Exhibit 4.6
AMENDED AND RESTATED
SHAREHOLDERS RIGHTS AGREEMENT
THIS AMENDED AND RESTATED
SHAREHOLDERS RIGHTS AGREEMENT (the “Agreement”) is made as of July 20,
2007 by and among NEGEVTECH LTD., an Israeli corporation (the
“Company”), and the individuals and entities identified in
Schedule A annexed hereto, each hereinafter referred to individually as an
“Investor” and, collectively, as the “Investors”.
W I T N E S S E T H:
WHEREAS,
the Company and the Prior Investors (as defined below) are parties to that certain
Shareholders’ Rights Agreement dated as of September 13, 2005, as amended on March
22, 2006 and on September 26, 2006 (the “Prior
Agreement”); and
WHEREAS,
the Investors, (which include certain of the Prior Investors) are parties to that certain
Series A1 Share Purchase Agreement of even date herewith between the Company and certain
of its shareholders (the “A1 Share Purchase Agreement”), pursuant to
which the Investors are purchasing Series A1 Preferred Shares of the Company; and
WHEREAS,
upon the Recapitalization and the Closing pursuant to the A1 Share Purchase Agreement (as
such terms are defined therein), all the Company’s preferred shares shall
automatically be converted into Ordinary Shares and any Prior Investor who shall become a
Participating Investor (as such term is defined in the A1 Share Purchase Agreement) shall
be issued, in lieu of such Ordinary Shares, Ordinary Preferred A Shares and/or Ordinary
Preferred B Shares, as the case may be and as provided therein; and
WHEREAS,
the Company and the Investors desire to amend and restate the Prior Agreement in
accordance with Section 12.4 of the Prior Agreement, to read as set forth herein; and
WHEREAS,
the Investors represent holders of at least a majority of the Registrable Securities
pursuant to the Prior Agreement and are therefore eligible, in accordance with Section
12.4 of the Prior Agreement, to amend the Prior Agreement as aforesaid;
NOW,
THEREFORE, in consideration of the mutual promises and covenants set forth herein, the
parties hereby agree that the Prior Agreement is hereby amended and restated in its
entirety, as follows:
1.
Definitions. For purposes of this Section:
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1.1
The
term “Articles of Association” means the Amended Articles of Association
of the Company in effect as of the date hereof, as may be amended from time to time. |
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1.2
The
term “as-converted basis” means assuming the theoretical conversion of
all outstanding Preferred Shares into Ordinary Shares, at the then applicable conversion
ratio. |
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1.3
The
term "Holder" means a holder of Registrable Securities who is a party to this Agreement. |
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1.4
The
term "Initiating Holders" means the holders of a majority of the Registrable
Securities then outstanding. |
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1.5
The
term “IPO” shall mean the consummation of the Company’s first sale
of its shares to the public in a bona fide underwriting pursuant to a registration
statement under the Act. |
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1.6
The
term “Major Shareholder” shall mean a holder of Preferred Shares holding
at least 2.5% of the issued and outstanding shares of the Company, on an as-converted
basis. |
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1.7
The
term “Ordinary Shares” shall mean Ordinary Shares of the Company, par
value NIS 1 each. |
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1.8
The
term “Ordinary Preferred A Shares” shall mean Ordinary Preferred A
Shares of the Company, par value NIS 1 each |
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1.9
The
term “Ordinary Preferred B Shares” shall mean Ordinary Preferred B
Shares of the Company, par value NIS 1 each. |
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1.10
The
term “Permitted Transferee” shall have the meaning given to it in the
Articles of Association. |
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1.11
The
term “Preferred A1 Shares” shall mean Series A1 Preferred Shares of the
Company, par value NIS 1 each. |
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1.11
The
term “Preferred Shares” shall mean the Ordinary Preferred A Shares, the
Ordinary Preferred B Shares and the Preferred A1 Shares. |
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1.12
The
term “Prior Investors” shall mean the holders of all of the preferred
shares of the Company issued and outstanding immediately prior to the Closing and the
Recapitalization, as such terms are defined in the A1 Share Purchase agreement. |
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1.13
The
term “Qualified IPO” shall mean the consummation of a firm commitment
underwritten public offering of the Company’s shares, with aggregate gross proceeds
to the Company of at least US$ 30,000,000, at an offering price per share representing a
pre-money valuation of the Company of at least US$130,000,000. |
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1.14
The
terms “register”, “registered”, and “registration” refer
to a registration effected by preparing and filing a registration statement or similar
document in compliance with the United States Securities Act of 1933, as amended, or
similar securities act in a jurisdiction other than the U.S. (the “Act”),
and the declaration or ordering of effectiveness of such registration statement or
document. |
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1.15
The
term “Registrable Securities” means (i) Ordinary Shares of the Company
held by an Investor and/or Plenus Technologies Ltd. (“Plenus”) including
any Ordinary Shares issued or issuable upon conversion of any Preferred Shares currently
held or hereafter acquired by an Investor and/or Plenus and all Ordinary Shares which an
Investor and/or Plenus may hereafter purchase pursuant to preemptive rights, rights of
first refusal, anti-dilution rights, or otherwise; and (ii) any Ordinary Shares issued
upon the conversion or exercise of any warrant, right or other security which is
currently held or hereafter acquired by an Investor; and (iii) any shares of the Company
issued as a dividend or in a share split or in connection with any other distribution
