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EXHIBIT 1.1
NAM TAI ELECTRONICS, INC.
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STANDBY UNDERWRITING AGREEMENT
_________ ___, 1997
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Associates, Inc.
As Representative of the Several Underwriters
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Nam Tai Electronics, Inc., a British Virgin Islands international business
company (the "Company") is distributing to each holder of its Common Shares, par
value $0.01 per share, on _______ __, 1997 (the "Record Date"), nontransferable
rights (the "Rights") to subscribe for one Unit (individually, a "Unit" and
collectively, the "Units") for every three Common Shares outstanding on the
Record Date. Each shareholder who exercises the Rights granted to him will have
the right to oversubscribe for Units (the "Oversubscription Right") in an amount
not exceeding fourty (40%) of the number of Units actually subscribed for by
that shareholder (the right to subscribe for Units, including the
Oversubscription Right, is hereinafter referred to as the "Rights Offering").
The Company proposes to issue and sell to you that number of Units equal to
3,000,000 Units less the number of Units purchased by the Company's shareholders
in the Rights Offering and to sell to you, at a price of $0.001 per warrant,
warrants (the "Standby Underwriter's Warrants") to purchase 120,000 Units, which
sale of Standby Underwriter's Warrants will be consummated in accordance with
the terms and conditions of the Standby Underwriter's Warrant Agreement (the
"Standby Underwriter's Warrant Agreement") filed as an exhibit to the
Registration Statement described below.
The Company has also agreed to sell to Freshman, Marantz, Orlanski, ▇▇▇▇▇▇
& ▇▇▇▇▇, a law corporation, at a price of $0.001 per warrant, warrants (the
"Counsel's Warrants") to purchase 10,000 Units, which sale of Counsel's Warrants
will be consummated in accordance with the terms and conditions of the Counsel's
Warrant Agreement (the "Counsel's Warrant Agreement") filed as an exhibit to the
Registration Statement described below. Each Unit shall consist of one Common
Share, par value $0.01 of the Company (each, a "Common Share" and collectively,
the "Common Shares") and one three-year Common Share purchase warrants (the
"Warrants") exercisable on or before ________ __, 2000 in accordance with the
terms and conditions of the Warrant Agreement (the "Warrant Agreement") attached
as an exhibit to the Registration Statement described below. The Units to be
purchased by the Standby Underwriter pursuant to this Standby Underwriting
Agreement will be referred to herein as the "Underwritten Units." Unless the
context otherwise provides, references in this Agreement to "Unit" shall refer
to the Units issuable upon exercise of the Rights and the Units issuable upon
exercise of the Standby Underwriter's Warrants; references to "Warrants" shall
refer to the Warrants, the Standby Underwriter's Warrants and the Counsel's
Warrants, references to "Common Shares" shall refer to the Common Shares of the
Company outstanding on the Record Date or underlying the Units and the Warrants
as the context indicates and "Securities" shall refer to the Units, the Warrants
and the Common Shares.
This is to confirm the agreement concerning the Underwriter's purchase of
the underwritten Units from the Company.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to,
and agrees with, the Underwriter that:
(a) A registration statement on Form F-3 (File No. 333-_______) with
respect to (i) the Rights, (ii) the Units, (iii) the Standby Underwriter's
Units, (iv) the Counsel's Warrants and (v) the
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Common Shares issuable upon exercise the Warrants, has been prepared by
the Company in conformity with the requirements of the Securities Act of
1933 (the "Securities Act"), and the rules and regulations of the
Securities and Exchange Commission (the "Commission") thereunder and has
been filed with the Commission. Copies of such registration statement and
any amendments, and all forms of the related prospectuses contained
therein, have been delivered to you or will be delivered to you
concurrently with their filing with the Commission. Such registration
statement, including the prospectus constituting a part thereof, Part II
and all financial schedules and exhibits thereto, and any documents
incorporated by reference therein, as amended at the time when it becomes
effective, is herein referred to as the "Registration Statement," and the
prospectus included as part of the Registration Statement on file with the
Commission that discloses all the information that was omitted from the
prospectus on the effective date pursuant to Rule 430A of the Rules and
Regulations (as defined below), with any changes contained in any
prospectus filed with the Commission by the Company with your consent
after the effective date of the Registration Statement, is herein referred
to as the "Final Prospectus." The prospectus included as part of the
Registration Statement on the date when the Registration Statement became
effective and the prospectus included in any post-effective amendment to
such Registration Statement is referred to herein as the "Effective
Prospectus"; any prospectus included in the Registration Statement and in
any amendments thereto prior to the effective date of the Registration
Statement is referred to herein as a "Pre-Effective Prospectus." The
Pre-Effective Prospectus, the Effective Prospectus and the Final
Prospectus may sometimes hereinafter be referred to collectively as the
"Prospectus." For purposes of this Agreement, "Rules and Regulations"
means the rules and regulations adopted by the Commission under either the
Securities Act or the Securities Exchange Act of 1934 (the "Exchange
Act"), as applicable.
(b) No order preventing or suspending the use of any Pre-Effective
Prospectus has been issued by the Commission, and each Pre-Effective
Prospectus, at the time of filing thereof, did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, except that
the foregoing shall not apply to statements in, or omissions from, any
Pre-Effective Prospectus in reliance upon, and in conformity with, written
information furnished to the Company by you or on your behalf specifically
for use in the preparation thereof.
(c) When the Registration Statement becomes effective, and at all
times subsequent thereto, the Registration Statement, any post-effective
amendment thereto and the Effective Prospectus and the Final Prospectus,
each as amended or supplemented, shall comply in all material respects
with the requirements of the Securities Act and the Rules and Regulations.
No such document shall contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of circumstances under which they
were made, not misleading, except that the foregoing shall not apply to
statements in, or omissions from, any such document in reliance upon, and
in conformity with, written information furnished to the Company by you or
on your behalf, specifically for use in the preparation thereof. There is
no contract or document required to be described in the Registration
Statement or the Prospectus, or to be filed as an exhibit to the
Registration Statement, which is not described or filed as required.
(d) Price Waterhouse, whose report appears in the Effective
Prospectus, are independent public accountants as required by the
Securities Act and the Rules and Regulations. The consolidated financial
statements and Schedules (including the related notes) included in the
Registration Statement or any Prospectus, present fairly, on the basis
stated therein, the financial condition, the results of the operations and
statements of cash flows of the entities purported to be shown thereby at
the dates and for the periods indicated and have been prepared in
accordance with generally accepted accounting principles ("GAAP"), applied
on a consistent basis throughout the periods indicated. The selected
consolidated financial data and summary consolidated financial information
included in the Registration Statement and
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any Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with the audited financial statements
included in the Registration Statement and the Prospectus.
(e) Each of the Company and its Subsidiaries (as defined in Section
12 hereof) has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
organization, with full power and authority (corporate and other) to own
or lease its properties and conduct its business as described in the
Prospectus, and is duly qualified to do business and is in good standing
in each jurisdiction in which the character of the business conducted by
it or the location of the properties owned or leased by it makes such
qualification necessary, except to the extent that the failure to so
qualify will not have a material adverse effect upon the business,
condition (financial or other), operations or prospects upon the Company
and its Subsidiaries taken as a whole (a "Material Adverse Effect"), and
each of the Company and its Subsidiaries holds all material licenses,
certificates, permits, consents, orders and approvals or other
authorizations from governmental authorities necessary to lease or own, as
the case may be, and to operate their property and conduct their business
as now conducted. Except as set forth in the Prospectus, the expiration of
any such licenses, certificates and permits would not materially affect
the operation of the Company and its Subsidiaries, taken as a whole. None
of the activities or businesses of the Company or any of its Subsidiaries
is in violation of any law, rule, regulation or order of the United
States, Canada, the Colony of Hong Kong, the British Virgin Islands, the
People's Republic of China, or any state, county, province, municipality
or locality thereof, or of any agency or body of the United States,
Canada, the Colony of Hong Kong, the British Virgin Islands, the People's
Republic of China, or of any state, county, province, municipality or
locality thereof or of any other foreign jurisdiction of which the Company
or any of its Subsidiaries may be subject, other than violations which
would not have a Material Adverse Effect.
(f) The capitalization of the Company as of June 30, 1997 is as set
forth under the caption "Capitalization" in the Prospectus, and the
Rights, the Units, the Warrants and the Common Shares conform to the
descriptions thereof contained under the caption "Description of
Securities" in the Final Prospectus; the outstanding Common Shares of the
Company have been, and the Common Shares underlying the Warrants, upon
issuance and delivery to the holders thereof and payment therefor in the
manner described in the Effective and Final Prospectus will be, duly
authorized, validly issued, fully paid and nonassessable, free and clear
of any liens, encumbrances, equities and claims. Except as disclosed in or
contemplated by this Agreement or the Lock-Up Agreement (as defined in
Section 4(f) hereof), there are no preemptive rights or other rights to
subscribe for or to purchase from the Company. or any restriction upon the
voting or transfer of, any Common Shares of the Company pursuant to the
Company's Memorandum of Association, Articles of Association or other
governing documents or any agreement or other instrument to which the
Company is a party or by which it is bound. Except as contemplated by this
Agreement, the Warrant Agreement, the Standby Underwriter's Warrant
Agreement or the Counsel's Warrant Agreement, none of the filing of the
Registration Statement, the distribution of the Rights nor the offering or
sale of the Securities as contemplated by this Agreement, the Warrant
Agreement, the Standby Underwriter's Warrant Agreement or the Counsel's
Warrant Agreement gives rise to any rights, other than those which have
been waived or satisfied, for or relating to the registration of any
shares of capital stock of the Company, or any warrants, options or rights
to acquire such capital stock. Except as set forth in Exhibit 22 of the
Registration Statement, the Company owns all of the issued and outstanding
shares of capital stock of each of the Subsidiaries and there are no
rights to subscribe for or to purchase from the Company or any of its
Subsidiaries any shares of capital stock of any of the Subsidiaries.
