3,500,000 SHARES(1)
COMMON STOCK
UNDERWRITING AGREEMENT
May __, 0000
X.X. Xxxxxxxxx + Co., LLC
ING Barings LLC
DLJDIRECT Inc.
as Representatives of the several Underwriters
x/x X.X. Xxxxxxxxx + Co., LLC
000 Xxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Nogatech Inc., a Delaware corporation (the "Company"), proposes to
issue and sell up to an aggregate of 3,500,000 shares of its authorized but
unissued common stock, par value $0.001 per share (the "Common Stock") (said
3,500,000 shares of Common Stock being herein called the "Underwritten Stock")
to the Underwriters (as hereinafter defined) and to grant the Underwriters an
option to purchase up to an aggregate of 525,000 additional shares of Common
Stock (the "Option Stock" and collectively with the Underwritten Stock, the
"Shares"). The Common Stock is more fully described in the Registration
Statement and the Prospectus hereinafter mentioned.
The Company hereby confirms the agreements made with respect to the
purchase of the Shares by the underwriters, for whom you are acting as
representatives, named in Schedule I hereto (herein collectively called the
"Underwriters," which term shall also include any underwriter purchasing Shares
pursuant to Section 3(b) hereof). You represent and warrant that you have been
authorized by each of the other Underwriters to enter into this Agreement on its
behalf and to act for it in the manner herein provided.
As a part of the offering contemplated by this Agreement, X.X.
Xxxxxxxxx + Co., LLC has agreed to reserve out of the Underwritten Stock up
to 100,000 shares in the aggregate for sale to the Company's employees,
officers and directors and other parties associated with the Company
(collectively, "Participants"), as set forth in the Prospectus under the
heading "Plan of Distribution" (the "Reserved Share Program"). The shares of
Common Stock to be sold by X.X. Xxxxxxxxx + Co., LLC pursuant to the Reserved
Share Program (the "Reserved Shares") will be sold by them pursuant to this
Agreement at the initial public offering price. Any Reserved Shares not
orally confirmed for purchase by any Participants as of 7:00 am California
time on the first day that trading of the shares commences or paid for by any
Participants in accordance with the customary policies of X.X. Xxxxxxxxx +
Co., LLC may be offered to the public in such
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(1) Plus an option to purchase from the Company up to an aggregate of
525,000 additional shares to cover over-allotments.
lawful manner as X.X. Xxxxxxxxx + Co., LLC shall, in its sole discretion,
deem to be appropriate.
1. REGISTRATION STATEMENT. The Company has filed with the
Securities and Exchange Commission (the "Commission") a registration
statement on Form S-1 (No. 333-32372), including the related preliminary
prospectus, for the registration under the Securities Act of 1933, as amended
(the "Act"), of the Shares. Copies of such registration statement and of each
amendment thereto, if any, including the related preliminary prospectus
(meeting the requirements of Rule 430A of the rules and regulations of the
Commission) heretofore filed by the Company with the Commission have been
delivered to you.
The term "Registration Statement" as used in this Agreement shall
mean such registration statement, including all exhibits and financial
statements, all information omitted therefrom in reliance upon Rule 430A and
contained in the Prospectus referred to below, in the form in which it became
effective, and any registration statement filed pursuant to Rule 462(b) of
the rules and regulations of the Commission with respect to the Shares
(herein called a Rule 462(b) registration statement), and, in the event of
any amendment thereto after the effective date of such registration statement
(herein called the "Effective Date"), shall also mean (from and after the
effectiveness of such amendment) such registration statement as so amended
(including any rule 462(b) registration statement). The term "Prospectus" as
used in this Agreement shall mean the prospectus relating to the Shares first
filed with the Commission pursuant to Rule 424(b) and Rule 430A (or if no
such filing is required, as included in the Registration Statement) and, in
the event of any supplement or amendment to such prospectus after the
Effective Date, shall also mean (from and after the filing with the
Commission of such supplement or the effectiveness of such amendment) such
prospectus as so supplemented or amended. The term "Preliminary Prospectus"
as used in this Agreement shall mean each preliminary prospectus included in
such registration statement prior to the time it becomes effective.
The Registration Statement has been declared effective under the
Act, and no post-effective amendment to the Registration Statement has been
filed as of the date of this Agreement. The Company has caused to be
delivered to you copies of each Preliminary Prospectus and has consented to
the use of such copies for the purposes permitted by the Act.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to the Underwriters as follows:
(a) Neither the Commission nor any state securities commission
has issued any order preventing or suspending the use of any Preliminary
Prospectus or has instituted or, to the Company's knowledge, threatened to
institute any proceedings with respect to such an order. The Registration
Statement and the Prospectus comply, and on the Closing Date (as hereinafter
defined) and any later date on which the Option Stock is to be purchased, the
Prospectus will comply, in all material respects, with the provisions of the Act
and the rules and regulations of the Commission thereunder (the "Act and Rules")
and will comply in all material respects with any applicable laws or regulations
of foreign jurisdictions, if applicable, in which the Prospectus and any
Preliminary Prospectuses, as amended or supplemented, if applicable, are
distributed in connection with the offer and sale of the Reserved Shares. On the
Effective Date, the Registration Statement did not contain any untrue statement
of a material fact and did not omit to state any material fact required to be
stated
therein or necessary in order to make the statements therein not misleading,
and on the Effective Date the Prospectus did not and, on the Closing Date and
any later date on which the Option Stock is to be purchased, will not contain
any untrue statement of a material fact and did not omit to state any
material fact required to be stated therein, or necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; PROVIDED, HOWEVER, that none of the
representations and warranties in this subparagraph (a) shall apply to
statements in, or omissions from, the Registration Statement or the
Prospectus made in reliance upon and in conformity with information herein or
otherwise furnished in writing to the Company by or on behalf of the
Underwriters expressly for use in the Registration Statement or Prospectus.
(b Each of the Company and its subsidiaries (i) has been duly
organized and is validly existing and (with respect to the Company and its U.S.
subsidiaries) is in good standing under the laws of its jurisdiction of
incorporation or formation, as the case may be, having full power and corporate
authority to own or lease its properties and to conduct its business as
described in the Registration Statement and the Prospectus; and (ii) is duly
qualified to do business as a foreign corporation and is in good standing in all
jurisdictions other than the jurisdiction of its organization in which the
character of the property owned or leased or the nature of the business
transacted by it makes qualification necessary (except where the failure to be
so qualified would not have a material adverse effect on the business,
properties, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole). The Company and its subsidiaries, collectively,
have employees located solely in Israel and California and in no other state in
the United States, and, notwithstanding anything in this (b)(ii) to the
contrary, each of the Company and Nogatech California, Inc. ("Nogatech
California") is duly qualified to do business as a foreign corporation and is in
good standing solely in California and Nogatech Ltd. ("Nogatech Israel") has not
qualified to do business in any jurisdiction other than the State of Israel, and
Delaware, California and Israel are the only jurisdictions in which the Company
or any of its subsidiaries are required to be so qualified except where the
failure to be so qualified would not have a material adverse effect on the
business, properties, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole. The Company and its subsidiaries
do not own any capital stock or other equity securities in any entity other than
Nogatech California and Nogatech Israel.
