Exhibit 1.1
EXECUTION VERSION
RETALIX LTD.
Underwriting Agreement
New York, New York
April 28, 2004
To the Representatives
named in Schedule I hereto
of the Underwriters named
in Schedule II hereto
Ladies and Gentlemen:
Retalix Ltd., a company organized under the laws of Israel (the
"COMPANY"), proposes to sell to the several underwriters named in Schedule II
hereto (the "UNDERWRITERS"), for whom you (the "REPRESENTATIVES") are acting as
representatives, the number of ordinary shares, NIS 1.00 par value ("ORDINARY
SHARES"), of the Company set forth in Schedule I hereto (said shares to be
issued and sold by the Company being hereinafter called the "UNDERWRITTEN
SECURITIES"). The Company also proposes to grant to the Underwriters an option
to purchase up to the number of additional Ordinary Shares set forth in Schedule
I hereto to cover over-allotments (the "OPTION SECURITIES;" the Option
Securities, together with the Underwritten Securities, being hereinafter called
the "SECURITIES"). To the extent there are no additional Underwriters listed on
Schedule I other than you, the term Representatives as used herein shall mean
you, as Underwriters, and the terms Representatives and Underwriters shall mean
either the singular or plural as the context requires. Any reference herein to
the Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein which were filed under, or furnished
to the Commission pursuant to, the Exchange Act on or before the Effective Date
of the Registration Statement or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may be; and
any reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to refer to and include
the filing of any document under the Exchange Act after the Effective Date of
the Registration Statement or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may be, deemed
to be incorporated therein by reference. Certain terms used herein are defined
in Section 19 hereof.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to, and agrees with, each Underwriter as set forth below in this
Section 1.
(a) The Company meets the requirements for use of Form F-3 under
the Act and has prepared and filed with the Commission a registration
statement (the file number of which is set forth in Schedule I hereto) on
Form F-3, including a related basic prospectus, for registration under the
Act of the offering and sale of the Securities. The Company may have filed
one or more amendments thereto, including a Preliminary Final Prospectus,
each of which has previously been furnished to you. The Company will next
file with the Commission one of the following: (1) after the Effective Date
of such
registration statement, a final prospectus supplement relating to the
Securities in accordance with Rules 430A and 424(b), (2) prior to the
Effective Date of such registration statement, an amendment to such
registration statement (including the form of final prospectus supplement)
or (3) a final prospectus in accordance with Rules 415 and 424(b). In the
case of clause (1), the Company has included in such registration
statement, as amended at the Effective Date, all information (other than
Rule 430A Information) required by the Act and the rules thereunder to be
included in such registration statement and the Final Prospectus. As filed,
such final prospectus supplement or such amendment and form of final
prospectus supplement shall contain all Rule 430A Information, together
with all other such required information, and, except to the extent the
Representatives shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution
Time or, to the extent not completed at the Execution Time, shall contain
only such specific additional information and other changes (beyond that
contained in the Basic Prospectus and any Preliminary Final Prospectus) as
the Company has advised you, prior to the Execution Time, will be included
or made therein. The Registration Statement, at the Execution Time, meets
the requirements set forth in Rule 415(a)(1)(x).
(b) On the Effective Date, the Registration Statement did and, when
the Final Prospectus is first filed (if required) in accordance with Rule
424(b) and on the Closing Date (as defined herein) and on any date on which
Option Securities are purchased, if such date is not the Closing Date (a
"SETTLEMENT DATE"), the Final Prospectus (and any supplement thereto) and
the Registration Statement will, comply in all material respects with the
applicable requirements of the Act and the Exchange Act and the respective
rules thereunder; on the Effective Date and at the Execution Time, the
Registration Statement did not or will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Final Prospectus, if not filed
pursuant to Rule 424(b), will not and, on the date of any filing pursuant
to Rule 424(b) and on the Closing Date and any settlement date, the Final
Prospectus (together with any supplement thereto) will not, include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that the Company makes no representations or warranties as to the
information contained in or omitted from the Registration Statement or the
Final Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to the Company by or on
behalf of any Underwriter through the Representatives specifically for
inclusion in the Registration Statement or the Final Prospectus (or any
supplement thereto).
(c) Each of the Company and its consolidated subsidiaries (referred
to herein as "SUBSIDIARIES") has been duly incorporated and is validly
existing as a corporation or limited liability company in good standing
under the laws of the jurisdiction in which it is chartered or organized
with full corporate or limited liability company power and authority to own
or lease, as the case may be, and to operate its properties and conduct its
business as described in the Final Prospectus, and is duly qualified to do
business as a foreign corporation or limited liability company, as the case
may be, and is in good standing under the laws of each jurisdiction which
requires such qualification, except
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where the failure to be so qualified to do business as a foreign corporation or
limited liability company, as the case may be, or be in good standing under the
laws of each jurisdiction which requires such qualification has not had and
would not have, individually or in the aggregate, a Material Adverse Effect.
(d) All the outstanding shares of capital stock or membership
interests of each Subsidiary have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as otherwise set
forth in the Final Prospectus, all outstanding shares of capital stock or
membership interests of the Subsidiaries are owned by the Company either
directly or through wholly owned subsidiaries free and clear of any
perfected security interest or any other security interests, claims, liens
or encumbrances.
(e) The Company's authorized equity capitalization is as set forth
in the Basic Prospectus. The capital stock of the Company conforms in all
material respects to the description thereof contained in the Final
Prospectus. The outstanding Ordinary Shares have been duly and validly
authorized and issued and are fully paid and nonassessable. The Securities
have been duly and validly authorized, and, when issued and delivered to
and paid for by the Underwriters pursuant to this Agreement, will be fully
paid and nonassessable. The Securities are or will be duly listed for
quotation and trading on the Nasdaq National Market, subject to official
notice of issuance, and on the Tel Aviv Stock Exchange, upon the approval
thereof by the Tel Aviv Stock Exchange. The certificates for the Securities
are in valid and sufficient form. The holders of outstanding shares of
capital stock of the Company are not entitled to preemptive or other rights
to subscribe for the Securities. Except as set forth in the Final
Prospectus, no options, warrants or other rights to purchase, agreements or
other obligations to issue, or rights to convert any obligations into or
exchange any securities for, shares of capital stock of or ownership
interests in the Company are outstanding.
(f) There is no franchise, contract or other document of a
character required to be described in the Registration Statement or Final
Prospectus, or to be filed as an exhibit thereto, which is not described or
filed as required; and the statements in the Final Prospectus under the
headings "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources," "Business--Sales
and Marketing," "--Research and Development," "--Legal Proceedings,"
"Management" and "Material Tax Considerations," and in the Base Prospectus
under the headings "Risk Factors--Risks Related To Our Location in
Israel--We currently participate in or receive tax benefits from government
programs. These programs require us to meet certain conditions and these
programs and benefits could be terminated or reduced in the future, which
could harm our results of operations," "--Risks Related To Our Location in
Israel--Because we have received grants from the Office of the Chief
Scientist, we are subject to ongoing restrictions that limit the
transferability of our technology and of our right to manufacture outside
of Israel, and certain of our large shareholders are required to undertake
to observe such restrictions," "Share Capital" and "Enforcement of Civil
Liabilities," insofar as such statements summarize matters, agreements,
documents or proceedings discussed therein, are accurate and fair summaries
of such matters, agreements, documents or proceedings.
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(g) All necessary corporate action has been duly and validly taken
by the Company to authorize the execution, delivery and performance of this
Agreement and the issuance and sale of the Securities by the Company. This
Agreement has been duly authorized, executed and delivered by the Company.
(h) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Final Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(i) No consent, approval, authorization, filing with or order of
any court or governmental agency or body is required to be obtained or
performed by the Company or any of its Subsidiaries in connection with the
transactions contemplated herein, except such as have been obtained under
the Act and Israeli law and such as may be required under the blue sky laws
of any jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters in the manner contemplated herein and in the
Final Prospectus. In addition, each approval, consent, order,
authorization, designation, declaration, or filing of, by or with any
regulatory, administrative or other governmental body necessary in
connection with the execution and delivery by the Company of this Agreement
and the consummation of the transactions herein contemplated required to be
obtained or performed by the Company, including without limitation any
approvals or exemptions required under Israeli law (except (i) such
additional steps as may be required by the National Association of
Securities Dealers, Inc. (the "NASD"), (ii) the Securities will be dually
listed and admitted and authorized for trading on the Tel Aviv Stock
Exchange only upon the approval of the Tel Aviv Stock Exchange, (iii) as
may be necessary to qualify the Securities for public offering by the
Underwriters under state securities or blue sky laws, or (iv) the filing of
this Agreement by the Company with the Commission) has been obtained or
made and is in full force and effect.
(j) Neither the Commission nor the Israeli Securities Authority has
issued an order preventing or suspending the use of any Basic Prospectus,
any Preliminary Final Prospectus or the Final Prospectus nor, to the
Company's knowledge, instituted proceedings for that purpose.
