EXHIBIT 2.(b)
CONFORMED COPY
AU Optronics Corp.
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250,000,000 Common Shares (NT$10.00 par value)
Represented by 25,000,000 American Depositary Shares
(Plus an option to purchase from the Selling Shareholders up to
35,000,000 additional Common Shares, represented by
3,500,000 American Depositary Shares to cover over-allotments)
U.S. Underwriting Agreement
New York, New York
May 23, 2002
Xxxxxxx Xxxxx Xxxxxx Inc.
UBS AG, acting through its business group UBS Warburg
ING Financial Markets LLC
CLSA Limited
Daiwa Securities SMBC Hong Kong Limited
Xxxxxx Brothers Inc.
As U.S. Representatives of the several
U.S. Underwriters,
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
AU Optronics Corp. (the "Company"), a corporation organized under the laws
of the Republic of China (the "ROC"), proposes to sell to the several U.S.
Underwriters, for whom the U.S. Representatives are acting as representatives,
250,000,000 common shares, NT$10.00 par value ("Common Shares") (said shares to
be issued and sold by the Company being hereinafter called the "U.S.
Underwritten Shares") in the form of American depositary shares ("ADSs"). The
Selling Shareholders propose to grant to the U.S. Underwriters an option to
purchase up to 35,000,000 additional Common Shares in the form of ADSs to cover
over-allotments (the "U.S. Option Shares" and together with the U.S.
Underwritten Shares, the "U.S. Shares").
It is understood that the Company and the Selling Shareholders are
concurrently entering into the International Underwriting Agreement (together
with this U.S. Underwriting Agreement, the "Underwriting Agreements") providing
for the sale by the
Company of 250,000,000 Common Shares (said shares to be sold by the Company
pursuant to the International Underwriting Agreement being hereinafter called
the "International Underwritten Shares") in the form of ADSs and providing for
the grant to the International Underwriters of an option to purchase from the
Selling Shareholders up to 35,000,000 additional Common Shares (the
"International Option Shares" and together with the "International Underwritten
Shares", the "International Shares") in the form of ADSs.
You have also advised the Company that the Shares to be sold by the
Company and the Selling Shareholders to the Underwriters shall be deposited by
the Company and the Selling Shareholders pursuant to the Deposit Agreement, to
be dated as of May 29, 2002 (the "Deposit Agreement"), to be entered into among
the Company, Citibank, N.A., as depositary (the "Depositary") and all holders
and beneficial owners from time to time of the ADSs. Upon deposit of any Common
Shares, the Depositary will issue American depositary shares representing the
Shares so deposited. The ADSs will be evidenced by American depositary receipts
(the "ADRs"). Each ADS will represent ten (10) Common Shares and each ADR may
represent any number of ADSs. Unless the context otherwise requires, the terms
"Underwritten Securities," "U.S. Underwritten Securities," "Option Securities",
"U.S. Option Securities," "International Underwritten Securities,"
"International Option Securities," "International Securities" and "Securities"
shall be deemed to refer, respectively, to Underwritten Shares, U.S.
Underwritten Shares, Option Shares, U.S. Option Shares, International
Underwritten Shares, International Option Shares, International Shares and
Shares as well as, in each case, to any ADSs representing such securities and
the ADRs evidencing such ADSs, and, in the case of the "Underwritten
Securities," to any Certificates of Payment (as hereinafter defined).
It is further understood and agreed that the International Underwriters
and the U.S. Underwriters have entered into an Agreement Between U.S.
Underwriters and International Underwriters dated the date hereof (the
"Agreement Between U.S. Underwriters and International Underwriters"), pursuant
to which, among other things, the International Underwriters may purchase from
the U.S. Underwriters a portion of the U.S. Securities to be sold pursuant to
this U.S. Underwriting Agreement and the U.S. Underwriters may purchase from
the International Underwriters a portion of the International Securities to be
sold pursuant to the International Underwriting Agreement.
To the extent there are no additional U.S. Underwriters listed on Schedule
I other than you, the term U.S. Representatives as used in this Agreement shall
mean you, as U.S. Underwriters, and the terms U.S. Representatives and U.S.
Underwriters shall mean either the singular or plural as the context requires.
In addition, to the extent that there is not more than one Selling Shareholder
named in Schedule II, the term Selling Shareholders shall mean the singular.
The use of the neuter in this Agreement shall include the feminine and
masculine wherever appropriate. Certain terms used in this Agreement are
defined in Section 20 hereof.
1. Representations and Warranties.
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(i) The Company represents and warrants to, and agrees with, each U.S.
Underwriter as set forth below in this Section 1.
(a) The Company has prepared and filed with the Commission a
Registration Statement (file number 333-87418) on Form F-1, including
related preliminary prospectuses, for registration under the Act of the
offering and sale of the Securities. The Company may have filed one or
more amendments thereto, including the related preliminary prospectuses,
each of which has previously been furnished to you. The Company will next
file with the Commission either (1) prior to the Effective Date of the
Registration Statement, a further amendment to such registration statement
(including the form of final prospectuses) or (2) after the Effective Date
of the Registration Statement, final prospectuses in accordance with Rules
430A and 424(b). In the case of clause (2), the Company has included in
the Registration Statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the Act and the
rules thereunder to be included in the Registration Statement and the
Prospectuses with respect to the Securities and the offering thereof in
the form of ADSs. As filed, such amendment and form of final prospectuses,
as the case may be, or such final prospectuses, shall contain all Rule
430A Information, together with all other such required information with
respect to the Securities and the offering thereof in the form of ADSs,
and, except to the extent the U.S. Representatives shall agree in writing
to a modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
latest Preliminary Prospectuses) as the Company has advised you, prior to
the Execution Time, will be included or made therein.
It is understood that two forms of prospectuses are to be used in
connection with the offering and sale of the Securities: one form of prospectus
relating to the U.S. Securities, which are to be offered and sold to United
States and Canadian Persons, and one form of prospectus relating to the
International Securities, which are to be offered and sold to persons other
than United States and Canadian Persons. The U.S. Prospectus and the
International Prospectus are identical except for the outside front cover page
and the outside back cover page.
(b) On the Effective Date, the Registration Statement did or will, and
when the Prospectuses are first filed (if required) in accordance with
Rule 424(b) and on the Closing Date (as defined in this Agreement ) and on
any date on which Option Securities are purchased, if such date is not the
Closing Date (a "settlement date"), each Prospectus (and any supplements
thereto) will comply in all material respects with the applicable
requirements of the Act and the rules thereunder; on the Effective Date
and at the Execution Time, the Registration Statement did not or will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading; and, on the Effective Date, each
Prospectus, if not filed pursuant to Rule 424(b), will not, and on the
date of any filing pursuant to Rule 424(b) and on the Closing Date and any
settlement date, each Prospectus (together with any supplement thereto)
will not,
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include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or warranties
as to the information contained in or omitted from the Registration
Statement, or the Prospectuses (or any supplement thereto) in reliance
upon and in conformity with information furnished in writing to the
Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion in the Registration Statement or the
Prospectuses (or any supplement thereto).
(c) The Company has filed with the Commission a registration
statement (file number 333-88080) on Form F-6 for the registration under
the Act of the offering and sale of the ADSs. The Company may have filed
one or more amendments thereto, each of which has previously been
furnished to you. Such ADR Registration Statement at the time of its
effectiveness did or will comply, and on the Closing Date will comply, in
all material respects, with the applicable requirements of the Act and the
rules thereunder and at the time of its Effective Date and at the
Execution Time, did not and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
(d) Upon issuance by the Depositary of ADSs evidenced by ADRs against
deposit of Underwritten Shares (initially in the form of certificates of
payment that represent the irrevocable right to receive such Shares (the
"Certificates of Payment")) in accordance with the provisions of the
Deposit Agreement, such ADRs will be duly and validly issued and persons
in whose names the ADRs are duly registered with the Depositary will be
entitled to the rights specified in the ADRs and in the Deposit Agreement;
the Deposit Agreement and the ADRs conform in all material respects to the
descriptions thereof contained in the Prospectuses; and upon the sale and
delivery to the U.S. Underwriters of the U.S. Underwritten Securities, and
payment therefor pursuant to this Agreement, the U.S. Underwriters will
acquire good, marketable and valid title to such U.S. Underwritten
Securities, subject to the terms of the Deposit Agreement, free and clear
of all pledges, liens, security interests, charges, claims or encumbrances
of any kind.
(e) Other than as set forth in the Prospectuses and so long as this
Agreement, the Certificates of Payment, the cross receipt and any other
documents which are deemed "receipts" under the ROC Stamp Duty Law are
executed outside of the ROC, no stamp or other issuance or transfer taxes
or duties and no capital gains, income, withholding or other taxes (except
such income taxes as may be imposed by the ROC government or any political
subdivision or taxing authority thereof or therein on payments thereunder
to any Underwriter, or on payments under the Deposit Agreement to the
Depositary, where the net income of such Underwriter or of the Depositary
is subject to tax by the ROC or withholding, if any, with respect to any
such income tax) are payable by or on behalf of the Underwriters to the
ROC or to any political subdivision or taxing authority thereof or therein
in connection with (i) the issuance and delivery of the Certificates of
Payment or the sale and delivery of the Underwritten Shares in the manner
contemplated in the Prospectuses and pursuant to
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the terms of this Agreement, (ii) the deposit with the Depositary or its
custodian of the Certificates of Payment or the Underwritten Shares
against the issuance of the ADRs evidencing the ADSs, (iii) the sale and
delivery outside the ROC by the Underwriters of the ADSs, as contemplated
herein or (iv) the execution and delivery of, or performance by any party
of its obligations under, this Agreement and the Deposit Agreement.
(f) Except as described in the Prospectuses, all cash dividends and
other distributions declared and payable on the Common Shares may under
current ROC law and regulations be paid to the Depositary and to the
holders of Securities, as the case may be, in the ROC in New Taiwan
dollars ("NT dollars") without obtaining any government approvals and may
be converted into foreign currency that may be transferred out of the ROC
in accordance with the Deposit Agreement, and no other withholding or
other taxes under the laws and regulations of the ROC are currently
required to be imposed in connection with the declaration and payment by
the Company of dividends and other distributions in respect of its capital
stock.
(g) The Company believes that it is not a Passive Foreign Investment
Company ("PFIC") within the meaning of Section 1297 of the United States
Internal Revenue Code of 1986, as amended, and does not expect to become a
PFIC in the future.
(h) Each of the Company and the Subsidiaries has been duly
incorporated and is validly existing as a corporation, and where
applicable, in good standing under the laws of the jurisdiction in which
it is chartered or organized with full corporate power and authority to
own or lease, as the case may be, and to operate its properties and
conduct its business as described in the Prospectuses and is duly
qualified to do business as a foreign corporation and, where applicable,
is in good standing under the laws of each jurisdiction which requires
such qualification, except where the failure to be so qualified or be in
good standing would not, individually or in the aggregate, have a material
adverse effect on the condition (financial or otherwise), earnings,
business or properties of the Company and the Subsidiaries, taken as a
whole.
(i) All the outstanding shares of capital stock of each Subsidiary
have been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Prospectuses, all
outstanding shares of capital stock of the Subsidiaries are owned by the
Company either directly or through wholly-owned subsidiaries free and
clear of any perfected security interest or any other security interests,
claims, liens or encumbrances.
(j) The Company's authorized equity capitalization is as set forth in
the Prospectuses; the capital stock of the Company conforms in all
material respects to the description thereof contained in the
Prospectuses; the outstanding Common Shares (including the Option Shares
being sold pursuant to the Underwriting Agreements by the Selling
Shareholders), have been duly and validly authorized and issued and are
fully paid and nonassessable; the Underwritten Shares being sold under the
Underwriting Agreements (including those represented by Certificates of
Payment) by
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the Company have been duly and validly authorized, and, when issued and
delivered against payment of the purchase price for the Underwritten
Securities by the U.S. Underwriters pursuant to this Agreement and by the
International Underwriters pursuant to the International Underwriting
Agreement, will be fully paid and nonassessable; all of the issued and
outstanding Common Shares of the Company have been duly listed, and
admitted and authorized for trading, on the Taiwan Stock Exchange; the
Underwritten Shares will be duly listed and admitted for trading on the
Taiwan Stock Exchange upon the exchange of the Certificates of Payment;
the Securities being sold under the Underwriting Agreements by the Company
are duly listed, and admitted and authorized for trading, subject to
official notice of issuance, on the New York Stock Exchange; the
certificates for the Underwritten Securities are in valid and sufficient
form; the holders of outstanding shares of capital stock of the Company
are not entitled to preemptive or other rights to subscribe for the
Securities, except for such rights that have been effectively waived; and,
except as set forth in the Prospectuses, no options, warrants or other
rights to purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for, shares of
capital stock of or ownership interests in the Company are outstanding.
(k) There is no franchise, contract or other document of a character
required to be described in the Registration Statement, ADR Registration
Statement or Prospectuses, or to be filed as an exhibit thereto, which is
not described or filed as required.
(l) Each of this Agreement and the Deposit Agreement has been duly
authorized, executed and delivered by the Company; and the Deposit
Agreement constitutes a valid and binding obligation of the Company
enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights generally.
(m) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Prospectuses, will not be, an "investment company" within
the meaning of and subject to regulation under the Investment Company Act
of 1940, as amended.
(n) No consent, approval, authorization, filing with, or order of,
any court or governmental agency or body is required in connection with
the transactions contemplated in this Agreement or in the Deposit
Agreement, except for (i) registration of the Securities under the Act and
any filings required under Rule 424 of the Act; (ii) registration of the
Securities under the Exchange Act; (iii) the approval of the Central Bank
of China in the ROC (the "CBC") of foreign exchange settlements and
payments contemplated by the Deposit Agreement; (iv) the filings and
approvals, if any, required under (A) the "Guidelines for Handling
Issuance and Offer of Overseas Securities by Issuers of the ROC (the
"Overseas Offering Rules"), and (B) the rules and regulations of the
Taiwan Stock Exchange, the Securities and Futures Commission of the ROC
(the "SFC") and the CBC; (v) the registration of the Underwritten Shares
with the Science-Based Industrial Park Administration of the ROC ("SIPA"),
which shall be filed by the
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Company within 15 days of the Closing Date; (vi) any government
authorizations as may be required under state securities, or "blue sky"
laws, of the U.S. or the laws of other jurisdictions outside the ROC and
the U.S. in connection with the purchase and distribution of the
Securities by the Underwriters in the manner contemplated herein and in
the Prospectuses; and (vii) those approvals which have been obtained under
the laws of the ROC and are in full force and effect as of the date
hereof, including the approval of SIPA, the approval of the CBC and the
approvals of the SFC.
(o) Neither the sale of the Underwritten Securities by the Company,
nor the execution and delivery of this Agreement or the Deposit Agreement,
nor the consummation of any other of the transactions contemplated herein
or in the Deposit Agreement, nor the fulfillment of the terms hereof or of
the Deposit Agreement, will conflict with, result in a breach or violation
of, or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of the Subsidiaries pursuant to, (i) the
articles of incorporation of the Company or the constituent documents of
any of the Subsidiaries, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company or any of the Subsidiaries is a party or bound or to which its or
their property is subject, or (iii) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or any of the
Subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over
the Company or any of the Subsidiaries or any of its or their properties,
except, with regard to clause (ii) or (iii) above, such as would not
individually or in the aggregate, have a material adverse effect on (A)
the performance by the Company of its obligations under this Agreement or
the Deposit Agreement or the consummation of any of the transactions
contemplated herein or therein or (B) the condition (financial or
otherwise), earnings, business or properties of the Company and the
Subsidiaries, taken as a whole.
(p) There are no contracts, agreements or understandings between the
Company and any person granting to such person the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company or to require the Company to include such
securities with the ADSs registered pursuant to the Registration
Statement.
(q) The consolidated historical financial statements and schedules of
the Company and its consolidated subsidiaries included in the Prospectuses
and the Registration Statement present fairly in all material respects the
financial condition, results of operations and cash flows of the Company
as of the dates and for the periods indicated, comply as to form, in all
material respects, with the applicable accounting requirements of the Act
and have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved
(except as otherwise noted therein). The summary and selected financial
data included in the Prospectuses and Registration Statement fairly
present, in all material respects, on the basis stated in the Prospectuses
and the Registration Statement, the information included therein. The pro
forma financial statements included in the Prospectuses and the
Registration Statement include assumptions that provide a reasonable basis
for presenting the significant effects directly attributable to the
transactions and events described therein, the related pro forma
adjustments give appropriate effect to those assumptions, and the pro
forma adjustments reflect the proper application of those adjustments to
the historical financial statement amounts in the pro forma financial
statements included in the Prospectuses and the Registration Statement.