(g) Except as described in or contemplated by the Effective and
Final Prospectus, there has not been any material adverse change in, or
any adverse development that materially affects, the business, properties,
financial condition, results of operations or prospects of the Company and
its Subsidiaries, taken as a whole, from the date as of which information
is given in the applicable Prospectus; and except as
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described in or contemplated by the Effective and Final Prospectus,
neither the Company nor any Subsidiary has, directly or indirectly,
incurred any material liabilities or obligations, direct or contingent,
not in the ordinary course of business, other than obligations related to
the offer and sale of the Securities, or entered into any transactions not
in the ordinary course of business, which are material to the business of
the Company or such Subsidiary and required to be disclosed in the
Prospectus. Except as described in or contemplated by the Final
Prospectus, there has not been any material change in the capital stock
of, or any incurrence of long-term debt by, the Company or its
Subsidiaries, or any issuance or grant of options, warrants or rights to
purchase the capital stock of the Company, or any declaration or payment
of any dividend on the capital stock of the Company from the date as of
which information is given in the Prospectus.
(h) Neither the Company nor any of its Subsidiaries is, nor with the
giving of notice or lapse of time or both would be, in violation of or in
default under, nor will the execution or delivery of this Agreement, the
Warrant Agreement, the Standby Underwriter's Warrant Agreement or the
Counsel's Warrant Agreement or consummation of the transactions
contemplated hereby or thereby result in a violation of, or constitute a
default under, the Memorandum of Association, Articles of Association or
other governing documents of the Company or any of its Subsidiaries, or
any agreement, indenture or other instrument, to which the Company or any
of its Subsidiaries is a party or by which any of them is bound, or to
which any of their respective properties is subject, nor will the
performance by the Company of its obligations hereunder, under the Warrant
Agreement, the Standby Underwriter's Warrant Agreement or the Counsel's
Warrant Agreement violate any law, rule, administrative regulation or
decree of any court or any governmental agency or body have jurisdiction
over the Company, its Subsidiaries or any of their properties, or result
in the creation or imposition of any lien, charge, claim or encumbrance
upon any property or asset of the Company or any of its Subsidiaries,
other than a lien, claim or encumbrance that would not have a Material
Adverse Effect. Except for permits and similar authorizations required
under the Securities Act and the securities or "blue sky" laws of certain
jurisdictions and for such permits and authorizations which have been
obtained, no consent, approval, authorization or order of any court,
governmental agency or body or financial institution is required in
connection with the consummation of the transactions contemplated by this
Agreement, the Warrant Agreement, the Standby Underwriter's Warrant
Agreement or the Counsel's Warrant Agreement.
(i) Each of this Agreement, the Warrant Agreement, the Standby
Underwriter's Warrant Agreement and the Counsel's Warrant Agreement has
been duly authorized by the Company; this Agreement has been duly executed
and delivered by the Company; this Agreement constitutes and, when
executed and delivered, the Warrant Agreement, the Standby Underwriter's
Warrant Agreement and the Counsel's Warrant Agreement will constitute, the
valid and binding agreement of the Company and each are enforceable
against the Company in accordance with their respective terms except as
rights to indemnity and/or contribution may be limited by federal or state
securities laws or the public policy underlying such laws, and except as
enforcement (i) may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting creditor's rights generally and (ii) is
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(j) The Company and its Subsidiaries have good and marketable title
to all real and personal property owned by them, free and clear of all
liens, encumbrances and defects except such as are described or referred
to in the Prospectus or such as do not materially affect the value of such
property or do not materially interfere with the use made or proposed to
be made of such property by the Company or such Subsidiaries. Any real
property and buildings held under lease by the Company or any of its
Subsidiaries are held by them under valid and existing and enforceable
leases subject to such exceptions as are not material or do not interfere
with the use made or proposed to be made of such property and buildings by
the Company or such Subsidiaries or such exceptions that take into account
the inherent difficulties of enforcing them because of the nature of the
legal system governing the leases.
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(k) The Company and the Subsidiaries, taken as a whole, have not
sustained since June 30, 1997 any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in
the Effective Prospectus and the Final Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Effective Prospectus and the Final Prospectus, there has
not been any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, business prospects, financial position, shareholders' equity
or results of operations of the Company and the Subsidiaries, taken as a
whole, otherwise than as set forth or contemplated in the Effective
Prospectus and the Final Prospectus.
(l) Except as described in the Prospectus, there is no litigation or
governmental proceeding to which the Company or any of its Subsidiaries is
a party or to which any property of the Company or such Subsidiaries is
subject or which is pending in which the Company has been served or, to
the knowledge of the Company, is otherwise pending or threatened against
the Company or any of its Subsidiaries which would have a Material Adverse
Effect, or which is required to be disclosed in the Prospectus, and to the
Company's knowledge no labor disturbance by the employees of the Company
or any of its Subsidiaries exists or is imminent which would have a
Material Adverse Effect, or which is required to be disclosed in the
Effective Prospectus and the Final Prospectus.
(m) Neither the Company nor any Subsidiary is in violation of any
law, ordinance, governmental rule or regulation or court decree to which
any of them may be subject which violation would have a Material Adverse
Effect.
(n) The Company has not taken and shall not take, directly or
indirectly, any action resulting in a violation of Regulation M under the
Exchange Act, or designed to cause or result in, or which has constituted
or which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the Common Shares of the Company to
facilitate the sale of or resale of the Units or Securities covered
thereby.
(o) The Company and its Subsidiaries have timely (giving effect to
permitted extensions) and properly prepared and filed all necessary
income, franchise and other required tax returns whether required by the
United States, Canada, the British Virgin Islands, the Colony of Hong Kong
or the People's Republic of China or any other jurisdiction, and has paid
all taxes shown as due thereon (other than such taxes, if any, owing by
certain of the Subsidiaries that are dormant and without assets, the
nonpayment of which would not have a Material Adverse Effect), and the
Company has no knowledge of any tax deficiency that has been or might be
asserted against the Company or its Subsidiaries which would have a
Material Adverse Effect.
(p) None of the Company, any of its Subsidiaries, nor to the
Company's knowledge any officer, director, employee or agent acting on
behalf of the Company or any of its Subsidiaries has at any time (i) made
any contributions to any candidate for political office in violation of
applicable law, or failed to disclose fully any contributions to any
candidate for political office in accordance with any applicable statute,
rule, regulation or ordinance requiring such disclosure, (ii) made any
payment to any local, state, federal or foreign governmental officer or
official, or other person charged with similar public or quasi-public
duties, other than payments required or allowed by applicable law, (iii)
made any payment outside the ordinary course of business to any purchasing
or selling agent or person charged with similar duties of any entity to
which the Company or any of its Subsidiaries sells or from which the
Company or any of its Subsidiaries buys products for the purpose of
influencing such agent or person to buy products from or sell products to
the Company or any of its Subsidiaries, or (iv) except as set forth in the
Prospectus, engaged in any transaction, maintained any bank account or
used any corporate funds except for
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transactions, bank accounts and funds which have been and are reflected in
the normally maintained books and records of the Company.
(q) Except as set forth in the Prospectus, the Company does not know
of any claims for services in the nature of a finder's fee, consulting fee
or brokerage fee with respect to this offering for which the Company, its
Subsidiaries or the Standby Underwriter may be responsible.
(r) The properties of the Company and its Subsidiaries are
adequately insured against loss or damage by fire and there is maintained
on such properties such other insurance as is prudent or customarily
maintained by companies in the same or similar business and in the same or
similar locality.
(s) Except as described in the Effective and Final Prospectus, the
Company or its Subsidiaries owns or possesses adequate rights to use all
material patents, patent rights, inventions, trademarks, service marks,
trade names and copyrights necessary for the conduct of its business as
described in the Effective and Final Prospectus; except as set forth in
the Effective and Final Prospectus, neither the Company nor such
Subsidiaries have received any notice of infringement of or conflict with,
and to the best knowledge of the Company neither the Company nor its
Subsidiaries is infringing or in conflict with, asserted rights of others
with respect to any patents, patent fights, inventions, trademarks,
service marks, trade names or copyrights which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a Material Adverse Effect.
(t) The Warrants, the Standby Underwriter's Warrants and the
Counsel's Warrants have been duly and validly authorized by the Company
and upon delivery to you in accordance herewith will be duly issued and
legal, valid and binding obligations of the Company.
(u) The Common Shares underlying the Warrants, the Standby
Underwriter's Warrants and the Counsel's Warrants have been duly
authorized and reserved for issuance upon the exercise of the Warrants,
the Standby Underwriter's Warrants and the Counsel's Warrants and when
issued upon payment of the exercise price therefor will be validly issued,
fully paid and nonassessable Common Shares, free and clear of all liens,
encumbrances, equities and claims.
(v) There are no outstanding loans or advances or guarantees of
indebtedness by the Company or any of its Subsidiaries to or for the
benefit of any of the officers or directors of the Company or any of its
Subsidiaries, or any of the members of the families of any of them, which
are required by the Rules and Regulations to be described in the
Registration Statement, Effective Prospectus and Final Prospectus except
such that are so described.
(w) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorizations (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorizations;
and (iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
2. PURCHASE BY THE UNDERWRITERS.
(a) On the basis of the representations, warranties, covenants and
agreements herein contained, and subject to the terms and conditions
herein set forth, the Company agrees to issue and sell to the Standby
Underwriter and the Standby Underwriter agrees to purchase from the
Company. the Underwritten Units, at a price per Underwritten Unit equal to
the lesser of per Unit, (x) $_________ per Unit,
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and (y) the closing bid price of the Common Shares on the NASDAQ National
Market System on _______, 1997, the Expiration Date of the Rights Offering
(the "Expiration Date"). The Standby Underwriter agrees to offer the
Underwritten Units to the public as set forth in the Final Prospectus.
