EXHIBIT 4.3
ORDINARY SHARE PURCHASE AGREEMENT
THIS ORDINARY SHARE PURCHASE AGREEMENT (THIS "AGREEMENT") IS DATED AS OF THE 22
DAY OF JUNE 2005 (THE "AGREEMENT DATE"), BY AND BETWEEN LANOPTICS LTD., AN
ISRAELI COMPANY (THE "COMPANY"), AND THE INVESTORS LISTED ON EXHIBIT A ATTACHED
HERETO (EACH AN "INVESTOR" AND TOGETHER THE "INVESTORS").
The parties hereto agree as follows:
ARTICLE I DEFINITIONS
SECTION 1.1 DEFINITIONS.
(a) "CLOSING" shall have the meaning assigned to such term in Section 2.4
hereof.
(b) "COMMISSION" shall mean the U.S. Securities and Exchange Commission.
(c) "EFFECTIVE DATE" shall mean the date the Registration Statement of the
Company covering the Shares being subscribed for hereby is declared effective by
the Commission.
(d) "EXCHANGE ACT" shall mean the U.S. Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
(e) "EZCHIP" shall mean E.Z. Chip Technologies Ltd., an Israeli company.
(f) "REGISTRABLE SECURITIES" shall have the meaning assigned to such term
in Section 3.1(a).
(g) "REGISTRATION STATEMENT" shall have the meaning assigned to such term
in Section 3.1(a).
(h) "SECURITIES ACT" shall mean the U.S. Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder.
(i) "SHARES" shall mean the Ordinary Shares of the Company that may be
purchased hereunder.
(j) "TRADING DAY" shall mean (a) any day on which the Ordinary Shares are
traded on the Nasdaq Small Cap Market, or (b) if the Ordinary Shares are not
then listed or quoted for trading on the Nasdaq Small Cap Market, then a day on
which trading occurs on the New York Stock Exchange (or any successor thereto).
ARTICLE II PURCHASE AND SALE OF SHARES; REPRESENTATIONS OF COMPANY
SECTION 2.1 PURCHASE AND SALE OF SHARES. Subject to the terms and
conditions of this Agreement, each Investor agrees, severally and not jointly,
to purchase at the Closing, and the Company agrees to issue and sell to each
Investor, that number of ordinary shares of the Company, NIS 0.02 par value per
share (the "ORDINARY SHARES"), indicated next to such Investor's name on EXHIBIT
A attached hereto, for the consideration calculated as set forth in EXHIBIT B
attached hereto.
SECTION 2.2 CONSIDERATION. In consideration for the Shares, each Investor
agrees, severally and not jointly, to transfer to the Company that number of
Ordinary or Preferred shares of EZchip, NIS 0.01 nominal value per share (the
"EZCHIP SHARES"), indicated next to such Investor's name on Exhibit A attached
hereto.
SECTION 2.3 SHARE CERTIFICATES. Against transfer of the consideration by
the Investors to the Company, the Company shall issue a Share Certificate to
each Investor indicating the number of Shares purchased by such Investor.
SECTION 2.4 CLOSING. The purchase and sale of the Shares (the "CLOSING")
shall take place at the offices of Naschitz, Xxxxxxx & Co, 0 Xxxxx Xxxxxx, Xxx
Xxxx 00000 Israel ("NASCHITZ") within three (3) business days of attainment of
all of the following (the "CLOSING DATE"):
(a) the receipt of approval of the board of directors of EZchip for the
transfer of the EZchip Shares to the Company;
(b) delivery to the Investors of opinion of legal counsel to the Company in
the form attached hereto as EXHIBIT C;
(c) the expiration of the waiting period pursuant to NASDAQ Rule
4320(e)(15); and
(d) the receipt of any other governmental or third party approvals that may
be required in connection with this Agreement and the transactions contemplated
hereunder.
(e) the receipt by the Company of tax ruling or any other approval or
waiver from the applicable tax authorities which approves that the Company is
entitled not to deduct or withhold any withholding tax or other applicable tax
with respect to the transactions contemplated by this Agreement"
Each party shall deliver all documents, instruments and writings required
to be delivered by such party pursuant to this Agreement at or prior to the
Closing. If the Closing has not occurred by the date sixty (60) days from the
Agreement Date, the Company's obligation to sell and the Investors' obligation
to purchase the Shares will terminate.
