Exhibit 1.1
2,500,000 Shares
PEAK INTERNATIONAL LIMITED
Common Stock
UNDERWRITING AGREEMENT
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November __, 1997
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
BANCAMERICA ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
As representatives of the
several underwriters
named in Schedule I hereto
c/▇ ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
▇▇. ▇.▇. ▇▇ ("▇▇. ▇▇"), the owner of all of the issued share capital
of Luckygold 18A Limited, a British Virgin Islands company ("Luckygold"), and
Luckygold, the direct holder of a majority of the issued shares of Peak
International Limited, a company organized under the laws of Bermuda (the
"Company"), on the date hereof, propose to sell an aggregate of 2,500,000 shares
of Common Stock, par value US$.01 per share, of the Company (the "Firm Shares")
to the several underwriters named in Schedule I hereto (the "Underwriters"). ▇▇.
▇▇ and Luckygold also propose to sell to the several Underwriters not more than
375,000 additional shares of Common Stock, par value US$.01 per share, of the
Company (the "Additional Shares") if requested by the Underwriters as provided
in Section 2 hereof. The Firm Shares and the Additional Shares are herein
collectively called the Shares. The shares
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of Common Stock, par value US$.01 per share, of the Company to be outstanding
after giving effect to the sales contemplated hereby are herein referred to as
the Common Stock. ▇▇. ▇▇ and Luckygold are herein collectively called the
"Selling Stockholder" and shall be jointly and severally responsible for the
obligations of the Selling Stockholder hereunder.
1. Registration Statement and Prospectus. The Company has prepared
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and filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively called the
"Act"), a registration statement on Form F-1 including a prospectus relating to
the Shares, which may be amended. The registration statement as amended at the
time when it becomes effective, including a registration statement (if any)
filed pursuant to Rule 462(b) under the Act increasing the size of the offering
registered under the Act and information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Act, is hereinafter referred to as the Registration Statement; and the
prospectus in the form first used to confirm sales of Shares is hereinafter
referred to as the Prospectus.
2. Agreements to Sell and Purchase. On the basis of the
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representations and warranties contained in this Agreement, and subject to its
terms and conditions, (i) the Selling Stockholder agrees to sell 2,500,000 Firm
Shares and (ii) each Underwriter agrees, severally and not jointly, to purchase
from the Selling Stockholder, at a price per share of US$___ (the "Purchase
Price"), the number of Firm Shares (subject to such adjustments to eliminate
fractional shares as you may determine) which bears the same proportion to the
total number of Firm Shares to be sold by the Selling Stockholder as the number
of Firm Shares set forth opposite the name of such Underwriter in Schedule I
hereto bears to the total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, (i) the Selling Stockholder
agrees to sell up to 375,000 Additional Shares and (ii) the Underwriters shall
have the right to purchase, severally and not jointly, up to an aggregate of
375,000 Additional Shares from the Selling Stockholder at the Purchase Price.
Additional Shares may be purchased solely for the purpose of covering over-
allotments made in connection with the offering of the Firm Shares. The
Underwriters may exercise their right to purchase Additional Shares in whole or
in part from time to time by giving written notice thereof to the Selling
Stockholder within 30 days after the date of this Agreement. You shall give any
such notice on behalf of the Underwriters and such notice shall specify the
aggregate number of Additional Shares to be purchased pursuant to such exercise
and the date for payment and delivery thereof. The date specified in any such
notice shall be a business day (i) no earlier than the Closing Date
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(as hereinafter defined), (ii) no later than ten business days after such notice
has been given and (iii) no earlier than two business days after such notice has
been given. If any Additional Shares are to be purchased, each Underwriter,
severally and not jointly, agrees to purchase from the Selling Stockholder the
number of Additional Shares (subject to such adjustments to eliminate fractional
shares as you may determine) which bears the same proportion to the total number
of Additional Shares to be purchased from the Selling Stockholder as the number
of Firm Shares set forth opposite the name of such Underwriter in Schedule I
bears to the total number of Firm Shares.
The Company and the Selling Stockholder hereby agree, severally and
not jointly, and the Company shall, concurrently with the execution of this
Agreement, deliver an agreement executed by each of the directors and executive
officers of the Company, pursuant to which each such person agrees, not to
offer, sell, contract to sell, grant any option to purchase, or otherwise
dispose of any common stock of the Company or any securities convertible into or
exercisable or exchangeable for such common stock or in any other manner
transfer all or a portion of the economic consequences associated with the
ownership of any such common stock, except to the Underwriters pursuant to this
Agreement, for a period of 90 days after the date of the Prospectus without the
prior written consent of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation.
Notwithstanding the foregoing, during such period the Company may grant stock
options pursuant to the Peak International Limited 1997 Share Option Plan (and
may issue shares of Common Stock upon the exercise thereof, which shares will be
subject to the restrictions contained in the foregoing sentence).
3. Terms of Public Offering. The Selling Stockholder is advised by
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you that the Underwriters propose (i) to make a public offering of their
respective portions of the Shares as soon after the effective date of the
Registration Statement as in your judgment is advisable and (ii) initially to
offer the Shares upon the terms set forth in the Prospectus.
4. Delivery and Payment. Delivery to the Underwriters of and
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payment for the Firm Shares shall be made at 10:00 A.M., New York City time, on
the third business day unless otherwise permitted by the Commission pursuant to
Rule 15c6-1 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (the "Closing Date"), following the date of the offering, at the offices
of counsel to the Underwriters, ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. The Closing Date and the
location of delivery of and the form of payment for the Firm Shares may be
varied by agreement between you and the Company.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at such place as you shall
designate at 10:00 A.M., New York City time, on the date specified in the
applicable exercise
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notice given by you pursuant to Section 2 (an "Option Closing Date"). Any such
Option Closing Date and the location of delivery of and the form of payment for
such Additional Shares may be varied by agreement between you and the Selling
Stockholder.
Certificates for the Shares shall be registered in such names and
issued in such denominations as you shall request in writing not later than two
full business days prior to the Closing Date or an Option Closing Date, as the
case may be. Such certificates shall be made available to you for inspection
not later than 9:30 A.M., New York City time, on the business day next preceding
the Closing Date or an Option Closing Date, as the case may be. Certificates in
definitive form evidencing the Shares shall be delivered to you on the Closing
Date or an Option Closing Date, as the case may be, with any transfer taxes
thereon duly paid by the Selling Stockholder for the respective accounts of the
several Underwriters, against payment of the Purchase Price therefor by wire
transfer of immediately available funds to the order of the Selling Stockholder.
5. Agreements of the Company. The Company agrees with you:
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5.1 To use its best efforts to cause the Registration Statement
to become effective at the earliest possible time.
5.2 To advise you promptly and, if requested by you, to
confirm such advice in writing, (i) when the Registration Statement has become
effective and when any post-effective amendment to it becomes effective, (ii) of
any request by the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional information, (iii)
of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or of the suspension of qualification of the
Shares for offering or sale in any jurisdiction, or the initiation of any
proceeding for such purposes, and (iv) of the happening of any event during the
period referred to in paragraph 5.5 below which makes any statement of a
material fact made in the Registration Statement or the Prospectus untrue or
which requires the making of any additions to or changes in the Registration
Statement or the Prospectus in order to make the statements therein not
misleading. If at any time the Commission shall issue any stop order suspending
the effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal or lifting of such order at the
earliest possible time.
5.3 To furnish to you, without charge, three signed copies of
the Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits, and to furnish to you and each
Underwriter designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to it, without
exhibits, as you may reasonably request.
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5.4 Not to file any amendment or supplement to the Registration
Statement, whether before or after the time when it becomes effective, or to
make any amendment or supplement to the Prospectus of which you shall not
previously have been advised or to which you shall reasonably object; and to
prepare and file with the Commission, promptly upon your reasonable request, any
amendment to the Registration Statement or supplement to the Prospectus which
may be necessary or advisable in connection with the distribution of the Shares
by you, and to use its best efforts to cause the same to become promptly
effective.
5.5 Promptly after the Registration Statement becomes effective,
and from time to time thereafter for such period as in the opinion of counsel
for the Underwriters a prospectus is required by law to be delivered in
connection with sales by an Underwriter or a dealer, to furnish to each
Underwriter and dealer as many copies of the Prospectus (and of any amendment or
supplement to the Prospectus) as such Underwriter or dealer may reasonably
request.
5.6 If during the period specified in Section 5.5 any event
shall occur as a result of which, in the judgment of the Company or in the
opinion of counsel for the Underwriters, it becomes necessary to amend or
supplement the Prospectus in order to make the statements therein, in the light
of the circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Prospectus to
comply with any law, forthwith to prepare and file with the Commission an
appropriate amendment or supplement to the Prospectus so that the statements in
the Prospectus, as so amended or supplemented, will not in the light of the
circumstances when it is so delivered, be misleading, or so that the Prospectus
will comply with law, and to furnish to each Underwriter and to such dealers as
you shall specify, such number of copies thereof as such Underwriter or dealers
may reasonably request.