(b) On the Closing Date, simultaneously with the purchase of the
Underwritten Units, if any, by the Standby Underwriter, the Company shall
pay to the Underwriter a Standby fee equal to four percent (4%) of the
total gross proceeds (before payment of any fees or commissions payable
hereunder or to any other third party) received by the Company from the
sale of Units in the Rights Offering and from the sale of the Underwritten
Units pursuant to this Agreement.
3. DELIVERY OF AND PAYMENT FOR UNITS. Delivery of certificates for the
Units to be purchased by the Standby Underwriter from the Company and payments
therefor, shall be made at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Associates, Inc.,
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or such
other place as mutually may be agreed upon), before 7:00 A.M., California time,
on the sixth full Business Day following the Expiration Date or at such other
date, not later than ten Business Days after such date, as shall be determined
by agreement of the Company and the Standby Underwriter (the "Closing Date").
Delivery of certificates representing the Underwritten Units shall be made
by or on behalf of the Company to you, against payment of the purchase price
therefor by certified or official bank check payable in Los Angeles Clearing
House funds. The Certificates shall be registered in such names and
denominations as you shall have requested at least two full Business Days prior
to the Closing Date, and shall be made available for checking and packaging at a
location as may be designated by you at least one full Business Day prior to the
Closing Date. Time shall be of the essence, and delivery at the time and place
specified in this Agreement is a further condition to the obligations of the
Standby Underwriter.
4. COVENANTS. The Company covenants and agrees with the Standby
Underwriter that:
(a) The Company shall use its best efforts to comply with the
provisions of and make all requisite filings with the Commission pursuant
to the Rules and Regulations and to notify you promptly (in writing, if
requested) of all such filings. The Company shall notify you promptly of
any request by the Commission for any amendment of or supplement to the
Registration Statement or the Effective or Final Prospectus or for
additional information; the Company shall prepare and file with the
Commission, promptly upon your request, any amendments of or supplements
to the Registration Statement or Effective or Final Prospectus which, in
your reasonable opinion, may be necessary or advisable in connection with
the distribution of the Units; the Company shall prepare and file with the
Commission from time to time any amendments of or supplements to the
Registration Statement or Effective or Final Prospectus (or in lieu
thereof, at the Company's option, a separate registration statement) which
may be necessary or advisable to comply with the requirements imposed upon
it by the Securities Act, as now and hereafter amended, and by the Rules
and Regulations as from time to time in force, so far as is necessary to
permit the continuance of sales of Common Shares upon exercise of the
Warrants and Standby Underwritten Warrants, until such time as all of the
Warrants have been exercised or redeemed and all of the Units underlying
the Standby Underwriter's Warrants and Counsel's Warrants have been issued
and sold (but not more than three years, six months after the Closing
Date); and the Company shall not file any amendment of or supplement to
the Registration Statement or the Effective or Final Prospectus which is
not approved by you after reasonable notice thereof, such approval not to
be unreasonably withheld or delayed. The Company shall advise you promptly
of the issuance by the Commission or any state or other regulatory body of
and stop order or other order suspending the effectiveness of the
Registration Statement, suspending or preventing the use of any
Pre-Effective Prospectus or the Effective or Final Prospectus or
suspending the qualification of the Securities for offering or sale in any
jurisdiction, or of the institution of any proceedings for any such
purpose, and the Company shall use its best efforts to prevent the
issuance of any stop order or other such order and, should a stop order or
other such order be issued, to obtain as
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soon as possible the lifting thereof.
(b) The Company shall furnish to the Standby Underwriter, from time
to time and without charge, a reasonable number of copies of the
Registration Statement of which one for the Standby Underwriter and one
for counsel to the Standby Underwriter shall be signed and shall include
exhibits and all amendments and supplements to any such Registration
Statement, in each case as soon as available and in such quantities as you
may from time to time reasonably request.
(c) Within the time during which a Final Prospectus relating to the
Securities is required to be delivered under the Securities Act, the
Company shall comply with all requirements imposed upon it by the
Securities Act, as now and hereafter amended, and by the Rules and
Regulations as from time to time in force, so far as is necessary to
permit the continuance of sales of or dealings in the Securities as
applicable, as contemplated by the provisions hereof and the Final
Prospectus. If during such period any event occurs as a result of which
the Final Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances then existing, not misleading, or if during such period it
is necessary to amend the Registration Statement or supplement the Final
Prospectus to comply with Securities Act, the Company shall promptly
notify you and the Company shall amend the Registration Statement or
supplement the Final Prospectus (at the expense of the Company) so as to
correct such statement or omission or effect such compliance.
(d) The Company shall take or cause to be taken all necessary action
and furnish to whomever you may direct such information as may be required
in qualifying the Securities for sale under the laws of such jurisdictions
which you shall designate and to continue such qualifications in effect
for as long as may be necessary for the distribution of the Securities,
except that in no event shall the Company be obligated in connection
therewith to qualify as a foreign corporation, or to execute a general
consent for service of process, or subject itself to taxation as doing
business in such jurisdiction.
(e) The Company shall make generally available to its security
holders, in the manner contemplated by Rule 158(b) under the Securities
Act, as soon as practicable but in any event not later than 45 days after
the end of its fiscal quarter in which the first anniversary date of the
effective date of the Registration Statement occurs, an earnings statement
satisfying the requirements of Section 11(a) of the Securities Act
covering a period of at least 12 consecutive months beginning after the
effective date of the Registration Statement.
(f) For a period of 90 days following the Closing Date, the Company
shall not, without your prior written consent, (i) purchase any Common
Shares or other equity securities of the Company, or (ii) offer, issue,
sell, transfer or otherwise dispose of, for value or otherwise, directly
or indirectly (whether through the grant of options, warrants or
otherwise), any Common Shares or other equity securities of the Company
except (A) the Rights or the Securities, (B) in connection with
acquisitions by the Company or pursuant to a stock option plan of the
Company providing for the issuance of up to [300,000] Common Shares and
the grant of options to officers, directors and employees under such plan
at an exercise price no less than the exercise price of the Rights or (C)
in a transaction which results in the shares so issued, sold, transferred
or disposed of constituting "restricted securities" for purposes of Rule
144 of the Rules and Regulations. At or before the Closing Date, you shall
receive from the officers, directors and certain principal shareholders
designated by you, a written agreement (the "Lock-Up Agreement") not to
offer, sell, transfer or otherwise dispose of, directly or indirectly, any
of the Common Shares or other equity securities of the Company now owned,
for a period of 90 days following the Closing Date, without your prior
written consent; provided, however, that such persons may make private
dispositions or gifts of such securities if such securities constitute
"restricted securities" within the meaning of Rule 144 of the Rules and
Regulations, in the hands of the acquiring persons, and if the acquiring
persons agree in writing to be
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bound by the foregoing restrictions on transfer.
(g) The Company shall not solicit Warrant exercises other than
through the Standby Underwriter. Upon exercise of any Warrant by the
holder thereof, the Company shall pay to the Standby Underwriter a fee in
an amount equal to one percent (1%) of the aggregate exercise price of the
Warrants so exercised, provided, that, (i) the market price of the Common
Shares on the date the Warrant is exercised is greater than the
then-exercise price of the Warrants; (ii) the exercise of the Warrants was
solicited by a member of the National Association of Securities Dealers,
Inc.; (iii) the Warrant being exercised is not held in a discretionary
account; (iv) disclosure of the compensation arrangements was made both at
the time of the Rights Offering and at the time of the exercise of the
Warrant; and (v) the solicitation of the exercise of the Warrant was not
in violation of Regulation M promulgated under the Exchange Act.
(h) The Company shall apply the net proceeds of the sale of the
Units as set forth in the Effective and Final Prospectus.