SECTION 2.5 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants as follows:
(a) The Company is a company duly incorporated and validly existing under
the laws of Israel. This Agreement constitutes, or shall constitute when
executed and delivered, a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms. Without limiting
the generality of the foregoing, the Company knows of no reason why it will not
be able to register the Registrable Securities as provided in Article III below.
(b) The Company is authorized to issue the Shares pursuant to this
Agreement, and the same shall be issued free and clear of any and all liens,
encumbrances, security interests and claims of any kind and nature, and no third
party holds any right or interest (beneficial, voting or otherwise) in the
Shares. The Shares when issued and paid for as provided herein will be
fully-paid and non-assessable.
(c) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated in this Agreement and the
fulfillment of the terms of this Agreement have been duly authorized by all
necessary corporate action and will not conflict with or constitute a breach of,
or default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to, any
contract, indenture, mortgage, loan agreement, deed, trust, note, lease,
sublease, voting agreement, voting trust or other instrument or agreement to
which the Company is a party or by which it may be bound, or to which any of the
property or assets of the Company is subject, and will not trigger anti-dilution
rights or other rights to acquire additional equity securities of the Company,
nor will such action result in any violation of the provisions of the articles
of association of the Company or any applicable statute, law, rule, regulation,
ordinance, decision, directive or order.
(d) For the three (3) years preceding the date hereof, the Company has
timely filed all reports, schedules, forms, statements and other documents
required to be filed by it with the Commission pursuant to the reporting
requirements of the Exchange Act, including material filed pursuant to Section
13(a) or 15(d) of the Exchange Act (all of the foregoing including filings
incorporated by reference therein being referred to herein as the "COMMISSION
DOCUMENTS"). The Company has delivered or made available to the Investors true
and complete copies of the Commission Documents filed with the Commission since
January 1, 2002 and prior to the Closing Date. The Company has not provided to
the Investors any information which, according to applicable law, rule or
regulation, should have been disclosed publicly by the Company but which has not
been so disclosed, other than with respect to the transactions contemplated by
this Agreement. The Form 20-F for the year ended December 31, 2003, as amended,
complied in all material respects with the requirements of the Exchange Act and
the rules and regulations of the Commission promulgated thereunder, and the said
Form 20-F did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Company included in the
Commission Documents comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the
Commission applicable thereto or other applicable rules and regulations with
respect thereto. Such financial statements have been prepared, for a period
prior to January 1 2004, in accordance with Israeli generally accepted
accounting principles ("GAAP"), and, for the period following January 1, 2004,
in accordance with US GAAP, applied on a consistent basis during the periods
involved (except (i) as may be otherwise indicated in such financial statements
or the notes thereto or (ii) in the case of unaudited interim statements, to the
extent they may not include footnotes or may be condensed or summary
statements), and fairly present in all material respects the financial position
of the Company and its subsidiaries as of the dates thereof and the results of
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments, not material in
amount).
(e) The Company meets the eligibility requirements for the use of Form F-3
for the registration of securities in a transaction involving secondary
offerings.
(f) The Company has no contract, arrangement or understanding with any
broker, finder or similar agent with respect to the issuance of the Shares to
the Investors and transfer of the EZchip Shares, as contemplated by this
Agreement.
(g) Capitalization.
(i) The authorized share capital of the Company consists of 30,000,000
Ordinary Shares.
(ii) As of the date hereof, the issued and outstanding capital stock
of the Company consists of 10,626,285 Ordinary Shares. The issued and
outstanding Ordinary Shares of the Company have been duly authorized and
validly issued, are fully paid and nonassessable and have not been issued
in violation of and are not otherwise subject to any preemptive or other
similar rights.
(iii) The Company has reserved 972,539Ordinary Shares for issuance
upon the exercise of warrants granted to certain entities, and share
options granted or available for future grant under the Company's employee
incentive share option plans.
