Exhibit 1.1
5,750,000 SHARES
SAIFUN SEMICONDUCTORS LTD.
ORDINARY SHARES, NOMINAL VALUE NIS 0.01 PER SHARE
UNDERWRITING AGREEMENT
, 2005
XXXXXX BROTHERS INC.
DEUTSCHE BANK SECURITIES INC.
CIBC WORLD MARKETS CORP.
XXXXXXX XXXXX & COMPANY, L.L.C.
XXXXXXX XXXXX & ASSOCIATES, INC.
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Saifun Semiconductors Ltd., a company organized under the laws of
the State of Israel (the "COMPANY"), proposes to sell an aggregate of 5,000,000
shares (the "FIRM SHARES") of the Company's ordinary shares, nominal value NIS
0.01 (the "ORDINARY SHARES").
In addition, the Company proposes to grant to the Underwriters (the
"UNDERWRITERS") named in Schedule 1 attached to this agreement (the "AGREEMENT")
an option to purchase up to an additional 750,000 Ordinary Shares on the terms
set forth in Section 2 (the "OPTION SHARES"). The Firm Shares and the Option
Shares, if purchased, are hereinafter collectively called the "SHARES." This is
to confirm the agreement concerning the purchase of the Shares from the Company
by the Underwriters.
Xxxxxx Brothers Inc. ("XXXXXX") has agreed to reserve a portion of
the Shares to be purchased by it under this Agreement for sale to the Company's
directors, officers and business associates and other parties related to the
Company (collectively, "PARTICIPANTS"), as set forth in the Prospectus under the
heading "Underwriting" (the "DIRECTED SHARE PROGRAM"). The Shares to be sold by
Xxxxxx and its affiliates pursuant to the Directed Share Program are referred to
hereinafter as the "DIRECTED SHARES." Any Directed Shares not confirmed for
purchase by any Participants by the end of the business day on which this
Agreement is executed will be offered to the public by the Underwriters as set
forth in the Prospectus.
SECTION 1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form F-1 with respect to the Shares
has (i) been prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "SECURITIES ACT"), and the rules and
regulations (the "RULES AND REGULATIONS") of the Securities and Exchange
Commission (the "COMMISSION") thereunder, (ii) been filed with the Commission
under the Securities Act and (iii) become effective under the Securities Act.
Copies of such registration statement and each of the amendments thereto have
been delivered by the Company to you as the representatives (the
"REPRESENTATIVES") of the Underwriters. As used in this Agreement, "EFFECTIVE
TIME" means the date and the time as of which such registration statement, or
the most recent post-effective amendment thereto, if any, was declared effective
by the Commission; "EFFECTIVE DATE" means the date of the Effective Time;
"PRELIMINARY PROSPECTUS" means each prospectus included in such registration
statement, or amendments thereto, before such registration statement became
effective under the Securities Act and any prospectus filed with the Commission
by the Company with the consent of the Representatives pursuant to Rule 424(a)
of the Rules and Regulations; "REGISTRATION Statement" means such registration
statement, as amended at the Effective Time, including all information contained
in the final prospectus filed with the Commission pursuant to Rule 424(b) of the
Rules and Regulations and deemed to be a part of the registration statement as
of the Effective Time pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations; and "PROSPECTUS" means such final prospectus, as first filed with
the Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the Rules and
Regulations. Any reference to the term "Registration Statement" shall be deemed
to include the abbreviated registration statement to register additional
Ordinary Shares under Rule 462(b) under the Rules and Regulations (the "RULE 462
REGISTRATION STATEMENT"). The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus or Prospectus or suspending the
effectiveness of the Registration Statement, and no proceeding for such purpose
has been instituted or to the Company's knowledge threatened by the Commission.
(b) The Registration Statement conformed in all material respects at
the Effective Time and conforms in all material respects, and any post-effective
amendment to the Registration Statement filed after the date hereof will conform
in all material respects on the applicable Effective Date, to the requirements
of the Securities Act and the Rules and Regulations. The Prospectus will conform
in all material respects when filed with the Commission pursuant to Rule 424(b)
and on the applicable Delivery Date (as defined in Section 4) to the
requirements of the Securities Act and the Rules and Regulations. The
Registration Statement, at the Effective Time, and the Prospectus, as of its
date and on the applicable Delivery Date, do not and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made) not
misleading; provided that no representation or warranty is made as to
information contained in or omitted from the
2
Registration Statement or the Prospectus in reliance upon and in conformity
with written information furnished to the Company through the Representatives by
or on behalf of any Underwriter specifically for inclusion therein, which
information is specified in Section 8(e).
(c) The Company has been duly incorporated and is validly existing
under the laws of the State of Israel, is duly qualified to do business in each
jurisdiction in which its ownership or lease of property or the conduct of its
businesses requires such qualification, and has all power and authority
necessary to own or hold its properties and to conduct the businesses in which
it is engaged, except where the failure to be so qualified or in good standing,
individually or in the aggregate, would not reasonably be expected to have a
material adverse effect on the condition (financial or otherwise), results of
operations, shareholders' equity, properties, business or prospects of the
Company and its subsidiaries taken as a whole (a "MATERIAL ADVERSE EFFECT"). No
proceeding has been instituted by the Registrar of Companies in Israel for the
dissolution of the Company.
(d) Except with respect to Saifun Ventures Ltd., which is currently
in the process of liquidation (which liquidation will not result in the Company
or any subsidiary thereof incurring material costs, expenses or any other
material liabilities), each subsidiary (as defined in Section 18) of the Company
has been duly organized, is validly existing and is in good standing, where
applicable, as a corporation or other business entity under the laws of its
jurisdiction of organization and is duly qualified to do business and in good
standing, where applicable, as a foreign corporation or other business entity in
each jurisdiction in which its ownership or lease of property or the conduct of
its businesses requires such qualification, except where the failure to be in
good standing or so qualified, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. Except with respect to
Saifun Ventures Ltd., which is currently in the process of liquidation, each
subsidiary of the Company has all power and authority necessary to own or hold
its properties and to conduct the businesses in which it is engaged. The Company
does not own or control, directly or indirectly, any corporation, association or
other entity other than the subsidiaries listed in Exhibit 21 to the
Registration Statement. None of the subsidiaries of the Company is a
"significant subsidiary," as such term is defined in Rule 405 of the Rules and
Regulations.
(e) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of the Company have been duly
authorized and validly issued and, as except as set forth in the Prospectus, are
fully paid and non-assessable, conform to the description thereof contained in
the Prospectus and were issued in compliance with federal and state securities
laws and not in violation of any preemptive right, resale right, right of first
refusal or similar right. All of the Company's options, warrants and other
rights to purchase or exchange any securities for Ordinary Shares have been duly
authorized and validly issued, conform to the description thereof contained in
the Prospectus and were issued in compliance with the laws of the State of
Israel. All of the issued shares of each subsidiary of the Company have been
duly authorized and validly issued and are fully paid and non-assessable and are
owned
3
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims, except for such liens, encumbrances, equities
or claims as could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
(f) The Shares to be issued and sold by the Company to the
Underwriters hereunder have been duly authorized and, upon payment and delivery
therefor in accordance with this Agreement, will be validly issued, fully paid
and non-assessable, will conform to the description thereof contained in the
Prospectus, will be issued in compliance with federal, state and foreign
securities laws, including the laws of the State of Israel, and will be free of
statutory and contractual preemptive rights, resale rights, rights of first
refusal and similar rights.
(g) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement. This
Agreement has been duly and validly authorized, executed and delivered by the
Company.
(h) The execution, delivery and performance of this Agreement by the
Company, the consummation of the transactions contemplated hereby and the
application of the proceeds from the sale of Shares as described under "Use of
Proceeds" in the Prospectus will not (i) conflict with or result in a breach or
violation of any of the terms or provisions of, impose any lien, charge or
encumbrance upon any property or assets of the Company and its subsidiaries, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement, license or other agreement or instrument to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject; (ii) result in any violation of the
provisions of the memorandum of association, articles of association, charter or
bylaws (or similar organizational documents) of the Company or any of its
subsidiaries; or (iii) result in any violation of any statute or any order, rule
or regulation of any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their properties or
assets; except, in the case of clauses (i) and (iii), for such conflicts,
breaches, violations or defaults as would not reasonably be expected to have a
Material Adverse Effect.
(i) Except for the registration of the Shares under the Securities
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), by the National Association of Securities Dealers,
Inc. (the "NASD") and under applicable state or foreign securities laws in
connection with the purchase and distribution of the Shares by the Underwriters,
no consent, approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body or any third party is required for
the execution, delivery and performance of this Agreement or any of the other
documents to be entered into in connection with the sale of the Shares by the
Company and the consummation of the transactions contemplated hereby and thereby
and the application of the proceeds from the sale of Shares as described under
4
"Use of Proceeds" in the Prospectus. Subject to the Underwriters' compliance
with their obligations in Section 3 hereof, the Company is not required to
publish a prospectus in Israel under the laws of the State of Israel.
(j) The Company and each of its subsidiaries have such permits,
licenses, consents, approvals, authorizations, orders, registrations,
qualifications, filings, patents, franchises, certificates of need and other
approvals or authorizations of governmental or regulatory authorities
("PERMITS") as are necessary under applicable law to own their properties and
conduct their businesses in the manner described in the Prospectus, except for
any of the foregoing that could not reasonably be expected to have a Material
Adverse Effect; each such Permit is valid and in full force and effect, and
neither the Company nor any subsidiary has received notice of any investigation
or proceedings which results in or, if decided adversely to the Company or any
subsidiary, could reasonably be expected to result in, the revocation of, or
imposition of a materially burdensome restriction on, any Permit; each of the
Company and its subsidiaries has fulfilled and performed all of its obligations
with respect to the Permits, and no event has occurred that allows, or after
notice or lapse of time would allow, revocation or termination thereof or
results in any other impairment of the rights of the holder or any such Permits,
except for any of the foregoing that could not reasonably be expected to have a
Material Adverse Effect.
(k) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right (other than rights which have been waived in writing or
otherwise satisfied) to require the Company to file a registration statement
under the Securities Act with respect to any securities of the Company owned or
to be owned by such person or to require the Company to include such securities
in the securities registered pursuant to the Registration Statement.
(l) As of the date hereof, the licensing agreements to which the
Company is a party (each a "LICENSING AGREEMENT" and, collectively, the
"LICENSING AGREEMENTS"), as described in the Prospectus under "Business -
Licensees," are, and on each Delivery Date such Licensing Agreements will be, in
full force and effect, except where the failure to be in full force and effect
would not reasonably be expected to have a Material Adverse Effect.
(m) The Company has not sold or issued any securities that would be
integrated with the offering of the Shares contemplated by this Agreement
pursuant to the Securities Act or the Rules and Regulations or the
interpretations thereof by the Commission, nor has the Company issued or offered
any Ordinary Shares or securities convertible or exercisable into its Ordinary
Shares to any persons during the 12 months preceding the date of the Delivery
Date (as defined in Section 4 hereof), other than (i) as described in the
Prospectus or (ii) the issuance of options pursuant to the Company's stock
option plans or the issuance of Ordinary Shares pursuant to the exercise of such
options.
5
(n) Except as described in the Prospectus, neither the Company nor
any of its subsidiaries has sustained, since the date of the latest audited
financial statements included in the Prospectus, any material loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, and since such date, except as described
in the Prospectus, there has not been any change in the share capital of the
Company (other than the grant of options pursuant to the Company's stock option
plans or upon exercise of outstanding options, convertible securities, rights or
warrants described in the Prospectus) or any material change in the long-term
debt of the Company and its subsidiaries or any material adverse change, or any
development involving a prospective adverse change, in or affecting the
condition (financial or otherwise), results of operations, shareholders' equity,
properties, management, business or prospects of the Company and its
subsidiaries taken as a whole, in each case except as could not reasonably be
expected to have a Material Adverse Effect.