(k) Neither the issue and sale of the Securities nor the
consummation of any other of the transactions herein contemplated nor the
fulfillment of the terms hereof will conflict with, result in a breach or
violation of, or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its Subsidiaries pursuant to,
(i) the articles or memorandum of association, charter, bylaws or other
organizational documents ("ORGANIZATIONAL DOCUMENTS") of the Company or any
of its Subsidiaries, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the Company or any
of its Subsidiaries is a party or bound or to which its or their property
is subject, or (iii) any statute, law, rule, regulation, judgment, order or
decree applicable to the Company or any of its Subsidiaries of any court,
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regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or any of its
Subsidiaries or any of its or their properties, except in the case of (ii)
for any conflict, breach, violation, lien, charge or encumbrance as would
not have a Material Adverse Effect.
(l) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
(m) The consolidated historical financial statements and schedules
of the Company and its Subsidiaries, BASS, Inc. and OMI International, Inc.
included and/or incorporated by reference in the Preliminary Final
Prospectus, Final Prospectus and the Registration Statement (which, as of
the Execution Time, consists of the financial statements incorporated by
reference to the Company's Report on Form 20-F/A filed with respect to the
year ended December 31, 2002 and the Reports on Form 6-K furnished by the
Company on November 21, 2003 (Exhibits 3 and 4 only), March 10, 2004, March
26, 2004 (all three reports contained therein) and April 13, 2004) present
fairly in all material respects the financial condition, results of
operations and cash flows of the Company and its Subsidiaries, BASS Inc.
and OMI International, Inc., respectively, as of the dates and for the
periods indicated, comply as to form with the applicable accounting
requirements of the Act and have been prepared in conformity with United
States generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as otherwise noted therein).
The selected financial data set forth under the caption "Selected
Consolidated Financial Data" in the Final Prospectus and Registration
Statement fairly present, on the basis stated in the Final Prospectus and
the Registration Statement, the information included therein. The pro forma
financial statements included or incorporated by reference in the
Registration Statement and the Final Prospectus (the "pro forma financial
statements") include assumptions that provide a reasonable basis for
presenting the significant effects directly attributable to the
transactions and events described therein, the related pro forma
adjustments give appropriate effect to those assumptions, and the pro forma
adjustments reflect the proper application of those adjustments to the
historical financial statement amounts in the pro forma financial
statements included or incorporated by reference in the Registration
Statement and the Final Prospectus The pro forma financial statements
comply as to form in all material respects with the applicable accounting
requirements of Regulation S-X under the Act.
(n) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its Subsidiaries or its or their property is pending or,
to the best knowledge of the Company, threatened that (i) could reasonably
be expected to have a material adverse effect on the performance of this
Agreement or the consummation of any of the transactions contemplated
hereby or (ii) could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, except as set forth in or
contemplated in the Final Prospectus (exclusive of any supplement thereto).
(o) Each of the Company and each of its Subsidiaries owns or leases
all such properties as are necessary to the conduct of its operations as
presently conducted.
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(p) Neither the Company nor any Subsidiary is in violation or
default of any provision of its Organizational Documents, or in violation
or default in any material respect of (i) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan agreement or
other agreement, obligation, condition, covenant or instrument to which it
is a party or bound or to which its property is subject, or (ii) any
statute, law, rule, regulation, judgment, order or decree of any court,
regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or such Subsidiary or
any of its properties, as applicable.
(q) Xxxxxxxxx & Xxxxxxxxx, a member of PricewaterhouseCoopers
International Limited, who have certified certain financial statements of
the Company and its Subsidiaries and delivered their report with respect to
the audited consolidated financial statements and schedules included in the
Final Prospectus, are independent public accountants with respect to the
Company within the meaning of the Act and the applicable published rules
and regulations thereunder.
(r) Nation Xxxxx Hermes Diamond (an independent member of the BDO
Xxxxxxx Alliance), who have certified certain financial statements of (i)
Retalix Holdings, Inc. and certain Subsidiaries and (ii) Retalix USA Inc.
and a Subsidiary, and delivered their report with respect to the audited
consolidated financial statements and schedules of such respective entities
included in the Final Prospectus, are independent public accountants with
respect to the Company within the meaning of the Act and the applicable
published rules and regulations thereunder.
(s) Flagel, Huber, Xxxxxx & Co., who have certified certain
financial statements of BASS, Inc. and delivered their report with respect
to the audited financial statements and schedules included in the Final
Prospectus, are independent public accountants with respect to the Company
within the meaning of the Act and the applicable published rules and
regulations thereunder.
(t) Xxxx Xxxxx Xxxxxx & Kasierer (a member of Ernst & Young
Global), who have certified certain financial statements of Cell-Time Ltd.
and delivered their report with respect to the audited financial statements
and schedules included in the Final Prospectus, are independent public
accountants with respect to the Company within the meaning of the Act and
the applicable published rules and regulations thereunder.
(u) Xxxxxxxx Xxxxx & Ford LLP, who have certified certain financial
statements of Retail Control Systems, Inc. and delivered their report with
respect to the audited financial statements and schedules included in the
Final Prospectus, are independent public accountants with respect to the
Company within the meaning of the Act and the applicable published rules
and regulations thereunder.
(v) Deloitte & Touche LLP, who have certified certain financial
statements of OMI International, Inc. and delivered their report with
respect to the audited financial statements and schedules included in the
Final Prospectus, are independent public accountants with respect to the
Company within the meaning of the Act and the applicable published rules
and regulations thereunder.
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(w) Except for Israeli stamp duties that may be payable in
connection with this Agreement, there are no share transfer taxes, stamp
duties or other similar fees or charges under the laws of Israel, the
United States or any state or political subdivision of any thereof,
required to be paid in connection with the execution and delivery of this
Agreement or the issuance, delivery or sale by the Company of the
Securities.
(x) The Company and each of its Subsidiaries have filed all
foreign, federal, state and local tax returns that are required to be filed
or have requested extensions thereof (except in any case in which the
failure so to file has not had and would not have, individually or in the
aggregate, a Material Adverse Effect, except as set forth in or
contemplated in the Final Prospectus (exclusive of any supplement thereto))
and have paid all taxes required to be paid by them and any other
assessment, fine or penalty levied against them, to the extent that any of
the foregoing is due and payable, except for any such assessment, fine or
penalty that is currently being contested in good faith or has not had and
would not have, individually or in the aggregate, a Material Adverse
Effect, except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(y) No labor problem or dispute with the employees of the Company
or any of its Subsidiaries exists or, to the Company's knowledge, is
threatened or imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or its
Subsidiaries' principal suppliers, contractors or customers, that has had
and would have, individually or in the aggregate, a Material Adverse
Effect, except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(z) The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent in the businesses in which they
are engaged; all policies of insurance and fidelity or surety bonds
insuring the Company or any of its Subsidiaries or their respective
businesses, assets, employees, officers and directors are in full force and
effect; the Company and its Subsidiaries are in compliance with the terms
of such policies and instruments in all material respects; and there are no
claims by the Company or any of its Subsidiaries under any such policy or
instrument as to which any insurance company is denying liability or
defending under a reservation of rights clause; neither the Company nor any
such Subsidiary has been refused any insurance coverage sought or applied
for; and neither the Company nor any such Subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost
that has not had and would not have, individually or in the aggregate, a
Material Adverse Effect, except as set forth in or contemplated in the
Final Prospectus (exclusive of any supplement thereto).
(aa) No Subsidiary of the Company is currently prohibited, directly
or indirectly, from paying any dividends to the Company, from making any
other distribution on such Subsidiary's capital stock, from repaying to the
Company any loans or advances to such Subsidiary from the Company or from
transferring any of such Subsidiary's property or
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assets to the Company or any other Subsidiary of the Company, except as
described in or contemplated by the Final Prospectus (exclusive of any
supplement thereto).
(bb) The Company and its Subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses, except for those the failure of which to possess has
not had and would not have, individually or in the aggregate, a Material
Adverse Effect, and neither the Company nor any such Subsidiary has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which,
individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, has had and would have a Material Adverse
Effect, except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(cc) The Company and each of its Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with applicable
generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(dd) The Company has not taken, directly or indirectly, any action
designed to or that would constitute or that might reasonably be expected
to cause or result in, under the Exchange Act or otherwise, stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(ee) The Company and its Subsidiaries are (i) in compliance with any
and all applicable U.S., Israeli, state and local laws and regulations
relating to (A) the protection of the environment (B) hazardous or toxic
substances or wastes, pollutants or contaminants, or (C) the protection of
human health and safety with respect to the environment or hazardous or
toxic substances or wastes, pollutants or contaminants (collectively,
"ENVIRONMENTAL LAWS"), (ii) have received and are in compliance with all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) have
not received notice of any actual or potential liability under any
Environmental Law, in each case except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals, or liability has not had and would not have, individually or in
the aggregate, a Material Adverse Effect, except as set forth in or
contemplated in the Final Prospectus (exclusive of any supplement thereto).
Except as set forth in the Final Prospectus, neither the Company nor any of
its Subsidiaries has been named as a "potentially responsible party" under
the Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended. The Company has reasonably concluded that any costs
and liabilities resulting from the effect of Environmental Laws
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on the business, operations and properties of the Company and its
Subsidiaries, would not have, individually or in the aggregate, a Material
Adverse Effect, except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto).