With the exception of the foregoing, and the right of the preferred shareholders
of EZchip to exchange their EZchip shares with Ordinary shares of the Company in
accordance with the Exchange Right Agreement dated May 8, 2003, executed between
the Company, Ezchip and such shareholders, there are no outstanding
subscriptions, options, warrants, convertible or exchangeable securities or
other rights granted to or by the Company to purchase Ordinary Shares or other
securities of the Company and there are no commitments or arrangements to issue
any Ordinary Shares or any security convertible into or exchangeable for
Ordinary Shares.
(h) Issuance, Sale and Delivery of the Shares.
(i) The issuance of the Shares is not subject to preemptive or other
similar rights or antidilution rights. Except as set forth in this
Agreement, no further approval or authority of the shareholders or the
Board of Directors of the Company will be required for the issuance and
sale of the Shares to be sold by the Company as contemplated in this
Agreement.
(ii) Neither the Company nor any of its subsidiaries or affiliates,
nor any Person acting on its or their behalf, (x) has engaged in any form
of general solicitation or general advertising (within the meaning of
Regulation D) in connection with the offer or sale of the Shares, (y) has,
directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under any circumstances that
would require registration of the Shares under the Securities Act or (z)
has issued any Ordinary Shares or other securities or instruments
convertible into, exchangeable for or otherwise entitling the holder
thereof to acquire Ordinary Shares which would be integrated with the sale
of the Shares to such Purchaser for purposes of the Securities Act or of
any applicable stockholder approval provisions, including, without
limitation, under the rules and regulations of The Nasdaq Stock Market, nor
will the Company or any of its subsidiaries or affiliates take any action
or steps that would require registration of any of the Shares under the
Securities Act or cause the offering of the Shares to be integrated with
other offerings. Assuming the accuracy of the representations and
warranties of the Purchasers in Section 3.2 hereof, the offer and sale of
the Shares by the Company to the Purchasers pursuant to this Agreement will
be exempt from the registration requirements of the Securities Act.
(i) NO MATERIAL CHANGE. Since December 31, 2004,
(i) there has not been any change, event or development having, or
that could be reasonably expected to have, individually or in the
aggregate, a material adverse effect on the condition, financial or
otherwise, or the earnings, assets or business affairs of the Company and
its subsidiaries taken as a whole (a "Company Material Adverse Effect");
(ii) other than the transactions contemplated by this Agreement, there
have been no transactions entered into by the Company other than those in
the ordinary course of business which are material with respect to the
Company;
(iii) there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its share capital; and
(iv) the Company has no new material contingent obligations.
(j) TRANSFER TAXES. The Company shall be liable for, and shall pay when
due, any transfer, gains, documentary, sales, use, registration, stamp, value
added or other similar taxes (other than income taxes) payable by reason of the
transactions contemplated by this Agreement or attributable to the initial sale
to the Investors of the Shares.
(k) MISCELLANEOUS
(i) There is no litigation, judgment, or statute prohibiting the sale
of the Shares to the Investors as such sale is contemplated pursuant to the
terms of the Agreement;
(ii) The Company's Ordinary Shares are listed on the Nasdaq Small Cap
Market and the Company has not received a cease trading order from the
Nasdaq Small Cap Market with respect to its securities; and
(iii) The Company shall cause the issuance of the Shares to the
Investors pursuant to the terms of the Agreement.
ARTICLE III REGISTRATION AND ACCREDITED INVESTOR RIGHTS AND OBLIGATIONS
SECTION 3.1 REGISTRATION STATEMENT.
(a) FILING AND EFFECTIVENESS. The Company will file as soon as commercially
practicable after the Closing, and in any event no later than thirty (30)
business days after the Closing Date, a Form F-3 (or if not eligible at such
time to file Form F-3, a Form F-1) registration statement with the Commission
(the "Registration Statement"), for the non-underwritten resale into the open
market or in privately negotiated transactions of the Shares (the "Registrable
Securities") by the Investors or by the limited or general partners of the
Investors to whom the shares have been distributed. Once filed, the Company
shall use best efforts to cause such Registration Statement registering the
Registrable Securities to be declared effective within ninety (90) days from the
filing Date. The Company will notify the Investors and its transfer agent of the
effectiveness of the Registration Statement within three (3) Trading Days of
such event.
