REGISTRATION RIGHTS AGREEMENT
REGISTRATION
RIGHTS AGREEMENT made as of July 18, 2007 by and among Given Imaging Ltd.,
an
Israeli corporation (the "Company"),
and the
holders of Ordinary Shares in the Company
whose signature is affixed hereto (the “Shareholders”).
WHEREAS
the Company and the Shareholders previously entered into an Investors Rights
Agreement whereby the Shareholders were provided, inter alia, with certain
registration rights which expired on October 10, 2006 ("Original Agreement");
WHEREAS,
the Shareholders wish to enter into a new Registration Rights Agreement with
the
Company providing the Shareholders with registration rights with substantially
similar terms to those provided in the Original Agreement; and
WHEREAS,
the Audit Committee and the Board of Directors of the Company have determined
that it is in the best interests of the Company that the Company enter into
this
Agreement.
NOW,
THEREFORE, subject to Section 5 below, in consideration of the covenants
and
agreements set forth herein and for other good and valuable consideration,
the
receipt and sufficiency of which are hereby mutually acknowledged, the parties
hereto covenant and agree as follows:
1. GENERAL
PROVISIONS
1.1
Shares Subject to this Agreement. The
Parties hereto expressly agree that the terms and restrictions of this Agreement
shall apply to all shares of the Company's share capital which any of them
now
owns or hereafter acquires by any means, including without limitation by
purchase, assignment or operation of law, or as a result of any share dividend,
share split, reorganization, reclassification, whether voluntary or involuntary,
or other similar transaction, whether by sale, merger, consolidation or other
similar transaction, or by purchase, assignment or operation of law (the
"Shares").
1.2
Certain Definitions. As
used
in this Agreement, the following terms shall have the following respective
meanings:
"Affiliate"
has the
meaning ascribed to that term in Rule 12b-2 under the Exchange Act, or any
successor rule.
"Articles"
shall
mean the Articles of Association of the Company as may hereafter be amended
in
accordance with their terms from time to time.
"Commission"
shall mean the Securities and Exchange Commission and any successor agency
of
the Federal government administering the Securities Act and the Exchange
Act.
"Exchange
Act"
shall
mean the Securities Exchange Act of 1934, as amended, and any successor Federal
statute, and the rules and regulations of the Commission thereunder, all
as the
same shall be in effect from time to time.
"Ordinary
Shares"
shall
mean (i)
the
ordinary shares, NIS 0.05 par value per share, of the Company, (ii)
any
other capital shares of the Company, however designated, authorized on or
after
the date hereof, which shall neither be limited to a fixed
sum
or percentage of par value in respect of the rights of the holders thereof
to
participate in dividends nor entitled to a preference prior or equal to any
class of preferred shares of the Company in the distribution of assets upon
the
voluntary or involuntary liquidation, dissolution or winding up of the Company;
and (iii)
any
other securities of the Company into which or for which any of the securities
described in (i) or (ii) may be converted or exchanged pursuant to any
recapitalization, reorganization, merger, consolidation, sale of assets or
other
similar event.
"Permitted
Transferee"
shall
mean with respect to any Shareholder, any Person that controls, is controlled
by
or is under common control with such Shareholder.
"Person"
means
an individual, corporation, partnership, limited liability company, joint
venture, trust or unincorporated organization, or a government or any agency
or
political subdivision thereof.
"Registrable
Securities"
shall
mean (i) Ordinary Shares held by the Shareholders from time to time and (ii)
other Ordinary Shares or other securities of the Company, in each case, issued
or issuable to the Shareholders or their Permitted Transferees with respect
to
such Ordinary Shares in connection with any share split, share dividend,
recapitalization, reorganization, merger, consolidation, sale of assets or
similar event, excluding in any event securities which have been (a) registered
under the Securities Act pursuant to an effective registration statement
filed
thereunder and disposed of in accordance with the registration statement
covering them, (b)
publicly
sold pursuant to Rule 144 under the Securities Act, or (c) sold by a person
in a
transaction in which the holder’s registration rights have not been assigned in
accordance with Section 3.14 hereof.
"Registration
Expenses"
shall
mean the expenses so described in Section 3.8.
"Securities
Act"
shall
mean the Securities Act of 1933, as amended, and any successor Federal statute,
and the rules and regulations of the Commission thereunder, all as the same
shall be in effect from time to time.
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"Selling
Expenses"
shall
mean the expenses so described in Section 3.8.
2. Reserved
3. TRANSFER
OF REGISTRABLE
SECURITIES; REGISTRATION
3.1 Restrictive
Legend. Each
certificate representing Registrable
Securities
(“Restricted Securities”) shall, except as otherwise provided in this Section
3.1 or in Section 3.2, be stamped or otherwise imprinted with a legend
substantially in the following form (in addition to any legend required under
applicable state securities laws):
Upon
request of a holder of such a certificate, the Company shall remove the
foregoing legend from the certificate if (i) there is an effective registration
statement covering the securities represented by such certificate, or (ii)
with
such request, the Company shall have received either the opinion referred
to in
Section 3.2(a)(i) or the "no-action" letter referred to in Section 3.2(a)(ii),
or (iii) pursuant to any other express provision hereof such legend is no
longer
required.
3.2 Notice
of Proposed Transfer.