(c) The Company has the duly authorized and validly issued
outstanding capitalization set forth under the caption "Capitalization" in the
Prospectus and will have the adjusted capitalization set forth therein on the
Closing Date and any later date on which the Option Stock is to be purchased,
based on the assumptions set forth therein. The securities of the Company
conform in all material respects to the descriptions thereof contained in the
Prospectus. The form of certificates for the Shares conforms to the corporate
law of the State of Delaware. The outstanding shares of Common Stock (other than
the Shares) have been duly authorized and validly issued by the Company and are
fully paid and nonassesable, and were issued in transactions that were exempt
from the registration requirements of the Act, without violation of any
preemptive rights, rights of first refusal or similar rights. Except as created
hereby or described in the Prospectus, there are no outstanding options,
warrants, rights or other arrangements requiring the Company at any time to
issue any capital stock. No holders of outstanding shares of capital stock of
the Company are entitled as such to any preemptive or other rights to subscribe
for any of the Shares, and neither the filing of the Registration Statement nor
the offering or sale of the Shares as contemplated by this Agreement gives rise
to any rights, other than those which have been waived or satisfied, for or
relating to, the registration of any securities of the Company. The Shares are
duly authorized, and will be, when sold to the Underwriters as provided herein,
validly issued, fully paid and nonassessable. No
further approval or authority of the stockholders or the Board of Directors
of the Company will be required for the issuance and sale of the Shares as
contemplated herein. The outstanding shares of capital stock or ownership
interests of each of its subsidiaries have been duly authorized and validly
issued, are fully paid and non-assessable, and, except for one ordinary
share, par value NIS 1.00 per share, of Nogatech Israel owned by X. Xxxxxxx &
Co. Trustee Ltd., which accounts for less than [1%] of the issued and
outstanding capital stock of Nogatech Israel, are solely owned by the Company
free and clear of all liens, encumbrances and equities and claims; and no
options, warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligations into shares
of capital stock or ownership interests in such subsidiary are outstanding.
(d) The Company has full legal right, power and authority to
enter into this Agreement and to consummate the transactions provided for
herein. This Agreement has been duly authorized, executed and delivered by the
Company and, assuming it is a binding agreement of the Underwriters, constitutes
a legal, valid and binding agreement of the Company enforceable against the
Company in accordance with its terms (except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application relating to or affecting the enforcement of
creditors' rights and the application of equitable principles relating to the
availability of remedies and except as rights to indemnity or contribution may
be limited by federal or state securities laws and the public policy underlying
such laws), and none of the Company's execution or delivery of this Agreement,
its performance hereunder, its consummation of the transactions contemplated
herein, its application of the net proceeds of the offering in the manner set
forth under the caption "Use of Proceeds" or the conduct of its business as
described in the Prospectus, conflicts or will conflict with or results or will
result in any breach or violation of any of the terms or provisions of, or
constitutes or will constitute a default under, causes or will cause (or permits
or will permit) the maturation or acceleration of any liability or obligation or
the termination of any right under, or result in the creation or imposition of
any lien, charge, or encumbrance upon, any property or assets of the Company or
any of its subsidiaries pursuant to the terms of (i) the certificate of
incorporation or bylaws of the Company or the organizational documents of its
subsidiaries, (ii) any indenture, mortgage, deed of trust, voting trust
agreement, stockholders' agreement, note agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which it is or may be bound or to which its respective property is or may be
subject or (iii) any statute, judgment, decree, order, rule or regulation
applicable to the Company or any of its subsidiaries of any government,
arbitrator, court, regulatory body or administrative agency or other
governmental agency or body, domestic or foreign, having jurisdiction over the
Company or any of its subsidiaries, or their activities or properties, which
would materially and adversely affect the business or properties of the Company
and its subsidiaries taken as a whole.
(e) The Common Stock has been approved for quotation on The
Nasdaq National Market subject only to official notes of issuance and, prior to
the Closing Date, (i) the Common Stock shall be listed and duly admitted to
trading on The Nasdaq National Market and (ii) the Shares will be authorized for
inclusion in The Nasdaq National Market.
(f) The financial statements of the Company and its
subsidiaries and the related notes and schedules thereto included in the
Registration Statement and the Prospectus fairly present the financial
position, results of operations, stockholders' equity and cash flows of
the Company and its subsidiaries at the dates and for the periods specified
therein. Such financial statements and the related notes and schedules
thereto have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved (except as
otherwise noted therein) and all adjustments necessary for a fair
presentation of results for such periods have been made; PROVIDED, HOWEVER,
that the unaudited financial statements are subject to normal year-end audit
adjustments (which are not expected to be material) and do not contain all
footnotes required under generally accepted accounting principles. The
summary and selected financial and statistical data included in the
Registration Statement and the Prospectus present fairly the information
shown therein and such data have been prepared on a basis consistent with the
financial statements contained therein and in the books and records of the
Company.
(g) Xxxxxxxxx & Xxxxxxxxx, who have certified the financial
statements filed with the Commission as part of the Registration Statement, are
independent public accountants as required by the Act and the rules and
regulations promulgated thereunder.
(h) Each of the Company and its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(i) Subject to applicable law, none of the Company's
subsidiaries is currently prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on the subsidiary's
capital stock, from repaying to the Company any loans or advances to the
subsidiary from the Company or from transferring any of such subsidiary's
property or assets to the Company, except as described in or contemplated by the
Prospectus.
(j) The Company and its subsidiaries have filed all necessary
federal, state and local income, franchise and other material tax returns and
has paid all taxes shown as due thereunder, and the Company and its subsidiaries
have no tax deficiency that has been or, to their knowledge, which might be
assessed against the Company and its subsidiaries which, if so assessed, would
materially and adversely affect the business or properties of the Company and
its subsidiaries, taken as a whole. All tax liabilities accrued through the date
hereof have been adequately provided for on the books of the Company and its
subsidiaries.
(k) The Company and its subsidiaries maintain insurance
underwritten by insurers of recognized financial responsibility of the types and
in amounts and with such deductibles as are adequate for companies in the same
or similar business, all of which insurance is in full force and effect.
(l) Except as disclosed in the Prospectus, there is no
action, suit, claim, proceeding or investigation pending or, to the Company's
knowledge, threatened against the Company, any of its subsidiaries or any of
their directors, officers, employees or agents before or
by any court, regulatory body or administrative agency or any other
governmental agency or body, domestic or foreign, which (i) questions the
validity of the capital stock of the Company or this Agreement or of any
action taken or to be taken by the Company pursuant to or in connection with
this Agreement, (ii) is required to be disclosed in the Registration
Statement which is not so disclosed (and such proceedings, if any, as are
summarized in the Registration Statement are accurately summarized in all
material respects), or (iii) may have a material adverse affect upon the
business operations, financial conditions or income of the Company and its
subsidiaries, taken as a whole.
(m) All executed agreements or copies of executed
agreements filed or incorporated by reference as exhibits to the Registration
Statement to which the Company or any of its subsidiaries is a party or by
which it is or may be bound or to which its assets, properties or businesses
are or may be subject have been duly and validly authorized, executed and
delivered by the Company or such subsidiary and constitute the legal, valid
and binding agreements of the Company or such subsidiary enforceable by and
against it in accordance with their respective terms (except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to enforcement of creditors'
rights generally, and general equitable principles relating to the
availability of remedies, and except as rights to indemnity or contribution
may be limited by federal or state securities laws and the public policy
underlying such laws). The description in the Registration Statement of
contracts and other documents are accurate and fairly present the information
required to be shown with respect thereto by the Act or the rules and
regulations promulgated thereunder, and there are no contracts or other
documents which are required by the Act or the rules and regulations
promulgated thereunder to be described in the Registration Statement or filed
as exhibits to the Registration Statement which are not described or filed as
required and the exhibits which have been filed are materially complete and
correct copies of the documents of which they purport to be copies, except to
the extent that such agreements are subject to a request for confidential
treatment that has been duly filed under the Act. Except for such rights as
described in the Registration Statement and the Prospectus, no party has any
right to require to the Company to register any securities for sale under the
Act.
(n) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as expressly
contemplated therein, neither the Company nor any of its subsidiaries has
incurred, other than in the ordinary course of its business, any material
liabilities or obligations, direct or contingent, purchased any of its
outstanding capital stock, paid or declared any dividends or other distributions
on its capital stock or entered into any material transactions, and there has
been no material change in capital stock or debt or any material adverse change
in the business, properties, assets, net worth, condition (financial or other),
or results of operations or prospects of the Company and its subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary course of
business.