(o) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be disclosed in
the Prospectus, the Company has not (i) issued or granted any securities other
than the exercise of outstanding options pursuant to the Company's stock options
plans, (ii) incurred any liability or obligation, direct or contingent, other
than liabilities and obligations which were incurred in the ordinary course of
business, (iii) entered into any transaction not in the ordinary course of
business or (iv) purchased any of its outstanding share capital, nor declared or
paid any dividend on its share capital.
(p) The historical financial statements of Company (including the
related notes and supporting schedules) filed as part of the Registration
Statement or included in the Prospectus comply as to form in all material
respects with the requirements of Regulations S-X under the Securities Act and
present fairly the financial condition, results of operations and cash flows of
the Company, at the dates and for the periods indicated, and, have been prepared
in conformity with accounting principles generally accepted in the United States
applied on a consistent basis throughout the periods involved. Solely with
respect to the line item "Equity in losses of equity method investees" in the
consolidated statements of operations of the Company the foregoing
representation is based on the audit reports of KPMG Deutsche
Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft and
Somekh Xxxxxxx, a member of KPMG International filed as part of the Registration
Statement and included in the Prospectus.
(q) The pro forma financial statements (including the related notes)
filed as part of the Registration Statement or included in the Prospectus comply
as to form in all material respects with the requirements of Regulation S-X
under the Securities Act and present fairly the information shown therein. Such
pro forma financial statements have been properly compiled on the bases
described therein, the assumptions used in preparation thereof are reasonable
and the adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to therein.
6
(r) Xxxx Xxxxx Xxxxxx & Kasierer, a member of Ernst & Young Global,
who have certified certain financial statements of the Company and its
consolidated subsidiaries, whose report appears in the Prospectus and who have
delivered the initial letter referred to in Section 7(h) hereof, are independent
public accountants as required by the Securities Act and the Rules and
Regulations.
(s) The Company and each of its subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them, in each case free and clear of all
liens, encumbrances and defects, except such as are described in the Prospectus
or such as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property
by the Company and its subsidiaries; and all assets held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases, with such exceptions as do not materially interfere with the
use made and proposed to be made of such assets by the Company and its
subsidiaries.
(t) The Company and each of its subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as is adequate for the
conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar businesses in
similar industries. All policies of insurance of the Company and its
subsidiaries are in full force and effect, except where the failure to be in
full force and effect would not reasonably be expected to have a Material
Adverse Effect; the Company and its subsidiaries are in compliance with the
terms of such policies in all material respects; and neither the Company nor any
of its subsidiaries has received notice from any insurer or agent of such
insurer that capital improvements or other expenditures are required or
necessary to be made in order to continue such insurance.
(u) Except as described in the Prospectus and the Registration
Statement, the Company and each of its subsidiaries own or, to the Company's
knowledge, possess a valid and enforceable right to use all: (i) patents and
patent applications, (ii) registered and unregistered trademarks, service marks,
trade names, trademark applications and service xxxx applications, (iii)
registered and unregistered copyrights and copyright applications, and (iv)
other intellectual property (including trade secrets, know-how and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures) (the "Intellectual Property") necessary for the conduct of their
respective businesses as currently being conducted and as described in the
Registration Statement and Prospectus and to the Company's knowledge, the
conduct of their respective businesses does not conflict with any Intellectual
Property rights of any third party, nor have they received any notice of any
claim of conflict with, any such Intellectual Property rights of any third
party, which claim, if the subject of an unfavorable decision, ruling or
judgment, would reasonably be expected to result in a material adverse effect.
Except as described in the Prospectus and the Registration Statement (i) the
Company is not aware of any infringement by third parties of any of its
Intellectual Property; (ii) there is no pending or, to the Company's knowledge,
threatened
7
action, suit, proceeding or claim by others challenging the Company's rights in
or to any such Intellectual Property; and (iii) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim by others that
the Company infringes or otherwise violates any patent, trademark, copyright,
trade secret or other proprietary rights of others.
(v) Except as described in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property or assets of the Company or any of its
subsidiaries is the subject that would reasonably be expected to have a Material
Adverse Effect or would reasonably be expected to have a material adverse effect
on the performance of this Agreement or the consummation of the transactions
contemplated hereby; and to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or by
others.
(w) There are no contracts or other documents of a character
required to be described in the Registration Statement or Prospectus or to be
filed as exhibits to the Registration Statement that are not described and filed
as required.
(x) Except as described in the Prospectus, no relationship, direct
or indirect, exists between or among the Company, on the one hand, and the
directors, officers, shareholders, customers or suppliers of the Company, on the
other hand, which is required to be described in the Prospectus which is not so
described. Since July 30, 2002, the Company has not, directly or indirectly,
including through any subsidiary, extended or maintained credit, or arranged for
the extension of credit, or renewed or amended any extension of credit, in the
form of a personal loan to or for any of its directors or executive officers
other than such loans as have been repaid in full to the Company.
(y) No labor disturbance by the employees of the Company or its
subsidiaries exists or, to the knowledge of the Company, is imminent that would
reasonably be expected to have a Material Adverse Effect. Without limiting the
generality of the foregoing, the Company and its subsidiaries are in compliance,
in all material respects, with the labor and employment laws and collective
bargaining agreements applicable to its employees in Israel.
(z) The Company and each of its subsidiaries have filed all Israeli
and United States federal, state and local income and franchise tax returns
required to be filed through the date hereof, subject to permitted extensions,
and have paid all taxes due thereon, except where a failure to file such tax
returns or to pay such taxes would not reasonably be expected to have a
Material Adverse Effect, and no tax deficiency has been determined adversely
to the Company or any of its subsidiaries, nor does the Company have any
knowledge of any tax deficiency that would reasonably be expected to have a
Material Adverse Effect.
(aa) The Company and each of its subsidiaries (i) make and keep
accurate books and record and (ii) maintain internal accounting controls which
provide reasonable assurance that (A) transactions are executed in accordance
with management's
8
authorization, (B) transactions are recorded as necessary to permit preparation
of its financial statements in conformity with accounting principles generally
accepted in the United States and to maintain accountability for its assets, (C)
access to their respective assets is permitted only in accordance with
management's authorization and (D) the reported accountability for their
respective assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(bb) Neither the Company nor any of its subsidiaries (i) is in
violation of its memorandum of association, articles of association, charter or
by-laws (or similar organizational documents), as applicable, (ii) is in
default, and no event has occurred that, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance of any
term, covenant or condition contained in any material indenture, mortgage, deed
of trust, loan agreement, license or other agreement or instrument to which it
is a party or by which it is bound or to which any of its properties or assets
is subject or (iii) is in violation of any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
it or its property or assets or has failed to obtain any license, permit,
certificate, franchise or other governmental authorization or permit necessary
to the ownership of its property or to the conduct of its business, except in
the case of clauses (ii) and (iii), to the extent any such conflict, breach,
violation or default would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(cc) Neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or affiliate of
the Company that is controlled by the Company or any of its subsidiaries is
aware of or has taken any action in connection with their services to or
employment by the Company, or that would reasonably be expected to impact the
Company, directly or indirectly, that would result in a violation by such
Persons of the FCPA, and the Company, its subsidiaries and, to the knowledge of
the Company, its affiliates that are controlled by the Company have conducted
their businesses in compliance with the FCPA and, prior to the Initial Delivery
Date (as defined below), intend to institute and maintain policies and
procedures designed to ensure, and which are reasonably expected to continue to
ensure, continued compliance therewith. "FCPA" means Foreign Corrupt Practices
Act of 1977, as amended, and the rules and regulations thereunder.
(dd) The operations of the Company and its subsidiaries are and have
been conducted at all times in compliance with the applicable money laundering
statutes of all jurisdictions, the applicable rules and regulations thereunder
and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the "MONEY
LAUNDERING LAWS") and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or any of its subsidiaries with respect to the Money Laundering Laws is pending
or, to the best knowledge of the Company, threatened.
(ee) Neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or affiliate of
the
9
Company or any of its subsidiaries is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department ("OFAC"); and the Company will not directly or indirectly use the
proceeds of the offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person or entity, for
the purpose of financing the activities of any person currently subject to any
U.S. sanctions administered by OFAC.
(ff) There is and has been no failure on the part of the Company and
any of the Company's directors or officers, in their capacities as such, to
comply with Section 402 of the Xxxxxxxx-Xxxxx Act of 2002.
(gg) The Company is not, and, as of the applicable Delivery Date and
after giving effect to the offer and sale of the Shares and the application of
the proceeds therefrom as described under "Use of Proceeds" in the Prospectus,
will not 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 thereunder.
(hh) The Company and each of its subsidiaries have established and
maintain disclosure controls and procedures (as such term is defined in Rule
13a-15 under the Exchange Act), and such disclosure controls and procedures are
effective in all material respects to perform the functions for which they were
established.
(ii) Since the date of the most recent balance sheet of the Company
and its consolidated subsidiaries reviewed or audited by Xxxx Xxxxx Xxxxxx &
Kasierer, a member of Ernst & Young Global, and the audit committee of the board
of directors of the Company, (i) the Company has not been advised of (A) any
significant deficiencies in the design or operation of internal controls that
could adversely affect the ability of the Company and each of its subsidiaries
to record, process, summarize and report financial data, or any material
weaknesses in internal controls and (B) any fraud, whether or not material, that
involves management or other employees who have a significant role in the
internal controls of the Company and each of its subsidiaries, and (ii) since
that date, there have been no significant changes in internal controls or in
other factors that could significantly affect internal controls, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
(jj) The Company has not distributed and, prior to the later to
occur of any Delivery Date and completion of the distribution of the Shares,
will not distribute without Xxxxxx'x consent any written offering material,
other than the Preliminary Prospectus and the Prospectus and, in connection with
the Directed Share Program described in Section 3, the enrollment materials
prepared by Xxxxxx that, to the Company's knowledge, would be deemed to be
offering material in connection with the offering and sale of the Shares, it
being understood that any press release regarding the distribution of the Shares
issued subsequent to the completion of the distribution of the Shares and any
earnings release issued regarding the results of operations and financial
condition of the Company for the quarter ended September 25, 2005, shall not be
deemed to be offering material in connection with the offering and sale of the
Shares.
10
(kk) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or that has constituted or that would
reasonably be expected to cause or result in the stabilization or manipulation
of the price of the Shares or any security of the Company to facilitate the sale
or resale of any of the Shares.
(ll) The Shares have been approved for listing, subject to official
notice of issuance and evidence of satisfactory distribution, on The NASDAQ
National Market.
(mm) There are no contracts, agreements or understandings between
the Company or any of its subsidiaries and any person that would give rise to a
valid claim against the Company or any of its subsidiaries or any Underwriter
for a brokerage commission, finder's fee or other like payment in connection
with the offering and sale of the Shares contemplated by this Agreement.
(nn) The Company was not, for the taxable year ended December 31,
2004, and upon the consummation of the transactions described hereby and the
application of the proceeds as described in the Registration Statement under the
caption "Use of Proceeds" is not expected to become for the taxable year ending
December 31, 2005 or any taxable year thereafter, a Passive Foreign Investment
Company ("PFIC") within the meaning of Section 1297 of the Code.
(oo) Except as disclosed in the Registration Statement and the
Prospectus, the Company and each of its subsidiaries is in compliance in all
material respects with all conditions and requirements stipulated by the
instruments of approval granted to it by the Investment Center of the Ministry
of Industry and Trade with respect to the "Approved Enterprise" status of any of
the Company's facilities and any other tax benefits received by the Company as
set forth under the caption "Law for the Encouragement of Capital Investments,
1959" in the Prospectus and by Israeli laws and regulations relating to such
"Approved Enterprise" status and the aforementioned other tax benefits received
by the Company; and the Company has not received any notice of any proceeding or
investigation relating to revocation or modification of any "Approved
Enterprise" status granted with respect to any of the Company's facilities. All
information supplied by the Company with respect to the applications relating to
such "Approved Enterprise" status was true, correct and complete in all material
respects when supplied to the appropriate authorities.
