EXHIBIT 1.1
EXECUTION COPY
NICE-SYSTEMS LTD.
American Depositary Shares
UNDERWRITING AGREEMENT
December 8, 2005
X.X. XXXXXX SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
UNDERWRITING AGREEMENT
December 8, 2005
X.X. XXXXXX SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
As Representatives of the several Underwriters
c/o X.X. XXXXXX SECURITIES INC.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
NICE-Systems Ltd., a company organized under the laws of the State of
Israel (the "COMPANY"), proposes to issue and sell to the several underwriters
named in Schedule A (the "UNDERWRITERS") an aggregate of 4,000,000 American
Depositary Shares (the "FIRM ADSs"), each representing one ordinary share, par
value NIS1.00 per share (the "ORDINARY SHARES") of the Company. In addition, the
Company has granted to the Underwriters an option to purchase up to an
additional 600,000 ADSs, each representing one Ordinary Share, as provided in
Section 2 (the "OPTION ADSS" and the "OPTION SHARES", respectively). The Firm
ADSs and, if and to the extent such option is exercised, the Option ADSs are
collectively called the "ADSS". X.X. Xxxxxx Securities Inc. ("JPMSI") and Banc
of America Securities LLC ("BAS") have agreed to act as representatives of the
several Underwriters (in such capacity, the "REPRESENTATIVES") in connection
with the offering and sale of the ADSs.
The ADSs will be evidenced by American Depositary Receipts ("ADRS") to be
issued pursuant to the Deposit Agreement, dated as of January 24, 1996, as
amended and restated as of July 22, 1997, among The Bank of New York, as
depositary (the "DEPOSITARY"), and all holders and beneficial owners from time
to time of the ADSs (the "DEPOSIT AGREEMENT").
The Company hereby confirms its agreement with the Underwriters as follows:
SECTION 1. Representations and Warranties of the Company.
A. The Company hereby represents, warrants and covenants to each
Underwriter as of the date hereof (unless otherwise specified herein) as
follows:
(a) The Company has prepared and filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement on Form F-3 (File No.
333-127883), which contains a form of prospectus relating to certain American
Depositary Shares, senior and subordinated debt securities, purchase contracts,
units and warrants (the "SHELF SECURITIES") to be sold from time to time by the
Company. Such registration statement, as amended, including the financial
statements, exhibits and schedules thereto, in the form in which it was declared
effective by the Commission under the Securities Act of 1933 and the rules and
regulations promulgated thereunder (collectively, the "SECURITIES ACT"),
including any required information deemed to be a part thereof at the time of
effectiveness pursuant to Rule 430A or Rule 434 under the Securities
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Act or the Securities Exchange Act of 1934 and the rules and regulations
promulgated thereunder (collectively, the "EXCHANGE ACT"), is called the
"REGISTRATION STATEMENT" and the prospectus included therein relating to the
Shelf Securities, in the form first used to confirm sales of the ADSs, is
hereinafter referred to as the "BASE PROSPECTUS." Any registration statement
filed by the Company pursuant to Rule 462(b) under the Securities Act is called
the "RULE 462(B) REGISTRATION STATEMENT", and from and after the date and time
of filing of the Rule 462(b) Registration Statement the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. The preliminary
prospectus supplement, dated November 21, 2005, relating to the ADSs, including
the Base Prospectus, is hereinafter called the "PRELIMINARY PROSPECTUS." The
term "PROSPECTUS" shall mean the final prospectus supplement relating to the
ADSs, including the Base Prospectus, that is first filed pursuant to Rule 424(b)
after the date and time that this Agreement is executed and delivered by the
parties hereto (the "EXECUTION TIME"). Any reference herein to the Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 6 of Form F-3 under
the Securities Act, as of the date of the Preliminary Prospectus or Prospectus,
as the case may be; any reference to any amendment or supplement to Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any
documents filed after the date of the Preliminary Prospectus or Prospectus, as
the case may be, under the Exchange Act, and incorporated by reference in the
Preliminary Prospectus or Prospectus, as the case may be; and any reference to
any amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Section 13(a) or
15(d) of the Exchange Act after the effective date of the Registration Statement
that is incorporated by reference in the Registration Statement. All references
in this Agreement to the Registration Statement, the Rule 462(b) Registration
Statement, the Preliminary Prospectus, the Prospectus, or any amendments or
supplements to any of the foregoing, shall include any copy thereof filed with
the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
System ("XXXXX").
(b) Compliance with Registration Requirements. The Registration Statement
has been declared effective by the Commission under the Securities Act. The
Commission has not requested any additional or supplemental information which
has not been provided to the Commission. No stop order suspending the
effectiveness of the Registration Statement is in effect and no proceedings for
such purpose have been instituted or are pending or, to the best knowledge of
the Company, are contemplated or threatened by the Commission.