The pro forma financial statements included in the Prospectuses and
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the Registration Statement comply as to form in all material respects with
the applicable accounting requirements of Regulation S-X under the Act and
the pro forma adjustments have been properly applied to the historical
amounts in the compilation of those statements.
(r) Neither the Company nor any of the Subsidiaries has sustained
since the date of the latest audited financial statements included in the
Prospectuses 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, other than as set forth or contemplated in the
Prospectuses, and, since the respective dates as of which information is
given in the Registration Statement and the Prospectuses, there has not
been any material change in the capital stock or long-term debt of the
Company or the Subsidiaries or any change, or any development involving a
prospective change, that would have a material adverse effect on the
condition (financial or otherwise), earnings, business or properties of
the Company and the Subsidiaries taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set forth
or contemplated in the Prospectuses (exclusive of any supplement thereto).
(s) Except as set forth in or contemplated in the Prospectuses
(exclusive of any supplement thereto), there are no legal or governmental
proceedings pending or, to the knowledge of the Company after due inquiry,
threatened that (i) could reasonably be expected to have a material
adverse effect on the performance of this Agreement or the consummation of
any of the transactions contemplated hereby or (ii) could reasonably be
expected to have a material adverse effect on the condition (financial or
otherwise), earnings, business or properties of the Company and the
Subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business.
(t) Each of the Company and each of the Subsidiaries owns or leases
all such properties as are necessary to the conduct of its operations as
presently conducted.
(u) The Company and the Subsidiaries have good and marketable title
to all real property and good and marketable title to all personal
property owned by them which is material to the business of the Company
and the Subsidiaries, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectuses
or such as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such
property by the Company or the Subsidiaries; and any real property and
buildings held under lease by the Company or any of the Subsidiaries are
held under valid, subsisting and enforceable leases with such exceptions
as are not material and do not materially interfere with the
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use made and proposed to be made of such property and buildings by the
Company or such Subsidiary, except as described in the Prospectuses.
(v) Neither the Company nor any of the Subsidiaries is in violation
or default of (i) any provision of its articles of incorporation or
bylaws, (ii) the terms of any indenture, contract, lease, mortgage, deed
of trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which it is a party or bound or to
which its property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or such Subsidiary or any of its
properties, as applicable, except such violations or defaults which,
individually or in the aggregate, would not have a material adverse effect
on the condition (financial or otherwise), earnings, business or
properties of the Company and the Subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course business.
(w) Each of KPMG, who has certified certain financial statements of
the Company and its consolidated subsidiaries and delivered a report with
respect to the audited consolidated financial statements and schedules
included in the Prospectuses, and Xxxxx, Xxxxx and Xxxxx, who has
certified certain financial statements of Unipac Optoelectronics
Corporation and delivered reports with respect to the audited consolidated
financial statements and schedules included in the Prospectuses, are
independent public accountants with respect to the Company and Unipac
Optoelectronics Corporation, respectively, within the meaning of the Act
and the applicable published rules and regulations thereunder.
(x) No material labor dispute with the employees of the Company or
any of the Subsidiaries exists, or, to the knowledge of the Company, is
imminent, except as set forth in or contemplated in the Prospectuses.
(y) The Company and the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which they
are engaged; neither the Company nor any Subsidiary has been refused any
insurance coverage sought or applied for; and the Company has no reason to
believe that either the Company or any of the Subsidiaries will be unable
to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue their respective businesses at a cost that would not have a
material adverse effect on the condition (financial or otherwise),
earnings, business or properties of the Company and the Subsidiaries,
taken as a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the
Prospectuses.
(z) Each of the Company and the Subsidiaries possesses all licenses,
certificates, permits and other authorizations issued by the appropriate
regulatory authorities necessary to own or lease their
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respective properties and conduct their respective businesses, and neither
the Company nor any Subsidiary has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would have a material
adverse effect on the condition (financial or otherwise), earnings,
business or properties of the Company and the Subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectuses
(exclusive of any supplement thereto).
(aa) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access
to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(bb) Neither the Company nor any of the Subsidiaries has taken,
directly or indirectly, any action that has constituted or that was
designed to or might reasonably be expected to cause or result in, under
the Exchange Act or otherwise, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
the Securities.
(cc) Except as set forth or contemplated in the Prospectuses, the
Company and the Subsidiaries are (i) in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating
to the environment or use, disposal or release or protection of human
exposure to hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws") (ii) have received and are in
compliance with all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses
and (iii) have not received notice of any actual or potential liability
for the investigation or remediation of any disposal or release of
hazardous or toxic substances or wastes, pollutants or contaminants,
except where such non-compliance with Environmental Laws, failure to
receive required permits, licenses or other approvals, or liability would
not, individually or in the aggregate, have a material adverse effect on
the condition (financial or otherwise), earnings, business or properties
of the Company and the Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business.
(dd) The subsidiaries listed on Annex A attached hereto are the only
subsidiaries of the Company.
(ee) The Company and the Subsidiaries own, possess or are licensed
under, or can acquire on reasonable terms, all material patents, patent
rights, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or
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unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names ("Intellectual
Property") currently employed by them and reasonably necessary to conduct
the business now operated by them and as proposed in the Prospectuses to
be conducted, and except as set forth in the Prospectuses, none of the
Company or the Subsidiaries has received any notice of infringement of the
foregoing Intellectual Property rights or that the Company or the
Subsidiaries is in conflict with asserted rights of others, that if
determined adversely to the Company would singly or in the aggregate have
a material adverse effect on the condition (financial or otherwise),
earnings, business or properties of the Company and the Subsidiaries,
taken as a whole.
(ff) Except as disclosed in the Prospectuses and to the Company's
knowledge after due inquiry, no relationship, direct or indirect, exists
between or among any of the Company or the Subsidiaries on the one hand,
and the directors, officers, supervisors, shareholders, customers or
suppliers of any of the Company or the Subsidiaries on the other hand,
that is required by the Act to be described in the Prospectuses.
(gg) This Agreement, the Deposit Agreement, the Certificates of
Payment, the certificates evidencing the Underwritten Shares, and any
other documents to be furnished hereunder are in proper form under the
laws of the ROC for the enforcement thereof against the Company under the
laws of ROC; to ensure the legality, validity, enforceability and
admissibility into evidence in the ROC of each such agreement or document,
it is not necessary that any such agreement or document be filed or
recorded with any court or other authority in the ROC, other than the
filing of the Deposit Agreement as required under the Overseas Offering
Rules as set forth in Section 1 (i)(n) hereof, or that any stamp or
similar tax be paid in the ROC or in respect of any such agreement or
document, it being understood that in court proceedings in the ROC a
translation into the Chinese language may be required.
(hh) Under the laws of the ROC, each holder of ADRs evidencing ADSs
issued pursuant to the Deposit Agreement shall be entitled, subject to the
Deposit Agreement, to seek enforcement of its rights through the
Depositary or the Depositary's nominee registered as representative of the
holders and beneficial owners of the ADRs in a direct suit, action or
proceeding against the Company.
(ii) The Company has complied with all provisions of Section 517.075,
Florida Statutes relating to doing business with the Government of Cuba or
with any person or affiliate located in Cuba.
Any certificate signed by any officer of the Company, in his or her
capacity as an officer of the Company, and delivered to the Representatives or
counsel for the Underwriters in connection with the offering of the Securities
shall be deemed a representation and warranty by the Company, as to matters
covered thereby, to each U.S. Underwriter.
11
(ii) Each Selling Shareholder represents and warrants to, and agrees with,
each U.S. Underwriter that:
(a) Such Selling Shareholder has been duly incorporated and is
validly existing with limited liability under the laws of the jurisdiction
in which it is chartered or organized, and this Agreement and the Power of
Attorney appointing certain individuals as such Selling Shareholder's
attorneys-in-fact to the extent set forth therein, relating to the
transactions contemplated hereby and by the Registration Statement (the
"Power of Attorney") have been duly authorized, executed and delivered by
such Selling Shareholder and such Power of Attorney constitutes a valid
and binding obligation of such Selling Shareholder enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights
generally.
(b) The U.S. Option Shares being sold under this Agreement by such
Selling Shareholder have been duly and validly authorized and are fully
paid and nonassessable; upon issuance by the Depositary of ADSs evidenced
by ADRs against deposit in accordance with the provisions of the Deposit
Agreement of the U.S. Option Shares to be sold by such Selling Shareholder
to the U.S. Underwriters, such ADRs will be duly and validly issued, and
persons in whose names such ADRs are duly registered with the Depositary
will be entitled to the rights specified in the ADRs and in the Deposit
Agreement; upon the sale and delivery to the U.S. Underwriters of the U.S.
Securities to be purchased from such Selling Shareholder, and payment
therefor pursuant to this Agreement, the U.S. Underwriters will acquire
good, marketable and valid title to such U.S. Securities subject to the
terms of the Deposit Agreement, free and clear of all pledges, liens,
security interests, charges, claims or encumbrances of any kind; assuming
the Deposit Agreement has been duly authorized and delivered by the
parties thereto, the U.S. Option Shares to be deposited by the Selling
Shareholders may be freely deposited with the Depositary against issuance
of ADRs evidencing ADSs and the ADSs delivered at the settlement date will
be freely transferable by such Selling Shareholder to or for the account
of the several U.S. Underwriters and (to the extent described in the
Prospectuses) the initial purchasers thereof; and there are no
restrictions on subsequent transfers of the U.S. Option Securities under
the laws of the ROC and of the United States except as described in the
Prospectuses under the captions "Description of Our Share Capital,"
"Description of American Depositary Shares" or "Foreign Investment and
Exchange Controls in Taiwan."
(c) Such Selling Shareholder is the beneficial owner of the U.S.
Option Shares to be deposited with the Depositary against issuance of the
ADRs evidencing the ADSs to be sold by such Selling Shareholder hereunder,
and has, and immediately prior to any settlement date will have, good and
valid title to such U.S. Option Shares, in each case free and clear of all
liens, encumbrances, equities and claims.
(d) No consent, approval, authorization or order of any court or
governmental agency or body having jurisdiction over such Selling
Shareholder is required for the deposit of Shares by such Selling
Shareholder in accordance with the
12
terms of the Deposit Agreement with the Depositary against issuance of the
ADRs evidencing the ADSs to be delivered at the settlement date for the
sale and delivery of the ADSs to be sold by such Selling Shareholder
hereunder, and for the execution, delivery and performance by such Selling
Shareholder of this Agreement, except (i) such as may have been obtained
under the Act, (ii) such as may be required under the "blue sky" laws of
any state, (iii) such as may be required under the securities laws of any
jurisdiction outside the United States or the ROC in connection with the
purchase and distribution of the Securities by the Underwriters, (iv) the
filings, if any, required under (A) the "Guidelines for Handling Issuance
and Offer of Overseas Securities by Issuers of the ROC (the "Overseas
Offering Rules"), and (B) the rules and regulations of the Taiwan Stock
Exchange, the Securities and Futures Commission of the ROC (the "SFC") and
the CBC; and (v) such other approvals as have been obtained and are in
full force and effect.
(e) None of the execution and delivery of this Agreement or the Power of
Attorney of such Selling Shareholder, the deposit of the U.S. Option Shares to
be sold by such Selling Shareholder with the Depositary in accordance with the
terms of the Deposit Agreement, the sale of the ADSs to be sold by the Selling
Shareholder, or the consummation of any other of the transactions contemplated
in this Agreement by such Selling Shareholder or the fulfillment of the terms
hereof by such Selling Shareholder, will conflict with, result in a breach or
violation of, or constitute a default under any law or articles of
incorporation or other constitutive documents of such Selling Shareholder or
the terms of any indenture or other agreement or instrument to which such
Selling Shareholder is a party or bound, or any judgment, order or decree
applicable to such Selling Shareholder or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body or arbitrator having
jurisdiction over such Selling Shareholder, other than any such conflict,
breach or violation that would not have a material adverse effect on the
ability of such Selling Shareholder to perform its obligations under this
Agreement.
(f) Other than the securities transfer tax required to be paid by the
Selling Shareholders under ROC laws and so long as this Agreement, the
Certificates of Payment, the cross-receipt and any other documents which are
deemed "receipts" under ROC Stamp Duty Law are executed outside the ROC, no
stamp or other issuance or transfer taxes or duties and no capital gains,
income, withholding or other taxes (except such income taxes as may be imposed
by the ROC government or any political subdivision or taxing authority thereof
or therein on payments thereunder to any Underwriter, or on payments under the
Deposit Agreement to the Depositary, where the net income of such Underwriter
or of the Depositary is subject to tax by the ROC or withholding, if any, with
respect to any such income tax) are payable by or on behalf of the Underwriters
to the ROC or to any political subdivision of taxing authority thereof or
therein, in connection with (i) the delivery of the Option Shares to be sold by
the Selling Shareholder in the manner contemplated by this Agreement, (ii) the
deposit with the Depositary or its custodian of the Option Shares against
issuance of the ADRs evidencing the ADSs, (iii) the sale and delivery outside
the ROC by the Underwriters of the ADSs, as contemplated herein or (iv) the
execution and delivery of, or the
13
performance by any party of its obligations under this Agreement and the
Deposit Agreement.
(g) This Agreement is in proper legal form under the laws of the
jurisdiction of the organization of the Selling Shareholder for the
enforcement thereof against such Selling Shareholder; and to ensure the
legality, validity, enforceability and admissibility into evidence in such
jurisdiction, it is not necessary that this Agreement be filed or recorded
with any court or other authority therein or that any stamp or similar tax
be paid therein or in respect of this Agreement.
(h) Such Selling Shareholder has not taken, directly or indirectly,
any action that has constituted or that was designed to or might
reasonably be expected to cause or result in, under the Exchange Act or
otherwise, the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Option Securities;
it being understood that neither the sale during April 2002 by United
Microelectronics Corporation of 80,000,000 Common Shares on April 23, 2002
in a public offering in the Republic of China nor the issuance by it on
May 10, 2002 of bonds that will be exchangeable, at the option of the
holders thereof, into Common Shares which are held by United
Microelectronics Corporation shall constitute actions that are the subject
of this paragraph (h).
Any certificate signed by any officer of any Selling Shareholder, in his
or her capacity as an officer of such Selling Shareholder, and delivered to the
Representatives or counsel for the Underwriters in connection with the offering
of the Securities shall be deemed a representation and warranty by such Selling
Shareholder, as to matters covered thereby, to each U.S. Underwriter.
2. Purchase and Sale.
(a) Subject to the terms and conditions and in reliance upon the
representations and warranties set forth in this Agreement, the Company agrees
to sell to each U.S. Underwriter, and each U.S. Underwriter agrees, severally
and not jointly, to purchase from the Company, at a purchase price of
US$11.2055 per ADS, the amount of the U.S. Underwritten Securities set forth
opposite such U.S. Underwriter's name in Schedule I to this Agreement.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties set forth in this Agreement, the Selling
Shareholders hereby grant an option to the several U.S. Underwriters to
purchase, severally and not jointly, up to 35,000,000 additional Common Shares
represented by ADSs, in the aggregate, at the same purchase price per ADS as
the U.S. Underwriters shall pay for the U.S. Underwritten Securities. Said
option may be exercised only to cover over-allotments in the sale of the U.S.
Underwritten Securities by the U.S. Underwriters. Said option may be exercised
in whole or in part at any time (but not more than once) on or before the 30th
day after the date of the U.S. Prospectus upon written or telegraphic notice by
the U.S. Representatives to the Company and such Selling
14
Shareholders setting forth the number of shares of the U.S. Option Securities
as to which the several U.S. Underwriters are exercising the option and the
settlement date. In the event that the U.S. Underwriters exercise less than
their full over-allotment option, the number of U.S. Option Securities to be
sold by each Selling Shareholder shall be, as nearly as practicable, in the
same proportion to each other as are the number of U.S. Option Securities
listed opposite their names on Schedule II. The number of U.S. Option
Securities to be purchased by each U.S. Underwriter shall be the same
percentage of the total number of U.S. Option Securities to be purchased by the
several U.S. Underwriters as such U.S. Underwriter is purchasing of the U.S.