5.7 Prior to any public offering of the Shares, to cooperate
with you and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue such qualification in effect so long as required
for distribution of the Shares and to file such consents to service of process
or other documents as may be necessary in order to effect such registration or
qualification.
5.8 To mail and make generally available to its stockholders as
soon as reasonably practicable, but no later than when it is required by the
rules of the Commission, an earnings statement covering a period of at least 12
months after the effective date of the Registration Statement (but in no event
commencing later than 90 days after such date) which shall satisfy the
provisions of Section 11(a) of the Act, and to advise you in writing when such
statement has been so made available.
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5.9 During the period of five years after the date of this
Agreement, to furnish to the record holders of its Common Stock such financial
and other reports of the Company and its subsidiaries as are required to be so
furnished by the Act, the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations of the Commission promulgated
thereunder.
5.10 During the period referred to in Section 5.9, to furnish to
you as soon as available a copy of each report or other publicly available
information of the Company mailed to the holders of Common Stock or filed with
the Commission and such other publicly available information concerning the
Company and its subsidiaries as you may reasonably request.
5.11 To use its best efforts to maintain the inclusion of the
Common Stock in the Nasdaq National Market (or on a national securities
exchange) for a period of five years after the effective date of the
Registration Statement.
5.12 To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by the
Company prior to the Closing Date or any Option Closing Date, as the case may
be, and to satisfy all conditions precedent to the delivery of the Shares.
6. Representations and Warranties of the Company. The Company
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represents and warrants to each Underwriter that:
6.1 (i) Each part of the Registration Statement, as amended or
supplemented, if applicable, when such part becomes effective, will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (ii) the Registration Statement and the Prospectus comply and, as
amended or supplemented, if applicable, will comply in all material respects
with the Act and (iii) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this Section 6.1 do
not apply to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter furnished to the
Company in writing by or on behalf of such Underwriter through you expressly for
use therein.
6.2 Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the Act, and each Registration Statement
filed pursuant to Rule 462(b) under the Act, if any, complied when so filed in
all material respects with the Act, and did not contain an untrue statement of a
material fact or omit to state a
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material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
6.3 The Company and each of its subsidiaries listed on Annex 1
hereto (the "Material Subsidiaries") has been duly incorporated and otherwise
duly organized, is validly existing as a corporation in good standing (if
applicable) under the laws of its jurisdiction of incorporation and has the
corporate power and authority to carry on its business as it is currently being
conducted and as described in the Prospectus and to own, lease and operate its
properties, and each is duly qualified and is in good standing (if applicable)
as a foreign corporation authorized to do business in each jurisdiction in which
the nature of its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the Company and its subsidiaries, taken as a whole.
All of the Company's subsidiaries required to be listed on Exhibit 21.1 to the
Registration Statement are listed thereon.
6.4 All of the outstanding shares of capital stock of, or other
ownership interests in, each of the Company's Material Subsidiaries have been
duly authorized and validly issued and are fully paid and non-assessable, and
are owned by the Company, free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature.
6.5 All the outstanding shares of capital stock of the Company
(including the Shares) have been duly authorized and validly issued and are
fully paid, non-assessable and not subject to any preemptive or similar rights.
6.6 The authorized capital stock of the Company, including the
Common Stock, conforms as to legal matters to the description thereof contained
in the Prospectus.
6.7 Neither the Company nor any of its Material Subsidiaries is
in violation of its respective memorandum of association or bye-laws (or
certificate of incorporation or by-laws or memorandum and articles of
association or other organizational documents, if applicable) or in default in
the performance of any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any other agreement,
indenture or instrument to which the Company or any of its subsidiaries is a
party or by which it or any of its subsidiaries or their respective property is
bound and which is material to the conduct of the business of the Company and
its subsidiaries taken as a whole.
6.8 The Company has full corporate power and authority to enter
into this Agreement. This Agreement has been duly authorized, executed and
delivered by the Company and is a valid, binding agreement of the Company
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enforceable in accordance with its terms, except as rights to indemnification
and contribution hereunder may be limited by applicable law. Other than the
permission of the Bermuda Monetary Authority for the transfer of the Shares
which has been obtained and which is in full force and effect, the (i)
execution, delivery and performance of this Agreement, (ii) compliance by the
Company with all the provisions hereof and (iii) consummation of the
transactions contemplated hereby will not require any consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body (except as such may be required under the
securities or Blue Sky laws of the various states) and will not conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the memorandum of association or bye-laws (or certificate of incorporation or
by-laws or memorandum and articles of association or other organizational
documents, if applicable) of the Company or any of its subsidiaries or any
agreement, indenture or other instrument to which it or any of its subsidiaries
is a party or by which it or any of its subsidiaries or their respective
property is bound, or violate or conflict with any laws, administrative
regulations or rulings or court decrees applicable to the Company, any of its
subsidiaries or their respective property.
6.9 Except as otherwise set forth in the Prospectus, there are
no material legal or governmental proceedings pending to which the Company or
any of its Material Subsidiaries is a party or of which any of their respective
property is the subject, and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated. No contract or document of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement is not so
described or filed as required.
6.10 Neither the Company nor any of its Material Subsidiaries
has violated any law or regulation relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), including Environmental Laws
of the People's Republic of China (the "PRC"), any law relating to
discrimination in the hiring, promotion or pay of employees nor any applicable
federal or state wages and hours laws, or any provisions of the Employee
Retirement Income Security Act or the rules and regulations promulgated
thereunder, which in each case could reasonably be expected to result in any
material adverse change in the business, prospects, financial condition or
results of operation of the Company and its subsidiaries, taken as a whole.
6.11 The Company and each of its Material Subsidiaries has such
permits, licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease and operate its respective
properties and to conduct its business as it is currently conducted and as
described in the Prospectus; the Company and each of its Material Subsidiaries
has fulfilled and
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performed all of its material obligations with respect to such permits, and no
event has occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material impairment of
the rights of the holder of any such permit; and, except as described in the
Prospectus, such permits contain no restrictions that are materially burdensome
to the Company or any of its Material Subsidiaries.
6.12 In the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the course of
which it identifies and evaluates associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such review, the
Company has reasonably concluded that such associated costs and liabilities
would not, singly or in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
6.13 Except as otherwise set forth in the Prospectus or such as
are not material to the business, financial condition or results of operation of
the Company and its subsidiaries, taken as a whole, the Company and each of its
Material Subsidiaries has good and marketable title, free and clear of all
liens, claims, encumbrances and restrictions, except liens for taxes not yet due
and payable, to all property and assets described in the Registration Statement
as being owned by it. Except as described in the Prospectus, all leases to which
the Company or any of its Material Subsidiaries is a party are valid and binding
and no default has occurred or is continuing thereunder, which might result in
any material adverse change in the business, financial condition or results of
operation of the Company and its subsidiaries taken as a whole, and there are no
adverse possession or other claims with respect to any of such leases to which
the Company or any of its Material Subsidiaries is a party as lessee with such
exceptions as do not materially interfere with the use made by the Company or
such subsidiary.
6.14 The Company and each of its Material Subsidiaries maintains
reasonably adequate insurance with respect to events customarily insured
against by companies similar to the Company that are in the Company's industry
and operate in the same jurisdictions.
6.15 BDO Binder are independent public accountants with respect
to the Company within the meaning the Act and the rules and regulations
promulgated thereunder.
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6.16 Deloitte Touche Tohmatsu are independent public accountants
with respect to the Company within the meaning of the Act and the rules and
regulations promulgated thereunder.
6.17 The financial statements, together with related schedules
and notes forming part of the Registration Statement and the Prospectus (and any
amendment or supplement thereto), present fairly the consolidated financial
position, results of operations and changes in financial position of the Company
and its consolidated subsidiaries on the basis stated in the Registration
Statement at the respective dates or for the respective periods to which they
apply; such statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and the other
financial and statistical information and data set forth in the Registration
Statement and the Prospectus (and any amendment or supplement thereto) is, in
all material respects, accurately presented and, to the extent derived from the
financial statements or the books and records of the Company, prepared on a
basis consistent with such financial statements and books and records.
6.18 The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
6.19 No holder of any security of the Company has any right to
require registration of shares of Common Stock or any other security of the
Company.
6.20 The Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
6.21 There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens related to
or entitling any person to purchase or otherwise to acquire any shares of the
capital stock of, or other ownership interest in, the Company or any of its
subsidiaries, except as otherwise disclosed in the Registration Statement.