(b) EFFECTIVENESS PERIOD. The Company will maintain the Registration
Statement effective under the Securities Act until the earlier of (i) the date
that all of the Shares have been sold pursuant to such Registration Statement,
(ii) the date the Investors receive an opinion from counsel to the Company,
which counsel shall be reasonably acceptable to the Investors, that the Shares
may be sold under the provisions of Rule 144 without limitation as to volume, or
(iii) the date that all Shares have been otherwise transferred to persons who
may trade such Shares without restriction under the Securities Act, and the
Company has delivered a new certificate or other evidence of ownership for such
Shares not bearing a restrictive legend, or (iv) twenty-four (24) months from
the Effective Date. Notwithstanding the foregoing, if the Company furnishes to
the Investors a certificate signed by the President of the Company stating (x)
that there shall have occurred any event, or there shall exist any
circumstances, which would require the disclosure of material non-public
information that the Company has a reasonable justification for keeping
confidential, or (y) that there shall have occurred any event which makes any
statement made in the Registration Statement, the Prospectus forming a part
thereof, or any document incorporated therein by reference untrue or which
requires the making of any changes in such Registration Statement, Prospectus or
incorporated document so that they will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, the Investors shall
forthwith discontinue disposition of the Shares covered by such Registration
Statement until such Investors shall be in receipt of written notice from the
Company to the effect that use of the Registration Statement or Prospectus may
be resumed and shall have been furnished copies of any amended or supplemented
Registration Statement or Prospectus or incorporated documents, as the case may
be. In the event that the Company shall furnish a certificate as contemplated by
the previous sentence suspending the use of the Registration Statement or
Prospectus, the time period referred to in clause (iv) of the first sentence of
this subsection (b) shall be extended by the number of days during the period
from and including the date of giving such notice to and including the date when
the Investors shall have received the copies of the amended or supplemented
Registration Statement or Prospectus or incorporated documents, as the case may
be. The Company shall also give prompt notice to the Investors if disposition of
the Shares covered by the Registration Statement is ordered to be discontinued
for any reason by the Commission, Nasdaq or any other governmental authority,
and in such event the time period referred to in clause (iv) of the first
sentence of this subsection (b) shall be extended by the number of days during
the period from and including the date such notice is given until the date that
notice is given to the Investors to the effect that disposition of the Shares
under the Registration Statement may resume.
(c) ADDITIONAL ACTIONS IN CONNECTION WITH THE REGISTRATION STATEMENT. In
addition to the foregoing, the Company shall:
(i) promptly furnish to the Investors with respect to the Shares
registered under the Registration Statement such reasonable number of
copies of the Prospectus, including any supplements to or amendments of the
Prospectus, and, upon request, the Preliminary Prospectus, in order to
facilitate the public sale or other disposition of all or any of the Shares
by the Investors;
(ii) during the period when copies of the Prospectus are required to
be delivered under the Securities Act or the Exchange Act, will file all
documents required to be filed with the Commission pursuant to Section 13
or 15 of the Exchange Act within the time periods required by the Exchange
Act and the rules and regulations promulgated thereunder;
(iii) timely file documents required of the Company for customary
state level securities law clearance in all states requiring such
clearance;
(iv) bear all expenses in connection with the procedures in this
Section 3.1 and the registration of the Shares pursuant to the Registration
Statement, but not including any fees and expenses of any advisers to the
Investors or brokerage fees and commissions incurred by the Investors;
; and
(v) provide Investors with a copy of the Registration Statement at
least five (5) business days prior to filing such Registration Statement
and to allow Investors' counsel to comment on and to approve any
information in the Registration Statement relating to such Investor;
PROVIDED, HOWEVER, that the five (5) day deadline and the 90 day deadlines
in Section 3.1(a) shall be extended by the number of days past the fifth
business day that the filing of such Registration Statement is delayed due
to the rights of Investors' counsel to approve the aforementioned
information in the Registration Statement.
SECTION 3.2 INVESTORS REPRESENTATIONS.
(a) EZCHIP SHARES. Each Investor represents and warrants that the EZchip
Shares indicated next to its name on Exhibit A are fully-paid and non-assessable
and are beneficially owned by it, free and clear of any and all liens,
encumbrances, security interests and claims of any kind and nature, and no third
party holds any right or interest (beneficial, voting or otherwise) in such
EZchip Shares.