with respect to, or in exchange for or in replacement of, such Ordinary Shares described
in (i) and (ii) above. |
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1.16
The
number of shares of “Registrable Securities then outstanding” shall be
determined by the number of shares of Ordinary Shares outstanding, calculated on an
as-converted basis, which are Registrable Securities. |
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1.17
The
term “Form F-3” means such form under the Act as in effect on the date
hereof or substantially similar thereto and available to the Company and/or the Holders
or any registration form under the Act subsequently adopted by the United States
Securities and Exchange Commission (“SEC”) which permits inclusion or
incorporation of substantial information by reference to other documents filed by the
Company with the SEC. |
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1.18
The
term “1934 Act” means the United States Securities and Exchange Act of
1934, as amended. |
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2.1
If
the Company shall receive at any time commencing six (6) months after the effective date
of the IPO, a written request from Initiating Holders, that the Company file a
registration statement under the Act for the registration of all or part of their
Registrable Securities, then the Company shall promptly give written notice of such
request to the other Holders, and the Company shall effect as soon as practicable, and in
any event shall use its best efforts to effect, within sixty (60) days of the receipt of
such request of the Initiating Holders, the registration under the Act of all Registrable
Securities (i) which the Initiating Holders requested to be registered as aforesaid and
(ii) of all Holders who wish to participate in such demand registration and provide the
Company with written requests for inclusion therein within twenty (20) days after the
receipt of the Company’s notice. No more than two (2) requests shall be made
pursuant to this Section 2.1. In no event shall the Company be required to effect more
than one demand registration in each six (6) month period. |
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2.2
If
the Initiating Holders intend to distribute the Registrable Securities covered by their
request by means of an underwriting, they shall so advise the Company as a part of their
request made pursuant to this Section 2 and the Initiating Holders shall have the right
to propose the managing underwriter in any underwritten offering (and such proposal shall
include in general the proposed terms of the underwriting agreement and pricing of the
transaction), subject to the consent of the Company, which consent shall not be
unreasonably withheld, and shall not be withheld if it is the lead or co-lead from the
IPO or other prior registered offering or one of the top twenty underwriters by volume of
deals in the preceding twelve months. In the event that the Initiating Holders do not
propose a managing underwriter or the Company reasonably withholds consent to the
proposed managing underwriter, the Company shall have the right to designate the managing
underwriter(s) in any underwritten offering, subject to the consent of the Initiating
Holders, which consent shall not be unreasonably withheld. |
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2.3
If
the underwriter of such offering determines that the number of shares requested by the
Holders is greater than the number of shares that may be underwritten, the number of
Registrable Securities that may be included in such registration shall be reduced
accordingly, and there shall be excluded from such registration to the extent necessary
to satisfy such limitation, first shares held by shareholders other than the Holders,
then shares which the Company may wish to register for its own account, and thereafter,
to the extent necessary, shares held by the Holders (pro rata to the respective number of
Registrable Shares then outstanding held by such Holders) and any Registrable Securities
excluded from such underwriting shall be withdrawn from the registration. A registration
statement shall not be counted as a request for the purpose of this Section 2 if, as a
result of an exercise of the underwriter’s cut-back provisions set forth herein,
less than 30% of the total number of Registrable Securities that Holders have requested
to be included in such registration statement are actually included. |
| 3. |
Incidental
Registration |
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3.1
At
any time after the IPO, if the Company proposes to register any of its stock or other
securities under the Act in connection with the public offering of such securities solely
for cash (other than registration statements pursuant to Section 2 above or relating to
employee benefit plans or with respect to corporate reorganization or other transactions
under Rule 145 of the Act), the Company shall, at such time, promptly give the Holders
written notice of such registration. Upon the written request of a Holder given within
twenty (20) days after receipt of such notice from the Company in accordance with the
notice provision of this Agreement, the Company shall use its best efforts to cause to be
registered under the Act all of the Registrable Securities that such Holder has requested
to be registered. In the event the Company shall grant to any shareholder the right to
register securities immediately upon the IPO of the Company, then the rights of the
Holders pursuant to this Section 3 shall be adjusted accordingly, and the Holders shall
be entitled to register Registrable Securities pursuant to this Section 3 immediately
upon IPO. |
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3.2
In
connection with any offering involving an underwriting of shares of the Company’s
capital stock, the Company shall not be required under Section 3 to include any of a
Holder’s securities in such underwriting unless the Holder (i) agrees to the sale of
(including any restriction on the sale of) its securities on the basis provided in any
customary underwriting arrangements, including customary lock-up periods as required by
(x) the underwriters with respect to any shares, provided such period shall not exceed