6.22 Except as disclosed in the Prospectus, there are no
business relationships or related party transactions required to be disclosed
therein by Form F-1 under the Act, and all material transactions between the
Company or any of its subsidiaries, on the one hand, and any shareholder or
affiliate of the Company, on the other hand, are on terms at least as favorable
to the Company or such subsidiary, as the case may be, as could be obtained with
an unaffiliated third party.
6.23 Neither the Company nor any of its Material Subsidiaries
(i) has experienced any labor disputes or any strikes or work stoppages by its
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employees, (ii) has any employees who are covered by a collective bargaining
agreement or (iii) has any unfair labor practice complaint pending against it
or, to the best knowledge of the Company, threatened against it, which has had
or could reasonably be expected to have a material adverse impact on the
business, financial condition or results of operation of the Company or any of
its Material Subsidiaries.
6.24 The Company and each of its Material Subsidiaries maintains
a system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
6.25 All material tax returns required to be filed by the Company
and each of its Material Subsidiaries in any jurisdiction have been filed, other
than those filings being contested in good faith, and all material taxes,
including withholding taxes, penalties and interest, assessments, fees and other
charges due pursuant to such returns or pursuant to any assessment received by
the Company or any of its Material Subsidiaries have been paid, other than those
being contested in good faith and for which adequate reserves have been
provided.
6.26 The shares of Common Stock, including the Shares, are listed
on the Nasdaq National Market.
6.27 All aspects of the Restructuring, as described in the
Prospectus, have been completed, and the Restructuring was effected in
compliance with all applicable laws.
6.28 Except as described in the Prospectus, no taxes, imposts or
duties of any nature (including, without limitation, stamp or other issuance or
transfer taxes or duties and capital gains, income, withholding or other taxes)
are payable by or on behalf of the Underwriters or any of their respective
subsidiaries to any political subdivision or taxing authority of Bermuda or Hong
Kong in connection with (1) the allotment, issuance and initial sale of the
Shares; (2) the initial sale of the Shares to the Underwriters in the manner
contemplated herein; or (3) the resale and delivery of Shares by the
Underwriters in the manner contemplated in this Agreement or the Prospectus.
6.29 The Company is subject to civil and commercial law with
respect to its obligations under this Agreement. The execution and delivery by
the
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Company and the performance by the Company of its obligations hereunder
constitute private and commercial acts rather than governmental or public acts,
and neither the Company nor any of its properties enjoys any right of immunity
in any jurisdiction from suit, judgment, execution on a judgment or attachment
(whether before judgment or in aid of execution) in respect of such obligations.
6.30 The Company has full corporate power and authority to enter
into and perform its obligations of indemnification and contribution set forth
in Section 8 of this Agreement, and neither the indemnification nor the
contribution provisions of such Section 8 contravene Bermuda public policy or
law.
6.31 The Agreement, dated May 28, 1987, between the Baoan County
Shenzhen Foreign Trade Company in association with Henggang Peak General
Manufacturing Plant and Hong Kong Peak Technology Limited, as amended and
extended on May 24, 1994 and December 12, 1996, and the Agreement, dated October
8, 1995, between Shenzhen Longgang District Henggang Joint Stock Company and
Peak Plastic & Metal Products (International) Limited (collectively, the
"Processing Agreements"), are valid and binding and enforceable in accordance
with their terms. The Company has received all required permits, licenses or
other approvals in connection with the Processing Agreements and the operation
of its existing and planned production facilities (the "Facilities") in
Shenzhen, China as contemplated therein, and no default has occurred or is
continuing under either Processing Agreement. The Land Use Rights Granting
Contracts, copies of which are incorporated by reference as Exhibits 10.5 and
10.6, respectively, to the Registration Statement, relating to the Facilities
are valid, binding and enforceable in accordance with their terms, and no
default has occurred or is continuing under either of such contracts.
6.32 The Company has been designated as non-resident of Bermuda
for exchange control purposes by the Bermuda Monetary Authority, whose
permission for the issue and transfer of the Shares has been obtained and is in
full force and effect. The transfer of Shares between persons regarded by the
Bermuda Monetary Authority as non-resident of Bermuda for exchange control
purposes and the sale of the Shares after completion of the offering
contemplated by this Agreement to or by such persons may be effected without
specific consent under the Exchange Control Act 1972 for so long as the Shares
are listed on the Nasdaq National Market. The issue or transfer of Shares to
and between any person regarded as resident in Bermuda for exchange control
purposes requires specific prior approval of the Bermuda Monetary Authority
under the Exchange Control Act of 1972.
6.33 Under the current laws and regulations of Bermuda, any
dividends and other distributions declared and payable on the shares of capital
stock of the Company may be paid to the holders of the Shares in U.S. dollars,
and all such
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dividends and other distributions will not be subject to withholding or other
taxes under the laws and regulations of Bermuda and may be so paid without the
necessity of obtaining any consent, approval, authorization or other order of or
with any court, regulatory body, administrative agency or other governmental
body or other authority in Bermuda. No Material Subsidiary of the Company is
currently prohibited or otherwise restricted, directly or indirectly, from
paying dividends to the Company or to the subsidiary of the Company that is its
parent company, from making any other distribution on such Material Subsidiary's
capital stock, from repaying to the Company or any other subsidiary of the
Company or from transferring any of such Material Subsidiary's property or
assets to the Company or any other subsidiary of the Company, except as
described in the Prospectus.
6.34 The Company has validly and irrevocably submitted to the
jurisdiction of any New York State or Federal court sitting in the City of New
York, has validly and irrevocably waived any objection to the venue of a
proceeding in any such court, and has validly and irrevocably appointed CT
Corporation System as its authorized agent for service of process, in each case,
to the extent set forth in Section 12.
6.35 The Company has timely filed all reports and other documents
it is required to file pursuant to the Exchange Act and the rules and
regulations of the Commission promulgated thereunder.
7. Representations and Warranties of the Selling Stockholder. The
---------------------------------------------------------
Selling Stockholder represents and warrants to each Underwriter that:
7.1 The Selling Stockholder is the lawful owner of the Shares to
be sold pursuant to this Agreement and has, and on the Closing Date and the
Option Closing Date, if applicable, will have, good and clear title to such
Shares, free of all restrictions on transfer, liens, encumbrances, security
interests and claims whatsoever.
7.2 Upon delivery of and payment for the Shares (including any
Additional Shares, if applicable) pursuant to this Agreement, good and clear
title to such Shares will pass to the Underwriters, free of all restrictions on
transfer, liens, encumbrances, security interests and claims whatsoever.
7.3 The Selling Stockholder has, and on the Closing Date and the
Option Closing Date, if applicable, will have, full legal right, power and
authority to enter into this Agreement and to sell, assign, transfer and deliver
such Shares in the manner provided herein, and this Agreement has been duly
authorized, executed and delivered by the Selling Stockholder and is a valid and
binding agreement of the Selling Stockholder enforceable in accordance with its
terms, except as rights to indemnity and contribution hereunder may be limited
by applicable law.
14
7.4 The Selling Stockholder has not taken, and will not take,
directly or indirectly, any action designed to, or which might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Shares
pursuant to the distribution contemplated by this Agreement, and other than as
permitted by the Act, the Selling Stockholder has not distributed and will not
distribute any prospectus or other offering material in connection with the
offering and sale of the Shares.
7.5 The execution, delivery and performance of this Agreement by
the Selling Stockholder, compliance by the Selling Stockholder with all the
provisions hereof and the consummation by the Selling Stockholder of the
transactions contemplated hereby will not require any consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body (except as such may be required under the Act,
state securities laws or Blue Sky laws) and will not conflict with or constitute
a breach of any of the terms or provisions of, or a default under, the articles
of association, memorandum of association or other organizational documents of
Luckygold, or any agreement, indenture or other instrument to which the Selling
Stockholder is a party or by which the Selling Stockholder or property of the
Selling Stockholder is bound, or violate or conflict with any law,
administrative regulation or ruling or court decree applicable to the Selling
Stockholder or property of the Selling Stockholder.
7.6 The representations and warranties of the Company contained
in Section 6.1 and Section 6.2 of this Agreement are true and correct.
7.7 If any time during the period described in Section 5.5
hereof, there is any change in the information in the Registration Statement or
the Prospectus, the Selling Stockholder will immediately notify you of such
change.
7.8 Each of ▇▇. ▇▇ and Luckygold has validly and irrevocably
submitted to the jurisdiction of any New York State or Federal court sitting in
the City of New York, has validly and irrevocably waived any objection to the
venue of a proceeding in any such court, and has validly and irrevocably
appointed CT Corporation System as his or its authorized agent for service of
process, in each case, to the extent set forth in Section 12.