(o) Neither the Company nor any of its subsidiaries is, or
with the giving of notice or lapse of time or both, will be, in violation of or
in default under, any term or provision of (i) its certificate of incorporation,
bylaws or other organizational documents, (ii) any indenture, mortgage, deed of
trust, voting trust agreement, stockholders' agreement, note agreement or other
agreement or instrument to which it is a party or by which it is or may be
bound or to which any of its property is or may be subject, or any
indebtedness, the effect of which breach or default either individually or in
the aggregate would have a material adverse effect on the business,
management, properties, assets, rights, operations, or condition (financial
or otherwise) of the Company and its subsidiaries, taken as a whole, or (iii)
any statute, judgment, decree, order, rule or regulation applicable to the
Company or such subsidiary or of any arbitrator, court, regulatory body,
administrative agency or any other governmental agency or body, domestic or
foreign, having jurisdiction over the Company or such subsidiary or its
activities or properties and the effect of which breach or default either
individually or in the aggregate would have a material adverse effect on the
business, management, properties, assets, rights, operations, or condition
(financial or otherwise) of the Company and its subsidiaries, taken as a
whole.
(p) The Company has not incurred any liability for a fee,
commission, or other compensation on account of the employment of a broker or
finder in connection with the transactions contemplated by this Agreement other
than as contemplated hereby.
(q) No labor disturbance by the employees of the Company or
any of its subsidiaries or principal suppliers or customers exists or, to the
Company's knowledge, is imminent, which disturbance would have a material
adverse effect on the business, management, properties, assets, rights,
operations, or condition (financial or otherwise) of the Company and its
subsidiaries, taken as a whole.
(r) Except as disclosed in the Prospectus, each of the Company
and its subsidiaries owns, is licensed or otherwise possesses all rights to use,
all patents, patent rights, inventions, know-how (including trade secrets and
other unpatented or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks, trade names, copyrights and
other intellectual property rights (collectively, the "Rights") necessary for
the conduct of its business as described in the Prospectus. To the Company's
knowledge, no claims have been asserted against the Company or any of its
subsidiaries by any person with respect to the use of any such Rights or
challenging or questioning the validity or effectiveness of any such Rights. The
continued use of the Rights in connection with the business and operations of
the Company and its subsidiaries does not, to the knowledge of the Company and
its subsidiaries, infringe on the rights of any person, which, if the subject of
an unfavorable decision, ruling or filing, would have a material adverse effect
on the condition, business or properties of the Company and its subsidiaries
taken as a whole.
(s) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions herein
contemplated (except such additional steps as may be required by the National
Association of Securities Dealers, Inc. (the "NASD"), the Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as amended or to qualify
or exempt the Shares for public offering by the Underwriters under state
securities or Blue Sky laws) has been obtained or made and is in full force and
effect.
(t) Neither the Company nor to the Company's knowledge, any
of its officers, directors or affiliates (within the meaning of the rules and
regulations promulgated under the
Act) has taken or may take, directly or indirectly, any action designed to
cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of the
shares of Common Stock of the Company, to facilitate the sale or resale of
the Shares or otherwise.
(u) Neither the Company nor any of its subsidiaries is, or
after giving effect to the issuance and sale of the Shares by the Company will
be, an "investment company" within the meaning of such term under the Investment
Company Act of 1940, as amended, and the rules and regulations of the Commission
promulgated thereunder.
(v) There are no transfer taxes or similar fees or charges
under Israeli law, federal law or the laws of any state, or any political
subdivision thereof, required to be paid in connection with the execution and
delivery of this Agreement or the issuance and sale by the Company of the
Shares.
(w) The Company and its subsidiaries have good and marketable
title to all properties and assets described in the Prospectus as owned by them,
free and clear of all liens, encumbrances, security interests, equities, claims
and defects, except such as are described in the Registration Statement and
Prospectus, or such as are not materially important in relation to the business
of the Company and its subsidiaries, taken as a whole. Except as disclosed in
the Prospectus, the Company has valid and enforceable leases for the properties
described in the Prospectus as leased by it, free and clear of all liens,
encumbrances, security interests, equities, claims and defects, except such as
are not material and do not interfere with the use made by the Company and its
subsidiaries thereof. Except as disclosed in the Prospectus, the Company and its
subsidiaries own or lease all such properties as are necessary to their
operations as now conducted, as set forth in the Registration Statement and the
Prospectus and the properties and business of the Company and its subsidiaries
conform in all material respects to the descriptions thereof contained in the
Registration Statement and the Prospectus.
(x) Except as disclosed in the Prospectus, each of the Company
and its subsidiaries holds all franchises, licenses, permits, approvals,
certificates and other authorizations from federal, state and other governmental
or regulatory authorities necessary to the ownership, leasing and operation of
its properties or required for the present conduct of its business, and such
franchises, licenses, permits, approvals, certificates and other governmental
authorizations are in full force and effect and the Company and its subsidiaries
are in compliance therewith in all material respects, except where the failure
so to obtain, maintain or comply with would not have a materially adverse effect
on the business, financial condition or results of operations of the Company and
its subsidiaries, taken as a whole.
(y) Nogatech Israel is in compliance with all material
conditions and requirements stipulated by the instruments of approval entitling
it or any of its operations to the status of "Approved Enterprise" under Israeli
law and by Israeli laws and regulations relating to such Approved Enterprise
status; all information supplied by Nogatech Israel with respect to such
applications was true, correct and complete in all material respects when
supplied to the appropriate authorities.
(z) Nogatech Israel is not in material violation of any
conditions or requirements stipulated by the instruments of approval granted to
any of them by the Office of Chief Scientist in the Ministry of Industry and
Trade and any applicable laws and regulations, with respect to any research and
development grants given to it by such office; all information supplied by
Nogatech Israel with respect to such applications was true, correct and complete
in all material respects when supplied to the appropriate authorities.
(aa) The Company and its subsidiaries are in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder (herein called "ERISA"); no "reportable
event" (as defined in ERISA) has occurred with respect to any "pension plan" (as
defined in ERISA) for which the Company or any of its subsidiaries would have
any liability; the Company and its subsidiaries have not incurred and do not
expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the "Code"); and each "Pension Plan"
for which the Company and its subsidiaries would have liability that is intended
to be qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification.
(bb) No relationship, direct or indirect, exists between or
among the Company or its subsidiaries, on the one hand, and the current or prior
directors, officers, five percent or greater stockholders, customers or
suppliers of the Company or its subsidiaries, on the other hand, which is
required to be described in the Prospectus that is not so described.
(cc) Neither the Company nor any of its subsidiaries, nor to
the Company's knowledge, any director, officer, agent, employee or other person
associated with or acting on behalf of the Company or any of its subsidiaries,
has used any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; violated or is in violation of any provisions of
the Foreign Corrupt Practices Act of 1977; or made any bribe, rebate, payoff,
influence, payment, kickback or other unlawful payment.
(dd) The Company has reviewed, and is continuing to review,
its operations, products and services to evaluate the extent to which the
business or operations of the Company or its subsidiaries will be affected by
the Year 2000 problem (that is, any significant risk that computer hardware or
software applications used by the Company or its subsidiaries will not, in the
case of dates or time periods occurring after December 31, 1999, function at
least as effectively as in the case of dates or time periods occurring prior to
January 1, 2000); as a result of such review, the Company has no reason to
believe, and does not believe, that there are any issues related to the
Company's preparedness for the Year 2000 that (i) are of a character required to
be described or referred to in the Prospectus by the Act that have not been
accurately described in the Prospectus or (ii) could reasonably be expected to
have a material adverse effect on the business, properties, financial condition
or results of operations of the Company and its subsidiaries, taken as a whole.
(ee) The business, operations and facilities of the Company
and each of its subsidiaries have been and are being conducted or operated in
compliance with all applicable laws, ordinances, rules, regulations, licenses,
permits, approvals, plans, authorizations or requirements relating to
occupational safety and health, pollution, protection of health or the
environment (including, without limitation, those relating to emissions,
discharges, release or threatened releases of pollutants, contaminants or
hazardous or toxic substances, materials or wastes into ambient air, surface
water, groundwater or land, or relating to the manufacture, processing,
distribution, use treatment, storage, disposal, transport or handling of
chemical substances, pollutants, contaminants or hazardous or toxic substances,
materials or wastes, whether solid, gaseous or liquid in nature) or otherwise
relating to remediating real property in which the Company or any of its
subsidiaries has or has had any interest, whether owned or leased, of any
governmental department, commission, board, bureau, agency or instrumentality of
the United States, any state or political subdivision thereof and all applicable
judicial or administrative agency or regulatory decrees, awards, judgments and
orders relating thereto, except for such failures to so comply as would not,
individually or in the aggregate, have a material adverse effect on the business
of the Company and its subsidiaries taken as a whole, and neither the Company
nor any of its subsidiaries has received any notice from a governmental
instrumentality or any third party alleging any violation thereof or liability
thereunder (including, without limitation, liability for costs of investigating
or remediating sites containing hazardous substances or damage to natural
resources).
