1
Exhibit 1.1
Zindart Limited
(a Hong Kong corporation)
1,400,000 American Depositary Shares
Representing 1,400,000 Ordinary Shares(1)
UNDERWRITING AGREEMENT
_____________, 1997
▇▇▇ ▇▇▇▇▇▇ & COMPANY
As Representative of the several
Underwriters named in Schedule I,
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Zindart Limited, a corporation formed under the laws of Hong Kong (the
"Company"), proposes to issue and sell to the several Underwriters named in
Schedule I hereto (the "Underwriters") 1,400,000 American Depositary Shares
(the "Shares") representing 1,400,000 of the Company's Ordinary Shares (the
"Ordinary Shares"). In addition, the Company also proposes to grant to the
Underwriters an option to purchase up to an additional 210,000 American
Depositary Shares representing 210,000 Ordinary Shares on the terms and for
the purposes set forth in Section 2(b) (the "Option Shares"). The Shares and
any Option Shares purchased pursuant to this Agreement are referred to
collectively in this Agreement as the "Securities." ▇▇▇ ▇▇▇▇▇▇ & Company is
acting as representative of the several Underwriters and in that capacity is
referred to in this Agreement as the "Representative."
The Company hereby confirms its agreements with the several
Underwriters as set forth below.
1. Representations and Warranties of the Company. The Company hereby
represents and warrants to and agrees with each Underwriter as follows:
------------------
(1) Plus an option to purchase from the Company up to 210,000
additional American Depositary Shares representing 210,000 Ordinary Shares to
cover over-allotments.
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(a) A Registration Statement (Registration No. 333-17973) on
Form F-1 under the Securities Act of 1933, as amended (the "Securities Act"),
including such amendments to such registration statement as may have been
required to the date of this Agreement, relating to the Securities has been
prepared by the Company under and in conformity with the provisions of the
Securities Act, the rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder and has been
filed with the Commission. After the execution of this Agreement, the Company
will file with the Commission either (i) if such registration statement, as it
may have been amended, has been declared by the Commission to be effective under
the Securities Act, a prospectus in the form most recently included in an
amendment to such registration statement (or, if no such amendment has been
filed, in such registration statement), with such changes or insertions as are
required by Rule 430A of the Rules and Regulations or permitted by Rule 424(b)
of the Rules and Regulations, and as has been provided to and approved by the
Representative prior to the execution of this Agreement, or (ii) if such
registration statement, as it may have been amended, has not been declared by
the Commission to be effective under the Securities Act, an amendment to such
registration statement, including a form of prospectus, a copy of which
amendment has been furnished to and approved by the Representative prior to the
execution of this Agreement. As used in this Agreement, the term "Registration
Statement" means such registration statement, including all financial schedules
and exhibits thereto and including any information omitted therefrom pursuant to
Rule 430A of the Rules and Regulations and included in the Prospectus (defined
below), in the form in which it became effective, and any registration statement
filed pursuant to Rule 462(b) of the Rules and Regulations with respect to the
Securities (a "Rule 462(b) Registration Statement"), and, in the event of any
amendment thereto after the effective date of such registration statement (the
"Effective Date"), shall also mean (from and after the effectiveness of such
amendment) such registration statement as so amended (including any 462(b)
Registration Statement); the term "Preliminary Prospectus" means each prospectus
subject to completion filed with such registration statement or any amendment
thereto (including the prospectus subject to completion, if any, included in the
Registration Statement or any amendment thereto at the time it was or is
declared effective); the term "Prospectus" means:
(A) the prospectus first filed with the Commission
pursuant to Rule 424(b) under the Securities Act; or
(B) if no prospectus is required to be filed pursuant
to Rule 424(b) under the Securities Act, the prospectus included in the
Registration Statement;
provided that if any revised prospectus that is provided to the Underwriters by
the Company for "use in connection with the offering of the Securities" differs
from the prospectus on file with the Commission at the time the Registration
Statement became or becomes, as the case may be, effective, whether or not the
revised prospectus is required to be filed with the Commission pursuant to Rule
424(b)(3) of the Rules and Regulations, the term "Prospectus"
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shall mean such revised prospectus from and after the time it is first provided
to the Underwriters for such use.
(b) No order suspending the effectiveness of the Registration
Statement or preventing or suspending the issue of any Preliminary Prospectus or
the Prospectus has been issued and no proceedings for that purpose are pending
or, to the best knowledge of the Company, threatened or contemplated by the
Commission; no order suspending the sale of the Securities in any jurisdiction
has been issued and no proceedings for that purpose are pending or, to the best
knowledge of the Company, threatened or contemplated, and any request of the
Commission for additional information (to be included in the Registration
Statement, any Preliminary Prospectus or the Prospectus or otherwise) has been
complied with.
(c) When the Preliminary Prospectus was filed with the
Commission it (i) contained all statements required to be contained therein and
complied in all respects with the requirements of the Securities Act, the Rules
and Regulations, the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations of the Commission thereunder (the "Exchange
Act Rules and Regulations") and (ii) did not include any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. When the Registration Statement or any amendment thereto
was or is declared effective, it (i) contained or will contain all statements
required to be contained therein and complied or will comply in all respects
with the requirements of the Securities Act, the Rules and Regulations, the
Exchange Act and the Exchange Act Rules and Regulations and (ii) did not or will
not include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading. When the
Prospectus or any amendment or supplement to the Prospectus is filed with the
Commission pursuant to Rule 424(b) (or, if the Prospectus or such amendment or
supplement is not required to be so filed, when the Registration Statement or
the amendment thereto containing such amendment or supplement to the Prospectus
was or is declared effective) and at all times subsequent thereto up to and
including the Closing Date (defined below) and any date on which Option Shares
are to be purchased, the Prospectus, as amended or supplemented at any such
time, (i) contained or will contain all statements required to be contained
therein and complied or will comply in all respects with the requirements of the
Securities Act, the Rules and Regulations, the Exchange Act and the Exchange Act
Rules and Regulations, and (ii) did not or will not include any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading. The foregoing provisions of this paragraph (c) do not
apply to statements or omissions made in any Preliminary Prospectus, the
Registration Statement or any amendment thereto or the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representative specifically for use therein.
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(d) The subsidiaries (each, a "Subsidiary" and collectively
the "Subsidiaries") of the Company and the jurisdiction of incorporation of each
Subsidiary is listed on Exhibit A hereto. As used in this Agreement, the word
"subsidiary" means any corporation, partnership, joint venture, limited
liability company or other entity of which the Company directly or indirectly
owns 50 percent or more of the equity or that the Company directly or indirectly
controls. The Company has no subsidiaries other than the Subsidiaries listed on
Exhibit A to this Agreement, and except as set forth on such Exhibit, the
Company owns 100 percent of the issued and outstanding stock of each of the
Subsidiaries. Exhibit B hereto lists each entity in which the Company or any
Subsidiary holds an equity interest, whether as a shareholder, partner, member,
joint venturer or otherwise. Except as set forth on Exhibit B, neither the
Company nor any Subsidiary has any equity interest in any person.
(e) The Company and each of its Subsidiaries has been duly
incorporated or organized and is validly existing as a corporation or other
legal entity in good standing under the laws of the jurisdiction of its
incorporation or organization, has full power (corporate and other) and
authority to own or lease its properties and conduct its business as described
in the Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus) and as currently being
conducted and proposed to be conducted by it and is duly qualified as a foreign
corporation and in good standing in all jurisdictions in which the character of
the property owned or leased or the nature of the business transacted by it
makes qualification necessary (except where the failure to be so qualified would
not have a material effect on the business, properties, condition (financial or
otherwise), results of operations or prospects of the Company or such
Subsidiary). The Company and each of its Subsidiaries is in possession of and
operating in compliance with all authorizations, licenses, certificates,
consents, orders and permits from federal, state, local, foreign and other
governmental or regulatory authorities that are material to the conduct of its
business, all of which are valid and in full force and effect. Each Chinese
contractual joint venture in which the Company is involved is operating in
compliance with the terms of its joint venture agreement.
(f) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus), there has not been
any material loss or interference with the business of the Company or any
Subsidiary from fire, explosion, flood, earthquake or other calamity, whether or
not covered by insurance, or from any court or governmental action, order or
decree, or any changes in the capital stock or long-term debt of the Company or
any Subsidiary, or any dividend or distribution of any kind declared, paid or
made on the capital stock or registered capital of the Company or any
Subsidiary, or any material change, or a development known to the Company that
might cause or result in a material change, in or affecting the business,
properties, condition (financial or otherwise), results of operation or
prospects of the Company or any Subsidiary, whether or not arising from
transactions in the ordinary course of business, in each case other than as may
be set forth in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), and
since such dates, except in the ordinary course of business, neither the Company
nor any Subsidiary has entered into any material transaction not
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described in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(g) There is no agreement, contract, license, lease or other
document required to be described in the Registration Statement or the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) or to be filed as an exhibit to the Registration
Statement which is not described or filed as required. All contracts described
in the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), if any, are in full force and effect on the date
hereof, and none of the Company, its Subsidiaries or any other party thereto is
in material breach of or default under any such contract.