8. Indemnification.
---------------
8.1 The Company and the Selling Stockholder, jointly and
severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act from and against any and all losses,
claims, damages, liabilities and judgments caused by any untrue statement or
alleged untrue statement of
15
a material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or judgment as such expenses are incurred, except insofar as
such losses, claims, damages, liabilities or judgments are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished in writing to the Company by
or on behalf of any Underwriter through you expressly for use therein; provided,
--------
however, that the aggregate liability of the Selling Stockholder pursuant to the
-------
provisions of this paragraph shall be equal to the aggregate purchase price, if
any, received by the Selling Stockholder from the sale of Shares hereunder;
provided, further, that the foregoing indemnity agreement with respect to any
-------- -------
preliminary prospectus shall not inure to any Underwriter from whom the person
asserting any such losses, claims, damages, liabilities and judgments purchased
Shares, or any person controlling such Underwriter, if a copy of the Prospectus
(as then amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered, at or
prior to the written confirmation of the sale of the Shares to such person, and
if the Prospectus (as so amended and supplemented) would have cured the defect
giving rise to such loss, claim, damage, liability or judgment.
8.2 In case any action shall be brought against any Underwriter
or any person controlling such Underwriter, based upon any preliminary
prospectus, the Registration Statement or the Prospectus or any amendment or
supplement thereto and with respect to which indemnity may be sought against the
Company and the Selling Stockholder, such Underwriter shall promptly notify the
Company and the Selling Stockholder in writing and the Company and the Selling
Stockholder shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to such indemnified party, and payment of all
fees and expenses. Any Underwriter or any such controlling person shall have
the right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Underwriter or such controlling person unless (i) the employment
of such counsel has been specifically authorized in writing by the Company, (ii)
the Company and the Selling Stockholder shall have failed to assume the defense
and employ counsel or (iii) the named parties to any such action (including any
impleaded parties) include both such Underwriter or such controlling person and
the Company or the Selling Stockholder, as the case may be, and such Underwriter
or such controlling person shall have been advised by such counsel that there
may be one or more legal defenses available to it which are different
16
from or additional to those available to the Company or the Selling Stockholder,
as the case may be (in which case the Company and the Selling Stockholder shall
not have the right to assume the defense of such action on behalf of such
Underwriter or such controlling person, it being understood, however, that the
Company and the Selling Stockholder shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all such Underwriters and controlling
persons, which firm shall be designated in writing by ▇▇▇▇▇▇▇▇▇, Lufkin &
▇▇▇▇▇▇▇▇ Securities Corporation and that all such fees and expenses shall be
reimbursed as they are incurred). The Company and the Selling Stockholder shall
be liable for any settlement of any such action effected without the written
consent of the Company or the Selling Stockholder, but if settled with the
written consent of the Company or the Selling Stockholder, the Company and the
Selling Stockholder agree to indemnify and hold harmless any Underwriter and any
such controlling person from and against any loss or liability by reason of such
settlement. Notwithstanding the immediately preceding sentence, if in any case
where the fees and expenses of counsel are at the expense of the indemnifying
party and an indemnified party shall have requested the indemnifying party to
reimburse the indemnified party for such fees and expenses of counsel as
incurred, such indemnifying party agrees that it shall be liable for any
settlement of any action effected without its written consent if (i) such
settlement is entered into more than 30 days after the receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall have failed to reimburse the indemnified party in accordance with such
request for reimbursement prior to the date of such settlement. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
8.3 Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, any person controlling the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, the Selling
Stockholder and each person, if any, controlling the Selling Stockholder within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act to the
same extent as the foregoing indemnity from the Company and the Selling
Stockholder to each Underwriter but only with reference to information relating
to such Underwriter furnished in writing by or on behalf of such Underwriter
through you expressly for use in the Registration Statement, the Prospectus or
any preliminary prospectus. In case any action shall be brought against the
Company, any of its directors, any such officer or any person controlling
17
the Company or the Selling Stockholder or any person controlling the Selling
Stockholder based on the Registration Statement, the Prospectus or any
preliminary prospectus and in respect of which indemnity may be sought against
any Underwriter, the Underwriter shall have the rights and duties given to the
Company and the Selling Stockholder (except that if the Company or the Selling
Stockholder shall have assumed the defense thereof, such Underwriter shall not
be required to do so, but may employ separate counsel therein and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Underwriter), and the Company, its directors, any such officers
and any person controlling the Company and the Selling Stockholder and any
person controlling the Selling Stockholder shall have the rights and duties
given to the Underwriter, by Section 8.2 hereof.
8.4 If the indemnification provided for in this Section 8 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Selling
Stockholder on the one hand and the Underwriters on the other hand from the
offering of the Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company and the Selling Stockholder on the one hand and
the Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Stockholder on the one hand and
the Underwriters on the other hand shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Selling Stockholder, and the total underwriting discounts and commissions
received by the Underwriters, bear to the total price to the public of the
Shares, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company and the Selling Stockholder on
the one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission to state a material fact relates to
information supplied by the Company, the Selling Stockholder or the Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholder and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 8.4
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The
18
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 8.4 are several in proportion to the respective number of Shares
purchased by each of the Underwriters hereunder and not joint.
9. Conditions of Underwriters' Obligations. The several obligations of
---------------------------------------
the Underwriters to purchase the Firm Shares under this Agreement are subject to
the satisfaction of each of the following conditions:
9.1 All the representations and warranties of the Company
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date.
9.2 The Registration Statement shall have become effective not
later than 5:00 P.M. (and in the case of a Registration Statement filed under
Rule 462(b) under the Act, not later than 10:00 P.M.), New York City time, on
the date of this Agreement or at such later date and time as you may approve in
writing, and (iii) at the Closing Date no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission.
9.3 (i) Since the date of the latest balance sheet included in
the Registration Statement and the Prospectus, there shall not have been any
material adverse change, or any development involving a prospective material
adverse change, in the condition, financial or otherwise, or in the earnings,
affairs or business prospects, whether or not arising in the ordinary course of
business, of the Company and its subsidiaries, taken as a whole, (ii) since the
date of the latest balance sheet included in the Registration Statement and the
Prospectus, there shall not have been any change, or any development involving a
prospective material adverse change, in the capital stock or material increase
in the long-term debt of the Company from that set forth in the Registration
Statement and Prospectus, (iii) the Company and its subsidiaries shall have no
liability or obligation, direct or contingent, which is material
19
to the Company and its subsidiaries, taken as a whole, other than those
reflected in the Registration Statement and the Prospectus and (iv) on the
Closing Date you shall have received a certificate dated the Closing Date,
signed by ▇.▇. ▇▇ and ▇▇▇▇▇ Mo in their capacities as the Chairman and Chief
Executive Officer and the Chief Financial Officer and Controller, respectively,
of the Company, confirming the matters set forth in Section 9.1, Section 9.2 and
Section 9.3.
9.4 All the representations and warranties of the Selling
Stockholder contained in this Agreement shall be true and correct on the Closing
Date with the same force and effect as if made on and as of the Closing Date and
you shall have received a certificate to such effect, dated the Closing Date,
from the Selling Stockholder.
9.5 You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of (i) ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, United States counsel for the Company and the
Selling Stockholder, to the effect set forth in Exhibit A-1 hereto, (ii) ▇▇▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇, Bermuda counsel for the Company and the Selling Stockholder, to
the effect set forth in Exhibit A-2 hereto, (iii) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Hong Kong
counsel for the Company and the Selling Stockholder, to the effect set forth in
Exhibit A-3 hereto, (iv) ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇, British Virgin Islands counsel
for the Company and the Selling Stockholder, to the effect set forth in Exhibit
A-4 hereto, and (v) Shenzhen Jin Di Law Office, People's Republic of China
counsel for the Company and the Selling Stockholder, to the effect set forth in
Exhibit A-5 hereto.
9.6 You shall have received on the Closing Date an opinion,
dated the Closing Date, of ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for
the Underwriters, as to the matters referred to in paragraphs 1 (but only with
respect to the Company), 2 (but only with respect to the statements under the
caption "Underwriting") and 6 of Exhibit A-1. In giving such opinion with
respect to the matters covered by paragraph 6 of Exhibit A-1, such counsel may
state that their opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and any amendments or
supplements thereto and review and discussion of the contents thereof, but are
without independent check or verification except as specified.
9.7 You shall have received a letter on and as of the Closing
Date, in form and substance satisfactory to you, from each of BDO Binder and
Deloitte Touche Tohmatsu, independent public accountants, with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus and substantially in the form and
substance of the letters delivered to you by BDO Binder and Deloitte Touche
Tohmatsu, respectively, on the date of this Agreement.
20
9.8 The Company and the Selling Stockholder shall not have
failed at or prior to the Closing Date to perform or comply with any of the
agreements herein contained and required to be performed or complied with by the
Company or the Selling Stockholder at or prior to the Closing Date.
