, which loss, litigation or change, in your
judgment, shall render it inadvisable to proceed with the delivery and
purchase of the Representative's Warrants, the Counsel's Warrants or the
Underwritten Units.
(j) On the date of this Standby Underwriting Agreement and on the
Closing Date you shall have received a letter from Price Waterhouse
independent accountants, dated such date and Closing Date, respectively,
addressed to you as Representative, to the effect that:
(i) It is an independent certified public accountant
with respect to the Company within the meaning of the Securities
Act and the applicable Rules and Regulations.
(ii) In its opinion, the financial statements and notes
thereto of the Company examined by it and contained in the
Effective and Final Prospectus comply as to form in all material
respects with the applicable accounting requirements of the
Securities Act and the Rules and Regulations.
(iii) On the basis of its procedures and inquiries as
specified in its letters, nothing has come to its attention to
cause it to believe that:
(1) The unaudited financial statements of the
Company contained in the Effective and Final Prospectus
(x) do not comply as to form in all material respects with
the applicable accounting requirements of the Securities
Act and the Rules and Regulations, or (y) are not in
conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of
the audited financial statements:
(2) The data included in the Effective and Final
Prospectus under the caption "Selected Financial Data" do
not agree with the corresponding amounts in the audited
and unaudited financial statements for and as at the end
of each of the periods then ended; and
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(3) At a specified date not more than five business
days prior to the date of such letter, (x) there was any
change in the capital stock or long-term debt of the
Company or any decrease in net current assets or net
assets or shareholders' equity, in each ease as compared
with the corresponding amounts shown in the June 30, 1997
balance sheet contained in the Effective and Final
Prospectus, or (y) for the period from July 1, 1997 to the
specified date referred to above, as compared with the
corresponding period in the prior year, there was any
decrease in sales, net income or income per share, except
in all instances for changes or decreases which the
Effective and Final Prospectus discloses have occurred or
may occur, or if there was any change or decrease, setting
forth the amount of such change or decrease.
(iv) It has compared the information expressed in amounts,
dollar amounts and percentages derived therefrom, and other
financial information pertaining to the Company set forth in the
Effective and Final Prospectus specified by you, in each case to
the extent such information was obtained or derived from the
general accounting records of the Company, with the results
obtained from the application of specified readings, inquiries
and other appropriate procedures set forth in such letters, and
found by it to be in agreement.
(k) At or prior to the Closing Date, you shall have received the
Lock-Up Agreements described in the last sentence of Section 4(f)
hereof.
(l) You shall have been furnished all additional documents and
certificates as you may reasonably request.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you and to counsel for the Standby Underwriter. The
Company shall furnish you with such conformed copies of such opinions,
certificates, letters and other documents as you shall reasonably request. If
any of the conditions specified in this Section 5 shall not have been fulfilled
when and as required by this Standby Underwriting Agreement and all obligations
of the Underwriters hereunder may be cancelled at, or at any time prior to, the
Closing Date, by you. Any such cancellation shall be without liability of the
Standby Underwriters to the Company. Notice of such cancellation shall be given
to the Company in writing, or by telegraph or telephone and confirmed in
writing.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless the Standby
Underwriters, each of its Subsidiaries, officers, directors, employees,
agents and counsel, and each person, if any, who controls the Standby
Underwriter within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act, against any loss, claim, damage or liability, joint
or several, to which such Standby Underwriter may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage or
liability (or action with respect thereto) arises out of or is based
upon (i) any untrue statement or alleged untrue statement of a material
fact made by the Company in Section 1 or 2 hereof, or (ii) any untrue
statement or alleged untrue statement of a material fact contained in
the Effective or Final Prospectus or any amendment or supplement
thereto, or (iii) the omission or alleged omission to state in the
Registration Statement. any Pre-Effective Prospectus, the Effective or
Final Prospectus or any amendment or supplement thereto 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; and the Company shall reimburse the Standby Underwriter for
any reasonable legal or reasonable other expenses as incurred by the
Standby Underwriter in connection with investigating or defending
against or appearing as a third party witness in connection with any
such loss, claim, damage, liability or action, notwithstanding the
possibility that payments for such expenses might later be held to be
improper, in which case the person receiving them shall promptly refund
them; provided, however, that the Company shall not be liable in any
such case to the extent, but only to the extent, that any such loss,
claim, damage or liability arising out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with written information
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furnished to the Company by or on behalf of the Standby Underwriter
specifically for use in the preparation of the Registration Statement,
any Pre-Effective Prospectus, the Effective or Final Prospectus or any
amendment or supplement thereto, and provided further, that with respect
to any untrue statement or omission or alleged untrue statement or
omission made in any Pre-Effective Prospectus, the indemnity agreement
contained in this paragraph shall not inure to the benefit of any
Standby Underwriter to the extent that any such loss, claim, damage,
liability or expense of the Standby Underwriter or controlling person
results from the fact that a copy of the Final Prospectus was not sent
or given to such person at or prior to the written confirmation of sale
of the Underwritten Securities as required by the Securities Act, and if
the untrue statement or omission has been corrected in the Final
Prospectus, unless such failure to deliver the Final Prospectus was a
result of noncompliance by the Company with its obligations under
Section 4(c) hereof.
