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EXHIBIT 1.1
BACKWEB TECHNOLOGIES LTD.
ORDINARY SHARES
----------------------
UNDERWRITING AGREEMENT
__________ __, 1999
Xxxxxxx, Xxxxx & Co.,
BancBoston Xxxxxxxxx Xxxxxxxx Inc.
Xxxxxx Brothers Inc.
Wit Capital Corporation
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Ladies and Gentlemen:
BackWeb Technologies Ltd., an Israeli corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of ................ ordinary shares (the "Ordinary Shares") (the "Firm Shares")
and, at the election of the Underwriters, up to ................ additional
Ordinary Shares (the "Optional Shares"). The Firm Shares and the Optional Shares
that the Underwriters elect to purchase pursuant to Section 2 hereof are herein
collectively called the "Shares".
1. The Company and BackWeb Technologies, Inc., a Delaware
corporation (the "U.S. Subsidiary") each, jointly and severally, represents and
warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form F-1 (File No. 333-....)
(the "Initial Registration Statement") in respect of the Shares has been
filed with the Securities and
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Exchange Commission (the "Commission"); the Initial Registration
Statement and any post-effective amendment thereto, each in the form
heretofore delivered to you, and, excluding exhibits thereto, to you for
each of the other Underwriters, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Act), which became effective upon filing, no
other document with respect to the Initial Registration Statement has
heretofore been filed with the Commission; and no stop order suspending
the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with
the Commission pursuant to Rule 424(a) of the rules and regulations of
the Commission under the Act is hereinafter called a "Preliminary
Prospectus"; the various parts of the Initial Registration Statement and
the Rule 462(b) Registration Statement, if any, including all exhibits
thereto and including the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b) under the
Act in accordance with Section 5(a) hereof and deemed by virtue of Rule
430A under the Act to be part of the Initial Registration Statement at
the time it was declared effective, each as amended at the time such
part of the Initial Registration Statement became effective or such part
of the Rule 462(b) Registration Statement, if any, became or hereafter
becomes effective, are hereinafter collectively called the "Registration
Statement"; and such final prospectus, in the form first filed pursuant
to Rule 424(b) under the Act, is hereinafter called the "Prospectus";
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did 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
light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter
through Xxxxxxx, Xxxxx & Co. expressly for use therein;
(c) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement
or the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
as to the Registration Statement and any amendment thereto and as of the
applicable filing date as to the Prospectus and any amendment or
supplement thereto, 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 not misleading; provided, however, that
this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
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furnished in writing to the Company by an Underwriter through Xxxxxxx,
Sachs & Co. expressly for use therein;
(d) Neither the Company nor any of its significant
subsidiaries (as defined in Rule 405 under the Act and as indicated on
Schedule II hereto) (the "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,
otherwise than as set forth or contemplated in the Prospectus; and,
since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any change
in the share capital or long-term debt of the Company or any of the
Subsidiaries or any material adverse change, or any development which
could reasonably be expected to result in a material adverse change, in
or affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company and the
Subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus; Schedule II attached hereto sets forth a
list of all subsidiaries of the Company;
(e) The Company and the Subsidiaries have good and marketable
title in fee simple to all real property owned by them 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 interfere with the use made and
proposed to be made of such property by the Company and the
Subsidiaries; and any real property and buildings held under lease by
the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not materially interfere with the use made and proposed
to be made of such property and buildings by the Company and the
Subsidiaries;
(f) The Company has been duly incorporated and is validly
existing as a corporation under the laws of the State of Israel, with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus; the U.S. Subsidiary has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware, with corporate power
and authority to own its properties and conduct its business as it is
currently being conducted;
(g) Each of the Company and the U.S. Subsidiary has been duly
qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of each other jurisdiction in which
it owns or leases properties or conducts any business so as to require
such qualification, except where the failure to so qualify would not,
individually or in the aggregate, have a material adverse effect on the
general affairs, management, or current of future financial position,
shareholders' equity, results of operations or business prospects of the
Company and the subsidiaries taken as a whole ("Material Adverse
Effect"); and each Subsidiary (excluding the U.S. Subsidiary) has been
duly incorporated and is validly existing as a corporation in good
standing
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under the laws of its jurisdiction of incorporation;
(h) 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 and are fully paid and
non-assessable and conform to the description of the Ordinary Shares
contained in the Prospectus; and all of the issued shares of capital
stock of each Subsidiary have been duly and validly authorized and
issued, are fully paid and non-assessable and are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims; the holders of outstanding shares of capital stock
of the Company are not entitled to preemptive or other rights to acquire
the Shares, except for such rights as have been waived, nor does any
such holder have rights to require registration of any securities of the
Company in connection with the registration of the Shares, except for
such rights as have been satisfied or waived; there are no outstanding
securities convertible into or exchangeable for, or warrants, rights or
options to purchase from the Company, or obligations of the Company to
issue, Ordinary Shares or any other class of share capital of the
Company, except as set forth in the Prospectus; and there are no
restrictions on subsequent transfers of the Shares under the laws of
State of Israel and of the United States, except as set forth in the
Prospectus;
(i) The Shares to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued and fully paid and non-assessable and will
conform to the description of the Ordinary Shares contained in the
Prospectus;