(b) AUTHORITY. Each Investor represents and warrants that it has full power
and authority to enter into and consummate the transactions contemplated by this
Agreement, and the consent of no other party or entity is necessary for the
consummation of the transactions contemplated herein other than as set forth
herein.
(c) BROKERS. Each Investor represents and warrants that it has no contract,
arrangement or understanding with any broker, finder or similar agent with
respect to the issuance of the Shares to the Investors and transfer of the
EZchip Shares, as contemplated by this Agreement.
(d) INVESTOR STATUS DECLARATION. Each Investor represents and warrants that
it is an Accredited Investor within the meaning of Rule 501 of Regulation D
promulgated under the Securities Act, and each Investor represents and warrants
that it understands that an investment in the Shares involves a high degree of
risk, including a risk of total loss of such Investor's investment, that it has
such knowledge and experience as to be capable of evaluating the merits and
risks of its investment in the Shares.
(e) PURCHASE ENTIRELY FOR OWN ACCOUNT. Each Investor represents and
warrants that it is acquiring the Shares for investment and for Investor's own
account, not as a nominee or agent, and not with a view to the resale or
distribution (other than to its general and limited partners) of any part
thereof, and except as aforesaid Investor has no present intention of, or any
arrangement or understanding with any other Persons with respect to, selling,
granting any participation in, or otherwise distributing the same, PROVIDED that
nothing in this section shall constitute an agreement by such Investor to hold
or refrain from disposing of the Shares for any amount of time, except as set
forth in Section 4.1, and PROVIDED, FURTHER, that any transfer, sale or other
disposition of the Shares by such Investor shall comply in all respects with the
requirements of the Securities Act and similar provisions of state law. Each
Investor does not presently have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to such
person or to any third person, with respect to any of the Shares.
(f) RESTRICTED SECURITIES. Each Investor understands that the Shares have
not been, and will not at the time of sale and issuance by the Company be,
registered under the Securities Act by reason of a specific exemption from the
registration provisions of the Securities Act which depends upon, among other
things, the bona fide nature of the investment intent and the accuracy of such
Investor's representations as expressed herein. Each Investor understands that
the Shares are "restricted securities" under applicable U.S. federal and state
securities laws and regulations, and that pursuant to these laws, such Investor
must hold the Shares indefinitely unless the Shares are registered with the
Commission and qualified by necessary state authorities or an exemption from
such registration and qualification requirements is available. Each Investor
further acknowledges that if an exemption from registration or qualification is
available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Shares, and
requirements relating to the Company which are outside of such Investor control,
and the Company agrees to comply with its obligations set forth herein and to
otherwise use its reasonable best efforts to satisfy such requirements.
(g) INFORMATION. Each Investor acknowledges that (i) it has been furnished
with all materials relating to the business, finances and operations of the
Company and materials relating to the offer and sale of the Shares which have
been requested by such Investor; (ii) it has not relied upon any representations
or other information (whether oral or written) other than as set forth in the
representations and warranties of the Company contained herein and the
Commission Documents, (iii) it has been afforded the opportunity to ask
questions of , and receive answers from, the Company, all of which questions
were answered to such Investor's satisfaction; (iv) it has sought such
accounting, legal and tax advice as it has considered necessary to make an
informed investment decision with respect to its acquisition of the Shares; (v)
it understands that it (and not the Company) shall be responsible for such
Investor's own tax liabilities that may arise as a result of this investment or
the transactions contemplated by this Agreement; (vi) it has reviewed the
Company's Annual Report on Form 20-F for the year ended December 31, 2003, and
its Reports on Form 6-K filed since December 31, 2003, all as filed with the
SEC; and (vii) it understands that an investment in the Company may be
considered as a high-risk investment, and such Investor nevertheless has
voluntarily agreed to consummate the investment.
(h) DISCLOSURES TO THE COMPANY. Each Investor understands that the Company
is relying on the statements contained herein to establish an exemption from
registration under federal and state securities laws. Such Investor will
promptly notify the Company of any changes in the information set forth in the
Registration Statement regarding such Investor.
SECTION 3.3 INDEMNIFICATION.