Underwritten Securities, subject to such adjustments as you in your absolute
discretion shall make to eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the U.S. Underwritten
Securities and the U.S. Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised on or before the third Business
Day prior to the Closing Date) shall be made at 10:00 AM, New York City time,
on May 29, 2002, or at such time on such later date not more than three
Business Days after the foregoing date as the U.S. Representatives and the
International Representatives shall designate, which date and time may be
postponed by agreement among the U.S. Representatives, the International
Representatives and the Company or as provided in Section 9 hereof (such date
and time of delivery and payment for the U.S. Securities being called in this
Agreement the "Closing Date"). Delivery of the U.S. Securities shall be made to
the U.S. Representatives for the respective accounts of the several U.S.
Underwriters against payment by the several U.S. Underwriters through the U.S.
Representatives of the respective aggregate purchase prices of the U.S.
Securities being sold by the Company and each of the Selling Shareholders to or
upon the order of the Company and the Selling Shareholders by wire transfer
payable in same-day funds to the accounts specified by the Company and the
Selling Shareholders. Delivery of the U.S. Underwritten Securities and the U.S.
Option Securities shall be made through the facilities of The Depository Trust
Company unless the U.S. Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised after the
third Business Day prior to the Closing Date, the Selling Shareholders will
deliver (at the expense of the Selling Shareholders) to the U.S.
Representatives, c/o Xxxxxxx Xxxxx Xxxxxx at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, xx the date specified by the U.S. Representatives (which shall be
within three Business Days after the exercise of said option), ADR certificates
representing the U.S. Option Securities in such names and denominations as the
U.S. Representatives shall have requested for the respective accounts of the
several U.S. Underwriters, against payment by the several U.S. Underwriters
through the U.S. Representatives of the purchase price thereof to or upon the
order of the Selling Shareholders by wire transfer payable in same-day funds to
the accounts specified by the Selling Shareholders. If settlement for the U.S.
Option Securities occurs after the Closing Date, such Selling Shareholders will
deliver to the U.S. Representatives on the settlement date for the U.S. Option
Securities, and the obligation of the U.S. Underwriters to purchase the U.S.
Option Securities shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as
15
of such date the opinions, certificates and letters delivered on the Closing
Date pursuant to Section 6 hereof.
The ADR certificates evidencing the U.S. Underwritten Securities and U.S.
Option Securities shall be registered in such names and in such denominations
as the U.S. Representatives may request not less than two full Business Days
prior to the applicable Closing Date and any settlement date.
It is understood and agreed that the Closing Date shall occur
simultaneously with the "Closing Date" under the International Underwriting
Agreement, and that the settlement date for any U.S. Option Securities
occurring after the Closing Date shall occur simultaneously with the
"settlement date" under the International Underwriting Agreement for any
International Option Securities occurring after the Closing Date.
4. Offering by Underwriters. It is understood that the several U.S.
Underwriters propose to offer the U.S. Securities for sale to the public as set
forth in the U.S. Prospectus.
5. Agreements.
(i) The Company agrees with the several U.S. Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement and the ADR Registration Statement, if not effective at the
Execution Time, and any amendment thereof, to become effective. Prior to
the termination of the offering of the Securities, the Company will not
file any amendment of the Registration Statement or the ADR Registration
Statement or supplement to the Prospectuses or any Rule 462(b)
Registration Statement unless the Company has furnished you a copy for
your review prior to filing and will not file any such proposed amendment
or supplement to which you reasonably object. Subject to the foregoing
sentence, if the Registration Statement or the ADR Registration Statement
has become or becomes effective pursuant to Rule 430A, or filing of the
Prospectuses is otherwise required under Rule 424(b), the Company will
cause the Prospectuses, properly completed, and any supplement thereto, to
be filed with the Commission pursuant to the applicable paragraph of Rule
424(b) within the time period prescribed and will provide evidence
satisfactory to the U.S. Representatives of such timely filing. The
Company will promptly advise the U.S. Representatives (1) when the
Registration Statement and the ADR Registration Statement, if not
effective at the Execution Time, shall have become effective, (2) when the
Prospectuses, and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b) or when any Rule
462(b) Registration Statement or ADR Registration Statement shall have
been filed with the Commission, (3) when, prior to termination of the
offering of the Securities, any amendment to the Registration Statement or
the ADR Registration Statement shall have been filed or become effective,
(4) of any request by the Commission or its staff for any amendment of the
Registration Statement, or any Rule 462(b) Registration Statement or the
ADR Registration Statement, or for any supplement to the Prospectuses or
for any
16
additional information, (5) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
ADR Registration Statement or the institution or threatening of any
proceeding for that purpose and (6) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the institution or threatening
of any proceeding for such purpose. The Company will use its best efforts
to prevent the issuance of any such stop order or the suspension of any
such qualification and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities, in
the opinion of counsel for the Underwriters, is required to be delivered
by an underwriter or dealer under the Act, any event occurs as a result of
which either of the Prospectuses as then supplemented would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it shall
be necessary to amend the Registration Statement or the ADR Registration
Statement or supplement either of the Prospectuses to comply with the Act
or the rules thereunder, the Company promptly will (1) notify the
Representatives of any such event; (2) prepare and file with the
Commission, subject to the second sentence of paragraph (i)(a) of this
Section 5, an amendment or supplement which will correct such statement or
omission or effect such compliance; and (3) supply any supplemented
Prospectuses to you in such quantities as you may reasonably request.
(c) As soon as practicable, the Company will make generally available
to its security holders and to the U.S. Representatives an earnings
statement or statements of the Company and the Subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under the
Act.
(d) The Company will furnish to the U.S. Representatives and counsel
for the U.S. Underwriters signed copies of the Registration Statement and
the ADR Registration Statement (including exhibits thereto) and to each
other U.S. Underwriter a copy of the Registration Statement and the ADR
Registration Statement (without exhibits thereto) and, so long as delivery
of a prospectus by an Underwriter or dealer may be required by the Act, as
many copies of each U.S. Preliminary Prospectus and the U.S. Prospectus
and any supplement thereto as the U.S. Representatives may reasonably
request.
(e) The Company will arrange, if necessary, for the qualification of
the Securities for sale under the laws of such jurisdictions as the U.S.
Representatives may designate and will maintain such qualifications in
effect so long as required for the distribution of the U.S. Securities;
provided, however, that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to service of
process in suits, other than those arising out of the offering or sale of
the Securities, in any jurisdiction where it is not now so subject.
17
(f) Except as contemplated pursuant to this Agreement, the Company
will not, without the prior written consent of Xxxxxxx Xxxxx Barney Inc.,
offer, sell, contract to sell, pledge, or otherwise dispose of (or enter
into any transaction which is designed to, or might reasonably be expected
to, result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by the Company
or any affiliate of the Company or any person in privity with the Company
or any affiliate of the Company) directly or indirectly, including the
filing (or participation in the filing) of a registration statement with
the Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act, any Common Shares or ADSs or
any securities convertible into, or exercisable, or exchangeable for,
Common Shares or ADSs, or publicly announce an intention to effect any
such transaction, for a period of 180 days after the date of this
Agreement; provided, however, that the Company may issue and sell Common
Shares pursuant to any employee stock option plan, stock ownership plan or
dividend reinvestment plan of the Company in effect at the Execution Time
and the Company may issue Common Shares issuable upon the conversion of
securities or the exercise of warrants outstanding at the Execution Time,
and the Company may take certain actions as described in the third
paragraph of the UMC Letter relating to the offering by United
Microelectronics Corporation of bonds that will be exchangeable into
Common Shares or ADSs of the Company; it being understood that the
preparation (or participation in the preparation) of a registration
statement shall not constitute the filing (or participation in the filing)
of a registration statement under this paragraph (f).
(g) Until the later of (i) the end of a period of 180 days following
the Closing Date and (ii) the completion of distribution of the
Securities, the Company will not take, directly or indirectly, any action
designed to, or which might reasonably be expected to cause or result,
under the Exchange Act or otherwise, in stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Common Shares or the ADSs.
(h) The Company will deposit Underwritten Shares or Certificates of
Payment with the Depositary in accordance with the terms of the Deposit
Agreement and will comply with the terms of this Agreement and the Deposit
Agreement so that ADRs evidencing ADSs representing deposited Underwritten
Shares or Certificates of Payment, as the case may be, will be executed by
the Depositary and delivered to the U.S. Underwriters as required hereby.
(i) The Company will notify the U.S. Representatives promptly upon
becoming aware of any event or development making untrue, or of any change
affecting, any of its representations, warranties, agreements or
indemnities herein at any time prior to payment being made to the Company
on the Closing Date and will take such steps as may be reasonably
requested by the U.S. Representatives to remedy the same.
18
(j) Between the date hereof and the Closing Date (inclusive), the
Company will, and will cause the Subsidiaries and all other parties acting
on its behalf to, notify and consult with the U.S. Representatives prior
to issuing any announcement (unless prevented by applicable law or
regulation or it is impracticable in light of the circumstances)
concerning the Securities or which, in the reasonable judgment of Company,
could be material in the context of the offering and distribution of the
Securities.
(k) The Company will use the net proceeds received by it from the
sale of the ADSs pursuant to this Agreement in the manner specified in the
Prospectuses under the caption "Use of Proceeds."
(l) In connection with listing the Shares on the Taiwan Stock
Exchange and the application to list the ADSs on the New York Stock
Exchange, the Company will furnish from time to time any and all
documents, instruments, information and undertakings and publish all
advertisements or other material that may be necessary in order to effect
such listings and maintain such listings.
(m) The Company will pay any stamp, issue, registration, documentary,
transfer or other taxes and duties, including interest and penalties, on
or in connection with the creation, issue, offering or sale by the Company
of the Certificates of Payment, the Underwritten Shares and the ADSs
(including the deposit by the Company of the Underwritten Shares or
Certificates of Payment, as the case may be, with the Depositary and the
issuance and delivery of the ADRs evidencing ADSs in exchange therefor by
the Depositary to or for the account of the Underwriters), the offer, sale
and delivery outside the ROC by the Underwriters of such ADSs and the
execution or delivery of this Agreement, including, in any such case, any
ROC withholding, transfer or similar tax asserted against an Underwriter
by reason of the purchase and sale of ADSs pursuant to this Agreement
(except such income taxes that may be imposed by the ROC government or any
political subdivision or taxing authority thereof or therein on any
Underwriter whose net income is subject to tax by the ROC or withholding,
if any, with respect to any such income tax).
(n) The Company, or one or more agents thereof acting on its behalf,
will make all filings and registrations, obtain all approvals and submit
all reports, if any, required for the issuance of the Underwritten Shares
and Certificates of Payment, the issuance and sale of the ADSs, the
compliance by the Company with all of the provisions of, and the
performance by the Company of its obligations under, this Agreement and
the Deposit Agreement, and the consummation of the transactions
contemplated herein and therein, including, but not limited, to all
filings, registrations, approvals and reports set forth in paragraph
(i)(o) of Section 1 hereof, on or prior to the date on which such filings,
registrations, approvals or reports, if any, are required to be made,
obtained or submitted.
(o) The Underwriters will pay, or reimburse the Company or the
Selling Shareholders, as the case may be, for amounts paid by the Company
or the Selling
19
Shareholders in respect of: (i) the fees and expenses of KPMG as the
Company's accountants and of Xxxxx, Xxxxx & Xxxxx as the accountants of
Unipac Optoelectronics Corporation and the fees and expenses of counsel
(including local and special counsel) for the Company and the Selling
Shareholders, in each case incurred in connection with the initial public
offering of the ADSs; (ii) the printing (or reproduction) and delivery
(including postage, air freight charges and charges for counting and
packaging) of such copies of the Registration Statement, each Preliminary
Prospectus, each Prospectus, the ADR Registration Statement, and all
amendments or supplements to any of them, as may, in each case, be
requested for use in connection with the offering and sale of the
Securities; and (iii) the transportation, meeting, lodging and other
roadshow expenses incurred by or on behalf of Company representatives in
connection with presentations to prospective purchasers of the Securities;
it being understood that the Underwriters shall not be required to pay, or
reimburse the Company for amounts paid in respect of, and the Company
shall pay or cause to be paid: (i) any registration fees payable to the
Commission in connection with the registration of the Securities with the
Commission, (ii) any listing fees and expenses payable in connection with
the listing of the ADSs on the New York Stock Exchange, (iii) any filing
fees payable in respect of any filings required to be made with the
National Association of Securities Dealers, Inc., (iv) the internal costs
and out-of-pocket fees and expenses incurred by employees of the Company,
the Selling Shareholders and their respective subsidiaries, in connection
with the initial public offering of the Securities, and (v) any amounts
payable by the Company under Section 5(i)(m) hereof; and provided further,
that the Underwriters shall not be required to pay, or reimburse the
Company or the Selling Shareholders for amounts paid in respect of, and
the Selling Shareholders shall, jointly and severally, pay or cause to be
paid, amounts payable by the Selling Shareholders under Section 5(v)(g)
hereof.
(p) Except as described in the Prospectuses or this Agreement, all
amounts payable by the Company in respect of the ADRs evidencing the ADSs
or the Underlying Shares shall be made free and clear of, and without
deducting for or on account of, any taxes imposed, assessed or levied by
the ROC or any authority thereof or therein (except such income taxes as
may be imposed by the ROC on payments hereunder to any Underwriter whose
net income is subject to tax by the ROC or withholding, if any, with
respect to any such income tax).
(ii) Each U.S. Underwriter agrees that it is not purchasing any of the
U.S. Securities for the account of anyone other than a United States or
Canadian Person, (ii) it has not offered or sold, and will not offer or sell,
directly or indirectly, any of the U.S. Securities or distribute any U.S.
Prospectus to any person outside the United States or Canada, or to anyone
other than a United States or Canadian Person, and (iii) any dealer to whom it
may sell any of the U.S. Securities will represent that it is not purchasing
for the account of anyone other than a United States or Canadian Person and
agree that it will not offer or resell, directly or indirectly, any of the U.S.
Securities outside the United States or Canada, or to anyone other than a
United States or Canadian Person or to any other dealer who does not so
represent and agree; provided, however, that the foregoing shall not restrict
(A) purchases and sales between the International Underwriters on the
20
one hand and the U.S. Underwriters on the other hand pursuant to the Agreement
Between U.S. Underwriters and International Underwriters, (B) stabilization
transactions contemplated under the Agreement Between U.S. Underwriters and
International Underwriters, conducted through Xxxxxxx Xxxxx Barney Inc. (or
through the U.S. Representatives and International Representatives) as part of
the distribution of the Securities, and (C) sales to or through (or
distributions of U.S. Prospectuses or U.S. Preliminary Prospectuses to) United
States or Canadian Persons who are investment advisors, or who otherwise
exercise investment discretion, and who are purchasing for the account of
anyone other than a United States or Canadian Person.
(iii) The agreements of the U.S. Underwriters set forth in paragraph (ii)
of this Section 5 shall terminate upon the earlier of the following events:
(a) A mutual agreement of the U.S. Representatives and the
International Representatives to terminate the selling restrictions set
forth in paragraph (ii) of this Section 5 and in Section 5(ii) of the
International Underwriting Agreement.
(b) The expiration of a period of 30 days after the Closing Date,
unless (A) the U.S. Representatives shall have given notice to the Company
and the International Representatives that the distribution of the U.S.
Securities by the U.S. Underwriters has not yet been completed, or (B) the
International Representatives shall have given notice to the Company and
the U.S. Representatives that the distribution of the International
Securities by the International Underwriters has not yet been completed.
If such notice by the U.S. Representatives or the International
Representatives is given, the agreements set forth in such paragraph (ii)
shall survive until the earlier of (1) the event referred to in clause (a)
of this subsection (iii), and (2) the expiration of an additional period
of 30 days from the date of any such notice.
(iv) Each U.S. Underwriter agrees that it has not offered or sold, and
agrees not to offer or sell, any Securities, directly or indirectly, in any
province or territory of Canada or to, or for the benefit of, any resident of
Canada in contravention of the securities laws thereof and, without limiting
the generality of the foregoing, represents that any offer or sale of
Securities in Canada will be made only (i) pursuant to an exemption from the
requirement to file a prospectus in the province or territory of Canada in
which such offer or sale is made and (ii) only by a dealer duly registered
under the applicable securities laws of that province or territory or in
circumstances where any exemption from the applicable registered dealer
requirements is available; and it will send to any dealer who purchases from it
any of the Securities a notice stating in substance that, by purchasing such
Securities, such dealer represents and agrees that it has not offered or sold,
and will not offer or sell, directly or indirectly, any of such Securities in
any province or territory of Canada or to, or for the benefit of, any resident
of Canada in contravention of the securities laws thereof and that any offer or
sale of Securities in Canada will be made only (i) pursuant to an exemption
from the requirement to file a prospectus in the province or territory of
Canada in which such offer or sale is made, and (ii) only by
21
a dealer duly registered under the applicable securities laws of that
province or territory or in circumstances where any exemption from the
applicable registered dealer requirements is available, and that such dealer
will deliver to any other dealer to whom it sells any of such Securities a
notice containing substantially the same statement as is contained in this
sentence.