(h) The authorized and outstanding capital stock of the
Company is set forth in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), and the description of the
Ordinary Shares and of the Securities therein conforms with and accurately
describes the rights set forth in the instruments defining the same. The
Securities and the Ordinary Shares represented by the Securities have been duly
and validly authorized and, when issued and delivered against payment therefor
as provided herein, will be duly and validly issued, fully paid and
nonassessable, and the issuance of the Ordinary Shares and the Securities is not
subject to any preemptive or similar rights.
(i) All of the outstanding Ordinary Shares of the Company have
been duly authorized and validly issued and are fully paid and nonassessable,
have been issued in compliance with all applicable securities laws and were not
issued in violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities of the Company. The description of the
Company's stock option, stock bonus and other stock plans or arrangements, if
any, and the options or other rights granted or exercised thereunder, if any,
set forth in the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), accurately and fairly present the information
required to be shown with respect to such plans, arrangements, options and
rights. Other than this Agreement and the options to purchase Ordinary Shares
described in the Prospectus, there are no options, warrants or other rights
outstanding to subscribe for or purchase any shares of the Company's capital
stock. There are no preemptive rights applicable to any of the Securities to be
sold by the Company.
(j) All of the stock or registered capital in the Subsidiaries
owned by the Company as set forth on Exhibit A is owned by the Company free and
clear of any pledge, lien, security interest, encumbrance, claim or equitable
interest of any type, kind or nature. All of the outstanding stock or registered
capital of each of the Subsidiaries has been duly authorized and validly issued
and is fully paid and nonassessable, has been issued in compliance with all
applicable laws, including securities laws, and was not issued in violation of
or subject to any preemptive rights or other rights to subscribe for or purchase
securities of such Subsidiary. There are no options, warrants or other rights
outstanding to subscribe for or purchase any shares of the capital stock or
registered capital of any Subsidiary and no
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Subsidiary is subject to any obligation, commitment, plan, arrangement or court
or administrative order with respect to same. There are no preemptive rights
applicable to any shares of capital stock or registered capital of the
Subsidiaries.
(k) This Agreement has been duly authorized, executed and
delivered by, and constitutes the valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
enforceability may be limited by general equitable principles, bankruptcy,
insolvency, reorganization, moratorium and laws affecting creditors' rights
generally, and except as rights to indemnification hereunder may be limited by
applicable federal or state securities laws. Other than the registration rights
described in the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) there are no rights for or relating to the
registration of any capital stock of the Company. The filing of the Registration
Statement does not give rise to any rights, other than those which have been
waived in writing, for or relating to the registration of any capital stock of
the Company.
(l) Neither the Company nor any of its Subsidiaries is, or
with the giving of notice or lapse of time or both would be, in violation of or
in default under, nor will the execution or delivery of this Agreement or the
completion of the transactions contemplated by this Agreement result in a
violation of or constitute a breach of or a default (including without
limitation with the giving of notice, the passage of time or otherwise) under,
the Memorandum of Association, Articles of Association or other governing
documents of the Company or such Subsidiary or any obligation, agreement,
covenant or condition contained in any bond, debenture, note or other evidence
of indebtedness or in any contract, indenture, mortgage, deed of trust, loan
agreement, lease, license, joint venture or other agreement or instrument to
which the Company or any Subsidiary is a party or by which any properties of the
Company or any Subsidiary may be bound or affected. The Company has not incurred
any liability, direct or indirect, for any finders' or similar fees payable on
behalf of the Company or the Underwriters in connection with the transactions
contemplated by this Agreement. The performance by the Company of its
obligations under this Agreement will not violate any law, ordinance, rule or
regulation, or any order, writ, injunction, judgment or decree of any
governmental agency or body or of any court having jurisdiction over the Company
or any Subsidiary or any properties of the Company or any Subsidiary, or result
in the creation or imposition of any lien, charge, claim or encumbrance upon any
property or asset of the Company or any Subsidiary. Except for permits and
similar authorizations required under the Securities Act, the Exchange Act or
under other securities or Blue Sky laws of certain jurisdictions and for such
permits and authorizations that have been obtained, no consent, approval,
authorization or order of any court, governmental agency or body, financial
institution or any other person is required in connection with the completion of
the transactions contemplated by this Agreement.
(m) The Company and each Subsidiary owns, or has valid rights
to use, all items of real and personal property which are material to the
business of the Company or such Subsidiary (including, without limitation, all
real property on which the Company's manufacturing facilities are located) free
and clear of all liens, encumbrances and claims that
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might materially interfere with the business, properties, condition (financial
or otherwise), results of operations or prospects of the Company or such
Subsidiary.
(n) The Company or the appropriate Subsidiary, as the case may
be, owns or possesses adequate rights to use all material patents, patent
rights, inventions, trade secrets, know-how, trademarks, service marks, trade
names and copyrights (collectively, "Intellectual Property") described or
referred to in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) as owned
by or used by the Company or such Subsidiary, or which are necessary for the
conduct of the business of the Company or such Subsidiary as described in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus); and neither the Company nor
any Subsidiary has received any notice of infringement of or conflict with
asserted rights of others with respect to any Intellectual Property which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, might have a material effect on the business, properties, condition
(financial or otherwise), results of operations or prospects of the Company or
any Subsidiary. Except as described in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) neither the Company nor any Subsidiary is a party to any
options, licenses, or agreements of any kind relating to Intellectual Property
or that grant rights to any other party to manufacture, license, produce,
assemble, market or sell the products of the Company or any Subsidiary, nor is
the Company or any Subsidiary bound by or a party to any options, licenses, or
agreements of any kind with respect to the Intellectual Property of any other
party. No employee of the Company or of any Subsidiary is obligated under any
contract (including licenses, covenants, or commitments of any nature) or other
agreement, or subject to any judgment, decree, or order of any court or
administrative agency, that would interfere with the use of such employee's best
efforts to promote the interests of the Company or such Subsidiary or that would
conflict with the business of the Company or such Subsidiary as presently
conducted or proposed to be conducted.
(o) There is no litigation or governmental proceeding to which
the Company or any Subsidiary is a party or to which any property of the Company
or any Subsidiary is subject which is pending or, to the best knowledge of the
Company, is threatened or contemplated against the Company or any Subsidiary
that might have a material effect on the business, properties, condition
(financial or otherwise), results of operations or prospects of the Company or
any Subsidiary, that might prevent consummation of the transactions contemplated
by this Agreement or that are required to be disclosed in the Registration
Statement or Prospectus (or, if the Prospectus is not in existence, in the most
recent Preliminary Prospectus) and are not so disclosed.
(p) None of the Company or any Subsidiary is in violation of,
or has received any notice or claim from any governmental agency or third party
that any of them is in violation of, any law, order, ordinance, rule or
regulation, or any order, writ, injunction, judgment or decree of any agency or
body or of any court, to which it or its properties
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(whether owned or leased) may be subject, which violation might have a material
effect on the business, properties, condition (financial or otherwise), results
of operations or prospects of the Company or any Subsidiary.
(q) The Company has not taken and shall not take, directly or
indirectly, any action designed to cause or result in, or which has constituted
or which might reasonably be expected to cause or result in, under the Exchange
Act, the Exchange Act Rules and Regulations or otherwise, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities. No bid or purchase by the Company and, to the best
knowledge of the Company, no bid or purchase that could be attributed to the
Company (as a result of bids or purchases by an "affiliated purchaser" within
the meaning of Rule 10b-6 under the Exchange Act) for or of the Securities, the
Ordinary Shares, any securities of the same class or series as the Ordinary
Shares or any securities convertible into or exchangeable for or that represent
any right to acquire Ordinary Shares is now pending or in progress or will have
commenced at any time prior to the completion of the distribution of the
Securities.
(r) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP, whose reports appear in the
Registration Statement and the Prospectus, are, and during the periods covered
by their reports in the Registration Statement were, independent accountants as
required by the Securities Act and the Rules and Regulations. The financial
statements and schedules included in the Registration Statement, each
Preliminary Prospectus and the Prospectus present fairly (or, if the Prospectus
has not been filed with the Commission, as to the Prospectus, will present
fairly) the financial condition, results of operations, cash flow and changes in
shareholders' equity and the financial statements and schedules included in the
Registration Statement present fairly the information required to be stated
therein. Such financial statements and schedules have been prepared in
accordance with United States generally accepted accounting principles applied
on a consistent basis throughout the periods presented. The selected and summary
financial and statistical data included in the Registration Statement and the
Prospectus present fairly (or, if the Prospectus has not been filed with the
Commission, as to the Prospectus, will present fairly) the information shown
therein and have been compiled on a basis consistent with the audited financial
statements presented therein. No other financial statements or schedules are
required to be included in the Registration Statement. Except as set forth in
such financial statements or as set forth in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), the
Company has no debts, liabilities or obligations (whether absolute, accrued,
contingent or otherwise) of any nature whatsoever, including, without
limitation, any tax liabilities or deferred tax liabilities or any other debts,
liabilities or obligations.