(a) Prior
to
any proposed sale or other transfer of any Restricted
Securities (other than under the circumstances described in Section 3.4 or
3.5),
the holder thereof shall give written notice to the Company of its intention
to
effect such sale or other transfer. Each such notice shall describe the manner
of the proposed sale, or other transfer and, if requested by the Company
shall
be accompanied by either (i)
an
opinion of counsel reasonably satisfactory to the Company to the effect that
the
proposed sale or other transfer may be effected without registration under
the
Securities Act or (ii)
a "no
action" letter from the Commission to the effect that the distribution of such
securities without registration will not result in a recommendation by the
staff
of the Commission that action be taken with respect thereto, whereupon the
holder of such share shall be entitled to transfer such share in accordance
with
the terms of its notice. Each certificate
for
Restricted Securities transferred as above provided shall bear the appropriate
restrictive legend set forth in Section 3.1, except that such
certificate
shall not bear such legend if (i)
such
transfer is in accordance with the provisions of Rule 144 (or any other rule
permitting public sale without registration under the Securities Act), or
(ii)
the opinion of counsel or "no-action" letter referred to above is to the
further
effect that the transferee and any subsequent transferee (other than an
Affiliate of the Company) would be entitled to transfer such securities in
a
public sale without registration under the Securities Act or that such legend
is
not required to establish compliance with any provisions of the Securities
Act.
Notwithstanding any other provision hereof, the restrictions provided for
in
this Section 3.2 shall not apply to securities which are not required to
bear
the legend prescribed by Section 3.1 in accordance with the provisions of
that
Section. The Company will not unreasonably refuse to accept an opinion of
counsel required hereby signed by counsel for a Shareholder.
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(b) No
such
opinion of counsel or "no action" letter from the Commission, as set forth
in
Section 3.2(a) above, shall be required in the event of a sale or other transfer
of any Registrable
Securities to (i) any Affiliate of a Shareholder, including, without limitation,
any venture capital limited partnership now existing or hereafter formed
which
controls, is controlled by or is under common control with such Shareholder;
(ii) one or more partners or members of the transferor (in the case of a
transferor that is a partnership, limited liability company or fund), to
a
shareholder (in the case of a transferor that is a corporation) or to a trust
grantor (in the case of a transferor that is a trust) in each case in respect
of
the beneficial interest of such partner, shareholder or trust;
or
(iii)
any
successors or assigns of any of the foregoing persons, provided
that
the
transferee agrees in writing to be subject to this Agreement to the same
extent
as if such transferee were originally a signatory.
3.3 Reserved
3.4 Required
Registration
(a)
One or
more of the Shareholders holding Registrable Securities constituting at least
5%
of the total number of Ordinary Shares then outstanding may request the Company
to register for sale under the Securities Act all or any portion of the Ordinary
Shares held by such requesting holder or holders for sale in the manner
specified in such notice; provided,
however,
that
the proposed aggregate offering price of the Ordinary Shares held by such holder
or holders must be at least US$15,000,000.
(b) Following
receipt of any notice under this Section 3.4, the Company shall promptly notify
all holders of Registrable Securities from whom notice has not been received
and
such holders shall then be entitled within thirty (30) days after receipt of
such notice from the Company to request the Company to include in the requested
registration all or any portion of their Ordinary Shares. The Company shall
use
its best efforts to register under the Securities Act, for public sale in
accordance with the method of disposition specified in the notice from
requesting holders described in paragraph (a) above, within 180 days of its
receipt of such notice, the number of shares of Registrable Securities specified
in such notice (and in all notices received by the Company from other holders
within thirty (30) days after the receipt of such notice by such holders).
The
Company shall be obligated to register the Ordinary Shares pursuant to this
Section 3.4 on two (2) occasions only, provided,
however,
that
such obligation shall be deemed satisfied only when a registration statement
covering all of the Ordinary Shares specified in notices received as aforesaid
(except to the extent reduced by the managing underwriter
pursuant to Section 3.4(d)) shall have become effective and, if such method
of
disposition is a firm commitment underwritten public offering, all such shares
shall have been sold pursuant thereto; provided,
further,
that,
upon effectiveness of the registration statement satisfying the second
registration obligation set forth in this Section 3.4, the Company shall have
no
further obligation to register any Ordinary Shares not otherwise included in
the
notices described above. Notwithstanding anything to the contrary contained
herein, no request may be made under this Section 3.4 during the period
commencing 60 days prior to the Company’s good faith estimate of the
effectiveness of a registration statement filed by the Company covering a firm
commitment underwritten public offering (other than pursuant to this Section
3.4) and prior to the later to occur of the completion of the period of
distribution for such offering or 120 days after the effective date of such
registration statement.
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(c) If
the
holders requesting such registration 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
3.4
and the Company shall include such information in the written notice referred
to
in paragraph (b) above. The right of any holder to registration pursuant to
this
Section 3.4 shall be conditioned upon such holder's agreeing to participate
in
such underwriting and to permit inclusion of such holder's Ordinary Shares
in
the underwriting. If such method of disposition is an underwritten public
offering, the Company may designate the managing underwriter(s) of such
offering, which managing underwriter(s) shall be reasonably acceptable to the
holders of at least a majority in interest of the shares of Registrable
Securities to be sold in such offering. A holder may elect to include in such
underwriting all or a part of the Registrable Securities it holds.