(pp) Due to the consummation of the transactions contemplated
hereby, the Company believes, based on its current ownership, that it will no
longer be considered a Controlled Foreign Corporation ("CFC") within the meaning
of Section 957 of the Code for future taxable years. No shareholder of the
Company other than Xx. Xxxx Xxxxx, Chief Executive Officer and Chairman of the
Company, and his wife, Xxxxx Xxxxx, is, as of the date of this Agreement, or
will be considered a United States shareholder within the meaning of Section
957 of the Code.
11
(qq) Except for stamp duty, and assuming that none of the
Underwriters is otherwise subject to taxation in Israel, the issuance, delivery
and sale to the Underwriters of the Shares to be sold by the Company are not
subject to any tax imposed by the State of Israel or any political subdivision
thereof.
(rr) The Registration Statement, the Prospectus and any Preliminary
Prospectus comply in all material respects, and any amendments or supplements
thereto will comply in all material respects, with any applicable laws or
regulations of foreign jurisdictions in which the Prospectus or any Preliminary
Prospectus, as amended or supplemented, if applicable, are distributed in
connection with the Directed Share Program. Assuming compliance by the
underwriters with the agreement contained in the second sentence of Section 3,
no consent, approval, authorization or order of, or filing or registration with,
any court or governmental body or agency, other than such as have been obtained,
is required under the securities laws and regulations of any foreign
jurisdiction in which the Directed Shares are being offered or sold outside of
the United States.
(ss) The Company has not offered, or caused Xxxxxx or its affiliates
to offer, Shares to any person pursuant to the Directed Share Program with the
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.
Any certificate signed by any officer of the Company and delivered
to the Representatives or counsel for the Underwriters in connection with the
offering of the Shares shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
SECTION 2. Purchase of the Shares by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 5,000,000 Firm Shares
to the several Underwriters and each of the Underwriters, severally and not
jointly, agrees to purchase the number of Firm Shares set forth opposite that
Underwriter's name in Schedule 1 hereto. Except as provided in Section 9 hereof,
each Underwriter shall be obligated to purchase from the Company that number of
Firm Shares that represents the same proportion of the number of Shares to be
sold by the Company as the number of Shares set forth opposite the name of such
Underwriter in Schedule 1 represents of the total number of Shares to be
purchased by all of the Underwriters pursuant to this Agreement. The respective
purchase obligations of the Underwriters with respect to the Firm Shares shall
be rounded among the Underwriters to avoid fractional shares, as the
Representatives may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to 750,000 Option Shares. Such option is exercisable in the event
that the Underwriters sell more Firm Shares than the number of Firm Shares in
the offering and as set forth in Section 4 hereof. Except as provided in Section
9 hereof, each Underwriter
12
agrees, severally and not jointly, to purchase the number of Option Shares
(subject to such adjustments to eliminate fractional shares as the
Representatives may determine) that bears the same proportion to the total
number of Option Shares to be sold on such Delivery Date as the number of Firm
Shares set forth in Schedule 1 hereto opposite the name of such Underwriter
bears to the total number of Firm Shares.
The price of both the Firm Shares and any Option Shares purchased by
the Underwriters shall be $ per share.
The Company shall not be obligated to deliver any of the Firm Shares
or Option Shares to be delivered on the applicable Delivery Date, except upon
payment for all such Shares to be purchased on such Delivery Date as provided
herein.
SECTION 3. Offering of Shares by the Underwriters. Upon authorization by
the Representatives of the release of the Firm Shares, the several Underwriters
propose to offer the Firm Shares for sale upon the terms and conditions set
forth in the Prospectus. Each of the Underwriters hereby covenants and agrees
that it will not offer the Shares in Israel, except that such Underwriter may
(A) offer for sale and sell Shares to entities which qualify under Section
15A(b)(1) of the Israeli Securities Law, 1968 and appear in the Addendum
thereto, or (B) offer Shares to other persons in Israel indicated by the Company
as participating in the Directed Share Program.
It is understood that approximately 250,000 Firm Shares will
initially be reserved as Directed Shares by the several Underwriters for offer
and sale upon the terms and conditions set forth in the Prospectus and in
accordance with the rules and regulations of the NASD to persons having business
relationships with the Company and its subsidiaries who have heretofore
delivered to Xxxxxx offers or indications of interest to purchase Firm Shares in
form satisfactory to Xxxxxx through the Directed Share Program and that any
allocation of such Firm Shares among such persons will be made in accordance
with timely directions received by Xxxxxx from the Company. It is further
understood that any Firm Shares which are not purchased by such persons will be
offered by the Underwriters to the public upon the terms and conditions set
forth in the Prospectus.
Subject to Section 6(h), the Company agrees to pay all fees and
disbursements incurred by the Underwriters in connection with the Directed Share
Program and any stamp duties or other taxes incurred by the Underwriters in
connection with the Directed Share Program.
SECTION 4. Delivery of and Payment for the Shares. Delivery of and payment
for the Firm Shares shall be made at 10:00 A.M., New York City time, on the
fourth full business day following the date of this Agreement or at such other
date or place as shall be determined by agreement between the Representatives
and the Company. This date and time are sometimes referred to as the "INITIAL
DELIVERY DATE." Delivery of the Firm Shares shall be made to the Representatives
for the account of each Underwriter against payment by the several Underwriters
through the Representatives of
13
the respective aggregate purchase prices of the Firm Shares being sold by the
Company to or upon the order of the Company by wire transfer in immediately
available funds to the accounts specified by the Company. Time shall be of the
essence, and delivery at the time specified pursuant to this Agreement is a
further condition of the obligation of each Underwriter hereunder. Delivery of
the Firm Shares shall be made through the facilities of The Depository Trust
Company unless the Representatives shall otherwise instruct.
The option granted in Section 2 will expire 30 days after the date
of this Agreement and may be exercised in whole or from time to time in part by
written notice being given by the Representatives; provided that if such date
falls on a day that is not a business day, the option granted in Section 2 will
expire on the next succeeding business day. Such notice shall set forth the
aggregate number of Option Shares as to which the option is being exercised, the
names in which the Option Shares are to be registered, the denominations in
which the Option Shares are to be issued and the date and time, as determined by
the Representatives, when the Option Shares are to be delivered; provided,
however, that this date and time shall not be earlier than the Initial Delivery
Date nor earlier than the second business day after the date on which the option
shall have been exercised nor later than the fifth business day after the date
on which the option shall have been exercised. The date and time the Option
Shares are delivered are sometimes referred to as an "OPTION SHARES DELIVERY
DATE" and the Initial Delivery Date and any Option Shares Delivery Date are
sometimes each referred to as a "DELIVERY DATE."
Delivery of and payment for the Option Shares shall be made at the
place specified in the first sentence of the first paragraph of this Section 4
(or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New York City time, on each such
Option Shares Delivery Date. Delivery of Option Shares shall be made to the
Representatives for the account of each Underwriter against payment by the
several Underwriters through the Representatives of the respective aggregate
purchase prices of the Option Shares being sold by the Company to or upon the
order of the Company by wire transfer in immediately available funds to the
accounts specified by the Company. Time shall be of the essence, and delivery at
the time and place specified pursuant to this Agreement is a further condition
of the obligation of each Underwriter hereunder. Delivery of the Options Shares
shall be made through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
SECTION 5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives (which approval shall not be unreasonably withheld) and to file
such Prospectus pursuant to Rule 424(b) under the Securities Act not later than
the Commission's close of business on the second business day following the
execution and delivery of this Agreement; to make no further amendment or any
supplement to the Registration Statement or to the Prospectus except as
permitted herein; to advise the Representatives, promptly after it receives
notice thereof, of the time when any amendment to the Registration Statement has
been filed or becomes effective or any
14
supplement to the Prospectus or any amended Prospectus has been filed and to
furnish the Representatives with copies thereof; to advise the Representatives,
promptly after it receives notice thereof, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the qualification
of the Shares for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statement or
the Prospectus or for additional information; and, in the event of the issuance
of any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any such qualification,
to use promptly its reasonable best efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the Underwriters a signed copy of the Registration Statement as
originally filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits other
than this Agreement and the computation of per share earnings), (ii) each
Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus and (iii) any document incorporated by reference in the Prospectus
(excluding exhibits thereto); and, if the delivery of a prospectus is required
at any time after the Effective Time in connection with the offering or sale of
the Shares or any other securities relating thereto and if at such time any
events shall have occurred as a result of which the Prospectus as then amended
or supplemented would include an 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 under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
to amend or supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to comply with the
Securities Act or the Exchange Act, to notify the Representatives and, upon
their request, to file such document and to prepare and furnish without charge
to each Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended or
supplemented Prospectus that will correct such statement or omission or effect
such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the reasonable judgment of the Company or the Representatives, be
required by the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy thereof to
the Representatives
15
and counsel for the Underwriters and obtain the consent of the Representatives
to the filing, which shall not be unreasonably withheld;
(f) As soon as practicable after the Effective Date to make
generally available to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the Company, Rule 158);
(g) For a period of two years following the Effective Date, to
furnish to the Representatives copies of all materials furnished by the Company
to its shareholders generally and all public reports and all reports and
financial statements furnished by the Company to the principal national
securities exchange or market upon which the Shares may be listed pursuant to
requirements of or agreements with such exchange or to the Commission pursuant
to the Exchange Act or any rule or regulation of the Commission thereunder (it
being understood that filing on XXXXX shall be deemed to constitute delivery
hereunder); (h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Shares for offering and
sale under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Shares; provided that in connection therewith
the Company shall not be required to (i) qualify as a foreign corporation in any
jurisdiction in which it would not otherwise be required to so qualify, (ii)
file a general consent to service of process in any such jurisdiction or (iii)
subject itself to taxation in any jurisdiction in which it would not otherwise
be subject;
(i) For a period of 180 days from the date of the Prospectus (the
"LOCK-UP PERIOD"), not to, directly or indirectly, (1) offer for sale, sell,
pledge or otherwise dispose of (or enter into any transaction or device that is
designed to, or could be expected to, result in the disposition by any person at
any time in the future of) any Shares or securities convertible into or
exchangeable for Shares, or sell or grant options, rights or warrants with
respect to any Shares or securities convertible into or exchangeable for Shares
(other than the grant of options pursuant to option plans existing on the date
hereof), (2) enter into any swap or other derivatives transaction that transfers
to another, in whole or in part, any of the economic benefits or risks of
ownership of such Shares, whether any such transaction described in clause (1)
or (2) above is to be settled by delivery of Shares or other securities, in cash
or otherwise, (3) file or cause to be filed a registration statement with
respect to any Shares or securities convertible, exercisable or exchangeable
into Shares or any other securities of the Company or (4) publicly disclose the
intention to do any of the foregoing, in each case without the prior written
consent of Xxxxxx, on behalf of the Underwriters, and to cause each officer and
director of the Company set forth on Schedule 2 hereto to furnish to the
Representatives, prior to the Initial Delivery Date, a letter or letters,
substantially in the form of Exhibit A hereto (the "LOCK-UP AGREEMENTS")
(provided that the foregoing shall not apply to (w) the
16
Shares to be sold hereunder, (x) the grant of options to purchase Ordinary
Shares pursuant to the employee benefit plans described in the Prospectus,
qualified stock option plans or other employee compensation plans described in
the Prospectus, (y) the issuance of Ordinary Shares pursuant to the Company's
employee benefit plans, employee stock purchase plan, qualified stock option
plans or other employee compensation plans described in the Prospectus, or (z)
the issuance of Ordinary shares or securities convertible into Ordinary Shares,
pursuant to the exercise of warrants or convertible securities described in the
Prospectus);
Notwithstanding the foregoing paragraph, if (1) during the last 17
days of the Lock-Up Period, the Company issues an earnings release or material
news or a material event relating to the Company occurs or (2) prior to the
expiration of the Lock-Up Period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the
Lock-Up Period, then the restrictions imposed in the preceding paragraph shall
continue to apply until the expiration of the 18-day period beginning on the
issuance of the earnings release or the announcement of the material news or the
occurrence of the material event, unless Xxxxxx, on behalf of the Underwriters,
waives such extension in writing;
(j) To apply the net proceeds from the sale of the Shares being sold
by the Company as set forth in the Prospectus;
(k) To furnish to its shareholders as soon as practicable after the
end of each fiscal year an annual report (including a balance sheet and
statements of income, shareholders' equity and cash flow of the Company and its
consolidated subsidiaries) certified by independent public accountants and
prepared in conformity with accounting principles generally accepted in the
United States, and to make available to its shareholders, as soon as practicable
after the end of each of the first three quarters of each fiscal year prepared
in conformity with accounting principles generally accepted in the United States
(beginning with the fiscal quarter ending after the Effective Date of the
Registration Statements), consolidated summary financial information of the
Company and its consolidated subsidiaries for such quarter in reasonable detail;
(l) To comply with all applicable securities and other applicable
laws, rules and regulations in each foreign jurisdiction in which the Directed
Shares are offered in connection with the Directed Share Program.