(j) All dividends and other distributions declared and payable
on the Shares may under the current laws and regulations of the State of
Israel be paid in Israeli currency that may be converted into foreign
currency that may be freely transferred out of the State of Israel, and,
except as described in the Prospectus, all such dividends and other
distributions will not be subject to withholding or other taxes under
the laws and regulations of the State of Israel and are otherwise free
and clear of any other tax, withholding or deduction in the State of
Israel and without the necessity of obtaining any Governmental
Authorization in the State of Israel;
(k) The issue and sale of the Shares to be sold by the Company
hereunder and the compliance by the Company and the U.S. Subsidiary with
the provisions of this Agreement and the consummation of the
transactions herein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute
a default under, any material indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any
of the Subsidiaries is a party or by which the Company or any of the
Subsidiaries is bound or to which any of the property or assets of the
Company or any of the Subsidiaries is subject, nor will such action
result in any violation of the provisions of the charter documents of
the Company or the U.S. Subsidiary or any statute or any order, rule or
regulation of any court or governmental agency or body or any stock
exchange authority (hereinafter referred to as a "Governmental Agency")
having jurisdiction over the
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Company or any of the Subsidiaries or any of their properties; and no
consent, approval, authorization, order, registration, clearance or
qualification of or with any such Governmental Agency (hereinafter
referred to as "Governmental Authorizations") is required for the issue
and sale of the Shares or the consummation by the Company of the
transactions contemplated by this Agreement, except (A) the registration
under the Act of the Shares, (B) such Governmental Authorizations as
have been duly obtained and are in full force and effect and copies of
which have been furnished to you (C) the approval by the National
Association of Securities Dealers, Inc. ("NASD") of the terms of the
sale of the Shares and (D) such Governmental Authorizations as may be
required under state securities or Blue Sky laws;
(l) Neither the Company nor any of the Subsidiaries is in
violation of its charter documents or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any material indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party
or by which it or any of its properties may be bound;
(m) No stamp or other issuance or transfer taxes or duties
and, assuming that the Underwriters are not otherwise subject to
taxation in Israel, no capital gains, income, withholding or other taxes
are payable by or on behalf of the Underwriters to the State of Israel
or any political subdivision or taxing authority thereof or therein in
connection with the sale and delivery by the Company of the Shares to or
for the respective accounts of the Underwriters;
(n) The statements set forth in the Prospectus under the
caption "Description of Share Capital", insofar as they purport to
constitute a summary of the terms of the Ordinary Shares and under the
captions "Risk Factors -- We are incorporated in Israel and have
important facilities and resources located in Israel", "-- We rely upon
tax benefits and other funding from the State of Israel" and "-- Israeli
courts might not enforce judgments rendered outside of Israel" and
"United States Federal Income Tax Consideration", "Israeli Taxation and
Investment Programs", "Conditions in Israel" and "Underwriting", insofar
as they purport to describe the provisions of the laws and documents
referred to therein, are accurate summaries of and descriptions of such
terms and provisions in all material respects;
(o) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any of
the Subsidiaries is a party or of which any property of the Company or
any of the Subsidiaries is the subject which, if determined adversely to
the Company or any of the Subsidiaries, would individually or in the
aggregate have a Material Adverse Effect; and, to the Company's and the
U.S. Subsidiary's knowledge, no such proceedings are threatened or
contemplated by any Governmental Agency or threatened by others;
(p) The Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company", as
such term is defined in the Investment
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Company Act of 1940, as amended (the "Investment Company Act");
(q) The Company is not, as of the Time of Purchase, a Passive
Foreign Investment Company ("PFIC") within the meaning of Section 1296
of the United States Internal Revenue Code of 1986, as amended, and, to
the Company's knowledge, is not likely to become a PFIC;
(r) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida Statutes;
(s) Ernst & Young LLP, who have certified certain financial
statements of the Company and the Subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(t) The Company has reviewed its operations and that of the
Subsidiaries and any third parties with which the Company or any of the
Subsidiaries has a material relationship to evaluate the extent to which
the business or operations of the Company or any of the Subsidiaries
will be affected by the Year 2000 Problem. As a result of such review,
the Company represents and warrants that the disclosure in the
Registration Statement relating to the Year 2000 Problem is accurate and
complies in all material respects with the rules and regulations of the
Act. The "Year 2000 Problem" as used herein means the Year 2000 issues
described in or contemplated by the Commission's Interpretation:
Disclosure of Year 2000 Issues and Consequences by Public Companies,
Investment Advisers, Investment Companies, and Municipal Securities
Issuers (Release No. 33-7558);
(u) The Company is in material compliance with all terms and
conditions of the laws and regulations regarding all "Approved
Enterprise" designations under the Law for Encouragement of Capital
Investments, 1959, of the State of Israel, as amended (the "Investment
Act");
(v) The Company qualifies as an "Industrial Company" within
the definition of the Law for the Encouragement of Industry (Taxes),
1969, of the State of Israel (the "Industry Act");
(w) The Company and the Subsidiaries have sufficient interest
in all licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service
marks and trade names, and all patents and patent rights ("Intellectual
Property") necessary to carry on its respective business as described in
the Prospectus, and, except as set forth in the Prospectus, neither the
Company nor any Subsidiary has received any written or to the Company's
knowledge, oral correspondence relating to any Intellectual Property of
the Company or notice of infringement of or conflict with asserted
rights of others with respect to any Intellectual
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Property of the Company which the Company or the U.S. Subsidiary
believes would, singly or in the aggregate, have a Material Adverse
Effect;
(x) No material labor dispute with the employees of the
Company or any Subsidiary exists, or, to the knowledge of the Company or
the U.S. Subsidiary, is imminent; and neither the Company nor the U.S.