Each of the Preliminary Prospectus and the Prospectus when filed complied
in all material respects with the Securities Act and the applicable rules
thereunder and, if filed by electronic transmission pursuant to XXXXX (except as
may be permitted by Regulation S-T under the Securities Act), was identical to
the copy thereof delivered to the Underwriters for use in connection with the
offer and sale of the ADSs. Each of the Registration Statement and any
post-effective amendment thereto, at the time it became effective and at the
date hereof, complied and will comply in all material respects with the
Securities Act and did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading. The
Prospectus, as amended or supplemented, as of its date, at the date hereof, at
the time of any filing pursuant to Rule 424(b), at the Closing Date (as defined
herein) and at any Subsequent Closing Date (as defined herein), did not and will
not contain any untrue statement of a material
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fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The representations and warranties set forth in the two immediately
preceding sentences do not apply to statements in or omissions from the
Registration Statement or any post-effective amendment thereto, or the
Prospectus, or any amendments or supplements thereto, made in reliance upon and
in conformity with information relating to any Underwriter furnished to the
Company in writing by the Representatives expressly for use therein, it being
understood and agreed that the only such information furnished by the
Representatives consists of the information described as such in Section 7
hereof. There is no contract or other document required to be described in the
Prospectus or to be filed as an exhibit to the Registration Statement which has
not been described, filed or incorporated by reference therein, as required.
(c) Documents Incorporated by Reference. The documents incorporated by
reference in the Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable.
(d) Disclosure Package. The term "DISCLOSURE PACKAGE" shall mean (i) the
Preliminary Prospectus, (ii) the issuer free writing prospectuses as defined in
Rule 433 of the Securities Act, if any, identified in Schedule B hereto (each,
an "ISSUER FREE WRITING PROSPECTUS"), (iii) any other free writing prospectus
that the parties hereto shall hereafter expressly agree in writing to treat as
part of the Disclosure Package and (iv) the information set forth in Schedule C
hereto. As of 7:00 p.m. (Eastern Time) on the date of this Agreement (the
"INITIAL SALE TIME"), the Disclosure Package did not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The preceding sentence does not apply to
statements in or omissions from the Disclosure Package based upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein, it being understood
and agreed that the only such information furnished by or on behalf of any
Underwriter consists of the information described as such in Section 7 hereof.
(e) Company Not Ineligible Issuer. (i) At the earliest time after the
filing of the Registration Statement relating to the ADSs at which the Company
or another offering participant made a bona fide offer (within the meaning of
Rule 164(h)(2)) of the Securities Act and (ii) as of the date of the execution
and delivery of this Agreement (with such date being used as the determination
date for purposes of this clause (ii)), the Company was not and is not an
Ineligible Issuer (as defined in Rule 405 of the Securities Act), without taking
account of any determination by the Commission pursuant to Rule 405 of the
Securities Act that it is not necessary that the Company be considered an
Ineligible Issuer.
(f) Issuer Free Writing Prospectuses. Each Issuer Free Writing Prospectus
does not include any information that conflicts with the information contained
in the Registration Statement, including any document incorporated by reference
therein that has not been superseded or modified. The foregoing sentence does
not apply to statements in or omissions from any Issuer Free Writing Prospectus
based upon and in conformity with written information furnished to the Company
by any Underwriter through the Representatives specifically for use
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therein, it being understood and agreed that the only such information furnished
by any Underwriter consists of the information described as such in Section 7
hereof.
(g) Accuracy of Statements in Prospectus. The statements in each of the
Disclosure Package and the Prospectus under the headings "UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES", "ISRAELI TAX CONSEQUENCES" and the risk factor
relating to inadequate intellectual property protections under the heading "RISK
FACTORS", insofar as such statements summarize legal matters, agreements,
documents or proceedings discussed therein, are accurate and fair summaries in
all material respects of such legal matters, agreements, documents or
proceedings.
(h) Distribution of Offering Material By the Company. The Company has not
distributed and will not distribute, prior to the later of the last Subsequent
Closing Date (as defined below) and the completion of the Underwriters'
distribution of the ADSs, any offering material in connection with the offering
and sale of the ADSs other than a Preliminary Prospectus, the Prospectus, or the
Registration Statement or, subject to the review and consent of the
Representatives, any press release meeting the requirements of Rule 134 or Rule
135 under the Securities Act, any Issuer Free Writing Prospectus or any other
free writing prospectus.
(i) The Agreements. Each of this Agreement and the Deposit Agreement has
been duly authorized, executed and delivered by, and is a valid and binding
agreement of, the Company, enforceable against the Company in accordance with
its terms except to the extent that (A) enforcement thereof may be limited by
(1) bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally and (2) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity) and (B) rights to indemnity and contribution may
be limited by United States federal or state or Israeli securities or other laws
or the policies underlying such laws.
(j) Authorization of the Shares. The unissued Ordinary Shares represented
by ADSs to be deposited by the Company with the Depositary or its designated
custodian have been duly and validly authorized. When the ADSs representing such
deposited Ordinary Shares have been issued and delivered against payment
therefor as provided herein, the Ordinary Shares, when so deposited and the
ADSs, when so issued and sold, will be duly and validly issued, fully paid and
non-assessable.
Upon payment for and delivery of the Ordinary Shares and ADSs pursuant to
this Agreement, the Underwriters, or other persons in whose names Ordinary
Shares or ADSs are registered (including the Depositary or its nominee) will
acquire good and valid title to such Ordinary Shares or ADSs, in each case free
and clear of all liens, encumbrances, equities, preemptive rights and other
claims. The ADSs and the Ordinary Shares represented by such ADSs will conform
in all material respects to the description thereof contained in the Prospectus.