SECTION 6. Expenses. The Company agrees, whether or not the transactions
contemplated by this Agreement are consummated or this Agreement is terminated,
to pay all the costs, expenses, fees and taxes incident to and in connection
with (a) the authorization, issuance, sale and delivery of the Shares and any
stamp duties or other taxes payable in that connection, and the preparation and
printing of certificates for the Shares; (b) the costs incident to the
preparation, printing and filing under the Securities Act of the Registration
Statement and any amendments and exhibits thereto, any Preliminary Prospectus,
the Prospectus and any amendment or supplement to the Prospectus; (c) the
distribution of the Registration Statement as originally filed and each
17
amendment thereto and any post-effective amendments thereof (including, in each
case, exhibits), any Preliminary Prospectus, the Prospectus and any amendment or
supplement to the Prospectus, all as provided in this Agreement; (d) the
production and distribution of this Agreement, any supplemental agreement among
the Underwriters and any other related documents in connection with the
offering, purchase, sale and delivery of the Shares; (e) any required review by
the NASD of the terms of sale of the Shares (including related fees and expenses
of counsel to the Underwriters, together with subparagraph (g) below, not to
exceed $20,000 in the aggregate); (f) the listing of the Shares on The NASDAQ
National Market; (g) the qualification of the Shares under the securities laws
of the several jurisdictions as provided in Section 5(h) and the preparation,
printing and distribution of a Blue Sky Memorandum (including related fees and
expenses of counsel to the Underwriters, together with subparagraph (e) above,
not to exceed $20,000 in the aggregate); (h) the offer and sale of Shares by the
Underwriters in connection with the Directed Share Program, including the fees
and disbursements of counsel to the Underwriters related thereto not to exceed
$20,000 in the aggregate, the costs and expenses of preparation, printing and
distribution of the Directed Share Program material and all stamp duties or
other taxes incurred by the Underwriters in connection with the Directed Share
Program; (i) the investor presentations on any "road show" undertaken in
connection with the marketing of the Shares, including, without limitation,
expenses associated with any Internet road show, travel and lodging expenses of
the representatives and officers of the Company and the cost of any aircraft
chartered in connection with the road show provided, however, that the
Underwriters agree to pay their pro rata share of the cost of any aircraft
chartered in connection with the road show (it being understood that, for
purposes of this clause (i), the Underwriters' pro rata share shall be
determined by dividing the number of representatives of the Underwriters on the
aircraft by the sum of (x) the number of representatives of the Underwriters and
(y) the number of representatives of the Company on the aircraft; for example,
if there are two representatives of the Underwriters and three representatives
of the Company on the aircraft, the Underwriters agree to pay 40% of the cost of
the aircraft); and (j) all other costs and expenses incident to the performance
of the obligations of the Company under this Agreement; provided that, except as
provided in this Section 6 and in Section 11, the Underwriters shall pay their
own costs and expenses, including the costs and expenses of their counsel, any
transfer taxes on the Shares which they may sell and the expenses of advertising
any offering of the Shares made by the Underwriters.
SECTION 7. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission
in accordance with Section 5(a); no stop order suspending the effectiveness of
the Registration Statement or preventing or suspending the use of the Prospectus
shall have been issued and no proceeding for such purpose shall have been
initiated or threatened by
18
the Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement or the Prospectus or otherwise shall
have been complied with or otherwise resolved to the Commission's satisfaction.
(b) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Shares, the
Registration Statement and the Prospectus, and all other legal matters relating
to this Agreement, the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the Underwriters, and the
Company shall have furnished to such counsel all documents and information that
they may reasonably request to enable them to pass upon such matters.
(c) The Eitan Law Group, outside Israeli counsel for the Company,
shall have furnished to the Representatives its written opinions, as outside
Israeli counsel to the Company, addressed to the Underwriters and dated each
such Delivery Date, substantially in the forms attached hereto as Exhibit B-1
and Exhibit B-2.
(d) White & Case LLP, outside U.S. counsel for the Company, shall
have furnished to the Representatives its written opinion, as outside U.S.
counsel to the Company, addressed to the Underwriters and dated each such
Delivery Date, substantially in the form attached hereto as Exhibit B-3.
(e) The Representatives shall have received from Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, U.S. counsel for the Underwriters, such opinion or
opinions, dated such Delivery Date, with respect to the issuance and sale of the
Shares, the Registration Statement, the Prospectus and other related matters as
the Representatives may reasonably require, and the Company shall have furnished
to such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(f) The Representatives shall have received from Meitar Liquornik
Geva & Leshem Xxxxxxxxx, Israeli counsel for the Underwriters, such opinion or
opinions, dated such Delivery Date, with respect to the issuance and sale of the
Shares, the Registration Statement, the Prospectus and other related matters as
the Representatives may reasonably require, and the Company shall have furnished
to such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(g) At the time of execution of this Agreement, the Representatives
shall have received from each of (i) Xxxx Xxxxx Xxxxxx & Kasierer, a member of
Ernst & Young Global, (ii) KPMG Deutsche Treuhand-Gesellschaft
Aktiengesellschaft Wirtschaftsprufungsgesellschaft and (iii) Somekh Xxxxxxx, a
member of KPMG International, a letter, in form and substance satisfactory to
the Representatives, addressed to the Underwriters and dated the date hereof (x)
confirming that they are independent public accountants within the meaning of
the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants
19
under Rule 2-01 of Regulation S-X of the Commission and (y) stating, as of the
date hereof (or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial information
and other matters ordinarily covered by accountants' "COMFORT LETTERS" to
underwriters in connection with registered public offerings.
(h) With respect to the letter of each of (x) Xxxx Xxxxx Xxxxxx &
Kasierer, a member of Ernst & Young Global, (y) KPMG Deutsche
Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft, and
(z) Somekh Xxxxxxx, a member of KPMG International, referred to in the preceding
paragraph and delivered to the Representatives concurrently with the execution
of this Agreement (the "INITIAL LETTERS"), the Company shall have furnished to
the Representatives a letter (the "BRING-DOWN LETTER") of each such accountants,
addressed to the Underwriters and dated such Delivery Date (i) confirming that
they are independent public accountants within the meaning of the Securities Act
and are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date of the bring-down letter (or, with
respect to matters involving changes or developments since the respective dates
as of which specified financial information is given in the Prospectus, as of a
date not more than five days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the financial information
and other matters covered by the initial letters and (iii) confirming in all
material respects the conclusions and findings set forth in the initial letter.
(i) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chief Executive Officer and its
Chief Financial Officer stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct on and as of each such Delivery Date,
and the Company has complied with all its agreements contained herein and
satisfied all the conditions on its part to be performed or satisfied hereunder
at or prior to such Delivery Date;
(ii) They have carefully examined the Registration Statement
and the Prospectus and, in their opinion, (A) the Registration Statement, as of
the Effective Time, and the Prospectus, as of its date and as of such Delivery
Date, did not and do not contain any untrue statement of a material fact and did
not and do not omit to state a material fact required to be stated therein (in
the case of the Prospectus, in light of the circumstances under which they were
made) or necessary to make the statements therein not misleading, and (B) since
the Effective Time no event has occurred that should have been set forth in a
supplement or amendment to the Registration Statement or the Prospectus that has
not been so set forth.
20
(j) Except as described in the Prospectus, (i) neither the Company
nor any of its subsidiaries shall have sustained since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree or (ii) since such date
there shall not have been any change in the share capital of the Company or any
of its subsidiaries (other than the grant of options pursuant to the Company's
stock option plans or upon exercise of outstanding options, convertible
securities, rights or warrants described in the Prospectus) or any material
change in the long-term debt of the Company and its subsidiaries or any change,
or any development involving a prospective change, in or affecting the condition
(financial or otherwise), results of operations, shareholders' equity,
properties, management, business or prospects of the Company and its
subsidiaries taken as a whole, the effect of which, in any such case described
in clause (i) or (ii), is, in the judgment of the Representatives, so material
and adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares being delivered on such Delivery
Date on the terms and in the manner contemplated in the Prospectus.
(k) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or in
the over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or
materially limited or the settlement of such trading generally shall have been
materially disrupted or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction, (ii) a banking
moratorium shall have been declared by federal or state authorities, (iii) the
United States shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or there shall
have occurred any other calamity or crisis, or (iv) there shall have occurred
such a material adverse change in general economic, political or financial
conditions, including, without limitation, as a result of terrorist activities
after the date hereof (or the effect of international conditions on the
financial markets in the United States shall be such), as to make it, in the
judgment of the Representatives, impracticable or inadvisable to proceed with
the public offering or delivery of the Shares being delivered on such Delivery
Date on the terms and in the manner contemplated in the Prospectus.