Subsidiary is aware of any existing, threatened or imminent labor
disturbance by the employees of any of its principal suppliers,
manufacturers or contractors that could reasonably be expected to result
in a Material Adverse Effect;
(y) The Company and the Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the business in which
they are engaged; and the Company and the Subsidiaries have no reason to
believe that they will not be able to renew their existing insurance
coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue their business at
a cost that would not have a Material Adverse Effect;
(z) Each of the Company and the Subsidiaries possesses all
certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
its respective business, except to the extent that the failure to
possess such certificates, authorizations and permits would not have a
Material Adverse Effect, and neither the Company nor any Subsidiary has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which,
individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in Material Adverse Effect;
and
(aa) Each of the Company and the Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
2. Subject to the terms and conditions herein set forth, (a) the
Company agrees to sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company at a purchase
price per Share of $.........., the number of Firm Shares (to be adjusted by you
so as to eliminate fractional shares) set forth opposite the name of such
Underwriter in Schedule I hereto and (b) in the event and to the extent that the
Underwriters shall exercise the election to purchase Optional Shares as provided
below, the Company agrees to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company at
the purchase price per Share set forth in clause (a) of this Section 2, that
portion of the number of Optional Shares as to which such election shall have
been exercised (to be adjusted by you so as to eliminate fractional
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shares) determined by multiplying such number of Optional Shares by a fraction
the numerator of which is the maximum number of Optional Shares which such
Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the maximum
number of Optional Shares that all of the Underwriters are entitled to purchase
hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to .......... Optional Shares, at the purchase price per Share
set forth in the paragraph above, for the sole purpose of covering
overallotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the Company,
given within a period of 30 calendar days after the date of this Agreement and
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by you but
in no event earlier than the First Time of Delivery (as defined in Section 4
hereof) or, unless you and the Company otherwise agree in writing, earlier than
two or later than ten business days after the date of such notice.
3. Upon the authorization by you 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.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in
such names as Xxxxxxx, Xxxxx & Co. may request upon at least forty-eight
hours' notice to the Company prior to Time of Delivery (as defined
below) (the "Notification Time"), shall be delivered by or on behalf of
the Company to Xxxxxxx, Sachs & Co., through the facilities of the
Depository Trust Company ("DTC") for the account of such Underwriter,
against payment by or on behalf of such Underwriter of the purchase
price therefor by wire transfer of immediately available funds to the
account specified by the Company to Xxxxxxx, Xxxxx & Co. at least
forty-eight hours in advance. The Company will cause the certificates
representing the Shares to be made available for checking and packaging
at least twenty-four hours prior to the Time of Delivery (as defined
below) with respect thereto at the office of DTC or its designated
custodian (the "Designated Office").
The time and date of such delivery and payment shall be, with
respect to the Firm Shares, 9:30 a.m., New York City time, on
............., 1999 or such other time and date as Xxxxxxx, Sachs & Co.
and the Company may agree upon in writing, and, with respect to the
Optional Shares, 9:30 a.m., New York City time, on the date specified by
Xxxxxxx, Xxxxx & Co. in the written notice given by Xxxxxxx, Sachs & Co.
of the Underwriters' election to purchase such Optional Shares, or such
other time and date as Xxxxxxx, Xxxxx & Co. and the Company may agree
upon in writing. Such time and date for delivery of the Firm Shares is
herein called the "First Time of Delivery", such time and date for
delivery of the Optional Shares, if not the First Time of Delivery, is
herein called the "Second Time of Delivery", and each such time and date
for delivery is herein called a "Time of Delivery".
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(b) The documents to be delivered at each Time of Delivery by
or on behalf of the parties hereto pursuant to Section 7 hereof,
including the cross-receipt for the Shares and any additional documents
requested by the Underwriters pursuant to Section 7 hereof, will be
delivered at the offices of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, 000 Xxxx
Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000 (the "Closing Location"), and the
Shares will be delivered as specified in Section (a) above, all at such
Time of Delivery. A meeting will be held at the Closing Location at
.......p.m., New York City time, on the New York Business Day next
preceding such Time of Delivery, at which meeting the final drafts of
the documents to be delivered pursuant to the preceding sentence will be
available for review by the parties hereto. For the purposes of this
Section 4, "New York Business Day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to
file such Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Act; to make no further amendment or any supplement to the
Registration Statement or Prospectus prior to the last Time of Delivery
which shall be disapproved by you promptly after reasonable notice
thereof; to advise you, promptly after it receives notice thereof, of
the time when any amendment to the Registration Statement has been filed
or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish you copies thereof; to advise
you, 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 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 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 prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the withdrawal
of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you 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 qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time to
time, to furnish the
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Underwriters with copies of the Prospectus in New York City in such
quantities as you may reasonably request, and, if the delivery of a
prospectus is required at any time prior to the expiration of nine
months after the time of issue of the Prospectus in connection with the
offering or sale of the Shares 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 during such period to amend or
supplement the Prospectus in order to comply with the Act, to notify you
and upon your request to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as you may
from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or
omission or effect such compliance, and in case any Underwriter is
required to deliver a prospectus in connection with sales of any of the
shares at any time nine months or more after the time of issue of the
Prospectus, upon your request but at the expense of such Underwriter, to
prepare and deliver to such Underwriter as many copies as you may
request of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon
as practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement (as defined in Rule
158(c) under the Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a) of
the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus, not to offer, sell, contract to sell or otherwise dispose
of, except as provided hereunder, any securities of the Company that are
substantially similar to the Shares, including but not limited to any
securities that are convertible into or exchangeable for, or that
represent the right to receive, Ordinary Shares or any such
substantially similar securities (other than pursuant to employee stock
option plans existing on, or upon the conversion or exchange of
convertible or exchangeable securities (including any warrants)
outstanding as of, the date of this Agreement), without the prior
written consent of Xxxxxxx Xxxxx & Co.;
(f) To furnish to its shareholders as soon as practicable
after the end of each fiscal year an annual report (in English)
(including a balance sheet and statements of income, shareholders'
equity and cash flows of the Company and its consolidated subsidiaries
certified by independent public accountants and prepared (i) in
conformity with generally accepted accounting principles in the State of
Israel ("Israel GAAP") which as of the date hereof is identical in all
material respects as applied to the company to generally accepted
accounting principles in the U.S. ("U.S. GAAP") or (ii) in conformity
with U.S. GAAP) and, as soon as practicable after the end of each of the
first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the
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effective date of the Registration Statement), to make available to its
shareholders consolidated summary financial information of the Company
and its subsidiaries for such quarter in reasonable detail and prepared
in accordance with Israel GAAP or U.S. GAAP;
(g) During a period of four years from the effective date of
the Registration Statement, upon your request to furnish to you copies
of all reports or other communications (financial or other) furnished to
shareholders, and to deliver to you (i) as soon as they are available,
copies of any reports and financial statements furnished to or filed
with the Commission or any securities exchange on which any class of
securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the
Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of
the Company and its subsidiaries are consolidated in reports furnished
to its shareholders generally or to the Commission);
(h) To use the net proceeds received by it from the sale of
the Shares pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds";
(i) To use its best efforts to list for quotation the Shares
on NASDAQ;
(j) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement, and the Company shall at the
time of filing either pay to the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act; and
(k) To file with the Commission such information on its
periodic reports filed pursuant to Section 13(a) and 15(d) of the
Exchange Act as may be required by Rule 463 under the Act.