the period of 180 days in respect of the IPO and 90 days in respect of any other offering
(provided that in such other offering at least 23% of the securities included in such
registration are Registrable Securities requested to be included by the Holders), and
provided that all senior employees, shareholders and management are subject to such
lock-up period unless the Holders of the majority of the Registrable Securities requested
to be registered therein agree in writing to waive such pre-condition or (y) applicable
law, or (z) stock exchanges; and (ii) provides any relevant information reasonably
requested and completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements, all reasonably requested, and other documents reasonably
requested, that are required under the terms of such underwriting arrangements and then
only in such quantity as the underwriters determine, in their sole discretion, will not
materially and adversely effect the success of the offering by the Company. If such
underwriters determine that the total amount of securities, including Registrable
Securities, requested by a Holder to be included in such offering could materially
adversely affect the success of such offering, then the Company shall be required to
include in such offering only that number of such securities, including Registrable
Securities, which the underwriters determine in their sole discretion will not materially
adversely affect the success of the offering, provided the Company will include in such
registration (i) first, the securities the Company proposes to sell, and (ii) second,
the Registrable Securities requested to be included in such registration, pro rata among
the Holders of such Registrable Securities on the basis of the number of Registrable
Securities owned by each holder of Registrable Securities participating in such
offering,; provided that in any event the Holders shall be entitled to register at least
23% of the securities to be included in any such registration. |
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| 4. |
Form
F-3 Registration. |
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In
case the Company shall receive at any time commencing six (6) months (or any longer period
as required by law or regulation) after the effective date of the IPO from a Holder or
Holders of the Registrable Securities then outstanding a request or requests that the
Company effect a registration on Form F-3 and any related qualification or compliance
with respect to all or a part of the Registrable Securities owned by the Holder, the
Company shall promptly give written notice of such request to the other Holders and the
Company shall: |
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Use
best efforts to effect, as soon as practicable, such registration and all such
qualifications and compliances as may be so requested and as would permit or facilitate
the sale and distribution of all of the Holder’s Registrable Securities as are
specified in such request and all Registrable Securities held by such Holders who wish to
participate in such demand registration and provide the Company with written requests for
inclusion therein within fifteen (15) days after the receipt of the Company’s notice;
provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this section 4: |
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(i) |
if
Form F-3 is not available for such offering by the Holder; or |
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(ii) |
in
any particular jurisdiction in which the Company would be required to qualify
to do business or to execute a general consent to service of process in
effecting such registration, qualification or compliance; or |
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(iii) |
the
requested registration would have an aggregate offering price of all
Registrable Shares sought to be registered, net of underwriting discounts
and commissions, below $1,500,000. |
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Subject
to the foregoing, the Company shall file a registration statement covering the Registrable
Securities as soon as practicable after receipt of the request of a Holder as aforesaid. |
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| 5. |
Obligations
of the Company. |
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Whenever
required under this Agreement to effect the registration of any Registrable Securities,
the Company shall, as expeditiously as reasonably possible: |
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5.1
Prepare
and file with the SEC a registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration statement to become
effective, and, upon the request of the Holders, keep such registration statement
effective for up to one hundred and twenty days or, if sooner, until the distribution
contemplated in the Registration Statement has been completed. |
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5.2
Prepare
and file with the SEC such amendments and supplements to such registration statement and
the prospectus used in connection with such registration statement as may be necessary to
comply with the provisions of the Act with respect to the disposition of all securities
covered by such registration statement. |
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5.3
Furnish
to the Holders and each duly authorized underwriter such number of authorized copies of a
prospectus, including copies of a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by the Holders. |
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5.4
Use
its best efforts to register and qualify the securities covered by such registration
statement under such other securities or Blue Sky laws of such jurisdictions as shall be
reasonably requested by the Holders of Registrable Securities covered by such
registration statement, provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a general
consent to service of process in any such states or jurisdictions. |
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5.5
In
the event of any underwritten public offering, enter into and perform its obligations
under an underwriting agreement, including indemnification and other customary
provisions, in usual and customary form, with the managing underwriter of such offering.