(ff) Neither the Company nor any of its subsidiaries, nor to
the Company's knowledge any officer or employee of the Company or any of its
subsidiaries is a party to any contract or commitment that restricts in any
material respect the ability of the Company, any of its subsidiaries or such
individual to engage in the business of the Company or such subsidiary as
described in the Registration Statement and the Prospectus.
(gg) The Company has not offered, or caused X.X. Xxxxxxxxx +
Co., LLC to offer, Reserved Shares to any person pursuant to the Reserved Share
Program with the specific intent to unlawfully influence (i) a customer or
supplier of the Company to alter the customer's or supplier's level or type of
business with the Company or (ii) a trade journalist or publication to write or
publish favorable information about the Company or its products. Neither the
Company nor any person acting on its behalf has furnished any written materials
of any kind to any individual or entity with respect to the Reserved Share
Program unless such recipient first received a copy of the Company's Preliminary
Prospectus.
3. PURCHASE OF THE SHARES BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Company shall issue
and sell the Underwritten Stock to the Underwriters, and the Underwriters agree
to purchase from the Company, the Underwritten Stock. The price at which such
shares of Underwritten Stock shall be sold by the Company and purchased by the
Underwriters shall be [$_____] per share (the "Purchase Price"). In making this
Agreement, each Underwriter is contracting severally and not jointly; except as
provided in paragraphs (b) and (c) of this Section 3, the agreement of each
Underwriter is to purchase only the respective number of shares of the
Underwritten Stock specified in Schedule I.
(b) If for any reason one of the Underwriters shall fail or
refuse (other than for a reason sufficient to justify the termination of this
Agreement under the provisions of Section 7 or 12 hereof) to purchase and pay
for the number of Shares agreed to be purchased by such Underwriter, the Company
shall immediately give notice thereof to you, and the non-defaulting
Underwriters shall have the right within 24 hours after the receipt by you of
such notice to purchase, or procure one or more other Underwriters to purchase,
in such proportions as may be agreed upon between you and such purchasing
Underwriters and upon the terms herein set forth, all or any part of the Shares
which such defaulting Underwriter agreed to purchase. If the non-defaulting
Underwriters fail so to make such arrangements with respect to all such shares
and portion, the number of Shares which the non-defaulting Underwriters are
otherwise obligated to purchase under this Agreement shall be automatically
increased on a pro rata basis to absorb the remaining Shares and portion which
the defaulting Underwriter agreed to purchase; PROVIDED, HOWEVER, that the
non-defaulting Underwriters shall not be obligated to purchase the Shares and
portion which the defaulting Underwriter agreed to purchase if the aggregate
number of such Shares exceeds 10% of the total number of Shares which the
Underwriters agreed to purchase under this Agreement. If the total number of
Shares which the defaulting Underwriter agreed to purchase shall not be
purchased or absorbed in accordance with the two preceding sentences, the
Company shall have the right, within 24 hours next succeeding the 24-hour period
above referred to, to make arrangements with other underwriters or purchasers
satisfactory to you for purchase of such shares and portion on the terms herein
set forth. In any such case, either you or the Company shall have the right to
postpone the Closing Date determined as provided in Section 5 hereof for not
more than seven business days after the date originally fixed as the Closing
Date pursuant to said Section 5 in order that any necessary changes in the
Registration Statement, the Prospectus or any other documents or arrangements
may be made. If the non-defaulting Underwriters do not make arrangements within
the 24-hour periods stated above for the purchase of all the Shares which the
defaulting Underwriter agreed to purchase hereunder, this Agreement shall be
terminated without further act or deed and without any liability on the part of
the Company to the non-defaulting Underwriters and without any liability on the
part of the non-defaulting Underwriters to the Company. Nothing in this
paragraph (b), and no action taken hereunder, shall relieve the defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
(c) On the basis of the representations, warranties and
covenants herein contained, and subject to the terms and conditions herein set
forth, the Company grants an option to the Underwriters to purchase, severally
and not jointly, the Option Stock at the Purchase Price. Said option may be
exercised only to cover over-allotments in the sale of the Underwritten Stock by
the Underwriters and may be exercised in whole or in part at any time (but not
more than once) on or before the thirtieth day after the date of this Agreement
upon written or telegraphic notice by the Underwriters to the Company setting
forth the aggregate number of shares of Option Stock as to which the
Underwriters are exercising the option. Delivery of the certificates for the
shares of Option Stock, and payment therefor shall be made as provided in
Section 5 hereof. The number of shares of the Option Stock to be purchased by
each Underwriter shall be in such amounts as the Underwriters shall agree upon
prior to the exercise of the option set forth hereunder.
4. OFFERING BY THE UNDERWRITERS.
(a) The terms of the initial public offering by the
Underwriters of the Shares to be purchased by them shall be as set forth in the
Prospectus. The Underwriters may from time to time change the public offering
price after the closing of the initial public offering and increase or decrease
the concessions and discounts to dealers as they may determine.
(b) The information set forth in the last paragraph in the
large box on the front cover page and under the caption "Plan of Distribution -
The Auction Process" in the Registration Statement, any Preliminary Prospectus
and the Prospectus relating to the Shares filed by the Company (insofar as such
information relates to the Underwriters or related persons) constitutes the only
information furnished by the Underwriters to the Company for inclusion in the
Registration Statement, any Preliminary Prospectus, and the Prospectus, and you
on behalf of the Underwriters represent and warrant to the Company that the
statements made therein (insofar as they relate to the Underwriters or related
persons) are correct and do not omit any 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.
5. DELIVERY OF AND PAYMENT FOR THE SHARES.
(a) Delivery of certificates for the shares of the
Underwritten Stock and the Option Stock (if the option granted by Section 3(c)
hereof shall have been exercised not later than 7:00 A.M., San Francisco time,
on the date two business days preceding the Closing Date), and payment therefor,
shall be made at the office of Xxxxxxxx & Xxxxxxxx LLP, 425 Market Street, San
Francisco, on the third business day after the date of this Agreement, or at
such time on such other day, not later than seven full business days after such
third business day, as shall be agreed upon in writing by the Company and you.
The date and hour of such delivery and payment are herein called the Closing
Date.
(b) If the option granted by Section 3(c) hereof shall be
exercised after 7:00 A.M., San Francisco time, on the date two business days
preceding the Closing Date, delivery of certificates for the shares of Option
Stock, and payment therefor shall be made at the office of Xxxxxxxx & Xxxxxxxx
LLP, 000 Xxxxxx Xxxxxx, Xxx Xxxxxxxxx, at 7:00 A.M., San Francisco time, on the
third business day after the exercise of such Option.
(c) Payment for the Shares purchased from the Company shall be
made to the Company or its order by wire transfer or one or more certified or
official bank check or checks in same day funds. Such payment shall be made upon
delivery of certificates for the Shares to you against receipt therefor signed
by you. Certificates for the Shares to be delivered to you shall be registered
in the name or names and shall be in such denominations as you may request at
least one business day before the Closing Date, in the case of Underwritten
Stock, and at least one business day prior to the purchase thereof, in the case
of Option Stock. Such certificates will be made available to the Underwriters
for inspection, checking and packaging on the business day prior to the Closing
Date or, in the case of Option Stock, by 12:00 P.M., San Francisco time on the
business day preceding the date of purchase.
6. COVENANTS OF THE COMPANY. The Company covenants and agrees
as follows:
(a) The Company will (i) prepare and timely file with the
Commission under 424(b) a Prospectus containing information previously omitted
at the time of effectiveness of the Registration Statement in reliance on Rule
430A and (ii) not file with the Commission any amendment to the Registration
Statement or supplement to the Prospectus (A) of which the Underwriters shall
not previously have been advised and furnished with a copy a reasonable period
of time prior to the proposed filing and as to which filing the Underwriters
shall not have given their consent or (B) which is not in compliance with the
Act or the rules and regulations of the Commission thereunder.