(l) The Lock-Up Agreements between the Representatives and the
officers, directors and shareholders of the Company set forth on Schedule 2,
delivered to the Representatives on or before the date of this Agreement, shall
be in full force and effect on such Delivery Date.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
21
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
SECTION 8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter,
its directors, officers and employees and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of Shares), to which that
Underwriter, director, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained (A) in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto or (B) in any materials or information provided
to investors by, or with the written approval of, the Company in connection with
the marketing of the offering of the Shares ("MARKETING MATERIALS"), including
any road show or investor presentations made to investors by the Company
(whether in person or electronically), (ii) the omission or alleged omission to
state in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any amendment or supplement thereto or any Marketing
Materials, any material fact required to be stated therein or necessary to make
the statements therein not misleading or (iii) any act or failure to act or any
alleged act or failure to act by any Underwriter in connection with, or relating
in any manner to, the Shares or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability or
action arising out of or based upon matters covered by clause (i) or (ii) above
(provided that the Company shall not be liable under this clause (iii) to the
extent that it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or action resulted
directly from any such acts or failures to act undertaken or omitted to be taken
by such Underwriter through its gross negligence or willful misconduct), and
shall reimburse each Underwriter and each such director, officer, employee or
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by that Underwriter, director, officer, employee or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or in any such amendment or
supplement, in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Company through the Representatives
by or on behalf of any Underwriter specifically for inclusion therein, which
information consists solely of the information specified in Section 8(e);
provided further, that the Company and its subsidiaries shall not be liable to
the Underwriters or any of their respective directors, officers, employees or
controlling persons with respect
22
to any such untrue statement or omission made in any Preliminary Prospectus
existing as of the date hereof that is corrected in the Prospectus if it is
judicially determined that (A) the person asserting any such loss, claim, damage
liability or action purchased Shares from the Underwriters in reliance upon the
Preliminary Prospectus, but was not delivered or sent a copy of the Prospectus,
if required by law, at or prior to the written confirmation of the sale of such
Shares to such person, unless such failure to deliver or send the Prospectus was
a result of noncompliance by the Company with Section 5 of this Agreement and
(B) the Underwriters, and each such officer, director, employee and controlling
person, if any, would not have incurred such loss, claim, damage, liability or
action had the Prospectus been delivered or sent). The foregoing indemnity
agreement is in addition to any liability that the Company may otherwise have to
any Underwriter or to any director, officer, employee or controlling person of
that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its officers who have signed the Registration
Statement, each of its directors, and each person, if any, who controls the
Company within the meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Company or any such director, officer or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or any Marketing Materials, or (ii) the
omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, or any Marketing Materials, any material fact required to be stated
therein or necessary to make the statements therein not misleading, but in each
case only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information concerning such Underwriter furnished to the Company through
the Representatives by or on behalf of that Underwriter specifically for
inclusion therein, which information is limited to the information set forth in
Section 8(e), and shall reimburse the Company and any such director, officer or
controlling person for any legal or other expenses reasonably incurred by the
Company or any such director, officer or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability that any Underwriter may
otherwise have to the Company or any such director, officer, employee or
controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or commencement; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 8 except to the extent it has been
23
judicially determined that it has been materially prejudiced by such failure;
provided, further, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 8. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 8 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that the indemnified party
shall have the right to employ its own counsel, but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless (i) the
Company and the Underwriters shall have so mutually agreed; (ii) the
indemnifying party has failed within a reasonable time to retain counsel
reasonably satisfactory to the indemnified party; (iii) the indemnified party
shall have reasonably concluded that there may be legal defenses available to
them that are different from or in addition to those available to the
indemnifying party; or (iv) the named parties in any such proceeding (including
any impleaded parties) include both the indemnified party, on the one hand, and
the indemnifying party, on the other hand, and representation of both sets of
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them, and in any such event the fees and expenses of
such separate counsel shall be paid by the indemnifying party. Notwithstanding
anything contained herein to the contrary, if indemnity may be sought pursuant
to Section 8(f) hereof in respect of a claim or action referred to in Section
8(f), then in addition to such separate firm for the indemnified parties, the
indemnifying party shall be liable for the fees and expenses of not more than
one separate firm (in addition to any local counsel) for the Xxxxxx Entities (as
defined in Section 8(f)) for the defense of any loss, claim, damage, liability
or action arising out of the Directed Share Program. No indemnifying party shall
(i) without the prior written consent of the indemnified parties (which consent
shall not be unreasonably withheld), settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding and does not include any
findings of fact or admissions of fault or culpability as to the indemnified
party, or (ii) be liable for any settlement of any such action effected without
its written consent (which consent shall not be unreasonably withheld), but if
settled with the consent of the indemnifying party or if there be a final
judgment of the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment to the extent provided in
this Section 8.
24
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a), 8(b) or 8(f) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company, on the one hand, and the Underwriters, on the other
hand, 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 the Company, on the one hand, and the
Underwriters, on the other, with respect to the statements or omissions that
resulted in such loss, claim, damage or liability, or action in respect thereof,
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,
with respect to such offering shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Shares purchased under this
Agreement (before deducting expenses) received by the Company, as set forth in
the table on the cover page of the Prospectus, on the one hand, and the total
underwriting discounts and commissions received by the Underwriters with respect
to the Shares purchased under this Agreement, as set forth in the table on the
cover page of the Prospectus, on the other hand, bear to the total gross
proceeds from the offering of the Shares under this Agreement, as set forth in
the table on the cover page of the Prospectus. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Underwriters, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
Section 8(d) were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 8(d) shall be deemed to include, for purposes
of this Section 8(d), 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 Section 8(d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
was offered to the public exceeds the amount of any damages which such
Underwriter has otherwise paid or become liable to pay by reason of any untrue
or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute as provided in this
25
Section 8(d) are several in proportion to their respective underwriting
obligations and not joint.
(e) The Underwriters severally confirm and the Company acknowledges
and agrees that the statements with respect to the public offering of the Shares
by the Underwriters set forth in the last paragraph on the cover page of the
Prospectus and the legend concerning over-allotments on the inside front cover
page of the Prospectus and the following information under the caption
"Underwriting in the Prospectus," (i) concession and reallowance figures, (ii)
the information in the table in the first paragraph, (iii) the information under
the subheading "Stabilization, Short Positions and Penalty Bids," (iv) the
information under the subheading "Discretionary Sales" and (v) the information
under the subheading "Electronic Distribution," are correct and constitute the
only information concerning such Underwriters furnished in writing to the
Company by or on behalf of the Underwriters specifically for inclusion in the
Registration Statement and the Prospectus.
(f) The Company agrees to indemnify and hold harmless Xxxxxx
(including its directors, officers and employees) and each person, if any, who
controls Xxxxxx within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act ("XXXXXX ENTITIES"), from and against any loss,
claim, damage or liability or any action in respect thereof to which any of the
Xxxxxx Entities may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action (i) arises out of, or
is based upon, any untrue statement or alleged untrue statement of a material
fact contained in any material prepared by or with the approval of the Company
for distribution to Directed Share Participants in connection with the Directed
Share Program or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (ii) arises out of, or is based upon, the failure of the
Directed Share Participant to pay for and accept delivery of Directed Shares
that the Directed Share Participant agreed to purchase or (iii) is otherwise
related to the Directed Share Program; provided that the Company shall not be
liable under this clause (iii) for any loss, claim, damage, liability or action
that is determined in a final judgment by a court of competent jurisdiction to
have resulted from the gross negligence or willful misconduct of the Xxxxxx
Entities. The Company shall reimburse the Xxxxxx Entities promptly upon demand
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred.
(g) In case any proceeding (including any governmental
investigation) shall be instituted involving any Xxxxxx Entity in respect of
which indemnity may be sought pursuant to Section 8(f), the Xxxxxx Entity
seeking indemnity shall do so in the manner set forth in Section 8(c) above.
(h) To the extent the indemnification provided for in Section 8(f)
is unavailable to a Xxxxxx Entity or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then the Company, in lieu of
indemnifying the Xxxxxx
26
Entity thereunder, shall contribute to the amount paid or payable by the Xxxxxx
Entity as a result of such losses, claims, damages or liabilities in the manner
set forth in Section 8(d) above.
(i) The indemnity and contribution provisions contained in this
Section 8 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Xxxxxx Entity or the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Directed Shares.
SECTION 9. Defaulting Underwriters.
If, on any Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Shares that the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of Firm Shares set forth opposite
the name of each remaining non-defaulting Underwriter in Schedule 1 hereto bears
to the total number of Firm Shares set forth opposite the names of all the
remaining non-defaulting Underwriters in Schedule 1 hereto; provided, however,
that the remaining non-defaulting Underwriters shall not be obligated to
purchase any of the Shares on such Delivery Date if the total number of Shares
which the defaulting Underwriter or Underwriters agreed but failed to purchase
on such date exceeds 9.09% of the total number of Shares to be purchased on such
Delivery Date, and any remaining non-defaulting Underwriter shall not be
obligated to purchase more than 110% of the number of the Shares which it agreed
to purchase on such Delivery Date pursuant to the terms of Section 2. If the
foregoing maximums are exceeded, the remaining non-defaulting Underwriters, or
those other underwriters satisfactory to the Representatives who so agree, shall
have the right, but shall not be obligated, to purchase, in such proportion as
may be agreed upon among them, all the Shares to be purchased on such Delivery
Date. If the remaining Underwriters or other underwriters satisfactory to the
Representatives do not elect to purchase the Shares which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such Delivery Date,
this Agreement (or, with respect to any Option Shares Delivery Date, the
obligation of the Underwriters to purchase, and of the Company to sell, the
Option Shares) shall terminate without liability on the part of any
non-defaulting Underwriter or the Company, except that the Company will continue
to be liable for the payment of expenses to the extent set forth in Sections 6
and 11. As used in this Agreement, the term "UNDERWRITER" includes, for all
purposes of this Agreement unless the context requires otherwise, any party not
listed in Schedule 1 hereto that, pursuant to this Section 9, purchases Shares
that a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of
any liability it may have to the Company for damages caused by its default. If
other Underwriters are obligated or agree to purchase the Shares of a defaulting
or withdrawing Underwriter, either the Representatives or the Company may
postpone the Delivery Date for up to seven full business days in order to effect
any changes that, in the opinion of
27
counsel for the Company or counsel for the Underwriters, may be necessary in the
Registration Statement, the Prospectus or in any other document or arrangement.
SECTION 10. Termination. The obligations of the Underwriters hereunder may
be terminated by the Representatives by notice given to and received by the
Company prior to delivery of and payment for the Shares if, prior to that time,
any of the events described in Sections 7(k) and 7(l), shall have occurred or if
the Underwriters shall decline to purchase the Shares for any reason permitted
under this Agreement.
SECTION 11. Reimbursement of Underwriters' Expenses. If the Company shall
fail to tender the Shares for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company is
not fulfilled, the Company will reimburse the Underwriters for all reasonable
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
incurred by the Underwriters in connection with this Agreement and the proposed
purchase of the Shares, and upon demand the Company shall pay the full amount
thereof to the Representatives. If this Agreement is terminated pursuant to
Section 9 by reason of the default of one or more Underwriters, the Company
shall not be obligated to reimburse any defaulting Underwriter on account of
those expenses.
SECTION 12. No Fiduciary Duty. The Company acknowledges and agrees that in
connection with this offering, sale of the Shares or any other services the
Underwriters may be deemed to be providing hereunder, notwithstanding any
preexisting relationship, advisory or otherwise, between the parties or any oral
representations or assurances previously or subsequently made by the
Underwriters: (i) no fiduciary or agency relationship between the Company and
any other person, on the one hand, and the Underwriters, on the other, exists;
(ii) the Underwriters are not acting as advisors, expert or otherwise, to the
Company, including, without limitation, with respect to the determination of the
public offering price of the Shares, and such relationship between the Company,
on the one hand, and the Underwriters, on the other, is entirely and solely
commercial, based on arms-length negotiations; (iii) any duties and obligations
that the Underwriters may have to the Company shall be limited to those duties
and obligations specifically stated herein; and (iv) the Underwriters and their
respective affiliates may have interests that differ from those of the Company.
The Company hereby waives any claims that the Company may have against the
Underwriters with respect to any breach of fiduciary duty in connection with
this offering of Shares.
SECTION 13. Research Independence. In addition, the Company acknowledges
that the Underwriters' research analysts and research departments are required
to be independent from their respective investment banking divisions and are
subject to certain regulations and internal policies, and that such
Underwriters' research analysts may hold and make statements or investment
recommendations and/or publish research reports with respect to the Company
and/or the sale of the Shares that differ from the views of its investment
bankers. The Company acknowledges that each of the
28
Underwriters is a full service securities firm and as such from time to time,
subject to applicable securities laws, may effect transactions for its own
account or the account of its customers and hold long or short positions in debt
or equity securities of the companies which may be the subject of the
transactions contemplated by this Agreement.
SECTION 14. Notices, Etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to Xxxxxx Brothers Inc., 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Syndicate Registration (Fax: 000-000-0000),
with a copy, in the case of any notice pursuant to Section 8(c), to the Director
of Litigation, Office of the General Counsel, Xxxxxx Brothers Inc., 000 Xxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000; (Fax: 000-000-0000).
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Xxxx Xxxxx (Fax: x000 (0) 000-0000);
(c) provided, however, that any notice to an Underwriter pursuant to
Section 8(c) shall be delivered or sent by mail, telex or facsimile transmission
to such Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by Xxxxxx on behalf of the
Representatives.