If a Holder shall participate in such underwriting he shall also enter into and perform
its obligations under such an agreement. |
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5.6
Notify
the Holders of Registrable Securities covered by such registration statement: |
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(i) |
promptly
after the Company shall receive notice thereof, of the time when such
registration statement becomes effective or when any amendment or
supplement or any prospectus forming a part of such registration statement
has been filed; |
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(ii) |
promptly
of any request by the SEC for the amending or supplementing of such
registration statement or prospectus for additional information; |
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(iii) |
at
any time when a prospectus relating thereto is required to be delivered under
the Act, of the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing. |
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5.7
Advise
a Holder if his Registrable Shares are included in such registration statement promptly
after the Company shall receive notice or otherwise obtain knowledge of the issuance of
any order by the SEC suspending the effectiveness of such registration statement or
amendment thereto or of the initiation or threatening of any proceeding for that purpose;
and promptly use its best efforts to prevent the issuance of any stop order or to obtain
its withdrawal promptly if a stop order should be issued; |
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5.8
Use
its best efforts to furnish, at the request of a Holder in the event he is requesting
registration of Registrable Securities pursuant to this Agreement on the date that such
Registrable Securities are delivered to the underwriters for sale in connection with a
registration pursuant to this Agreement, if such securities are being sold through
underwriters, on the date that the registration statement with respect to such securities
becomes effective, (i) an opinion, dated such date, of the counsel representing the
Company for the purposes of such registration, in form and substance as is customarily
given to underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to a Holder in the event he is requesting registration of Registrable
Securities and (ii) a letter dated such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the underwriters, if any, and to a Holder in the event he is requesting
registration of Registrable Securities. |
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Notwithstanding
anything to the contrary in this Agreement, the Company shall not be obligated to effect
any registration pursuant to this Agreement: (i) within a period of one hundred eighty
(180) days following the effective date of a previous registration of the Company’s
securities and (ii) if the Company shall furnish to the Holders a certificate signed by
the Chairman of the Board of the Company stating that in the good faith judgment of the
Board of Directors of the Company, it would be seriously detrimental to the Company and
its shareholders for such registration to be effected at such time, in which event the
Company shall have the right to defer the filing of the registration statement for a
period of not more than one hundred twenty (120) days after receipt of the request of a
Holder under this Agreement; provided, however, that with respect to a registration
requested pursuant to Sections 2 or 4 above: (A) the Company shall not utilize this right
more than once in any twelve (12) month period; (B) the Company shall not register any
securities for the account of itself or any other stockholder during such one hundred
twenty (120) day period other than S-8 registration or the like, and (C) if the Initiating
Holders disapprove of the deferral of the registration, they may elect to withdraw their
demand by written notice to the Company, in which case such registration, if effected,
shall not be counted for the purpose of Section 2. |
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| 6. |
Expenses
of Registration |
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All
expenses (other than underwriting discounts, fees and commissions) incurred in connection
with registrations, filings or qualifications pursuant to Sections 2, 3 and 4, including
(without limitation) all registration, filing and qualification fees, printers’ and
accounting fees, fees and disbursements of counsel for the Company, and the reasonable
fees and disbursements of one counsel for the selling Holders (the “Registration
Expenses”) shall be borne by the Company; provided, however, that the Company
shall not be required to pay for any expenses of any registration proceeding begun
pursuant to Section 2 if the registration request is subsequently withdrawn at the request
of Holders of the majority of the Registrable Securities to be so registered (in which
case the Holder shall bear such expenses), unless such Holders agree to forfeit their
right to the demand registration pursuant to Section 2; provided further, however that if
at the time of such withdrawal, the Holders have learned of a material adverse change in
the condition, business or prospects of the Company from that known to the Holders at the
time of the request and have withdrawn the request with reasonable promptness following
disclosure by the Company of such material adverse change or in the event that the Holders
have withdrawn their registration request in accordance with the second paragraph of
Section 5.8, then the Holders shall not be required to pay any of such expenses and shall
retain their rights pursuant to Section 2. All underwriting discounts, fees and
commissions applicable to the sale of Registrable Securities and pursuant to this
Agreement shall be borne by the holders of such Registrable Securities, pro rata on the
basis of the number of shares sold in the respective offering. |
| 7. |
Indemnification.