(b) As soon as the Company is advised or obtains knowledge
thereof, the Company will advise the Underwriters (i) of any request made by the
Commission for amendment of the Registration Statement, for supplement to the
Prospectus or for additional information, (ii) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement, or
the institution or threat of any action, investigation or proceeding for that
purpose, or (iii) the receipt by the Company of any notification with respect to
the suspension of the qualification of the Shares for sale in any jurisdiction,
or the receipt by it of notice of the initiation or threatening of any
proceeding for that purpose. The Company will use its best efforts to prevent
the issuance of any such order and, if issued, to obtain the lifting or
withdrawal thereof as soon as possible.
(c) The Company will (i) on or before the Closing Date,
deliver to the Underwriters a signed copy of the Registration Statement as
originally filed and of each amendment thereto filed prior to the time the
Registration Statement becomes effective and, promptly upon the filing thereof,
a signed copy of each post-effective amendment, if any, to the Registration
Statement (together with, in each case, all exhibits thereto unless previously
delivered to the Underwriters), (ii) as promptly as possible deliver to the
Underwriters, at such office as the Underwriters may designate, as many copies
of the Prospectus as the Underwriters may reasonably request, and (iii)
thereafter from time to time during the period in which a prospectus is required
by law to be delivered by an Underwriter or dealer, likewise send to the
Underwriters as many additional copies of the Prospectus and as many copies of
any supplement to the Prospectus and of any amended prospectus, filed by the
Company with the Commission, as the Underwriters may reasonably request for the
purposes contemplated by the Act.
(d) If at any time during the period in which a prospectus
is required by law to be delivered by an Underwriter or dealer any event
relating to or affecting the Company, or of which the Company shall be
advised in writing by the Underwriters, shall occur as a result of which it
is necessary, in the opinion of counsel for the Company or of counsel for the
Underwriters, to supplement or amend the Prospectus in order to make the
Prospectus not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser of the Shares, the Company will forthwith
prepare and file with the Commission a supplement to the Prospectus or an
amended prospectus so that the Prospectus as so supplemented or amended will
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light
of the circumstances existing at the time such Prospectus is delivered to
such purchaser, not misleading. If, after the initial public offering of the
Shares by the Underwriters and during such period, the Underwriters shall
propose to vary the terms of the offering thereof by reason of changes in
general market
conditions or otherwise, you will advise the Company in writing of the
proposed variation, and, if in the opinion either of counsel for the Company
or of counsel for the Underwriters such proposed variation requires that the
Prospectus be supplemented or amended, the Company will forthwith prepare and
file with the Commission a supplement to the Prospectus or an amended
prospectus setting forth such variation. The Company authorizes the
Underwriters and all dealers to whom any of the Shares may be sold by the
Underwriters to use the Prospectus, as from time to time amended or
supplemented, in connection with the sale of the Shares in accordance with
the applicable provisions of the Act and the applicable rules and regulations
thereunder for such period.
(e) Prior to the filing thereof with the Commission, the
Company will submit to you, for your information, a copy of any post-effective
amendment to the Registration Statement and any supplement to the Prospectus or
any amended prospectus proposed to be filed.
(f) The Company will cooperate, when and as reasonably
requested by you, in the qualification of the Shares (including the Reserved
Shares to be offered in connection with the Reserved Share Program) for offer
and sale under the securities or blue sky laws of such jurisdictions as you may
designate and, during the period in which a prospectus is required by law to be
delivered by an Underwriter or a dealer, in keeping such qualifications in good
standing under said securities or blue sky laws; PROVIDED, HOWEVER, that the
Company shall not be required to qualify as a foreign corporation or file any
general consent to service of process in any jurisdiction in which it is not so
qualified. The Company will from time to time, prepare and file such statements,
reports, and other documents as are or may be required to continue such
qualifications in effect for so long a period as you may reasonably request for
distribution of the Shares.
(g) The Company agrees to pay all costs and expenses incident
to the performance of the obligations of the Company under this Agreement,
including, without limitation, all costs and expenses incident to (i) the
preparation, printing and filing with the Commission and the NASD of the
Registration Statement, any Preliminary Prospectus and the Prospectus, (ii) the
furnishing to the Underwriters of copies of any Preliminary Prospectus and of
the several documents required by paragraph (c) of this Section 6 to be so
furnished, (iii) the printing of this Agreement and related documents delivered
to the Underwriters, (iv) the preparation, printing and filing of all
supplements and amendments to the Prospectus referred to in paragraph (d) of
this Section 6, (v) the furnishing to you of the reports and information
referred to in paragraph (j) of this Section 6, and (vi) the printing and
issuance of stock certificates, including the transfer agent's fees.
(h) The Company agrees to reimburse you, for the account of
the several Underwriters, for blue sky fees and related disbursements (including
reasonable counsel fees and disbursements and cost of printing memoranda for the
Underwriters) paid by or for the account of the Underwriters or their counsel in
qualifying the Shares under state securities or blue sky laws and in the review
of the offering by the NASD.
(i) As soon as practicable, but in any event not later than
45 days after the end of the first fiscal quarter first occurring after the
first anniversary of the Effective Date, the Company will make generally
available to its security holders, in the manner specified in Rule
158(b) of the rules and regulations promulgated under the Act, an earnings
statement which will be in the detail required by, and will otherwise comply
with, the provisions of Section 11(a) of the Act and Rule 158(a) of the rules
and regulations promulgated thereunder.
(j) During a period of three years after the date hereof, the
Company will furnish to you, and to each Underwriter who may so request in
writing, copies of all periodic and special reports furnished to stockholders of
the Company and of all information, documents and reports filed with the
Commission.
(k) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a registrar
(which may be the same entity as the transfer agent) for its Common Stock.
(l) The Company will not, directly or indirectly, without the
prior written consent of X.X. Xxxxxxxxx + Co., LLC. on behalf of the
Underwriters, issue, offer, sell, grant any option to purchase or otherwise
dispose (or announce any issuance, offer, sale, grant of any option to purchase
or other disposition) of any shares of Common Stock or any securities
convertible into, or exchangeable or exercisable for, shares of Common Stock for
a period of 180 days following the commencement of the public offering of the
Shares by the Underwriters, except pursuant to this Agreement and except for
issuances pursuant to the exercise of stock options outstanding on or granted
subsequent to the date hereof, pursuant to a stock option or other employee
benefit plan in existence on the date hereof and except as contemplated by the
Prospectus.
(m) The Company will cause the Shares to be duly included for
quotation on the Nasdaq National Market prior to the Closing Date.
(n) The Company will not take, directly or indirectly, and
will use its best efforts to cause its officers, directors or affiliates not to
take, directly or indirectly, any action designed to, or which might in the
future reasonably be expected to cause or result in, stabilization or
manipulation of the price of any securities of the Company.
(o) The Company will apply the net proceeds of the offering
received by it in the manner set forth under the caption "Use of Proceeds" in
the Prospectus.
(p) The Company will timely file all such reports, forms or
other documents as may be required from time to time, under the Act, the rules
and regulations promulgated thereunder, the Exchange Act, and the rules and
regulations promulgated thereunder, and all such reports, forms and documents
filed will comply as to form and substance in all material respects with the
applicable requirements under the Act, the rules and regulations promulgated
thereunder, the Exchange Act and the rules and regulations promulgated
thereunder.
(q) The Company is familiar with the Investment Company Act of
1940, as amended, and has in the past conducted its affairs, and will in the
future conduct its affairs, in such a manner to ensure that the Company was not
and will not be an "investment company" or a "company" controlled by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, and the rules and regulations thereunder.
(r) The Company has caused to be delivered to you prior to the
effective date of the Registration Statement a letter (the "Lock-Up Agreement")
from each of the Company's directors, officers and each holder of at least 1.0%
of the outstanding capital stock of the Company, stating that such person agrees
that he or she will not, without prior written consent of X.X. Xxxxxxxxx + Co.,
LLC, directly or indirectly, sell, offer, contract to sell, transfer the
economic risk of ownership in, make any short sale, pledge or otherwise dispose
of any shares of capital stock of the Company or any securities convertible into
or exchangeable or exercisable for or any other rights to purchase or acquire
capital stock, for a period of 180 days from the effective date of the
Registration Statement.