SECTION 15. Agent for Service; Submission to Jurisdiction; Waiver of
Immunities. By the execution and delivery of this Agreement, the Company hereby
designates and appoints Saifun Semiconductors, Inc. as the authorized agent of
the Company upon whom process may be served in any suit, proceeding or other
action against the Company instituted by any Underwriter or by any person
controlling an Underwriter as to which such Underwriter or any such controlling
person is a party and based upon this Agreement, or in any other action against
the Company in any federal or state court sitting in the County of New York,
arising out of the offering made by the Prospectus or any purchase or sale of
Shares in connection therewith. The Company expressly accepts jurisdiction of
any such court in respect of any such suit, proceeding or other action and,
without limiting other methods of obtaining jurisdiction, expressly submits to
nonexclusive personal jurisdiction of any such court in respect of any such
suit, proceeding or other action. Such designation and appointment shall be
irrevocable, unless and until a successor authorized agent in the County and
State of New York reasonably acceptable to the Underwriters shall have been
appointed by the Company such successor shall have accepted such appointment and
written notice thereof shall have been given to the Underwriters. The Company
further agrees that service of process upon its authorized agent or successor
shall be deemed in every respect personal service
29
of process upon the Company in any such suit, proceeding or other action. In the
event that service of any process or notice of motion or other application to
any such court in connection with any such motion in connection with any such
action or proceeding cannot be made in the manner described above, such service
may be made in the manner set forth in conformance with the Hague Convention on
the Service Abroad of Judicial and Extrajudicial Documents on Civil and
Commercial Matters or any successor convention or treaty. The Company hereby
irrevocably waives any objection that it may have or hereafter have to the
laying of venue of any such action or proceeding arising out of or based on the
Shares, or this Agreement or otherwise relating to the offering, issuance and
sale of the Shares in any Federal or state court sitting in the County of New
York and hereby further irrevocably waives any claim that any such action or
proceeding in any such court has been brought in an inconvenient forum. The
Company agrees that any final judgment after exhaustion of all appeals or the
expiration of time to appeal in any such action or proceeding arising out of the
sale of the Shares or this Agreement rendered by any such Federal court or state
court shall be conclusive and may be enforced in any other jurisdiction by suit
on the judgment or in any other manner provided by law. Nothing contained in
this Agreement shall affect or limit the right of the Underwriters to serve any
process or notice of motion or other application in any other manner permitted
by law or limit or affect the right of the Underwriters to bring any action or
proceeding against the Company or any of its property in the courts of any other
jurisdiction. The Company further agrees to take any and all action, including
the execution and filing of all such instruments and documents, as may be
necessary to continue such designations and appointments or such substitute
designations and appointments in full force and effect. The Company hereby
agrees with the Underwriters to the nonexclusive jurisdiction of the courts of
the State of New York, or the Federal courts sitting in the County of New York
in connection with any action or proceeding arising from the sale of the Shares
or this Agreement brought by the Company or the Underwriters.
SECTION 16. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, and
their respective successors. This Agreement and the terms and provisions hereof
are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the directors,
officers and employees of the Underwriters and each person or persons, if any,
who control any Underwriter within the meaning of Section 15 of the Securities
Act and (B) the indemnity agreement of the Underwriters contained in Section
8(b) of this Agreement shall be deemed to be for the benefit of the directors of
the Company, the officers of the Company who have signed the Registration
Statement and any person controlling the Company within the meaning of Section
16 of the Securities Act. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this Section
16, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
30
SECTION 17. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in this
Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Shares and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
SECTION 18. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "BUSINESS DAY" means each Monday, Tuesday,
Wednesday, Thursday or Friday that is not a day on which banking institutions in
New York are generally authorized or obligated by law or executive order to
close and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
SECTION 19. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 20. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original, but all such counterparts
shall together constitute one and the same instrument.
SECTION 21. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
31
If the foregoing correctly sets forth the agreement between the Company
and the Underwriters, please indicate your acceptance in the space provided for
that purpose below.
Very truly yours,
SAIFUN SEMICONDUCTORS LTD.
By:
---------------------------------
Name:________________________
Title: _____________________
Accepted:
XXXXXX BROTHERS INC.
DEUTSCHE BANK SECURITIES INC.
CIBC WORLD MARKETS CORP.
XXXXXXX XXXXX & COMPANY, L.L.C.
XXXXXXX XXXXX & ASSOCIATES, INC.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By XXXXXX BROTHERS INC.
By:
--------------------------------------------
Authorized Representative
SCHEDULE 1
Underwriters Number of Firm Shares
------------ ---------------------
Xxxxxx Brothers Inc. .............................
Deutsche Bank Securities Inc......................
CIBC World Markets Corp. .........................
Xxxxxxx Xxxxx & Company, L.L.C....................
Xxxxxxx Xxxxx & Associates, Inc. .................
Total.............................................
SCHEDULE 2
PERSONS DELIVERING LOCK-UP AGREEMENTS
Directors
Xxxxxxx Xxxx
Xxxxx Xxxx
Xx. Xxxxxx Xxxxxx
Xxxxx Xxxx
Xxxxxx Xxxxxx
Officers
Xx. Xxxx Eitan
Xxxx Xxxxxxxxxxx
Xxxx Xxxxx
Xxxx Xxxxxx
Xxxxxxx Xxxxxx
Dr. Xxxx Xxxxx
Shareholders
To come
EXHIBIT A
LOCK-UP AGREEMENT
-, 2005
XXXXXX BROTHERS INC.
DEUTSCHE BANK SECURITIES INC.
CIBC WORLD MARKETS CORP.
XXXXXXX XXXXX & COMPANY, L.L.C.
XXXXXXX XXXXX & ASSOCIATES, INC.
c/x Xxxxxx Brothers Inc.
000 0xx Xxxxxx
Xxx Xxxx, XX 00000
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Brothers Inc. ("XXXXXX")
proposes to enter into an Underwriting Agreement (the "UNDERWRITING AGREEMENT")
with Saifun Semiconductors Ltd., a company organized under the laws of the State
of Israel (the "COMPANY"), providing for the initial public offering (the
"PUBLIC OFFERING") by the several Underwriters, including Xxxxxx (the
"UNDERWRITERS"), of Ordinary Shares, nominal value NIS 0.01, of the Company (the
"ORDINARY SHARES"). In the event of any change in the identity of the
Underwriters, this agreement shall inure to the benefit of such Underwriters
that are party to the Underwriting Agreement whether or not such Underwriters
are listed above.
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Xxxxxx on
behalf of the Underwriters, it will not, during the period (the "LOCK-UP
PERIOD") commencing on the date hereof and ending 180 days (together with any
extension thereto pursuant to the terms hereof) after the date of the final
prospectus relating to the Public Offering (the "PROSPECTUS"), (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
Ordinary Shares or any securities convertible into or exercisable or
exchangeable for Ordinary Shares or (2) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Ordinary Shares, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Ordinary Shares or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (a) the sale of any Shares to the Underwriters pursuant to the Underwriting
Agreement, (b) transactions relating to Ordinary Shares or other securities
acquired in open market transactions after the completion of the Public
Offering, (c) the exercise of
stock options granted pursuant to the Company's stock option/incentive plans or
otherwise outstanding on the date hereof, provided that it shall apply to any
Ordinary Shares issued upon such exercise, (d) the establishment of any
contract, instruction or plan that satisfies all of the requirements of Rule
10b5-1(c)(1)(i)(B) under the Securities Exchange Act of 1934 (a "PLAN") provided
that (i) no sales of Ordinary Shares or securities convertible into, or
exchangeable or exercisable for, Ordinary Shares, shall be made pursuant to a
Plan prior to the expiration of the Lock-up Period, and (ii) there shall be no
public announcement or notification (including pursuant to the filing of Form
144 under the Securities Act of 1933) of a Plan nor of the intention to sell
Ordinary Shares, or securities convertible into or exchangeable or exercisable
for the Ordinary Shares pursuant to a Plan prior to the expiration of the
Lock-up Period, (e) transfers of Ordinary Shares or any security convertible
into Ordinary Shares as a bona fide gift or gifts (which shall include, in the
case of an individual, a gift occurring at death by will or intestacy, and
transfers during lifetime to a trust or other entity for bona fide estate
planning or tax purposes), (f) distributions of Ordinary Shares or any security
convertible into Ordinary Shares to limited partners or shareholders of the
undersigned; provided that in the case of any transfer or distribution pursuant
to clause (e) and (f), each donee, distributee or other transferee shall sign
and deliver a letter substantially in the form of this letter. In addition, the
undersigned agrees that, without the prior written consent of Xxxxxx on behalf
of the Underwriters, it will not, during the period commencing on the date
hereof and ending 180 days after the date of the Prospectus, make any demand for
or exercise any right with respect to, the registration of any Ordinary Shares
or any security convertible into or exercisable or exchangeable for Ordinary
Shares. The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of the undersigned's share of Ordinary Shares except in compliance with
the foregoing restrictions.
Notwithstanding the foregoing, if (1) during the last 17 days of the
180-day restricted period the Company issues an earnings release or material
news or a material event relating to the Company occurs; or (2) prior to the
expiration of the 180-day restricted period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of
the 180-day period, the restrictions imposed by this letter shall continue to
apply until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event.
The undersigned understands that the Company and the Underwriters are
relying upon this agreement in proceeding toward consummation of the Public
Offering. The undersigned further understands that this agreement is irrevocable
and shall be binding upon the undersigned's heirs, legal representatives,
successors and assigns.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
The agreement set forth herein shall be terminated if (1) prior to the
execution of the Underwriting Agreement, the Company notifies you that it does
not intend to proceed with the Public Offering, (2) for any reason the
Underwriting Agreement shall be terminated prior to the closing of the Public
Offering in accordance with its terms, or (3) the closing of the Public Offering
does not occur by June 30, 2006.
Very truly yours,
--------------------------
(Name)
--------------------------
(Address)
EXHIBIT B-1
FORM OF CORPORATE OPINION OF ISSUER'S ISRAELI COUNSEL
November [ ], 2005
To:
Xxxxxx Brothers Inc.
Deutsche Bank Securities Inc.
CIBC World Markets Corp.
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxxx Xxxxx & Associates
as Representatives of the several
Underwriters named in the
Schedule 1 of the Underwriting Agreement
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
RE: SAIFUN SEMICONDUCTORS LTD.
Our ref.: 970307-26-04
Ladies and Gentlemen:
We have acted as Israeli counsel for Saifun Semiconductors Ltd. (the
"COMPANY"), a company organized under the laws of the State of Israel, in
connection with the transactions contemplated by the purchase agreement (the
"UNDERWRITING AGREEMENT") dated November [ ], 2005, among the Company and
Xxxxxx Brothers Inc., Deutsche Bank Securities Inc., CIBC World Markets Corp.,
Xxxxxxx Xxxxx & Associates and Xxxxxxx Xxxxx & Company, L.L.C., as
representatives of the several underwriters named in Schedule 1 thereto (the
"UNDERWRITERS"). This opinion is delivered to you pursuant to Section 7(c) of
the Underwriting Agreement. Capitalized terms used herein and not otherwise
defined are used herein as defined in the Underwriting Agreement.
In so acting, we have examined certificates of officers of the Company,
and the originals (or copies thereof, certified to our satisfaction) of such
corporate documents and records of the Company, and such other documents,
records and papers as we have deemed relevant in order to give the opinions
hereinafter set forth. In this connection, we have assumed the genuineness of
signatures, the authenticity of all documents submitted to us as originals and
the conformity to authentic original documents of all documents submitted to us
as certified, conformed, facsimile or photostatic copies. In addition, we have
relied, to the extent that we deem such reliance proper, upon such certificates
of officers of the Company and the representations and warranties of the Company
in the
Underwriting Agreement with respect to the accuracy of factual matters contained
therein which were not independently established.