6. The Company covenants and agrees and with the several
Underwriters that will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Selling Agreements (if
applicable), the Blue Sky Memorandum, closing documents (including compilations
thereof) and any other documents in connection with the offering, purchase, sale
and delivery of the Shares; (iii) all reasonable expenses in connection with the
qualification of the Shares for offering and sale under state securities laws as
provided in Section 5(b) hereof, including the fees and disbursements of counsel
for the Underwriters in connection with such qualification and in connection
with the Blue Sky surveys; (iv) all fees and expenses in connection with listing
the Shares and on the NASDAQ; (v) the filing fees incident
12
to, and the fees and disbursements of counsel for the Underwriters in connection
with, securing any required review by the NASD of the terms of the sale of the
Shares; (vi) the fees and expenses of the Authorized Agent (as defined in
Section 15 hereof); (vii) the cost of preparing stock certificates; (vii) the
cost and charges of any transfer agent or registrar; and (ix) all other costs
and expenses incident to the performance of its obligations hereunder which are
not otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section, and Sections 8 and 11 hereof,
the Underwriters will pay all of their own costs and expenses, including the
fees of their counsel, stock transfer taxes (other than any imposed by the State
of Israel or any political subdivision or taxing authority thereof or therein)
on resale of any of the Shares by them, and any advertising expenses connected
with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares
to be delivered at each Time of Delivery, shall be subject, in their discretion,
to the condition that all representations and warranties and other statements of
the Company herein are, at and as of such Time of Delivery, true and correct,
the condition that the Company shall have performed all of its and their
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 5(a) hereof; if the Company has elected to rely upon Rule
462(b), the Rule 462(b) Registration Statement shall have become
effective by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by
the Commission; and all requests for additional information on the part
of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Shearman & Sterling, counsel for the Underwriters, shall
have furnished to you their written opinion (a draft of such opinion is
attached as Annex II(a) hereto), dated such Time of Delivery, with
respect to the matters covered in paragraphs (i), (ii), (xiii) and the
penultimate paragraph in subclause (c) below and such other matters as
you may reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable them to
pass upon such matters;
(c) Wilson, Sonsini, Xxxxxxxx & Xxxxxx, P.C., counsel for the
Company, shall have furnished to you their written opinion (a draft of
such opinion is attached as Annex II(b) hereto), dated such Time of
Delivery, in form and substance satisfactory to you, to the effect that:
(i) This Agreement has been duly executed and delivered
by the U.S. Subsidiary;
(ii) The U.S. Subsidiary has been duly incorporated and
is validly existing as a corporation in good standing under the
laws of Delaware, with all
13
requisite corporate power and authority to own its properties and
conduct its business as described in the Prospectus;
(iii) The U.S. Subsidiary has been duly qualified as a
foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in which
it owns or leases properties or conducts any business so as to
require such qualification, except where the failure to so
register or qualify would not have a Material Adverse Effect
(such counsel being entitled to rely in respect of the opinion in
this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company,
provided that such counsel shall state that they believe that
both you and they are justified in relying upon such opinions and
certificates);
(iv) All of the issued shares of capital stock of the
U.S. Subsidiary have been duly and validly authorized and issued,
are fully paid and non-assessable, and are owned directly or
indirectly by the Company, to such counsel's knowledge free and
clear of all liens, encumbrances, equities or claims (such
counsel being entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect of matters
of fact upon certificates of officers of the Company or its
subsidiaries, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such
opinions and certificates);
(v) To such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental
proceedings pending or threatened to which the U.S. Subsidiary is
a party or of which any property of the U.S. Subsidiary is the
subject which are of a character required to be disclosed in the
Registration Statement and which are not adequately disclosed in
the Prospectus;
(vi) The issue and sale of the Shares and the compliance
by the Company and the U.S. Subsidiary with the provisions of
this Agreement and the consummation of the transactions herein
and therein contemplated will not 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 known to
such counsel to which the U.S. Subsidiary is a party or by which
the U.S. Subsidiary is bound or to which any of the property or
assets of the U.S. Subsidiary is subject and which is filed as an
exhibit to the Registration Statement, nor will such action
result in any violation of the provisions of the charter
documents of the U.S. Subsidiary or any statute or any order,
rule or regulation known to such counsel of any United States
Federal or California or Delaware Governmental Agency having
jurisdiction over the U.S. Subsidiary or any of its properties;
(vii) To the knowledge of such counsel, the U.S.