(i) The Company shall pay or cause to be paid (i) all expenses
(including stock transfer taxes) incurred in connection with the
distribution of the Rights and the purchase, sale and delivery of the
Units to its shareholders and the Standby Underwriter, as applicable, (ii)
all fees and expenses (including, without limitation, fees and expenses of
the Company's accountants and counsel, but excluding fees and expenses of
counsel for the Standby Underwriter not related to the matters set forth
in Section 4(i)(iii) below)) in connection with the preparation, printing,
filing, delivery and shipping of the Registration Statement (including the
financial statements therein and all amendments and exhibits thereto),
each Pre-Effective Prospectus, the Effective and Final Prospectus as
amended or supplemented and the printing, delivery and shipping of this
Standby Underwriting Agreement and Selected Dealer Agreements and any
letters transmitting the offering material to the Standby Underwriter or
selling group members (including costs of mailing and shipment), (iii) all
filing fees and up to $[2,500] for the payment of fees and disbursements
of counsel to the Standby Underwriter incurred in connection with the
qualification of the Units and the Securities under state securities laws
as provided in Section 4(d) hereof; (iv) the filing fee of the National
Association of Securities Dealers, Inc., (v) any applicable listing fees,
(vi) the cost of printing certificates representing the Warrants and the
Common Shares, (vii) the cost and charges of any transfer agent or
registrar, (viii) the costs of a tombstone advertisement relating to the
Rights Offering in the Wall Street Journal, national edition and The
Investment Reporter, in each case in form and substance satisfactory to
the Standby Underwriter, and of advertising undertaken at the Company's
request, including all graphic slide costs (ix) the costs of preparing,
printing and distributing bound volumes for the Standby Underwriter and
its counsel, (x) all costs and expenses incurred by the Company in
connection with travelling and attending meetings on the "road show" or
other marketing expenses incurred in connection with distribution of the
Rights and the Securities, (xi) the fee set forth in Section 2(b), and
(xii) all other costs and expenses incident to the performance of the
obligations of the Company hereunder which are not otherwise provided for
in this section. In addition, the Company shall also pay to you, at the
Closing Date, a nonaccountable expense allowance equal to $ ________. If
the sale of the Underwritten Units provided for herein is not consummated
by reason of acts of the Company pursuant to Section 7(a) hereof which
prevent this Agreement from becoming effective, or by reason of any
failure, refusal or inability on the part of the Company to perform any of
its agreements on its part to be performed or because any other condition
of the Standby Underwriter's obligations hereunder is not fulfilled, the
Company shall reimburse the Standby Underwriter for all reasonable
out-of-pocket disbursements (including reasonable fees and disbursements
of counsel) actually incurred by the Standby Underwriter in connection
with the investigation, preparing to market and marketing of the Units or
in contemplation of performing their obligations hereunder. If the sale of
the Underwritten Units is not consummated because you determine, in your
sole judgment, that market conditions are unsuitable for such offering, or
if information comes to your attention (other than information contrary to
the representations, warranties and covenants of the Company contained
herein)
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relating to the Company, its Subsidiaries, their respective management
personnel, or their position in the industry which could, in your sole
judgment. preclude a successful offering of the Underwritten Units to the
public, then the maximum amount to which you shall be entitled to
reimbursement for your out-of-pocket expenses shall be $________. The
Company shall not in any event be liable to the Standby Underwriter for
loss of anticipated profits from the transactions covered by this Standby
Underwriting Agreement. It is understood and agreed, however, that except
as provided in this Section 4, the Standby Underwriter shall pay all of
its expenses and costs, including the fees of its own counsel and
advertising expenses or other expenses connected with any offers and/or
sales of Underwritten Units they may make.
(j) The Company, at its expense, shall furnish its shareholders with
an annual report containing audited financial statements prepared in
accordance with GAAP that have been reported on by its independent
accountants, and, as soon as practicable after the end of each of the
first three quarters of each fiscal year, a balance sheet, a statement of
the Company's cash flows for such quarter, and a statement of the
Company's operations for such quarter (which may be in condensed form),
all in reasonable detail, and for five years after the Closing Date, at
its expense, shall furnish you, (i) as soon as practicable after the end
of each fiscal year, a balance sheet of the Company and any Subsidiaries
as at the end of such fiscal year, together with statements of income or
operations, shareholders' equity and cash flows of the Company and any
consolidated Subsidiaries, and of any non-consolidated significant
Subsidiary, for such fiscal year, all in reasonable detail and accompanied
by a copy of the certificate or report thereon of independent certified
public accountants; (ii) as soon as they are available, a copy of all
reports (financial or other) mailed to security holders; (iii) as soon as
they are available, a copy of all reports and financial statements
furnished to or filed with the Commission; and (iv) such other information
as you may from time to time reasonably request.
(k) So long as the Company has an active subsidiary or subsidiaries,
the financial statements provided for in Section 4(j) will be on a
consolidated basis to the extent the accounts of the Company and its
Subsidiary or Subsidiaries are consolidated in reports furnished to its
shareholders generally, separate financial statements shall be furnished
for all Subsidiaries whose accounts are not consolidated but which at the
time are "significant subsidiaries" as defined in Rule 405 of the Rules
and Regulations.
(l) The Company maintains and shall continue to maintain a system of
internal accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are recorded as necessary in
order to permit preparation of financial statements in accordance with
generally accepted accounting principles and to maintain accountability
for assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(m) The Company shall comply with all registration, filing and
reporting requirements of the Exchange Act which may from time to time be
applicable to the Company.
(n) The Company shall make all filings required, including
registration under the Exchange Act, to obtain and maintain the listing of
the Units on the NASDAQ Interdealer Quotation System and the Warrants and
the Common Shares on the NASDAQ National Market System, in each case upon
the effectiveness of the Registration Statement.
(o) The Company shall make reasonable efforts to acquire and
maintain, for a period of three years from the Closing Date, officer and
director liability insurance, at reasonable cost (as determined in the
reasonable judgment of the Board) and in reasonable amounts from a
responsible issuer.
(p) The Company shall use its reasonable efforts to maintain in
place the executive officers
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of the Company who are identified in the Registration Statement for a
reasonable period of time after the Closing Date.
5. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. The obligations of the Standby
Underwriter hereunder to purchase and pay for the Underwritten Units, and to
perform each of its other obligations set forth herein, are subject to the
accuracy, as of the date hereof and the Closing Date (as if made at the Closing
Date), of the representations and warranties of the Company contained herein, to
the performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective and all filings required by Rule 424
and Rule 430A of the Rules and Regulations shall have been made within the
time period required by the Rules and Regulations; no stop order
suspending the effectiveness of the Registration Statement or any
amendment or supplement thereto shall have been issued; no proceedings for
the issuance of such an order shall have been initiated or threatened; and
any request of the Commission for additional information (to be included
in the Registration Statement or the Final Prospectus or otherwise) shall
have been disclosed to you and complied with to your satisfaction.
(b) You shall not have advised the Company that the Registration
Statement or Effective or Final Prospectus, or any amendment or supplement
thereto, contains an untrue statement of fact which, in your opinion, is
material, or omits to state a fact which, in your opinion, is material and
is required to be stated therein or is necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(c) On or prior to the Closing Date, you shall have received from
Troop ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, counsel for the Standby
Underwriter, such opinion or opinions with respect to the sufficiency of
all corporate proceedings and other legal matters relating to this
Agreement and the transactions contemplated hereby as you reasonably may
require, and such counsel shall have received such papers and information
as they request to enable them to pass upon such matters.
(d) On the Closing Date, there shall have been furnished to you the
opinion (addressed to the Underwriter) of McW. ▇▇▇▇▇▇ & Co., counsel for
the Company with respect to certain matters of the law of the British
Virgin Islands, dated the Closing Date and in form and substance
satisfactory to counsel for the Underwriter and stating that it may be
relied upon by counsel for the Underwriter in giving their opinion, to the
effect that:
(i) The Company is a corporation duly organized and validly
existing and in good standing under the laws of the British Virgin
Islands. The Company has all corporate power and authority, and all
material permits of and from all British Virgin Islands' public,
regulatory or governmental officials and bodies, to own, lease and
operate its properties and conduct its business as now being
conducted and as described in the Prospectus and, to the best
knowledge of such counsel, there are no proceedings pending or
threatened relating to the revocation or modification of any such
permit, nor is there any basis therefor, nor has any event occurred
that allows (or which with notice or lapse of time, or both, would
allow) revocation or termination thereof or result in any other
impairment of the rights of the holder of any such permit.
(ii) The Company has all requisite corporate power and
authority to execute, deliver and perform each of this Agreement,
the Standby Underwriter's Warrant Agreement, the Counsel's Warrant
Agreement and the Warrant Agreement. Each of this Agreement, the
Standby Underwriter's Warrant Agreement, the Counsel's Warrant
Agreement and the Warrant Agreement have been duly and validly
authorized, executed and delivered by the Company, and constitute
the
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legal, valid and binding agreement of the Company, enforceable
against the Company in accordance with its respective terms, except
as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights
generally from time to time in effect and the availability of
equitable remedies (regardless of whether enforceability is
considered in a proceeding at law or in equity).
(iii) None of the execution, delivery and performance of this
Agreement, the Standby Underwriter's Warrant Agreement, the
Counsel's Warrant Agreement and the Warrant Agreement, the
consummation of the transactions herein or therein contemplated by
the Company, including the issuance, sale and delivery of the
Securities provided for thereunder, nor compliance with the terms
and provisions hereof and thereof, will: (A) to the best of such
counsel's knowledge, conflict with or result in a breach of any of
the terms and provisions of, or constitute a default (or an event
that with notice or lapse of time, the Counsel's Warrants, or both,
would constitute a default) or require consent under, or result in
the creation or imposition of any lien, encumbrance, security
interest, claim or other restriction of any nature whatsoever upon
any property or assets of the Company or any of the Subsidiaries,
pursuant to the terms of any oral or written agreement or
understanding, instrument or permit known to such counsel to which
the Company or any of the Subsidiaries is a party or by which any of
their respective properties or assets may be bound; or (B) violate
or conflict with any provisions of the charter of the Company or any
of the Subsidiaries, or any statute, rule or regulation, or to the
best of such counsel's knowledge, any permit, judgment, decree,
order of any court, arbitrator or similar person or any British
Virgin Islands' public, governmental or other regulatory agency or
body having jurisdiction over the Company or any of the Subsidiaries
or any of their respective properties or assets. No consent,
approval, authorization or permit of or with any court, arbitrator
or similar person or any British Virgin Islands' public,
governmental or regulatory agency or body having jurisdiction over
the Company or any of the Subsidiaries or any of their respective
properties or assets is required for the execution, delivery and
performance of this Agreement, the Standby Underwriter's Warrant
Agreement, the Counsel's Warrant Agreement or the Warrant Agreement,
and the consummation of the transactions herein or therein
contemplated, including, without limitation, the issuance, sale and
delivery of any of the Units or the Securities.