9.9 The Company and the Selling Stockholder shall have furnished
to you such other documents and certificates as you may reasonably request,
including documents and certificates relating to the accuracy and completeness
of any statement in the Registration Statement or Prospectus.
The several obligations of the Underwriters to purchase any
Additional Shares hereunder are subject to the delivery to you on the applicable
Option Closing Date of such documents as you may reasonably request with respect
to the good standing of the Company, the due authorization and issuance of such
Additional Shares and other matters related to the issuance of such Additional
Shares.
10. Effective Date of Agreement and Termination. This Agreement shall
-------------------------------------------
become effective upon the later of (i) execution of this Agreement and (ii) when
notification of the effectiveness of the Registration Statement has been
released by the Commission.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Company and the Selling Stockholder if any of
the following has occurred: (i) since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
material adverse change or development involving a prospective material adverse
change in the condition, financial or otherwise, of the Company and its
subsidiaries, taken as a whole, or the earnings, affairs, or business prospects
of the Company and its subsidiaries, taken as a whole, whether or not arising in
the ordinary course of business, which would, in your judgment, make it
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus, (ii) any outbreak or escalation of hostilities or other
national or international calamity or crisis or change in economic conditions or
in the financial markets of the United States or elsewhere that, in your
judgment, is material and adverse and would, in your judgment, make it
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus, (iii) the suspension or material limitation of trading in
securities on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market or limitation on prices for securities on any such
exchange or National Market, (iv) the declaration of a banking moratorium by
either federal or New York State authorities or (v) the taking of any action by
any federal, state or local government or agency in respect of its monetary or
fiscal affairs which in your opinion has a material adverse effect on the
financial markets in the United States.
21
If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares or Additional Shares, as the case may be, which it or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase is not more than one-tenth of the total number of Shares to be
purchased on such date by all Underwriters, each non-defaulting Underwriter
shall be obligated severally, in the proportion which the number of Firm Shares
set forth opposite its name in Schedule I bears to the total number of Firm
Shares which all the non-defaulting Underwriters, as the case may be, have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase on such date; provided that in no event shall the number of Firm Shares
--------
or Additional Shares, as the case may be, which any Underwriter has agreed to
purchase pursuant to Section 2 hereof be increased pursuant to this Section 10
by an amount in excess of one-ninth of such number of Firm Shares or Additional
Shares, as the case may be, without the written consent of such Underwriter. If
on the Closing Date or on an Option Closing Date, as the case may be, any
Underwriter or Underwriters shall fail or refuse to purchase Firm Shares, or
Additional Shares, as the case may be, and the aggregate number of Firm Shares
or Additional Shares, as the case may be, with respect to which such default
occurs is more than one-tenth of the aggregate number of Shares to be purchased
on such date by all Underwriters and arrangements satisfactory to you and the
applicable Sellers for purchase of such Shares are not made within 48 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter and the Selling Stockholder. In any such case
which does not result in termination of this Agreement, either you or the
Selling Stockholder shall have the right to postpone the Closing Date or the
applicable Option Closing Date, as the case may be, but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of any such
Underwriter under this Agreement.
11. Agreements of the Selling Stockholder. The Selling Stockholder
-------------------------------------
agrees with you and the Company:
11.1 To pay or to cause to be paid all transfer taxes with
respect to the Shares to be sold by the Selling Stockholder;
11.2 To take all reasonable actions in cooperation with the
Company and the Underwriters to cause the Registration Statement to become
effective at the earliest possible time, do and perform all things to be done
and performed by the
22
Selling Stockholder under this Agreement prior to the Closing Date and satisfy
all conditions precedent to the delivery of the Shares pursuant to this
Agreement; and
11.3 Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay all costs,
expenses, fees and taxes incident to (i) the preparation, printing, filing and
distribution under the Act of the Registration Statement (including financial
statements and exhibits), each preliminary prospectus and all amendments and
supplements to any of them prior to or during the period specified in Section
5.5, (ii) the printing and delivery of the Prospectus and all amendments or
supplements to it during the period specified in Section 5.5 but not exceeding
nine months after the effective date of the Registration Statement, (iii) the
printing and delivery of this Agreement, the Preliminary and Supplemental Blue
Sky Memoranda and all other agreements, memoranda, correspondence and other
documents printed and delivered in connection with the offering of the Shares
(including in each case any disbursements of counsel for the Underwriters
relating to such printing and delivery), (iv) the registration or qualification
of the Shares for offer and sale under the securities or Blue Sky laws of the
several states (including in each case the reasonable fees and disbursements of
counsel for the Underwriters relating to such registration or qualification and
memoranda relating thereto), (v) filings and clearance with the National
Association of Securities Dealers, Inc. in connection with the offering, (vi)
the listing of the Shares on the Nasdaq National Market, (vii) furnishing such
copies of the Registration Statement, the Prospectus and all amendments and
supplements thereto as may be requested for use in connection with the offering
or sale of the Shares by the Underwriters or by dealers to whom Shares may be
sold and (viii) the performance by the Company and the Selling Stockholder of
their other obligations under this Agreement.
12. Judicial Proceedings.
--------------------
12.1 Each of the Company, ▇▇. ▇▇ and Luckygold irrevocably
submits to the non-exclusive jurisdiction of any New York State or Federal court
sitting in the City of New York over any suit, action or proceeding arising out
of or relating to this Agreement or the Shares. To the fullest extent each of
the Company, Luckygold and ▇▇. ▇▇ may effectively do so under applicable law,
each such person irrevocably waives and agrees not to assert, by way of motion,
as a defense or otherwise, any claim that such person is not subject to the
jurisdiction of any such court, any objection that such person may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
brought in any such court and any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
12.2 Each of the Company, Luckygold and ▇▇. ▇▇ agrees, to the
fullest extent such person may effectively do so under applicable law, that a
23
judgment in any suit, action or proceeding of the nature referred to in Section
12.1 brought in any such court shall be conclusive and binding upon such person
subject to rights of appeal, as the case may be, and may be enforced in the
courts of the United States of America or the State of New York (or any other
court the jurisdiction of which such person is or may be subject) by a suit upon
such judgment.
12.3 Each of the Company, Luckygold and ▇▇. ▇▇ has irrevocably
designated and appointed CT Corporation System, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, for a period of six years from the date hereof, as its or his
authorized agent, upon whom process may be served in any suit, action or
proceeding of the nature referred to in Section 12.1 by mailing a copy thereof
by registered or certified mail, postage prepaid, return receipt requested, to
the agent at the address of such person specified in Section 13. The Company,
Luckygold and ▇▇. ▇▇ each agrees that such service (i) shall be deemed in every
respect effective service of process upon it or him in any such suit, action or
proceeding and (ii) shall, to the fullest extent permitted by law, be taken and
held to be valid personal service upon and personal delivery to such person.
Notices hereunder shall be conclusively presumed received as evidenced by a
delivery receipt furnished by the United States Postal Service or any commercial
delivery service.
12.4 Nothing in this Section 12 shall affect the right of any
Underwriter to serve process in any manner permitted by law, or limit any right
to bring proceedings against the Company or the Selling Stockholder in the
courts of any jurisdiction or to enforce in any lawful manner a judgment
obtained in one jurisdiction in any other jurisdiction.
13. Judgment Currency. If for the purpose of obtaining judgment in
-----------------
any court it is necessary to convert a sum due hereunder into any currency other
than United States dollars, the parties hereto agree, to the fullest extent that
they may effectively do so, that the rate of exchange used shall be the rate at
which in accordance with normal banking procedures an Underwriter could purchase
United States dollars with such other currency in New York City on the business
day preceding that on which final judgment is given. The obligation of the
Company or the Selling Stockholder, as the case may be, in respect of any sum
due from the Company or the Selling Stockholder to any Underwriter shall,
notwithstanding any judgment in a currency other than United States dollars, be
discharged only if and to the extent that on the first business day following
receipt by such Underwriter of any sum adjudged to be so due in such other
currency, such Underwriter may in accordance with normal banking procedures
purchase United States dollars with such other currency as it would have
purchased on the business day preceding that on which the final judgment is
rendered; if the United States dollars so purchased are less than the sum
originally due to such Underwriter hereunder, each of the Company and the
Selling Stockholder
24
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify such Underwriter against such loss.
14. Payments Free and Clear of Withholding Tax. All amounts payable
------------------------------------------
by the Company and the Selling Stockholder to the Underwriters hereunder
(including payment of selling concessions and underwriting commissions to, and
reimbursement of expenses of, the Underwriters pursuant to this Agreement) shall
be made free and clear of, and without deduction for, any taxes, duties,
assessments or governmental charges of whatever nature imposed, levied,
collected, withheld or assessed by any tax authority of Bermuda or Hong Kong
unless such withholding or deduction is required by law or by regulation or
governmental policy having the force of law.