(s) The books, records and accounts of the Company and each
Subsidiary accurately and fairly reflect, in reasonable detail, the transactions
in and dispositions of the assets of the Company and such Subsidiary. The
systems of internal accounting controls maintained by the Company and each
Subsidiary are sufficient to provide reasonable assurances that: (i)
transactions are executed in accordance with management's general or
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specific authorization; (ii) transactions are recorded as necessary (x) to
permit preparation of financial statements in conformity with generally accepted
accounting principles and (y) to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(t) The Company will not, and the Company has delivered to
the Representative the written agreement of each of Zindart Pte Limited, a
Singapore corporation which is the Company's sole shareholder ("Zindart
Singapore"), to the effect that Zindart Singapore will not, for a period of 180
days following the date of this Agreement, without the prior written consent of
the Representative, offer, sell or contract to sell, or otherwise dispose of, or
announce the offer of, any Ordinary Shares, American Depositary Shares ("ADSs")
representing Ordinary Shares, or options, convertible securities or other
securities exercisable or exchangeable for, or convertible into, Ordinary Shares
or ADSs in each case without the prior written consent of the Representative.
(u) The Company has delivered to the Representative the
Agreement Regarding Future Share Distributions executed by the Company and
Zindart Singapore.
(v) No labor disturbance by the employees of the Company or
any Subsidiary exists, is imminent or, to the best knowledge of the Company, is
contemplated or threatened; and the Company is not aware of an existing,
imminent or threatened labor disturbance by the employees of any principal
suppliers, contract manufacturing organizations, manufacturers, authorized
dealers or distributors that might be expected to result in any material change
in the business, properties, condition (financial or otherwise), results of
operations or prospects of the Company. No collective bargaining agreement
exists with any employees of the Company or any such Subsidiary and, to the
best knowledge of the Company, no such agreement is imminent. Except as
disclosed in the Registration Statement, no officer, employee or consultant of
the Company or any Subsidiary whose continued services are material to the
conduct of the business of the Company or any Subsidiary has any plans to
terminate employment with the Company or such Subsidiary nor does the Company
or any Subsidiary have a present intention to terminate the employment or
contract of any such person.
(w) The Company and each Subsidiary has filed all federal,
state, national, provincial, local and foreign tax returns that are required to
be filed or has requested extension thereof and has paid all taxes, including
withholding taxes, penalties and interest, assessments, fees and other charges
to the extent that the same have become due and payable. No tax assessment or
deficiency has been made or proposed against the Company or any of its
Subsidiaries, nor has the Company or any Subsidiary received any notice of any
proposed tax assessment or deficiency.
(x) Except as set forth in the Prospectus (or if the
Prospectus is not in existence, the most recent Preliminary Prospectus) there
are no outstanding loans, advances or guaranties of indebtedness by the Company
to or for the benefit of any of (i) its "affiliates," as such term is defined in
the Rules and Regulations, (ii) any of the officers or directors of any of its
Subsidiaries or (iii) any of the members of the families of any of them.
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(y) Neither the Company nor any Subsidiary has, directly or
indirectly, at any time: (i) made any contributions to any candidate for
political office in violation of law; (ii) made any payment to any local, state,
federal or foreign governmental officer or official, or other person charged
with similar public or quasi-public duties; or (iii) violated any provision of
the Foreign Corrupt Practices Act of 1977, as amended.
(z) Neither the Company nor any Subsidiary has any liability,
absolute or contingent, relating to: (i) public health or safety; (ii) worker
health or safety; (iii) product defect or warranty; or (iv) except as may be
disclosed in the Registration Statement and Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) pollution, damage to
or protection of the environment, including, without limitation, relating to
damage to natural resources, emissions, discharges, releases or threatened
releases of hazardous materials into the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or otherwise relating to the manufacture, processing, use, treatment,
storage, generation, disposal, transport or handling of any hazardous materials.
As used herein, "hazardous material" includes chemical substances, wastes,
pollutants, contaminants, hazardous or toxic substances, constituents, materials
or wastes, whether solid, gaseous or liquid in nature.
(aa) The Company has not distributed and will not distribute
prior to the Closing Date or on or prior to any date on which the Option Shares
are to be purchased, as the case may be, any prospectus or other offering
material in connection with the offering and sale of the Securities other than
the Prospectus, the Registration Statement and any other material which may be
permitted by the Securities Act and the Rules and Regulations.
(bb) The Company has filed and will file in a timely manner
all reports and other documents required to be filed with the Commission under
the Exchange Act and with the National Association of Securities Dealers, Inc.
(the "NASD"), and each such report or other document contained, at the time it
was filed, such information as was required to be included in such report or
other document and all such information was correct and complete in all material
respects; except as disclosed in the Registration Statement, no event has
occurred or is likely to occur that required or would require an amendment to
any report or document referred to in this section that has not been filed or
distributed as required.
(cc) The Securities have been approved for inclusion for
listing on the Nasdaq National Market, subject only to official notice of
issuance.
(dd) The Company is not now, and intends to conduct its
affairs in the future in such a manner so that it will not become, an investment
company within the meaning of the Investment Company Act of 1940, as amended.
(ee) The Company satisfies the requirements for filing a
registration statement on Form F-1.
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(ff) Except as described in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), neither
the Company nor any Subsidiary has entered into any transaction with any
affiliate of the Company other than an arm's length transaction, and all such
transactions required to be described in the Registration Statement or the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) have been described therein.
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2. Purchase, Sale and Delivery of the Securities.
(a) On the basis of the representations, warranties, covenants
and agreements of the Company contained in this Agreement and subject to the
terms and conditions set forth in this Agreement, the Company agrees to sell to
the several Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at a purchase price of $______ per Share
(the "Purchase Price") the respective number of Shares set forth opposite the
name of such Underwriter on Schedule I to this Agreement (subject to adjustment
as provided in Section 9 of this Agreement).
(b) On the basis of the several (and not joint)
representations, warranties, covenants and agreements of the Underwriters
contained in this Agreement and subject to the terms and conditions set forth
in this Agreement, the Company grants an option to the several Underwriters to
purchase from the Company all or any portion of the Option Shares at the
Purchase Price.
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This option may be exercised only to cover over-allotments in the sale of the
Shares by the Underwriters and 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
Prospectus upon written, telecopied or telegraphic notice by the Representative
to the Company setting forth the aggregate principal number of Option Shares as
to which the several Underwriters are exercising the option and the settlement
date. If the option to purchase the Option Shares is exercised, the Option
Shares shall be purchased severally, and not jointly, by each Underwriter, in
the same proportion that the number of Shares set forth opposite the name of the
Underwriter in Schedule I to this Agreement bears to the total number of Shares
to be purchased by the Underwriters under Section 2(a) above, subject to such
adjustments as the Representative in its absolute discretion shall make to
eliminate any fractional Shares. Delivery of Option Shares, and payment
therefor, shall be made as provided in Section 2(c) and Section 2(d) below.
(c) Delivery of the Shares and the Option Shares (if the
option granted by the Company in Section 2(b) above has been exercised not later
than 7:00 a.m., San Francisco time, on the date two business days preceding the
Closing Date), and payment therefor, shall be made at the office of ▇▇▇ ▇▇▇▇▇▇ &
Company, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ at 7:00 a.m., San
Francisco time, on the third business day after the date of this Agreement, or
as provided in Section 9 of this Agreement. The date and hour of delivery and
payment for the Shares are referred to in this Agreement as the "Closing Date."
As used in this Agreement, "business day" means a day on which the Nasdaq
National Market is operating and on which banks in New York and California are
open for business and not permitted by law or executive order to be closed. ADRs
representing the Shares shall be in such denominations and registered in such
names as the Representative may request in writing at least two business days
before the Closing Date.
(d) If the option granted by the Company in Section 2(b) above
is exercised after 7:00 a.m., San Francisco time, on the date two business days
preceding the Closing Date, delivery of the Option Shares and payment therefor
shall be made at the office of ▇▇▇ ▇▇▇▇▇▇ & Company, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ at 7:00 a.m., San Francisco time, on the date specified by
the Representative (which shall be three or four or fewer business days after
the exercise of the option, but not in excess of the period specified in the
Rules and Regulations).
(e) Payment of the purchase price for the Securities by the
several Underwriters shall be made by certified or official bank check or checks
drawn in next-day
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funds, payable to the order of the Company. Such payment shall be made upon
delivery of the Securities to the Representative for the respective accounts of
the several Underwriters. The Securities to be delivered to the Representative
shall be registered in such name or names and shall be in such denominations as
the Representative may request at least two business days before the Closing
Date, in the case of the Shares, and at least one business day prior to the
purchase of the Option Shares, in the case of the Option Shares. The
Representative, individually and not on behalf of the Underwriters, may (but
shall not be obligated to) make payment to the Company for Shares to be
purchased by any Underwriter whose check shall not have been received by the
Representative on the Closing Date or any later date on which Option Shares are
purchased for the account of such Underwriter. Any such payment shall not
relieve such Underwriter from any of its obligations hereunder.