(iv) The authorized, issued and outstanding capital stock of
the Company, is as set forth under the caption "Capitalization" in
the Effective Prospectus. The Units, the Common Shares and the
Warrants, the Standby Underwriter's Warrants, the Counsel's Warrant
Agreement and each other authorized class of capital stock of the
Company conforms in all material respects to all statements in
relation thereto contained in the Effective Prospectus. The Company
has a sufficient number of authorized but unissued Common Shares to
enable the Company to issue, without further stockholder action, all
of the Common Shares underlying the Warrants, the Standby
Underwriter's Warrants and the Counsel's Warrants. The Company has
reserved out of the authorized but unissued Common Shares all of the
shares underlying the Units and Warrants. All of the issued and
outstanding Common Shares have been duly and validly authorized and
issued and are fully paid and nonassessable, with no personal
liability attaching to the ownership thereof. The shares to be
issued or sold in accordance with the terms of this Agreement, the
Units and the Warrants when paid for in accordance with this
Agreement, and the Warrant Agreement, as applicable, will be duly
and validly issued, fully paid and nonassessable, with no personal
liability attaching to the ownership thereof. There are no
preemptive fights or other rights to subscribe for or to purchase,
or any restrictions upon the voting or transfer of, any Common
Shares pursuant to the Company's charter or, to the best knowledge
of such counsel, any other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which the
Company or any of the Subsidiaries is bound.
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(v) To the best of such counsel's knowledge, there is no
litigation, arbitration, action, suit, proceeding or investigation
before or by any court, arbitrator or similar party or by or before
any governmental agency or body, pending or threatened: (A) to which
the Company, or any of the Subsidiaries is a party or which any
property or assets of the Company, or any of the Subsidiaries is the
subject that is required to be disclosed in the Registration
Statement or the Prospectus that is not described as required; or
(B) to which the Company or any of the Subsidiaries is a party or
which any property or assets of the Company or any of the
Subsidiaries is the subject that, if adversely determined, could
individually or in the aggregate, have a material effect on the
business, operations, earnings, prospects, properties or condition
(financial or otherwise) of the Company, or any of the Subsidiaries.
(vi) To the best of such counsel's knowledge, neither the
Company, nor any of the Subsidiaries is in violation of, or in
default with respect to, its charter or any British Virgin Islands'
law, rule, permit, regulation, order, judgment or decree applicable
to or binding upon the Company or any Subsidiary or by which any of
their respective assets or properties may be bound or affected,
except such as are described in the Effective Prospectus and Final
Prospectus or such as, individually or in the aggregate, do not now
have, and in the future do not pose a significant risk of having a
material adverse effect upon the business, operations, earnings,
properties or condition (financial or otherwise) of the Company or
any of the Subsidiaries.
(vii) To the best of such counsel's knowledge, no default
exists, and no event has occurred that with notice or lapse of time,
or both, would constitute a default in the due performance and
observance of any term, covenant or condition of any material
indenture, mortgage, deed of trust, note, bank loan or credit
agreement, lease, permit, authorization or any other material oral
or written agreement or instrument to which the Company or any of
the Subsidiaries is a party or by which any of them or any of their
respective properties or assets may be bound or affected.
(viii) The form of certificates for the Warrants attached to
the Registration Statement as an exhibit has been duly adopted by
the Company and conforms to all legal requirements of the British
Virgin Islands.
(ix) To the best of such counsel's knowledge, there are no
outstanding options, warrants, calls, rights or other agreements or
commitments with respect to the purchase of any capital shares of
the Company, other than as disclosed in the Registration Statement.
(x) The descriptions contained in the Registration Statement
of British Virgin Islands statutes, British Virgin Islands legal and
governmental proceedings or British Virgin Islands laws are accurate
and complete in all material respects.
(xi) Under the laws of the British Virgin Islands, the
submission by the Company to the jurisdiction of any Federal or
State court sitting in the State of California, and the designation
of the law of the State of California to apply to this Agreement is
binding upon the Company and would be enforceable in any judicial or
administrative proceeding in the British Virgin Islands if properly
brought to the attention of the Court or administrative body in
accordance with the laws of the British Virgin Islands.
(xii) Any judgment obtained in the Federal Courts of the
United States or any State Court in the United States against the
Company for a definite sum would be treated by the High Court of the
British Virgin Islands as a cause of action in itself so that no
retrial of the issues would be necessary provided that:
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(A) the Federal Court of or the State court in the
United States had jurisdiction in the matter:
(B) the judgment given by the Federal Court of or the
State Court in the United States was final and
conclusive;
(C) the judgment given by the Federal Court of or the
State Court in the United States was not in
respect of penalties, taxes, fines or similar
fiscal or revenue obligations;
(D) in obtaining the judgment there was no fraud on
the part of the person in whose favor the judgment
was given or on the part of the Federal Court of
or the State Court in the United States;
(E) recognition or enforcement of the judgment in the
British Virgin Islands would not be contrary to
public policy; and
(F) the proceedings pursuant to which judgment was
obtained were not contrary to natural justice.
In rendering such opinion, such counsel may rely, as to matters of fact,
to the extent it deems proper, on statements or certificates of responsible
officers of the Company or the Subsidiaries, certificates of public officials,
and certificates or other written statements of officers of departments of
various jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company and the Subsidiaries, provided that
copies of any such statements or certificates shall be delivered to the Standby
Underwriter's counsel upon request.
(e) On the Closing Date, there shall have been furnished to you the
opinion (addressed to the Underwriters) of ▇▇▇▇▇▇▇▇▇ & Grist, counsel for
the Company with respect to certain matters of Hong Kong law, dated the
Closing Date and in form and substance satisfactory to counsel for the
Standby Underwriter and stating that it may be relied upon by counsel for
the Standby Underwriter in giving their opinion, to the effect that:
(i) Each of Nam Tai Management Services Limited, Nam Tai
Electronic & Electrical Products Limited, Nam Tai Supplies Limited,
Nam Tai Electronic Co. Limited, ▇▇▇ ▇▇▇▇ Electronic Manufacturing
Limited, Nam Tai Finance Services Limited, and Zastron Limited
(collectively, the "HK Subsidiaries") are corporations duly
organized and validly existing under the laws of the Colony of Hong
Kong. Except for such of the HK Subsidiaries that are dormant and
without assets, each of the HK Subsidiaries has full corporate power
and authority, and all material permits of and from all Hong Kong
public, regulatory or governmental officials or bodies, to own,
lease and operate its respective properties and conduct its
respective business in the manner currently conducted and as
proposed to be conducted and, to the best of our knowledge, except
for such of the HK Subsidiaries that are dormant and without assets,
there are no proceedings pending or threatened relating to the
revocation or modification of any such permit, nor is there any
basis therefor, nor has any event occurred that allows (or which
with notice or lapse of time, or both, would allow) revocation or
termination thereof or result in any other impairment of the right
of the holder of any such permit.
(ii) All of the issued and outstanding capital stock of each
of the HK Subsidiaries has been duly and validly authorized and
issued, is fully paid and nonassessable, has not been issued and is
not owned or held in violation of any preemptive rights contained in
the Articles of Association of the relevant HK Subsidiary and is
owned directly by the Company or by one of the
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Company's wholly owned Hong Kong subsidiaries, to the best of our
knowledge, free and clear of any lien, encumbrance, claim security
interest, restriction on transfer (except for restrictions imposed
under the Securities Act or applicable state or foreign securities
laws).
(iii) The descriptions contained in the Registration Statement
of Hong Kong statutes, Hong Kong legal and governmental proceedings
or Hong Kong laws are accurate and complete in all material
respects.
(iv) Under the laws of the Colony of Hong Kong, the submission
by the Company or any HK Subsidiary to the jurisdiction of any
Federal or State court sitting in the State of California, and the
designation of the law of the State of California to apply to the
Standby Underwriting Agreement is binding upon the Company and each
HK Subsidiary and would be enforceable in any judicial or
administrative proceeding in the Colony of Hong Kong if properly
brought to the attention of the Court or administrative body in
accordance with the laws of the Colony of Hong Kong.
(v) To the best of our knowledge (based upon examination of
each of the HK Subsidiaries' statutory books, records maintained by
the Registrar of Companies and available for inspection in respect
of each of the HK Subsidiaries, and our files), there are no
outstanding options, warrants, calls, fights or other agreements or
commitments with respect to the purchase of any capital stock of any
of the HK Subsidiaries, other than as disclosed in the Registration
Statement.
In rendering such opinion, such counsel may rely, as to matters of fact,
to the extent it deems proper on statements or certificates of responsible
officers of the Company or the Subsidiaries, certificates of public officials,
and certificates or other written statements of officers of departments of
various jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company and the Subsidiaries, provided that
copies of any such statements or certificates shall be delivered to the Standby
Underwriter's counsel upon request.
(f) On the Closing Date, there shall have been furnished to you the
opinion (addressed to the Standby Underwriter) of ▇▇▇▇▇▇ Downs, counsel
for the Company's Canadian subsidiary with respect to certain matters of
Canadian law, dated the Closing Date and in form and substance
satisfactory to counsel for the Standby Underwriter and stating that it
may be relied upon by counsel for the Standby Underwriter in giving their
opinion, to the effect that:
(i) Nam Tai Electronics (Canada) Limited ("NOT Canada"), is a
corporation duly organized and validly existing under the federal
laws of Canada. NOT Canada has full corporate power and authority to
own, lease and operate its properties and conduct its business as
described in the Registration Statement.
(ii) NOT Canada's authorized share capital consists of an
unlimited number of shares. NOT Canada's issued share capital
consists of 450,000. All of the issued and outstanding capital stock
of NOT Canada has been duly and validly authorized and issued, is
fully paid and nonassessable and has not been issued and is not
owned or held in violation of any preemptive rights contained in its
Articles of Information or under the Canada Business Corporation
Act. Of the issued and outstanding share capital of NOT Canada, the
Company is the registered owner of 300,000 shares.
(iii) To the best of such counsel's knowledge, there are no
outstanding options, warrants, calls, rights or other agreements or
commitments with respect to the purchase of any capital stock of NOT
Canada, other than as disclosed in the Registration Statement.