(d) A
registration statement filed pursuant to this Section 3.4 may, subject to the
following provisions, include (i) Ordinary Shares for sale by the Company for
its own account, (ii) Ordinary Shares held by officers or directors of the
Company and (iii) Ordinary Shares held by other holders of Registrable
Securities to be included in the securities to be covered by such registration
statement in accordance with Section 3.5 and Ordinary Shares held by other
holders of Ordinary Shares who may from time to time have the right to seek
to
include such Ordinary Shares in such registration statement (the holders
referred to in this clause (iii), collectively, "Other Shareholders"), in each
case for sale in accordance with the method of disposition specified by the
requesting holders. If such registration shall be underwritten, the Company,
such officers and directors and Other Shareholders proposing to distribute
their
shares through such underwriting shall enter into an underwriting agreement
in
customary form (including representations, warranties and indemnification
provisions customary for a transaction of this kind) with the representative
of
the underwriter or underwriters selected for such underwriting on terms no
less
favorable to such officers, directors or Other Shareholders than the terms
afforded the holders of Registrable Securities. If and to the extent that the
managing underwriter determines that marketing factors require a limitation
on
the number of shares to be included in such registration, then the Ordinary
Shares held by officers or directors (other than Registrable Securities) of
the
Company or by Other Shareholders (other than Registrable Securities) and
Ordinary Shares to be sold by the Company for its own account shall be excluded
from such registration to the extent so required by such managing underwriter,
and unless the holders of such shares and the Company have otherwise agreed
in
writing, such exclusion shall be applied first to the Ordinary Shares of the
Company to be included for its own account to the extent
required by the managing underwriter, and then to the shares held by the
directors and officers and the Other Shareholders to the extent required by
the
managing underwriter, ratable among them on the basis of the respective number
of shares held by each of them. If the managing underwriter determines that
marketing factors require a limitation of the number of Registrable Securities
to be registered under this Section 3.4, then Registrable Securities shall
be
excluded in such manner that the securities to be sold shall be allocated among
the selling holders pro rata based on their ownership of Registrable Securities.
In any event all securities to be sold other than Registrable Securities will
be
excluded prior to any exclusion of Registrable Securities. No Registrable
Securities or any other security excluded from the underwriting by reason of
the
underwriter's marketing limitation shall be included in such registration.
If
any holder of Registrable Securities, officer, director or Other Shareholder
who
has requested inclusion in such registration as provided above, disapproves
of
the terms of the underwriting, such holder of securities may elect to withdraw
therefrom by written notice to the Company and the managing underwriter. The
securities so withdrawn shall also be withdrawn from registration. Except for
registration statements on Form X-0, X-0 or any comparable form or successor
thereto, the Company will not file with the Commission any other registration
statement with respect to its Ordinary Shares, whether for its own account
or
that of other shareholders, from the date of receipt of a notice from requesting
holders pursuant to this Section 3.3 until the completion of the period of
distribution of the registration contemplated thereby or 120 days after the
effective date of such registration, whichever is earlier, if in the good faith
judgment of the managing underwriter marketing factors would materially
adversely affect the price of the Registrable Securities subject to such
underwritten registration.
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3.5
Incidental Registration. If
the
Company at any time proposes to register any of its securities under the
Securities Act for sale to the public, whether for its own account or for the
account of other security holders or both (except with respect to registration
statements on Forms X-0,
X-0 or
any successor to such forms or another form not available for registering the
Registrable Securities for sale to the public), each such time it will promptly
give written notice to all holders of the Registrable Securities of its
intention so to do. Upon the written request of any such holder, received by
the
Company within thirty (30) days after the giving of any such notice by the
Company, to register any or all of its Registrable Securities, the Company
will
use its reasonable best efforts to cause the Registrable Securities as to which
registration shall have been so requested to be included in the securities
to be
covered by the registration statement proposed to be filed by the Company,
all
to the extent requisite to permit the sale or other disposition by the holder
(in accordance with its written request) of such Registrable Securities so
registered. If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so
advise the holders of Registrable Securities as a part of the written notice
given pursuant to this Section 3.5. In such event the right of any holder of
Registrable Securities to registration pursuant to this Section 3.5 shall be
conditioned upon such holder's participation in such underwriting to the extent
provided herein. All holders of Registrable Securities proposing to distribute
their securities through such underwriting shall (together with the Company
and
the other shareholders distributing their securities through such underwriting)
enter into an underwriting agreement in customary form with the underwriter
or
underwriters selected for underwriting by the Company. Notwithstanding any
other
provision of this Section 3.5, if the underwriter determines that marketing
factors require a limitation on the number of shares to be underwritten, the
Company shall
so
advise all holders of securities requesting registration of any limitations
on
the number of shares to be underwritten, and the number of shares of securities
that are entitled to be included in the registration and underwriting shall
be
allocated (i)
first to
the party initiating such registration procedure (whether the Company for
selling Ordinary Shares for its own account or any holder of Registrable
Securities initiating such registration); and
(ii)
then, to
Other Shareholders requesting registration pursuant to this Section 3.5 or
other
similar piggy-back registration rights and to the Company with respect to
Ordinary Shares being sold for its own account (unless allocated first under
clause (i) above), in proportion, as nearly as practicable, to the respective
amounts of securities requested by them to be included in such registration.
Notwithstanding the foregoing provisions, the Company may withdraw any
registration statement referred to in this Section 3.5 without thereby incurring
any liability to the holders of Registrable Securities. If any holder of
Registrable Securities disapproves of the terms of any such underwriting, it
may
elect to withdraw therefrom by written notice to the Company and the
underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such
registration.
6
3.6 Registration
on Form F-3.
(a) In
addition to the rights provided in Section 3.4, provided that at least nine
(9)
months have elapsed since the most recent registration in which the shareholder
seeking to make a request under this Section 3.6 was entitled to request that
any of its Registrable Securities be included therein, if at any time (i) any
holder or holders of the Registrable Securities request that the Company file
a
registration statement on Form F-3 or any comparable or successor form thereto
for a public offering of all or any portion of the shares of Registrable
Securities held by such requesting holder or holders, the reasonably anticipated
aggregate price to the public of which would exceed US$15,000,000 (in case
of an
underwritten offering) or $5,000,000 (in case of a non-underwritten offering),
and (ii) the Company is a registrant entitled to use Form F-3 or any comparable
or successor form thereto to register such shares, then the Company shall use
its best efforts to register under the Securities Act on Form F-3 or any
comparable or successor form thereto, for public sale in accordance with the
method of disposition specified
in
such notice, the number of Registrable Securities specified in such notice.