No further approval or authority of the shareholders or the Board of Directors
of the Company will be required for the issuance and sale of the ADSs or the
issuance and deposit of the Ordinary Shares as contemplated herein and in the
Deposit Agreement.
Upon the due and valid issuance by the Depositary of ADRs evidencing ADSs
against deposit of Ordinary Shares in respect thereof and against payment
therefor in accordance with
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the provisions hereof and of the Deposit Agreement, the persons in whose names
the ADRs are registered will be entitled to the rights specified in the ADRs and
in the Deposit Agreement; and the Deposit Agreement conforms in all material
respects to the description thereof contained in the Prospectus.
(k) No Applicable Registration or Other Similar Rights. There are no
persons with registration or other similar rights to have any equity or debt
securities registered for sale under the Registration Statement or included in
the offering contemplated by this Agreement, except for such rights as have been
duly waived.
(l) No Material Adverse Change. Except as otherwise disclosed in the
Disclosure Package and the Prospectus, subsequent to the respective dates as of
which information is given in the Disclosure Package: (i) there has been no
material adverse change, or any development that could reasonably be expected to
result in a material adverse change, in the condition, financial or otherwise,
or in the earnings, business, properties, operations or prospects, whether or
not arising from transactions in the ordinary course of business, of the Company
and its subsidiaries, considered as one entity (any such change is called a
"MATERIAL ADVERSE CHANGE"); (ii) the Company and its subsidiaries, considered as
one entity, have not incurred any material liability or obligation, indirect,
direct or contingent, nor entered into any material transaction or agreement
(other than in the ordinary course of business); and (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Company or,
except for dividends paid to the Company or other subsidiaries, any of its
subsidiaries on any class of capital stock or repurchase or redemption by the
Company or any of its subsidiaries of any class of capital stock.
(m) Independent Accountants. Kost, Forer, Gabbay & Kasierer, a member of
Ernst & Young Global, and PricewaterhouseCoopers LLP, each of whom have
expressed their opinion with respect to certain financial statements (which term
as used in this Agreement includes the related notes thereto) of the Company and
its subsidiaries, are independent registered public accounting firms with
respect to the Company as required by the Securities Act and the Exchange Act
and the applicable published rules and regulations thereunder.
(n) Preparation of the Financial Statements. The financial statements filed
with the Commission as a part of or incorporated by reference in the
Registration Statement and included or incorporated by reference in the
Disclosure Package and the Prospectus present fairly in all material respects
the consolidated financial position of the Company and its subsidiaries as of
and at the dates indicated and the results of their operations and cash flows
for the periods specified. The supporting schedules included or incorporated by
reference in the Registration Statement present fairly in all material respects
the information required to be stated therein. Such financial statements comply
as to form in all material respects with the applicable accounting requirements
of the Securities Act and have been prepared in conformity with generally
accepted accounting principles as applied in the United States applied on a
consistent basis throughout the periods involved, except as may be expressly
stated in the related notes thereto. No other financial statements or supporting
schedules are required to be included or incorporated by reference in the
Registration Statement.
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(o) Incorporation and Good Standing of the Company and its Subsidiaries.
Each of the Company and its subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, where such concept is applicable and has
corporate power and authority to own or lease, as the case may be, and operate
its properties and to conduct its business as described in the Disclosure
Package and the Prospectus and, in the case of the Company, to enter into and
perform its obligations under this Agreement, except for such jurisdictions
where the failure to so qualify or to be in good standing would not,
individually or in the aggregate, result in a material adverse effect, on the
condition, financial or otherwise, or on the earnings, business, properties,
operations or prospects, whether or not arising from transactions in the
ordinary course of business, of the Company and its subsidiaries, considered as
one entity (a "MATERIAL ADVERSE EFFECT"). Each of the Company and each
subsidiary is duly qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except for such jurisdictions where the failure to so
qualify or to be in good standing would not have a Material Adverse Effect. No
proceeding has been instituted by the Registrar of Companies in Israel for the
dissolution of the Company or any of its Israeli subsidiaries. All of the issued
and outstanding shares of capital stock of each subsidiary have been duly
authorized and validly issued, are fully paid and nonassessable and are owned by
the Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or claim. The Company does not own
or control, directly or indirectly, any corporation, association or other entity
other than Nice Systems Singapore (PTE) Ltd., Nice Systems Australia PTY Limited
and the subsidiaries listed in Exhibit 8.1 to the Company's Annual Report on
Form 20-F for the fiscal year ended 2004.
(p) Capitalization and Other Capital Stock Matters. The authorized, issued
and outstanding capital stock of the Company is as set forth in each of the
Disclosure Package and the Prospectus under the caption "CAPITALIZATION" (other
than for subsequent issuances, if any, pursuant to employee benefit plans
described in the Disclosure Package and the Prospectus or upon exercise of
outstanding options described in the Disclosure Package and the Prospectus, as
the case may be). The Ordinary Shares to be issued hereunder (including the
Ordinary Shares which are represented by the Firm ADSs and Option ADSs) conform
in all material respects to the description thereof contained in each of the
Disclosure Package and the Prospectus. All of the issued and outstanding
Ordinary Shares have been duly authorized and validly issued, and are fully paid
and nonassessable. None of the outstanding Ordinary Shares were issued in
violation of any preemptive rights, rights of first refusal or other similar
rights to subscribe for or purchase securities of the Company. There are no
authorized or outstanding options, warrants, preemptive rights, rights of first
refusal or other rights to purchase, or equity or debt securities convertible
into or exchangeable or exercisable for, any capital stock of the Company or any
of its subsidiaries other than those described in the Disclosure Package and the
Prospectus. The description of the Company's stock option, stock bonus and other
stock plans or arrangements, and the options or other rights granted thereunder,
set forth or incorporated by reference in the Prospectus accurately and fairly
presents in all material respects the information required to be shown with
respect to such plans, arrangements, options and rights.