In the event that any such withholding or deduction is so required,
the Company and the Selling Stockholder will pay such additional amounts as will
result in the receipt by the Underwriters of such amount as would have been
received by the Underwriters had no such withholding or deduction been required.
15. Miscellaneous. Notices given pursuant to any provision of this
-------------
Agreement shall be addressed as follows: (a) if to the Company, to Peak
International Limited, ▇▇▇▇▇ ▇, ▇, ▇ ▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ Cable Tower, 9 ▇▇▇
▇▇▇▇▇ Road, Tsuen Wan, New Territories, Hong Kong, (b) if to the Selling
Stockholder, to (i) ▇▇. ▇.▇. ▇▇, ▇/▇ ▇▇▇▇▇ ▇, ▇, ▇ ▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
Cable Tower, 9 ▇▇▇ ▇▇▇▇▇ Road, Tsuen Wan, New Territories, Hong Kong and to (ii)
Luckygold 18A Limited, c/o Peak International Limited, ▇▇▇▇▇ ▇, ▇, ▇ ▇▇▇ ▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ Cable Tower, 9 ▇▇▇ ▇▇▇▇▇ Road, Tsuen Wan, New Territories, Hong
Kong, Attention: ▇▇. ▇.▇. ▇▇, and (c) if to any Underwriter or to you, to you
c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Syndicate Department, or in any case to such
other address as the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Selling Stockholder, the Company, its
officers and directors and of the several Underwriters set forth in or made
pursuant to this Agreement shall remain operative and in full force and effect,
and will survive delivery of and payment for the Shares, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf of
any Underwriter or by or on behalf of the Company or the Selling Stockholder,
the officers or directors of the Company or any controlling person of the
Company or the Selling Stockholder, (ii) acceptance of the Shares and payment
for them hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of the Company or the Selling Stockholder to
comply with
25
the terms or to fulfill any of the conditions of this Agreement, the Company and
the Selling Stockholder agree to reimburse the several Underwriters for all out-
of-pocket expenses (including the fees and disbursements of counsel) reasonably
incurred by them.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Selling
Stockholder, the Underwriters, any controlling persons referred to herein and
their respective successors and assigns, all as and to the extent provided in
this Agreement, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" shall not include a
purchaser of any of the Shares from any of the several Underwriters merely
because of such purchase.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY IN SUCH STATE.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the agreement
between the Company, the Selling Stockholder and the several Underwriters.
Very truly yours,
PEAK INTERNATIONAL LIMITED
By
-----------------------------
Name:
Title:
-------------------------------
▇.▇. ▇▇, as Selling Stockholder
26
LUCKYGOLD 18A LIMITED
By
-----------------------------
Name:
Title:
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
BANCAMERICA ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By ▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
By
--------------------------------
Name:
Title:
SCHEDULE I
----------
Number of Firm Shares
Underwriters to be Purchased
------------ ---------------------
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------
TOTAL 2,500,000
SCHEDULE II
-----------
Selling Stockholder
-------------------
Number of Additional
Name Shares That May be Sold
---- -----------------------
▇.▇. ▇▇ and Luckygold 375,000
18A Limited, jointly and
severally
Annex 1 to
-------
Underwriting Agreement
Material Subsidiaries
---------------------
Peak Plastic & Metal Products (International) Limited
AJMS Peak Sdn Bhd
Warden Development Limited
Peak Resources Singapore Pte. Limited
SemiCycle Hong Kong Limited
Peak International, Inc.
Draft 10/31/97
Exhibit A-1 to
-----------
Underwriting Agreement
Opinions to be Rendered by ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇,
United States Counsel for the Company and the Selling Stockholder
1. Insofar as New York law governs its execution and delivery, this
Agreement has been duly executed and delivered by the Company and the Selling
Stockholder and, assuming due authorization, execution and delivery under
Bermuda law and the laws of the British Virgin Islands, is a valid and binding
agreement of the Company and the Selling Stockholder.
2. The statements under the captions "Shares Eligible for Future
Sale," "Taxation - United States Taxation" and "Underwriting" in the Prospectus,
insofar as such statements constitute a summary of United States legal matters,
documents or proceedings referred to therein, fairly present the information
called for with respect to such United States legal matters, documents and
proceedings.
3. The execution, delivery and performance of this Agreement by the
Company and the Selling Stockholder, compliance by the Company and the Selling
Stockholder with all the provisions hereof and the consummation of the
transactions contemplated hereby (including, without limitation, the issuance
and sale of the Shares) will not require any consent, approval, authorization or
other order of any United States court, regulatory body, administrative agency
or other governmental body (except such as may be required under the Act or
other securities or Blue Sky laws) or violate or conflict with any United States
Federal or New York laws, administrative regulations or rulings or court decrees
applicable to the Company or any of its subsidiaries or the Selling Stockholder
or their respective properties.
4. Immediately prior to the Closing Date (or the Option Closing
Date, if applicable), the Selling Stockholder has good and valid title to the
Shares to be delivered by it on such date, and upon delivery of such Shares by
the Selling Stockholder and payment therefor pursuant to this Agreement, good
and valid title to such Shares has passed to the Underwriters, severally, free
and clear of all restrictions on transfer, liens, encumbrances, security
interests and claims whatsoever, including any "adverse claim" within the
meaning of the Uniform Commercial Code in effect in the State of New York,
assuming the Underwriters purchased such Shares for value in good faith without
notice of any adverse claim.
2
5. The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
6. (i) The Registration Statement (including any Registration
Statement filed under 462(b) of the Act, if any) and the Prospectus and any
supplement or amendment thereto (except for financial statements, as to which no
opinion will be expressed) comply as to form in all material respects with the
Act, and (ii) no facts have come to the attention of such counsel that lead such
counsel to believe that (except for financial statements, as to which no opinion
will be expressed) the Registration Statement and the prospectus included
therein at the time the Registration Statement became effective contained any
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, as amended or supplemented, if applicable (except for
financial statements, as to which no opinion will be expressed) contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
7. Under the laws of the State of New York relating to submission to
jurisdiction, each of the Company, Luckygold and ▇▇. ▇.▇. ▇▇ has validly and
irrevocably submitted to the personal jurisdiction of any New York State or
United States federal court sitting in the City of New York in any action, suit
or proceeding arising out of or relating to this Agreement, has validly and
irrevocably waived any objection to the venue of a proceeding in any such court
and has validly and irrevocably appointed CT Corporation System, ▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as its or his authorized agent for service of process,
in each case, to the extent set forth in Section 12 of this Agreement, and
service of process effected in the manner set forth in Section 12 of this
Agreement will be effective to confer valid personal jurisdiction over the
Company, Luckygold and ▇▇. ▇.▇. ▇▇ in any such action.
Such counsel shall also confirm (i) that they have been informed by
the staff of the Commission that the Registration Statement has become effective
under the Act and (ii) that to the 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 before or
contemplated by the Commission. In addition, in giving such opinion with
respect to the matters covered by paragraph 6, such counsel may state that their
opinion and belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and discussion of the contents thereof,
but are without independent check or verification except as specified.
3
Exhibit A-2 to
-----------
Underwriting Agreement
Opinions to be Rendered by ▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇,
Bermuda Counsel for the Company and the Selling Stockholder
1. The Company has been duly incorporated as an exempted company
under the Companies ▇▇▇ ▇▇▇▇ and is validly existing as an exempted company and
in good standing (meaning that it has not failed to make any filing with any
Bermuda government authority or to pay any Bermuda government fee or tax which
might make it liable to be struck off the Register of Companies and thereby
cease to exist under the laws of Bermuda) and has the corporate power and
authority required to carry on its business as it is currently being conducted
and to own, lease and operate its properties as described in the Prospectus.
2. As an exempted company, the Company has the power and authority
to carry on business outside Bermuda from a place of business within Bermuda.
3. The Company has the authorized share capital set forth in the
Prospectus. All of the issued shares of the Company (including the Shares) have
been duly authorized and validly issued and are fully paid and non-assessable
(meaning that no further sums are payable to the Company on such shares) and not
subject to any preemptive or similar rights.
4. The Shares to be sold by the Selling Stockholder hereunder have
been duly authorized, validly issued, fully paid and non-assessable (meaning
that no further sums are payable to the Company on such Shares), and such Shares
are not subject to any preemptive or similar rights.
5. The Company has the necessary corporate power and authority to
enter into and perform its obligations under this Agreement. The Company has
taken all corporate action required to authorize its execution, delivery and
performance of this Agreement. This Agreement has been duly executed and
delivered by or on behalf of the Company, and constitutes the valid and binding
obligations of the Company enforceable in accordance with its terms.