Whenever the Company is required by this Section 3.6 to use its best efforts
to
effect the registration of Registrable Securities, each of the procedures and
requirements of Section 3.4 (with all holders of Registrable Securities being
treated equally), including but not limited to the requirement that the Company
notify all holders of Registrable Securities from whom notice has not been
received and provide them with the opportunity to participate in the offering,
shall apply to such registration, provided,
however,
that
except as provided above, there shall be no limitation on the number of
registrations on Form F-3 which may be requested and obtained under this Section
3.6.
(b) The
Company shall use its best efforts to qualify for registration on Form F-3
or
any comparable or successor form or forms; and to that end the Company shall
register (whether or not required by law to do so) the Ordinary Shares under
the
Exchange Act in accordance with the provisions of that Act following the
effective date of the first registration of any securities of the Company on
Form F-1 or any comparable or successor form.
7
3.7 Registration
Procedures. If
and
whenever the Company is required by the
provisions of Sections 3.4, 3.5 or 3.6 to use its best efforts to effect the
registration of any Registrable
Securities under the Securities Act, the Company will, as expeditiously
as
possible:
(a) prepare
and file with the Commission a registration statement (which, in the case of
an
underwritten public offering pursuant to Section 3.4, shall be on Form F-1
or
other form of general applicability satisfactory to the managing underwriter
selected as therein provided) with respect to such securities including
executing an undertaking to file post-effective amendments and use its best
efforts to cause such registration statement to become and remain effective
for
the period of the distribution contemplated thereby (determined as provided
below);
(b) prepare
and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may
be
necessary to keep such registration statement effective for the period specified
herein and comply with the provisions of the Securities Act with respect to
the
disposition of all Registrable Securities covered by such registration statement
in accordance with the sellers' intended method of disposition set forth in
such
registration statement for such period;
(c) furnish
to each seller of Registrable Securities and to each underwriter such number
of
copies of the registration statement and each such amendment and supplement
thereto (in each case including all exhibits) and the prospectus included
therein (including each preliminary prospectus) as such persons reasonably
may
request in order to facilitate the public sale or other disposition of the
Registrable Securities covered by such registration statement;
(d) use
its
best efforts to register or qualify the Registrable Securities covered by such
registration statement under the securities or "blue sky" laws of such
jurisdictions as the sellers of Registrable Securities or, in the case of an
underwritten public offering, the managing underwriter reasonably shall request,
provided,
however,
that
the Company shall not for any such purpose be required to qualify generally
to
transact business as a foreign corporation in any jurisdiction where it is
not
so qualified or to consent to general service of process in any such
jurisdiction, unless the Company is already subject to service in such
jurisdiction;
(e) use
its
best efforts to list the Registrable Securities covered by such registration
statement with any securities exchange on which the Ordinary Shares of the
Company are then listed;
(g) immediately
notify each seller of Registrable Securities and each underwriter under such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any
event
of which the Company has knowledge as a result of which the prospectus contained
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 light
of
the circumstances then existing, and promptly prepare and furnish to such
seller
a
reasonable number of copies of a prospectus supplemented or amended so that,
as
thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the circumstances
then
existing;
8
(h) if
the
offering is underwritten and at the request of any seller of Registrable
Securities, use its best efforts to furnish on the date that Registrable
Securities are delivered to the underwriters for sale pursuant to such
registration: (i)
an
opinion dated such date of counsel representing the Company for the purposes
of
such registration, addressed to the underwriters to such effects as reasonably
may be requested by counsel for the underwriters, and (ii)
a letter
dated such date from the independent public accountants retained by the Company,
addressed to the underwriters stating that they are independent public
accountants within the meaning of the Securities Act and that, in the opinion
of
such accountants, the financial
statements of the Company included in the registration statement or the
prospectus, or any amendment or supplement thereof, comply as to form in all
material respects with the applicable accounting requirements of the Securities
Act, and such letter shall additionally cover such other financial matters
(including information as to the period ending no more than five (5) business
days prior to the date of such letter) with respect to such registration as
such
underwriters reasonably may request;
(i) make
available for inspection by each seller of Registrable Securities, any
underwriter participating in any distribution pursuant to such registration
statement, and any attorney, accountant or other agent retained by such seller
or underwriter, all at the cost and expense of such sellers or underwriters,
as
the case may be, reasonable access to all financial and other records, pertinent
corporate documents and properties of the Company, as such parties may
reasonably request, and cause the Company's officers, directors and employees
to
supply all information reasonably requested by any such seller, underwriter,
attorney,
accountant or agent in connection with such registration statement, all subject
to the recipients' signing non-disclosure undertakings in form designated by
the
Company;
(j) cooperate
with the selling holders of Registrable Securities and the managing underwriter,
if any, to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold, such certificates
to
be in such denominations and registered in such names as such holders or the
managing underwriter may request at least two business days prior to any sale
of
Registrable Securities;
(l) in
the
event of any underwritten public offering, enter into and perform its
obligations under an underwriting agreement reasonably acceptable to the
Company, in usual and
customary form, with the managing underwriter of such offering.
9
For
purposes of this Agreement, the period of distribution of
Registrable Securities
in a firm commitment underwritten public offering shall be deemed to extend
until each underwriter has completed the distribution of all securities
purchased by it, and the period of distribution of Registrable Securities in
any
other registration shall be deemed to extend until the earlier of the sale
of
all Registrable
Securities covered thereby or 180 days after the effective date thereof,
provided,
however,
in the
case of any registration of Registrable Securities on Form F-3 or a comparable
or successor form which are intended to be offered on a continuous or delayed
basis, such 180 day-period shall be extended, if necessary, to keep the
registration statement effective until all such Registrable Securities are
sold
(but in no event longer than nine months after the effective date of such
registration statement), provided that Rule 415, or any successor rule under
the
Securities Act, permits an offering on a continuous or delayed basis, and
provided,
further,
that
applicable rules under the Securities Act governing the obligation to file
a
post effective amendment, permit, in lieu of filing a post-effective amendment
which (y)
includes
any prospectus required by Section 10(a)(3) of the Securities Act or
(z)
reflects
facts or events representing a material or fundamental change in or omission
from the information set forth in the registration statement, the incorporation
by reference of information required to be included in (y) and (z) above
contained in periodic reports filed pursuant to Section 13 or 15(d) of the
Exchange Act in the registration statement.