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(iv) To the best of such counsel's knowledge, NOT Canada has
all material permits of and from all Canadian public, regulatory or
governmental officials or bodies, to own, lease and operate its
properties and conduct is business as described in the Registration
statement and there are no proceedings pending or threatened
relating to the revocation or modification of any such permit nor is
there any basis therefor, nor has any event occurred that allows (or
with which notice or lapse of time, or both, would allow) revocation
or termination thereof or result in any other impairment of the
rights of the holder of any such permit.
(v) NOT Canada is not in breach or violation of (i) its
memorandum or articles of association, (ii) any agreement,
instrument, order, writ, judgment or decree to which such
corporation is a party or to which its assets or property are
subject, or (iii) any consent, approval, authorization or other
similar action required under Canadian law in connection with the
conduct of its business.
(vi) Under the laws of British Columbia and the federal laws
of Canada applicable therein, the submission by the Company or NOT
Canada to the jurisdiction of any Federal or State court sitting in
the State of California, and the designation of the law of the State
of California to apply to this Agreement is binding upon the Company
and NOT Canada and would be enforceable in any judicial or
administrative proceeding in Canada if properly brought to the
attention of the Court or administrative body in accordance with the
laws of Canada.
(vii) Subject to certain time limitations, a Canadian court
may declare a civil judgment rendered outside of Canada enforceable.
In rendering such opinion, such counsel may rely, as to matters of fact,
to the extent it deems proper, on statements or certificates of responsible
officers of the Company or the Subsidiaries, certificates of public officials,
and certificates or other written statements of officers of departments of
various jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company and the Subsidiaries, provided that
copies of any such statements or certificates shall be delivered to the Standby
Underwriter's counsel upon request.
(g) On the Closing Date, there shall have been furnished to you the
opinion (addressed to the Underwriters) of counsel for the Company
licensed in the People's Republic of China, dated the Closing Date and in
form and substance satisfactory to counsel for the Underwriters and
covering such matters concerning the Company's Chinese subsidiaries,
assets and property, as well as matters of Chinese law, as may be
reasonably requested by the Standby Underwriter.
In rendering such opinion, such counsel for the Company shall state that
it has reviewed the Registration Statement and the Prospectus, and no facts have
come to the attention of such counsel to give such counsel reason to believe
that the Registration Statement, at the time it became effective (or if any
amendment thereof or supplement thereto is made prior to the Closing Date, as of
the date of such amendment or supplement), contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that the
Prospectus, at the time the Registration Statement became effective (or if any
amendment thereof is made prior to the Closing Date, as of the date of such
amendment) and at the Closing Date contained an untrue statement of a material
fact or omitted to state a material fact necessary, in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading (it being understood that such counsel need express no belief or
opinion with respect to the financial statements and schedules and other
financial statistical data included therein).
In rendering such opinion, such counsel may rely, as to matters of fact,
to the extent it deems proper, on statements or certificates of responsible
officers of the Company or the Subsidiaries, certificates of public officials,
and certificates or other written statements of officers of departments of
various jurisdictions having custody of
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documents respecting the corporate existence or good standing of the Company and
the Subsidiaries, provided that copies of any such statements or certificates
shall be delivered to the Standby Underwriter's counsel upon request.
(h) On the Closing Date, there shall have been furnished to you the
opinion (addressed to the Underwriter) of Freshman, Marantz, Orlanski,
▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Company, dated the Closing Date and in
form and substance satisfactory to counsel for the Standby Underwriter and
stating that it may be relied upon by counsel for the Standby Underwriter
in giving their opinion, to the effect that:
(i) Each of the Company and its Subsidiaries is duly qualified
or licensed and in good standing as a foreign corporation in each
jurisdiction of the United States in which the character or location
of its properties (owned, leased or licensed) or the nature or
conduct of its business makes such qualification or licensing
necessary, except where such failures so to qualify or be sc
licensed in the aggregate would not have a material adverse effect
on the business, operations, earnings, properties or condition
(financial or otherwise) of the Company and its Subsidiaries taken
as a whole ("Material Adverse Effect").
(ii) Neither the execution, delivery and performance of this
Agreement, the Warrant Agreement, Standby Underwriter's Warrant
Agreement or the Counsel's Warrant Agreement, the consummation of
the transactions herein or therein contemplated by the Company
including the distribution of the Rights, the issuance, sale and
delivery of the Units to be sold hereunder or under the Standby
Underwriter's Warrant Agreement or the Counsel's Warrant Agreement,
nor compliance with the terms and provisions hereof and thereof,
will: (A) to the best of such counsel's knowledge, conflict with or
result in a breach of any of the terms and provisions of, or
constitute a default (or an event that with notice or lapse of time,
or both, would constitute a default) or require consent under, or
result in the creation or imposition of any lien, encumbrance,
security interest, claim or other restriction of any nature
whatsoever upon any property or assets of the Company or any of the
Subsidiaries, pursuant to the terms of any oral or written agreement
or understanding, instrument or permit known to such counsel to
which the Company or any of the Subsidiaries is a party or by which
any of their respective properties or assets may be bound; or (B)
violate or conflict with any provisions, or any applicable statute,
rule or regulation of the United States or any state thereof, or to
the best of such counsel's knowledge, any permit, judgment, decree,
order of any court, arbitrator or similar person or any public,
governmental or other regulatory agency or body having jurisdiction
over the Company or any of the Subsidiaries or any of their
respective properties or assets. No consent, approval, authorization
or permit of or with any court, arbitrator or similar person or any
United States public, governmental or regulatory agency or body
having jurisdiction over the Company or any of the Subsidiaries or
any of their respective properties or assets is required for the
execution, delivery and performance of this Agreement, the Warrant
Agreement, the Standby Underwriter's Warrant Agreement or the
Counsel's Warrant Agreement, and the consummation of the
transactions herein or therein contemplated, including, without
limitation, the distribution of the Rights, the issuance, sale and
delivery of the Units, the Warrants and the Common Shares except the
registration of the Rights and the Securities under the Securities
Act and the delivery of a prospectus required by Section 10(a)(3) of
the Securities Act and such permits as may be required by the NASD,
or under state and foreign securities or "Blue Sky" laws in
connection with the purchase and distribution of the Underwritten
Units by the Standby Underwriter (as to which such counsel need
express no opinion).
(iii) To the best of such counsel's knowledge, the Units, the
Common Shares and the Warrants, the Standby Underwriter's Warrants,
the Counsel's Warrants and each other authorized class of capital
stock of the Company conforms in all material respects to all
statements in relation thereto contained in the Effective
Prospectus. Except for the rights and options to purchase up to
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[300,000] Common Shares that may be granted under the Company's
employee benefit plans, there are no preemptive rights or other
rights to subscribe for or to purchase, or any restrictions upon the
voting or transfer of, any Common Shares set forth in the Company's
charter or, to the best knowledge of such counsel, any other
agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the
Subsidiaries is bound.
(iv) To the best of such counsel's knowledge, there is no
litigation, arbitration, action, suit, proceeding or investigation
before or by any court, arbitrator or similar party or by or before
any governmental agency or body, domestic or foreign, pending or
threatened: (A) to which the Company, or any of the Subsidiaries is
a party or which any property or assets of the Company, or any of
the Subsidiaries is the subject that is required to be disclosed in
the Registration Statement or the Prospectus that is not described
as required; or (A) to which the Company or any of the Subsidiaries
is a party or which any property or assets of the Company or any of
the Subsidiaries is the subject that, if adversely determined, could
individually or in the aggregate, have a Material Adverse Effect.
(v) Nothing has come to such counsel's attention that causes
them to believe that either the Company, or any of the Subsidiaries
is in violation of, or in default with respect to, its charter or
bylaws or any law, rule, permit, regulation, order, judgment or
decree applicable to or binding upon the Company or any Subsidiary
or by which any of their respective assets or properties may be
bound or affected, except such as are described in the Registration
Statement and the Effective Prospectus or such as, individually or
in the aggregate, do not now have, and in the future do not pose a
significant risk of having a Material Adverse Effect.
(vi) To the best of such counsel's knowledge, all contracts,
agreements, leases or licenses, oral or written, and other documents
required to be described in or filed as exhibits to the Registration
Statement or the Prospectus have been so described or filed in the
Registration Statement and the Effective Prospectus, or an amendment
or supplement thereto.
(vii) To the best of such counsel's knowledge, no default
exists, and no event has occurred that with notice or lapse of time,
or both, would constitute a default in the due performance and
observance of any term, covenant or condition of any material
indenture, mortgage, deed of trust, not, bank loan or credit
agreement, lease, permit, authorization or any other material oral
or written agreement or instrument to which the Company or any of
the Subsidiaries is a party or by which any of them or any of their
respective properties or assets may be bound or affected.
(viii) This Standby Underwriting Agreement, the Warrant
Agreement, the Standby Underwriter's Warrant Agreement and the
Counsel's Warrant Agreement have each been duly authorized, executed
and delivered by the Company and each constitutes the valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as rights to indemnify and/or
contribution may be limited by federal or state securities laws or
the public policy underlying such laws and except as enforcement (A)
may be limited by bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally, and (B) is subject to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(ix) The Registration Statement and the Final Prospectus and
any amendments or supplements thereto (other than the financial
statements and schedules and other financial and statistical data
included therein, as to which such counsel need express no opinion),
on the date the Registration Statement became effective and upon the
filing of the Final Prospectus and any
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amendments or supplements thereto complied as to form in all
material respects with the requirements of the Securities Act and
the Rules and Regulations promulgated thereunder.
(x) The Registration Statement and all post-effective
amendments thereto filed prior to the Closing Date have become
effective under the Act and, to the best of such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereof has
been issued and no proceedings therefor have been initiated or
threatened by the Commission or any "Blue Sky" or securities
authority of any jurisdiction.