(s) The Company will comply with all applicable securities and
other applicable laws, rules and regulations in each jurisdiction in which the
Reserved Shares are offered in connection with the Reserved Share Program. The
Company hereby agrees that it will direct the Company's transfer agent to place
a stop transfer restriction for a period of three months from the date of this
Agreement upon any Reserved Shares that are restricted by the NASD or the NASD
rules from sale, transfer, assignment, pledge or hypothecation for such three
month period following the date of this Agreement. X.X. Xxxxxxxxx + Co., LLC
will notify the Company in writing as to which persons purchasing Reserved
Shares will need to be so restricted. If the Company shall release, or seek to
release, from such restrictions any of such Reserved Shares, the Company agrees
to reimburse X.X. Xxxxxxxxx + Co., LLC for any reasonable expenses (including
without limitation legal expenses) they incur in connection with, or as a result
of, such release.
7. CONDITIONS OF THE UNDERWRITER'S OBLIGATIONS. The obligations
of the several Underwriters under this Agreement are subject to the
performance by the Company on and as of the Closing Date or any later date on
which Option Stock is to be purchased, as the case may be, of its covenants
and agreements hereunder, and the following additional conditions:
(a) The Registration Statement shall have become effective,
and no stop order suspending the effectiveness of the Registration Statement
shall have been issued, and no proceedings for that purpose shall have been
instituted or threatened or, to the knowledge of the Company or the
Underwriter, shall be contemplated by the Commission.
(b) The Underwriters shall be satisfied that (i) as of the
Effective Date, the statements made in the Registration Statement and the
Prospectus were true and correct and neither the Registration Statement nor
the Prospectus omitted to state a fact required to be stated therein or is
necessary to make the statements therein not misleading, (ii) since the
Effective Date, no event has occurred which should have been set forth in a
supplement or amendment to the Prospectus which has not been set forth in an
effective supplement or amendment, (iii) since the respective dates as of
which information is given in the Registration Statement in the form in which
it originally became effective and the Prospectus contained therein, there
has not been any material adverse change or any development involving a
prospective material adverse change in the business, properties, financial
condition or results of operations of the Company and its subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary course
of business, and since such dates, except in the ordinary course of business,
neither the Company nor any of its subsidiaries has entered into any material
transaction not referred to in the Registration Statement in the form in
which it originally became effective and the Prospectus contained therein,
(iv) neither the Company nor any of its subsidiaries has any material
contingent obligations which are not disclosed in the Registration Statement
and the Prospectus, (v) there are not pending or known threatened legal
proceedings to which the Company or any of its subsidiaries is a party or of
which property of the Company or any of its subsidiaries is subject which are
material and which are not disclosed in the Registration Statement and the
Prospectus, (vi) there are not any franchises, contracts, leases or other
documents which are required to be filed as exhibits to the Registration
Statement which have not been filed as required, and (vii) the
representations and warranties of the Company herein are true and correct in
all material respects as of the Closing Date or any later date on which
Option Stock is to be purchased, as the case may be.
(c) On or prior to the Closing Date, the legality and
sufficiency of the sale of the Shares hereunder and the validity and form of the
certificates representing the Shares, all corporate proceedings and other legal
matters incident to the foregoing, and the form of the Registration Statement
and of the Prospectus (except as to the financial statements contained therein),
shall have been approved at or prior to the Closing Date by Xxxxxxxx & Xxxxxxxx
LLP, counsel for the Underwriters. The Underwriters shall have received from
counsel to the Underwriters, such opinion or opinions with respect to the
issuance and sale of the Shares, the Registration Statement and the Prospectus
and such other related matters as the Underwriters reasonably may request and
such counsel shall have received such documents and other information as they
request to enable them to pass upon such matters.
(d) On the Closing Date, and if Option Stock is purchased at
any date after the Closing Date, on such later date, the Underwriters shall have
received an opinion addressed to the Underwriters, dated the Closing Date or, if
related to the later sale of Option Stock, such later date, of Bay Venture
Counsel, LLP, counsel to the Company, substantially to the effect set forth in
EXHIBIT A hereto, and of Fischer, Behar, Chen & Co., Israeli counsel to the
Company, substantially to the effect set forth in EXHIBIT B hereto. In rendering
any such opinion, such counsel may rely, as to matters of fact, to the extent
such counsel reasonably deems proper, and subject to the provisions of paragraph
(c) above, on certificates of responsible officers of the Company and public
officials. References to the Registration Statement and the Prospectus in this
paragraph (d) shall include any amendment or supplement thereto at the date of
such opinion.
(e) You shall have received from Xxxxxxxxx & Xxxxxxxxx a
letter or letters, addressed to the Underwriters and the Board of Directors
of the Company and dated the Closing Date and any later date on which Option
Stock is purchased, confirming that they are independent public accountants
with respect to the Company within the meaning of the Act and the applicable
published rules and regulations thereunder and based upon the procedures
described in their letter delivered to the Underwriters concurrently with the
execution of this Agreement (the "Original Letter"), but carried out to a
date not more than three business days prior to the Closing Date or such
later date on which Option Stock is purchased (i) confirming, to the extent
true, that the statements and conclusions set forth in the Original Letter
are accurate as of the Closing Date or such later date, as the case may be,
and (ii) setting forth any revisions and additions to the statements and
conclusions set forth in the Original Letter which are necessary to reflect
any changes in the facts described in the Original Letter since the date of
the Original Letter or to reflect the availability of more recent financial
statements, data or information. The letters shall not disclose any change,
or any development involving a prospective change, in or
affecting the business or properties of the Company or any of its
subsidiaries, which in your sole judgment, makes it impractical or
inadvisable to proceed with the public offering of the Shares or the purchase
of the Option Stock as contemplated by the Prospectus.
(f) You shall have from Xxxxxxxxx & Xxxxxxxxx, a letter
stating that their review of the Company's internal accounting controls, to the
extent they deemed necessary in establishing the scope of their examination of
the Company's financial statements as at December 31, 2000, did not disclose any
weakness in internal controls that they considered to be material weaknesses.
(g) On the Closing Date, and on any later date on which Option
Stock is purchased, you shall have received a certificate, dated the Closing
Date or such later date, as the case may be, signed by the Chief Executive
Officer and Chief Financial Officer of the Company stating that the respective
signers of said certificate have carefully examined the Registration Statement
in the form in which it originally became effective and the Prospectus contained
therein and any amendments or supplements thereto and this Agreement, and, to
their knowledge that the statements included in paragraph (b) of this Section 7
are true and correct.
(h) You shall have been furnished evidence in usual written or
telegraphic form from the appropriate authorities of the several jurisdictions,
or other evidence satisfactory to you, of the qualification referred to in
paragraph (f) of Section 6 hereof.
(i) Prior to the Closing Date, the Shares shall have been duly
authorized for inclusion on the Nasdaq National Market upon official notice of
issuance.
In case any of the conditions specified in this Section 7 shall not
be fulfilled, this Agreement may be terminated by you by giving notice to the
Company. Any such termination shall be without liability of the Company to
the Underwriters and without liability of the Underwriters to the Company;
PROVIDED, HOWEVER, that (i) in the event of such termination, the Company
agrees to indemnify and hold harmless the Underwriters from all costs or
expenses incident to the performance of the obligations of the Company under
this Agreement, including all costs and expenses referred to in paragraphs
(g) and (h) of Section 6 hereof, and (ii) if this Agreement is terminated by
you because of any refusal, inability or failure on the part of the Company
to perform any agreement herein, to fulfill any of the conditions herein, or
to comply with any provision hereof other than by reason of a default by any
of the Underwriters, the Company will reimburse the Underwriters severally
upon demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the transactions contemplated hereby.
8. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
(a) The obligations of the Company to deliver the Shares shall
be subject to the conditions that (i) the Registration Statement shall have
become effective and (ii) no stop order suspending the effectiveness thereof
shall be in effect and no proceedings therefor shall be pending or threatened by
the Commission.