6. The authorized share capital of the Company, including the shares
of the Company, conforms as to legal matters to the description thereof
contained in the Prospectus and each of the Underwriters will receive good and
valid
4
title to the Shares being purchased by such Underwriter from the Selling
Stockholder hereunder, free of all restrictions on transfer, liens,
encumbrances, security interests and claims whatsoever.
7. The statements under the captions "Enforcement of Civil
Liabilities," "Risk Factors - Relationship with Principal Shareholder and
Potential Conflicts of Interest," "Potential Difficulties in Protecting
Shareholder Rights," "Taxation - Bermuda Taxation," "Certain Foreign Issuer
Considerations," "Description of Shares" and "Underwriting" in the Prospectus
and Item 14 of Part II of the Registration Statement, insofar and to the extent
that they constitute a summary or description of the laws and regulations of
Bermuda, or its respective agencies, authorities or other governmental bodies,
or documents, or proceedings or conclusions of Bermuda law, fairly present the
matters referred to therein.
8. To the best of such counsel's knowledge, the Company is not in
violation of its memorandum of association or bye-laws or in breach of any
Bermuda laws or regulations.
9. The execution, delivery and performance of this Agreement by the
Company and the Selling Stockholder, compliance by the Company and the Selling
Stockholder with all the provisions hereof and the consummation of the
transactions contemplated hereby (including, without limitation, the sale of the
Shares) will not require any consent, approval, authorization or other order of
any Bermuda court, regulatory body, administrative agency or other governmental
body (except for such approvals under the Companies ▇▇▇ ▇▇▇▇ and the Exchange
Control Act 1972 as have been duly obtained and are in full force and effect)
and will not conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the memorandum of association or bye-laws of
the Company, or violate or conflict with any Bermuda laws, administrative
regulations or rulings or court decrees applicable to the Company or its
properties.
10. To the best of such counsel's knowledge and based upon the
results of searches conducted at the Supreme Court Registry on November __,
1997, there are no legal or governmental proceedings pending in Bermuda to which
the Company is a party or to which any of its property is subject, and such
counsel has not been expressly notified that any such proceedings are threatened
or contemplated by any governmental agency or threatened by others in Bermuda.
11. The choice of the laws of New York to govern this Agreement is a
valid choice of law and will be recognized and upheld by the courts of Bermuda.
The Company has the legal capacity to ▇▇▇ and be sued in its own name under the
laws of Bermuda. The irrevocable submission by the Company to the non-exclusive
jurisdiction of any New York State or United States federal court sitting in the
City of
5
New York in any action, suit or proceeding arising out of or relating to this
Agreement and the waivers by the Company of any immunity and any objection to
the venue of a proceeding in any such court are legal, valid and binding under
the laws of Bermuda and will be accepted by the courts of Bermuda provided such
submission and waivers are valid under the laws of New York. Under the laws of
Bermuda, the appointment by the Company of an agent for service of process in
any suit or proceeding based on or arising under this Agreement constitutes
legal, valid and binding obligations of the Company.
12. The Registration Statement and the filing of the Registration
Statement with the Commission have been duly authorized by and on behalf of the
Company, and the Registration Statement has been duly executed pursuant to such
authorization by and on behalf of the Company.
13. The Company has full power, authority and legal right to enter
into and perform its obligations of indemnification and contribution as set
forth in Section 8 of this Agreement, and neither the indemnification nor the
contribution provisions of such Section 8 contravene Bermuda public policy or
the laws of Bermuda.
14. Except as described in the Prospectus, no taxes, imposts or
duties of any nature (including, without limitation, stamp or other issuance or
transfer taxes or duties and capital gains, income, withholding or other taxes)
are payable in Bermuda in connection with (a) the allotment, issuance and
initial sale of the Shares; (b) the initial sale of the Shares to the
Underwriters in the manner contemplated herein; or (c) the resale and delivery
of Shares by the Underwriters in the manner contemplated in the Prospectus.
15. The courts of Bermuda would recognize as a valid judgment, a
final and conclusive judgment in personam obtained in the courts of New York
against the Company based upon this Agreement under which a sum of money is
payable (other than a sum of money payable in respect of multiple damages, taxes
or other charges of a like nature or in respect of a fine or other penalty) and
would give a judgment based thereon provided that (a) such courts had proper
jurisdiction over the parties subject to such judgment, (b) such courts did not
contravene the rules of natural justice of Bermuda, (c) such judgment was not
obtained by fraud, (d) the enforcement of the judgment would not be contrary to
the public policy of Bermuda, (e) no new admissible evidence relevant to the
action is submitted prior to the rendering of the judgment by the courts of
Bermuda and (f) the correct procedures under the laws of Bermuda are complied
with.
16. The Company is not entitled to any immunity under the laws of
Bermuda, whether characterized as sovereign immunity or otherwise, from any
legal proceedings, whether in Bermuda or elsewhere, to enforce or to collect
upon this
6
Agreement (including, without limitation, immunity from service of process,
immunity from jurisdiction of any court or tribunal or immunity of any of its
property from attachment prior to entry of judgment or from attachment in aid of
execution upon a judgment) in respect of itself or its property.
17. The Company has been designated as a non-resident of Bermuda for
exchange control purposes by the Bermuda Monetary Authority, whose permission
for the issue and transfer of the Shares has been obtained and is in full force
and effect. The transfer of the Shares between persons regarded by the Bermuda
Monetary Authority as non-resident of Bermuda for exchange control purposes and
the sale of the Shares after completion of the offering contemplated by this
Agreement to or by such persons may be effected without specific consent under
the Exchange Control Act 1972 for so long as the Shares are listed on the Nasdaq
National Market. The issue or transfer of the Shares to and between any person
regarded as resident in Bermuda for exchange control purposes requires specific
prior approval of the Bermuda Monetary Authority under the Exchange Control Act
of 1972.
18. It is not necessary under the laws of Bermuda (i) to enable the
Underwriters to enforce their rights under this Agreement or (ii) solely by
reason of the execution, delivery or consummation of this Agreement, that any of
them should be licensed, qualified or entitled to carry on business in Bermuda.
19. The Prospectus, together with attachments, as filed with the
Registrar of Companies complies with the requirements of the Companies ▇▇▇ ▇▇▇▇.
20. No holder of any Shares outstanding after completion of the
offering contemplated by this Agreement is or will be subject to any liability
in Bermuda in respect of any liability of the Company by virtue of holding any
such Shares. There are no restrictions on the holders of the Shares on the
transfer of any of the Shares (except the restrictions on transfer which may
applicable to residents of Bermuda for exchange control purposes) for so long as
the Shares are listed on the Nasdaq National Market; there are no limitations on
the rights of any holders of the Shares to hold or vote such Shares in
accordance with the memorandum of association or bye-laws of the Company.
21. Any dividends and other distributions declared and payable on the
shares of the Company may under the current laws and regulations of Bermuda be
paid in United States dollars, and all such dividends or other distributions
will not be subject to withholding or other taxes under the laws and regulations
of Bermuda and may be so paid without the necessity of obtaining any order,
consent, approval, license, authorization or validation of or exemption by any
governmental or public body or authority of Bermuda or any sub-division thereof.
7
22. As of the date of such counsel's opinion, and based solely on
such counsel's review of the register of members of the Company, Luckygold was
the registered owner of the Shares.
8
Exhibit A-3 to
-----------
Underwriting Agreement
Opinions to be Rendered by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Hong Kong Counsel to
the Company and the Selling Stockholder
1. Each of Peak Plastic & Metal Products (International) Limited
("Peak (HK)"), Warden Development Limited ("Warden") and SemiCycle Hong Kong
Limited ("SemiCycle (HK)") (collectively, the "Hong Kong Subsidiaries") has been
duly incorporated, is validly existing as a company under the laws of Hong Kong
and has the corporate power and authority required to carry on its business as
it is currently being conducted and to own, lease and operate its properties as
described in the Prospectus.
2. All of the issued ordinary shares of each Hong Kong Subsidiary
are part of the authorized share capital of each of those companies and such
issued shares are recorded in the respective registers of members of each such
subsidiary as fully paid and the current registered holders of such shares are
those set forth on a schedule to such counsel's opinion.
3. The statements under the captions "Risk Factors - Considerations
Relating to Hong Kong" and "Business - Products and Production Processes" in the
Prospectus, insofar as they are statements as to the substance or effect of the
laws of Hong Kong, constitute a materially accurate description of such legal
matters (but not any other matters, including any matter of fact or opinion
contained or referred to under such captions, in respect of which matters we
express no opinion).
4. The execution, delivery and performance of this Agreement by the
Company and Luckygold and ▇▇. ▇▇ and the compliance by and each of those persons
with the provisions hereof and the consummation of the transactions contemplated
hereby (including, without limitation, the issuance and sale of the Shares) will
not require any consent, approval, authorization or other order of any Hong Kong
court, regulatory body, administrative agency or other governmental body and
will not conflict with or constitute a breach of any of the provisions of the
memorandum of association or articles of association of any of the Hong Kong
Subsidiaries, or be in breach of or conflict with any of the laws of Hong Kong
which are applicable to the Company, any of its subsidiaries or Luckygold or ▇▇.