(v) Each Selling Shareholder agrees with the several U.S. Underwriters
that:
(a) Such Selling Shareholder will not, without the prior written
consent of Xxxxxxx Xxxxx Xxxxxx Inc., offer, sell, contract to sell,
pledge or otherwise dispose of (or enter into any transaction which is
designed to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to
cash settlement or otherwise) by such Selling Shareholder or any Affiliate
of such Selling Shareholder or, except in the case of Kuang-Hwa Investment
Holding Co. Ltd., any person in privity with such Selling Shareholder or
any Affiliate of such Selling Shareholder) directly or indirectly, or file
(or participate in the filing of) a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act with respect to, any Common
Shares or ADSs (other than Common Shares or ADSs disposed of as bona fide
gifts approved by Xxxxxxx Xxxxx Xxxxxx Inc.) or any securities convertible
into or exercisable or exchangeable for Common Shares or ADSs, or publicly
announce an intention to effect any such transaction, for a period of 90
days after the date of this Agreement; provided, however, that United
Microelectronics Corporation shall not be restricted pursuant to this
paragraph (a) from exchanging its exchangeable bonds issued on May 10,
2002 into Common Shares after June 19, 2002 pursuant to the terms of such
bonds.
(b) Until the later of (i) the end of a period of 90 days following
the Closing Date and (ii) the completion of distribution of the
Securities, such Selling Shareholder will not take any action designed to
or which might reasonably be expected to cause or result, under the
Exchange Act or otherwise, in stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the
Common Shares or the ADSs.
(c) Such Selling Shareholder will advise you promptly, and if
requested by you, will confirm such advice in writing, so long as delivery
of a prospectus relating to the Securities by an underwriter or dealer is,
in the opinion of counsel for the Underwriters, required under the Act, of
any change in the information in the Registration Statement, the ADR
Registration Statement or the Prospectuses relating to such Selling
Shareholder.
(d) No later than the second Business Day in the ROC (such date, the
"Deposit Date") after the receipt of the notice of exercise of the
Underwriters' over-allotment option pursuant to Section 2(b) hereof, to
deposit, or cause to be deposited on its behalf, the Option Shares to be
sold by such Selling Shareholder hereunder with the Depositary in
accordance with the provisions of the Deposit Agreement and otherwise
22
to comply with the Deposit Agreement so that ADRs evidencing ADSs to be
sold by such Selling Shareholder will be executed (and, if applicable,
countersigned) and issued by the Depositary against receipt of such Option
Shares and delivered to the Underwriters at the Closing Date or the
settlement date, as applicable.
(e) Such Selling Shareholder will advise you promptly upon becoming
aware of any event or development making untrue, or of any change
affecting, any of its representations, warranties, agreements or
indemnities herein at any time prior to payment being made to such Selling
Shareholder on the settlement date and will take such steps as may be
reasonably requested by you to remedy the same.
(f) Between the date hereof and the settlement date (inclusive), such
Selling Shareholder will, and will cause its Affiliates and all other
parties acting on its behalf to, notify and consult with you prior to
issuing any announcement (unless such notification and consultation is
prevented by applicable law or regulation or is impractical in light of
circumstances) concerning the Securities or which could be material in the
context of the offering and distribution of the Securities; provided that
such Selling Shareholder, such Affiliates and such other parties shall not
be restricted, following such notification and consultation, from issuing
any such announcement that any of them is required to issue under
applicable law or regulation.
(g) Such Selling Shareholder will pay any stamp, issue, registration,
documentary, transfer or other taxes and duties, including interest and
penalties, on or in connection with the offering or sale of Shares and
ADSs by such Selling Shareholder pursuant to this Agreement (including the
deposit by such Selling Shareholder of Option Shares with the Depositary
and the issuance and delivery of the ADRs evidencing ADSs in exchange
therefor by the Depositary to or for the account of the Underwriters), the
offer, sale and delivery outside the ROC by the Underwriters of such ADSs
and the execution or delivery of this Agreement, including, in any such
case, any ROC withholding, transfer or similar tax asserted against an
Underwriter by reason of the purchase and sale of ADSs pursuant to this
Agreement (except such income taxes that may be imposed by the ROC
government or any political subdivision or taxing authority thereof or
therein on any Underwriter whose net income is subject to tax by the ROC
or withholding, if any, with respect to any such income tax).
(h) Such Selling Shareholder will pay, or cause to be paid, any
securities transfer tax payable on the transfer of the Option Shares
represented by the ADSs to be sold by such Selling Shareholder pursuant to
the Underwriting Agreements to the appropriate taxing authorities in the
Republic of China no later than the first Business Day in the ROC
following any date on which Option Shares are purchased pursuant to the
Underwriting Agreements, and shall deliver, no later than on the Deposit
Date to the Depositary a New Taiwan dollar Bank of Taiwan cheque payable
to the ROC taxing authority, dated as of such date, in the amount of such
securities transfer tax.
(i) Any amounts payable by such Selling Shareholder under this
Agreement shall be made free and clear of and without deduction for or on
account of any taxes
23
imposed, assessed or levied by the jurisdiction of its organization or any
political subdivision thereof or therein except as described in the
Prospectuses (except such income taxes as may be imposed by the ROC on
payments hereunder to any Underwriter whose net income is subject to tax
by the ROC or withholding, if any, with respect to such income tax).
6. Conditions to the Obligations of the Underwriters. The obligations of
the U.S. Underwriters to purchase the U.S. Underwritten Securities and the U.S.
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Shareholders contained in this Agreement as of the Execution Time, the Closing
Date and any settlement date pursuant to Section 3 hereof, to the accuracy of
the statements of the Company and the Selling Shareholders made in any
certificates pursuant to the provisions hereof, to the performance by the
Company and the Selling Shareholders of their respective obligations under this
Agreement and to the following additional conditions:
(i) If the Registration Statement and the ADR Registration Statement have
not become effective prior to the Execution Time, unless the U.S.
Representatives and the International Representatives agree in writing to a
later time, the Registration Statement and the ADR Registration Statement will
become effective not later than (a) 6:00 PM New York City time on the date of
determination of the public offering price, if such determination occurred at
or prior to 3:00 PM New York City time on such date or (b) 9:30 AM New York
City time on the Business Day following the day on which the public offering
price was determined, if such determination occurred after 3:00 PM New York
City time on such date; if filing of either of the Prospectuses, or any
supplement thereto, is required pursuant to Rule 424(b), the Prospectuses, and
any such supplement, will be filed in the manner and within the time period
required by Rule 424(b); and no stop order suspending the effectiveness of the
Registration Statement or the ADR Registration Statement shall have been issued
and no proceedings for that purpose shall have been instituted or threatened.
(ii) On each of the Closing Date and any settlement date, the Company
shall have requested and caused Xxxxxxx Xxxxxxx & Xxxxxxxx, United States
counsel for the Company, to have furnished to the Representatives their
opinion, dated the Closing Date or the settlement date, as the case may be, to
the effect that:
(a) The Underwriting Agreements have been duly executed and
delivered by the Company in accordance with the laws of the State of New
York.
(b) The Deposit Agreement has been duly executed and delivered by
the Company in accordance with the laws of the State of New York and,
assuming that the Deposit Agreement is the valid and legally binding
obligation of the Depositary, constitutes a valid and legally binding
obligation of the Company, enforceable against the Company in accordance
with its terms, subject to (i) the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, (ii) general
equitable principles
24
(whether considered in a proceeding in equity or at law), (iii) an
implied covenant of good faith and fair dealing and (iv) the effects of
the possible judicial application of foreign laws or foreign governmental
or judicial action affecting creditors' rights, and also subject to the
qualification that enforceability of the indemnification provisions of
the Deposit Agreement may be limited by considerations of public policy.
Upon issuance by the Depositary of the ADRs evidencing ADSs against the
deposit of the Underlying Shares (initially in the form of Certificates
of Payment) in accordance with the provisions of the Deposit Agreement,
the ADRs will be duly and validly issued pursuant to the laws of the
State of New York and the persons in whose names such ADRs are registered
will be entitled to the rights specified therein and in the Deposit
Agreement.
(c) The compliance by the Company with all of the provisions of the
Underwriting Agreements and the Deposit Agreement will not breach or
result in a default by the Company under any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument that is expressly
governed by the laws of the State of New York and filed as an exhibit to
the Registration Statement, nor will such action violate any United
States federal or New York state statute or any order known to such
counsel issued pursuant to any United States federal or New York state
statute by any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their properties.
(d) No consent, approval, authorization, order, registration or
qualification of or with any United States federal or New York state
governmental agency or body or, to the knowledge of such counsel, any
United States federal or New York state court is required for the
compliance by the Company with all of the provisions of the Underwriting
Agreements and the Deposit Agreement, except for the registration under
the Act and the Exchange Act of the Shares and the ADSs or the offering
and sale thereof, and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or "blue sky" laws in connection with the purchase and distribution of
the Shares and the ADSs by the Underwriters.
(e) The statements made in the Prospectuses under the captions
"Description of American Depositary Shares," "Shares Eligible for Future
Sale" and "Underwriting", insofar as they purport to constitute summaries
of the terms of New York state or United States federal statutes or rules
and regulations thereunder or English language contracts or other
documents therein described, constitute accurate summaries of the terms
of such statutes, rules and regulations or contracts and other documents
in all material respects.
(f) The statements made in the Prospectuses under the caption "Tax
Considerations for Investors in Our ADSs or Shares - United States
Federal Income Tax Considerations for United States Holders," insofar as
they purport to constitute summaries of matters of United States federal
tax laws and regulations or legal conclusions with respect thereto,
constitute accurate summaries of matters described therein in all
material respects.
25
(g) To the knowledge of such counsel, there are no contracts or
documents of a character required to be described in the Registration
Statement, the ADR Registration Statement or the Prospectuses or to be
filed as exhibits to the Registration Statement or the ADR Registration
Statement that are not described or filed as required.
(h) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Prospectuses, will not be an "investment company" within
the meaning of and subject to regulation under the United States
Investment Company Act of 1940, as amended.
(i) The Registration Statement and the ADR Registration Statement
have become effective under the Act; any required filing with the
Commission of the Prospectuses, and any supplement thereto, pursuant to
Rule 424(b) has been made in the manner and within the time period
required by Rule 424(b); and, to the knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement and the
ADR Registration Statement has been issued or proceeding for that purpose
initiated or threatened by the Commission.
(j) Assuming the validity of such actions under the laws of the ROC
and any other non-United States jurisdiction (and subject to the
limitations and provisions of Sections 1331, 1332 and 1404(a) of Title 28
of the United States Code and Section 510 of the New York Civil Practice
Law and Rules), under the laws of the State of New York relating to
personal jurisdiction, and pursuant to Section 15 of the Underwriting
Agreements and Section 7.6 of the Deposit Agreement, the Company has: (A)
validly submitted to the non-exclusive personal jurisdiction of the New
York Courts in any action, suit or proceeding arising out of or based
upon the Underwriting Agreements or the Deposit Agreement or the
transactions contemplated thereby; and (B) validly appointed CT
Corporation System in New York, New York as its authorized agent for the
purpose described in Section 15 of the Underwriting Agreements and
Section 7.6 of the Deposit Agreement; the waiver by the Company of any
objection to the venue of any proceeding in the New York Courts is valid
(subject to customary limitations under New York state and Federal laws);
and service of process effected in the manner set forth in Section 15 of
the Underwriting Agreements and Section 7.6 of the Deposit Agreement will
be effective under the laws of the State of New York to confer valid
personal jurisdiction over the Company.
Such opinion may be subject to customary assumptions, qualifications and
limitations and, in rendering such opinion, such counsel may state that (i)
they do not express any opinion therein concerning any law other than the law
of the State of New York and the federal law of the United States of America
and (ii) with respect to all matters governed by the laws of the ROC, such
counsel understand that the Representatives are relying on the applicable
opinion of Xxxxxx & Xxxxxx referred to below. Such opinion shall also include
language confirming the extent of such counsel's participation in the
preparation of the Registration Statement, the ADR Registration Statement and
the Prospectuses and confirming that based on such participation: (i) such
counsel are of the opinion that the Registration Statement and the ADR
Registration Statement, as of their respective effective dates, and the
Prospectuses, as of May 23, 2002, complied as to form in all material respects
with the requirements of the Act (except in each case for the financial
statements and other financial data contained therein, as to which such counsel
need express no opinion); and (ii) such counsel have no reason to believe that
the Registration Statement and the ADR Registration
26
Statement, as of their respective effective dates (except in each case for the
financial statements and other financial data contained therein, as to which
such counsel need express no belief), contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading or that the
Prospectuses (except for the financial statements and other financial data
contained therein, as to which such counsel need express no belief) contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The foregoing opinion
and statement may be qualified by a statement to the effect that such counsel
have not independently verified the accuracy, completeness or fairness of the
statements made or included in the Registration Statement, the ADR Registration
Statement or the Prospectuses and take no responsibility therefor, except as
and to the extent set forth in clauses (e) and (f) above.
(iii) On each of the Closing Date and any settlement date, the Company and
each of Benq Corporation ("Benq"), Acer, Inc. ("Acer") and Kuang-Hwa Investment
Holding Co., Ltd. ("Kuang-Hwa"), shall have requested and caused Xxxxxx &
Xxxxxx, ROC counsel for the Company and for Benq, Acer and Kuang-Hwa as Selling
Shareholders, to have furnished to the Representatives their opinion, dated the
Closing Date or the settlement date, as the case may be, and addressed to the
Representatives, to the effect that:
(a) The Company has been duly incorporated, is validly existing as
a corporation under the laws of the ROC, has the corporate power and
authority to own or lease its property and to conduct its business as
described in the Prospectuses and is duly qualified to transact business
and to own or lease its properties in the ROC.
(b) The Company's authorized and issued share capital is as set
forth in the Prospectuses; the capital stock of the Company conforms in
all material respects to the description thereof contained in the
Prospectuses; the outstanding Common Shares (including the Option Shares)
have been duly and validly authorized and issued ,fully paid and
non-assessable; the Underwritten Shares (including the Certificate of
Payment) have been duly authorized and, when issued and delivered in
accordance with the terms of the Underwriting Agreements and the Deposit
Agreement, will be validly issued , fully paid and non-assessable with no
personal liability for the obligations of the Company attaching to the
ownership thereof; the issuance of the Underwritten Shares will not be
subject to any preemptive or similar rights except such as have been duly
and validly waived; all of the Common Shares outstanding prior to the
issuance of the Underwritten Shares (including the Option Shares) have
been duly listed and admitted for trading on the Taiwan Stock Exchange;
the Underwritten Shares will be duly listed and admitted for trading on
the Taiwan Stock Exchange upon exchange of the
27
Certificate of Payment; the holders of outstanding Common Shares of the
Company are not entitled to preemptive or other rights to acquire the
ADSs in connection with the transactions contemplated by the Underwriting
Agreements; the Option Shares to be deposited by the Selling Shareholders
may be freely deposited with the Depositary against issuance of ADRs
evidencing ADSs; there are no restrictions on subsequent transfer of the
Shares underlying the ADSs except as described in the Prospectuses under
the captions "Description of Our Share Capital", "Description of American
Depositary Shares" and "Foreign Investment and Exchange Controls in
Taiwan"; and, except as set forth in the Prospectuses, there are no
outstanding securities convertible into or exchangeable for, or warrants,
rights or options to purchase from the Company, or obligations of the
Company to issue, Common Shares or any other class of capital stock of
the Company. The Company's authorized equity capitalization is as set
forth in the Prospectuses; the capital stock of the Company conforms in
all material respects to the description thereof contained in the
Prospectuses; the outstanding Common Shares (including the Securities
being sold pursuant to the Underwriting Agreements by the Selling
Shareholders) and all the Shares of the Company to be deposited in the
ADR facility pursuant to the terms of the Underwriting Agreements, have
been duly and validly authorized and issued and are fully paid and
nonassessable and no holder thereof is, or will be, subject to personal
liability by reason of being such holder; the Securities being sold under
the Underwriting Agreements (including any Certificates of Payment) by
the Company have been duly and validly authorized, and, when issued and
delivered to and paid for by the Underwriters pursuant to this Agreement,
will be fully paid and nonassessable; all of the issued and outstanding
Common Shares of the Company have been duly listed, and admitted and
authorized for trading, on the Taiwan Stock Exchange; the Underlying
Shares will be duly listed and admitted for trading on the Taiwan Stock
Exchange upon the exchange of the Certificates of Payment; the holders of
outstanding shares of capital stock of the Company are not entitled to
preemptive or other rights to subscribe for the Securities; assuming the
Deposit Agreement has been duly authorized and delivered by the parties
thereto, the Option Shares to be deposited by the Selling Shareholders
may be freely deposited with the Depositary against issuance of ADRs
evidencing ADSs and the ADSs delivered at the settlement date will be
freely transferable by the Selling Shareholders to or for the account of
the several Underwriters and (to the extent described in the
Prospectuses) the initial purchasers thereof; there are no restrictions
on subsequent transfers of the Option Securities except as described in
the Prospectuses under the captions "Description of Our Share Capital,"
"Description of American Depositary Shares" or "Foreign Investment and
Exchange Controls in Taiwan"; and, except as set forth in the
Prospectuses, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities for, shares of capital stock
of or ownership interests in the Company are outstanding.