(q) NASDAQ Listing. The ADSs are approved for listing on the Nasdaq Stock
Market, Inc., subject only to official notice of issuance.
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(r) Non-Contravention of Existing Instruments; No Further Authorizations or
Approvals Required. Neither the Company nor any of its subsidiaries is (i) in
violation or in default (or, with the giving of notice or lapse of time, would
be in default) ("Default") under its memorandum or articles of association,
charter or by-laws, or similar organizational documents, (ii) is in Default
under any indenture, mortgage, loan or credit agreement, deed of trust, note,
contract, franchise, lease or other agreement, obligation, condition, covenant
or instrument to which the Company or such subsidiary is a party or by which it
may be bound, or to which any of the property or assets of the Company or any of
its subsidiaries is subject (each, an "EXISTING INSTRUMENT"), or (iii) is in
violation of any statute, law, rule, regulation, judgment, order or decree of
any court, regulatory body, administrative agency, governmental body, arbitrator
or other authority having jurisdiction over the Company or such subsidiary or
any of its properties, as applicable, except with respect to clauses (ii) and
(iii) only, for such Defaults as would not, individually or in the aggregate,
have a Material Adverse Effect. The Company's execution, delivery and
performance of this Agreement and consummation of the transactions contemplated
hereby by the Disclosure Package and by the Prospectus (i) have been duly
authorized by all necessary corporate action and will not result in any Default
under the memorandum or articles of association, charter or by-laws or similar
organizational documents of the Company or any subsidiary, (ii) will not
conflict with or constitute a breach of, or Default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, or require the
consent of any other party to, any Existing Instrument, and (iii) will not
result in any violation of any statute, law, rule, regulation, judgment, order
or decree applicable to the Company or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or any of its subsidiaries or any
of its or their properties, except with respect to clauses (ii) and (iii) for
which any such Default or violation would not, individually or in the aggregate,
have a Material Adverse Effect. No consent, approval, authorization or other
order of, or registration or filing with, any court or other governmental or
regulatory authority or agency is required for the Company's execution, delivery
and performance of this Agreement and consummation of the transactions
contemplated hereby by the Disclosure Package and by the Prospectus, except such
as have been obtained or made by the Company. Subject to the Underwriters'
compliance with their obligations in Section 2(d) hereof, the Company is not
required to publish a prospectus in Israel under the laws of the State of
Israel.
(s) No Material Actions or Proceedings. Except as otherwise disclosed in
the Disclosure Package and the Prospectus, there are no legal or governmental
actions, suits or proceedings, including, but not limited to, proceedings or
investigations by the Israeli income tax authorities, VAT authorities, customs
authorities or environmental authorities, or by the Israeli National Insurance
(collectively, the "ISRAELI AUTHORITIES"), pending or, to the Company's
knowledge, threatened (i) against or affecting the Company or any of its
subsidiaries, (ii) which has as the subject thereof any directors and officers
of the Company identified on Exhibit E-1 hereto or property owned or leased by
the Company or any of its subsidiaries or (iii) relating to environmental or
discrimination matters, where in any such case (A) there is a reasonable
possibility that such action, suit or proceeding might be determined adversely
to the Company or such subsidiary and (B) any such action, suit or proceeding,
if so determined adversely, would reasonably be expected to have a Material
Adverse Effect or adversely affect the consummation of the transactions
contemplated by this Agreement.
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(t) Labor Matters. No labor problem or dispute with the employees of the
Company or any of its subsidiaries exists or to the Company's knowledge is
threatened or imminent, and the Company is not aware of any existing or imminent
labor disturbance by the employees of any of its or its subsidiaries' principal
suppliers, contractors or customers, that in either case could have a Material
Adverse Effect.
(u) Intellectual Property Rights. The Company and its subsidiaries own,
possess, license or have other rights to use, on reasonable terms, all patents,
patent applications, trade and service marks, trade and service xxxx
registrations, trade names, copyrights, licenses, inventions, trade secrets,
technology, know-how and other intellectual property (collectively, the
"INTELLECTUAL PROPERTY") advisable for the conduct of the Company's business as
now conducted or as proposed in each of the Disclosure Package and the
Prospectus to be conducted. Except as set forth in the Disclosure Package and
the Prospectus (a) to the Company's knowledge, there is no material infringement
by third parties of any such Intellectual Property owned by or exclusively
licensed to the Company, other than any potential infringement claims being
investigated by the Company in the ordinary course of business; (b) there is no
pending or, to the Company's knowledge, threatened action, suit, proceeding or
claim by others challenging the Company's rights in or to any material
Intellectual Property, and the Company is unaware of any facts which would form
a reasonable basis for any such claim; (c) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim by others
challenging the validity or scope of any such Intellectual Property, and the
Company is unaware of any facts which would form a reasonable basis for any such
claim; and (d) there is no pending or, to the Company's knowledge, threatened
action, suit, proceeding or claim by others that the Company's business as now
conducted infringes or otherwise violates any patent, trademark, copyright,
trade secret or other proprietary rights of others, and the Company is unaware
of any other fact which would form a reasonable basis for any such claim, in the
cases of (b), (c) and (d), except where the failure to so disclose would not
reasonably be expected to have a Material Adverse Effect.