(ff) The minimum funding standard under Section 302 of the Employee
Retirement Income Security Act of 1974, as amended, and the regulations and
published interpretations thereunder ("ERISA"), has been satisfied in all
material respects by each "pension plan" (as defined in Section 3(2) of
ERISA) which has been established or maintained by the Company and/or one
or more of its Subsidiaries that are subject to such standard, and the
trust forming part of each such plan which is intended to be qualified
under Section 401 of the Code is so qualified; each of the Company and its
Subsidiaries subject to ERISA has fulfilled its obligations, if any, under
Section 515 of ERISA in all material respects; neither the Company nor any
of its Subsidiaries subject to ERISA maintains or is required to contribute
to a "welfare plan" (as defined in Section 3(1) of ERISA) which provides
retiree or other post-employment welfare benefits or insurance coverage
(other than "continuation coverage" (as defined in Section 602 of ERISA));
each pension plan and welfare plan established or maintained by the Company
and/or one or more of its Subsidiaries subject to ERISA is in compliance in
all material respects with the currently applicable provisions of ERISA;
and neither the Company nor any of its Subsidiaries subject to ERISA has
incurred or could reasonably be expected to incur any withdrawal liability
under Section 4201 of ERISA, any liability under Section 4062, 4063, or
4064 of ERISA, or any other liability under Title IV of ERISA.
(gg) There is and has been no failure on the part of the Company and
any of the Company's directors or officers, in their capacities as such, to
comply with any currently effective provision that applies to the Company
or its directors or officers in their capacities as such of the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated in
connection therewith (the "SARBANES OXLEY ACT"), including Section 402
related to loans and Sections 302 and 906 related to certifications.
(hh) Neither the Company nor any of its Subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its Subsidiaries is aware of or has
taken any action, directly or indirectly, that would result in a violation
by such entities or persons of the FCPA, including, without limitation,
making use of the mails or any means or instrumentality of interstate
commerce corruptly in furtherance of an offer, payment, promise to pay or
authorization of the payment of any money, or other property, gift, promise
to give, or authorization of the giving of anything of value to any
"foreign official" (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political
office, in contravention of the FCPA and the Company, its Subsidiaries and,
to the knowledge of the Company, its affiliates have conducted their
businesses in compliance with the FCPA. "FCPA" means Foreign Corrupt
Practices Act of 1977, as amended, and the rules and regulations
thereunder.
(ii) The operations of the Company and its Subsidiaries are and have
been conducted at all times in compliance in all material respects with
applicable financial
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recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, and to the Company's
knowledge, the money laundering statutes of all jurisdictions, the rules
and regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the "MONEY LAUNDERING LAWS") and no action, suit or
proceeding by or before any court or governmental agency, authority or body
or any arbitrator involving the Company or any of its Subsidiaries with
respect to the Money Laundering Laws is pending or, to the best knowledge
of the Company, threatened.
(jj) Neither the Company nor any of its Subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its Subsidiaries is currently subject to
any U.S. sanctions administered by the Office of Foreign Assets Control of
the U.S. Treasury Department ("OFAC"); and the Company will not directly or
indirectly use the proceeds of the offering, or lend, contribute or
otherwise make available such proceeds to any Subsidiary, joint venture
partner or other person or entity, for the purpose of financing the
activities of any person whom the Company is aware is currently subject to
any U.S. sanctions administered by OFAC.
(kk) Retalix Holdings, Inc., Retalix USA Inc., StoreNext Retail
Technology, LLC and OMI International, Inc. are the only significant
subsidiaries of the Company as defined by Rule 1-02 of Regulation S-X.
(ll) The Company and its Subsidiaries own, possess, license or have
other rights to use all patents, patent applications, trade and service
marks, trade and service xxxx registrations, trade names, copyrights,
licenses, inventions, trade secrets, technology, know-how and other
intellectual property (collectively, the "INTELLECTUAL PROPERTY") necessary
for the conduct of the Company's business as now conducted or as proposed
in the Final Prospectus to be conducted. Except as set forth in the Final
Prospectus under the caption "Business--Legal Proceedings," (a) other than
agreements to which the Company or one of its Subsidiaries is a party,
there are no rights of third parties to any such Intellectual Property; (b)
to the Company's knowledge, there is no material infringement by third
parties of any such Intellectual Property; (c) there is no pending or, to
the Company's knowledge, threatened action, suit, proceeding or claim by
others challenging the Company's rights in or to any such Intellectual
Property, and the Company is unaware of any facts which would form a
reasonable basis for any such claim; (d) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim against
the Company or any of its Subsidiaries by others challenging the validity
or scope of any such Intellectual Property owned by the Company or its
Subsidiaries, and the Company is unaware of any facts which would form a
reasonable basis for any such claim; (e) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim by others
that the Company infringes or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary rights of others, and the
Company is unaware of any other fact which would form a reasonable basis
for any such claim; (f) there is no U.S. patent or published U.S. patent
application known to the Company which contains claims that dominate or may
dominate any Intellectual Property described in the Final Prospectus as
being owned by or licensed
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to the Company or that interferes with the issued or pending claims of any
such Intellectual Property; and (g) there is no prior art of which the
Company is aware that may render any U.S. patent held by the Company
invalid or any U.S. patent application held by the Company unpatentable
which is required to be and has not been disclosed to the U.S. Patent and
Trademark Office. The statements contained in the Final Prospectus under
the captions "Risk Factors--Risks Related To Our Business,"
"Business--Technology," "--Proprietary Rights" and "--Legal Proceedings"
insofar as such statements summarize legal matters, agreements, documents,
or proceedings discussed therein, are accurate and fair summaries of such
legal matters, agreements, documents or proceedings.
(mm) Other than would not have a Material Adverse Effect, the
Company is in compliance with all conditions or requirements stipulated by
(i) instruments of approval granted to it by any Israeli authority with
respect to the "approved enterprise" status of any of its facilities, or
(ii) Israeli laws and regulations relating to such approved enterprise
status, and does not have any knowledge or reason to believe that it will
not continue to comply in every material respect with such instruments of
approval. The execution, delivery, and performance of this Agreement and
the issuance and delivery of the Securities do not violate or cause a
default under any condition or requirement described in the immediately
preceding sentence. All information supplied by the Company with respect to
its applications for "approved enterprise" status was true, correct and
complete in all material respects when supplied to the appropriate
authorities. The Company has not received any notice of proceedings
relating to revocation or modification of the "approved enterprise" status
of any of the Company's facilities which might jeopardize the Company's
ability to receive the benefits of "approved enterprise" status.
(nn) The Company is in compliance with all conditions or
requirements stipulated by (i) the instruments of approval granted to it by
the Office of the Chief Scientist with respect to any research and
development grants given to it by such Office, or (ii) Israeli laws and
regulations relating to such grants and does not have any knowledge or
reason to believe that it will not continue to comply with such instruments
of approval, except, in each case, as has not had and would not have,
individually or in the aggregate, a Material Adverse Effect or as set forth
in or contemplated in the Final Prospectus (exclusive of any supplement
thereto). The execution, delivery and performance of this Agreement and the
issuance and delivery of the Securities do not violate or cause a default
under any condition or requirement described in the immediately preceding
sentence. All information supplied by the Company with respect to its
applications for such grants was true, correct and complete when supplied
to the Office of the Chief Scientist, except as has not had and would not
have, individually or in the aggregate, a Material Adverse Effect or as set
forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(oo) The Company and each of its Subsidiaries are in compliance, in
all material respects, with the labor and employment laws and collective
bargaining agreements applicable to their respective employees in Israel.
11
(pp) To the Company's knowledge, neither the Company nor any of its
Subsidiaries nor any of its or their properties or assets has any immunity
from the jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid
of execution or otherwise) under the laws of Israel, the United States, or
any state or political subdivision of any thereof.
(qq) The Company is not, and does not believe that, upon
consummation of the transactions contemplated hereby and the application of
the proceeds as described in the Final Prospectus under the caption "Use of
Proceeds," it will become, a passive foreign investment company as defined
in Section 1297 of the Internal Revenue Code of 1986, as amended.
(rr) The Company believes that it qualified for 2003 as an
"Industrial Company" within the definition of the Law for the Encouragement
of Industry (Taxes), 1969; and absent a change in such law, the Company
intends to continue to so qualify for 2004.
(ss) No transaction has occurred between or among the Company or its
Subsidiaries, on the one hand, and any of its officers or directors,
shareholders or any affiliate or affiliates of any such officer or director
or shareholder, on the other, that is required to be described in and is
not described in the Final Prospectus. All approvals necessary to be
received for such transactions under the Company's Organizational
Documents, statute, rule or regulation or by the Nasdaq National Market
have been received.
(tt) For a period of twelve months prior to and including the
Closing Date, the Company has not offered or sold any of its securities in
Israel, save for (i) options issued to its employees or employees of
subsidiaries in Israel and (ii) any of the Securities that may be offered
in Israel, in each case which issuance of options or offering of Securities
was made in compliance with the requirements set forth in the Israeli
Securities Law 5728-1968 and the regulations promulgated thereunder.
(uu) The Company is not a reporting issuer in any province or
territory of Canada.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
2. PURCHASE AND SALE. (a) Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
$17.01 per share, the amount of the Underwritten Securities set forth opposite
such Underwriter's name in Schedule II hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants an
option to the several Underwriters
12
to purchase, severally and not jointly, up to 450,000 Option Securities at the
same purchase price per share as the Underwriters shall pay for the Underwritten
Securities. Said option may be exercised only to cover over-allotments in the
sale of the Underwritten Securities by the Underwriters. Said option may be
exercised in whole or in part at any time on or before the 30th day after the
date of the Final Prospectus upon written or telegraphic notice by the
Representatives to the Company setting forth the number of shares of the Option
Securities as to which the several Underwriters are exercising the option and
the settlement date. The number of shares of the Option Securities to be
purchased by each Underwriter shall be the same percentage of the total number
of shares of the Option Securities to be purchased by the several Underwriters
as such Underwriter is purchasing of the Underwritten Securities, subject to
such adjustments as you in your absolute discretion shall make to eliminate any
fractional shares.