(b) The Standby Underwriter shall indemnify and hold harmless the
Company against any loss, claim, damage or liability to which the
Company may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage or liability (or action with respect
thereof) arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement, the Pre-Effective Prospectus, the Effective or
Final Prospectus or any amendment or supplement thereto, or (ii) the
omission or alleged omission to state in the Registration Statement, any
Pre-Effective Prospectus, the Effective or Final Prospectus or any
amendment or supplement thereto 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, except that
such indemnification shall be available in each such case to the extent,
but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company by you
specifically for use in the preparation thereof; and the Standby
Underwriter shall reimburse any legal or other expenses as and when
reasonably incurred by the Company in connection with investigating,
defending against, settling, compromising or paying any such loss,
claim, damage, liability or action. This indemnity agreement will be in
addition to any liability which the Standby Underwriter may otherwise
have.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of any claim or the commencement
of any action, the indemnified party shall, if a claim with respect
thereto is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the claim or the
commencement of that action; and the failure to notify the indemnifying
party shall not relieve it from any liability that it may have to an
indemnified party otherwise than under such subsection. If any such
claim or action is brought against an indemnified party, it shall notify
the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, to assume the
defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party
of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under
such subsection for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation, except that you shall have the right
to employ counsel to represent you against the Company under such
subsection if, in your reasonable judgment, it is advisable for you to
be represented by separate counsel, and in that event the reasonable
legal fees and expenses of one such separate counsel shall be paid by
the Company.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection 6(a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above and in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Standby
Underwriter from the offer and sale of the Securities, or (ii) if the
allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand, and the Standby Underwriter, on
the other hand, in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative respective
benefits received by the Company and the Standby Underwriter shall be
deemed to be in the same proportion that the total net proceeds from
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the offer and sale of the Underwritten Securities (before deducting
expenses) received by the Company, on the one hand, and the total
standby fees received by the Standby Underwriter, on the other hand,
bear to one another, in each ease as set forth in the table on the cover
page of the Final Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company, or
the Standby Underwriter and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The Company and the Standby Underwriter agree
that it would not be just and equitable if contributions pursuant to
this subsection 6(d) were to be determined by pro rata allocation or by
any other method of allocation which does not take into account the
equitable considerations referred to in the first sentence of this
subsection (d). The amount paid by an indemnified party as a result of
the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending against any action or claim
which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), the Standby Underwriter shall not be
required to contribute any amount in excess of the amount by which the
total price at which the Underwritten Units purchased by it and
distributed to the public exceeds the amount of any damages that the
Standby Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11 of the Securities Act) shall be entitled to contributions
from any person who was not guilty of such fraudulent misrepresentation.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted
against it with respect to which contribution may be sought, it shall
promptly give written notice of such service to the party or parties
from whom contribution may be sought, but the omission so to notify such
party or parties of any such service shall not relieve the party from
whom contribution may be sought from any obligation it may have
hereunder or otherwise (except as specifically provided in Section 6(c)
above).