(c) The Underwriting Agreements and the Deposit Agreement have been
duly authorized, executed and delivered by the Company and constitute
valid and legally binding obligations of the Company, enforceable in
accordance with their terms; the Certificate of Payment evidencing the
Underwritten Shares has been duly authorized
28
and, when executed and delivered by the Company, will constitute valid
and legally binding obligations of the Company, enforceable in accordance
with its terms.
(d) No consent, approval, authorization, filing with, or order of,
or qualification with, any governmental body or agency of the government
of the ROC is required in connection with the transactions contemplated
in the Underwriting Agreements or in the Deposit Agreement, except for
(i) the approvals of the CBC and reports to the CBC of the foreign
exchange settlements and payments contemplated by the Deposit Agreement
(the "CBC Conversion Filings"); (ii) the filings and approvals, if any,
required under (A) the "Guidelines For Handling Issuance and Offer of
Overseas Securities by Issuers of the ROC (the "Overseas Offering
Rules"), and (B) the rules and regulations of the Taiwan Stock Exchange,
the ROC SFC and the CBC; (iii) completion of the corporate amendment
registration reflecting the issuance of the Underwritten Shares with the
SIPA which registration is required to be filed by the Company with
fifteen (15) days after the Closing Date and (iv) the approvals which
have been obtained under the laws of the ROC and are in full force and
effect as of the date hereof, including the SIPA Approval, the CBC
Approvals and the ROC SFC Approvals.
(e) Except as disclosed in the Prospectuses and except for the
securities transaction tax payable by the Selling Shareholders under the
ROC laws and so long as the Underwriting Agreements, the Certificate of
Payment, the cross receipt and any other documents which would be deemed
"receipts" under the ROC Stamp Duty Law are executed outside of the ROC,
no stamp or other issuance or transfer taxes or duties and no capital
gains, income, withholding or other taxes are payable by or on behalf of
the Underwriters to the government of the ROC or any political
subdivision or taxing authority thereof or therein in connection with (A)
the issuance and delivery of the Certificate of Payment or sale and
delivery of the Underwritten Shares and the Option Shares in accordance
with the Underwriting Agreements and the Deposit Agreement, (B) the
deposit with the Depositary or its custodian of the Certificate of
Payment, the Underwritten Shares and the Option Shares against the
issuance of the ADRs evidencing the ADSs, (C) the sale and delivery
outside of the ROC by the Underwriters of the ADSs pursuant to the terms
of and in the manner contemplated in the Underwriting Agreements or (D)
the execution and delivery of the Underwriting Agreements and the Deposit
Agreement.
(f) Subject to the qualification that litigation and arbitration in
the ROC are not necessarily a matter of public record, to the best of our
knowledge, except as described in the Prospectuses, we are not aware of
any ROC legal or governmental proceedings pending or threatened to which
the Company or any Subsidiary is a party or to which any of the
properties of the Company or any of the Subsidiaries is subject that
could reasonably be expected to have a material adverse effect on the
Company and the Subsidiaries, taken as a whole ("Material Adverse
Effect").
(g) Neither the execution and delivery by the Company of, the
performance by the Company of its obligations under, and the consummation
of any of the other transactions contemplated in the Underwriting
Agreements and the Deposit Agreement,
29
nor the application of the proceeds from the sale of Underwritten
Securities as described in the Prospectuses, will contravene or result in
a breach or violation of any provision of applicable laws and regulations
of the ROC or the Articles of Incorporation or other constitutive
documents of the Company, or, to the best of our knowledge, any agreement
or other instrument binding upon the Company that is material to the
Company and the Subsidiaries, taken as a whole, or, to the best of our
knowledge, any judgment, order or decree of any governmental body, agency
or court of the ROC having jurisdiction over the Company or any of the
Subsidiaries; neither the execution and delivery by each of Benq, Acer
and Kuang-Hwa of, nor the performance by each of Benq, Acer and Kuang-Hwa
of, their respective obligations under the Underwriting Agreements and
the Powers of Attorney will contravene or result in a breach or violation
of any provision of applicable laws and regulations of the ROC or the
articles of incorporation or other constitutive documents of Benq, Acer
and Kuang-Hwa.
(h) We have reviewed the statements in the Prospectuses under the
captions "Risk Factors", "Dividends", "Our Business", "Management",
"Related Party Transactions", "Description of Our Share Capital",
"Description of American Depositary Shares", "The Securities Markets of
Taiwan", "Foreign Investment and Exchange Controls in Taiwan", "Shares
Eligible for Future Sale", "Enforceability of Civil Liabilities" and "Tax
Considerations for Investors in Our ADSs or Shares - ROC Tax
Considerations" and confirm that, insofar as such statements constitute
summaries of the legal matters, legal documents or legal proceedings
referred to therein, to the extent, and only to the extent, governed by
the laws of the ROC, fairly present the information called for with
respect to such legal matters, documents and proceedings and fairly
summarize the matters described therein.
(i) Nothing has come to our attention that would lead us to believe
that (except for the financial statements and other financial or
statistical data contained therein, as to which we need not express any
opinion or belief) the Registration Statement or the ADR Registration
Statement as of the respective dates thereof contained any untrue
statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein not misleading; and the
Prospectuses as of their respective dates and as of the date hereof,
contained or contain any untrue statement of a material fact or omitted
or omits to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(j) The Underwriting Agreements, the Deposit Agreement, the
Certificate of Payment and the documents to be furnished thereunder are
in proper legal form under the laws of the ROC for the enforcement
thereof against the Company, Benq, Acer and Kuang-Hwa, as applicable,
under the laws of the ROC. Except for the filings and registrations
referred to in opinion (d) above, it is not necessary, required, or
advisable, to ensure the legality, validity, enforceability or
admissibility in evidence of any of such agreement or document that such
agreement or document be filed or recorded with any court or other
authority in the ROC or that any stamp or similar tax\
30
be paid, it being understood that in court proceedings in the ROC a
translation into Chinese language may be required.
(k) None of the parties to the Underwriting Agreements or the
Deposit Agreement in order to enforce any of their respective rights
under the Underwriting Agreements or the Deposit Agreement or any other
document to be furnished thereunder , and none of the holders of the ADSs
in order to enforce any of their respective rights under the ADRs or the
Deposit Agreement or any other document to be furnished thereunder (other
than such parties or holders that are established under the laws of the
ROC) need be licensed, qualified or entitled to do business in the ROC
(l) None of the parties to the Underwriting Agreements or the
Deposit Agreement (other than those parties established under the laws of
the ROC) and none of the holders of the ADSs are or will be deemed to be
resident, domiciled, carrying on business or, subject to taxation in the
ROC or be required to be licensed, qualified or otherwise entitled to do
business in the ROC solely by reason of the ownership of the ADSs or the
entry into, performance and/or enforcement of the Underwriting Agreements
and/or the Deposit Agreement, as applicable.
(m) The choice of New York Law to govern the Underwriting
Agreements and the Deposit Agreement is a valid choice of law. Under the
Law Governing the Application of Laws to Civil Matters Involving Foreign
Elements of the ROC (i.e., the ROC conflicts of law rules), if any claim
with respect to the obligations of the Company, Benq, Acer or Kuang-Hwa
under the Underwriting Agreement or the Deposit Agreement, as applicable
comes under the jurisdiction of the ROC courts, New York Law is to be
applied.
(n) The submission in the Underwriting Agreements and the Deposit
Agreement by each of the Company, Benq, Acer and Kuang-Hwa, as
applicable, to the non-exclusive jurisdiction of and the irrevocable
waiver of objection to venue of a proceeding in the U.S. federal and New
York state courts in New York City is valid and binding upon each of the
Company, Benq, Acer and Kuang-Hwa. The irrevocable appointment by each of
the Company, Benq, Acer and Kuang-Hwa of CT Corporation System in New
York as its authorized agent for the purpose described in the
Underwriting Agreements and the Deposit Agreement, as applicable, is
legal, valid and binding on each of the Company, Benq, Acer and
Kuang-Hwa.
(o) A judgment obtained against the Company, Benq, Acer or
Kuang-Hwa in the courts of the ROC in respect of any sum payable by the
Company, Benq, Acer or Kuang-Hwa under the Underwriting Agreements or the
Deposit Agreement, as applicable may be expressed in United States
dollars or New Taiwan dollars. However, if such judgment is enforced
against assets of the Company, Benq, Acer or Kuang-Hwa located in the
ROC, the fact that the judgment is rendered and expressed in United
States dollars does not, for foreign exchange control purposes, itself,
create a right to convert the New Taiwan dollar proceeds of such
enforcement into United States dollars.
31
(p) Except as described in the Prospectuses, all cash dividends and
other distributions declared and payable on the Common Shares may be paid
by the Company to each such holder in New Taiwan dollars that may be
converted into foreign currency and freely transferred out of the ROC
without the necessity of obtaining any governmental authorizations of, or
from, any governmental agency in the ROC. However, the CBC Conversion
Filings will be required to be made by the Company in connection with
such conversion and transfer and similar filings by holders of Common
Shares withdrawn from the ADS facility or their designated agents in the
ROC will be required in connection with such conversion and transfer.
Other than as described in the Prospectuses, all such dividends and other
distributions made to holders of ADSs who are non-residents of the ROC
will not be subject to the ROC income, withholding or other taxes under
the laws and regulations of the ROC and are otherwise free and clear of
any other tax, duty, withholding or deduction in the ROC.
(q) To the best of our knowledge, and except as otherwise disclosed
in the Prospectuses, (i) the Company owns or possesses or is licensed to
use all material patents, patent applications, trademarks, service marks,
trade names, licenses, copyrights and proprietary or other confidential
information ("Intellectual Property Rights") currently utilized by the
Company in connection with its business and proposed to be utilized in
connection with its business, and (ii) the Company has not received any
notice of material infringement of or conflict with asserted rights of
any third party with respect to any Intellectual Property Rights which,
if determined adversely to the Company, would have a Material Adverse
Effect.
(r) To the best of our knowledge, the Company holds all, and is not
in material violation of any, ROC governmental licenses and approvals
necessary to own its property and conduct its business as described in
the Prospectuses except to the extent that the failure to hold such
licenses or approvals and/or the violation thereof would not have a
Material Adverse Effect.
(s) With respect to the Company's obligations and those of Benq,
Acer and Kuang-Hwa under the Underwriting Agreements and the Deposit
Agreement, as applicable, in the event a judgment of the courts of a
country other than the ROC, including without limitation a judgment
obtained in a New York court, were obtained, and enforcement of such
judgment were sought in the ROC, such judgment would be recognized and
enforced by the courts of the ROC without retrial or examination of the
merits of the case only if the ROC courts are satisfied that: (i) the
court rendering the judgment had subject matter jurisdiction under the
laws of the ROC; (ii) the judgment was not contrary to public order or
good morals of the ROC; (iii) the judgment was a final judgment for which
the period for appeal had expired or from which no appeal could be taken;
(iv) if the Company , Benq, Acer or Kuang-Hwa did not appear in the
proceedings in such court and a judgment by default was entered, process
was served either personally on the Company, Benq, Acer or Kuang-Hwa in
the country of litigation or with the assistance of the judicial
authorities of the ROC; and (v) judgments of the courts of the ROC would
be enforceable in the jurisdiction of the court rendering such judgment
on a reciprocal basis.
32
(t) The performance by the Underwriters or the Depositary of any of
their respective duties, obligations or responsibilities under the
Underwriting Agreements or the Deposit Agreement in the manner
contemplated thereby will not violate any applicable ROC law.
(u) The voting arrangements set forth under "Description of
American Depositary Shares" as described in the Prospectuses and the
voting arrangements as set forth in the Deposit Agreement are legal and
conform to the requirements of ROC law and constitute a valid and binding
agreement by the holders of interests in the ADSs as to their voting
rights.
(v) The Depositary will not be deemed to be authorized to exercise
any discretion when voting in accordance with the Deposit Agreement under
ROC law, and the Depositary will not (in the absence of negligence, bad
faith or breach of contract, and subject to general principles of agency)
be subject to any liability under ROC law for losses arising from the
exercise of the voting arrangements set out in the Deposit Agreement on
the grounds that voting in accordance with the Deposit Agreement is in
violation of ROC law.
(w) So long as no single owner of the ADSs holds or owns, as
applicable, ADSs (or ADSs, Certificate of Payment and Common Shares in
the aggregate) representing more than 10% of the Company's outstanding
Common Shares, there will be no reporting obligations under the ROC law
on the part of the Depositary or its nominee or owner of the ADSs (i) by
virtue of the Depositary being a party to the Deposit Agreement and
exercising its rights and performing its obligations thereunder or (ii)
in connection with the ADSs and the Certificate of Payment or Common
Shares represented by the ADSs.
(x) Each of the Company, Benq, Acer and Kuang-Hwa can xxx and be
sued in its own name under the laws of the ROC and an ROC court would
have jurisdiction in any suit, action or proceedings brought against the
Company, Benq, Acer and Kuang-Hwa arising out of or in connection with
the Underwriting Agreements or the Deposit Agreement, as applicable.
(y) Each of Benq, Acer and Kuang-Hwa has been duly incorporated and
is validly existing as a corporation under the laws of the ROC.
(z) The Underwriting Agreements and the Powers of Attorney have
been duly authorized, executed and delivered by each of Benq, Acer and
Kuang-Hwa and constitute valid and legally binding obligations of each of
Benq, Acer and Kuang-Hwa, enforceable in accordance with the terms
thereof.
(aa) To the best of our knowledge, the Company is not in violation
of the Articles of Incorporation or other constitutive documents or in
default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement, lease or other
33
agreement or instrument to which it is a party or by which it or any of
its properties may be bound.
(bb) Each of Benq, Acer and Kuang-Hwa has, and immediately prior to
the Closing Date or any settlement date, as applicable, will have, full
right, power and authority to deposit the Option Shares with the
Depositary as contemplated in the Underwriting Agreements and to sell,
assign, transfer and deliver the Option Shares in the form of ADSs to be
sold by Benq, Acer and Kuang-Hwa under the Underwriting Agreements.
(cc) Each of Benq, Acer and Kuang-Hwa is the beneficial owner of
the Option Shares to be deposited with the Depositary against issuance of
the ADRs evidencing the ADSs to be sold by Benq, Acer and Kuang-Hwa
pursuant to the Underwriting Agreements, has, and immediately prior to
the Closing Date or any settlement date, as applicable, will have, good
and valid title to such Option Shares, in each case free and clear of all
liens, encumbrances, equities and claims; and upon delivery of such
Option Shares and payment therefor pursuant to the Underwriting
Agreements, good and valid title to such Option Shares, free and clear of
all liens, encumbrances, equities or claims, will pass to the Depositary
or its nominee for the benefit of the several Underwriters.
(dd) To the best of our knowledge, the Company has good and
marketable title to all real property and good and marketable title to
all personal Property owned by them which is material to the business of
the Company, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectuses or such as do
not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by
the Company; and any real property and buildings held under lease by the
Company are held under valid, subsisting and enforceable leases with such
exceptions as are not material and do not materially interfere with the
use made and proposed to be made of such property and buildings by the
Company and except as described in the Prospectuses.