Subsidiary is not in violation of its charter documents or in
default in the performance or observance of any obligation,
agreement, covenant or condition contained in any indenture,
14
mortgage, deed of trust, loan agreement, lease or other agreement
or instrument to which it is a party or by which it or any of its
properties may be bound and which is filed as an Exhibit to the
Registration Statement;
(viii) All of the Ordinary Shares (including the Shares)
have been duly approved for inclusion on NASDAQ, subject to the
consummation of the transactions contemplated by this Agreement
and to official notice of issuance;
(ix) No Governmental Authorization of the United States
or the States of California or Delaware is required for the
execution and delivery of this Agreement or the consummation by
the Company of the transactions contemplated by this Agreement,
except the registration under the Act of the Shares or filings
and other actions required pursuant to the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereof,
the approval by the NASD of the terms of the sale of the Shares,
and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue
Sky laws in connection with the purchase and distribution of the
Shares by the Underwriters;
(x) The statements set forth in the Prospectus under
the caption "United States Federal Income Tax Considerations",
insofar as they purport to describe the provisions of United
States Federal income tax laws referred to therein, are accurate
summaries and descriptions of such terms and provisions in all
material respects, subject to the limitations set forth therein;
(xi) The Company is not an "investment company", as such
term is defined in the Investment Company Act; and
(xii) The Registration Statement and the Prospectus and
any further amendments and supplements thereto made by the
Company prior to such Time of Delivery (other than the financial
statements and notes thereto and related schedules and the other
financial and accounting data included therein or omitted
therefrom, as to which such counsel need express no opinion) as
of their respective effective and issue dates complied as to form
in all material respects with the requirements of the Act and the
rules and regulations thereunder.
Although they have not independently verified or
confirmed 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 limited
extent set forth to in the opinion in subsection (xi) of this
Section 7(c), nothing has come to their attention that has caused
them to believe that, as of its effective date or such Time of
Delivery, the Registration Statement or any further amendment
thereto made by the Company prior to such Time of Delivery (other
than the financial statements and notes thereto and related
schedules and the other financial and accounting data included
therein or omitted therefrom, as to which such counsel need
express no opinion) contained an untrue statement of a material
fact or omitted to state a material fact required
15
to be stated therein or necessary to make the statements therein
not misleading, or that, as of its date or such Time of Delivery,
the Prospectus or any further amendment or supplement thereto
made by the Company prior to such Time of Delivery (other than
the financial statements and notes thereto and related schedules
and the other financial and accounting data included therein or
omitted therefrom, as to which such counsel need express no
opinion) 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 they
do not know of any amendment to the Registration Statement
required to be filed or of any contracts or other documents of a
character required to be filed as an exhibit to the Registration
Statement or required to be described in the Registration
Statement or the Prospectus which are not filed or described as
required.
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the
States of California and Delaware and the federal laws of the United
States.
(d) Meitar, Liquornik, Geva & Co., Israeli counsel for the
Underwriters, shall have furnished to you their written opinion (a draft
of such opinion is attached as Annex II(c) hereto), dated such Time of
Delivery, with respect to the matters covered in paragraphs (i), (ii)
(with respect to the Shares), (iii), (vi), (viii), (x), (xi), (xii),
(xiii), and (xvi) of subclause (e) below and such other matters as you
may reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass
upon such matters;
(e) Naschitz, Xxxxxxx & Co., Israeli counsel for the Company,
shall have furnished to you their written opinion (a draft of such
opinion is attached as Annex II(d) hereto), dated such Time of Delivery,
in form and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation under the laws of the State of
Israel, with power and authority (corporate and other) to own its
properties and conduct its business as described in the
Prospectus;
(ii) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued share capital of
the Company (including the Shares being delivered at such Time of
Delivery) have been duly and validly authorized and issued and
are fully paid and non-assessable; under the Company's Memorandum
of Association and Articles of Association, under the laws of the
State of Israel and under agreements known to such counsel, the
holders of the outstanding share capital of the Company are not
entitled to preemptive or other rights to acquire the Shares to
be purchased from the Company under this Agreement which have not
been complied with or waived; the Shares are freely transferable
by the Company to or for the account of the several Underwriters
in the manner contemplated herein and, except as set forth
16
in the Prospectus, there are no restrictions on subsequent
transfers of Shares; and the Shares conform to the description of
the Ordinary Shares contained in the Prospectus;
(iii) All Governmental Authorizations of and with any
Governmental Agency in the State of Israel required for the
Shares to be duly and validly authorized and issued have been
obtained or made and are in full force and effect;
(iv) The Company has good and marketable title in fee
simple to all real property in Israel owned by it, 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 interfere with the use made
and proposed to be made of such property by the Company; and any
real property and buildings in Israel held under lease by the
Company are held by it under valid, subsisting and enforceable
leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such
property and buildings by the Company;
(v) To the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any
Subsidiary is a party or of which any property of the Company or
any of the Subsidiaries is the subject which, if determined
adversely to the Company or any of the Subsidiaries, would
individually or in the aggregate have a material adverse effect
on the current or future consolidated financial position,
shareholders' equity or results of operations of the Company and
the Subsidiaries; and such counsel is not aware of any such
proceedings that are threatened or contemplated by any
Governmental Agency or threatened by others;
(vi) This Agreement has been duly authorized, executed
and delivered by the Company;
(vii) The issue and sale of the Shares being delivered at
such Time of Delivery to be sold by the Company and the