(f) The several Underwriters propose to offer the Securities
for sale to the public as soon as the Representative deems it advisable to do
so. The Securities are to be initially offered to the public at the public
offering price set forth (or to be set forth) in the Prospectus. The
Representative may from time to time thereafter change the public offering price
and other selling terms.
(g) The information set forth [in the last paragraph on the
front cover page (insofar as such information relates to the Underwriters), the
legend respecting stabilization set forth on page 3 and the statements set forth
under the caption "Underwriting" in the Registration Statement, any Preliminary
Prospectus and in the final form of Prospectus filed pursuant to Rule 424(b)]
constitute the only information furnished by the Underwriters to the Company for
inclusion in any Preliminary Prospectus, the Prospectus or the Registration
Statement.
3. Further Agreements of the Company. The Company covenants and agrees
with the several Underwriters as follows:
(a) The Company will use its best efforts to cause the
Registration Statement, and any amendment thereof, if not effective at the time
of execution of this Agreement, to become effective as promptly as possible. If
the Registration Statement has become or becomes effective pursuant to Rule
430A, or filing of the Prospectus is otherwise required under Rule 424(b), the
Company will file the Prospectus, properly completed (and in form and substance
reasonably satisfactory to the Underwriters) pursuant to Rule 424(b) within the
time period prescribed and will provide evidence satisfactory to the
Representative of such timely filing. The Company will not file the Prospectus,
any amended Prospectus, any amendment (including post-effective amendments) of
the Registration Statement or any supplement to the Prospectus without (i)
advising the Representative of the proposed filing of such amendment or
supplement and, a reasonable time prior to the proposed filing,
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furnishing the Representative with copies thereof and (ii) obtaining the prior
consent of the Representative to such filing. The Company will prepare and file
with the Commission, promptly upon the request of the Representative, any
amendment to the Registration Statement or supplement to the Prospectus that may
be necessary or advisable in the opinion of the Representative in connection
with the distribution of the Securities by the Underwriters and shall use its
best efforts to cause the same to become effective as promptly as possible.
(b) The Company will promptly advise the Representative (i)
when the Registration Statement becomes effective, (ii) when any post-effective
amendment thereof becomes effective, (iii) of any request by the Commission for
any amendment of or supplement to the Registration Statement or the Prospectus
or for any additional information, (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose, and (v) of the
receipt by the Company of any notification with respect to the suspension of the
registration, qualification or exemption from registration or qualification of
the Securities for sale in any jurisdiction or the initiation 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 suspension and, if issued, to
obtain as soon as possible the withdrawal thereof.
(c) The Company will (i) on or before the Closing Date,
deliver to the Representative and its counsel a signed copy of the Registration
Statement as originally filed and of each amendment thereto filed prior to the
time the Registration Statement becomes effective and, promptly upon the filing
thereof, a signed copy of each post-effective amendment, if any, to the
Registration Statement (together with, in each case, all exhibits thereto unless
previously furnished to the Representative) and will also deliver to the
Representative for distribution to the several Underwriters, a sufficient number
of additional conformed copies of each of the foregoing (excluding exhibits) so
that one copy of each may be distributed to each Underwriter, (ii) as promptly
as possible deliver to the Representative and send to the several Underwriters,
at such office or offices as the Representative may designate, as many copies of
the Prospectus as the Representative may reasonably request and (iii) thereafter
from time to time during the period in which a prospectus is required by law to
be delivered by an Underwriter or a dealer, likewise to send to the Underwriters
as many additional copies of the Prospectus and as many copies of any supplement
to the Prospectus and of any amended Prospectus, filed by the Company with the
Commission, as the Representative may reasonably request for the purposes
contemplated by the Securities Act.
(d) If at any time during the period in which a prospectus is
required by law to be delivered by an Underwriter or a dealer any event shall
occur as a result of which it is necessary to supplement or amend the Prospectus
in order to make the Prospectus not misleading or so that the Prospectus will
not omit to state a material fact necessary to be stated therein, in each case
at the time the Prospectus is delivered to a purchaser of the Securities, or if
it shall be necessary to amend or to supplement the Prospectus to comply with
the Securities Act or the Rules and Regulations, the Company will forthwith
prepare
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and file with the Commission a supplement to the Prospectus or an amended
Prospectus so that the Prospectus as so supplemented or amended will not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein not misleading and so that it
then will otherwise comply with the Securities Act and the Rules and
Regulations. If, after the public offering of the Securities by the Underwriters
and during such period, the Underwriters propose to vary the terms of offering
thereof by reason of changes in general market conditions or otherwise, the
Representative will advise the Company in writing of the proposed variation and
if, in the opinion either of counsel for the Company or counsel for the
Underwriters, such proposed variation requires that the Prospectus be
supplemented or amended, the Company will forthwith prepare and file with the
Commission a supplement to the Prospectus setting forth such variation. The
Company authorizes the Underwriters and all dealers to whom any of the
Securities may be sold by the Underwriters to use the Prospectus, as from time
to time so amended or supplemented, in connection with the sale of the
Securities in accordance with the applicable provisions of the Securities Act
and the Rules and Regulations for such period.
(e) The Company will cooperate with the Representative and its
counsel in the qualification or registration of the Securities for offer and
sale under the securities or blue sky laws of such jurisdictions as the
Representative may designate and, if applicable, in connection with exemptions
from such qualification or registration and, during the period in which a
Prospectus is required by law to be delivered by an Underwriter or a dealer, in
keeping such qualifications, registrations and exemptions in effect; provided,
however, that, other than the appointment of a United States representative as
required by the Securities Act, the Company shall not be obligated to file any
general consent to service of process or to qualify to do business as a foreign
corporation in any jurisdiction in which it is not so qualified. The Company
will, from time to time, prepare and file such statements, reports and other
documents as are or may be required to continue such qualifications,
registrations and exemptions in effect for so long a period as the
Representative may reasonably request for the distribution of the Securities.
(f) During a period of five years commencing with the date of
this Agreement, the Company will promptly furnish to the Representative and to
each Underwriter who may so request in writing copies of (i) all periodic and
special reports furnished by it to shareholders of the Company, (ii) all
information, documents and reports filed by it with the Commission, any
securities exchange on which any securities of the Company are then listed, the
Nasdaq National Market or the NASD, (iii) all press releases and material news
items or articles in respect of the Company or its affairs released or prepared
by the Company (other than promotional and marketing materials disseminated
solely to customers and potential customers of the Company in the ordinary
course of business) and (iv) any additional information concerning the Company
or its business which the Representative may reasonably request.
(g) As soon as practicable, but not later than the 45th day
following the end of the fiscal quarter first ending after the first anniversary
of the Effective Date, the
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Company will make generally available to its securities holders and furnish to
the Representative an earnings statement or statements in accordance with
Section 11(a) of the Securities Act and Rule 158 of the Rules and Regulations.
(h) The Company will apply the net proceeds from the offering
of the Securities in the manner set forth under the caption "Use of Proceeds" in
the Prospectus.
(i) The Company will comply with all provisions of all
undertakings contained in the Registration Statement.
(j) The Company will, and at all times for a period of at
least five years after the date of this Agreement, cause the Securities to be
listed on the Nasdaq National Market, and the Company will comply with all
registration, filing, reporting and other requirements of the Exchange Act and
the Nasdaq National Market which may from time to time be applicable to the
Securities, the Ordinary Shares and the Company.
(k) The Company will use its best efforts to maintain
insurance of the types and in the amounts which it deems adequate for its
business consistent with insurance coverage maintained by companies of similar
size and engaged in similar businesses in similar geographic locations,
including, but not limited to, product liability insurance and general
liability insurance covering all real and personal property owned or leased by
the Company against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against.
(l) The Company will issue no press release prior to the
Closing Date with respect to the offering without the Representative's prior
written consent.
(m) The Company will not effect a change in its accounting
firm to any other firm other than a "big six" accounting firm for a period of
three years from the date of this Agreement without the written consent of the
Representative.
(n) The Company has not and will not, without the prior
written consent of the Representative, seek any exemption from the listing
requirements of the Nasdaq National Market.
(o) The Company will take all steps necessary to comply with
the requirements of the NASD in connection with the issuance and sale of the
Securities.
4. Representations and Warranties, and Covenants of, the Underwriters.
Each Underwriter, severally and not jointly represents and warrants to, and
agrees with the Company, that:
(a) It has not offered or sold and will not offer or sell the
Securities to persons in the United Kingdom, other than to persons whose
ordinary activities involve them in acquiring, holding, managing or disposing
of investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995 of the United Kingdom;
(b) It has only issued or passed on and will only issue or
pass on in the United Kingdom any document received by it in connection with
the issue and sale of the Securities to a person who is of a kind described in
Article 11(3) of the Financial Services ▇▇▇ ▇▇▇▇ (Investment Advertisement)
(Exemptions) Order 1996 or is a person to whom such a document may otherwise
lawfully be issued or passed on; and
(c) It has complied and will comply with all applicable
provisions of the Financial Services ▇▇▇ ▇▇▇▇ with respect to anything done by
it in relation to the Securities from or otherwise involving the United
Kingdom.