(e) The obligations of the Company under this Section 6 shall be
in addition to any liability that the Company may otherwise have, and
shall extend, upon the same terms and conditions, to each person, if
any, who controls any Standby Underwriter within the meaning of the
Securities Act. The obligations of the Standby Underwriter under this
Section 6 shall be in addition to any liability that the Standby
Underwriter may otherwise have, and shall extend, upon the same terms
and conditions, to each director of the Company (including any person
who, with his consent, is named in the Registration Statement as about
to become a director of the Company), to each officer of the Company who
has signed the Registration Statement and to each person, if any, who
controls the Company within the meaning of the Securities Act.
7. EFFECTIVE DATE AND TERMINATION.
(a) This Standby Underwriting Agreement shall become effective at
8:00 A.M., Los Angeles time, on the earlier of (i) the first full
Business Day following the date the Registration Statement becomes
effective or (ii) the day on which you release the Underwritten Units
for sale to the public. You shall notify the Company immediately after
you have taken any action that causes this Standby Underwriting
Agreement to become effective. Until this Standby Underwriting Agreement
is effective, it may be terminated by the Company by giving notice as
hereinafter provided to you or by you by giving notice as hereinafter
provided to the Company, except that the provisions of Section 4(i) and
Section 6 shall at all times be effective. For purposes of this Standby
Underwriting Agreement, the release of the Underwritten Units for sale
to the public shall be deemed to have been made when you release, by
telegram or otherwise, firm offers of the Underwritten Units to
securities dealers or release for publication a newspaper advertisement
relating to the Units, whichever occurs first.
(b) Until the Closing Date, this Standby Underwriting Agreement
may be terminated by you by giving notice as hereinafter provided to the
Company, if (i) the Company shall have failed, refused or been unable,
at or prior to the Closing Date, in material respects to perform any
agreement on its part to be performed hereunder, (ii) any other material
condition of the obligations of the Standby Underwriter hereunder is not
fulfilled; (iii) trading in or reporting of securities generally on the
New York Stock Exchange. The Nasdaq National Market System or the
over-the-counter market shall have been suspended
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or minimum prices shall have been established on either of such
exchanges or such market by the Commission or by such exchange or other
regulatory body or governmental authority having jurisdiction; (iv) a
general banking moratorium shall have been declared by federal or state
authorities; or (v) if in your sole judgment there shall have been such
a material adverse change in general economic, political or financial
conditions or if in your sole judgment there shall have been a material
adverse change in international conditions, the effect of which on the
financial market in the United States shall be such as makes it
inadvisable to proceed with the delivery of any of the Underwritten
Units. Any termination of this Underwriting Agreement pursuant to this
Section 7 shall be without liability on the part of the Company or the
Standby Underwriter, except as otherwise provided in Section 4(i) and
Section 6 hereof.
Any notice referred to above may be given at the address specified in
Section 9 hereof in writing or by telegraph or telephone, and if by telegraph or
telephone, shall be immediately confirmed in writing.
8. SURVIVAL OF INDEMNITIES, CONTRIBUTION, WARRANTIES AND
REPRESENTATIONS. The indemnity and contribution agreements contained in Section
6 and the representations, warranties and agreements of the Company in Sections
1, 2, 4 and 5 shall survive the delivery of the Warrants or Units to the
Underwriters hereunder and shall remain in full force and effect, regardless of
any termination or cancellation of this Underwriting Agreement or any
investigation made by or on behalf of any indemnified party.
9. NOTICES. Except as otherwise provided in this Underwriting Agreement,
whenever notice is required by the provisions hereof to be given to: (a) the
Company, such notice shall be in writing addressed to the Company at ▇▇▇▇ ▇,
▇▇/▇., ▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ City, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President with a copy to Nam Tai Electronics
(Canada) Ltd., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇, ▇▇▇▇▇▇, Attention: ▇▇. ▇. ▇. ▇▇▇; and (b) to the Standby Underwriter,
such notice shall be in writing addressed to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Associates, Inc.,
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇.
10. INFORMATION FURNISHED BY UNDERWRITERS. The statements set forth (i)
on the front cover page with respect to price, Standby Fees and terms of the
offering, the last two paragraphs on the inside front cover page with respect to
stabilization and passive market making, under the caption "Standby
Underwriting" in any Pre-Effective Prospectus and in the Effective Prospectus
and the Final Prospectus, and (ii) the portion of the amount reflected under
"Blue Sky" fees and expenses (including those of counsel included in "Legal
Fees") in Item 14 of Part II of the Registration Statement representing the blue
sky filing fees and estimated legal fees and expenses of counsel for the Standby
Underwriter in connection with registration of the Securities for sale in
various states, constitute the written information furnished by or on behalf of
any Standby Underwriter herein, and are true and correct in all material
respects.