(b) In case either of the conditions specified in paragraph
(a) of this Section 8 shall not be fulfilled, this Agreement may be terminated
by the Company by giving notice to
you. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company;
PROVIDED, HOWEVER, that in the event of any such termination the Company
agrees to indemnify and hold harmless the Underwriters from all costs or
expenses incident to the performance of the obligations of the Company under
this Agreement, including all costs and expenses referred to in paragraphs
(g) and (h) of Section 6 hereof.
9. INDEMNIFICATION AND CONTRIBUTION.
(a) Subject to the provisions of paragraph (d) of this
Section 9, the Company agrees to indemnify and hold harmless each Underwriter
(and any person participating in the distribution who is deemed to be an
underwriter (as defined in Section 2(11) of the Act) and each person
(including each member or officer thereof), if any, who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages or
liabilities, joint or several (and actions in respect thereof), to which such
indemnified parties or any of them may become subject, under the Act, the
Exchange Act or other federal or state statutory law or regulation, at common
law or otherwise, and the Company agrees to reimburse each such Underwriter
and controlling person for any legal or other expenses (including, except as
otherwise hereinafter provided, reasonable fees and disbursements of counsel)
incurred by the respective indemnified parties in connection with defending
against any such losses, claims, damages, or liabilities or in connection
with any investigation or inquiry of, or other proceeding which may be
brought against, the respective indemnified parties, in each case arising out
of or are based upon (i) any untrue statement or alleged untrue statement of
any material fact contained in the Registration Statement (including the
Prospectus as part thereof and any Rule 462(b) registration statement) or any
post-effective amendment thereto (including any Rule 462(b) registration
statement) or 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, or (ii) any untrue statement or alleged untrue
statement of any material fact contained in any Preliminary Prospectus or the
Prospectus (as amended or as supplemented if the Company shall have filed
with the Commission any amendment thereof or supplement thereto) or 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
circumstance under which they were made, not misleading, or (iii) any untrue
statement or alleged untrue statement of any material fact contained in any
audio or visual materials provided by the Company or based upon written
information furnished by or on behalf of the Company including, without
limitation, slides, videos, films or tape recordings, used in connection with
the marketing of the Underwritten Stock, including without limitation, untrue
or alleged untrue statements communicated to securities analysts employed by
the Underwriters; PROVIDED, HOWEVER, that (i) the indemnity agreement of the
Company contained in this paragraph (a) shall not apply to any such loss,
claim, damage, liability or action if such statement or omission was made in
reliance upon and in conformity with information furnished as herein stated
or otherwise furnished in writing to the Company by or on behalf of any
Underwriter expressly for use in any Preliminary Prospectus or the
Registration Statement or the Prospectus or any such amendment thereof or
supplement thereto, and (ii) that the indemnity agreement contained in this
paragraph (a) with respect to any Preliminary Prospectus shall not inure to
the benefit of any Underwriter (or such persons) if the person asserting any
such loss, claim, damage, liability or action purchased Shares which are the
subject thereof to the extent that any such loss, claim, damage,
liability or action (A) results from the fact that such Underwriter failed to
send or give a copy of the Prospectus (as amended or supplemented) to such
person at or prior to the confirmation of the sale of such Shares to such
person in any case where such delivery is required by the Act and (B) arises
out of or is based upon an untrue statement or omission of a material fact
contained in such Preliminary Prospectus that was corrected in the Prospectus
(as amended and supplemented), unless such failure resulted from
non-compliance by the Company with paragraph (c) of Section 6 hereof. The
indemnity agreements of the Company contained in this paragraph (a) and the
representations and warranties of the Company contained in Section 2 hereof
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall survive
the delivery and payment for the Shares.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who has signed
the Registration Statement, each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the
other Underwriters against any and all losses, claims, damages or liabilities,
joint or several, to which such indemnified parties or any of them may become
subject, under the Act, the Exchange Act or other federal or state statutory law
or regulation, at common law or otherwise and to reimburse each of them for any
legal or other expenses (including, except as otherwise hereinafter provided,
reasonable fees and disbursements of counsel) incurred by the respective
indemnified parties in connection with defending against any such losses,
claims, damages or liabilities or in connection with any investigation or
inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case arising out of or are based upon (i) any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement (including the Prospectus as part thereof and any
Rule 462(b) registration statement) or any post-effective amendment thereto
(including any Rule 462(b) registration statement) or 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, or (ii) any untrue
statement or alleged untrue statement of any material fact contained in any
Preliminary Prospectus or the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment thereof or supplement
thereto) or 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 circumstance under which they were made, not misleading, in each
case to the extent, but only to the extent, that such statement or omission was
made in reliance upon and in conformity with information furnished as herein
stated or otherwise furnished in writing by or on behalf of such indemnifying
Underwriter to the Company expressly for use in the Registration Statement or
the Prospectus or any such amendment thereof or supplement thereto, and will
reimburse, as incurred, all legal or other expenses reasonably incurred by the
Company or any such director, officer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action.
The indemnity agreement of each Underwriter contained in this paragraph (b)
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall survive
the delivery and payment for the Shares.
(c) Each party indemnified under the provisions of
paragraph (a) or (b) of this Section 9 agrees that, upon the service of a
summons or other initial legal process upon it in any action or suit
instituted against it or upon its receipt of written notification of the
commencement of any investigation or inquiry of, or proceeding against it, in
respect of which indemnity may be
sought on account of any indemnity agreement contained in such paragraphs,
such indemnified party will promptly notify any party or parties from whom
indemnification may be sought hereunder of the commencement thereof in
writing. No indemnification provided for in such paragraphs shall be
available to any party who shall fail so to give such notice if the party to
whom such notice was not given was unaware of the action, suit,
investigation, inquiry or proceeding to which such notice would have related
and was prejudiced by the failure to give the notice, but the omission so to
notify such indemnifying party or parties of any such service or notification
shall not relieve such indemnifying party or parties from any liability which
it or they may have to the indemnified party for contribution or otherwise
than on account of such indemnity agreement. Any indemnifying party or
parties against which a claim is to be made will be entitled, at its own
expense, to participate in the defense of such action, suit, investigation or
inquiry of, an indemnified party. Any indemnifying party shall be entitled,
if it so elects within a reasonable time after receipt of notice from the
indemnified party or parties of an action, suit, investigation or inquiry to
which indemnity may be sought, to assume the entire defense thereof (alone or
in conjunction with any other indemnifying party or parties), at its own
expense, in which case such defense shall be conducted by counsel reasonably
satisfactory to the indemnified party or parties; PROVIDED, HOWEVER, that (i)
if the indemnified party or parties has reasonably concluded that there may
be a conflict between the positions of the indemnifying party or parties and
of the indemnified party or parties in conducting the defense of such action,
suit, investigation, inquiry or proceeding or that there may be legal
defenses available to such indemnified party or parties different from or in
addition to those available to the indemnifying party or parties, then
counsel for the indemnified party or parties shall be entitled to conduct
such defense to the extent reasonably determined by such counsel to be
necessary to protect the interests of the indemnified party or parties and
(ii) in any event, the indemnified party or parties shall be entitled to have
counsel chosen by such indemnified party or parties participate in, but not
conduct, the defense. Upon receipt of notice from the indemnifying party to
such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying
party will not be liable to such indemnified party under this Section 9 for
any legal or other expenses (other than the reasonable costs of
investigation) subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party has employed such
counsel in connection with the assumption of different or additional legal
defenses in accordance with the proviso to the immediately preceding
sentence, or (ii) the indemnifying party has authorized in writing the
employment of counsel for the indemnified party at the expense of the
indemnifying party. If no such notice to assume the defense of such action
has been given within a reasonable time of the indemnified party's or
parties' notice to such indemnifying party or parties, the indemnifying party
or parties shall be responsible for any legal or other expenses incurred by
the indemnified party or parties in connection with the defense of the
action, suit, investigation, inquiry or proceeding.