5. Fees and Expenses.
(a) The Company agrees with each Underwriter that:
(i) The Company will pay and bear all costs and
expenses in connection with: the preparation, printing and filing of the
Registration Statement (including financial statements, schedules and exhibits),
Preliminary Prospectuses and the Prospectus, any drafts of each of them and any
amendments or supplements to any of them; the duplication or, if applicable,
printing (including all drafts thereof) of this Agreement, the Agreement Among
Underwriters, any Selected Dealer Agreements, the Preliminary Blue Sky Survey
and any Supplemental Blue Sky Survey, the Underwriters' Questionnaire, the Power
of Attorney and the Depositary Agreement and the duplication and printing
(including of drafts thereof) of any other underwriting documents and material
(including but not limited to
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marketing memoranda and other marketing material) in connection with the
offering, purchase, sale and deliver of the Securities; the issuance and
delivery of the Securities under this Agreement to the several Underwriters,
including all expenses, taxes, duties, fees and commissions on the purchase and
sale of the Securities and stock exchange brokerage and transaction levies with
respect to the purchase and, if applicable, the sale of the Securities by the
Company to the Underwriters; the cost of printing the certificates for the
Securities; the Transfer Agents', Depositary's and Registrars' fees; the fees
and disbursements of counsel for the Company; all fees and other charges of the
Company's independent public accountants and any other experts named in the
Prospectus; the cost of furnishing to the several Underwriters copies of the
Registration Statement (including appropriate exhibits), Preliminary Prospectus
and the Prospectus, the agreements and other documents and instruments referred
to above and any amendments or supplements to any of the foregoing; the NASD
filing fees; the cost of qualifying or registering the Securities (or obtaining
exemptions from qualification or registration) under the laws of such
jurisdictions as the Representative may designate (including filing fees and
fees and costs/disbursements of Underwriters' counsel in connection with such
NASD filings and state securities or Blue Sky qualifications, registrations and
exemptions and in preparing the preliminary and any final Blue Sky Memorandum);
all fees and expenses in connection with listing of the Securities on the Nasdaq
National Market; all advertising and road show expenses; and all other expenses
incurred by the Company in connection with the performance of its obligations
hereunder. In addition, the Company will pay 80 percent of the out-of-pocket
costs and expenses of the Underwriters and their counsel with respect to the
Offering whether or not the Offering is consummated; provided, however, that the
amount paid by the Company in accordance with this sentence shall not exceed
$280,000. Amounts paid in connection with state securities and Blue Sky
qualification (including filing fees, fees and expenses of counsel shall not be
taken into consideration when calculating the $280,000 "cap" in the preceding
sentence.
(ii) In addition to its obligations under Section
8(a) of this Agreement, the Company agrees that, as an interim measure during
the pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any loss, claim, damage or liability described in
Section 8(a) of this Agreement, it will reimburse or advance to or for the
benefit of the Underwriters, and each of them, on a monthly basis (or more
often, if requested, but in no case more frequently than weekly) for all legal
and other expenses incurred in connection with investigating or defending any
such claim, action, investigation, inquiry or other proceeding, notwithstanding
the absence of a judicial determination as to the propriety and enforceability
of the Company's obligation to reimburse or advance for the benefit of the
Underwriters for such expenses or the possibility that such payments might later
be held to have been improper by a court of competent jurisdiction. To the
extent that any portion, or all, of any such interim reimbursement payments or
advances are so held to have been improper, the Underwriters receiving the same
shall promptly return such amounts to the Company together with interest,
compounded daily, at the prime rate (or other commercial lending rate for
borrowers of the highest credit standing) announced from time to time by Bank of
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America, NT&SA, San Francisco, California (the "Prime Rate"), but not in excess
of the maximum rate permitted by applicable law. Any such interim reimbursement
payments or advances that are not made to or for the Underwriters within 30 days
of a request for reimbursement or for an advance shall bear interest at the
Prime Rate, compounded daily, but not in excess of the maximum rate permitted by
applicable law, from the date of such request until the date paid.
(b) In addition to their obligations under Section 8(b) of
this Agreement, the Underwriters severally and in proportion to their obligation
to purchase Shares as set forth on Schedule I hereto, agree that, as an interim
measure during the pendency of any claim, action, investigation, inquiry or
other proceeding arising out of or based upon any loss, claim, damage or
liability described in Section 8(b) of this Agreement, they will reimburse or
advance to or for the benefit of the Company on a monthly basis (or more often,
if requested, but in no case more frequently than weekly) for all legal and
other expenses incurred by the Company in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety or
enforceability of the Underwriters' obligation to reimburse or advance for the
benefit of the Company for such expenses and the possibility that such payments
or advances might later be held to have been improper by a court of competent
jurisdiction. To the extent that any portion, or all, of any such interim
reimbursement payments or advances are so held to have been improper, the
Company shall promptly return such amounts to the Underwriters together with
interest, compounded daily, at the Prime Rate, but not in excess of the maximum
rate permitted by applicable law. Any such interim reimbursement payments or
advances that are not made to the Company within 30 days of a request for
reimbursement or for an advance shall bear interest at the Prime Rate,
compounded daily, but not in excess of the maximum rate permitted by applicable
law, from the date of such request until the date paid.
(c) Any controversy arising out of the operation of the
interim reimbursement and advance arrangements set forth in Sections 5(a)(ii)
and 5(b) above, including the amounts of any requested reimbursement payments or
advances, the method of determining such amounts and the basis on which such
amounts shall be apportioned among the indemnifying parties, shall be settled by
arbitration conducted under the provisions of the Code of Arbitration Procedure
of the NASD. Any such arbitration must be commenced by service of a written
demand for arbitration or a written notice of intention to arbitrate. If the
party demanding arbitration does not make such designation of an arbitration
tribunal in such demand or notice, then the party responding to the demand or
notice is authorized to do so. Any such arbitration will be limited to the
interpretation and obligations of the parties under the interim reimbursement
and advance provisions contained in Sections 5(a)(ii) and 5(b) above and will
not resolve the ultimate propriety or enforceability of the obligation to
indemnify for or contribute to expenses that is created by the provisions of
Section 8 of this Agreement.
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(d) If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Underwriters set
forth in Section 6 of this Agreement is not satisfied, or because of any
termination pursuant to Section 10(b) of this Agreement, or because of any
refusal, inability or failure on the part of the Company to perform any covenant
or agreement set forth in this Agreement or to comply with any provision of this
Agreement other than by reason of a default by any of the Underwriters, the
Company agrees to reimburse the several Underwriters upon demand for all
out-of-pocket accountable expenses actually incurred (including fees and
disbursements of counsel) that shall have been incurred by any or all of them in
connection with investigating, preparing to market or marketing the Securities
or otherwise in connection with this Agreement.
6. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase and pay for the Securities shall be subject, in the
sole discretion of the Representative, to the accuracy as of the date of
execution of this Agreement, the Closing Date and the date and time at which the
Option Shares are to be purchased, as the case may be, of the representations
and warranties of the Company set forth in this Agreement, to the accuracy of
the statements of the Company and its officers made in any certificate delivered
pursuant to this Agreement, to the performance by the Company of all of its
obligations to be performed under this Agreement at or prior to the Closing Date
or any later date on which Option Shares are to be purchased, as the case may
be, to the satisfaction of all conditions to be satisfied or performed by the
Company at or prior to that date and to the following additional conditions:
(a) The Registration Statement shall have become effective
(or, if a post-effective amendment is required to be filed pursuant to Rule 430A
under the Act, such post-effective amendment shall become effective and the
Company shall have provided evidence satisfactory to the Representative of such
filing and effectiveness) not later than 5:00 p.m., New York time, on the date
of this Agreement or at such later date and time as the Representative may
approve in writing and, at the Closing Date or, with respect to the Option
Shares, the date on which such Option Shares are to be purchased, no stop order
suspending the effectiveness of the Registration Statement or any qualification,
registration or exemption from qualification or registration for the sale of the
Securities in any jurisdiction shall have been issued and no proceedings for
that purpose shall have been instituted or threatened; and any request for
additional information on the part of the Commission shall have been complied
with to the reasonable satisfaction of the Representative and its counsel.
(b) The Representative shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇
White & ▇▇▇▇▇▇▇▇▇, counsel for the Underwriters, an opinion, on and dated as of
the Closing Date or, if applicable, the date on which Option Shares are to be
purchased, with respect to the issuance and sale of the Securities and such
other related matters as the Representative may reasonably require, and the
Company shall have furnished such counsel with all documents which they may
request for the purpose of enabling them to pass upon such matters.
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(c) The Representative shall have received on the Closing Date
or, if applicable, the later date on which Option Shares are purchased (i) the
opinion of McCutchen, Doyle, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the Company, (ii)
▇▇▇▇▇▇ ▇.▇. ▇▇▇▇ & Co., Hong Kong counsel to the Company, and (iii) Guangzhou
Foreign Economic Law Office, People's Republic of China counsel to the Company,
addressed to the Underwriters and dated the Closing Date or such later date,
with reproduced copies or signed counterparts thereof for each of the
Underwriters in each case in form and substance satisfactory to the
Representative.