(ee) The Registration Statement and the Prospectuses have been duly
authorized by and on behalf of the Company; the Registration Statements
have been signed for and on behalf of the Company by officers thereunto
duly authorized and by directors duly elected or appointed.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the ROC, to
the extent they deem proper and specified in such opinion, upon the opinion of
other counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of the
Company and public officials. References to the Prospectuses in this paragraph
(iii) include any supplements thereto at the Closing Date.
34
(iv) On each of the Closing Date and any settlement date, the Depositary
shall have requested and caused Patterson, Belknap, Xxxx & Xxxxx LLP, counsel
for the Depositary, to have furnished to the Representatives their opinion
dated the Closing Date or the settlement date, as the case may be, and
addressed to the Representatives, to the effect that:
(a) The Deposit Agreement has been duly authorized, executed and
delivered by the Depositary and constitutes a legal, valid and binding
instrument enforceable against the Depositary in accordance with its
terms (subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors'
rights generally from time to time in effect); the statements in the
Prospectuses under the heading "Description of American Depositary
Shares," insofar as such statements purport to describe the Depositary
and summarize certain provisions of the Deposit Agreement, the ADSs and
the ADRs, are fair and accurate.
(b) The Depositary has full power and authority and legal right to
execute and deliver the Deposit Agreement and to perform its obligations
thereunder.
(c) The ADRs and the ADSs evidenced thereby are in valid and
sufficient form and, when issued under the Deposit Agreement, the ADRs
will be duly and validly issued and will entitle the holders and
beneficial owners thereof to the rights specified therein and in the
Deposit Agreement.
(d) The ADR Registration Statement has become effective under the
Act and, to the knowledge of such counsel, no stop order suspending the
effectiveness of the ADR Registration Statement has been issued, no
proceedings for that purpose have been instituted or threatened, and the
ADR Registration Statement, and each amendment comply as to form in all
material respects with the applicable requirements of the Act and the
rules thereunder.
(v) On each of the Closing Date and any settlement date, the Selling
Shareholders shall have requested and caused Xxxxxxx Xxxxxxx & Xxxxxxxx, United
States counsel for the Selling Shareholders, to have furnished to the
Representatives their opinion dated the Closing Date or the settlement date, as
the case may be, addressed to the Representatives, to the effect that:
(a) The Underwriting Agreements have been duly executed and
delivered by or on behalf of the Selling Shareholders in accordance with
the laws of the State of New York.
(b) The compliance by the Selling Shareholders with all of the
provisions of the Underwriting Agreements will not violate any United
States federal or New York state statute or any order known to such
counsel issued pursuant to any United States federal or New York state
statute by any court or governmental agency or body having jurisdiction
over any Selling Shareholder.
35
(c) No consent, approval, authorization, order, registration or
qualification of or with any United States federal or New York state
governmental agency or body or, to the knowledge of such counsel, any
United States federal or New York state court is required for the
compliance by the Selling Shareholders with all of the provisions of the
Underwriting Agreements, except for the registration under the Act and
the Exchange Act of the Shares and the ADSs or the offering and sale
thereof, and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or "blue sky"
laws in connection with the purchase and distribution of the Shares and
the ADSs by the Underwriters.
(d) Assuming the validity of such actions under the laws of the ROC
and any other non-United States jurisdiction (and subject to the
limitations and provisions of Sections 1331, 1332 and 1404(a) of Title 28
of the United States Code and Section 510 of the New York Civil Practice
Laws and Rules), under the laws of the State of New York relating to
personal jurisdiction, and pursuant to Section 15 of the Underwriting
Agreements, each Selling Shareholder has: (A) validly submitted to the
non-exclusive personal jurisdiction of the New York Courts in any action,
suit or proceeding arising out of or based upon the Underwriting
Agreements or the transactions contemplated thereby; and (B) in the case
of Benq, Acer and Kuang-Hwa, validly appointed CT Corporation System in
New York, New York, and in the case of UMC (as defined below), validly
appointed Law+, P.C., as its authorized agent for the purpose described
in Section 15 of the Underwriting Agreements, the waiver by each Selling
Shareholder of any objection to the venue of any proceeding in the New
York Courts is valid (subject to customary limitations under New York
state and federal laws), and service of process effected in the manner
set forth in Section 15 of the Underwriting Agreements will be effective
under the laws of the State of New York to confer valid personal
jurisdiction over such Selling Shareholder.
(e) Upon payment for and transfer of the security entitlements to
the ADSs representing Option Shares as contemplated in the Underwriting
Agreements, DTC will be a protected purchaser who acquires its interest
free of any adverse claim (within the meaning of Section 8-303 of the New
York UCC), and an action based on an adverse claim to the security
entitlements to such ADSs may not be asserted against the Underwriters.
The opinion of such counsel may be subject to customary assumptions,
qualifications and limitations and, in rendering such opinion, such counsel may
state that (i) they do not express any opinion therein concerning any law other
than the law of the State of New York and the federal law of the United States
of America and (ii) with respect to all matters governed by the laws of the
ROC, such counsel understand that the Representatives are relying on an opinion
of Xxxxxx & Xxxxxx. References to the Prospectuses in this paragraph (v)
include any supplements thereto at the Closing Date.
(vi) On each of the Closing Date and any settlement date, United
Microelectronics Corporation ("UMC") shall have requested and caused Chen &
Lin, ROC counsel for UMC as a Selling Shareholder, to have furnished to the
Representatives
36
their opinion dated the Closing Date or the settlement date, as the case may
be, addressed to the Representatives, to the effect that:
(a) UMC has been duly incorporated and is validly existing as a
corporation under the laws of the ROC.
(b) The Underwriting Agreements and the Power of Attorney of UMC
have been duly authorized, executed and delivered by UMC and constitute
valid and legally binding obligations of UMC enforceable in accordance
with the terms thereof, and UMC has the full legal right and authority to
sell, transfer and deliver the Option Shares in the form of ADSs to be
sold by UMC under the Underwriting Agreements.
(c) UMC is the beneficial owner of the Option Shares to be
deposited by UMC with the Depositary against issuance of the ADRs
evidencing the ADSs to be sold by UMC hereunder, and has, and immediately
prior to the Closing Date or any settlement date will have, good and
valid title to such Option Shares, in each case free and clear of all
liens, encumbrances, equities and claims.
(d) Upon delivery of the Option Shares to be purchased from UMC,
and payment therefor, pursuant to the Underwriting Agreements, good and
valid title to such Option Shares, free and clear of all liens,
encumbrances, equities or claims, will pass to the Depositary or its
nominee for the benefit of the several Underwriters; assuming the Deposit
Agreement has been duly authorized and delivered by the parties thereto,
the Option Shares to be deposited by UMC may be freely deposited with the
Depositary against issuance of ADRs evidencing ADSs and the ADSs
delivered at the settlement date will be freely transferable by UMC to or
for the account of the several Underwriters and (to the extent described
in the Prospectuses) the initial purchasers thereof; and there are no
restrictions on subsequent transfers of the Option Securities to be sold
by UMC except as described in the Prospectuses under the captions
"Description of Our Share Capital," "Description of American Depositary
Shares" or "Foreign Investment and Exchange Controls in Taiwan".
(e) No consent, approval, authorization, filing with, or order of,
or qualification with, any governmental body or agency of the government
of the ROC is required in connection with the transactions contemplated
in the Underwriting Agreements or in the Deposit Agreement, except for
(i) the approvals of the CBC and reports to the CBC of the foreign
exchange settlements and payments contemplated by the Deposit Agreement
(the "CBC Conversion Filings"); (ii) the filings and approvals, if any,
required under (A) the "Guidelines For Handling Issuance and Offer of
Overseas Securities by Issuers of the ROC (the "Overseas Offering
Rules"), and (B) the rules and regulations of the Taiwan Stock Exchange,
the ROC SFC and the CBC; (iii) completion of the corporate amendment
registration reflecting the issuance of the Underwritten Shares with the
SIPA which registration is required to be filed by the Company with
fifteen (15) days after the Closing Date and (iv) the approvals which
have been obtained under the laws of the ROC and are in full force and
effect as of the date hereof, including the SIPA Approval, the CBC
Approvals and the ROC SFC Approvals.
37
(f) None of the execution and delivery or the Power of Attorney of
UMC or of the Underwriting Agreements by UMC, and the performance by UMC
of its obligations under the Underwriting Agreements and the Power of
Attorney of UMC, will conflict with, or result in a breach or violation
of, any applicable laws of the ROC or the articles of incorporation or
any other constitutive documents of UMC.
(g) The choice of law provision set forth in Section 15 of the
Underwriting Agreements will be recognized by the courts of the ROC and
such counsel knows of no reason why the courts of the ROC would not give
effect to the choice of New York law as the proper law of the
Underwriting Agreements, provided that the relevant provisions of the
laws of the State of New York will not be applied to the extent such
courts hold that such provisions of the laws of the State of New York are
contrary to the public order or good morals of the ROC and an ROC court
would have jurisdiction in any suit, action or proceedings brought
against UMC arising out of or in connection with the Underwriting
Agreements; UMC has the legal capacity to xxx and be sued in its own name
under the laws of the ROC; UMC has validly and irrevocably appointed
Law+, P.C. as its authorized agent for the purpose described in Section
15 of the Underwriting Agreements under the laws of the ROC; the
irrevocable submission of UMC to the non-exclusive jurisdiction of the
New York Courts and the waivers by UMC of any objection to the venue of
the proceeding in a New York Court in the Underwriting Agreements are
legal, valid and binding under the laws of the ROC; and any final and
conclusive judgment against UMC obtained in a New York Court arising out
of or in relation to the obligations of UMC under the Underwriting
Agreements would be enforceable against UMC in the courts of the ROC,
provided that the court of the ROC in which the enforcement is sought is
satisfied that (A) the court rendering the judgment had jurisdiction over
the subject matter according to the laws of the ROC, (B) the judgment is
not contrary to the public order or good morals of the ROC, (C) if the
judgment was rendered by default by the court rendering the judgment, UMC
was served while within the jurisdiction of such court or process was
served on UMC with judicial assistance of the ROC; and (D) judgments of
the courts of the ROC are recognized and enforceable in the court
rendering the judgment on a reciprocal basis.
(h) A judgment obtained against UMC in the courts of the ROC in
respect of any sum payable by UMC under the Underwriting Agreements or
the Deposit Agreement, as applicable may be expressed in United States
dollars or New Taiwan dollars.
(i) The Underwriting Agreements and the documents to be furnished
thereunder are in proper legal form under the laws of the ROC for the
enforcement thereof against UMC, as applicable, under the laws of the
ROC. Except for the filings and registrations referred to in paragraph
(e) above, it is not necessary, required, or advisable, to ensure the
legality, validity, enforceability or admissibility in evidence of any of
such agreement or document that such agreement or document be filed or
recorded with any court or other authority in the ROC or that any stamp
or similar tax be paid, it being understood that in court proceedings in
the ROC a translation into Chinese language may be required.
38
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the ROC, to
the extent they deem proper and specified in such opinion, upon the opinion of
other counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of the
Company and public officials. References to the Prospectuses in this paragraph
(vi) include any supplements thereto at the Closing Date.
(vii) On each of the Closing Date and any settlement date, the
Representatives shall have received from Xxxxx Xxxx & Xxxxxxxx, United States
counsel for the Underwriters, such opinion or opinions, dated the Closing Date
or the settlement date, as the case may be, addressed to the Representatives,
with respect to the issuance and sale of the Securities, the Registration
Statement, the ADR Registration Statement, the Prospectuses (together with any
supplement thereto) and other related matters as the Representatives may
reasonably require, and the Company and each Selling Shareholder shall have
furnished to such counsel such documents as they reasonably request for the
purpose of enabling them to pass upon such matters.
(viii) On each of the Closing Date and any settlement date, the
Representatives shall have received from Xxx & Li, ROC counsel for the
Underwriters, such opinion or opinions, dated the Closing Date or the
settlement date, as the case may be, and addressed to the Representatives, with
respect to the issuance and sale of the Securities, the Registration Statement,
the ADR Registration Statement, the Prospectuses (together with any supplement
thereto) and other related matters as the Representatives may reasonably
require, and the Company and each Selling Shareholder shall have furnished to
such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(ix) On each of the Closing Date and any settlement date, the Company
shall have furnished to the Representatives a certificate of the Company,
signed by the Chairman of the Board or the President and the principal
financial or accounting officer of the Company, dated the Closing Date or the
settlement date, as the case may be, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the ADR
Registration Statement, the Prospectuses, any supplements to the Prospectuses
and this Agreement and that:
(a) The representations and warranties of the Company in the
Underwriting Agreements are true and correct on and as of the Closing
Date or the settlement date, as the case may be, with the same effect as
if made on the Closing Date or the settlement date, as the case may be,
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied under the
Underwriting Agreements at or prior to the Closing Date or the settlement
date, as the case may be.
39
(b) No stop order suspending the effectiveness of the Registration
Statement or the ADR Registration Statement has been issued and no
proceedings for that purpose have been instituted or, to the Company's
knowledge, threatened.
(c) Since the date of the most recent financial statements included
in the Prospectuses (exclusive of any supplement thereto), there has not
been any change, or any development involving a prospective change, that
would have a material adverse effect on the condition (financial or
otherwise), earnings, business or properties of the Company and the
Subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business, except as set forth in or
contemplated in the Prospectuses (exclusive of any supplement thereto).
(x) On each of the Closing Date and any settlement date, each Selling
Shareholder shall have furnished to the Representatives a certificate, signed
by a duly authorized signatory of such Selling Shareholder, dated the Closing
Date or the settlement date, as the case may be, to the effect that the signer
of such certificate has carefully examined the Registration Statement, the ADR
Registration Statement, the Prospectuses, any supplement to either of the
Prospectuses and this Agreement and the International Underwriting Agreement
and that the representations and warranties of such Selling Shareholder in this
Agreement and the International Underwriting Agreement are true and correct in
all material respects on and as of the Closing Date or the settlement date, as
the case may be, to the same effect as if made on the Closing Date, or the
settlement date, as the case may be.
(xi) The Company shall have requested and caused KPMG to have furnished to
the Representatives letters, dated respectively as of the Execution Time, as of
the Closing Date, and as of any settlement date, in form and substance
satisfactory to the Representatives, confirming that they are independent
accountants within the meaning of the Act and the applicable rules and
regulations adopted by the Commission thereunder and that they have performed a
review of the unaudited interim financial information of the Company for the
three-month period ended March 31, 2002 and as at March 31, 2002, in accordance
with generally accepted auditing standards applicable in the ROC and statement
on Auditing Standards No. 71, provided that the letter delivered on the Closing
Date shall use a "cut-off" date not earlier than the date hereof and the letter
delivered on any settlement date shall use a "cut-off" date not earlier than
the date of the third Business Day prior to such settlement date, and stating
in effect that:
(a) In their opinion the audited financial statements and financial
statement schedules included in the Registration Statement and the
Prospectuses and reported on by them comply as to form in all material
respects with the applicable accounting requirements of generally
accepted accounting principles in the ROC and the applicable accounting
requirements of the Act and the related rules and regulations adopted by
the Commission; and all necessary adjustments to net income and
shareholders' equity for the periods presented that would be required if
U.S. generally accepted accounting principles had been applied have been
made.
40
(b) On the basis of a reading of the latest unaudited financial
statements made available by the Company and the Subsidiaries; their
limited review, in accordance with generally accepted auditing standards
applicable in the ROC and standards established under Statement on
Auditing Standards No. 71, of the unaudited interim financial information
for the three-month period ended March 31, 2002, and as at March 31,
2002; carrying out certain specified procedures (but not an examination
in accordance with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the comments
set forth in such letter; a reading of the minutes of the meetings of the
stockholders and directors of the Company and the Subsidiaries; and
inquiries of certain officials of the Company who have responsibility for
financial and accounting matters of the Company and the Subsidiaries as
to transactions and events subsequent to December 31, 2001, nothing came
to their attention which caused them to believe that:
(i) any unaudited financial statements included in the
Registration Statement and the Prospectuses do not comply as to
form in all material respects with generally accepted accounting
principles and the regulations in the ROC and applicable accounting
requirements of the Act and with the related rules and regulations
adopted by the Commission with respect to registration statements
on Form F-1; and said unaudited financial statements are not in
conformity with generally accepted accounting principles applied on
a basis substantially consistent with that of the audited financial
statements included in the Registration Statement and the
Prospectuses; and all necessary adjustments to net income and
shareholders' equity for such interim period that would be required
if U.S. generally accepted accounting principles had been applied
have not been made.