In
connection with each registration hereunder,
the
sellers of Registrable Securities will furnish to the Company in writing such
information requested by the Company with respect to themselves and the proposed
distribution by them as shall be reasonably necessary in order to assure
compliance with Federal and applicable state securities laws.
3.8 Expenses.
(a) All
expenses incurred by the Company in complying with Sections 3.4, 3.5 and 3.6,
including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel and independent public accountants
for the Company, fees and expenses (including counsel fees) incurred in
connection with complying with state securities or "blue sky" laws, fees of
the
National Association of Securities Dealers, Inc., transfer taxes, fees of
transfer agents and registrars, costs of any insurance which might be obtained
by the Company with respect to the offering by the Company, and fees and
disbursements of one counsel selected by the holders of at least two-thirds
(2/3) of the Registrable Securities being sold, but excluding any Selling
Expenses, are called "Registration Expenses". All underwriting discounts and
selling commissions applicable to the sale of Registrable Securities are called
"Selling Expenses".
(b) The
Company will pay all Registration Expenses in connection with each registration
statement under Sections 3.4, 3.5 or 3.6; provided,
that,
in the
event of a registration pursuant to Section 3.4 hereof which is withdrawn at
the
request of the Shareholders other than (i)
as a
result of the Company's failure to perform its obligations hereunder, (ii)
as a
result of a cutback by the underwriter of such registration in the amount
of
Registrable
Securities which may be included in such registration by more than 25% or
(iii)
as a
result of information concerning a materially adverse change in the Company's
business or financial
condition that is made
known to the Shareholders after the date on which such registration was
requested, the Shareholders shall pay the Registration Expenses with respect
to
such registration. In the event that a registration pursuant to Section 3.4
hereof is withdrawn pursuant to clauses (i), (ii) or (iii) of this Section
3.8(b), the Shareholders shall, immediately following such withdrawal, be
entitled to that number of registration requests pursuant to Section 3.4 hereof
to which they would have been entitled not taking into account the withdrawn
request. All Selling Expenses in connection with each registration statement
under Sections 3.4, 3.5 or 3.6 shall be borne by the participating sellers
in
proportion to the number of shares registered by each, or by such participating
sellers other than the Company (except to the extent the Company shall be a
seller) as they may agree.
10
3.9 Indemnification
and Contribution.
(a) In
the
event of a registration of any of the Registrable Securities under the
Securities Act pursuant to any of Sections 3.4, 3.5 or 3.6, the Company will
indemnify
and
hold
harmless each holder of Registrable Securities, its officers, directors and
partners, each underwriter of such Registrable Securities thereunder and each
other person, if any, who controls such holder or underwriter within the meaning
of the Securities Act (each, an "Indemnitee"),
against
any losses, claims, damages or liabilities, joint or several, to which such
Indemnitee may become subject under the Securities Act or otherwise, insofar
as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in any prospectus, offering circular
or
other document incident to such registration (including any related
notification,
registration statement under which such Registrable Securities were registered
under the Securities Act pursuant to any of Sections 3.4, 3.5, or 3.6 any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof), (ii) any blue sky application or other document executed
by the Company specifically for that purpose or based upon written information
furnished by the Company filed in any state or other jurisdiction in order
to
qualify any or all of the Registrable Securities under the securities laws
thereof (any such application, document or information herein called a "Blue
Sky
Application"),
(iii)
any
omission or alleged omission to state in any such registration statement,
prospectus, amendment or supplement or in any Blue Sky Applications executed
or
filed by the Company, a material fact required to be stated therein or necessary
to make the statements therein not misleading, or
(iv)
any
violation by the Company of the Securities Act or any rule or regulation
promulgated under the Securities Act or any state law applicable to the Company
and relating to action or inaction required of the Company in connection with
such registration, and will reimburse each Indemnitee
for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action,
promptly after being so incurred, provided,
however,
that the
Company will not be liable to an Indemnitee if and to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so made
in
conformity with written information furnished by such Indemnitee, in writing
specifically for use in such registration statement or prospectus; provided
further, however, that, other than in a firm commitment underwriting, the
foregoing indemnity agreement with respect to any preliminary prospectus shall
not inure to the benefit of any Indemnitee from whom the person asserting any
such losses, claims, damages or liabilities purchased shares in the offering,
if
a copy of the prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Indemnitee to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the shares to such person, and if the prospectus
(as
so amended or supplemented) would have cured the defect giving rise to such
loss, claim, damage or liability.