In rendering such opinion, such counsel for the Company shall state that
in participating the preparation of the Registration Statement and the Final
Prospectus, and in conferences with the officers and other representatives of
and accountants for the Company and with the Representatives and Underwriter's
Counsel, at which conferences the contents of the Registration Statement and the
Final Prospectus and related matters were discussed, no facts have come to the
attention of such counsel to give such counsel reason to believe that the
Registration Statement, at the time it became effective (or if any amendment
thereof is made prior to the Closing Date, as of the date of such amendment),
and at the Closing Date contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
belief or opinion with respect to the financial statements and schedules and
other financial statistical data included therein).
In rendering such opinion, such counsel may rely, as to matters of fact
(except such firm's knowledge), to the extent it deems proper, on statements or
certificates of responsible officers of the Company or the Subsidiaries,
certificates of public officials, and certificates or other written statements
of officers of departments of various jurisdictions having custody of documents
respecting the corporate existence or good standing of the Company and the
Subsidiaries, provided that copies of any such statements or certificates shall
be delivered to the Standby Underwriter's counsel upon request.
(i) There shall have been furnished to you a certificate, dated the
Closing Date and addressed to you, signed by the President and by the
Financial Controller of the Company to the effect that (i) the
representations and warranties of the Company contained in this Standby
Underwriting Agreement are true and correct as if made at and as of the
Closing Date, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at
or prior to the Closing Date; (ii) no stop order suspending the
effectiveness of the Registration Statement has been issued, and no
proceedings for that purpose have been initiated or threatened; (iii) all
filings required by Rule 424 and Rule 430A of the Rules and Regulations
have been made; (iv) the signers of said certificate have carefully
examined the Registration Statement and the Effective Prospectus and the
Final Prospectus, and any amendments or supplements thereto, and such
documents contain all statements and information required to be included
therein, and do not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading;, and (v) since the effective date of the
Registration Statement, there has occurred no event required to be set
forth in an amendment or supplement to the Registration Statement or the
Effective Prospectus and the Final Prospectus which has not been so set
forth.
(j) Since the effective date of the Registration Statement, the
Company shall not have sustained any loss by fire, flood, accident or
other calamity, nor shall it have become a party to or the subject of any
litigation, individually or in the aggregate, which is material to the
Company, nor shall there have been a material adverse change in the
general affairs, business, key personnel, capitalization, financial
position or net worth of the Company, whether or not arising in the
ordinary course of business, which loss, litigation or change, in your
judgment, shall render it inadvisable to proceed with the delivery and
purchase of the Standby Underwriter's Warrants, the Counsel's Warrants or
the Underwritten Units.
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(k) On the date of this Standby Underwriting Agreement and on the
Closing Date you shall have received a letter from Price Waterhouse
independent accountants, dated such date and Closing Date, respectively,
addressed to you as Representative, to the effect that:
(i) It is an independent certified public accountant with
respect to the Company within the meaning of the Securities Act and
the applicable Rules and Regulations.
(ii) In its opinion, the financial statements and notes
thereto of the Company examined by it and contained in the Effective
and Final Prospectus comply as to form in all material respects with
the applicable accounting requirements of the Securities Act and the
Rules and Regulations.
(iii) On the basis of its procedures and inquiries as
specified in its letters, nothing has come to its attention to cause
it to believe that:
(1) The unaudited financial statements of the Company
contained in the Effective and Final Prospectus (x) do not
comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Rules
and Regulations, or (y) are not in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited financial
statements:
(2) The data included in the Effective and Final
Prospectus under the caption "Selected Financial Data" do not
agree with the corresponding amounts in the audited and
unaudited financial statements for an ad as to the end of each
of the periods then ended; and
(3) At a specified date not more than five business days
prior to the date of such letter, (x) there was any change in
the capital stock or long-term debt of the Company or any
decrease in net current assets or net assets or shareholders'
equity, in each ease as compared with the corresponding
amounts shown in the June 30, 1997 balance sheet contained in
the Effective and Final Prospectus, or (y) for the period from
__________ __, 199_ to the specified date referred to above,
as compared with the corresponding period in the prior year,
there was any decrease in sales, net income or income per
share, except in all instances for changes or decreases which
the Effective and Final Prospectus discloses have occurred or
may occur, or if there was any change or decrease, setting
forth the amount of such change or decrease.
(iv) It has compared the information expressed in amounts,
dollar amounts and percentages derived therefrom, and other
financial information pertaining to the Company set forth in the
Effective and Final Prospectus specified by you, in each case to the
extent such information was obtained or derived from the general
accounting records of the Company, with the results obtained from
the application of specified readings, inquiries and other
appropriate procedures set forth in such letters, and found by it to
be in agreement.
(l) At or prior to the Closing Date, you shall have received the
Lock-Up Agreements described in the last sentence of Section 4(f) hereof.
(m) You shall have been furnished all additional documents and
certificates as you may reasonably request.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only
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if they are reasonably satisfactory in form and substance to you and to counsel
for the Standby Underwriter. The Company shall furnish you with such conformed
copies of such opinions, certificates, letters and other documents as you shall
reasonably request. If any of the conditions specified in this Section 5 shall
not have been fulfilled when and as required by this Standby Underwriting
Agreement and all obligations of the Underwriters hereunder may be cancelled at,
or at any time prior to, the Closing Date, by you. Any such cancellation shall
be without liability of the Standby Underwriters to the Company. Notice of such
cancellation shall be given to the Company in writing, or by telegraph or
telephone and confirmed in writing.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless the Standby
Underwriter, each of its Subsidiaries, officers, directors, employees,
agents and counsel, and each person, if any, who controls the Standby
Underwriter within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act, against any loss, claim, damage or liability, joint
or several, to which such Standby Underwriter may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage or
liability (or action with respect thereto) arises out of or is based upon
(i) any untrue statement or alleged untrue statement of a material fact
made by the Company in Section 1 or 2 hereof, or (ii) any untrue statement
or alleged untrue statement of a material fact contained (A) in the
Effective or Final Prospectus or any amendment or supplement thereto, or
(B) in any blue sky application or other document executed by the Company
specifically for that purpose or based upon information furnished by the
Company filed in any state or other jurisdiction in order to qualify any
or all of the Securities under the securities laws thereof (any such
application, document or information being hereinafter called a "Blue Sky
Application"), or (iii) the omission or alleged omission to state in the
Registration Statement. any Pre-Effective Prospectus, the Effective or
Final Prospectus or any amendment or supplement thereto or in any Blue Sky
Application a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading; and the Company shall reimburse the
Standby Underwriter for any reasonable legal or reasonable other expenses
as incurred by the Standby Underwriter in connection with investigating or
defending against or appearing as a third party witness in connection with
any such loss, claim, damage, liability or action, notwithstanding the
possibility that payments for such expenses might later be held to be
improper, in which case the person receiving them shall promptly refund
them; provided, however, that the Company shall not be liable in any such
case to the extent, but only to the extent, that any such loss, claim,
damage or liability arising out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance
upon and in conformity with written information furnished to the Company
by or on behalf of the Standby Underwriter specifically for use in the
preparation of the Registration Statement, any Pre-Effective Prospectus,
the Effective or Final Prospectus or any amendment or supplement thereto,
or any Blue Sky Application; and provided further, that with respect to
any untrue statement or omission or alleged untrue statement or omission
made in any Pre-Effective Prospectus, the indemnity agreement contained in
this paragraph shall not inure to the benefit of any Standby Underwriter
to the extent that any such loss, claim, damage, liability or expense of
the Standby Underwriter or controlling person results from the fact that a
copy of the Final Prospectus was not sent or given to such person at or
prior to the written confirmation of sale of the Underwritten Securities
as required by the Securities Act, and if the untrue statement or omission
has been corrected in the Final Prospectus, unless such failure to deliver
the Final Prospectus was a result of noncompliance by the Company with its
obligations under Section 4(c) hereof.
(b) The Standby Underwriter shall indemnify and hold harmless the
Company against any loss, claim, damage or liability to which the Company
may become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage or liability (or action with respect thereof) arises
out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in the Registration Statement,
the Pre-Effective Prospectus, the Effective or Final Prospectus or any
amendment
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or supplement thereto, or (B) in any Blue Sky Application, or (ii) the
omission or alleged omission to state in the Registration Statement, any
Pre-Effective Prospectus, the Effective or Final Prospectus or any
amendment or supplement thereto or in any Blue Sky Application a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that such indemnification shall be available in each
such case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished
to the Company by you specifically for use in the preparation thereof; and
the Standby Underwriter shall reimburse any legal or other expenses as and
when reasonably incurred by the Company in connection with investigating,
defending against, settling, compromising or paying any such loss, claim,
damage, liability or action. This indemnity agreement will be in addition
to any liability which the Standby Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of any claim or the commencement of any action,
the indemnified party shall, if a claim with respect thereto is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the claim or the commencement of that
action; and the failure to notify the indemnifying party shall not relieve
it from any liability that it may have to an indemnified party otherwise
than under such subsection. If any such claim or action is brought against
an indemnified party, it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the
extent that it wishes, to assume the defense thereof with counsel
reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be
liable to the indemnified party under such subsection for any legal or
other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation, except that you shall have the right to employ counsel to
represent you against the Company under such subsection if, in your
reasonable judgment, it is advisable for you to be represented by separate
counsel, and in that event the reasonable legal fees and expenses of one
such separate counsel shall be paid by the Company.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection 6(a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above (c) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Standby
Underwriter from the offer and sale of the Securities, or (ii) if the
allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand, and the Standby Underwriter, on the other
hand, in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative respective benefits received by the
Company and the Standby Underwriter shall be deemed to be in the same
proportion that the total net proceeds from the offer and sale of the
Underwritten Securities (before deducting expenses) received by the
Company, on the one hand, and the total standby fees received by the
Standby Underwriter, on the other hand, bear to one another, in each ease
as set forth in the table on the cover page of the Final Prospectus. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company, or the Standby Underwriter and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The Company and
the Standby Underwriter agree that it would not be just and equitable if
contributions pursuant to this subsection 6(d) were to be determined by
pro rata allocation or by any other method of allocation which does not
take into account the equitable considerations referred to in the first
sentence of this subsection (d). The amount paid by an indemnified party
as a result of the losses, claims, damages or
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liabilities referred to in the first sentence of this subsection (d) shall
be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending
against any action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), the Standby
Underwriter shall not be required to contribute any amount in excess of
the amount by which the total price at which the Underwritten Units
purchased by it and distributed to the public exceeds the amount of any
damages that the Standby Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11 of the Securities Act) shall be entitled to
contributions from any person who was not guilty of such fraudulent
misrepresentation. Each party entitled to contribution agrees that upon
the service of a summons or other initial legal process upon it in any
action instituted against it with respect to which contribution may be
sought, it shall promptly give written notice of such service to the party
or parties from whom contribution may be sought, but the omission so to
notify such party or parties of any such service shall not relieve the
party from whom contribution may be sought from any obligation it may have
hereunder or otherwise (except as specifically provided in Section 6(c)
above).