(d) The Representative shall be satisfied that there has not
been any material change in the market for securities in general or in
political, financial or economic conditions in any country or countries as to
render it impracticable in the Representative's judgment to make a public
offering of the Securities, or a material adverse change in market levels for
securities in general (or those of companies in particular) or financial or
economic conditions which render it inadvisable to proceed.
(e) The Representative shall have received on the Closing Date
and on any later date on which Option Shares are purchased a certificate, dated
the Closing Date or such later date, as the case may be, and signed by the
President and the Chief Financial Officer of the Company confirming certain of
the representations and warranties of the Company, as follows:
(i) the representations and warranties of the Company
set forth in Section 1 of this Agreement are true and correct with the same
force and effect as if expressly made at and as of the Closing Date or such
later date on which Option Shares are purchased, and the Company has complied
with all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date or such later date;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued, and no proceedings for that purpose
have been instituted or are pending or are threatened under the Securities Act;
(iii) the Securities have been approved for listing
on the Nasdaq National Market, subject only to notice of issuance; and
(iv) (A) the respective signers of such certificate
have carefully examined the Registration Statement in the form in which it
originally became effective and the Prospectus and any supplements or amendments
to any of them and, as of the Effective Date, the statements made in the
Registration Statement and the Prospectus were true and correct in all material
respects and neither the Registration Statement nor the Prospectus omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading, (B) since the Effective Date, no
event has occurred
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that should have been set forth in an amendment to the Registration Statement or
a supplement or amendment to the Prospectus that has not been set forth in such
an amendment or supplement, (C) since the respective dates as of which
information is given in the Registration Statement in the form in which it
originally became effective and the Prospectus, there has not been any material
change or any development involving a prospective material change in or
affecting the business, properties, condition (financial or otherwise), results
of operations or prospects of the Company and its Subsidiaries taken as a whole
and, since such dates, neither the Company nor any of its Subsidiaries has
entered into any material transaction not referred to in the Registration
Statement in the form in which it originally became effective and the Prospectus
contained therein, (D) there are not any pending or known threatened legal
proceedings to which the Company or any Subsidiary is a party or of which
property of the Company or any Subsidiary is the subject which are material and
which are not disclosed in the Registration Statement and the Prospectus and (E)
there are not any license agreements, contracts, leases or other documents that
are required to be filed as exhibits to the Registration Statement that have not
been filed as required.
(f) The Representative shall have received from ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, LLP, accountants to the Company, a letter or letters, addressed to the
Underwriters and dated the Closing Date and any later date on which Option
Shares are purchased, confirming that they are independent accountants with
respect to the Company within the meaning of the Securities Act and the
applicable Rules and Regulations thereunder and, based upon the procedures
described in their letter delivered to the Representative concurrently with the
execution of this Agreement (the "Original Letter"), but carried out to a date
not more than five business days prior to the Closing Date or such later date on
which Option Shares are purchased, (i) confirming, to the extent true, that the
statements and conclusions set forth in the Original Letter are accurate as of
the Closing Date or such later date, as the case may be, and (ii) setting forth
any revisions and additions to the statements and conclusions set forth in the
Original Letter that are necessary to reflect any changes in the facts described
in the Original Letter since the date of the Original Letter or to reflect the
availability of more recent financial statements, data or information. Such
letters shall reflect that there is not any change, or any development involving
a prospective change, in or affecting the business, properties or condition
(financial or otherwise), results of operations or prospects of the Company
which, in the Representative's sole judgment, makes it impractical or
inadvisable to proceed with the public offering of the Shares or the purchase of
the Option Shares as contemplated by the Prospectus. In addition, the
Representative shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, on or prior to the
Closing Date, a letter addressed to the Company and made available to the
Representative for the use of the Underwriters stating that their review of the
Company's system of internal controls, to the extent they deemed necessary in
establishing the scope of their examination of the Company's consolidated
financial statements as of March 31, 1996 or in delivering their Original
Letter, did not disclose any weaknesses in internal controls that they
considered to be material weaknesses.
(g) Prior to the Closing Date, the Securities shall have been
approved for listing on the Nasdaq National Market, subject only to official
notice of issuance.
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(h) On or prior to the Closing Date, the Representative shall
have received from the Company and/or Zindart Singapore the executed agreements
described in Section 1(t) and 1(u) of this Agreement.
(i) The Representative shall have received, on or before the
Closing Date, evidence that the Company has amended its Memorandum of
Association and Articles of Association to provide that directors of the
Company shall not be entitled to appoint any other person a "proxy director" to
attend all meetings of the Board of Directors of the Company or to vote upon
matters before the Board of Directors.
(j) The Company shall have furnished to the Representative
such further certificates and documents as the Representative shall request
(including certificates of officers of the Company) as to the accuracy of the
representations and warranties of the Company set forth in this Agreement, the
performance by the Company of its obligations under this Agreement and such
other matters as the Representative may have then requested.
All the agreements, opinions, certificates and letters
mentioned above or elsewhere in this Agreement will be in compliance with the
provisions of this Agreement only if they are satisfactory to the Representative
and its counsel. The Company will furnish the Representative with such number of
conformed copies of such opinions, certificates, letters and documents as the
Representative shall reasonably request.
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, time being of the essence, or if any of the opinions and certificates
mentioned above or elsewhere in this Agreement shall not be in all material
respects satisfactory in form and substance to the Representative and its
counsel, this Agreement and all obligations of the Underwriters hereunder may be
canceled by the Representative at or at any time prior to, the Closing Date or,
with respect to the Option Shares, prior to the date which the Option Shares are
to be purchased, as the case may be. Notice of such cancellation shall be given
to the Company in writing or by telephone, telecopy or telegraph confirmed in
writing. Any such termination shall be without liability of the Company to the
Underwriters (except as provided in Section 5 or Section 8 of this Agreement)
and without liability of the Underwriters to the Company (except as provided
in Section 8 of this Agreement).
7. Conditions of the Obligation of the Company. The obligations of the
Company to sell and deliver the Securities required to be delivered as and when
specified in this Agreement shall be subject to the condition that, at the
Closing Date or, with respect to the Option Shares, the date and time at which
the Option Shares are to be purchased, no stop order suspending the
effectiveness of the Registration Statement shall be in effect and no
proceedings therefor shall be pending or threatened by the Commission.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person (including each partner or officer thereof) who
controls any Underwriter within the meaning of Section 15 of the Securities Act
from and against any and all losses, claims, damages or liabilities, joint or
several, to which such indemnified parties or any of them may become subject
under the Securities Act, the Exchange Act or any other federal, state
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or foreign statute, law or regulation, at common law or otherwise, except to
the extent such losses, claims, damages or liabilities are finally judicially
determined to have resulted solely from actions taken or the failure
to take action by the person claiming indemnification in bad faith or due
solely to gross negligence on the part of the person claiming indemnification,
and the Company agrees to reimburse each such Underwriter and controlling
person for any legal or other expenses (including, except as otherwise provided
below, settlement expenses and fees and disbursements of counsel) incurred by
the respective indemnified parties in connection with defending against any
such losses, claims, damages or liabilities or in connection with any
investigation or inquiry of, or other proceeding that may be brought against,
the respective indemnified parties, in each case insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon, in whole or in part, (i) any breach of any representation,
warranty, covenant or agreement of the Company contained in this Agreement,
(ii) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement in the form originally filed or in any
amendment thereto (including the Prospectus as part thereof) or any
post-effective amendment thereto, or 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 or (iii) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus or
the Prospectus (as amended or as supplemented if the Company shall have filed
with the Commission any amendment thereof or supplement thereto) or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading or (iv)
any untrue statement or alleged untrue statement of a material fact contained
in any application or other document, or any amendment or supplement thereto,
executed by the Company or based upon written information furnished by or on
behalf of the Company filed in any jurisdiction in order to qualify or register
the Securities under the securities or Blue Sky laws thereof or to obtain an
exception from such qualification or registration or filed with the Commission,
any securities association or the Nasdaq National Market, or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided, however, that (1) the
indemnity agreements of the Company contained in this Section 8(a) shall not
apply to such losses, claims, damages, liabilities or expenses if such
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter through the Representative specifically for use in any Preliminary
Prospectus or the Registration Statement or the Prospectus or any such
amendment thereof or supplement thereto and (2) the indemnity agreement
contained in this Section 8(a) with respect to any Preliminary Prospectus shall
not inure to the benefit of any Underwriter from whom the person asserting any
such losses, claims, damages, liabilities or expenses purchased the Securities
that is the subject thereof (or to the benefit of any person controlling such
Underwriter) if the Company can demonstrate that at or prior to the written
confirmation of the sale of such Securities a copy of the Prospectus (or the
Prospectus as amended or supplemented) or, for this purpose, if applicable, a
copy of the then most recent Preliminary Prospectus was not sent or delivered
to such person and the untrue statement or omission of a material fact
contained in
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such Preliminary Prospectus or, if applicable, prior Preliminary Prospectus was
corrected in the Prospectus (or the Prospectus as amended or supplemented) or,
if applicable, the then most recent Preliminary Prospectus, unless the failure
is the result of noncompliance by the Company with Section 3 of this Agreement.