(v) All Necessary Permits, etc. The Company and each subsidiary possess
such valid and current licenses, certificates, authorizations or permits issued
by the appropriate state, federal or foreign regulatory agencies or bodies that
are advisable to conduct their respective businesses, except whether the failure
to possess such licenses, certificates, authorizations or 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, or non-compliance with, any such License, certificate, authorization or
permit which, individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would reasonably be expected to have a Material
Adverse Effect.
(w) Title to Properties. The Company and each of its subsidiaries has good
and marketable title to all the properties and assets reflected as owned in the
financial statements referred to in Section 1(A)(n) above (or elsewhere in the
Disclosure Package and the Prospectus), in each case free and clear of any
security interests, mortgages, liens, encumbrances, equities, claims and other
defects, except such as do not materially and adversely affect the value of such
property and do not materially interfere with the use made or proposed to be
made of such property by the Company or such subsidiary. The real property,
improvements, equipment and personal property held under lease by the Company or
any subsidiary are held under leases that are in full force and effect, with
such exceptions as are not material and do not materially
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interfere with the use made or proposed to be made of such real property,
improvements, equipment or personal property by the Company or such subsidiary.
(x) Tax Law Compliance. The Company and its consolidated subsidiaries have
filed all necessary federal, state, local and foreign income and franchise tax
returns or have filed for extensions thereof in a timely manner and have paid
all taxes required to be paid by any of them and, if due and payable, any
related or similar assessment, fine or penalty levied against any of them,
except for any taxes, assessments, fines or penalties as may be being contested
in good faith and by appropriate proceedings, except in all cases where any such
failure of the Company to file or pay, as the case may be, would not reasonably
be expected to have a Material Adverse Effect. The Company has made appropriate
provisions in the applicable financial statements referred to in Section 1(A)(n)
above in respect of all federal, state, local and foreign income and franchise
taxes for all current or prior periods as to which the tax liability of the
Company or any of its consolidated subsidiaries has not been finally determined.
(y) Company Not an "Investment Company". The Company has been advised of
the rules and requirements under the Investment Company Act of 1940, as amended
(the "INVESTMENT COMPANY ACT"). The Company is not, and after receipt of payment
for the ADSs and the application of the proceeds in accordance with Section
3(A)(r) below and as contemplated under the caption "USE OF PROCEEDS" in each of
the Preliminary Prospectus and the Prospectus will not be, required to be
registered as an "INVESTMENT COMPANY" within the meaning of the Investment
Company Act.
(z) Insurance. Each of the Company and its subsidiaries are insured by
institutions that in the Company's reasonable business judgment are recognized,
financially sound and reputable institutions with policies in such amounts and
with such deductibles and covering such risks as are generally deemed adequate
and customary for their businesses. All policies of insurance and fidelity or
surety bonds insuring the Company or any of its subsidiaries or their respective
businesses, assets, employees, officers and directors are in full force and
effect and the Company and its subsidiaries are in compliance with the terms of
such policies and instruments in all material respects. The Company has no
reason to believe that it or any subsidiary will not be able (i) to renew its
existing insurance coverage as and when such policies expire or (ii) to obtain
comparable coverage from similar institutions as may be necessary or appropriate
to conduct its business as now conducted and at a cost that would not have a
Material Adverse Effect.
(aa) No Restrictions on Dividends. No subsidiary of the Company is
currently prohibited, directly or indirectly, from paying any dividends to the
Company, from making any other distribution on such subsidiary's capital stock,
from repaying to the Company any loans or advances to such subsidiary from the
Company or from transferring any of such subsidiary's property or assets to the
Company or any other subsidiary of the Company, except as described in or
contemplated by the Disclosure Package and the Prospectus.
(bb) No Price Stabilization or Manipulation. The Company has not taken,
directly or indirectly, any action in the United States or Israel designed to or
that might be reasonably expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the ADSs. The Company acknowledges that the
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Underwriters may engage in passive market making transactions in the ADSs on the
Nasdaq Stock Market, Inc. in accordance with Regulation M under the Exchange
Act.
(cc) Related Party Transactions. There are no business relationships or
related-party transactions involving the Company or any subsidiary or any other
person required to be described in the Disclosure Package or the Prospectus that
have not been described as required.
(dd) Internal Controls and Procedures. The Company maintains systems of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with the general or specific
authorizations of the directors and management; (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 the general or
specific authorization of the directors and management; 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.
(ee) Approved Enterprise Status. Neither the Company nor any subsidiary is
in violation of any condition or requirement stipulated by (i) the instruments
of approval granted to any of them by any Israeli authority with respect to the
"APPROVED enterprise" status of any of its facilities, or (ii) Israeli laws and
regulations relating to such approved enterprise status, which violation,
individually or in the aggregate, could have a material adverse effect on the
consolidated financial position, shareholders' equity, results of operations or
business of the Company and its subsidiaries, taken as a whole, and does not
have any knowledge or reason to believe that it will not comply in every
material respect with such instruments of approval. 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 its applications for "APPROVED ENTERPRISE" status is true, correct and
complete in all material respects.