In the event any Registrable Securities are included in a registration
statement pursuant to this Agreement: |
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7.1
To
the extent permitted by law the Company will indemnify and hold harmless each of the
Holders, any underwriter (as defined in the Act) for the Holders, each of their
directors, shareholders, partners and officers, and legal counsel and independent
accountants, and each person, if any, who controls such Holder within the meaning of the
Act or the 1934 Act (collectively and individually referred to as the “Indemnified
Party”) against all claims, losses, damages and liabilities (joint or several)
(or actions in respect thereof) arising out of or based on any of the following
statements, omissions or violations: (i) untrue statement (or alleged untrue statement)
of a material fact contained in any such registration statement, prospectus or any
amendments or supplements thereto, offering circular or other document; or (ii) any
omission (or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; or (iii) any
violation (or alleged violation) by the Company of the Act or any other securities laws,
and will reimburse such Indemnified Party for any legal or any other expenses reasonably
incurred by them in connection with investigating, preparing or defending any such loss,
claim, damage, liability, or action as such expenses are incurred; provided, however, (i)
that the Company will not be liable to an Indemnified Party in any such case to the
extent that any such loss, damage, liability, cost or expense arises out of or is based
upon an untrue statement or omission in such registration statement, prospectus, offering
circular or other document in reliance upon and in conformity with written information
furnished to the Company by an instrument duly executed by such Indemnified Party, and
stated to be specifically for use therein; and (ii) that the indemnity agreement
contained in this subsection 7.1 shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected without the
consent of the Company, which consent shall not be unreasonably withheld. |
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7.2
To
the extent permitted by law, each Holder , in the event that his Registrable Securities
are included in such registration, will indemnify the Company, each of its directors and
officers and its legal counsel and independent accountants, each underwriter, if any, of
the Company’s securities covered by such registration statement, each other Holder
selling Registrable Securities in such registration and each person who controls the
Company, such underwriter or such other Holder within the meaning of the Act, against all
claims, losses, damages and liabilities (or actions in respect thereof) arising out of or
based on any untrue statement (or alleged untrue statement) of a material fact contained
in any such registration statement, prospectus, offering circular or other document, or
any 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 will reimburse
the Company, such directors, officers, persons, underwriters, Holders, or control persons
for any legal or any other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement, prospectus,
offering circular or other document in reliance upon and in strict conformity with
written information furnished to the Company by an instrument duly executed by such
Holderand stated to be specifically for use therein; provided, however, that the
obligations of such Holder hereunder shall be limited to an amount equal to the proceeds
(net of underwriters discounts, fees and commissions) to such Holder from the sale of
Registrable Securities sold by such Holder pursuant to such registration and provided
further that the indemnity agreement contained in this subsection 7.2 shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of such Holder, which consent shall not be
unreasonably withheld. |
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7.3
If
recovery is not available under the foregoing indemnification provisions, for any reason
other than as specified therein, the parties entitled to indemnification by the terms
thereof shall be entitled to contribution to liabilities and expenses as more fully set
forth in an underwriting agreement to be executed in connection with such registration.
In determining the amount of contribution to which the respective parties are entitled,
there shall be considered the parties’ relative knowledge and access to information
concerning the matter with respect to which the claim was asserted, the opportunity to
correct and prevent any statement or omission, and any other equitable considerations
appropriate under the circumstances. In no event shall the liability of a Holder exceed
the proceeds (net of underwriters discounts, fees and commissions) from the offering
received by such Holder. |
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7.4
Promptly
after receipt by an indemnified party under this Section 7 of notice of the commencement
of any action (including any governmental action), such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this Section
7, deliver to the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent the
indemnifying party so desires, jointly with any other indemnifying party similarly
noticed, to assume the defense thereof with counsel mutually satisfactory to the parties;
provided, however, that an indemnified party (together with all other indemnified parties
which may be represented without conflict by one counsel) shall have the right to retain
one separate counsel, with the fees and expenses to be paid by indemnifying party, if
representation of such indemnified party by the counsel retained by the indemnifying
party would be inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such proceeding. The
failure to deliver written notice to the indemnifying party within a reasonable time of
the commencement of any such action, shall not relieve the indemnifying party of its
obligations hereunder except to the extent such failure results in a lack of timely
actual knowledge by the indemnifying party and the indemnifying party suffers actual
damage as a result thereof or actual prejudices to its ability to defend such action. |
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7.5
The
obligations of the Company and the Holders under this Section 7 shall survive the
completion of any offering of Registrable Securities in a registration statement under
this Agreement, and otherwise. |
| 8. |
Reports
Under the 1933 Act. |
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In
the event the Company becomes subject to reporting under the 1934 Act, then with a view to
making available to the Holders the benefits of Rule 144 promulgated under the Act and any
other rule or regulation of the SEC that may at any time permit a Holder to sell
securities of the Company to the public without registration or pursuant to a registration
on Form F-3, the Company agrees to: |
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8.1
make
and keep public information available, as those terms are understood and defined in SEC
Rule 144, at all times after ninety (90) days after the effective date of first
registration statement filed by the Company for the offering of its securities to the
general public; |
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8.2
take
such action, including the voluntary registration of its Ordinary Shares under Section 12
of the 1934 Act, as is necessary to enable the Holders to utilize Form F-3 for the sale
of their Registrable Securities. |
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8.3
file
with the SEC in a timely manner all reports and other documents required of the Company