(d) If the indemnification provided for in this Section 9 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) above in respect of any losses, claims, damages, expenses
or liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
referred to in paragraphs (a) and (b) above (i) in such proportion as is
appropriate to reflect the relative benefits received by each of
the contributing parties from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of each
of the contributing parties, on the one hand, and the party to be
indemnified, on the other hand in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by
the Company, on the one hand, and the Underwriters, on the other, shall be
deemed to be in the same proportion as the total net proceeds from the
offering of the Shares (before deducting expenses) and the total underwriting
discount received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus, bear to the aggregate public offering
price of the Shares. Relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by each indemnifying party, and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable consideration referred to above. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
paragraph (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this paragraph (d), no Underwriter shall be required to
contribute any amount in excess of the underwriting discount applicable to
the Shares purchased by the Underwriter hereunder. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this paragraph
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect to which a claim for contribution may be made against another
party or parties under this paragraph (d), it will promptly notify such party or
parties from whom contribution may be sought, but the omission so to notify such
party or parties shall not relieve the party or parties from whom contribution
may be sought from any other obligation it may have hereunder or otherwise
(except as specifically provided in paragraph (c) of this Section 9). The
contribution agreement set forth above shall be in addition to any liabilities
which any indemnifying party may have at common law or otherwise.
(e) No indemnifying party will, without the prior written
consent of the indemnified party, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder
(whether or not such indemnified party or any person who controls such
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act is a party to such claim, action, suit or proceeding) unless
such settlement, compromise or consent includes an unconditional release of
such indemnified party and each such controlling person from all liability
arising out of such claim, action, suit or proceeding.
(f) The Company agrees to indemnify and hold harmless X.X.
Xxxxxxxxx + Co., LLC and each person (including each member of officer thereof),
if any, who controls X.X. Xxxxxxxxx + Co., LLC within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act ("Indemnified
Entities"), from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) (i)
caused by any untrue statement or alleged untrue statement of a material fact
contained in any material prepared by or with the consent of the Company for
distribution to participants in connection with the Reserved Share Program, or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; (ii) the failure of any Participant to pay for and accept delivery
of Reserved Shares that the participant has agreed to purchase; or (iii) related
to, arising out of, or in connection with the Reserved Share Program other than
losses, claims, damages or liabilities (or expenses relating thereto) that are
finally judicially determined to have resulted from the bad faith or gross
negligence of Indemnified Entities.
10. REIMBURSEMENT OF CERTAIN EXPENSES.
In addition to their other obligations under Section 9 of this Agreement, the
Company hereby agrees to reimburse on a quarterly basis the Underwriters for
all reasonable legal and other expenses incurred in connection with
investigating or defending any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in paragraph (a) of Section 9 of
this Agreement, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the obligations under this Section 10 and
the possibility that such payments might later be held to be improper,
provided, however, that (i) to the extent that any such payment is ultimately
held to be improper, the Underwriters shall promptly refund it and (ii) the
Underwriters shall provide to the Company, upon request, reasonable
assurances of their ability to effect any refund, when and if due.
11. REPRESENTATIONS, ETC. TO SURVIVE DELIVERY. The respective
representations, warranties, agreements, covenants, indemnities and statements
of, and on behalf of, the Company and its officers, and the Underwriters,
respectively, set forth in or made pursuant to this Agreement will remain in
full force and effect, regardless of any investigation made by or on behalf of
the Underwriters, and will survive delivery of and payment for the Shares. Any
successors to the Underwriters shall be entitled to the indemnity, contribution
and reimbursement agreements contained in this Agreement.
12. TERMINATION.
(a) This Agreement (except for the provisions of Section 9
hereof) may be terminated by you by notice to the Company at any time prior to
the Closing Date if: (i) the Company shall have sustained a loss by strike,
fire, flood, accident or other calamity of such a character as to interfere
materially with the conduct of the business and operations of the Company
regardless of whether or not such loss was insured; (ii) trading in the Common
Stock shall have been suspended or trading in securities generally on the New
York Stock Exchange, the American Stock Exchange or the Nasdaq National Market
shall have been suspended or limitations on such trading shall have been imposed
or limitations on prices shall have been established on any such exchange or
market system; (iii) the engagement in hostilities or an
escalation of major hostilities by the United States or Israel or the
declaration of war or a national emergency by the United States or Israel on
or after the date hereof shall have occurred; (iv) any outbreak of
hostilities or other national or international calamity or crisis or material
adverse change in economic or political conditions shall have occurred if the
effect of such outbreak, calamity, crisis or change in economic or political
conditions in the financial markets of the United States or Israel would, in
your reasonable judgment, make the offering or delivery of the Shares
impracticable; (v) the enactment, publication, decree or other promulgation
of any Israeli, federal or state statute, regulation, rule or order of, or
commencement of any proceeding or investigation by, any court, legislative
body, agency or other governmental authority shall have occurred which in the
Underwriter's reasonable opinion materially and adversely affects or will
materially or adversely affect the business or operations of the Company;
(vi) a banking moratorium shall have been declared by California, New York,
United States or Israeli authorities; or (vii) the taking of any action by
any Israeli, federal, state or local government or agency in respect of its
monetary or fiscal affairs shall have occurred which in your reasonable
judgment has a material adverse effect on the securities markets in the
United States or Israel.
(b) If this Agreement is terminated pursuant to this Section
12, there shall be no liability of the Company to the Underwriters and no
liability of the Underwriters to the Company; PROVIDED, HOWEVER, that in the
event of any such termination, the Company agrees to indemnify and hold harmless
the Underwriters from all costs or expenses incident to the performance of the
obligations of the Company under this Agreement, including all costs and
expenses referred to in paragraphs (g) and (h) of Section 6. Notwithstanding any
termination of this Agreement, the provisions of Section 9 hereof shall survive
and remain in full force and effect.
13. NOTICES. All communications hereunder shall be in writing
and if sent to the Underwriters shall be mailed or delivered or telegraphed
and confirmed by letter or telecopied and confirmed by letter to X.X.
Xxxxxxxxx + Co., LLC at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx
00000, with copies to Xxxxxxxx & Xxxxxxxx LLP, 000 Xxxxxx Xxxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx X. Xxxx, Esq. or, if sent to
the Company, shall be mailed or delivered or telegraphed and confirmed to the
Company at 0000 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000, with
copies to Bay Venture Counsel, LLP, 0000 Xxxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxx, Esq.
14. SUCCESSORS. This Agreement shall incur to the benefit of
and be binding upon the Company and the Underwriters and, with respect to the
provisions of Section 9 hereof, the several parties (in addition to the
Company and the Underwriters) indemnified under the provisions of said
Section 9, and their respective personal representatives successors and
assigns. Nothing in this agreement is intended or shall be construed to give
any other person any legal or equitable right, remedy or claim under or in
respect of this agreement, or any provisions herein contained. The term
"successors and assigns" as herein used shall not include any purchaser, as
such purchaser, of any of the Shares from the Underwriters.
15. COUNTERPARTS. This agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of
which together shall be deemed to be one and the same instrument.
16. GOVERNING LAW. This agreement shall be governed by and
construed in accordance with the laws of the State of California. Any legal
suit, action or proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby may be instituted in
the federal courts of the United States of America located in the City and
County of San Francisco or the courts of the State of California in each case
located in the City and County of San Francisco (collectively, the "Specified
Courts"), and each party irrevocably submits to the exclusive jurisdiction
(except for proceedings instituted in regard to the enforcement of a judgment
of any such court, as to which such jurisdiction is non-exclusive) of such
courts in any such suit, action or proceeding. Service of any process,
summons, notice or document by mail to such party's address set forth above
shall be effective service of process for any suit, action or other
proceeding brought in any such court. The parties irrevocably and
unconditionally waive any objection to the laying of venue of any suit,
action or other proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any such court that
any such suit, action or other proceeding brought in any such court has been
brought in an inconvenient forum.
If the foregoing correctly sets forth our understanding, please
indicate the Underwriters' acceptance thereof in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement
between us.
Very truly yours,
NOGATECH, INC.
By: __________________________________
Name: ____________________________
Title: ___________________________
Accepted as of the date first above written:
X.X. XXXXXXXXX + CO., LLC
ING Barings LLC
DLJDIRECT Inc.
as representatives of the
several Underwriters
By: X.X. Xxxxxxxxx + Co., LLC
By:_________________________________
Name:___________________________
Title:__________________________