(e) The obligations of the Company under this Section 6 shall be in
addition to any liability that the Company may otherwise have, and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Standby Underwriter within the meaning of the Securities Act.
The obligations of the Standby Underwriter under this Section 6 shall be
in addition to any liability that the Standby Underwriter may otherwise
have, and shall extend, upon the same terms and conditions, to each
director of the Company (including any person who, with his consent, is
named in the Registration Statement as about to become a director of the
Company), to each officer of the Company who has signed the Registration
Statement and to each person, if any, who controls the Company within the
meaning of the Securities Act.
7. EFFECTIVE DATE AND TERMINATION.
(a) This Standby Underwriting Agreement shall become effective at
8:00 A.M., Los Angeles time, on the earlier of (i) the first full Business
Day following the date the Registration Statement becomes effective. or
(ii) the day on which you release the Underwritten Units for sale to the
public. You shall notify the Company immediately after you have taken any
action that causes this Standby Underwriting Agreement to become
effective. Until this Standby Underwriting Agreement is effective, it may
be terminated by the Company by giving notice as hereinafter provided to
you or by you by giving notice as hereinafter provided to the Company,
except that the provisions of Section 4(i) and Section 6 shall at all
times be effective. For purposes of this Standby Underwriting Agreement,
the release of the Underwritten Units for sale to the public shall be
deemed to have been made when you release, by telegram or otherwise, firm
offers of the Underwritten Units to securities dealers or release for
publication a newspaper advertisement relating to the Units, whichever
occurs first.
(b) Until the Closing Date, this Standby Underwriting Agreement may
be terminated by you by giving notice as hereinafter provided to the
Company, if (i) the Company shall have failed, refused or been unable, at
or prior to the Closing Date, in material respects to perform any
agreement on its part to be performed hereunder, (ii) any other material
condition of the obligations of the Standby Underwriter hereunder is not
fulfilled; (iii) trading in or reporting of securities generally on the
New York Stock Exchange, the NASDAQ National Market System or the
over-the-counter market shall have been suspended or minimum prices shall
have been established on either of such exchanges or such market by the
Commission or by such exchange or other regulatory body or governmental
authority having jurisdiction; (iv) a general banking moratorium shall
have been declared by federal or state authorities; or (v) if in your sole
judgment there shall have been such a material adverse change in general
economic, political or financial conditions or if in your sole judgment
there shall have been a material adverse change in
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Troop ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, llp
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international conditions, the effect of which on the financial market in
the United States shall be such as makes it inadvisable to proceed with
the delivery of any of the Underwritten Units. Any termination of this
Underwriting Agreement pursuant to this Section 7 shall be without
liability on the part of the Company or the Standby Underwriter, except as
otherwise provided in Section 4(i) and Section 6 hereof.
Any notice referred to above may be given at the address specified in
Section 9 hereof in writing or by telegraph or telephone, and if by telegraph or
telephone, shall be immediately confirmed in writing.
8. SURVIVAL OF INDEMNITIES, CONTRIBUTION, WARRANTIES AND REPRESENTATIONS.
The indemnity and contribution agreements contained in Section 6 and the
representations, warranties and agreements of the Company in Sections 1, 2, 4
and 5 shall survive the delivery of the Warrants or Units to the Underwriters
hereunder and shall remain in full force and effect, regardless of any
termination or cancellation of this Underwriting Agreement or any investigation
made by or on behalf of any indemnified party.
9. NOTICES. Except as otherwise provided in this Underwriting Agreement,
whenever notice is required by the provisions hereof to be given to: (a) the
Company, such notice shall be in writing addressed to the Company at 9/F, Houtex
Industrial Building, 16 Hung To Road, ▇▇▇▇ ▇▇▇▇, Kowloon, Hong Kong, Attention:
__________, President with a copy to Nam Tai Electronics (Canada) Ltd., ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇,
Attention: ▇. ▇. ▇▇▇; and (b) to the Standby Underwriter, such notice shall be
in writing addressed to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Associates, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇.
10. INFORMATION FURNISHED BY UNDERWRITERS. The statements set forth (i) on
the front cover page with respect to price, Standby Fees and terms of the
offering, the last paragraph on the inside front cover page with respect to
stabilization, that the Standby Underwriter has no policy of permitting waivers
of lock-up agreements and under the caption "Standby Underwriting" in any
Pre-Effective Prospectus and in the Effective Prospectus and the Final
Prospectus, and (ii) the portion of the amount reflected under "Blue Sky" fees
and expenses (including those of counsel included in "Legal Fees") in Item 13 of
Part H of the Registration Statement representing the blue sky filing fees and
estimated legal fees and expenses of counsel for the Standby Underwriter in
connection with registration of the Securities for sale in various states,
constitute the written information furnished by or on behalf of any Standby
Underwriter referred to in paragraphs Co) and (c) of Section 1 hereof and in
paragraphs (a) and Co) of Section 6 hereof, and are true and correct in all
material respects.
11. PARTIES. Except for the provisions of Section 14, which provisions
alone are intended to benefit persons who purchase the Underwritten Units
directly from the Standby Underwriter, this Standby Underwriting Agreement is
made solely for the benefit of the Standby Underwriter and the Company and may
officer, director or controlling person referred to in Section 6 hereof, and
their respective successors and assigns, and no other person shall acquire or
have any right by virtue of this Standby Underwriting Agreement. The term
'successors and assigns," as used in this Standby Underwriting Agreement, shall
not include any purchaser of any of the Underwritten Units from the Standby
Underwriter under this Agreement merely by reason of such purchase.
12. DEFINITION OF "BUSINESS DAY "AND "SUBSIDIARY." For purposes of this
Standby Underwriting Agreement, (a) "Business Day" means any day on which the
New York Stock Exchange, Inc. is open for trading, and Co) "Subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations.
13. GOVERNING LAW. THIS STANDBY UNDERWRITING AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT
GIVING EFFECT TO THE CHOICE OF LAW OR CONFLICT OF LAWS PRINCIPLES THEREOF.
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Troop ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, llp
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14. SUBMISSION TO JURISDICTION AND WAIVER OF IMMUNITY AND INCONVENIENT
FORUM. The Company acknowledges, consents and agrees that any and all disputes
arising in connection with this Standby Underwriting Agreement and the
transactions contemplated by this Standby Underwriting Agreement, including the
offer and sale of the Units, may be brought in any state or federal court of
record in located in Los Angeles County, State of California. By its signature
to this Standby Underwriting Agreement, the Company irrevocably submits to the
jurisdiction of the state and federal courts located in Los Angeles County,
State of California in any legal action or proceeding relating to this Standby
Underwriting Agreement and the transactions contemplated by this Standby
Underwriting Agreement, including the offer and sale of the Underwritten Units.
The Company irrevocably waives all immunity from jurisdiction, attachment
and execution, whether on the basis of sovereignty or otherwise, to which it
might otherwise be entitled in any legal action or proceeding in any state or
federal court located in Los Angeles County, State of California. The Company
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to any suit, action or proceeding relating to this
Standby Underwriting Agreement and the transactions contemplated by this Standby
Underwriting Agreement, including the offer and sale of the Securities being
brought in the federal or state courts located in Los Angeles County, State of
California, and hereby further irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum.
The provisions of this Section 14 are also intended to benefit those
persons who acquire the Underwritten Units directly from the Standby
Underwriter.
15. COUNTERPARTS. This Standby Underwriting Agreement may be signed in one
or more counterpart, each of which shall constitute an original and all of which
together shall constitute one and the same agreement. Please confirm, by signing
and returning to us counterparts of this Standby Underwriting Agreement, that
the foregoing correctly sets forth the agreement among the Company and the
Standby Underwriter.
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Troop ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, llp
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Very truly yours,
"COMPANY"
NAM TAI ELECTRONICS, INC.
By:
--------------------------------
▇.▇. ▇▇▇
Its: Chief Executive Officer and
President
Confirmed and accepted as of the date first above mentioned:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ASSOCIATES, INC.
By:
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Its:
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In consideration of the execution of this Agreement by ▇.▇. ▇▇▇▇▇▇ & Co.,
Inc., the Undersigned hereby agree to exercise in full all of our Rights
(without regard to any oversubscription fights we may have).
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▇.▇. ▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Troop ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, llp
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