3. DELIVERY AND PAYMENT. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised on or before the third Business
Day prior to the Closing Date) shall be made on the date and at the time
specified in Schedule I hereto or at such time on such later date not more than
three Business Days after the foregoing date as the Representatives shall
designate, which date and time may be postponed by agreement between the
Representatives and the Company or as provided in Section 9 hereof (such date
and time of delivery and payment for the Securities being herein called the
"CLOSING DATE"). Delivery of the Securities shall be made to the Representatives
for the respective accounts of the several Underwriters against payment by the
several Underwriters through the Representatives of the purchase price thereof
to or upon the order of the Company by wire transfer payable in same-day funds
to an account specified by the Company. Delivery of the Underwritten Securities
and the Option Securities shall be made through the facilities of The Depository
Trust Company unless the Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised after
the third Business Day prior to the Closing Date, the Company will deliver the
Option Securities (at the expense of the Company) to the Representatives, at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date specified by the
Representatives (which shall be within three Business Days after exercise of
said option) for the respective accounts of the several Underwriters, against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Company by wire transfer payable in
same-day funds to an account specified by the Company. If settlement for the
Option Securities occurs after the Closing Date, the Company will deliver to the
Representatives on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Final Prospectus.
5. AGREEMENTS. The Company agrees with the several Underwriters
that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective.
13
Prior to the termination of the offering of the Securities, the Company
will not file any amendment of the Registration Statement or supplement
(including the Final Prospectus or any Preliminary Final Prospectus) to the
Basic Prospectus or any Rule 462(b) Registration Statement unless the
Company has furnished you a copy for your review prior to filing and will
not file any such proposed amendment or supplement to which you reasonably
object. Subject to the foregoing sentence, if the Registration Statement
has become or becomes effective pursuant to Rule 430A, or filing of the
Final Prospectus is otherwise required under Rule 424(b), the Company will
cause the Final Prospectus, properly completed, and any supplement thereto
to be filed in a form approved by the Representatives with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the Representatives of
such timely filing. The Company will promptly advise the Representatives
(1) when the Registration Statement, if not effective at the Execution
Time, shall have become effective, (2) when the Final Prospectus, and any
supplement thereto, shall have been filed (if required) with the Commission
pursuant to Rule 424(b) or when any Rule 462(b) Registration Statement
shall have been filed with the Commission, (3) when, prior to termination
of the offering of the Securities, any amendment to the Registration
Statement shall have been filed or become effective, (4) of any request by
the Commission or its staff for any amendment of the Registration
Statement, or any Rule 462(b) Registration Statement, or for any supplement
to the Final Prospectus or for any additional information, (5) 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 (6) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the institution or threatening
of any proceeding for such purpose. The Company will use its best efforts
to prevent the issuance of any such stop order or the suspension of any
such qualification and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Final Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Final Prospectus to comply
with the Act or the Exchange Act or the respective rules thereunder, the
Company promptly will (1) notify the Representatives of such event, (2)
prepare and file with the Commission, subject to the second sentence of
paragraph (a) of this Section 5, an amendment or supplement which will
correct such statement or omission or effect such compliance and (3) supply
any supplemented Final Prospectus to you in such quantities as you may
reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an earnings
statement or statements of the Company and its Subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under the
Act.
14
(d) The Company will furnish to the Representatives and counsel for
the Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a copy
of the Registration Statement (without exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required by the
Act, as many copies of each Preliminary Final Prospectus and the Final
Prospectus and any supplement thereto as the Representatives may reasonably
request. The Company will pay the expenses of printing or other production
of the Registration Statement, any Preliminary Final Prospectus (including
any supplement thereto) and the Final Prospectus (including any supplement
thereto).
(e) The Company will use its best efforts to arrange, if necessary,
for the qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may designate, will maintain such
qualifications in effect so long as required for the distribution of the
Securities and will pay any fee of the National Association of Securities
Dealers, Inc., in connection with its review of the offering of the
Securities; provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified
or to take any action that would subject it to service of process in suits,
other than those arising out of the offering or sale of the Securities, in
any jurisdiction where it is not now so subject.
(f) The Company will not, without the prior written consent of
Citigroup Global Markets Inc., offer, sell, contract to sell, pledge, or
otherwise dispose of, (or enter into any transaction which is designed to,
or might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash settlement
or otherwise) by the Company or any affiliate of the Company or any person
in privity with the Company or any affiliate of the Company) directly or
indirectly, including the filing (or participation in the filing) of a
registration statement with the Commission in respect of, or establish or
increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange Act,
any other Ordinary Shares or any securities convertible into, or
exercisable, or exchangeable for, Ordinary Shares; or publicly announce an
intention to effect any such transaction, until the Business Day set forth
on Schedule I hereto; PROVIDED, HOWEVER, that the Company may issue new
options and issue and sell Ordinary Shares pursuant to any employee stock
option plan, stock ownership plan or dividend reinvestment plan of the
Company in effect at the Execution Time and the Company may issue Ordinary
Shares issuable upon the conversion of securities or the exercise of
warrants outstanding at the Execution Time; PROVIDED FURTHER, HOWEVER, that
the Company may, until the Business Day set forth on Schedule I hereto,
issue up to 700,000 Ordinary Shares in connection with acquisitions, as
long as the recipients of such shares agree to be subject to a
substantially similar lock-up.
(g) The Company will comply in all material respects with all
applicable securities and other applicable laws, rules and regulations,
including, without limitation, the Sarbanes Oxley Act, and will use its
best efforts to cause the Company's directors and officers, in their
capacities as such, to comply with such laws, rules and regulations,
including, without limitation, the provisions of the Sarbanes Oxley Act.
15
(h) The Company will not take, directly or indirectly, any action
designed to or that would constitute or that might reasonably be expected
to cause or result in, under the Exchange Act or otherwise, stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(i) The Company agrees to pay the costs and expenses relating to
the following matters: (A) the preparation, printing or reproduction and
filing with the Commission of the Registration Statement (including
financial statements and exhibits thereto), each Preliminary Final
Prospectus and the Final Prospectus; (B) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting
and packaging) of such copies of the Registration Statement, each
Preliminary Final Prospectus and the Final Prospectus as may, in each case,
be reasonably requested by the Underwriters for use in connection with the
offering and sale of the Securities; (C) the preparation, printing,
authentication, issuance and delivery of certificates for the Securities,
including any stamp or transfer taxes in connection with the original
issuance and sale of the Securities; (D) the printing (or reproduction) and
delivery of this Agreement, any blue sky memorandum and all other
agreements or documents printed (or reproduced) and delivered in connection
with the offering of the Securities; (E) the registration of the Securities
under the Exchange Act and the listing of the Securities on the Nasdaq
National Market and the Tel Aviv Stock Exchange; (F) any registration or
qualification of the Securities for offer and sale under the securities or
blue sky laws of the several states (including filing fees and the
reasonable fees and expenses of counsel for the Underwriters relating to
such registration and qualification); (G) any filings required to be made
with the National Association of Securities Dealers, Inc. (including filing
fees and the reasonable fees and expenses of counsel for the Underwriters
relating to such filings); (H) the transportation and other expenses
incurred by or on behalf of Company representatives in connection with
presentations to prospective purchasers of the Securities; (I) the fees and
expenses of the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company; and (J) all other
costs and expenses incident to the performance by the Company of its
obligations hereunder.
(j) To the extent that it can do so in a manner consistent with its
business objectives, the Company shall use reasonable best efforts to avoid
becoming a PFIC. If the Company determines that is has become a PFIC, it
will use its best efforts to inform its shareholders of such PFIC status as
soon as practicable and to provide its shareholders with the information
and statements requested by them to comply with any applicable reporting
and other requirements of Sections 1291-1298 of the Code.
(k) To the extent that, and for as long as the laws of Israel or
any other foreign jurisdiction in which the Securities are offered require
any permit or approval by, or exemption of, any local authority of the
transactions contemplated hereby to be legally permitted and to remain
effective, the Company will obtain and maintain each such permit, approval
or exemption valid and in full force and effect for such time as is
required by such jurisdiction.
16
(l) The Company will take all actions necessary for listing the
Securities on the Tel Aviv Stock Exchange and will file all required
information with the Israeli Investment Center following the consummation
of the transactions contemplated hereby.
(m) Except for the offer and sale of the Securities contemplated
hereby, the Company will not from the date hereof up to and including the
Closing Date offer or sell any of its securities in Israel, save for
options issued to its Israeli employees and Ordinary Shares that may be
issued to Israelis pursuant to Section 5(f) above, which issuances shall be
made in compliance with the requirements set forth in the Israeli
Securities Law 5728-1968 and the regulations promulgated thereunder.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the Execution Time, the Closing Date and any settlement date pursuant to Section
3 hereof, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 9:30 AM on the Business Day following
the day on which the public offering price was determined, if such
determination occurred after 3:00 PM New York City time on such date; if
filing of the Final Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Final Prospectus, and any such supplement,
will be filed in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been instituted or threatened.