11
(b) In
the
event of a registration of any of the Registrable Securities under the
Securities Act pursuant to any of Sections 3.4, 3.5 or 3.6, each seller of
such
Registrable Securities thereunder, severally and not jointly, will indemnify
and
hold harmless the Company, each person, if any, who controls the Company within
the meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each other seller of
Registrable Securities, each underwriter and each person who controls any
underwriter within the meaning of the Securities Act, against all losses,
claims, damages or liabilities, joint or several, to which the Company or such
officer, director, other seller, underwriter or controlling person may become
subject under the Securities Act 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 any material fact
contained in any prospectus, offering circular or other document incident to
such registration (including any related notification, registration statement
under which such Registrable Securities were registered under the Securities
Act
pursuant to any of Sections 3.4, 3.5 or 3.6, any preliminary prospectus or
final
prospectus contained therein, or any amendment or supplement thereof), or any
Blue Sky Application 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 will reimburse
the
Company and each such officer, director, other seller, underwriter and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action, promptly after being so incurred, provided,
however,
that
such seller will be liable hereunder
in any
such case if and only to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with information pertaining to such seller, as such, furnished
in
writing to the Company by such seller specifically for use in such registration
statement or prospectus; and provided,
further, however,
that the
liability of each seller hereunder shall be limited to the proceeds received
by
such seller from the sale of Registrable Securities covered by such registration
statement. Not in limitation of the foregoing, it is understood and agreed
that
the indemnification obligations of any seller hereunder pursuant to any
underwriting agreement entered into in connection herewith shall be limited
to
(or be reasonably comparable to, in the event an underwriter reasonably requires
the use of its form of underwriting agreement) the obligations contained in
this
subparagraph (b).
(c) Promptly
after receipt by an indemnified party hereunder
of
notice of the commencement of any action, such indemnified party shall, if
a
claim in respect thereof is to be made against the indemnifying party hereunder,
notify the indemnifying party in writing thereof, but the omission so to notify
the indemnifying party shall not relieve it from any liability which it may
have
to such indemnified party other than under this Section 3.9 and shall only
relieve it from any liability which it may have to such indemnified party under
this Section 3.9 if and to the extent the indemnifying
party
is prejudiced by such omission. In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement
thereof, the indemnifying party shall be entitled to participate in and, to
the
extent it shall wish, to assume and undertake the defense thereof with counsel
selected by such indemnifying party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake
the
defense thereof, the indemnifying
party
shall not be liable to such indemnified party under this Section 3.9 for any
legal expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation and of
liaison with counsel so selected, provided,
however,
that, if
the defendants in any such action include both the indemnified party and the
indemnifying party and the counsel selected by the indemnifying party shall
have
reasonably concluded that there may be deemed to conflict with the interests
of
the indemnifying party, the indemnified party shall have the right to select
a
separate counsel and to assume such legal defenses and otherwise to participate
in the defense of such action, with the expenses and fees of such separate
counsel and other expenses related to such participation to be reimbursed by
the
indemnifying party. No indemnifying party, in the defense of any such claim
or
action, shall, except with the consent of each indemnified party, consent to
entry of any judgment or enter into any settlement which does not include as
an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim
or
action, and no indemnified party shall consent to entry of any judgment or
settle such claim or litigation without the prior written consent of the
indemnifying party, which consent shall not be unreasonably withheld. Each
indemnified party shall furnish such information regarding itself or the claim
in question as an indemnifying party may reasonably request in writing and
as
shall be reasonably required in connection with defense of such claim and
litigation resulting therefrom.
12
(d) In
order
to provide for just and equitable contribution to joint liability under the
Securities Act in any case in which either (i)
any
indemnified party makes a claim for indemnification pursuant to this Section
3.9
but it is judicially determined (by the entry of a final judgment or decree
by a
court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 3.9 provides
for indemnification in such case, or (ii)
contribution under the Securities Act may be required on the part of any such
indemnified party in circumstances for which indemnification is provided under
this Section 3.9; then, and in each such case, the indemnifying party shall,
in
lieu of indemnifying such indemnified party, contribute to the amount paid
or
payable by such indemnified party as a result of such losses, claims, damages
or
liabilities to which such party may be subject in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the
one
hand and the indemnified party on the other in connection with the statements
or
omissions which resulted in such losses, claims, damages or liabilities, as
well
as any other relevant equitable considerations. The relative fault of the
indemnifying party and the indemnified party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of
material fact related to information supplied by the indemnifying party or
the
indemnified party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
Notwithstanding the foregoing (A) no such holder of Registrable Securities
will
be required to contribute any amount in excess of the proceeds received from
the
sale of all such Registrable Securities offered by it pursuant to such
registration statement; and (B)
no
person or entity guilty of fraudulent misrepresentation (within the meaning
of
Section 11(f)
of the
Securities Act) will be entitled to contribution from any person or entity
who
was not guilty of such fraudulent misrepresentation.
13
(e) The
indemnities and obligations provided in this Section 3.9 shall survive the
transfer of any Registrable Securities by such holder.
3.10 Changes
in Ordinary Shares. If,
and
as often as, there is any change in the Ordinary Shares by way of a share split,
share dividend, combination or reclassification,
or through a merger, consolidation, reorganization or recapitalization, or
by
any other means, appropriate adjustment shall be made in the provisions hereof
so that the rights and privileges granted hereby shall continue with respect
to
the Ordinary Shares as so changed.
3.11 Rule
144 and 144A Reporting. With
a
view to making available the benefits
of
certain rules and regulations of the Commission which may at any time permit
the
sale of the Registrable Securities to the public without registration, except
as
provided in paragraph (c)
below,
at all times after any registration statement covering a public offering of
securities of the Company under the Securities Act shall have become effective,
the Company agrees to:
(a) use
its
best efforts to comply with all of the applicable reporting requirements of
the
Exchange Act and shall comply with all other public information reporting
requirements of the Commission as a condition to the availability of an
exemption from the Securities Act for the sale of any of the Registrable
Securities by any holder of Registrable Securities pursuant to Rule 144 or
Rule
144A thereof, as amended from time to time, or any successor rule thereto or
otherwise;
(b) cooperate
with each holder of Registrable Securities in supplying such information as
may
be necessary for such holder of Registrable Securities to complete and file
any
information reporting forms presently or hereafter required by the Commission
as
a condition to the availability of an exemption from the Securities Act under
Rule 144 or Rule 144A thereunder for the sale of any of the Registrable
Securities by any holder of Registrable Securities; and
(c) furnish
to each holder of Registrable Securities forthwith upon request a written
statement by the Company as to its compliance with the reporting requirements
of
such Rule 144 or Rule 144A (or any successor rule) and, at any time after it
has
become subject to such reporting requirements, of the Securities Act and the
Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed by the Company as such
holder may reasonably request in availing itself of any rule or regulation
of
the Commission allowing such holder to sell any Registrable Securities without
registration.