under the Act and the 1934 Act; and |
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8.4
furnish
to each Holder, so long as such Holder owns any Registrable Securities, forthwith upon
request (i) a written statement by the Company that it has complied with the reporting
requirements of SEC Rule 144 (at any time after ninety (90) days after the effective date
of the first registration statement filed by the Company), the Act and the 1934 Act (at
any time after it has become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant to Form F-3 (at any
time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of
the Company and such other reports and documents so filed by the Company, and (iii) such
other information as may be reasonably requested in availing the Holder of any rule or
regulation of the SEC which permits the selling of any such securities without
registration or pursuant to such form. |
| 9. |
Assignment
of Registration Rights and Grant of Additional Rights. |
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9.1
The
rights to cause the Company to register Registrable Securities pursuant to this Agreement
may be assigned (but only with all related obligations) by a Holder to a transferee or
assignee of such securities, provided that such transfer or assignment is made pursuant
to the provisions of the Articles of Association and in accordance with any provisions
relating to transfer and/or assignment of such securities appearing in the relevant Share
Purchase Agreement and/or in this Agreement, and provided further that the Company is,
within a reasonable time after such transfer, furnished with written notice of the name
and address of such transferee or assignee and the securities with respect to which such
registration rights are being assigned and such transferee or assignee consents to be
subject to this Agreement. |
| |
9.2
From
and after the date of this Agreement, the Company shall not, without the prior written
consent of the holders of at least 60% of the Registrable Securities then outstanding
enter into any agreement with any holder or prospective holder of any securities of the
Company that would allow such holder or prospective holder (a) to include such
securities in any registration filed under this Agreement, unless under the terms of such
agreement, such holder or prospective holder may include such securities in any such
registration only to the extent that the inclusion of such securities will not reduce the
amount of the Registrable Securities of the Holders that are included or (b) to
demand registration of their securities, including, without limitation, on Form F-3. |
| 9A. |
Termination
of Registration Rights |
| |
Notwithstanding
anything to the contrary contained in this Agreement or otherwise, the registration rights
granted pursuant to the provisions of Sections 2, 3 and 4 hereunder shall terminate and
shall be of no further force and effect five years following the IPO, regardless of any
Rule 144 availability. |
| 10. |
Covenants
of the Company. |
| |
10.1
Delivery
of Financial Statements. |
| |
Until
a Qualified IPO, the Company shall deliver to each Major Shareholder the following reports
in English (and with respect to the reports listed in subsections (a) and (b) below also
to Intel Atlantic, Inc. (“Intel”) for so long as it holds
Preferred Shares of the Company): |
| |
(a)
as soon as practicable, but in any event within forty-five (45) days after the
end of each fiscal year of the Company, consolidated financial
statements audited and certified by independent public accountants of
the Company which are associated with one of the “Big Four” US
accounting firms, prepared in accordance with US generally accepted
accounting principals with reconciliation to Israeli GAAP. |
| |
(b)
as soon as practicable, but in any event within thirty (30) days of the end of
each quarter, consolidated financial quarterly reports, reviewed by
independent public accountants of the Company, prepared in US Dollars
in accordance with generally accepted accounting principles. |
| |
(c)
as soon as practicable, but in no event later
than 30 days prior to the beginning of each year, revised twelve
month forward prospective budgets, including detailed quarterly
financial projections for such twelve months period (hereinafter
referred to as “Annual Budget”). |
11
| |
(d)
monthly reports and other reports regarding the Company’s
operation, in such format, and containing such information as the
Board of Directors shall require (including at least a business
update and overview, profit and loss and cash-flow statements) within
reasonable time, not to exceed 30 days, from the end of each calendar
month. |
| |
(e) Such other information as may reasonably be requested by such Major
Shareholder. |
| |
(f)
In addition, if an Investor reasonably determines, that being a
publicly traded company or an affiliate of a publicly traded company,
it requires additional financial information in respect of the
Company in order to timely publish the reports of the Investor and/or
of such affiliated company(ies), the Company shall promptly provide
the Investor with financial information with respect to the Company,
and such reports may be attached to the reports published by the
Investor or such affiliated companies, to the extent required by law. |
| |
10.2
Delivery
of Work Plan and Annual Budget |
| |
No
later than November 30 of each year, the Company shall submit to the Board of Directors
the annual Work Plan and the Annual Budget for the forthcoming calendar year. |
| |
During
the regular working hours and upon reasonable advance notice, each Major Shareholder shall
have full access to all books and records of the Company, shall be entitled to review and
copy them at their discretion, and shall be entitled to visit and inspect the
Company’s property, inspect its assets and consult with the management of the
Company, providing that in exercising such rights no information shall be disclosed to the
Major Shareholders, the disclosure of which in the discretion of the Board of Directors of
the Company, might cause damage to the business of the Company as contemplated in the
Updated Work Plan (as defined in the A1 Share Purchase Agreement). The provisions of this
Agreement and of the respective Share Purchase Agreements regarding the Investors’
undertakings of confidentiality or any separate non-disclosure agreement executed by any
Investor shall apply, mutatis mutandis, to any information disclosed to the Major
Shareholders pursuant to the rights set out under this Section 10.3. |
| |
Unless
the Board of Directors shall deem otherwise appropriate for the Company, the Company will
take all reasonable steps necessary to initiate/continue the prosecution of its patent
applications and to maintain any patents granted thereon. |
| |
10.5
Auditors
and Internal Auditor. |
| |
The
Company shall maintain the services of: (i) one of the “big four” accounting
firms or one of their respective affiliates as independent auditors of the Company, and
(ii) an internal auditor, such appointments and their respective terms to be approved by
the Board of Directors of the Company, subject to applicable law. |
12
| |
From
time to time, the parties may make available to each other, in written form or orally,
information of a confidential and proprietary nature including, but not limited to,
technology, technical, test and analysis data, specifications, prototypes, marketing,
application, financial, bookkeeping, business, and customer information. The parties shall
not disclose such information to others or use such information without the prior written
consent of the disclosing party or as necessary to carry out the terms of this Agreement.