(b) The Company shall have requested and caused Goldfarb, Levy,
Eran & Co., Israeli counsel for the Company, to have furnished to the
Representatives their opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) The Company and Tamar Industries M.R. Electronic
(1985) Ltd., TradaNet Electronic Commerce Services Ltd., Store Next
Ltd. and XxxxxXxxxxxxx.Xxx Ltd. (individually, an "ISRAELI SUBSIDIARY"
and, collectively, the "ISRAELI SUBSIDIARIES") has been duly
incorporated and is validly existing as a company under the laws of
Israel, with full corporate power and authority to own or lease, as
the case may be, and to operate its properties and conduct its
business as described in the Final Prospectus.
(ii) All necessary corporate action has been duly and
validly taken by the Company to authorize the execution, delivery and
performance of this Agreement
17
and the issuance and sale of the Securities by the Company. This
Agreement has been duly and validly authorized, executed and delivered
by the Company.
(iii) All the outstanding shares of capital stock of each
Israeli Subsidiary have been duly and validly authorized and issued
and are fully paid and nonassessable, and, except as otherwise set
forth in the Final Prospectus, based solely on such counsel's review
of the respective shareholder registers of the Israeli Subsidiaries,
all outstanding share capital of the Israeli Subsidiaries is owned by
the Company either directly or through wholly owned subsidiaries free
and clear of any perfected security interest and, to the knowledge of
such counsel, any other security interest or lien.
(iv) The Company's authorized equity capitalization is as
set forth in the Final Prospectus. The share capital of the Company
conforms in all material respects to the description thereof contained
in the Final Prospectus. The outstanding Ordinary Shares have been
duly and validly authorized and issued and are fully paid and
nonassessable. The Securities have been duly and validly authorized,
and, when issued and delivered to and paid for by the Underwriters
pursuant to this Agreement, will be fully paid and nonassessable. The
Securities will be duly listed, admitted and authorized for trading on
the Tel Aviv Stock Exchange upon approval thereof by the Tel Aviv
Stock Exchange.
(v) The certificates for the Securities are in valid and
sufficient form. The holders of outstanding Ordinary Shares are not
entitled under any law or the Organizational Documents of the Company
or the Israeli Subsidiaries and, to such counsel's knowledge, under
any contracts, to preemptive or other rights to subscribe for the
Securities. Except as set forth in the Final Prospectus, no options,
warrants or other rights to purchase, agreements or other obligations
to issue, or rights to convert any obligations into or exchange any
securities for, shares of capital stock of or ownership interests in
the Company are outstanding.
(vi) To the knowledge of such counsel, there is no pending
or threatened material legal proceeding by or before any Israeli court
or governmental agency, or any other Israeli official, authority or
body or any arbitrator in Israel involving the Company or any of its
Subsidiaries or its or their property which is not disclosed in the
Final Prospectus, and, to such counsel's knowledge, there is no
material franchise, contract or other document that has been entered
into by the Company or any of its Subsidiaries other than in the
ordinary course of business and that is not described in the Final
Prospectus or filed as an exhibit to the Registration Statement; and
the statements in the Final Prospectus under the headings
"Business--Legal Proceedings," "Management--Conflict of Interest under
Israeli Law," "--Board Practices" and "Material Tax
Considerations--Israeli Taxation," and in the Base Prospectus under
the headings "Risk Factors--Risks Related To Our Location in
Israel--We currently participate in or receive tax benefits from
government programs. These programs require us to meet certain
conditions and these programs and benefits could be terminated or
reduced
18
in the future, which could harm our results of operations," "--Risks
Related To Our Location in Israel--Because we have received grants
from the Office of the Chief Scientist, we are subject to ongoing
restrictions that limit the transferability of our technology and of
our right to manufacture outside of Israel, and certain of our large
shareholders are required to undertake to observe such restrictions,"
"Share Capital" and "Enforcement of Civil Liabilities," insofar as
such statements summarize Israeli legal matters, agreements, documents
or proceedings discussed therein, are accurate and fair summaries of
such legal matters, agreements, documents or proceedings.
(vii) The Registration Statement, the Final Prospectus and
all other filings by the Company with the Commission have been duly
authorized (and the Registration Statement has been duly executed) by
and on behalf of the Company.
(viii) Assuming that the Securities are not offered in
Israel to investors that are not qualified under Section 15A(b) of the
Securities Law, 5729-1968, in excess of the number of non-qualified
investors remaining to the Company under Section 15A(a)(1) thereof, no
consent, approval, authorization, filing with or order, designation or
declaration of, by or with any Israeli court or Israeli regulatory,
administrative or other governmental agency or body is required to be
obtained or performed by the Company or any of its Subsidiaries in
connection with the execution and delivery by the Company of this
Agreement and the consummation of the transactions contemplated
herein, except (A) the approval of the Investment Center and the
Office of the Chief Scientist, each of which has been obtained and is
in full force and effect and which, in the case of the approval of the
Investment Center, is subject to the filing of certain information
following the consummation of the transactions contemplated hereby and
(B) the approval of the Tel Aviv Stock Exchange to list the Securities
thereon. To the knowledge of such counsel, no proceedings to rescind
or modify such consents, approvals, authorizations and exemptions have
been instituted and none are pending or contemplated by any Israeli
authority.
(ix) To the knowledge of such counsel, the Israeli
Securities Authority has not issued an order preventing or suspending
the use of any Basic Prospectus, any Preliminary Final Prospectus or
the Final Prospectus relating to the proposed offering of the
Securities nor has it instituted proceedings for that purpose.
(x) Neither the issue and sale of the Securities, nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof, will conflict with, result in a
breach or violation of, give rise to a right to terminate or
accelerate the due date of any payment due under, or result in the
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its Israeli Subsidiaries pursuant to,
(i) the Organizational Documents of the Company or any of the Israeli
Subsidiaries, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument of
19
which such counsel is aware, to which the Company or any of its
Israeli Subsidiaries is a party or bound or to which its or their
property is subject, or (iii) any Israeli statute, law, rule,
regulation or, to the knowledge of such counsel, any judgment, order
or decree applicable to the Company or any of its Israeli Subsidiaries
of any Israeli court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction
over the Company or any of its Israeli Subsidiaries or any of its or
their properties, except in the case of clause (ii) for any conflict,
breach, violation, lien, charge or encumbrance as would not have,
individually or in the aggregate, a Material Adverse Effect.
(xi) To the knowledge of such counsel, no default exists,
and no event has occurred which with notice or lapse of time, or both,
would constitute a default, in the due performance and observance of
any term, covenant or condition by the Company of any indenture,
mortgage, deed of trust, note or any other agreement or instrument to
which the Company is a party or by which it or any of its assets or
properties or businesses may be bound or affected, that is described
in, referred to in or filed as an Exhibit to the Registration
Statement, where the consequences of such default, individually or in
the aggregate, has had and would have, individually or in the
aggregate, a Material Adverse Effect on the Company and except as set
forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(xii) No holders of securities of the Company have rights
to the registration of such securities under the Registration
Statement; except as disclosed in the Registration Statement and the
Final Prospectus, to the knowledge of such counsel, upon the
consummation of the transactions contemplated hereby, the Company will
not have any material obligations pursuant to any shareholders'
agreements or voting trusts with respect to any securities of the
Company.
(xiii) To the knowledge of such counsel, none of the
licenses, approvals or permits described in the Final Prospectus as
having been issued by any Israeli authority have been rescinded or
modified and such licenses, approvals or permits are in full force and
effect, except as has not had and would not have, individually or in
the aggregate, a Material Adverse Effect or as set forth in or
contemplated in the Final Prospectus (exclusive of any supplement
thereto); such counsel is not aware that any proceedings to rescind or
modify such licenses, approvals or permits have been instituted and
are pending or threatened by any Israeli authority; and under exchange
control regulations currently in effect there are no authorizations or
consents required from any governmental or regulatory body in Israel
to give nonresidents of Israel the right to freely repatriate to
non-Israel currency all amounts received with respect to Securities
that were purchased with non-Israel currency, whether as a dividend,
as a liquidating distribution or as proceeds from the sale of such
shares, subject to applicable tax withholding.
20
(xiv) To the knowledge of such counsel, all real property
and buildings held under lease by the Company in Israel are held by it
under valid, subsisting and enforceable leases, with such exceptions
as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company as
described in the Final Prospectus.
(xv) Except for Israeli stamp tax duties that may be
payable in connection with this Agreement, there are no share transfer
taxes, stamp duties or other similar fees or charges under the laws of
Israel or any political subdivision thereof, required to be paid in
connection with the execution and delivery of this Agreement or the
issuance, delivery or sale by the Company of the Securities.
(xvi) Under the laws of Israel, the submission by the
Company to the jurisdiction of any federal or state court sitting in
New York and the designation of the law of the State of New York to
apply to this Agreement will be binding upon the Company and, if
properly brought to the attention of the court or administrative body
in accordance with the laws of Israel, would be enforceable in any
judicial or administrative proceeding in Israel subject to the
existence of special circumstances or considerations, and subject
generally to the discretion of the Israeli court ruling on the matter.