Subject to the preceding paragraphs and the subsequent paragraphs
hereof, we are of the opinion that:
(i) The Company has been duly incorporated, is validly existing as a
corporation under the laws of the State of Israel, is duly authorized
to do business in Israel and has the legal authority necessary to hold
or own its properties in Israel and conduct the businesses in which it
is engaged, and to the best of our knowledge no proceeding has been
instituted by the Registrar of Companies in Israel for the dissolution
of the Company;
(ii) Each Israeli subsidiary of the Company has been duly incorporated, is,
other than Saifun Ventures Ltd. which is currently in the process of
voluntary liquidation: (A) validly existing as a corporation under the
laws of the State of Israel, (B) duly authorized to do business in
Israel, and (C) has the legal authority necessary to hold or own its
properties in Israel and conduct the businesses in which it is engaged,
and to the best of our knowledge, other than with respect to Saifun
Ventures Ltd. Which is currently in the process of voluntary
liquidation, no proceeding has been instituted by the Registrar of
Companies in Israel for the dissolution of the each such Israeli
subsidiary;
(iii) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable
and conform to the description thereof contained in the Prospectus; all
of the issued shares of capital stock of each Israeli subsidiary of the
Company have been duly and validly authorized and issued and are fully
paid, non-assessable and (except for directors' qualifying shares) are
owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims; and except as set forth in the
Prospectus, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities for, shares of capital
stock of or ownership interests in the Company or any Israeli
subsidiary are outstanding;
(iv) The Ordinary Shares being delivered on such Delivery Date to the
Underwriters under the Underwriting Agreement have been duly and
validly authorized and, when issued and delivered against payment
therefor, will be duly and validly issued, fully paid and
non-assessable;
(v) Except as described in the Prospectus, there are no preemptive or other
rights to subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any Ordinary Shares pursuant to the Company's
memorandum of association or articles of association, as amended, or,
to our knowledge after reasonable investigation, pursuant to any
agreement or other instrument to which the Company is a party or by
which it is bound;
(vi) The amendment of the Company's articles of association has been duly
and validly authorized and completed by the Company in accordance with
its articles of association and applicable Israeli law;
(vii) To our knowledge, without having made any search of the public docket
records of any court, governmental agency or body, or administrative
agency, and other than as set forth in the Prospectus, (A) there are no
legal or governmental proceedings pending to which the Company or any
of its Israeli subsidiaries is a party or of which any property or
assets in Israel of the Company or of any of its Israeli subsidiaries
is the subject which, if determined adversely to the Company or any of
its Israeli subsidiaries, might have a material adverse effect on the
consolidated financial position, stockholders' equity or results of
operations of the Company and its Israeli subsidiaries; and, (B) to the
best of our knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(viii) The statements contained in the Prospectus under the captions "Risk
Factors- Risks Relating to our Location in Israel," "Business - Legal
Proceedings, "Management's Discussion and Analysis of Financial
Condition and Results of Operation," "Management," "Certain
Relationships and Related Party Transactions, " "Description of Share
Capital," and "Israeli Tax Considerations and Government Programs",
insofar as they describe Israeli statutes, rules and regulations or
agreements, other documents or proceedings discussed therein governed
by Israeli law (except that in each case we are not expressing any
opinion as to the financial statements, schedules and other financial
data included therein or excluded therefrom), constitute a fair summary
thereof;
(ix) The Underwriting Agreement has been duly authorized, executed and, to
the extent governed by Israeli law, delivered by the Company, and all
corporate action required by the laws of the State of Israel and the
memorandum or articles of association of the Company to be taken by the
Company for the due and proper authorization, issuance, offering, sale
and delivery of the Shares has been validly and sufficiently taken; the
filing of the Registration Statement has been duly authorized by and on
behalf of the Company;
(x) The issuance and sale of the Ordinary Shares being delivered on such
Delivery Date by the Company pursuant to the Underwriting Agreement,
and the execution, delivery and compliance by the Company with all of
the provisions of the Underwriting Agreement and the consummation of
the transactions contemplated thereby will not to the best of our
knowledge conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any of its Israeli subsidiaries
is a party or by which the Company or any of its Israeli subsidiaries
is bound or to which any of the property or assets of the Company or
any of its Israeli subsidiaries is subject, nor will such actions
result in any violation of the provisions of the memorandum of
association or articles of association of the Company or any of
its Israeli subsidiaries or any Israeli statute or any order, rule or
regulation known to us of any Israeli court or governmental agency or
body having jurisdiction over the Company or any of its Israeli
subsidiaries;
(xi) Neither the Company and/or any of its Israeli subsidiaries is in
violation or default of (i) any provision of its memorandum or articles
of association, (ii) to the best of our knowledge, the terms of any
indenture, contract, lease, mortgage, deed of trust, loan agreement or
other agreement, obligation, condition, covenant or instrument to which
it is a party or by which it is bound or to which its property is
subject; or (iii) any Israeli statute, law, rule, regulation, judgment,
order or decree of any Israeli court, regulatory body, arbitrator or
other authority having jurisdiction in Israel over the Company or such
subsidiary, which violation or default detailed in sub-sections
(i)-(iii) above, if determined adversely to the Company or any of its
subsidiaries, might have a material adverse effect on the consolidated
financial position, shareholders' equity or results of operations of
the Company and its subsidiaries;
(xii) No consent, approval, authorization, license, registration,
qualification or order of any Israeli court or governmental agency or
regulatory body is required for the due authorization, execution,
delivery or performance of the Underwriting Agreement by the Company or
the consummation of the transactions contemplated hereby or thereby,
except for consents which have been obtained and filings with the
Israeli Registrar of Companies which need to be made at or prior to the
Delivery Date;
(xiii) Except for the Israeli stamp duty and assuming that none of the
Underwriters is otherwise subject to taxation in Israel, the issuance
and sale to the Underwriters of the Shares to be sold by the Company
hereunder are not subject to any tax imposed by Israel or any political
subdivision thereof;
(xiv) Under the laws of the State of Israel, the submission by the Company to
the nonexclusive jurisdiction of a New York court as set forth in
Section 19 of the Underwriting Agreement and the Company's agreement to
the designation of New York law as set forth in Section 19 of the
Underwriting Agreement are binding upon the Company and, if properly
brought to the attention of the court in accordance with the laws of
Israel, would be enforceable in any judicial proceeding in Israel,
subject to the provisions appearing below in section (xvi);
(xv) The Company has duly designated Saifun Semiconductors Inc. as its agent
to receive service of process as set forth in Section 15 of the
Underwriting Agreement;
(xvi) Subject to certain time limitations, an Israeli court may declare a
foreign civil judgment enforceable if it finds that the judgment was
rendered by a court which was, according to the laws of that state of
the court, competent to render the judgment; the judgment is no longer
appealable; the obligation imposed by the judgment is enforceable
according to the rules relating to enforceability of judgments in
Israel and the substance of the judgment is not contrary to public
policy; and the judgment is executory in the state in which it was
given; a foreign
judgment will not be declared enforceable if it was given in a state
whose laws do not provide for the enforcement of judgments of Israeli
courts (subject to exceptional cases) or if its enforcement is likely
to prejudice the sovereignty or security of the State of Israel; an
Israeli court also will not declare a foreign judgment enforceable if
it is proved to the Israeli court that (i) the judgment was obtained by
fraud; (ii) there was no due process; (iii) the judgment was rendered
by a court not competent to render it according to the laws of private
international law in Israel; (iv) the judgment is at variance with
another judgment that was given in the same matter between the same
parties and which is still valid; or (v) at the time the action was
brought in the foreign court a suit in the same matter and between the
same parties was pending before a court or tribunal in Israel; and
(xvii) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person
granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
the Company under the Securities Act;
(xviii) Assuming that all parties thereto have acted in good faith, no person
or entity has the right, under the Registration Rights Agreement dated
as of October 2, 2000 as amended on September 29, 2005, to require the
Company to include ordinary shares of the Company or other securities
of the Company held by such person or entity in the Registration
Statement.
We are members of the Bar of the State of Israel. In this opinion we express no
opinion as to any laws other than the laws of the State of Israel as the same
are in force on the date hereof and we have not, for the purpose of giving this
opinion, made any investigation of the laws of any other jurisdiction. We
express no opinion here with respect to the meaning, validity, binding nature or
enforceability of any contract, agreement, instrument or other document which by
its terms purports to be governed by the laws of any jurisdiction other than the
State of Israel.
In the course of preparation by the Company of the Registration Statement and
the Prospectus, we have participated in conferences with officers and other
representatives of the Company, with representatives of the independent auditors
of the Company, and with you and your counsel.
Based upon such participation in the preparation of the Registration Statement
and the Prospectus, without independent check or verification, and subject to
the preceding paragraphs and the subsequent and final paragraphs hereof, no
facts have come to our attention which lead us to believe that (i) the
Registration Statement (except for the financial statements and related notes
and schedules and other financial schedules and other financial and statistical
data included therein or omitted therefrom, as to which we express no opinion
and/or belief) as of the Effective Date, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or
necessary in order to make the statements therein not misleading, or (ii) that
as of its date and the date hereof, the Prospectus (other than the financial
statements and related notes and schedules and other financial and statistical
data included therein or omitted therefrom, as to which we express no belief)
contains any untrue statement of a material fact or omits 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.
We are not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus (except to the extent referred to in the opinion in
subsection (viii) above) and our judgments as to materiality are, to the extent
we deem appropriate, based in part upon the views of appropriate officers and
other representatives of the Company.
The phrase "to our knowledge" or words of similar import, means the actual
knowledge (without independent investigation except as otherwise stated) of
lawyers at Eitan Law Group.
This opinion is given to you and is solely for your benefit in connection with
the Closing occurring today and the offering of the Shares, in each case
pursuant to the Underwriting Agreement. This opinion may not be disclosed to or
relied upon by any other person, firm or corporation for any purpose without our
prior written consent. We do not undertake to advise you of any changes in our
opinions expressed herein resulting from matters that may hereafter arise or
that hereafter may be brought to our attention.
Yours sincerely,
Eitan Law Group
EXHIBIT B-2
FORM OF INTELLECTUAL PROPERTY OPINION OF ISSUER'S ISRAELI COUNSEL
November [ ], 2005
To:
Xxxxxx Brothers Inc.
Deutsche Bank Securities Inc.
CIBC World Markets Corp.
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxxx Xxxxx & Associates
as Representatives of the several
Underwriters named in the
Schedule 1 of the Underwriting Agreement
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
RE: SAIFUN SEMICONDUCTORS LTD.
Ladies and Gentlemen:
This opinion is delivered in connection with the Underwriting Agreement, dated
November [ ], 2005 (the "UNDERWRITING AGREEMENT"), among Saifun Semiconductors
Ltd., an Israeli company (the "COMPANY"), and Xxxxxx Brothers Inc., Deutsche
Bank Securities Inc., CIBC World Markets Corp., Xxxxxxx Xxxxx & Company, L.L.C.,
and Xxxxxxx Xxxxx & Associates, as Representatives of the several Underwriters
named in Schedule 1 thereto, relating to the public offering of 5,750,000
Ordinary Shares, par value NIS0.01 each, of the Company pursuant to the
registration statement on Form F-1 filed with the United States Securities and
Exchange Commission (including the prospectus attached to that registration
statement, the "REGISTRATION STATEMENT"). Unless otherwise defined herein, the
capitalized terms used herein shall have the meanings ascribed to them in the
Underwriting Agreement.
We are familiar with those parts of the Company's technology which formed the
basis of the U.S. Patents, U.S. Applications, the Foreign Patent and Foreign
Applications (each as defined below and together referred to hereinafter as the
"PATENTS"). We have acted as Patent Counsel to the Company and have prosecuted
the Patents listed in EXHIBITS A, B, C AND D hereto. We were not instructed to
consider the validity of any of the Patents.
Our knowledge of the Company and its business is therefore limited to the
above-mentioned aspects of the Company and its business.