Each party shall treat such information with the same care as it would exercise in the
handling of its own confidential or proprietary information and shall obtain reasonable
assurances that each person to whom such information is disclosed, will hold such
information in confidence. Confidential information as referred to in this Section 11
shall not include information (i) which is or becomes public knowledge through no fault of
the receiving party; (ii) which is known to the receiving party on a non-confidential
basis at the time of disclosure by the disclosing party, as evidenced by the receiving
party’s written records; (iii) which is disclosed to the receiving party on a
non-confidential basis by a third party having no obligation of secrecy to the disclosing
party; or (iv) which is subsequently independently developed by or for the receiving party
without use of confidential information. Notwithstanding the aforesaid: (i) a party shall
be entitled to disclose confidential information which it is required to disclose under
any applicable law or stock exchange regulations, provided, however, that such disclosure
is made to the minimum extent required and provided that a prior notice of disclosure is
given to the disclosing party and sufficient opportunity to limit or contest such
disclosure; (ii) a party shall be entitled to disclose confidential information to any
person or entity to which such party transfers or considers transferring securities in the
Company, subject to a standard undertaking not less strict than the undertaking set out
herein, and (iii) in connection with periodic and financial reports to its shareholders,
investors or partners, each party may make general statements regarding the nature and
progress of the Company’s business, and may provide summary financial information of
the Company. The provisions of this Section 11 shall not apply to Intel. Instead, the
terms of Section 3 (“Confidentiality”) of the Intel Side Agreement by and
between the Company, Intel and additional parties, dated July 2002, shall continue to
apply with respect to Intel (and this Agreement shall be deemed a “Financing
Agreement” for the purpose of said Section 3). |
| |
12.1
Further
Assurances. Each of the parties hereto shall perform such further acts and execute
such further documents as may reasonably be necessary to carry out and give full effect
to the provisions of this Agreement and the intentions of the parties as reflected
thereby. |
| |
12.2
Governing
Law; Jurisdiction. This Agreement shall be governed by and construed according to the
laws of the State of Israel, without regard to the conflict of laws provisions thereof,
and the parties hereto irrevocably submit solely to the jurisdiction of the Courts of Tel
Aviv, in respect of any dispute or matter arising out of or connected with this
Agreement. |
| |
12.3
Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the
Company, the Investors and the respective successors and permitted assigns of the
Investors. The parties may not assign any of there rights or obligations under this
Agreement without the prior written consent of the other parties unless such rights or
obligations are assigned together with the shares to which they relate and the assignee
undertakes in writing to be bound by the provisions hereof. |
13
| |
12.4
Entire
Agreement; Amendment and Waiver; Headings; Preamble and Schedules. This Agreement and
the Schedules and Exhibits hereto constitute the full and entire understanding and
agreement between the parties with regard to the subject matters hereof and thereof. The
Prior Agreement (including, for the avoidance of doubt, all amendments thereof) is hereby
terminated in its entirety and shall be of no further force or effect. Any term of this
Agreement may be amended or terminated and the observance of any term hereof may be
waived (either prospectively or retroactively and either generally or in a particular
instance) only with the written consent of the Company and the holders of at least 60% of
the Registrable Securities then outstanding. All article and section headings are
inserted for convenience only and shall not modify or affect the construction or
interpretation of any provision of this Agreement. The preamble and schedules to this
Agreement are incorporated herein and form an integral part of this Agreement. |
| |
12.5
Notices
Unless otherwise provided, any notice required or permitted under this Agreement
shall be given in writing, shall be effective when given, and shall in any event be
deemed to be given upon receipt or, if earlier, (a) five (5) days after the day of
deposit with a National Post Office, if delivered by first class mail, postage prepaid,
if addressed to a party in the same country or fourteen (14) after deposit with a
National Post Office, if delivered by first class mail, postage prepaid, if addressed to
a party in a different country, (b) upon delivery, if delivered by hand (c) five (5) days
after the day of deposit with recognized overnight courier service freight prepaid or (d)
two (2) days after the business day of facsimile transmission, if delivered by facsimile
transmission with a copy by first class mail, postage prepaid, and each notice shall be
addressed to the party to be notified at the address set forth in this section as
follows: |
|
|
|
| |
Negevtech Ltd. |
|
| |
attn: |
CEO |
| |
address: |
Beit Tamar |
| |
|
00 Xxxxxx Xx. |
| |
|
Xxxxxxx 00000 |
|
|
|
| |
tel: |
00-0000000 |
| |
fax: |
00-0000000 |
| |
as
set forth on Schedule A hereto: |
| |
or
at such other address as such party may designate by written notice to the other parties. |
14
| |
12.6
Delays
or Omissions. No delay or omission to exercise any right, power, or remedy accruing
to any party upon any breach or default under this Agreement, shall be deemed a waiver of
any other breach or default theretofore or thereafter occurring. Any waiver, permit,
consent, or approval of any kind or character on the part of any party of any breach or
default under this Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to the
extent specifically set forth in such writing. All remedies, either under this Agreement
or by law or otherwise afforded to any of the parties, shall be cumulative and not
alternative. |
| |
12.7
Severability.