(xvii) Subject to certain time limitations, Israeli courts
have the authority to enforce United States final executory judgments
for liquidated amounts in civil matters, obtained after due process
before a court of competent jurisdiction (according to the laws of the
state in which the judgment was given and the rules of private
international law currently prevailing in Israel), provided that (i)
the judgment is enforceable in the state in which it was given; (ii)
adequate service of process has been effected and the defendant has
had a reasonable opportunity to present his arguments and defense;
(iii) the judgment or the enforcement thereof is not contrary to the
law, public policy, security or sovereignty of Israel; (iv) the
judgment was not obtained by fraud and does not conflict with any
other valid judgment in the same matter between the same parties; and
(v) an action between the same parties in the same matter is not
pending in any Israeli court at the time the lawsuit is instituted in
the foreign court.
(xviii) The Company has appointed Retalix USA Inc. as the
authorized agent of the Company for the purpose described in Section
17 of this Agreement.
Such opinion shall also state that, although such counsel is not
passing upon and assumes no responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement or
the Final Prospectus (except to the extent specified in such opinion), such
counsel has no reason to believe that on the Effective Date or the date the
Registration Statement was last deemed amended the Registration Statement
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Final Prospectus as of its
date and on the Closing Date included or includes any untrue statement of a
material fact or omitted or omits to state a material fact
21
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (in each case, other than the
financial statements and related notes thereto and other financial or
accounting data contained therein, as to which such counsel need express no
opinion).
Such opinion shall be limited solely to the laws of Israel. In
rendering such opinion, such counsel may rely on certificates of
responsible officers of the Company and public officials. References to the
Final Prospectus in this paragraph (b) shall also include any supplements
thereto at the Closing Date.
(c) The Company shall have requested and caused Xxxxxxxx &
Worcester LLP, United States counsel for the Company, to have furnished to
the Representatives their opinion, dated the Closing Date and addressed to
the Representatives, to the effect that:
(i) Each of Retalix Holdings, Inc., Retalix USA Inc., Retail
Control Systems, Inc., BASS, Inc., StoreNext Retail Technology, LLC
and OMI International Inc. (each, a "U.S. SUBSIDIARY" and,
collectively, the "U.S. SUBSIDIARIES") has been duly incorporated or
organized, as applicable, and is validly existing as a corporation or
limited liability company in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full
corporate or limited liability company power and authority to own or
lease, as the case may be, and to operate its properties and conduct
its business as described in the Final Prospectus, and is duly
qualified to do business as a foreign corporation or limited liability
company, as the case may be, and is in good standing under the laws of
each jurisdiction which requires such qualification, except where the
failure to be so qualified to do business as a foreign corporation or
limited liability company, as the case may be, or be in good standing
under the laws of each jurisdiction which requires such qualification
has not had and would not have, individually or in the aggregate, a
Material Adverse Effect.
(ii) All the outstanding shares of capital stock or
membership interest, as the case may be, of each U.S. Subsidiary have
been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Final
Prospectus, all outstanding shares of capital stock or membership
interests of each U.S. Subsidiary are owned by the Company either
directly or through wholly owned subsidiaries. To the knowledge of
such counsel, such shares are owned free and clear of any perfected
security interest, claim, lien or encumbrance.
(iii) The Securities are duly listed for trading, subject to
official notice of issuance, on the Nasdaq National Market.
(iv) To the knowledge of such counsel, (i) there is no
pending or threatened action, suit or proceeding by or before any U.S.
court or governmental agency, or any other U.S. official authority or
body or any arbitrator involving the Company or any of its
Subsidiaries or its or their property of a character required to be
disclosed in the Registration Statement which is not adequately
disclosed in
22
the Final Prospectus, and (ii) there is no franchise, contract or
other document of a character required to be described in the
Registration Statement or Final Prospectus, or to be filed as an
exhibit thereto, which is not described or filed as required; and the
statements in the Final Prospectus under the headings "Business--Legal
Proceedings" and "Material Tax Considerations--U.S. Taxation," insofar
as such statements summarize United States legal matters, agreements
or proceedings discussed therein, are accurate and fair summaries of
such legal matters, agreements or proceedings.
(v) The Registration Statement has become effective under
the Act; any required filing of the Basic Prospectus, Preliminary
Final Prospectus and Final Prospectus, and any supplements thereto,
pursuant to Rule 424(b) has been made in the manner and within the
time period required by Rule 424(b); to the knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for that purpose have
been instituted or threatened; the Registration Statement and the
Final Prospectus (other than the financial statements and related
notes thereto and the other financial or accounting data contained
therein, as to which such counsel need express no opinion) comply as
to form in all material respects with the applicable requirements of
the Act and the Exchange Act and the respective rules thereunder.
(vi) This Agreement has been duly and validly executed and
delivered by the Company.
(vii) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Final Prospectus, will not be, an
"investment company" as defined in the Investment Company Act of 1940,
as amended.
(viii) No consent, approval, authorization, filing with or
order of any court or governmental agency or body of the United States
(or any state or political subdivision thereof) is required to be
obtained or performed by the Company or any of its Subsidiaries in
connection with the transactions contemplated herein, except such as
have been obtained under the Act and such as may be required under the
blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated in this Agreement and in the Final Prospectus and such
other approvals (specified in such opinion) as have been obtained.
(ix) Neither the issue and sale of the Securities, nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation of, or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
U.S. Subsidiaries pursuant to, (i) the Organizational Documents of any
U.S. Subsidiary, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument of which such
counsel is aware, to which the Company or
23
any of its U.S. Subsidiaries is a party or bound or to which its or
their property is subject, or (iii) any U.S. statute, law, rule,
regulation or, to the knowledge of such counsel, any judgment, order
or decree applicable to the Company or any of its U.S. Subsidiaries of
any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority of the United States (or any state or
political subdivision thereof) having jurisdiction over the Company or
any of its U.S. Subsidiaries or any of its or their properties, except
in the case of clause (ii) for any conflict, breach, violation, lien,
charge or encumbrance as would not have, individually or in the
aggregate, a Material Adverse Effect.
(x) Assuming the validity of such actions under the laws of
Israel, the Company has validly appointed Retalix USA Inc. as its
authorized agent for service of process pursuant to the Agreement, and
service of process effected on such agent in the manner set forth in
Section 17 of the Agreement will be effective to confer valid personal
jurisdiction in any New York court over the Company.
Such opinion shall also state that, although such counsel is not
passing upon and assumes no responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement or
the Final Prospectus (except to the extent specified in such opinion), such
counsel has no reason to believe that on the Effective Date or the date the
Registration Statement was last deemed amended the Registration Statement
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Final Prospectus as of its
date and on the Closing Date included or includes any untrue statement of a
material fact or omitted or omits to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading (in each case, other than the financial
statements and related notes thereto and the other financial or accounting
data contained therein, as to which such counsel need express no opinion).
Such opinion shall be limited solely to the laws of the State of New
York, the Commonwealth of Massachusetts, the General Corporation Law of the
State of Delaware and the Federal laws of the United States. In rendering
such opinion, such counsel may rely as to matters of fact, to the extent
they deem proper, on certificates of responsible officers of the Company
and public officials. References to the Final Prospectus in this paragraph
(c) shall also include any supplements thereto at the Closing Date.
(d) The Representatives shall have received from Fischer, Behar,
Chen & Co., Israeli counsel for the Underwriters, and Weil, Gotshal &
Xxxxxx LLP, U.S. counsel for the Underwriters, such opinion or opinions,
dated the Closing Date and addressed to the Representatives, with respect
to the issuance and sale of the Securities, the Registration Statement, the
Final Prospectus (together with any supplement thereto) and other related
matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
24
(e) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the Company,
dated the Closing Date, to the effect that the signers of such certificate
have carefully examined the Registration Statement, the Final Prospectus,
any supplements to the Final Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in
this Agreement are true and correct on and as of the Closing Date with
the same effect as if made on the Closing Date and the Company has
complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial
statements included or incorporated by reference in the Final
Prospectus (exclusive of any supplement thereto), there has been no
Material Adverse Effect, except as set forth in or contemplated in the
Final Prospectus (exclusive of any supplement thereto).