(a) INDEMNIFICATION BY COMPANY. In the event of a registration of any
Shares pursuant to this Article III, the Company will indemnify and hold
harmless Investors and each officer, director, employee and agent of each of the
foregoing, against any expenses, losses, claims, damages or liabilities, joint
or several, to which Investors may become subject under the Securities Act, any
state securities law or otherwise, including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, insofar as such expenses,
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, on the Effective Date thereof, in any registration
statement under which such Shares are registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, 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 in light of the circumstances under
which they were made not misleading; PROVIDED, HOWEVER, that the Company will
not be liable in any such case to the extent that any such expense, 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 such
registration statement, said preliminary prospectus or said prospectus or said
amendment or supplement in reliance upon and in conformity with written
information furnished in writing to the Company by or on behalf of Investors
specifically for use in the preparation thereof and, PROVIDED, FURTHER, that the
Company will not be liable in any such case to the extent that any such expense,
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
such registration statement, said preliminary prospectus or said prospectus has
been corrected in an amendment or supplement thereto and if, having previously
been furnished by or on behalf of the Company with copies of the registration
statement, preliminary prospectus or prospectus as amended or supplemented the
Investors fail to deliver such amended or supplemented registration statement,
preliminary prospectus or prospectus in connection with the sale of Shares to
any person asserting such expense, loss, claim, damage or liability.
(b) INDEMNIFICATION BY INVESTORS. In the event of any registration of any
Shares under the Securities Act pursuant to this Article III, each Investor,
severally and not jointly, will indemnify and hold harmless the Company, each
officer of the Company who signs the registration statement, and each director
of the Company against any and all such expenses, losses, claims, damages or
liabilities referred to in the first paragraph of this Section 3.3, if the
statement, alleged statement, omission or alleged omission in respect of which
such expense, loss, claim, damage or liability is asserted was made in reliance
upon and in conformity with information furnished in writing to the Company by
or on behalf of such Investor specifically for use in connection with the
preparation of such registration statement, preliminary prospectus, prospectus,
amendment or supplement; PROVIDED, HOWEVER, that the indemnity provided in this
subsection shall not apply to amounts paid in settlement of any such expense,
loss, claim, damage, liability or action if such settlement is effected without
the consent of such Investor, which consent shall not be unreasonably withheld;
and PROVIDED, FURTHER that the total amounts payable by an Investor under this
subsection shall not exceed the net proceeds received by such Investor in the
registered offering out of which such indemnity arises.
(c) INDEMNIFICATION PROCEDURE. Each party entitled to indemnification under
this Section 3.3 (the "INDEMNIFIED PARTY") shall give notice to the party
required to provide indemnification (the "INDEMNIFYING PARTY") promptly after
such Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting thereon, PROVIDED that the
Indemnified Party may participate in such defense at its own expense, and
PROVIDED, FURTHER that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 3.3 except to the extent such failure resulted in actual
detriment to the Indemnifying Party. No Indemnifying Party, in the defense of
any such claim or litigation, 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 litigation. 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.
ARTICLE IV ADDITIONAL COVENANTS
SECTION 4.1 TRANSFER RESTRICTIONS.
(a) Each Investor shall not sell or otherwise dispose of the LanOptics
Shares held by it except as follows: (i) one-third of the LanOptics Shares may
be sold or otherwise disposed of at any time following the Closing Date, (ii) an
additional one-third of the LanOptics Shares may be sold or otherwise disposed
of at any time beginning ninety (90) days after the Closing Date, and (iii) the
remaining one-third of the LanOptics Shares may be sold or otherwise disposed of
at any time beginning one hundred and eighty (180) days after the Closing Date.
Notwithstanding the foregoing, until such time as the Registration Statement
referred to in Section 3.1 is declared effective, the Investors shall not make
any sales except to affiliated entities or QIBs under Rule 144A, or pursuant to
an exemption from the registration requirements of the United States federal
securities laws.
(b) The Investors agree to the imprinting, so long as is required by this
Section 4.1, of the following legend (the "LEGEND") on any certificate
evidencing Shares:
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF
COUNSEL TO THE TRANSFEROR, REASONABLY ACCEPTABLE TO THE COMPANY, TO SUCH
EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.