3.12 "Market
Stand-Off'
Agreement. Each
of
the Shareholders agrees, severally and not jointly, if requested by the Company
and an underwriter of Ordinary Shares (or other securities) of the Company,
not
to sell or otherwise transfer or dispose of any Ordinary Shares (or other
securities) of the Company held by such Shareholder during a period not to
exceed ninety (90) days following the effective date of any registration
statement filed by the Company
under the Securities Act, and to enter into an agreement to such effect;
provided,
that,
all of
the Company's officers, directors and holders of at least 5% of the outstanding
Ordinary Shares (or securities convertible into at least 5% of the Ordinary
Shares) also enter into agreements to such effect.
14
The
Company may impose stop-transfer instructions with respect to the shares (or
securities) subject to the foregoing restriction until the end of said
period.
3.13 Reserved
3.14 Assignment
of Registration Rights. The
rights to cause the Company to register Registrable Securities pursuant to
this
Article 3 may be assigned (but only with all related obligations) by a holder
of
Registrable Securities to a transferee or assignee of such securities who is
not
engaged in a business activity competitive with the Company (as reasonably
determined by the Company's Board of Directors) and who, after such assignment
or transfer, holds at least 500,000 shares of Registrable Securities (subject
to
appropriate adjustment for share splits, share dividends, combinations and
similar recapitalization events), provided,
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 provided,
further,
that
such assignment shall be effective only if (i) immediately following such
transfer the further disposition of such securities by the transferee or
assignee is restricted under the Securities Act and (ii) the transferee or
assignee shall acknowledge in writing that the transferred or assigned
Registrable Securities shall remain subject to this Agreement. For the purposes
of determining the number of shares of Registrable Securities held by a
transferee or assignee, the holdings of transferees and assignees of a
partnership who are partners or retired partners of such partnership (including
spouses and ancestors, lineal descendants and siblings of such partners or
spouses who acquire Registrable Securities by gift, will or intestate
succession) shall be aggregated together and with the partnership; provided,
that,
all
assignees and transferees who would not qualify individually for assignment
of
registration rights shall have a single attorney-in-fact for the purpose of
exercising any rights, receiving notices or taking any action
under
this Article 3.
3.15 Blockage
Periods.
Notwithstanding any other provision of this Agreement, the Company shall be
permitted to defer the filing of any registration statement under Sections
3.4
or 3.6 if the Company’s Board of Directors determines in good faith, as
certified in writing by the Company’s President or Chief Executive Officer to
the holder of Registrable Securities requesting registration pursuant to any
of
the said Sections, that the filing of such a registration statement at such
time
would be seriously detrimental to the business of the Company. The Company
may
decline to file any registration statement for this reason only once in any
12-month period and only for a maximum period of 90 days at any one
time.
3.16 Termination
of Registration Rights.
The
rights under this Section 3 will expire with respect to each of the Shareholders
and their respective successors, assigns and transferees, upon the earlier
of
(i) five years after the date of the approval of this Agreement by the Company's
shareholders or (ii) with respect to a particular holder or any of it
successors, assigns or transferees, the earlier of such person's ceasing to
hold
any Registrable Securities or at such
time
as such person is entitled to sell all of its Registrable Securities within
a
consecutive 90-day period pursuant to Rule 144.
15
4. MISCELLANEOUS
4.1 Notices.
All
notices, requests, consents and other communications hereunder
shall be
in writing, shall be addressed to the receiving party's address set forth below
or to such other address as a party may designate by notice hereunder, and
shall
be either (i)
delivered by hand, (ii)
made by
telecopy or facsimile transmission, (iii)
sent by
overnight courier, or (iv)
sent by
registered or certified mail, return receipt requested, postage
prepaid.
If
to the
Company: Given
Imaging Ltd.
2
Ha’Carmel Street
New
Industrial Park
P.O.
Box
258
Yoqneam
00000
Xxxxxx
Attn:
the
CEO
000-0-000-0000
(Fax)
If
to the
Shareholders: To
the
addresses set forth on Exhibit A
All
notices, requests, consents and other communications hereunder
shall be
deemed to have been given either (i)
if by
hand, at the time of the delivery thereof to the receiving party at the address
of such party set forth above, (ii)
if made
by telecopy or facsimile transmission, on the next business day following the
day such notice is transmitted, or (iii) if sent by registered or certified
mail, on the fifth business day following the day such mailing is
made.
4.2 Entire
Agreement. This
Agreement embodies the entire
agreement
and understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral or written agreements and understandings
relating to the subject matter hereof. No statement, representation, warranty,
covenant or agreement of any kind not expressly set forth in this Agreement
shall affect, or be used to interpret, change or restrict, the express terms
and
provisions of this Agreement.
4.3 Modifications
and Amendments. This
Agreement may be amended or modified, and any provision hereof may be waived,
only with the written consent of (i) the Company and (ii) the holders of at
least two-thirds (2/3) of the Registrable Securities whose rights under Section
3 have not terminated according to the provisions of this Agreement. Any waiver
or consent hereunder shall be effective only in the specific instance and for
the purpose for which it was given, and shall not constitute a continuing waiver
or consent.
4.4 Assignment.
The
rights and obligations under this Agreement may not be assigned
by the Company without the prior written consent of at least a majority of
the
holders of
Registrable
Securities, unless specifically permitted by the terms hereof.