If any provision of this Agreement is held by a court of competent jurisdiction to be
unenforceable under applicable law, then such provision shall be excluded from this
Agreement and the remainder of this Agreement shall be interpreted as if such provision
were so excluded and shall be enforceable in accordance with its terms; provided,
however, that in such event this Agreement shall be interpreted so as to give effect, to
the greatest extent consistent with and permitted by applicable law, to the meaning and
intention of the excluded provision as determined by such court of competent
jurisdiction. |
| |
12.8
Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be
deemed an original and enforceable against the parties actually executing such
counterpart, and all of which together shall constitute one and the same instrument. |
| |
12.9
Aggregation
of Holdings. For purposes of determining the availability of any right, the
computation of shareholdings or the applicability of any limitation under this Agreement,
each Investor’s holdings in the Company and the holdings of any of its Permitted
Transferees shall be aggregated, and the aggregate holdings shall be considered to be
held by such Investor and its Permitted Transferees as a single shareholder. |
[Remainder of Page Intentionally
Left Blank]
15
IN WITNESS WHEREOF, the
parties have executed this Shareholders’ Rights Agreement as of the date first above
written.
|
|
| By: |
1)
——————————————
title |
[SIGNATURE PAGE TO SHAREHOLDERS
RIGHTS AGREEMENT DATED JULY 2007]
16
IN WITNESS WHEREOF, the
parties have executed this Shareholders’ Rights Agreement as of the date first above
written.
INVESTORS:
[SEE SEPARATE SIGNATURE
PAGES]
[SIGNATURE PAGE TO SHAREHOLDERS
RIGHTS AGREEMENT DATED JULY 2007]
17
SCHEDULE A
Investors and Addresses
| Investor |
Address |
| Pitango Venture Capital Fund III (Israeli Sub) L.P. |
00 XxXxxxxxx Xxxxxx Xxxx. X Xxxxxxxx 00000, Xxxxxx |
| Pitango Venture Capital Fund III (Israeli Sub.) Non-Q L.P. |
| Pitango Venture Capital Fund III (Israeli Investors) L.P. |
| Pitango Parallel Investor Fund III (Israel), L.P. |
| Pitango Principles Fund III (Israel) L.P. |
| Pitango Venture Capital Fund III Trusts 2000 Ltd. |
| Shrem, Fudim, Xxxxxx Founders Group II L.P. |
00 Xx'xxxxx Xxxxxx Xxx Xxxx 00000, Xxxxxx |
| Xxxxx Xxxxx Xxxxxx & Co. Ltd. |
| Xxxxx Xxxxx Xxxxxx Founders Group II Annex Fund L.P. |
| SVE Star Ventures Enterprises GmbH & Co. No. IX KG. |
Star Ventures Management
Xxxxxxxxxxxxxx 0
X-00000 Xxxxxx
Xxxxxxx
Contact: Xxxxxxx Xxxxxxxxxx |
| Star Growth Enterprise, a German Civil Law Partnership (with limitation of liability |
| SVM Star Ventures Managementgesellschaft mbH Nr. 3 |
| Star Management of Investments No. II (2000) L.P. |
SVM Star Venture Capital Management Ltd.
11 Galgaley Haplada St.,
P.O. Box 12600,
Xxxxxxxx Xxxxxxx, 00000, Xxxxxx.
Contact: Xxxx Xxxxxx-Xxxxx |
| Genesis Partners II, L.D.C. |
Ackerstein Towers B
00 XxXxxxxxx Xx
Xxxxxxxx, 00000
Xxxxxx |
| Genesis Partners II (Israel), L.P. |
| Poalim Ventures Ltd. |
Xxxxx Xxxxx, 00 Xxxxxxxxxx Xxxx, Xxx Xxxx 00000, Israel
Number for notices being delivered by facsimile:
03-5675760 |
| Poalim Ventures I Ltd. |
| Poalim Ventures II L.P. |
| Wellington Partners Venture III Technology Fund L.P. |
Xxxxxxxxxxxxxxxx 0, 00000 Xxxxxxxx, Xxxxxxx |
| Amadeus III |
Xxxxx Xxxxxxxx Xxxxx
0 Xxxxx Xxxxxxxx
Xxxxxxxxx
XX0 0XX |
| Amadeus III Affiliates Fund L.P. |
0000 Xxxxxxxxxxx Xxxx
Xxxxx 000, Xxxxxxxxxx,
Xxx Xxxxxx Xxxxxx,
Xxxxxxxx 00000 |
18