(c) Certificates evidencing the Shares shall not contain any legend
(including the legend set forth in Section 4.1(a)) while a registration
statement covering the resale of such security is effective under the Securities
Act, or (ii) following any sale of such Shares pursuant to Rule 144, or (iii) if
such Shares are eligible for sale under Rule 144(k), or (iv) if such legend is
not required under applicable requirements of the Securities Act (including
judicial interpretations and pronouncements issued by the Staff of the
Commission).
SECTION 4.2 The Company will use best efforts to list the Shares for
trading on the Nasdaq system or any relevant market or system, if applicable.
ARTICLE V MISCELLANEOUS
SECTION 5.1 FEES AND EXPENSES. Each party will pay its own fees and
expenses related to the transactions contemplated by this Agreement
SECTION 5.2 CONSENT TO JURISDICTION AND GOVERNING LAW. Each of the Company
and Investors (i) hereby irrevocably submit to the exclusive jurisdiction of the
appropriate courts in Tel Aviv, Israel for the purposes of any suit, action or
proceeding arising out of or relating to this Agreement and (ii) hereby waives,
and agrees not to assert in any such suit, action or proceeding, any claim that
it is not personally subject to the jurisdiction of such court, that the suit,
action or proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper. Each of the Company and each of the
Investors consent to process being served in any such suit, action or proceeding
by mailing a copy thereof to such party at the address in effect for notices to
it under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing in this Section shall
affect or limit any right to serve process in any other manner permitted by law.
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Israel, without giving effect to the choice of law
provisions thereof.
SECTION 5.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement contains the entire
understanding of the parties with respect to the matters covered hereby and,
except as specifically set forth herein, neither the Company nor Investors makes
any representations, warranty, covenant or undertaking with respect to such
matters. The parties hereto may not amend this Agreement or any rights or
obligations hereunder without the prior written consent of the Company and
Investors.
SECTION 5.4 NOTICES. Any notice, demand, request, waiver or other
communication required or permitted to be given hereunder shall be in writing
and shall be effective (a) upon hand delivery, by telecopy or facsimile at the
address or number designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the second
business day following the date of dispatch by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such dispatch,
whichever shall first occur. The addresses for such communications shall be:
If to the Company: LanOptics Ltd.
0 Xxxxxxx Xxxxxx
X.X.Xxx 000
Xxxxxxx 00000, Xxxxxx
Tel. No.: (972)-3-959 6666
Fax No.: (972)-3-959 4166
Attention:
If to the Investors: To the address and fax number indicated on
Exhibit A hereof.
With a copy (which shall not
constitute notice) to:
Any party hereto may from time to time change its address for notices by
giving at least ten (10) days written notice of such changed address to the
other party hereto.
SECTION 5.5 WAIVERS. No provision of this Agreement may be waived other
than by a written instrument signed by the party against whom enforcement of any
such waiver is sought. No waiver by either party of any default with respect to
any provision, condition or requirement of this Agreement shall be deemed to be
a continuing waiver in the future or a waiver of any other provisions, condition
or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.
SECTION 5.6 HEADINGS. The article, section and subsection headings in this
Agreement are for convenience only and shall not constitute a part of this
Agreement for any other purpose and shall not be deemed to limit or affect any
of the provisions hereof.
SECTION 5.7 SUCCESSORS AND ASSIGNS. Investors may not assign this Agreement
to any person without the prior consent of the Company, which consent will not
be unreasonably withheld; PROVIDED, HOWEVER, that the Investors may assign this
Agreement to an affiliate without the consent of the Company. This Agreement
shall be binding upon and inure to the benefit of the parties and their
successors and permitted assigns.
SECTION 5.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument.
SECTION 5.9 SEVERABILITY. The provisions of this Agreement are severable
and, in the event that any court of competent jurisdiction shall determine that
any one or more of the provisions or part of the provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision or part of a provision of this Agreement, and this Agreement
shall be reformed and construed as if such invalid or illegal or unenforceable
provision, or part of such provision, had never been contained herein, so that
such provisions would be valid, legal and enforceable to the maximum extent
possible.
SECTION 5.10 FURTHER ASSURANCES. From and after the date of this Agreement,
upon the request of the Investors or the Company, each of the Company and the
Investors shall execute and deliver such instruments, documents and other
writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement.