Whenever our opinions herein are qualified by the phrase, "to the best of our
knowledge", such language means that, based upon the actual knowledge of
attorneys presently within our firm and all knowledge that would have been
gained upon the reasonable investigation of our files, we believe that such
opinions are factually correct.
We have read the Registration Statement, including particularly the portions of
the Registration Statement referring to the Patents, trade-secrets, trademarks
or other proprietary information or materials.
Based on the foregoing, as of the date hereof, we are of the opinion that:
1. As to the statements in the Registration Statement, under the captions
"Risk Factors" and "Business" insofar as they describe the Patents, we
have no reason to believe that the above mentioned sections of the
Registration Statement, at the time the Registration Statement became
effective and as of the date hereof, contain any untrue statement of a
material fact or, in light of the circumstances under which they were
made, omit to state a material fact required to be stated therein or
necessary to make a statement therein not misleading.
2. The Company is listed in the records of the United States Patent and
Trademark Office (the "PTO") as the sole Assignee of record of the patents
listed on EXHIBIT A to this Opinion (the "U.S. PATENTS"), and the sole
Applicant of record of each of the published patent applications listed on
EXHIBIT B to this Opinion (the "U.S. APPLICATIONS"). To the best of our
knowledge, the Company is the sole owner of the U.S. Patents and U.S.
Applications, excluding such U.S. Patents listed in EXHIBIT A1 and U.S.
Applications listed in EXHIBIT B1, which the Company owns jointly with
third party.
The Company is listed in the records of the appropriate foreign patent
offices as the sole Assignee of record of the patents listed on EXHIBIT C
to this Opinion (the "FOREIGN PATENT") and the sole Applicant of record of
each of the published patent applications listed on EXHIBIT D (the
"FOREIGN APPLICATIONS"). To the best of our knowledge, the Company is the
sole owner of the Foreign Patent and pending Foreign Applications.
3. We are not aware of any material defects in form in the preparation or
filing of the U.S. Applications and Foreign Applications on behalf of the
Company. To the best of our knowledge, the U.S. Applications and Foreign
Applications are being prosecuted by the Company and have not been finally
rejected or abandoned. We are not aware of any fact which would preclude
the grant of issued patents based on the U.S. Applications and Foreign
Applications.
4. To the best of our knowledge, all pertinent prior art references that we
were aware of during the prosecution of the Patents were disclosed to the
PTO or the appropriate foreign patent offices, and to the best of our
knowledge neither we nor the Company, made any misrepresentation to, or
concealed
any relevant or material fact from, the PTO or the appropriate foreign
patent offices during prosecution of any of the Patents.
5. To the best of our knowledge, there is no pending or threatened material
action, suit or claim, challenging ownership rights, scope or validity
with respect to the U.S. Patents, the U.S. Applications, Foreign Patents
and Foreign Applications.
6. To the best of our knowledge, there is no pending or threatened claim by a
third party alleging that the Company's products or technology infringe
upon the patents, copyright, trade secrets or similar intellectual
property rights of such third party.
7. To the best of our knowledge, the Company has not asserted claims against
third parties alleging the infringement of any of the Patents by such
third parties.
8. To the best of our knowledge, the Company has taken such steps as are
required, including payment of the necessary maintenance fees, to maintain
the enforceability of the U.S. Patents and Foreign Patents, and to
maintain the pendency of the U.S. Applications and Foreign Applications.
This opinion is rendered to you and is solely for your benefit in connection
with the closing occurring today and the offering of the Shares, in each case
pursuant to the Underwriting Agreement. This opinion may not be disclosed to or
relied upon by any other person, firm or corporation for any purpose without our
prior written consent. We do not undertake to advise you of any changes in our
opinions expressed herein resulting from matters that may hereafter arise or
that hereafter may be brought to our attention.
Yours sincerely,
Eitan Law Group
LIST OF EXHIBITS
EXHIBIT A U.S. Patents
EXHIBIT A1 Jointly owned U.S. Patents
EXHIBIT B U.S. Applications
EXHIBIT B1 Jointly owned U.S. Applications
EXHIBIT C Foreign Patent
EXHIBIT C1 Jointly owned Foreign Patent
EXHIBIT D Foreign Applications
EXHIBIT D1 Jointly owned Foreign Applications
EXHIBIT B-3
FORM OF OPINION OF ISSUER'S U.S. COUNSEL
November [ ], 2005
Xxxxxx Brothers Inc.
Deutsche Bank Securities Inc.
CIBC World Markets Corp.
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxxx Xxxxx & Associates, Inc.
as Representatives of the several
Underwriters named in the
Schedule 1 of the Underwriting Agreement
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We have acted as United States counsel for Saifun Semiconductors Ltd. (the
"Company"), a company organized under the laws of the State of Israel, in
connection with the transactions contemplated by the underwriting agreement (the
"Underwriting Agreement") dated November [ ], 2005, among the Company and Xxxxxx
Brothers Inc., Deutsche Bank Securities Inc., CIBC World Markets Corp., Xxxxxxx
Xxxxx & Company, L.L.C. and Xxxxxxx Xxxxx & Associates, Inc., as representatives
of the several underwriters named in Schedule 1 thereto (the "Underwriters").
This opinion is delivered to you pursuant to Section 8(d) of the Underwriting
Agreement. Capitalized terms used herein and not otherwise defined are used
herein as defined in the Underwriting Agreement.
In so acting, we have examined certificates of officers of the Company,
and the originals (or copies thereof, certified to our satisfaction) of such
corporate documents and records of the Company, and such other documents,
records and papers as we have deemed relevant in order to give the opinions
hereinafter set forth. In this connection, we have assumed the genuineness of
signatures, the authenticity of all documents submitted to us as originals and
the conformity to authentic original documents of all documents submitted to us
as certified, conformed, facsimile or photostatic copies. In addition, we have
relied, to the extent that we deem such reliance proper, upon such certificates
of officers of the Company and the representations and warranties of the Company
in the Underwriting Agreement with respect to the accuracy of factual matters
contained therein which were not independently established. We have also assumed
that, under the laws of the State of Israel, the Underwriting Agreement has been
duly authorized, executed and
delivered by the Company, the Company has full power, authority and legal right
to enter into and perform its obligations under the Underwriting Agreement, and
that there has been due authorization, issuance and delivery of the Firm Shares
by the Company. Our opinion in paragraph 8 below as to the effectiveness of the
Registration Statement and the absence of stop orders is based solely upon
telephonic confirmations received by us from individuals whom we believe to be
members of the Staff of the Securities and Exchange Commission (the
"Commission").
1. The Underwriting Agreement has been duly executed and delivered by the
Company, to the extent such execution and delivery are governed by the laws of
the State of New York.
2. No consent, approval, authorization or order of, or qualification,
filing or registration with any New York State or Federal governmental agency or
body or any New York State or Federal court is required to be obtained or made
by the Company or the U.S. Subsidiary for the execution and delivery of the
Underwriting Agreement or for the issuance and sale of the Firm Shares by the
Company as contemplated in the Underwriting Agreement, except (i) such as have
been obtained or made under the Securities Act, (ii) such as may be required
under state securities or blue sky laws or the securities laws of any foreign
jurisdiction in connection with the purchase and distribution of the Shares by
the Underwriters in the manner contemplated in the Underwriting Agreement and in
the Prospectus (as to which we express no opinion), and (iii) such as may be
required by the National Association of Securities Dealers, Inc.
3. The execution and delivery of the Underwriting Agreement by the Company
and the issuance and sale of the Shares by the Company as contemplated in the
Underwriting Agreement will not conflict with or result in a breach or violation
of any of the terms and provisions of the certificate of incorporation or bylaws
of the U.S. Subsidiary, any New York State (or, in the case of the U.S.
Subsidiary, Delaware General Corporation Law) or Federal law, rule or regulation
that in our experience is normally applicable to transactions of the type
contemplated by the Underwriting Agreement or, to our knowledge, any order of
any New York State or Federal court or governmental agency or body known to us
to have jurisdiction over the Company or the U.S. Subsidiary (except that we
express no opinion in this paragraph as to Federal or state securities or blue
sky laws).
4. Subject to the assumptions, qualifications and limitations contained
therein, we hereby confirm our opinion contained in the Prospectus under
"Taxation and Government Programs - United States Federal Income Taxation," and
you may rely upon such opinion as if it were addressed to you.
5. The statements in the Prospectus under the caption "Ordinary Shares
Eligible for Future Sale," to the extent that they constitute a summary of U.S.
Federal securities law, are accurate in all material respects.
6. To our knowledge, there is no legal or governmental proceeding pending
in any state or Federal court located in the County of New York, State of New
York to which the Company or the U.S. Subsidiary is a party which seeks to
restrain, enjoin or prevent the execution and delivery of the Underwriting
Agreement or the consummation of the transactions contemplated thereby.
7. The Company is not, nor will it become as a result of the consummation
of the transactions contemplated by the Underwriting Agreement and the
application of the net proceeds from the sale of the Firm Shares as described in
the Prospectus, an "investment company" as defined in the Investment Company Act
of 1940, as amended.
8. Assuming the validity of such actions under the laws of the State of
Israel, the Company has validly appointed the U.S. Subsidiary as its authorized
agent for service of process pursuant to the Underwriting Agreement under the
laws of the State of New York, and service of process effected on such agent in
the manner set forth in Section 14 of the Underwriting Agreement will be
effective under the laws of the State of New York to confer valid personal
jurisdiction over the Company.
9. The Registration Statement was declared effective by the Commission
under the Securities Act as of [ ] p.m., Washington, D.C. time, on November [ ]
2005 and the Prospectus was filed with the Commission pursuant to Rule
424(b)([1]) on November [ ], 2005. No stop order suspending the effectiveness of
the Registration Statement has been issued and, to our knowledge, no proceedings
for such purpose have been instituted or are pending or are contemplated or
threatened by the Commission.
10. To our knowledge, except as described in the Prospectus, there are no
contracts or agreements between the Company and any person granting such person
the right to require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned or to be
owned by such person.
In the course of preparation by the Company of the Registration Statement
and the Prospectus, we have participated in conferences with officers and other
representatives of the Company, with representatives of the independent auditors
of the Company, and with you and your counsel. We are not passing upon and do
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus (except to
the extent stated in paragraphs 4 and 5 above), and our judgments as to
materiality are, to the extent we deem appropriate, based in part upon the views
of appropriate officers and other representatives of the Company.
Based upon such participation in the preparation of the Registration
Statement and the Prospectus, but without independent check or verification, and
subject to the preceding paragraph and the subsequent and final paragraphs
hereof, (a) in our opinion, each of the Registration Statement at the time of
effectiveness and the Prospectus as of its date (except for the financial
statements and related notes and schedules and other
financial and statistical data included therein or omitted therefrom, as to
which we express no opinion) appears on its face to comply as to form in all
material respects with the requirements of the Securities Act and the Rules and
Regulations, as applicable, (b) we do not know of any legal proceeding to which
the Company is a party or to which it or its properties are subject which is
required to be described in the Registration Statement which is not described as
required, (c) nothing has come to our attention which causes us to believe that
(i) as of its effective date, the Registration Statement (other than the
financial statements and related notes and schedules and other financial and
statistical data included therein or omitted therefrom, as to which we express
no belief) contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and (ii) as of its date and the date hereof,
the Prospectus (other than the financial statements and related notes and
schedules and other financial and statistical data included therein or omitted
therefrom, as to which we express no belief) contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
The phrase "to our knowledge" or words of similar import, means actual
knowledge without independent investigation except as otherwise stated.
We do not express or purport to express any opinions with respect to laws
other than the laws of the State of New York, the General Corporation Law of the
State of Delaware and the Federal securities laws of the United States. This
opinion is given solely for your use in connection with the Underwriting
Agreement and may not be relied on by any other person or for any other purpose.
We do not undertake to advise you of any changes in our opinions expressed
herein resulting from matters that may hereafter arise or that hereafter may be
brought to our attention.
Very truly yours,