(ii) with respect to the period subsequent to March 31, 2002,
there were any changes, at a specified date not more than five days
prior to the date of the letter, in the long-term debt of the
Company and the Subsidiaries or capital stock of the Company or
decreases in the consolidated net current assets or stockholders'
equity of the Company as compared with the amounts shown on the
March 31, 2002, consolidated balance sheet included in the
Registration Statement and the Prospectuses, or for the period from
April 1, 2002 to such specified date there were any decreases, as
compared with the corresponding period in the preceding year in
consolidated net sales or in the total or per-share amounts of net
income of the Company and the Subsidiaries, except in all instances
for changes or decreases set forth in such letter, in which case
the letter shall be accompanied by an explanation by the Company as
to the significance thereof unless said explanation is not deemed
necessary by the Representatives.
(c) They have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical
41
nature (which is limited to accounting, financial or statistical
information derived from the general accounting records of the Company
and its subsidiaries) set forth in the Registration Statement and the
Prospectuses, including the information set forth under the captions
"Prospectus Summary - Summary Financial and Operational Data" and
"Selected Financial and Operational Data" in the Prospectuses, agrees
with the accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation.
(d) On the basis of a reading of the unaudited pro forma financial
statements included in the Registration Statement and the Prospectuses
(the "pro forma financial statements"); carrying out certain specified
procedures; inquiries of certain officials of the Company and Unipac
Optoelectronics Corporation, who have responsibility for financial and
accounting matters; and proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical amounts in the
pro forma financial statements, nothing came to their attention which
caused them to believe that the pro forma financial statements do not
comply as to form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X or that the pro forma
adjustments have not been properly applied to the historical amounts in
the compilation of such statements.
(xii) The Company shall have requested and caused Xxxxx, Xxxxx & Xxxxx to
have furnished to the Representatives letters, dated respectively as of the
Execution Time, as of the Closing Date, and as of any settlement date, in form
and substance satisfactory to the Representatives, confirming that they are
independent accountants within the meaning of the Act and the applicable rules
and regulations adopted by the Commission thereunder and containing other
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements of
Unipac Optoelectronics Corporation and certain financial information contained
in the Registration Statement and the Prospectuses, provided that the letter
delivered on the Closing Date shall use a "cut-off" date not earlier than the
date hereof and the letter delivered on any settlement date shall use a
"cut-off" date not earlier than the date of the third Business Day prior to
such settlement date.
(xiii) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof), and the Prospectuses (exclusive of any supplement thereto),
there shall not have been (a) any change or decrease specified in the letter or
letters referred to in paragraph (x) of this Section 6 or (b) any change, or
any development involving a prospective change, in or affecting the condition
(financial or otherwise), earnings, business or properties of the Company and
the Subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in the
Prospectuses (exclusive of any supplement thereto) the effect of which, in any
case referred to in clause (a) or (b) above, is, in the sole judgment of the
U.S. Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the U.S. Securities as
contemplated by the Registration Statement
42
(exclusive of any amendment thereof), the ADR Registration Statement and the
Prospectuses (exclusive of any supplement thereto).
(xiv) The Company and the Depositary shall have executed and delivered the
Deposit Agreement, and the Selling Shareholders shall have executed and
delivered the Powers of Attorney, in each case in form and substance
satisfactory to the Representatives, and each of the Deposit Agreement and the
Powers of Attorney shall be in full force and effect.
(xv) The Selling Shareholders shall have delivered to the Depositary, no
later than on the Deposit Date, a New Taiwan dollar Bank of Taiwan cheque
payable to the ROC taxing authority, dated as of such date of delivery, in the
amount of the securities transfer tax payable on the transfer on the Closing
Date or the settlement date, as the case may be, of the Option Shares
represented by the ADSs to be sold by the Selling Shareholders pursuant to the
Underwriting Agreements to the appropriate taxing authorities in the Republic
of China.
(xvi) The Depositary shall have furnished or caused to be furnished to the
Representatives certificates satisfactory to the Representatives evidencing (i)
the deposit with the Depositary of the Certificates of Payment or Option Shares
in respect of which ADSs to be purchased by the Underwriters on the Closing
Date or any settlement date, as the case may be, are to be issued, (ii) the
execution, issuance, countersignature (if applicable) and delivery of the ADRs
evidencing such ADSs pursuant to the Deposit Agreement, (iii) if applicable,
the receipt by the Depositary of the New Taiwan dollar Bank of Taiwan cheque
referred to in Section 6(xv) hereof, and (iv) such other matters related
thereto as the Representatives reasonably request.
(xvii) Prior to each of the Closing Date and any settlement date, the
Company and the Selling Shareholders shall have furnished to the
Representatives such further information, certificates and documents as the
Representatives may reasonably request.
(xviii) The ADSs shall have been listed and admitted and authorized for
trading on the New York Stock Exchange, subject only to official notice of
issuance, and satisfactory evidence of such actions shall have been provided to
the Representatives.
(xix) At the Execution Time, the Company shall have furnished to the
Representatives a letter substantially in the form of Exhibit A hereto from
each executive officer of the Company listed in the Prospectuses, and the legal
entity represented by each director and supervisor of the Company, in each case
addressed to the Representatives.
(xx) No order or notice, oral or written, from any governmental or
regulatory authority of the ROC, including the ROC SFC, has been received by
the Company to the effect that the offering contemplated by this Agreement, if
consummated, will contravene applicable laws or regulations of the ROC.
43
(xxi) Prior to the Closing Date, the Company shall have received from each
of its employees entitled to subscribe to the Underwritten Shares a written
waiver of such employee's right to subscribe to such Underwritten Shares.
(xxii) The closing of the purchase of the International Underwritten
Securities to be issued and sold by the Company and the Selling Shareholders
pursuant to the International Underwriting Agreement shall occur concurrently
with the closing of the purchase of the U.S. Underwritten Securities described
herein.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or
if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the U.S. Underwriters under this Agreement may
be canceled at, or at any time prior to, the Closing Date or the settlement
date by the Representatives. Notice of such cancellation shall be given to the
Company and each Selling Shareholder in writing or by telephone or facsimile
confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters,
at 18/F, The Hong Kong Club Building, 3A Chater Road, Hong Kong, on the Closing
Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the U.S.
Securities provided for in this Agreement is not consummated:
(a) Because any condition to the obligations of the Underwriters
set forth in Section 6 hereof is not satisfied because of any refusal,
inability or failure of the Company to comply with such condition, or
because of any refusal, inability or failure on the part of the Company
to perform any agreement in this Agreement or comply with any provision
hereof other than by reason of a default by any of the Underwriters, the
Underwriters shall not be required to make any payments, or reimburse the
Company or the Selling Shareholders for any payments, described in
Section 5(i)(o) hereof, and the Company will reimburse the Underwriters
severally through Xxxxxxx Xxxxx Barney Inc. on demand for (i) all
out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities and (ii) all payments by the
Underwriters under Section 5(i)(o) hereof.
(b) Because of any termination pursuant to Section 10 hereof, the
Underwriters shall not be required to make any payments, or reimburse the
Company or the Selling Shareholders for any payments, described in
Section 5(i)(o) hereof and the Company will reimburse the Underwriters
severally through Xxxxxxx Xxxxx Xxxxxx Inc. on demand for all payments
made by the Underwriters pursuant to Section 5(i)(o) hereof; provided
that if the Company or any of its subsidiaries consummates an
international securities offering with any lead manager other than
Xxxxxxx Xxxxx
44
Barney Inc. or any affiliates of Xxxxxxx Xxxxx Xxxxxx Inc. in the period
ending 365 days following such termination, then immediately upon the
consummation of such offering, the Company will, in addition, reimburse
the Underwriters severally through Xxxxxxx Xxxxx Barney Inc. on demand
for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities.
(c) For any reason other than those set forth in paragraphs (a) or
(b) above, the Underwriters will not be required to make any payments, or
reimburse the Company or the Selling Shareholders for any payments,
described in Section 5(i)(o) hereof, and the Company will reimburse the
Underwriters severally through Xxxxxxx Xxxxx Xxxxxx Inc. on demand for
all payments by the Underwriters under Section 5(i)(o) hereof.
If the Company is required to make any payments to the Underwriters under
this Section 7 because of any Selling Shareholder's refusal, inability or
failure to satisfy any condition to the obligations of the Underwriters set
forth in Section 6, the Selling Shareholders shall reimburse the Company pro
rata in proportion to the percentage of Securities to be sold by each on demand
for all amounts so paid.
8. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless each U.S. Underwriter, the directors, officers, employees and
agents of each U.S. Underwriter and each person who controls any U.S.
Underwriter within the meaning of either the Act or the Exchange Act against
any and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement for the
registration of the Securities as originally filed or in any amendment thereof,
or in the ADR Registration Statement as originally filed or in any amendment
thereof, or in any U.S. or International Preliminary Prospectus or in either of
the Prospectuses, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any U.S. Underwriter through the U.S. Representatives specifically for
inclusion therein. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Selling Shareholder severally and not jointly agrees to indemnify
and hold harmless the Company, each of its directors, each of its officers who
signs the
45
Registration Statement or the ADR Registration Statement, each U.S.
Underwriter, the directors, officers, employees and agents of each U.S.
Underwriter and each person who controls the Company or any U.S. Underwriter
within the meaning of either the Act or the Exchange Act and each other Selling
Shareholder, if any, to the same extent as the foregoing indemnity from the
Company to each U.S. Underwriter, but only with reference to written
information furnished to the Company by or on behalf of such Selling
Shareholder specifically for inclusion in the documents referred to in the
indemnity in Section 8(a). This indemnity agreement will be in addition to any
liability which any Selling Shareholder may otherwise have.
(c) Each U.S. Underwriter severally and not jointly agrees to indemnify
and hold harmless the Company, each of its directors, each of its officers who
signs the Registration Statement or the ADR Registration Statement, and each
person who controls the Company within the meaning of either the Act or the
Exchange Act and each Selling Shareholder, to the same extent as the indemnity
in Section 8(a) from the Company to each U.S. Underwriter, but only with
reference to written information relating to such U.S. Underwriter furnished to
the Company by or on behalf of such U.S. Underwriter through the
Representatives specifically for inclusion in the documents referred to in the
indemnity in Section 8(a). This indemnity agreement will be in addition to any
liability which any U.S. Underwriter may otherwise have. The Company and each
Selling Shareholder acknowledge that the statements set forth in the last
paragraph of the cover page regarding delivery of the Securities, and, under
the heading "Underwriting," (i) the list of Underwriters and their respective
participation in the sale of the Securities, (ii) the sentences related to
concessions and reallowances, and (iii) the paragraph related to stabilization,
syndicate covering transactions and penalty bids in any U.S. or International
Preliminary Prospectus and the Prospectuses, constitute the only information
furnished in writing by or on behalf of the several Underwriters for inclusion
in any U.S. or International Preliminary Prospectus or the Prospectuses.
(d) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
this Section 8, notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party (i) will not
relieve it from liability under paragraph (a), (b) or (c) above unless and to
the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a), (b) or (c) above. The indemnifying party shall be
entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint
46
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying
party to represent the indemnified party would present such counsel with a
conflict of interest, (ii) the actual or potential defendants in, or targets
of, any such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded that there may
be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party,
(iii) the indemnifying party shall not have employed counsel satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (i) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Underwriters and the directors,
officers, employees and agents of each Underwriter and each person who controls
any Underwriter within the meaning of either the Act or the Exchange Act, (ii)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either the Act or the Exchange Act and (iii) the fees and expenses of more
than one separate firm (in addition to any local counsel) for all Selling
Shareholders and all persons, if any, who control any Selling Shareholder
within the meaning of either the Act or the Exchange Act, and that all such
fees and expenses shall be reimbursed as they are incurred. In the case of any
such separate firm for the Underwriters and directors, officers, employees and
agents, and control persons, of any Underwriters, such firm shall be designated
in writing by Xxxxxxx Xxxxx Xxxxxx Inc. In the case of any such separate firm
for the Company, and such directors, officers and control persons of the
Company, such firm shall be designated in writing by the Company. In the case
of any such separate firm for the Selling Shareholders and such control persons
of any Selling Shareholders, such firm shall be designated in writing by the
persons named as attorneys-in-fact for the Selling Shareholders under the
Powers of Attorney. An indemnifying party will not, without the prior written
consent of the indemnified parties, settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution may be
sought under this Agreement (whether or not the indemnified parties are actual
or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
(e) In the event that the indemnity provided in paragraph (a), (b) or (c)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, the Selling Shareholders and the
U.S. Underwriters agree to contribute to the aggregate losses, claims, damages
and liabilities (including legal or
47
other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company, one or more of
the Selling Shareholders and one or more of the U.S. Underwriters may be
subject in such proportion as is appropriate to reflect the relative benefits
received by the Company, by the Selling Shareholders and by the U.S.
Underwriters from the offering of the U.S. Securities; provided, however, that
in no case shall any U.S. Underwriter (except as may be provided in any
agreement among underwriters relating to the offering of the Securities) be
responsible for any amount in excess of the underwriting discount or commission
applicable to the U.S. Securities purchased by such U.S. Underwriter under this
Agreement. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company, the Selling Shareholders and the U.S.
Underwriters shall contribute in such proportion as is appropriate to reflect
not only such relative benefits but also the relative fault of the Company, of
the Selling Shareholders and of the U.S. Underwriters in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company and by the
Selling Shareholders shall be deemed to be equal to the total net proceeds from
the offering (before deducting expenses) received by each of them, and benefits
received by the U.S. Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the cover
page of the U.S. Prospectus. Relative fault shall be determined by reference
to, among other things, whether any untrue or any alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information provided by the Company and the Selling Shareholders on
the one hand or the U.S. Underwriters on the other, the intent of the parties
and their relative knowledge, access to information and opportunity to correct
or prevent such untrue statement or omission. The Company, the Selling
Shareholders and the U.S. Underwriters agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (e), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an U.S. Underwriter within the meaning
of either the Act or the Exchange Act and each director, officer, employee and
agent of an U.S. Underwriter shall have the same rights to contribution as such
U.S. Underwriter, and each person who controls the Company within the meaning
of either the Act or the Exchange Act, each officer of the Company who shall
have signed the Registration Statement or the ADR Registration Statement and
each director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (e).
9. Default by an Underwriter. If any one or more U.S. Underwriters shall
fail to purchase and pay for any of the U.S. Securities agreed to be purchased
by such U.S. Underwriter or U.S. Underwriters under this Agreement and such
failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement,
48
the remaining U.S. Underwriters shall be obligated severally to take up and pay
for (in the respective proportions which the amount of U.S. Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount
of U.S. Securities set forth opposite the names of all the remaining U.S.
Underwriters) the U.S. Securities which the defaulting U.S. Underwriter or U.S.
Underwriters agreed but failed to purchase; provided, however, that in the
event that the aggregate amount of U.S. Securities which the defaulting U.S.
Underwriter or U.S. Underwriters agreed but failed to purchase shall exceed 10%
of the aggregate amount of U.S. Securities set forth in Schedule I hereto, the
remaining U.S. Underwriters shall have the right to purchase all, but shall not
be under any obligation to purchase any, of the U.S. Securities, and if such
nondefaulting U.S. Underwriters do not purchase all the U.S. Securities, this
Agreement will terminate without liability to any nondefaulting U.S.
Underwriter, the Selling Shareholders or the Company. In the event of a default
by any U.S. Underwriter as set forth in this Section 9, the Closing Date shall
be postponed for such period, not exceeding five Business Days, as the U.S.
Representatives shall determine in order that the required changes in the
Registration Statement, the ADR Registration Statement and the Prospectuses or
in any other documents or arrangements may be effected. Nothing contained in
this Agreement shall relieve any defaulting U.S. Underwriter of its liability,
if any, to the Company, the Selling Shareholders and any nondefaulting U.S.