11. PARTIES. Except for the provisions of Section 14, which provisions
alone are intended to benefit persons who purchase the Underwritten Units
directly from the Standby Underwriter, this Standby Underwriting Agreement is
made solely for the benefit of the Standby Underwriter and the Company and may
officer, director or controlling person referred to in Section 6 hereof, and
their respective successors and assigns, and no other person shall acquire or
have any right by virtue of this Standby Underwriting Agreement. The term
'successors and assigns," as used in this Standby Underwriting Agreement, shall
not include any purchaser of any of the Underwritten Units from the Standby
Underwriter under this Agreement merely by reason of such purchase.
12. DEFINITION OF "BUSINESS DAY," "SUBSIDIARY" AND "SIGNIFICANT
SUBSIDIARY." For purposes of this Standby Underwriting Agreement, (a) "Business
Day" means any day on which the New York Stock Exchange, Inc. is open for
trading, and) "Subsidiary" and "Significant Subsidiary" have the respective
meanings set forth in Rule 405 of the Rules and Regulations.
13. GOVERNING LAW. THIS STANDBY UNDERWRITING AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT
GIVING EFFECT TO THE CHOICE OF LAW OR CONFLICT OF LAWS PRINCIPLES THEREOF.
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14. SUBMISSION TO JURISDICTION AND WAIVER OF IMMUNITY AND INCONVENIENT
FORUM. The Company acknowledges, consents and agrees that any and all disputes
arising in connection with this Standby Underwriting Agreement and the
transactions contemplated by this Standby Underwriting Agreement, including the
offer and sale of the Units, may be brought in any state or federal court of
record in located in Los Angeles County, State of California. By its signature
to this Standby Underwriting Agreement, the Company irrevocably submits to the
jurisdiction of the state and federal courts located in Los Angeles County,
State of California in any legal action or proceeding relating to this Standby
Underwriting Agreement and the transactions contemplated by this Standby
Underwriting Agreement, including the offer and sale of the Underwritten Units.
The Company irrevocably waives all immunity from jurisdiction,
attachment and execution, whether on the basis of sovereignty or otherwise, to
which it might otherwise be entitled in any legal action or proceeding in any
state or federal court located in Los Angeles County, State of California. The
Company irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to any suit, action or proceeding
relating to this Standby Underwriting Agreement and the transactions
contemplated by this Standby Underwriting Agreement, including the offer and
sale of the Securities being brought in the federal or state courts located in
Los Angeles County, State of California, and hereby further irrevocably waives
any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.
The provisions of this Section 14 are also intended to benefit those
persons who acquire the Underwritten Units directly from the Standby
Underwriter.
15. COUNTERPARTS. This Standby Underwriting Agreement may be signed in
one or more counterparts, each of which shall constitute an original and all of
which together shall constitute one and the same agreement. Please confirm, by
signing and returning to us counterparts of this Standby Underwriting Agreement,
that the foregoing correctly sets forth the agreement among the Company and the
Standby Underwriter.
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Very truly yours,
"COMPANY"
NAM TAI ELECTRONICS, INC.
By:(s.d) ▇. ▇. ▇▇▇
-------------------------------------
Its: Chairman of the Board
Confirmed and accepted as of the date first above mentioned:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ASSOCIATES, INC.
By: (s.d.) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------------
Its: Managing Director
In consideration of the execution of this Agreement by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Associates, Inc., the Undersigned hereby agree to exercise in full all of our
Rights (without regard to any oversubscription rights we may have).
(s.d) ▇. ▇. ▇▇▇
---------------------------------
(s.d) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
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SCHEDULE A
PERCENTAGE OF
NUMBER
OF UNDERWRITTEN
Standby Underwriters UNITS
-------------------- ------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Associates, Inc. ........................................ 68%
Kashner Davidson Securities Corporation .................................. 20
Cohig & Associates, Incorporated ......................................... 12
---
Total ...................................................... 100%
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