Neither the Company nor any subsidiary is in violation of any conditions or
requirements stipulated by the instruments of approval granted to any of them by
the Office of the Chief Scientist in the Ministry of Industry, Commerce & Labor,
with respect to any research and development grants given to it by such office,
which violation, individually or in the aggregate, could have a material adverse
effect on the consolidated financial position, shareholders' equity, results of
operations or business of the Company or any of its subsidiaries, taken as a
whole.
(ff) No Unlawful Contributions or Other Payments. 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 or any of its subsidiaries
is aware of or has taken any action, directly or indirectly, that would result
in a violation by such Persons of the FCPA, including, without limitation,
making use of the mails or any means or instrumentality of interstate commerce
corruptly in furtherance of an offer, payment, promise to pay or authorization
of the payment of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any "FOREIGN OFFICIAL" (as
such term is defined in the FCPA) or any foreign political party or official
thereof or any candidate for foreign political office, in contravention of the
FCPA, and the Company, its subsidiaries and, to the knowledge of the Company,
its affiliates have conducted their businesses in compliance with the FCPA and
have instituted and maintain
10
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.
(gg) No Conflict with Money Laundering Laws. The operations of the Company
and its subsidiaries are and have been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all applicable jurisdictions, the 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.
(hh) No Conflict with OFAC Laws. 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 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.
(ii) Compliance with Environmental Laws. The Company and its subsidiaries
(i) are in compliance with any and all applicable federal, state, local and
foreign laws, rules, regulations, decisions and orders relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (collectively, "ENVIRONMENTAL
LAWS"); (ii) have received and are in compliance with all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses; and (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any disposal or
release of hazardous or toxic substances or wastes, pollutants or contaminants,
except in any such case for any such failure to comply, or failure to receive
required permits, licenses or approvals, or liability as would not, individually
or in the aggregate, have a Material Adverse Effect.
(jj) ERISA Compliance. None of the following events has occurred or exists:
(i) a failure to fulfill the obligations, if any, under the minimum funding
standards of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and the regulations and published
interpretations thereunder with respect to a Plan, determined without regard to
any waiver of such obligations or extension of any amortization period; (ii) an
audit or investigation by the Internal Revenue Service, the U.S. Department of
Labor, the Pension Benefit Guaranty Corporation or any other federal or state
governmental agency or any foreign regulatory agency with respect to the
employment or compensation of employees by any member of the Company that could
have a Material Adverse Effect; (iii) any breach of any contractual obligation,
or any violation of law or applicable qualification standards, with respect
11
to the employment or compensation of employees by any member of the Company that
would reasonably be expected to have a Material Adverse Effect. None of the
following events has occurred or to the Company's knowledge, is reasonably
expected to occur: (i) a material increase in the aggregate amount of
contributions required to be made to all Plans in the current fiscal year of the
Company compared to the amount of such contributions made in the Company's most
recently completed fiscal year; (ii) a material increase in the Company's
"ACCUMULATED POST-RETIREMENT BENEFIT OBLIGATIONS" (within the meaning of
Statement of Financial Accounting Standards 106) compared to the amount of such
obligations in the Company's most recently completed fiscal year; (iii) any
event or condition giving rise to a liability under Title IV of ERISA that would
reasonably be expected to have a Material Adverse Effect; or (iv) the filing of
a claim by one or more employees or former employees of the Company related to
their employment that would reasonably be expected to have a Material Adverse
Effect. For purposes of this paragraph, the term "PLAN" means an employee
benefit plan (within the meaning of Section 3(3) of ERISA) subject to Title IV
of ERISA with respect to which any member of the Company may have any liability.
(kk) Israeli Employment Law. 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.
(ll) Brokers. There is no broker, finder or other party that is entitled to
receive from the Company any brokerage or finder's fee or other fee or
commission as a result of any transactions contemplated by this Agreement.
(mm) Xxxxxxxx-Xxxxx Compliance. There is and has been no failure on the
part of the Company or any of the Company's directors or officers, in their
capacities as such, to comply with any applicable provision of the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated in
connection therewith (the "Xxxxxxxx-Xxxxx Act"), including Section 402 related
to loans and Sections 302 and 906 related to certifications. In addition, the
Company has no reason to believe that it will not be in compliance on a timely
basis with Section 404, entitled "Management's Assessment of Internal Controls",
of the Xxxxxxxx-Xxxxx Act and the rules and regulations promulgated thereunder
or any successor provisions.
(nn) Subsidiaries. The subsidiaries listed on Annex A attached hereto are
the only significant subsidiaries of the Company as defined by Rule 1-02 of
Regulation S-X (the "SUBSIDIARIES").
(oo) Statistical and Market Related Data. Nothing has come to the attention
of the Company that has caused the Company to believe that the statistical and
market-related data included in each of the Disclosure Package and the
Prospectus is not based on or derived from sources that are reliable and
accurate in all material respects.