The indemnity agreements of the Company contained in this Section 8(a) and the
representations and warranties of the Company contained in Section 1 of this
Agreement shall remain operative and in full force and effect regardless of any
investigation made by or behalf of any indemnified party and shall survive the
delivery of and payment for the Securities. This indemnity agreement shall be
in addition to any liabilities which the Company may otherwise have.
(b) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company, each of its officers who signs the
Registration Statement, each of its directors, each other Underwriter and each
person (including each partner or officer thereof) who controls the Company or
any such other Underwriter within the meaning of Section 15 of the Securities
Act from and against any and all losses, claims, damages or liabilities, joint
or several, to which such indemnified parties or any of them may become subject
under the Securities Act, the Exchange Act, or other federal, state or foreign
statute, law or regulation or at common law or otherwise and to reimburse each
of them for any legal or other expenses (including, except as otherwise
hereinafter provided, settlement expenses and fees and disbursements of counsel)
incurred by the respective indemnified parties in connection with defending
against any such losses, claims, damages or liabilities or in connection with
any investigation or inquiry of, or other proceeding that may be brought
against, the respective indemnified parties, in each case arising out of or
based upon (i) any breach of any covenant or agreement of the indemnifying
Underwriter contained in this Agreement, (ii) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(including the Prospectus as part thereof) or any post-effective amendment
thereto, or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading or
(iii) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus or the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
thereof or supplement thereto) or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, but in each case under clauses (i), (ii) and (iii)
above, as the case may be, only if such statement or omission was made in
reliance upon and in connection with information furnished in writing to the
Company by or on behalf of such indemnifying Underwriter through the
Representative specifically for use in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment thereof or
supplement thereto. The Company acknowledges and agrees that the matters
described in Section 2(g) of this Agreement constitute the only information
furnished in writing by or on behalf of any of the several Underwriters
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for inclusion in the Registration Statement or the Prospectus or in any
Preliminary Prospectus. The several indemnity agreement of each Underwriter
contained in this Section 8(b) shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any indemnified
party and shall survive the delivery of and payment for the Securities. This
indemnity agreement shall be in addition to any liabilities which each
Underwriter may otherwise have.
(c) Each person or entity indemnified under the provisions of
Sections 8(a) and 8(b) above agrees that, upon the service of a summons or other
initial legal process upon it in any action or suit instituted against it or
upon its receipt of written notification of the commencement of any
investigation or inquiry of, or proceeding against, it in respect of which
indemnity may be sought on account of any indemnity agreement contained in such
Sections , it will, if a claim in respect thereunder is to be made against the
indemnifying party or parties under this Section 8, promptly give written notice
(the "Notice") of such service or notification to the party or parties from whom
indemnification may be sought hereunder. No indemnification provided for in
Sections 8(a) or 8(b) above shall be available to any person who fails to so
give the Notice if the party to whom such Notice was not given was unaware of
the action, suit, investigation, inquiry or proceeding to which the Notice would
have related, but only to the extent such party was materially prejudiced by the
failure to receive the Notice, and the omission to so notify such indemnifying
party or parties shall not relieve such indemnifying party or parties from any
liability which it or they may have to the indemnified party for contribution or
otherwise than on account of Sections 8(a) and 8(b). Any indemnifying party
shall be entitled at its own expense to participate in the defense of any
action, suit or proceeding against, or investigation or inquiry of, an
indemnified party. Any indemnifying party shall be entitled, if it so elects
within a reasonable time after receipt of the Notice by giving written notice
(the "Notice of Defense") to the indemnified party, to assume (alone or in
conjunction with any other indemnifying party or parties) the entire defense of
such action, suit, investigation, inquiry or proceeding, in which event such
defense shall be conducted, at the expense of the indemnifying party or parties,
by counsel chosen by such indemnifying party or parties and reasonably
satisfactory to the indemnified party or parties; provided, however, that (i) if
the indemnified party or parties reasonably determine that there may be a
conflict between the positions of the indemnifying party or parties and of the
indemnified party or parties in conducting the defense of such action, suit,
investigation, inquiry or proceeding or that there may be legal defenses or
rights available to such indemnified party or parties different from or in
addition to those available to the indemnifying party or parties, then separate
counsel for and selected by the indemnified party or parties shall be entitled,
at the expense of the indemnifying parties, to conduct the defense of the
indemnified parties to the extent determined by counsel to the indemnified
parties to be necessary to protect the interests of the indemnified party or
parties and (ii) in any event, the indemnified party or parties shall be
entitled to have counsel selected by such indemnified party or parties
participate in, but not conduct, the defense. If, within a reasonable time after
receipt of the Notice, an indemnifying party gives a Notice of Defense and,
unless separate counsel is to be chosen by the indemnified party or parties as
provided above, the counsel chosen by the indemnifying party or parties is
reasonably satisfactory to the
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indemnified party or parties, the indemnifying party or parties will not be
liable under Sections 8(a) through 8(c) for any legal or other expenses
subsequently incurred by the indemnified party or parties in connection with the
defense of the action, suit, investigation, inquiry or proceeding, except that
(A) the indemnifying party or parties shall bear and pay the legal and other
expenses incurred in connection with the conduct of the defense as referred to
in clause (i) of the "provided, however" clause in the preceding sentence and
(B) the indemnifying party or parties shall bear and pay such other expenses as
it or they have authorized to be incurred by the indemnified party or parties.
If, within a reasonable time after receipt of the Notice, no Notice of Defense
has been given, the indemnifying party or parties shall be responsible for any
legal or other expenses incurred by the indemnified party or parties in
connection with the defense of the action, suit, investigation, inquiry or
proceeding.
(d) In order to provide for just and equitable contribution in
any action in which a claim for indemnification is made pursuant to this Section
8 but is judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right to appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 8 provides for
indemnification in such case, each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in Section 8(a) or 8(b)
above (i) in such proportion as is appropriate to reflect the relative benefits
received by each indemnifying party from the offering of the Securities or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of each
indemnifying party in connection with the statements or omissions that resulted
in such losses, claims, damages or liabilities, or actions in respect thereof,
as well as any other relevant equitable considerations. The relative benefits
received by the Company and the Underwriters shall be deemed to be in the same
respective proportion as the total proceeds from the offering of the Securities,
net of the underwriting discounts, received by the Company and the total
underwriting discount retained by the Underwriters bear to the aggregate public
offering price of the Securities. Relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by each indemnifying party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were to be determined by pro rata
allocation which does not take into account the equitable considerations
referred to in the first sentence of the first paragraph of this Section 8(d)
and to the considerations referred to in the third sentence of the first
paragraph of this Section 8(d). The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities, or actions in respect
thereof, referred to in the
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first sentence of the first paragraph of this Section 8(d) shall be deemed to
include any legal or other expenses incurred by such indemnified party in
connection with investigating, preparing to defend or defending against any
action or claim which is the subject of this Section 8(d). Notwithstanding the
provisions of this Section 8(d), no Underwriter shall be required to contribute
any amount in excess of the underwriting discount applicable to the Securities
purchased by that Underwriter. For purposes of this Section 8(d), each person
who controls an Underwriter within the meaning of the Securities Act shall have
the same rights to contribution as such Underwriter, and each person who
controls the Company within the meaning of the Securities Act, each officer of
the Company who signed the Registration Statement and each director of the
Company shall have the same rights to contribution as the Company; provided,
however, in each case that no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute in this Section
8(d) are several in proportion to their respective underwriting obligations and
not joint.
Each party or other entity entitled to contribution agrees
that upon the service of a summons or other initial legal process upon it in any
action instituted against it in respect of which contribution may be sought, it
will promptly give written notice of such service to the party or parties from
whom contribution may be sought, but the omission to so notify such party or
parties of any such service shall not relieve the party from whom contribution
may be sought from any obligation it may have hereunder or otherwise (except as
specifically provided in Section 8(c) above).
(e) The Company shall not, without the prior written consent
of each Underwriter, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not such Underwriter or any person who controls such Underwriter
within the meaning of Section 15 of the Securities Act is a party to such claim,
action, suit or proceeding) unless such settlement, compromise or consent
includes an unconditional release of each such Underwriter and each such
controlling person from any and all liability arising out of such claim, action,
suit or proceeding.
(f) The parties to this Agreement hereby acknowledge that they
are sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions of this Agreement, including, without
limitation, the provisions of Sections 5(a)(ii), 5(b) and 5(c) and this Section
8 of this Agreement and that they are fully informed regarding all such
provisions. They further acknowledge that the provisions of Sections 5(a)(ii),
5(b) and 5(c) and this Section 8 of this Agreement fairly allocate the risks in
light of the ability of the parties to investigate the Company and its business
in order to assure that adequate disclosure is made in the Registration
Statement and Prospectus as required by the Securities Act, the Rules and
Regulations, the Exchange Act and the Exchange Act Rules and Regulations. The
parties are advised that federal or state policy, as
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interpreted by the courts in certain jurisdictions, may be contrary to certain
provisions of Sections 5(a)(ii), 5(b) and 5(c) and this Section 8 of this
Agreement and, to the extent permitted by law, the parties hereto hereby
expressly waive and relinquish any right or ability to assert such public policy
as a defense to a claim under Sections 5(a)(ii), 5(b) or 5(c) or this Section 8
of this Agreement and further agree not to attempt to assert any such defense.