compliance by the Company with the provisions of this Agreement
and the consummation of the transactions herein contemplated will
not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any
material indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to such counsel to which the
Company is a party or by which the Company is bound or to which
any of the property or assets of the Company is subject, nor will
such action result in any violation of the provisions of the
charter documents of the Company or any statute or any order,
rule or regulation known to such counsel of any State of Israel
Governmental Agency having jurisdiction over the Company or any
of its properties;
(viii) No Governmental Authorization of or with any
Governmental
17
Agency in the State of Israel is required for the issue and sale
of the Shares by the Company or the consummation by the Company
of the transactions contemplated by this Agreement, except such
as have been duly obtained and are in full force and effect;
(ix) The statements in the Prospectus under "Description
of Share Capital", insofar as they purport to constitute a
summary of the terms of the Ordinary Shares and under the
captions "Risk Factors -- We are incorporated in Israel and have
important facilities and resources located in Israel", "-- We
rely upon tax benefits and other funding from the State of
Israel", "-- Israeli courts might not enforce judgments rendered
outside of Israel", and "Israeli Taxation and Investment
Programs", to the extent such statements relate to matters of law
or regulation or to the provisions of documents therein
described, are accurate summaries of such matters in all material
respects;
(x) No stamp or other issuance or transfer taxes or
duties and no capital gains, income, withholding or other taxes
are payable by or on behalf of the Underwriters to the State of
Israel or to any political subdivision or taxing authority
thereof or therein in connection with the sale and delivery by
the Company of the Shares to or for the respective accounts of
the Underwriters in the manner contemplated herein;
(xi) Insofar as matters of Israeli law are concerned,
the Registration Statement and the filing of the Registration
Statement with the Commission have been duly authorized by and on
behalf of the Company; and the Registration Statement has been
duly executed pursuant to such authorization by and on behalf of
the Company;
(xii) The Company's agreement to the choice of law
provisions set forth in Section 17 hereof will be recognized by
the courts of the State of Israel; the Company can xxx and be
sued in its own name under the laws of the State of Israel; the
irrevocable submission of the Company to the exclusive
jurisdiction of a New York Court, the waiver by the Company of
any objection to the venue of a proceeding of a New York Court
and the agreement of the Company that this Agreement shall be
governed by and construed in accordance with the laws of the
State of New York are legal, valid and binding; and service of
process effected in the manner set forth in Section 14 hereof
will be effective, insofar as the law of the State of Israel is
concerned, to confer valid personal jurisdiction over the
Company. Subject to certain time limitations, an Israeli court
may declare a judgment obtained in a New York Court arising out
of or in relation to the obligations of the Company under this
Agreement enforceable against the Company if it finds that (a)
the judgment was rendered by a court which was, according to the
laws of the state of the court, competent to render the judgment;
(b) the judgment is no longer appealable; (c) the obligation
imposed by the judgment is enforceable according to the rules
relating to the enforceability of judgments in Israel and the
substance of the judgment is not contrary to public
18
policy; and (d) the judgment is executory in the state in which
it was given. Even if the above conditions are satisfied, an
Israeli court will not enforce a foreign judgment such as the
above 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 such as the above
enforceable if (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 manner 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 manner
and between the same parties was pending before a court or
tribunal in Israel;
(xiii) All dividends and other distributions declared and
payable on the Shares may under the current laws and regulations
of the State of Israel be paid in New Israeli Shekels that may be
converted into foreign currency that may be freely transferred
out of the State of Israel, and, except as set forth in the
Prospectus, all such dividends and other distributions will not
be subject to withholding or other taxes under the laws and
regulations of the State of Israel and are otherwise free and
clear of any other tax, withholding or deduction in the State of
Israel and without the necessity of obtaining any Governmental
Authorization in the State of Israel;
(xiv) The Company is not in violation of its charter
documents or, to such counsel's knowledge, in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed
of trust, loan agreement, lease or other agreement or instrument
to which it is a party or by which it or any of its properties
may be bound;
(xv) To the best of such counsel's knowledge, (a) the
Company has all licenses and concessions of and from all
Governmental Agencies that are necessary to own or lease its
properties and conduct its businesses as described in the
Prospectus; and (b) the Company has all franchises, permits,
authorizations, approvals and orders and other licenses and
concessions of and from all Governmental Agencies that are
necessary to own or lease its other properties and conduct its
businesses as described in the Prospectus except for such
licenses, franchises, permits, authorizations, approvals and
orders the failure to obtain which will not have a material
adverse effect on the financial condition or results of
operations of the Company and the Subsidiaries; and
(xvi) Although they do not assume any responsibility for
the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, except
for those referred to in the opinion in subsection (x) of this
Section 7(d), they have no reason to believe that, as of its
effective date, the Registration Statement or any further
amendment thereto made by the Company prior to such Time of
Delivery (other than the financial
19
statements and related schedules therein, as to which such
counsel need express no opinion) 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 or that, as of its date, the Prospectus or any further
amendment or supplement thereto made by the Company prior to such
Time of Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading or that, as of such Time of Delivery, either
the Registration Statement or the Prospectus or any further
amendment or supplement thereto made by the Company prior to such
Time of Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no
opinion) contains an untrue statement of a material fact or omits
to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.
In giving such opinion, such counsel may state that with respect
to all matters of United States law they have relied upon the opinions
of United States counsel for the Company delivered pursuant to paragraph
(c) of this Section 7.