Underwriter for damages occasioned by its default under this Agreement.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the U.S. Representatives, by notice given to the Company
prior to delivery of and payment for the U.S. Securities, if at any time prior
to such time (i) trading in the Company's Common Shares shall have been
suspended by the Commission or the Taiwan Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been suspended
or limited or minimum prices shall have been established on either of such
Exchanges, (ii) a banking moratorium shall have been declared by U.S. Federal,
New York State or the ROC authorities or (iii) there shall have occurred any
outbreak or escalation of hostilities, declaration by the United States or the
ROC of a national emergency or war, or other calamity or crisis the effect of
which on financial markets is such as to make it, in the sole judgment of the
U.S. Representatives, impractical or inadvisable to proceed with the offering
or delivery of the U.S. Securities as contemplated by the U.S. Prospectus
(exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers, of each Selling Shareholder and of the U.S. Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any U.S.
Underwriter, any Selling Shareholder or the Company or any of the officers,
directors or controlling persons referred to in Section 8 hereof, and will
survive delivery of and payment for the U.S. Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
49
12. Notices. All communications under this Agreement will be in writing
and effective only on receipt, and, if sent to the U.S. Representatives, will
be mailed, delivered or telefaxed to Xxxxxxx Xxxxx Xxxxxx Inc., Attention:
General Counsel (fax no.: (000) 000-0000) and confirmed to such General Counsel
at Xxxxxxx Xxxxx Barney Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000,
Attention: General Counsel; or, if sent to the Company, will be mailed,
delivered or telefaxed to (fax no.: (000-0) 000-0000) and confirmed to it at 0
Xx-Xxxx Xx., 0 Xxxxxxx-Xxxxx Xxxxxxxxxx Xxxx, Xxxx-Xxx 300, Taiwan, ROC,
attention of Xxxxx Xxx, Senior Manager of Finance Department; or if sent to any
Selling Shareholder, will be mailed, delivered or telefaxed and confirmed to it
at the address set forth in Schedule II hereto.
13. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 8 hereof, and no other
person will have any right or obligation under this Agreement.
14. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
15. Jurisdiction. Each of the Company and the Selling Shareholders agrees
that any suit, action or proceeding against the Company brought by any U.S.
Underwriter, the directors, officers, employees and agents of any U.S.
Underwriter, or by any person who controls any U.S. Underwriter, arising out of
or based upon this Agreement or the transactions contemplated hereby may be
instituted in any New York Court, and waives any objection which it may now or
hereafter have to the laying of venue of any such proceeding, and irrevocably
submits to the non-exclusive jurisdiction of such courts in any suit, action or
proceeding. Each of the Company and each Selling Shareholder other than UMC has
appointed CT Corporation System, Inc., 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 as its authorized agent and UMC has appointed Law+, P.C., 000 Xxxxxxxx
Xxxxxx, Xxx Xxxxx, XX 00000 as its authorized agent (in each case, such agent,
the "Authorized Agent") upon whom process may be served in any suit, action or
proceeding arising out of or based upon this Agreement or the transactions
contemplated herein which may be instituted in any New York Court, by any U.S.
Underwriter, the directors, officers, employees and agents of any U.S.
Underwriter, or by any person who controls any U.S. Underwriter, and expressly
accepts the non-exclusive jurisdiction of any such court in respect of any such
suit, action or proceeding. Each of the Company and the Selling Shareholders
hereby represents and warrants that the Authorized Agent has accepted such
appointment and has agreed to act as said agent for service of process, and the
Company agrees to take any and all action, including the filing of any and all
documents that may be necessary to continue such appointment in full force and
effect as aforesaid. Service of process upon the Authorized Agent shall be
deemed, in every respect, effective service of process upon the Company and the
Selling Shareholders. Notwithstanding the foregoing, any action arising out of
or based upon this Agreement may be instituted by any U.S. Underwriter, the
directors, officers, employees and agents
50
of any U.S. Underwriter, or by any person who controls any U.S. Underwriter, in
any court of competent jurisdiction in the ROC.
The provisions of this Section 15 shall survive any termination of this
Agreement, in whole or in part.
16. Currency. Each reference in this Agreement to U.S. Dollars (the
"relevant currency") is of the essence. To the fullest extent permitted by law,
the obligations of each of the Company and the Selling Shareholders in respect
of any amount due under this Agreement will, notwithstanding any payment in any
other currency (whether pursuant to a judgment or otherwise), be discharged
only to the extent of the amount in the relevant currency that the party
entitled to receive such payment may, in accordance with its normal procedures,
purchase with the sum paid in such other currency (after any premium and costs
of exchange) on the Business Day immediately following the day on which such
party receives such payment. If the amount in the relevant currency that may be
so purchased for any reason falls short of the amount originally due, the
Company or the Selling Shareholder making such payment will pay such additional
amounts, in the relevant currency, as may be necessary to compensate for the
shortfall. Any obligation of any of the Company or the Selling Shareholders not
discharged by such payment will, to the fullest extent permitted by applicable
law, be due as a separate and independent obligation and, until discharged as
provided herein, will continue in full force and effect.
17. Waiver of Immunity. To the extent that any of the Company or the
Selling Shareholders has or hereafter may acquire any immunity (sovereign or
otherwise) from any legal action, suit or proceeding, from jurisdiction of any
court or from set-off or any legal process (whether service or notice,
attachment in aid or otherwise) with respect to itself or any of its property,
each of the Company and the Selling Shareholders hereby irrevocably waives and
agrees not to plead or claim such immunity in respect of its obligations under
this Agreement.
18. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
19. Headings. The section headings used in this Agreement are for
convenience only and shall not affect the construction hereof.
20. Definitions. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the United States Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"ADR Registration Statement" shall mean the registration statement
referred to in paragraph 1(i)(c) above, including all exhibits thereto, each as
amended at the time such part of the registration statement became effective.
51
"ADRs" shall mean the certificates issued by the Depositary to evidence
the American depositary shares issued under the terms of the Deposit Agreement.
"ADSs" shall mean the American depositary shares, each of which represents
ten (10) common shares of the Company, par value NT$10 per share, issued under
the terms of the Deposit Agreement.
"Affiliate" shall mean, with respect to any Selling Shareholder other than
Kuang-Hwa, any affiliate of such Selling Shareholder, and, solely with respect
to Kuang-Hwa, any person or entity directly, or indirectly through one or more
intermediaries, controlled by Kuang-Hwa.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City or the ROC.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement and the ADR Registration Statement, any post-effective amendment or
amendments thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the United States Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this U.S. Underwriting
Agreement is executed and delivered by the parties hereto.
"International Preliminary Prospectus" shall have the meaning set forth
under "U.S. Preliminary Prospectus."
"International Prospectus" shall mean such form of prospectus relating to
the International Securities as first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is made, such form of
prospectus included in the Registration Statement at the Effective Date.
"International Representatives" shall mean the addressees of the
International Underwriting Agreement.
"International Securities" shall mean the International Underwritten
Securities and the International Option Securities.
"International Underwriters" shall mean the several underwriters named in
Schedule I to the International Underwriting Agreement.
"International Underwriting Agreement" shall mean the International
Underwriting Agreement dated the date hereof related to the sale of the
International
52
Securities by the Company and the Selling Shareholders to the International
Underwriters.
"New York Courts" shall mean the U.S. Federal or State courts located in
the State of New York, County of New York.
"Option Securities" shall mean the U.S. Option Securities and the
International Option Securities.
"Option Shares" shall mean the U.S. Option Shares and the International
Option Shares.
"Preliminary Prospectus" shall have the meaning set forth under "U.S.
Preliminary Prospectus."
"Prospectuses" and "each Prospectus" shall mean the U.S. Prospectus and
the International Prospectus.
"Registration Statement" shall mean the registration statement referred to
in paragraph 1(i)(a) above, including exhibits and financial statements, as
amended at the Execution Time (or, if not effective at the Execution Time, in
the form in which it shall become effective) and, in the event any
post-effective amendment thereto or any Rule 462(b) Registration Statement
becomes effective prior to the Closing Date, shall also mean such registration
statement as so amended or such Rule 462(b) Registration Statement, as the case
may be. Such term shall include any Rule 430A Information deemed to be included
therein at the Effective Date as provided by Rule 430A.
"Representatives" shall mean the U.S. Representatives and the
International Representatives.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under the Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration statement
and any amendments thereto filed pursuant to Rule 462(b) relating to the
offering covered by the registration statement referred to in Section 1(a)(i)
hereof.
"Securities" shall mean the U.S. Securities and the International
Securities.
"Selling Shareholders" shall mean the persons named on Schedule II to the
U.S. Underwriting Agreement and the International Underwriting Agreement.
"Shares" shall mean the U.S. Shares and the International Shares.
53
"Subsidiaries" shall mean the subsidiaries of the Company listed on Annex
A attached hereto.
"UMC Letter" shall mean the letter agreement dated April 30, 2002 between
the Company and Xxxxxxx Xxxxx Xxxxxx Inc. relating to the offering by United
Microelectronics Corporation of bonds that will be exchangeable into the Common
Shares or ADSs of the Company.
"Underlying Shares" shall mean the Shares that will be represented by the
ADSs.
"Underwriter" and "Underwriters" shall mean the U.S. Underwriters and the
International Underwriters.
"Underwritten Securities" shall mean the U.S. Underwritten Securities and
the International Underwritten Securities.
"Underwritten Shares" shall mean the U.S. Underwritten Shares and the
International Underwritten Shares.
"United States or Canadian Person" shall mean any person who is a national
or resident of the United States or Canada, any corporation, partnership, or
other entity created or organized in or under the laws of the United States or
Canada or of any political subdivision thereof, or any estate or trust the
income of which is subject to United States or Canadian Federal income
taxation, regardless of its source (other than any non-United States or
non-Canadian branch of any United States or Canadian Person), and shall include
any United States or Canadian branch of a person other than a United States or
Canadian Person. "U.S." or "United States" shall mean the United States of
America (including the states thereof and the District of Columbia), its
territories, its possessions and other areas subject to its jurisdiction.
"U.S. Preliminary Prospectus" and "International Preliminary Prospectus",
respectively, shall mean any preliminary prospectus with respect to the
offering of the U.S. Securities and the International Securities, as the case
may be, referred to in paragraph 1(i)(a) above and any preliminary prospectus
with respect to the offering of the U.S. Securities and the International
Securities, as the case may be, included in the Registration Statement at the
Effective Date that omits Rule 430A Information; and the U.S. Preliminary
Prospectus and the International Preliminary Prospectus are hereinafter
collectively called the "Preliminary Prospectuses".
"U.S. Prospectus" shall mean the prospectus relating to the Securities
that is first filed pursuant to Rule 424(b) after the Execution Time or, if no
filing pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities included in the Registration Statement at
the Effective Date.
"U.S. Representatives" shall mean the addressees of the U.S. Underwriting
Agreement.
54
"U.S. Securities" shall mean the U.S. Underwritten Securities and the U.S.
Option Securities.
"U.S. Underwriting Agreement" shall mean this agreement relating to the
sale of the U.S. Securities by the Company and the Selling Shareholders to the
U.S. Underwriters.
"U.S. Underwriters" shall mean the several underwriters named in Schedule
I to the U.S. Underwriting Agreement.
55
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several U.S. Underwriters.
Very truly yours,
AU Optronics Corp.
By: /s/ Xxxx-Xxx (K.Y.) Xxx
--------------------------------
Chief Executive Officer
Benq Corporation
By: /s/ Xxxx-Xxx (K.Y.) Xxx
--------------------------------
President
United Microelectronics Corporation
By: /s/ Max Xxxxxxx Xxxxx
--------------------------------
Attorney-in-fact
Acer Inc.
By: /s/ Max Xxxxxxx Xxxxx
--------------------------------
Attorney-in-fact
Kuang-Hwa Investment Holding Co.,
Ltd.
By: /s/ Max Xxxxxxx Xxxxx
--------------------------------
Attorney-in-fact
56
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Xxxxxxx Xxxxx Barney Inc.
UBS AG, acting through its business group UBS Warburg
ING Financial Markets LLC
CLSA Limited
Daiwa Securities SMBC Hong Kong Limited
Xxxxxx Brothers Inc.
By: Xxxxxxx Xxxxx Barney Inc.
By: /s/ Xxxxx Xxx
--------------------------------------------
Managing Director
For themselves and the other
several U.S. Underwriters
named in Schedule I to
the foregoing Agreement.
57
SCHEDULE I
Number of ADSs (representing
Underwritten Shares) to be
Underwriters Purchased
------------ ----------------------------
Xxxxxxx Xxxxx Barney Inc.............................. 15,000,000
UBS AG, acting through its business group
UBS Warburg....................................... 5,000,000
ING Financial Markets LLC............................. 2,500,000
CLSA Limited.......................................... 1,000,000
Daiwa Securities SMBC Hong Kong Limited............... 1,000,000
Xxxxxx Brothers Inc................................... 500,000
------------
Total................. 25,000,000
SCHEDULE II
Maximum Number of
ADSs (representing
Selling Shareholders: Option Shares) to be Sold
--------------------- -------------------------
Benq Corporation
000, Xxxx-Xxxx Xxxx,
Xxxxxxxx Xxxxxxx, 000
Xxxxxx, ROC
Fax No.: (000-0) 000-0000 1,250,000
United Microelectronics Corporation
Xx. 0 Xxx-Xxxxx Xxxx II,
Science-Based Industrial Park,
Hsin-Chu City 300,
Taiwan, ROC
Fax No.: (000-0) 000-0000 1,250,000
Acer Inc.
00X, #00, Xxxx Xxx Xx Road, Sec. 1,
Hsinchih, Xxxxxx, Xxxxx 000,
Xxxxxx, ROC
Fax No.: (000-0) 0000-0000 500,000
Kuang-Hwa Investment Holding Co., Ltd.
00X, 000, Xx Xxx Xxxx, Xxx 0, Xxxxxx,
Xxxxxx, ROC
Fax No.: (000-0) 0000-0000 500,000
-----------
Total ................ 3,500,000
EXHIBIT A
[Form of Lock-Up Agreement]
[Letterhead of executive officer or shareholder of
AU Optronics Corp.]
, 2002
Xxxxxxx Xxxxx Xxxxxx Inc.
UBS AG, acting through its business group UBS Warburg
CLSA Limited
Daiwa Securities SMBC Hong Kong Limited
Xxxxxx Brothers Inc.
As Representatives of the several U.S. Underwriters
and International Underwriters
ING Financial Markets LLC
As Representative of the Several U.S. Underwriters
ING Bank N.V.
As Representative of the Several International Underwriters
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed U.S.
Underwriting Agreement and International Underwriting Agreement (collectively,
the "Underwriting Agreements") to be entered into between AU Optronics Corp.
(the "Company"), a corporation organized under the laws of the Republic of
China, the selling shareholders to be named therein, and you as representative
of a group of U.S. Underwriters and International Underwriters to be named
therein, relating to an underwritten public offering of American depositary
shares ("ADSs"), each ADS representing ten common shares, par value NT$10.00
per share, of the Company (the "Common Shares").
In order to induce you and the other U.S. Underwriters and International
A-1
58
Underwriters to enter into the Underwriting Agreements, the undersigned will
not, without the prior written consent of Xxxxxxx Xxxxx Barney Inc., offer,
sell, contract to sell, pledge or otherwise dispose of (or enter into any
transaction which is designed to, or might reasonably be expected to, result in
the disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the undersigned or any
affiliate of the undersigned or any person in privity with the undersigned or
any affiliate of the undersigned), directly or indirectly, including the filing
(or participation in the filing) of a registration statement with the U.S.
Securities and Exchange Commission in respect of, or establish or increase a
put equivalent position or liquidate or decrease a call equivalent position,
within the meaning of Section 16 of the U.S. Securities Exchange Act of 1934,
as amended, and the rules and regulations of the U.S. Securities and Exchange
Commission promulgated thereunder with respect to, any Common Shares or ADSs
(other than Common Shares or ADSs disposed of as bona fide gifts approved by
Xxxxxxx Xxxxx Xxxxxx Inc.) or any securities convertible into, or exercisable
or exchangeable for, Common Shares or ADSs, or publicly announce an intention
to effect any such transaction, for a period that commences on the date hereof
and ends 90 days after the date of the Underwriting Agreements.
If, for any reason, the Underwriting Agreements shall be terminated prior
to the Closing Date (as defined in the Underwriting Agreements), the agreement
set forth above shall likewise be terminated.
Yours very truly,
[Signature of executive officer or
shareholder]
[Name and address of executive officer
or shareholder]
A-2
Annex A
Subsidiaries
AU Optronics (L) Corp.
AU Optronics Corporation
America
AU Optronics (Suzhou) Corp.
AU Optronics Corporation
Japan