9. Substitution of Underwriters. If for any reason one or more of the
Underwriters fails or refuses (otherwise than for a reason sufficient to justify
the termination of this Agreement under the provisions of Section 6 or Section
10 of this Agreement) to purchase and pay for the number of Shares agreed to be
purchased by such Underwriter or Underwriters, the Representative shall
immediately give notice thereof to the Company and the non-defaulting
Underwriters shall have the right within 24 hours after the receipt by the
Representative of such notice to purchase, or procure one or more other
Underwriters to purchase, in such proportions as may be agreed upon among the
Representative and such purchasing Underwriter or Underwriters and upon the
terms set forth herein, all or any part of the Shares that such defaulting
Underwriter or Underwriters agreed to purchase. If the non-defaulting
Underwriters fail to make such arrangements with respect to all such Shares, the
number of shares of Shares that each non-defaulting Underwriter is otherwise
obligated to purchase under this Agreement shall be automatically increased on a
pro rata basis to absorb the remaining Shares that the defaulting Underwriter or
Underwriters agreed to purchase; provided, however, that the non-defaulting
Underwriters shall not be obligated to purchase the Shares that the defaulting
Underwriter or Underwriters agreed to purchase if the aggregate amount of such
Shares exceeds 10% of the aggregate amount of Shares that all Underwriters
agreed to purchase under this Agreement. If the total number of shares of Shares
that the defaulting Underwriter or Underwriters agreed to purchase shall not be
purchased or absorbed in accordance with the two preceding sentences, the
Company shall have the right, within 24 hours next succeeding the first 24-hour
period above referred to, to make arrangements with other underwriters or
purchasers satisfactory to the Representative for purchase of such Shares on the
terms set forth in this Agreement. In any such case, either the Representative
or the Company shall have the right to postpone the Closing Date determined as
provided in Section 2(c) of this Agreement for not more than seven business days
after the date originally fixed as the Closing Date pursuant to Section 2(c) in
order that any necessary changes in the Registration Statement, the Prospectus
or any other documents or arrangements may be made.
If neither the non-defaulting Underwriters nor the Company
shall make arrangements within the time periods set forth above for the purchase
of all the Shares that the defaulting Underwriter or Underwriters agreed to
purchase hereunder, this Agreement shall be terminated without further act or
deed and without any liability on the part of the Company to any non-defaulting
Underwriter (except as provided in Section 5 or Section 8 of this Agreement) and
without any liability on the part of any nondefaulting Underwriters to the
Company (except to the extent provided in Section 8 of this Agreement). Nothing
in this Section 9, and no action taken hereunder, shall relieve any defaulting
Underwriter from
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liability, if any, to the Company or any nondefaulting Underwriter for damages
occasioned by its default under this Agreement. The term "Underwriter" in this
Agreement shall include any persons substituted for an Underwriter under this
Section 9.
10. Effective Date of Agreement and Termination.
(a) If the Registration Statement has not been declared
effective prior to the date of this Agreement, this Agreement shall become
effective at such time, after notification of the effectiveness of the
Registration Statement has been released by the Commission, as the
Representative and the Company shall agree upon the public offering price and
other terms and the purchase price of the Securities. If the public offering
price and other terms and the purchase price of the Securities shall not have
been determined prior to 5:00 p.m., New York time, on the third full business
day after the Registration Statement has become effective, this Agreement shall
thereupon terminate without liability on the part of the Company to the
Underwriters (except as provided in Section 5 or Section 8 of this Agreement).
By giving notice before the time this Agreement becomes effective, the
Representative, as representative of the several Underwriters, may prevent this
Agreement from becoming effective without liability of any party to the other
party, except that the Company shall remain obligated to pay costs and expenses
to the extent provided in Section 5 and Section 8 of this Agreement. If the
Registration Statement has been declared effective prior to the date of this
Agreement, this Agreement shall become effective upon execution and delivery by
the Representative and the Company.
(b) This Agreement may be terminated by the Representative in
its absolute discretion by giving written notice to the Company at any time on
or prior to the Closing Date or, with respect to the purchase of the Option
Shares, to the Company on or prior to any later date on which the Option Shares
are to be purchased, as the case may be, if prior to such time any of the
following has occurred or, in the Representative's opinion, is likely to occur:
(i) after the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material change or development
involving a prospective adverse change in or affecting the business, properties,
condition (financial or otherwise), results of operations or prospects of the
Company and its subsidiaries taken as a whole, which would, in the
Representative's sole judgment, make the offering or the delivery of the
Securities impracticable or inadvisable; or (ii) if trading in securities of the
Company has been suspended by the Commission or if trading generally on the New
York Stock Exchange, American Stock Exchange, Nasdaq National Market or
over-the-counter market has been suspended or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required, by either of such exchanges, by the NASD or by the Commission; or
(iii) if there shall have been the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of, or
commencement of any proceeding or investigation by, court, legislative body,
agency or other governmental authority which in the Representative's sole
judgment materially affects or may materially affect the business, properties,
condition (financial or otherwise), results of operations or prospects of the
Company and its
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subsidiaries taken as a whole; (iv) if there shall have been the declaration of
a banking moratorium by federal, New York or California authorities; (v)
existing international monetary conditions shall have undergone a material
change which, in the Representative's sole judgment, makes the offering or
delivery of the Securities impracticable or inadvisable; or (vi) if there has
occurred any material change in the financial markets in the United States or
internationally or any outbreak of hostilities or escalation of existing
hostilities or other crisis, the effect of which in the Representative's sole
judgment make the offering or delivery of the Securities impracticable or
inadvisable. If this Agreement shall be terminated pursuant to this Section 10,
there shall be no liability of the Company to the Underwriters (except pursuant
to Section 5 and Section 8 of this Agreement) and no liability of the
Underwriters to the Company (except pursuant to Section 8 of this Agreement).
11. Notices. Except as otherwise provided herein, all communications
hereunder shall be in writing or by either telecopier or telegraph and, if to
the Underwriters, shall be mailed, telecopied or telegraphed or delivered to ▇▇▇
▇▇▇▇▇▇ & Company, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (telecopier: (▇▇▇) ▇▇▇-▇▇▇▇); and if to
the Company, shall be mailed, telecopied, telegraphed or delivered to it at
its office at ______________________. All notices given by telecopy or
telegraph shall be promptly confirmed by letter.
12. Persons Entitled to the Benefit of This Agreement. This Agreement
shall inure to the benefit of the Company, the several Underwriters and,
with respect to the provisions of Section 5 and Section 8 of this Agreement,
the several parties (in addition to the Company and the several Underwriters)
indemnified under the provisions of Section 5 and Section 8 and in addition,
as to Section 5, ▇▇▇ ▇▇▇▇▇▇ & Company, and its respective personal
representatives, successors and assigns (whether such succession or assignment
is by sale, assignment, merger, reverse merger, consolidation, operation of
law or, without limitation, otherwise). Nothing in this Agreement is intended
or shall be construed to give to any other person, firm or corporation any
legal or equitable remedy or claim under or in respect of this Agreement or
any provision contained herein. The term "successors and assigns" as herein
used shall not include any purchaser, as such, of any of the Shares from the
several Underwriters.
13. General. Notwithstanding any provision of this Agreement to the
contrary, the reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties, covenants and
agreements in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof or by or on behalf of
the Company or their respective directors or officers and (c) delivery and
payment for the Securities under this Agreement; provided, however, that if this
Agreement is terminated prior to the Closing Date, the provisions of Sections
3(f), 3(g), 3(h), 3(i) and 3(j) of this Agreement shall be of no further force
or effect.
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This Agreement may be executed in two or more counterparts, each of
which shall constitute an original, but all of which together shall constitute
one and the same instrument.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS, AND NOT THE LAWS PERTAINING TO CHOICE OR CONFLICT OF LAWS, OF
THE STATE OF CALIFORNIA.
14. Authority of the Representative. In connection with this Agreement,
the Representative will act for and on behalf of the several Underwriters, and
any action taken under this Agreement by the Representative, as representative
of the several Underwriters, will be binding on all of the Underwriters.
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If the foregoing correctly sets forth your understanding,
please so indicate by signing in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among the Company and
the several Underwriters.
Very truly yours,
ZINDART LIMITED
By:
-------------------------------------
Feather Siu ▇▇▇▇ ▇▇▇
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
▇▇▇ ▇▇▇▇▇▇ & COMPANY
By:
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Managing Director
On its behalf and on behalf of each of the
several Underwriters named in Schedule I hereto
34
SCHEDULE I
UNDERWRITERS
Number of Firm Shares
Underwriters to be Purchased
------------ ---------------
▇▇▇ ▇▇▇▇▇▇ & Company
---------
Total =======
1,400,000