(f) On the date of the Prospectus of a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the
effective date of any post-effective amendment to the Registration
Statement filed subsequent to the date of this Agreement and also at
each Time of Delivery, Ernst & Young LLP shall have furnished to you a
letter or letters, dated the respective dates of delivery thereof, in
form and substance satisfactory to you, to the effect set forth in Annex
I hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex I(a) hereto and a draft
of the form of letter to be delivered on the effective date of any
post-effective amendment to the Registration Statement and as of each
Time of Delivery is attached as Annex I(b) hereto);
(g) (i) Neither the Company nor any of the Subsidiaries shall
have sustained since the date of the latest audited financial statements
included 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, otherwise than as set forth or contemplated in the
Prospectus, and (ii) since the respective dates as of which information
is given in the Prospectus there shall not have been any change in the
share capital or long-term debt of the Company or any of the
Subsidiaries or any change, or any development which could reasonably be
expected to result in a prospective change, in or affecting the general
affairs, management, financial position, shareholders' equity or results
of operations of the Company and the Subsidiaries, otherwise than as set
forth or contemplated in the Prospectus, 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 at such Time of Delivery on the terms and in the
manner contemplated in the
20
Prospectus;
(h) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act,
and (ii) no such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities;
(i) On or after the date hereof there shall not have occurred
any of the following: (i) a suspension or material limitation in trading
in securities generally on the New York Stock Exchange, on NASDAQ or the
Tel Aviv Stock Exchange; (ii) a suspension or material limitation in
trading in the Company's securities on NASDAQ; (iii) a general
moratorium on commercial banking activities in New York or the State of
Israel declared by the relevant authorities; (iv) a change or
development involving a prospective change in Israeli taxation affecting
the Company, the Shares or the transfer thereof or the imposition of
exchange controls by the United States or the State of Israel, if the
effect of any such change or development specified in this clause (iv)
in the judgment of the representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Shares being delivered at such Time of Delivery on the terms and in the
manner contemplated in the Prospectus; or (v) the outbreak or escalation
of hostilities involving the United States, the United Kingdom or the
State of Israel or the declaration by the United States, the United
Kingdom or the State of Israel of a national emergency or war, if the
effect of any such event specified in this clause (v) in the judgment of
the representatives makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares being delivered
at such Time of Delivery on the terms and in the manner contemplated in
the Prospectus or (vi) the occurrence of any material adverse change in
the existing financial, political or economic conditions in the United
States and the State of Israel or elsewhere which, in the judgment of
the representatives would materially and adversely affect the financial
markets or the market for the Shares and other equity securities;
(j) The Shares to be sold by the Company at such Time of
Delivery shall have been duly approved, subject to notice of issuance,
for quotation on NASDAQ;
(k) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on
the New York Business Day next succeeding the date of this Agreement;
(l) The Company shall have furnished or caused to be furnished
to you at such Time of Delivery certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery, as
to the performance by the Company of all of their respective obligations
hereunder to be performed at or prior to such Time of Delivery, and as
to such other matters as you may reasonably request, and the Company
shall have furnished or caused to be furnished certificates as to the
matters set forth in subsections
21
(a) and (f) of this Section, and as to such other matters as you may
reasonably request; and
(m) You shall have received the lock-up agreements in the form
attached hereto as Annex III from all directors and executive officers
of the Company and all Stockholders holding more than [__]% of the
Company's share capital.
8. (a) The Company and the U.S. Subsidiary will, jointly and
severally, indemnify and hold harmless each Underwriter against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company and the U.S. Subsidiary
shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the
Company and the U.S. Subsidiary against any losses, claims, damages or
liabilities to which the Company or the U.S. Subsidiary may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through
Xxxxxxx, Sachs & Co. expressly for use therein; and will reimburse the
Company and the U.S. Subsidiary for any legal or other expenses
reasonably incurred by the Company or the U.S. Subsidiary in connection
with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party under such
22
subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not
relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be
brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after
notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any
legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified
party, effect the settlement or compromise of, or consent to the entry
of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability arising out of such action or claim
and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified
party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from
the offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if
the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion
as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the U.S. Subsidiary on the one
hand and the Underwriters on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the U.S. Subsidiary on the one hand and the Underwriters on
the other shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Shares purchased under this Agreement
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters with
respect to the Shares purchased under this Agreement, in each case as
set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact
23
relates to information supplied by the Company on the one hand or the
Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission. The Company, the U.S. Subsidiary and the
Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were 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
account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this subsection
(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 were offered to the public exceeds
the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such 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 Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this
subsection (d) to contribute are several in proportion to their
respective underwriting obligations and not joint.
(e) The obligations of the Company and the U.S. Subsidiary
under this Section 8 shall be in addition to any liability which the
Company or the U.S. Subsidiary may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of the
Company or the U.S. Subsidiary (including any person who, with his or
her consent, is named in the Registration Statement as about to become a
director of the Company) and to each person, if any, who controls the
Company or the U.S. Subsidiary within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Shares which it has agreed to purchase hereunder at a Time
of Delivery, you may in your discretion arrange for you or another party
or other parties to purchase such Shares on the terms contained herein.
If within thirty-six hours after such default by any Underwriter you do
not arrange for the purchase of such Shares, then the Company shall be
entitled to a further period of thirty-six hours within which to procure
another party or other parties satisfactory to you to purchase such
Shares on such terms. In the event that, within the respective
prescribed periods, you notify the Company that you have so arranged for
the purchase of such Shares, or the Company notify you that they have so
arranged for the purchase of such Shares, you or the Company shall have
the right to postpone such Time of Delivery for a period of not more
than seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus, or in any
other documents or arrangements, and the Company agrees to file promptly
any amendments to the Registration Statement or the
24
Prospectus which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by
you and the Company as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed
one-eleventh of the aggregate number of all of the Shares to be
purchased at such Time of Delivery, then the Company shall have the
right to require each non-defaulting Underwriter to purchase the number
of Shares which such Underwriter agreed to purchase hereunder at such
Time of Delivery and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of
Shares which such Underwriter agreed to purchase hereunder) of the
Shares of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by
you and the Company as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased exceeds one- eleventh of
the aggregate number of all of the Shares to be purchased at such Time
of Delivery, or if the Company shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase
Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to the Second Time of Delivery, the obligations of the
Underwriters to purchase and of the Company to sell the Optional Shares)
shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company, except for the expenses to be
borne by the Company and the Underwriters as provided in Section 6
hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the U.S. Subsidiary and the
several Underwriters, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or any controlling person of
any Underwriter, or the Company or the U.S. Subsidiary, or any officer or
director or controlling person of the Company or the U.S. Subsidiary, or any
controlling person, and shall survive delivery of and payment for the Shares.