▇▇ or any of their respective properties.
9
5. There are no laws of Hong Kong or provisions of the respective
memorandum and articles of association of the Hong Kong Subsidiaries
("Memorandum and Articles") which prohibit or restrict, save as set out in the
respective Memorandum and Articles of Peak (HK), Warden and Semicycle (HK), any
of Peak (HK), Warden or Semicycle (HK) from paying dividends out of profits
which are under the Companies Ordinance available for that purpose (as that
phrase is interpreted pursuant to Section 79B of the Companies Ordinance), to
the respective registered shareholders of Peak (HK), Warden and Semicycle (HK).
Section 79B of the Companies Ordinance provides that a company's profits
available for distribution are its accumulated, realized profits, so far as not
previously utilized by distribution or capitalization, less its accumulated,
realized losses, so far as not previously written off in a reduction or
reorganization of capital duly made.
6. Searches made on __ November, 1997 at the Hong Kong Companies
Registry, the Office of the Official Receiver in Hong Kong and at the Registry
of the Supreme Court of Hong Kong in respect of the period 1st July, 1996 to __
November, 1997 revealed (a) no order or resolution for the winding-up or order
for the receivership of any of the Hong Kong Subsidiaries; and (b) that no
proceedings had been filed in the High Court of Hong Kong against any of the
Hong Kong Subsidiaries during the period 1st July, 1996 to ___ November, 1997.
It should be noted that such searches are not capable of revealing whether or
not a winding-up petition or application for the appointment of a receiver has
been presented. Notice of a winding-up or receivership order made or winding-up
resolution passed may not be filed immediately.
10
Exhibit A-4 to
-----------
Underwriting Agreement
Opinions to be Rendered by ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇, British
Virgin Islands Counsel to the Company and the Selling Stockholder
1. Each of Luckygold 18A Limited ("Luckygold") and each of the
subsidiaries of the Company (the "BVI Subsidiaries" and, together with
Luckygold, the "BVI Affiliates") listed on Schedule 1 to such counsel's opinion
(which Schedule shall set forth all of the Company's British Virgin Islands
subsidiaries) has been duly incorporated and is validly existing as an
International Business Company and in good standing (meaning that it has not
failed to make any filing with any British Virgin Islands government authority
or to pay any British Virgin Islands government fee or tax which might make it
liable to be struck off the Register of Companies and thereby cease to exist)
under the laws of the British Virgin Islands (the "BVI") and has the corporate
power and authority required to carry on its business as it is currently being
conducted and to own, lease and operate its properties as described in the
Prospectus.
2. Luckygold has the necessary corporate power and authority to
enter into and perform its obligations under this Agreement.
3. Luckygold has taken all corporate action required to authorize
its execution, delivery and performance of this Agreement. This Agreement has
been duly executed and delivered by or on behalf of Luckygold, and constitutes
the valid and binding obligations of Luckygold enforceable in accordance with
its terms.
4. The execution, delivery and performance of this Agreement by the
Company and the Selling Stockholder, compliance by the Company and the Selling
Stockholder with all the provisions hereof and the consummation of the
transactions contemplated hereby (including, without limitation, the sale of the
Shares) will not require any consent, approval, authorization or other order of
any BVI court, regulatory body, administrative agency or other governmental body
and will not conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the Memorandum of Association or Articles of
Association of any BVI Affiliate or violate or conflict with any BVI laws,
administrative regulations or rulings or court decrees.
5. It is not necessary or desirable to ensure the enforceability in
the British Virgin Islands of this Agreement that it be registered in any
register kept by, or filed with, any governmental authority or regulatory body
in the BVI.
11
6. Based solely on such counsel's review of the share register,
Memorandum of Association and Articles of Association of each of the BVI
Subsidiaries, all of the outstanding shares of capital stock of each of the BVI
Subsidiaries have been duly authorized and validly issued and are fully paid,
non-assessable (meaning that no further sums are payable to the relevant BVI
Subsidiary on such shares) and not subject to any preemptive or similar rights.
7. To the best of such counsel's knowledge, there are no legal or
governmental proceedings pending in the BVI to which the Company or any BVI
Affiliate is a party or to which any of their respective property is subject,
and such counsel has not been notified that any such proceedings are threatened
or contemplated by any governmental agency or threatened by others in the BVI.
8. Insofar as the laws of the BVI are concerned, the Restructuring,
as described in the Prospectus, has been completed and was effected in
compliance with all applicable BVI laws.
9. Under BVI law, no BVI Subsidiary is currently prohibited or
otherwise restricted, directly or indirectly, from paying dividends to the
Company or to the subsidiary of the Company that is its parent company, from
making any other distribution on such subsidiary's capital stock, from repaying
to the Company or any other subsidiary of the Company or from transferring any
of such subsidiary's property or assets to the Company or any other subsidiary
of the Company in accordance with the International Business Companies Ordinance
(the "Ordinance") except as described in the Prospectus. In particular, any BVI
Subsidiary declaring a dividend must comply with Section 36 of the Ordinance,
which provides, inter alia, that dividends shall only be declared and paid out
----- ----
of surplus and that "[n]o dividend shall be declared and paid unless the
directors determine immediately after payment of the dividend that (a) the
company will be able to satisfy its liabilities as they become due in the
ordinary course of its business; and (b) the realizable value of the assets of
the company will not be less than the sum of its total liabilities, other than
deferred taxes, as shown in the books of account and its capital; and, in the
absence of fraud, the decision of the directors as to the realizable value of
the assets of the company is conclusive, unless a question of law is involved."
Any sale, transfer, lease, exchange or other disposition of assets of a BVI
Subsidiary other than a mortgage, charge or other encumbrance or the enforcement
thereof of more than 50 percent of the assets of such BVI Subsidiary may have to
comply with the procedure set out in Section 80 of the Ordinance.
12
Exhibit A-5 to
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Underwriting Agreement
Opinions to be Rendered by Shenzhen Jin Di Law Office,
PRC Counsel for the Company and the Selling Stockholder
1. The statements under the captions "Risk Factors - Concentration
of Operations in the PRC" and "Business - Production Facilities" in the
Prospectus, insofar as such statements constitute a summary of legal matters,
documents or proceedings referred to therein, fairly present the information
called for with respect to such legal matters, documents and proceedings.
2. The execution, delivery and performance of this Agreement by the
Company and the Selling Stockholder, compliance by the Company and the Selling
Stockholder with all the provisions hereof, and the consummation of the
transactions contemplated hereby (including, without limitation, the sale of the
Shares) will not require any consent, approval, authorization or other order of
any PRC court, regulatory body, administrative agency or other governmental
body, except such as have been duly obtained, and will not conflict with or
constitute a breach of any of the terms or provisions of, or a default under, or
conflict with any PRC laws, administrative regulations or rulings or court
decrees.
3. To the best of such counsel's knowledge, after due inquiry, there
are no legal or government proceedings pending or threatened in the PRC to which
the Company or any of its subsidiaries is a party or to which any of their
respective property is subject which individually or in the aggregate could
reasonably be expected to have a material adverse effect on the Company and its
subsidiaries taken as a whole.
4. To the best of such counsel's knowledge, after due inquiry,
neither the Company nor any of its subsidiaries has violated any PRC
Environmental Laws, or any PRC law relating to discrimination in the hiring,
promotion or pay of employees or any applicable wages and hours laws of the PRC,
which in each case might result in any material adverse change in the business,
prospects, financial condition or results of operation of the Company and its
subsidiaries taken as a whole.
5. The Agreement, dated May 28, 1987, between the Baoan County
Shenzhen Foreign Trade Company in association with Henggang Peak General
Manufacturing Plant and Hong Kong Peak Technology Limited, as amended and/or
extended on May 24, 1994 and December 12, 1996, and the Agreement, dated October
8, 1995, between Shenzhen Longgang District Henggang Joint Stock Company and
13
Peak Plastic & Metal Products (International) Limited (collectively, the
"Processing Agreements"), are valid and binding and enforceable by the Company
in accordance with their terms. The Company has received all required permits,
licenses or other approvals in connection with the Processing Agreements and the
operation of its existing and planned production facilities (the "Facilities")
in Shenzhen, China as contemplated therein, and no default has occurred or is
continuing under either Processing Agreement. The Land Use Rights Granting
Contracts, copies of which are incorporated by reference as Exhibits 10.5 and
10.6, respectively, to the Registration Statement, relating to the Facilities
are valid, binding and enforceable in accordance with their terms, and no
default has occurred or is continuing under either of such contracts.