SECTION 5.11 "BLUE SKY" LAWS. In connection with the issuance of the Shares
pursuant to this Agreement and any intended disposition of the Shares by the
Investors pursuant to the Registration Statement referred to in Article III
hereof, the Company will use its reasonable best efforts to register or qualify
all Shares under such state, local or foreign securities or "blue sky" laws of
such jurisdictions as the Investors shall reasonably request, and do any and all
other acts and things that may be reasonably necessary to enable the sale of the
Shares to the Investors or to consummate the disposition by the Investors of
Shares pursuant to the Registration Statement; PROVIDED, HOWEVER, that the
Company shall not for any such purpose be required to qualify generally to do
business as a foreign corporation in any jurisdiction wherein it is not so
qualified, or to subject itself to taxation in respect of doing business in any
such jurisdiction, or to consent to general service of process in any such
jurisdiction.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first above written.
LANOPTICS LTD.
By: /S/ Xxx Xxxxxxxx
--------------------
Name: Xxx Xxxxxxxx
------------------
Title: Director
---------------
INTERNATIONAL BUSINESS MACHINE
CORPORATION DELTA CAPITAL LTD.
By: /S/ Xxxxx Xxxxxxx By: /S/ Xxxxx Xxxxxxxx
--------------------- ----------------------
Name: Xxxxx Xxxxxxx Name: Xxxxx Xxxxxxxx
------------------- --------------------
Title: VP Corporate Develpoment Title: Authorized Signatory
------------------------------- ---------------------------
TAMAR TECHNOLOGY INVESTORS TAMAR TECHNOLOGY INVESTORS
(ISRAELI) L.P. (DELAWARE) L.P.
By: /S/ Xxxxx Xxxxx By: /S/ Xxxxx Xxxxx
------------------- -------------------
Name: Xxxxx Xxxxx Name: Xxxxx Xxxxx
----------------- -----------------
Title: Managing Partner Title: Managing Partner
----------------------- -----------------------
/S/ Xxxxxxxx Xxxxxxx /S/ Xxxxxxxx Xxxx Xxxxxx III
-------------------- ----------------------------
Xxxxxxxx Xxxxxxx Xxxxxxxx Xxxx Xxxxxx III
EXHIBIT A
SCHEDULE OF INVESTORS AND NUMBER OF SHARES AND EZCHIP SHARES
EZchip Shares
Investor (Fully diluted as converted) LanOptics Shares
-------- ---------------------------- ----------------
IBM 2,103,924 586,383
TAMAR TECHNOLOGY INVESTORS 817,319 227,794
XXXXXXXX XXXXXXX 550,000 153,290
DELTA CAPITAL 70,000 19,510
XXXX XXXXXX 70,000 19,510
TOTAL 3,611,243 1,006,486
EXHIBIT B
The Exchange Ratio ("ER") shall reflect the number of Ordinary Shares of
LanOptics received by each Investor for one share of EZchip, and may be
expressed as the ratio between the number of the EZchip Shares on a fully
diluted as converted basis of such Investor prior to the Closing and the
Ordinary Shares of LanOptics obtained by such Investor following the Closing.
The formula for the calculation of the ER is expressed algebraically as follows
(the "ER Formula"):
ER=N/(E*B)
WHERE:
(1) n = N - N
---
1-X
(2) X = B
---
A+B
AND:
A - LanOptics percentage holdings in EZchip on a fully diluted as
converted basis as of the signing of this Agreement.
B - The percentage holdings in EZchip of the Investors on a fully diluted
as converted basis as of the signing of this Agreement.
X - The percentage holdings in LanOptics of the Investors on a fully
diluted basis following the Closing.
N - The aggregate number of shares of LanOptics on a fully diluted basis
as of immediately prior to the PIPE transaction made by LanOptics on
November 2004.
n - LanOptics newly issued shares to satisfy the purchase of LanOptics
shares by the Investors at the Closing.
E - The aggregate number of shares of EZchip on a fully diluted as
converted basis at the signing of this Agreement.
* Note: the aggregate number of shares of LanOptics - the parameter N in the
formula above, is calculated as of November 2004 and does not take into
consideration the shares of LanOptics issued in the PIPE transaction.
