A standby underwriting arrangement in conjunction with a rights offering provides the:

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A standby underwriting arrangement provides the issuer with an alternate avenue of sale to ensure success of the rights offering. In this arrangement, the standby underwriter commits to purchase any shares which are not subscribed for by the existing shareholders, thereby ensuring that the offering will be fully subscribed. This reduces the risk for existing shareholders who may not want to fully exercise their rights and increases the likelihood of the offering being successful.

A Standby Underwriting Arrangement in Conjunction with a Rights Offering