(f) The Company shall have requested and caused Xxxxxxxxx &
Xxxxxxxxx, a member of PricewaterhouseCoopers International Limited, to
have furnished to the Representatives, at the Execution Time and at the
Closing Date, letters (which may refer to letters previously delivered to
one or more of the Representatives), dated respectively as of the Execution
Time and as of the Closing Date, in form and substance satisfactory to the
Representatives, stating in effect that:
(i) they are independent certified public accountants
with respect to the Company within the meaning of the Act and the
applicable rules and regulations thereunder adopted by the Commission;
(ii) in their opinion the consolidated financial
statements and financial statement schedules audited by them and
incorporated by reference or included, as the case may be, in the
Registration Statement and the Final Prospectus comply as to form in
all material respects with the applicable accounting requirements of
the Act and related rules and regulations adopted by the Commission;
(iii) on the basis of a reading of the latest unaudited
financial data made available by the Company and its Subsidiaries;
carrying out certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of the
2004 meetings of the stockholders, board of directors, and the audit
committee and other committees of the Company as set forth in the
minute books at a date not more than five business days prior to the
date of the letter; inquiries of certain officials of the Company who
have responsibility for financial and accounting
25
matters as to transactions and events subsequent to December 31, 2003;
and reading the letters dated April 28, 2004 of Nation Xxxxx Hermes
Diamond (an independent member of the BDO Xxxxxxx Alliance), with
regard to Retalix Holdings, Inc. and subsidiaries for the years ended
December 31, 2001, 2002 and 2003, of Flagel, Huber, Xxxxxx & Co., with
regard to BASS Inc. for the year ended December 31, 2001, and of Xxxx
Xxxxx Xxxxx & Kasierer (a member of Ernst & Young Global), with regard
to Cell-Time Ltd. for the year ended December 31, 2003, nothing came
to their attention which caused them to believe that with respect to
the period subsequent to December 31, 2003, there were any changes in
the consolidated capital stock or increases in consolidated long-term
debt of the Company and its subsidiaries at March 31, 2004, as
compared with the amounts shown on the December 31, 2003 audited
consolidated balance sheet incorporated by reference or included, as
the case may be, in the Registration Statement and the Final
Prospectus, or for the period from January 1, 2004 to March 31, 2004
there were any decreases, as compared with the corresponding period in
the preceding year, in consolidated net sales of the Company and its
subsidiaries, except in all instances for changes or decreases which
the Registration Statement and the Final Prospectus discloses have
occurred or may occur;
(iv) on the basis of carrying out certain even more
limited procedures, consisting of inquiries of certain officials of
the Company who have responsibility for financial and accounting
matters as to transactions and events subsequent to March 31, 2004; a
reading of the minutes of the 2004 meetings of the stockholders, board
of directors, and the audit committee and other committees of the
Company as set forth in the minute books at a date not more than five
business days prior to the date of the letter; and reading the letters
dated April 28, 2004 of Nation Xxxxx Hermes Diamond (an independent
member of the BDO Xxxxxxx Alliance), with regard to Retalix Holdings,
Inc. and subsidiaries for the years ended December 31, 2001, 2002 and
2003, of Flagel, Huber, Xxxxxx & Co., with regard to BASS Inc. for the
year ended December 31, 2001, and of Xxxx Xxxxx Xxxxx & Kasierer (a
member of Ernst & Young Global), with regard to Cell-Time Ltd. for the
year ended December 31, 2003, nothing came to their attention which
caused them to believe that with respect to the period subsequent to
March 31, 2004, there were any changes in the consolidated capital
stock or increases in consolidated long-term debt of the Company and
its subsidiaries at a specified date not more than five days prior to
the date of the letter, as compared with the amounts shown on the
December 31, 2003 audited consolidated balance sheet incorporated by
reference or included, as the case may be, in the Registration
Statement and the Final Prospectus, or for the period from March 31,
2004 to such specified date, there were any decreases, as compared
with the corresponding period in the preceding year, in consolidated
net sales of the Company and its subsidiaries, except in all instances
for changes or decreases which the Registration Statement and the
Final Prospectus discloses have occurred or may occur;
26
(v) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature (which
is limited to accounting, financial or statistical information derived
from the general accounting records of the Company and its
subsidiaries) set forth in the Registration Statement and the Final
Prospectus, including (without limitation) certain information set
forth under the captions "Prospectus Supplement Summary,"
"Capitalization," "Selected Consolidated Financial Data,"
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Business" in the Final Prospectus, and the
information included or incorporated by reference in Items 3, 4, 5,
and 11 of the Company's Report on Form 20-F, incorporated by reference
in the Registration Statement and the Final Prospectus, agrees with
the accounting records of the Company and its subsidiaries, excluding
any questions of legal interpretation;
(vi) on the basis of a reading of the unaudited pro forma
financial statements; carrying out certain specified procedures;
inquiries of certain officials of the Company and OMI International
Inc. who have responsibility for financial and accounting matters; and
proving the arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts in the pro forma financial
statements, nothing came to their attention which caused them to
believe that the pro forma financial statements included in the Final
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X or
that the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of such statements.
References to the Final Prospectus in this paragraph (f) include any
supplement thereto at the date of the letter.
(g) The Company shall have requested and caused Deloitte & Touche
LLP to have furnished to the Representatives, at the Execution Time and at
the Closing Date, letters (which may refer to letters previously delivered
to one or more of the Representatives) with respect to the financial
information of OMI International, Inc., included or incorporated by
reference in the Registration Statement and the Final Prospectus, in form
and substance satisfactory to the Representatives, (1) confirming that they
are independent public accountants within the meaning of the Act and the
Exchange Act and the respective rules and regulations of the Commission
adopted thereunder and (2) stating, as of the date of the letter (or, with
respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Final
Prospectus, as of a date not more than five days prior to the date of the
letter), the conclusions and findings of such firm with respect to the
financial information and other matters ordinarily covered by accountants'
"comfort letters" to underwriters in connection with registered public
offerings. All references to the Final Prospectus in this paragraph (g)
include any supplement thereto at the date of the letter.
(h) Subsequent to the Execution Time or, if earlier, the dates as
of which information is given in the Registration Statement (exclusive of
any amendment thereof)
27
and the Final Prospectus (exclusive of any supplement thereto), there shall
not have been (i) any change specified in the letters referred to in
paragraphs (f) and (g) of this Section 6 or (ii) any change, or any
development involving a prospective change, in or affecting the condition
(financial or otherwise), earnings, business or properties of the Company
and its Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Final Prospectus (exclusive of any supplement thereto)
the effect of which, in any case referred to in clause (i) or (ii) above,
is, in the judgment of the Representatives, so material and adverse as to
make it impractical or inadvisable to proceed with the offering or delivery
of the Securities as contemplated by the Registration Statement (exclusive
of any amendment thereof) and the Final Prospectus (exclusive of any
supplement thereto).
(i) Prior to the Closing Date, the Company shall have furnished to
the Representatives such further information, certificates and documents as
the Representatives may reasonably request.
(j) The Securities shall have been listed for trading on the Nasdaq
National Market and an application for the listing of the Securities on the
Tel Aviv Stock Exchange shall have been submitted by the Company, and
satisfactory evidence of such actions shall have been provided to the
Representatives.
(k) At the Execution Time, the Company shall have furnished to the
Representatives a letter substantially in the form of Exhibit A hereto from
each executive officer and director of the Company, addressed to the
Representatives.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as provided in this Agreement, or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement shall not be in
reasonably satisfactory form and substance to the Representatives and counsel
for the Underwriters, this Agreement and all obligations of the Underwriters
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Weil, Gotshal & Xxxxxx LLP, counsel for the
Underwriters, at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the Closing
Date.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. 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 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally through Citigroup Global Markets Inc. on demand for all out-of-pocket
expenses (including reasonable fees and disbursements of counsel) that shall
have been incurred by them in connection with the proposed purchase and sale of
the Securities.
28
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration of
the Securities as originally filed or in any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless the Company, each of its directors, each of its officers who
signs the Registration Statement, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, to the same extent as
the foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company acknowledges that the statements
set forth in the last paragraph of the cover page regarding delivery of the
Securities and, under the heading "Underwriting," (i) the list of Underwriters
and their respective participation in the sale of the Securities, (ii) the
sentences related to concessions and reallowances, (iii) the paragraph relating
to short sales, stabilization and syndicate covering transactions, (iv) the
paragraph relating to passive market making, (v) the paragraph relating to
restrictions on offers of Ordinary Shares in the United Kingdom and The
Netherlands, (vi) the paragraph relating to the availability of a prospectus in
electronic format, Internet distributions and online brokerage account holders
and (vii) the paragraph relating to penalty bids in any Preliminary Final
Prospectus and the Final Prospectus constitute the only information furnished in
writing by or on behalf of the several Underwriters for inclusion in any
Preliminary Final Prospectus or the Final Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will
29
not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
PROVIDED, HOWEVER, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the indemnifying
party shall authorize in writing the indemnified party to employ separate
counsel at the expense of the indemnifying party. It is understood, however,
that the Company shall, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the fees and
expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for all such Underwriters and controlling persons, which
firm shall be designated in writing by Citigroup Global Markets Inc. An
indemnifying party will not, without the prior written consent (which shall not
be unreasonably withheld) of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters severally
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "LOSSES") to which the Company
and one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and by the Underwriters on the other from the offering of the Securities;
PROVIDED, HOWEVER, that in no case shall any Underwriter (except as may be
provided in any agreement among underwriters relating to the offering of the
Securities) be responsible for any amount in excess of the underwriting discount
or commission applicable to the Securities purchased by such Underwriter
hereunder. If the allocation provided by the
30
immediately preceding sentence is unavailable for any reason, the Company and
the Underwriters severally shall contribute in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the
Company on the one hand and of the Underwriters on the other in connection with
the statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company shall be
deemed to be equal to the total net proceeds from the offering of the Securities
(before deducting expenses) received by it, and benefits received by the
Underwriters shall be deemed to be equal to the total underwriting discounts and
commissions, in each case as set forth on the cover page of the Final
Prospectus. Relative fault shall be determined by reference to, among other
things, whether any untrue or any alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to information
provided by the Company on the one hand or the Underwriters on the other, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls
the Company within the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d).
9. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule II hereto bears to the aggregate amount
of Securities set forth opposite the names of all the remaining Underwriters)
the Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase; PROVIDED, HOWEVER, that in the event that the aggregate
amount of Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate amount of Securities set
forth in Schedule II hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Securities, and if such nondefaulting Underwriters do not purchase all the
Securities, this Agreement will terminate without liability to any nondefaulting
Underwriter or the Company. In the event of a default by any Underwriter as set
forth in this Section 9, the Closing Date shall be postponed for such period,
not exceeding five Business Days, as the Representatives shall determine in
order that the required changes in the Registration Statement and the Final
Prospectus or in any other documents or arrangements may be effected. Nothing
contained in this Agreement shall relieve any defaulting Underwriter
31
of its liability, if any, to the Company and any nondefaulting Underwriter for
damages occasioned by its default hereunder.
10. TERMINATION. This Agreement shall be subject to termination in
the discretion of the Representatives, by notice given to the Company prior to
delivery of and payment for the Securities, if at any time prior to such time
(i) trading in the Company's Ordinary Shares shall have been suspended by the
Commission, the Israeli Securities Authority, the Nasdaq National Market or the
Tel Aviv Stock Exchange or trading in securities generally on the New York Stock
Exchange, the Nasdaq National MARKET or the Tel Aviv Stock Exchange shall have
been suspended or limited or minimum prices shall have been established on such
Exchanges or the Nasdaq National Market, (ii) a banking moratorium shall have
been declared either by Federal or New York State authorities or (iii) there
shall have occurred any outbreak or escalation of hostilities, declaration by
the United States of a national emergency or war, or other calamity or crisis
the effect of which on financial markets is such as to make it, in the judgment
of the Representatives, impractical or inadvisable to proceed with the offering
or delivery of the Securities as contemplated by the Final Prospectus (exclusive
of any supplement thereto).
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors, employees, agents or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Citigroup Global Markets Inc. General Counsel (fax
no.: (000) 000-0000) and confirmed to the General Counsel, Citigroup Global
Markets Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention:
General Counsel; or, if sent to the Company, will be mailed, delivered or
telefaxed to Retalix Ltd., Chief Financial Officer (fax no. x000-0-000-0000) and
confirmed to it at Retalix Ltd., 00 Xxxxxx Xxxxxx, Corex House, 43000, Ra'anana,
Israel, Attention: Chief Financial Officer, with a copy to Xxxxxx X. Xxxxx,
Xxxxxxxx & Worcester LLP (fax no. (000) 000-0000) and confirmed to Xxxxxx X.
Xxxxx, Xxxxxxxx & Worcester LLP, Xxx Xxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000.
13. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. APPLICABLE LAW. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
32
15. COUNTERPARTS. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. HEADINGS. The section headings used herein are for convenience
only and shall not affect the construction hereof.
17. JURISDICTION. The Company agrees that any suit, action or
proceeding against the Company brought by any Underwriter, the directors,
officers, employees and agents of any Underwriter, or by any person who controls
any Underwriter, arising out of or based upon this Underwriting Agreement or the
transactions contemplated hereby may be instituted in any New York Court, and
waives any objection which it may now or hereafter have to the laying of venue
of any such proceeding, and irrevocably submits to the non-exclusive
jurisdiction of such courts in any suit, action or proceeding. The Company has
appointed Retalix USA Inc., which currently maintains an office at 0000 Xxxxxxxx
Xxxxxxx, Xxxxx 000, Xxxxx, Xxxxx 00000, Xxxxxx Xxxxxx of America, as its
authorized agent (the "AUTHORIZED AGENT") upon whom process may be served in any
suit, action or proceeding arising out of or based upon this Agreement or the
transactions contemplated herein which may be instituted in any New York Court,
by any Underwriter, the directors, officers, employees and agents of any
Underwriter, or by any person who controls any Underwriter, and expressly
accepts the non-exclusive jurisdiction of any such court in respect of any such
suit, action or proceeding. The Company hereby represents and warrants that the
Authorized Agent has accepted such appointment and has agreed to act as said
agent for service of process, and the Company agrees to take any and all action,
including the filing of any and all documents that may be necessary to continue
such appointment in full force and effect as aforesaid. Service of process upon
the Authorized Agent shall be deemed, in every respect, effective service of
process upon the Company . Notwithstanding the foregoing, any action arising out
of or based upon this Agreement may be instituted by any Underwriter, the
directors, officers, employees and agents of any Underwriter, or by any person
who controls any Underwriter, in any court of competent jurisdiction in Israel.
The provisions of this Section 17 shall survive any termination of this
Agreement, in whole or in part.
18. WAIVER OF JURY TRIAL. Each party hereto irrevocably waives all
right to trial by jury in any action, proceeding or counterclaim (whether based
on contract, tort or otherwise) arising out of or relating to this Agreement or
the transactions contemplated hereby or the actions of the parties hereto in the
negotiation, performance or enforcement hereof.
19. DEFINITIONS. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Basic Prospectus" shall mean the prospectus referred to in
paragraph 1(a) above contained in the Registration Statement at the
Effective Date including any Preliminary Final Prospectus.
33
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement relating to
the Securities that was first filed pursuant to Rule 424(b) after the
Execution Time, together with the Basic Prospectus.
"Material Adverse Effect" shall mean an effect that could reasonably
be expected to have a material adverse effect on the condition (financial
or otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
"Preliminary Final Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Securities and the
offering thereof and is used prior to filing of the Final Prospectus,
together with the Basic Prospectus.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b) Registration
Statement, as the case may be. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as provided
by Rule 430A.
"Rule 415," "Rule 424," "Rule 430A" and "Rule 462" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
34
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the registration statement referred to in
Section 1(a) hereof.
[SIGNATURE PAGES FOLLOW]
35
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the Company
and the several Underwriters.
Very truly yours,
Retalix Ltd.
By: /s/ Xxxxx Xxxxxx
------------------------------
Name: Xxxxx Xxxxxx
Title: Chief Executive Officer
Retalix USA Inc.
(solely in respect of Section 17 hereof)
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: CEO
36
The foregoing Agreement is hereby confirmed and accepted as of the date
specified in Schedule I hereto.
Citigroup Global Markets Inc.
By: /s/ Xxxx Xxxxxxx
----------------------------
Name: Xxxx Xxxxxxx
Title: Managing Director
For itself and the other several Underwriters, if any, named in Schedule II to
the foregoing Agreement.
37
SCHEDULE I
Underwriting Agreement dated April 28, 2004
Registration Statement No. 333-110681
Representative(s): Citigroup Global Markets Inc.
UBS Securities LLC,
Xxxxx Xxxxxxx & Co.
X.X. Xxxxxxxxx, Towbin LLC
Title, Purchase Price and Description of Securities:
Title: Ordinary Shares
Number of Shares to be sold by the Company: 3,000,000
Price to Public per Share (include accrued dividends, if any): $18.00
Price to Public -- total: $54,000,000
Underwriting Discount per Share: $0.99
Underwriting Discount -- total: $2,970,000
Proceeds to Company per Share: $17.01
Proceeds to Company -- total: $51,030,000
Closing Date, Time and Location: May 4, 2004 at 10:00 a.m. at the offices
of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Type of Offering: Non-Delayed
Date referred to in Section 5(f) after which the Company may offer or sell
securities issued or guaranteed by the Company without the consent of the
Representative(s): August 2, 2004
Over-allotment Option: 450,000 shares
SCHEDULE II
NUMBER OF UNDERWRITTEN
UNDERWRITERS SECURITIES TO BE PURCHASED
------------ --------------------------
Citigroup Global Markets Inc. 1,350,000
UBS Securities LLC 975,000
Xxxxx Xxxxxxx & Co. 450,000
X.X. Xxxxxxxxx, Towbin LLC 225,000
--------------------------
Total ........................................ 3,000,000
==========================
[Form of Lock-Up Agreement] EXHIBIT A
[LETTERHEAD OF OFFICER, DIRECTOR OR MAJOR STOCKHOLDER OF
RETALIX LTD.]
RETALIX LTD. -- PUBLIC OFFERING OF ORDINARY SHARES
April 28, 2004
Citigroup Global Markets Inc.
UBS Securities LLC
Xxxxx Xxxxxxx & Co.
X.X. Xxxxxxxxx, Towbin LLC
As Representative of the several Underwriters,
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "
UNDERWRITING AGREEMENT"), between
Retalix Ltd, an
Israeli company (the "COMPANY"), and each of you as representatives of a group
of Underwriters named therein, relating to an underwritten public offering of
Ordinary Shares (the "ORDINARY SHARES") of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting
Agreement, the undersigned will not, without the prior written consent of
Citigroup Global Markets Inc., offer, sell, contract to sell, pledge or
otherwise dispose of (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the undersigned or any affiliate of the undersigned or any person
in privity with the undersigned or any affiliate of the undersigned), directly
or indirectly, including the filing (or participation in the filing) of a
registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to, any
shares of capital stock of the Company or any securities convertible into or
exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such transaction, for a period of 90 days after the date
of the
Underwriting Agreement, other than Ordinary Shares disposed of as bona
fide gifts approved by Citigroup Global Markets Inc.
If for any reason the
Underwriting Agreement shall be terminated prior to the
Closing Date (as defined in the
Underwriting Agreement), the agreement set forth
above shall likewise be terminated.
Yours very truly,
[Signature of officer, director or major stockholder]
[Name and address of officer, director or major stockholder]