(pp) Immunity from Jurisdiction. To the best knowledge of the Company,
neither the Company nor any of its subsidiaries nor any of its or their
properties or assets has any immunity from the jurisdiction of any court or from
any legal process (whether through service or notice, attachment prior to
judgment, attachment in aid of execution or otherwise).
12
(qq) PFIC Status. To the best knowledge of the Company, the Company is 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, a Passive Foreign Investment Company ("PFIC") within the
meaning of Section 1297 of the Internal Revenue Code, as amended ("CODE").
(rr) Stamp Tax. Except for Israeli 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 ADSs to be sold by the Company are
not subject to any tax imposed by the State of Israel or any political
subdivision thereof.
(ss) Permanent Establishment in U.S. The Company does not currently and has
never had a permanent establishment in the United States within the meaning of
Article 5 of the Convention Between the Government of the United States of
America and the Government of the State of Israel With Respect to Taxes on
Income.
Any certificate signed by an officer of the Company and delivered to the
Representatives or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
set forth therein.
SECTION 2. Purchase, Sale and Delivery of the ADSs.
(a) The Firm ADSs. The Company agrees to issue and sell to the several
Underwriters the Firm ADSs upon the terms herein set forth. On the basis of the
representations, warranties and agreements herein contained, and upon the terms
but subject to the conditions herein set forth, the Underwriters agree,
severally and not jointly, to purchase from the Company the respective number of
Firm ADSs set forth opposite their names on Schedule A. The purchase price per
Firm ADSs to be paid by the several Underwriters to the Company shall be
$43.9375 per ADS.
(b) The Closing Date. Delivery of ADRs evidencing the Firm ADSs to be
purchased by the Underwriters and payment therefor shall be made at the offices
of Xxxxx Xxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or
such other place as may be agreed to by the Company and the Representatives) at
9:00 a.m. New York time, on December 14, 2005 or such other time and date as the
Representatives and the Company may agree upon in writing (the time and date of
such closing are called the "CLOSING DATE").
(c) The Option ADSs; the Subsequent Closing Date. In addition, on the basis
of the representations, warranties and agreements herein contained, and upon the
terms but subject to the conditions herein set forth, the Company hereby grants
an option to the several Underwriters to purchase, severally and not jointly, up
to an aggregate of 600,000 Option ADSs from the Company at the purchase price
per share to be paid by the Underwriters for the Firm ADSs. The option granted
hereunder may be exercised at any time and from time to time upon notice by the
Representatives to the Company, which notice may be given at any time within 30
days from the date of this Agreement. Such notice shall set forth (i) the
aggregate number of Option ADSs as to which the Underwriters are exercising the
option, (ii) the names and denominations in which
13
the certificates for the ADRs evidencing the Option ADSs are to be registered
and (iii) the time, date and place at which such ADRs will be delivered (which
time and date may be simultaneous with, but not earlier than, the Closing Date;
and in such case the term "CLOSING DATE" shall refer to the time and date of
delivery of certificates for the Firm ADSs and the Option ADSs). Each time and
date of delivery, if subsequent to the Closing Date, is called a "SUBSEQUENT
CLOSING DATE" and shall be determined by the Representatives and shall not be
earlier than three nor later than five full business days after delivery of such
notice of exercise. If any Option ADSs are to be purchased, each Underwriter
agrees, severally and not jointly, to purchase the number of Option ADSs
(subject to such adjustments to eliminate fractional shares as the
Representatives may determine) that bears the same proportion to the total
number of Option ADSs to be purchased as the number of Firm ADSs set forth on
Schedule A opposite the name of such Underwriter bears to the total number of
Firm ADSs.
(d) Public Offering of the ADSs. The Representatives hereby advise the
Company that the Underwriters intend to offer for sale to the public, as
described in the Prospectus, their respective portions of the ADSs as soon after
this Agreement has been executed as the Representatives have determined is
advisable and practicable.
Each of the Underwriters hereby covenants and agrees that it will not offer
the ADSs in Israel, except that such Underwriters may (A) offer for sale and
sell ADSs to entities which qualify under Section 15A(b)(1) of the Israeli
Securities Law, 1968 and appear in the Addendum thereto, or (B) offer ADSs to
other persons in Israel whose number (pursuant to offers by all Underwriters)
does not exceed thirty-five (35).
(e) Payment for the ADSs. Payment for the ADSs shall be made at the Closing
Date (and, if applicable, at any Subsequent Closing Date) by wire transfer of
immediately available funds to the order of the Company.
It is understood that the Representatives have been authorized, for their
own account and the accounts of the several Underwriters, to accept delivery of
and receipt for, and make payment of the purchase price for, the Firm ADSs and
any Option ADSs the Underwriters have agreed to purchase. JPMSI or BAS,
individually and not as the Representative of the Underwriters, may (but shall
not be obligated to) make payment for any ADSs to be purchased by any
Underwriter whose funds shall not have been received by the Representatives by
the Closing Date or any Subsequent Closing Date, as the case may be, for the
account of such Underwriter, but any such payment shall not relieve such
Underwriter from any of its obligations under this Agreement.