16
4.5 Benefit.
All
statements, representations, warranties, covenants and agreements in this
Agreement shall be binding on the parties hereto and shall inure to the benefit
of the respective successors and permitted assigns of each party hereto. Nothing
in this Agreement shall be construed to create any rights or obligations except
among the parties hereto, and no person or entity shall be regarded as a
third-party beneficiary of this Agreement.
4.6 Governing
Law. This
Agreement and the rights and obligations of the parties hereunder
shall be
construed in accordance with and governed by the law of the State of New York,
without giving effect to the conflict of law principles thereof (other than
Section 5-1401 of the General Obligations Law of the State of New
York).
4.7 Jurisdiction
and Service of Process. Any
legal
action or proceeding with respect to this Agreement shall be brought in the
courts of the State of New York or of the United States of America for the
District of New York. By execution and delivery of this Agreement, each of
the
parties hereto accepts for itself and in respect of its property, generally
and
unconditionally, the jurisdiction of the aforesaid
courts.
Each of the parties hereto irrevocably consents to the service of process of
any
of the aforementioned
courts
in any such action or proceeding by the mailing of copies thereof by certified
mail, postage prepaid, to the party at its address set forth in Section 4.1
hereof.
4.9 Interpretation.
The
parties hereto acknowledge and agree that: (i)
each
party and its counsel reviewed and negotiated the terms and provisions of this
Agreement and have contributed to its revision; (ii)
the rule
of construction to the effect that any ambiguities are resolved against the
drafting party shall not be employed in the interpretation of this Agreement;
and (iii)
the
terms and provisions of this Agreement shall be construed fairly as to all
parties hereto and not in favor of or against any party, regardless of which
party was generally responsible for the preparation of this
Agreement.
4.10 Headings
and Captions. The
headings and captions of the
various
subdivisions of this Agreement are for convenience of reference only and shall
in no way modify or affect the meaning or construction of any of the terms
or
provisions hereof.
4.11 Enforcement.
Each
of
the parties hereto acknowledges and agrees that the rights acquired by each
party hereunder are unique and that irreparable damage would occur in the event
that any of the provisions of this Agreement to be performed by the other
parties were not performed in accordance with their specific terms or were
otherwise breached.
Accordingly,
in addition to any other remedy to which the parties hereto are entitled at
law
or in equity, each party hereto shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement by any other party and to
enforce specifically the terms and provisions hereof in any federal or state
court to which the parties have agreed hereunder
to
submit to jurisdiction.
17
4.12 No
Waiver of Rights, Powers and Remedies. No
failure or delay by a party hereto in exercising any right, power or remedy
under this Agreement, and no course of dealing among the parties hereto, shall
operate as a waiver of any such right, power or remedy of the party, other
than
as provided by Section 4.3 above. No single or partial exercise of any right,
power or remedy under this Agreement by a party hereto, nor any abandonment
or
discontinuance of steps to enforce any such right, power or remedy, shall
preclude such party from any other or further exercise thereof or the exercise
of any other right, power or remedy hereunder. The election of any remedy by
a
party hereto shall not constitute a waiver of the right of such party to pursue
other available remedies. No notice to or demand on a party not expressly
required under this Agreement shall entitle the party receiving such notice
or
demand to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the party giving such
notice or demand to any other or further action in any circumstances without
such notice or demand.
4.13 Counterparts.
This
Agreement may be executed in one or more counterparts, and by different parties
hereto on separate counterparts, each of which shall be deemed an original,
but
all of which together shall constitute one and the same instrument.
5. Condition
Precedent The
execution, delivery and performance of this Agreement is conditional upon
obtaining the approval of the shareholders of the Company in accordance with
applicable law. If such approval is not obtained, this Agreement shall be deemed
null and void ab initio.
18
IN
WITNESS WHEREOF, the parties hereto
have
executed this Investor Rights Agreement or caused this Agreement to be executed
by their duly authorized representatives;
as of
the date first written above.
|
By:
|
/s/
Xxxxxx Xxxxxx
|
|
Xx.
Xxxxx (Homi) Shamir
|
|
|
President
and Chief
|
|
|
Executive
Officer
|
|
|
By:
|
/s/
Xxxxx Xxxxx
|
|
Xx.
Xxxxx Xxxxx
|
|
|
Chief
Financial Officer
|
|
19
|
SHAREHOLDERS:
|
DISCOUNT
INVESTMENT CORPORATION LTD.
|
By:
|
/s/
Xxxxxx Xxxxx
|
|
Name:
|
Xxxxxx
Xxxxx
|
|
Title:
|
Legal
Counsel
|
|
By:
|
/s/
Xxxxxx Xxxxx
|
|
Name:
|
Xxxxxx
Xxxxx
|
|
Title:
|
VP
and Controller
|
ELRON
ELECTRONIC INDUSTRIES LTD.
|
By:
|
/s/
Xxxxx Xxxxxx
|
|
Name:
|
Xxxxx
Xxxxxx
|
|
Title:
|
Chief
Executive Officer
|
|
By:
|
/s/
Xxxx Xxxxxxxx
|
|
Name:
|
Xxxx
Xxxxxxxx
|
|
Title:
|
General
Counsel
|
RDC
XXXXXX DEVELOPMENT CORPORATION LTD.
20
EXHIBIT
A
RDC
Xxxxxx Development Corporation Ltd.
|
Address:
|
|
Xxxxxxxx
0
|
|
Xxx
Xxxxxxxxxx Xxxx
|
|
Xxxxxxx
00000
|
|
Xxxxxx
|
Discount
Investment Corporation Ltd.
|
Address:
|
|
Triangular
Tower
|
|
44th
Floor
|
|
3
Azrieli Center
|
|
Xxx
Xxxx 00000
|
|
Xxxxxx
|
Elron
Electronic Industries Ltd.
21