Anything herein to the contrary notwithstanding, the indemnity agreement
of the Company and the U.S. Subsidiary in subsection (a) of Section 8 hereof,
the representations and warranties in subsections (b) and (c) of Section 1
hereof and any representation or warranty as to the accuracy of the Registration
Statement or the Prospectus contained in any certificate furnished by the
Company pursuant to Section 7 hereof, insofar as they may constitute a basis for
indemnification for liabilities (other than payment by the Company of
25
expenses incurred or paid in the successful defense of any action, suit or
proceeding) arising under the Act, shall not extend to the extent of any
interest therein of a controlling person or partner of an Underwriter who is a
director, officer or controlling person of the Company when the Registration
Statement has become effective, except in each case to the extent that an
interest of such character shall have been determined by a court of appropriate
jurisdiction as not against public policy as expressed in the Act. Unless in the
opinion of counsel for the Company the matter has been settled by controlling
precedent, the Company will, if a claim for such indemnification is asserted,
submit to a court of appropriate jurisdiction the question of whether such
interest is against public policy as expressed in the Act and will be governed
by the final adjudication of such issue.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, the Company and the U.S. Subsidiary shall not then be under any
liability to any Underwriter except as provided in Sections 6 and 8 hereof; but,
if for any other reason any Shares are not delivered by or on behalf of the
Company as provided herein, the Company will reimburse the Underwriters through
you for all out-of-pocket expenses approved in writing by you, including fees
and disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Shares not so delivered,
but the Company and the U.S. Subsidiary shall then be under no further liability
to any Underwriter in respect of the Shares not so delivered except as provided
in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Xxxxxxx, Sachs &
Co., 00 Xxx Xxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; and 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: Chief Financial Officer; provided, however,
that any notice to an Underwriter pursuant to Section 8 (c) hereof shall be
delivered or sent by mail, telex or facsimile transmission to such Underwriter
at its address set forth in its Underwriters' Questionnaire or telex
constituting such Questionnaire, which address will be supplied to the Company
by you upon request. Any such statements, requests, notices or agreements shall
take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company, the U.S. Subsidiary and, to the
extent provided in Sections 8 and 10 hereof, the officers and directors of the
Company and each person who controls the Company, the U.S. Subsidiary or any
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Shares from any Underwriter
shall be deemed a successor or assign by reason merely of such purchase.
14. Each of the parties hereto irrevocably (i) agrees that any legal
suit, action or
26
proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby may be instituted in any Federal or State Court in the City
of New York, (ii) waives, to the fullest extent it may effectively do so, any
objection which it may now or hereafter have to the laying of venue of any such
proceeding and (iii) submits to the exclusive jurisdiction of such courts in any
such suit, action or proceeding. The Company hereby designates and appoints the
U.S. Subsidiary, as its authorized agent (the "Authorized Agent") upon whom
process may be served in any such action arising out of or based on this
Agreement or the transactions contemplated hereby which may be instituted in any
New York Court by any Underwriter or by any person who controls any Underwriter,
expressly consents to the jurisdiction of any such court in respect of any such
action, and waives any other requirements of or objections to personal
jurisdiction with respect thereto. Such appointment shall be irrevocable unless
and until a successor authorized agent acceptable to the Underwriters in their
sole and absolute discretion shall have been appointed by the Company.. The
Company represents and warrants that the Authorized Agent has agreed to act as
such agent for service at process and agrees to take any and all action,
including the filing of any and all documents and instruments, that may be
necessary to continue such appointment in full force and effect as aforesaid.
Service of process upon the Authorized Agent and written notice of such service
to the Company shall be deemed, in every respect, effective service of process
upon the Company.
15. In respect of any judgment or order given or made for any amount
due hereunder that is expressed and paid in a currency (the "judgment currency")
other than United States dollars, the Company, as the case may be, will
indemnify each Underwriter against any loss incurred by such Underwriter as a
result of any variation as between (i) the rate of exchange at which the United
States dollar amount is converted into the judgment currency for the purpose of
such judgment or order and (ii) the rate of exchange at which such Underwriter
on the date such judgment currency is actually received by the Underwriter is
able to purchase United States dollars with the amount of the judgment currency
so received by such Underwriter. The foregoing indemnity shall constitute a
separate and independent obligation of the Company and shall continue in full
force and effect notwithstanding any such judgment or order as aforesaid. The
term "rate of exchange" shall include any premiums and costs of exchange payable
in connection with the purchase of or conversion into United States dollars.
16. Time shall be of the essence of this Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
17. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
18. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
27
If the foregoing is in accordance with your understanding, please sign
and return to us [__] counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters, the
Company and the U.S. Subsidiary. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Company for examination upon request, but without warranty on
your part as to the authority of the signers thereof.
Very truly yours,
BackWeb Technologies Ltd.
By:
Name:
Title:
BackWeb Technologies, Inc.
By:
Name:
Title:
Accepted as of the date hereof at
........, ...............:
Xxxxxxx, Xxxxx & Co.
BancBoston Xxxxxxxxx Xxxxxxxx Inc.
Xxxxxx Brothers Inc.
Wit Capital Corporation
By:
(Xxxxxxx, Sachs & Co.)
28
SCHEDULE I
Number of Optional
Shares to be
Total Number of Purchased if
Firm Shares to be Maximum Option
Underwriter Purchased Exercised
-----------
Xxxxxxx, Xxxxx & Co.
BancBoston Xxxxxxxxx Xxxxxxxx Inc.
Xxxxxx Brothers Inc.
Wit Capital Corporation
Total