(f) Delivery of the ADSs. The Company shall deliver or cause to be
delivered certificates for the Firm Shares or Option Shares representing the
Firm ADSs or Option ADSs to the Depositary or its designated custodian and ADRs
evidencing the ADSs shall be delivered to the Representatives for the account of
each Underwriter. Upon delivery, the ADRs evidencing the Firm Shares or Option
Shares, as the case may be, shall be registered in such names and in such
denominations as the Representatives shall request in writing not less than two
full business days prior to the Closing Date. For the purpose of expediting the
checking and packaging of the ADRs evidencing the Firm Shares, the Company shall
cause such ADRs to be available for inspection by the Representatives in New
York, New York, not later than 2:00 p.m., New York City time, on the business
day prior to the Closing Date.
14
(g) Delivery of Prospectus to the Underwriters. Not later than 12:00 p.m.
on the second business day following the date the ADSs are first released by the
Underwriters for sale to the public, the Company shall deliver or cause to be
delivered, copies of the Prospectus in such quantities and at such places as the
Representatives shall reasonably request.
SECTION 3. Covenants of the Company and Underwriters.
A. Covenants of the Company. The Company covenants and agrees with each
Underwriter as follows:
(a) Representatives' Review of Proposed Amendments and Supplements. During
the period beginning on the Initial Sale Time and ending on the later of the
Closing Date or such date, as in the reasonable opinion of counsel for the
Underwriters, the Prospectus is no longer required by law to be delivered in
connection with sales by an Underwriter or dealer, including in circumstances
where such requirement may be satisfied pursuant to Rule 172 (the "PROSPECTUS
DELIVERY PERIOD"), prior to amending or supplementing the Registration
Statement, the Disclosure Package or the Prospectus, the Company shall furnish
to the Representatives for review a copy of each such proposed amendment or
supplement, and the Company shall not file or use any such proposed amendment or
supplement to which the Representatives reasonably object.
(b) Securities Act Compliance. After the date of this Agreement, the
Company shall promptly advise the Representatives in writing (i) of the receipt
of any comments of, or requests for additional or supplemental information from,
the Commission, (ii) of the time and date of any filing of any post-effective
amendment to the Registration Statement or any amendment or supplement to the
Preliminary Prospectus or the Prospectus, (iii) of the time and date that any
post-effective amendment to the Registration Statement becomes effective and
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of the Preliminary Prospectus or the Prospectus, or (v) of
any proceedings to remove, suspend or terminate from listing or quotation the
Ordinary Shares from any securities exchange upon which it is listed for trading
or included or designated for quotation, or of the threatening or initiation of
any proceedings for any of such purposes. The Company shall use its reasonable
best efforts to prevent the issuance of any such stop order or prevention or
suspension of such use. If the Commission shall enter any such stop order or
order of notice of prevention or suspension at any time, the Company will use
its reasonable best efforts to obtain the lifting of such order at the earliest
possible moment, or will file a new registration statement and use its
reasonable best efforts to have such new registration statement declared
effective as soon as practicable. Additionally, the Company agrees that it shall
comply with the provisions of Rules 424(b) and 430A, as applicable, under the
Securities Act, including with respect to the timely filing of documents
thereunder, and will use its reasonable efforts to confirm that any filings made
by the Company under such Rule 424(b) were received in a timely manner by the
Commission.
(c) Exchange Act Compliance. During the Prospectus Delivery Period, the
Company will file all documents required to be filed by it with the Commission
pursuant to Section 13, 14 or 15 of the Exchange Act in the manner and within
the time periods required by the Exchange Act.
15
(d) Amendments and Supplements to the Registration Statement, Prospectus
and Other Securities Act Matters. If, during the Prospectus Delivery Period, any
event or development shall occur or condition exist as a result of which the
Disclosure Package or the Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein in the light of the
circumstances then prevailing or under which they were made, as the case may be,
not misleading, or if it shall be necessary to amend or supplement the
Disclosure Package or the Prospectus, or to file under the Exchange Act any
document incorporated by reference in the Disclosure Package or the Prospectus,
in order to make the statements therein, in the light of the circumstances then
prevailing or under which they were made, as the case may be, not misleading, or
if in the reasonable opinion of the Representatives it is otherwise necessary to
amend or supplement the Registration Statement, the Disclosure Package or the
Prospectus, or to file under the Exchange Act any document incorporated by
reference in the Disclosure Package or the Prospectus, or to file a new
registration statement containing the Prospectus, in order to comply with law,
including in connection with the delivery of the Prospectus, the Company agrees
to (i) notify the Representatives of any such event or condition and (ii)
promptly prepare (subject to Section 3(A)(a) and 3(A)(e) hereof), file with the
Commission (and use its best efforts to have any amendment to the Registration
Statement or any new registration statement to be declared effective) and
furnish at its own expense to the Underwriters, amendments or supplements to the
Registration Statement, the Disclosure Package or the Prospectus, or any new
registration statement, necessary in order to make the statements in the
Disclosure Package or the Prospectus as so amended or supplemented, in the light
of the circumstances then prevailing or under which they were made, as the case
may be, not misleading or so that the Registration Statement, the Disclosure
Package or the Prospectus, as amended or supplemented, will comply with law.
(e) Permitted Free Writing Prospectuses. The Company represents that it has
not made, and agrees that, unless it obtains the prior written consent of the
Representatives, it will not make any offer relating to the ADSs that would
constitute an Issuer Free Writing Prospectus or that would otherwise constitute
a "free writing prospectus" (as defined in Rule 405 of the Securities Act)
required to be filed by the Company with the Commission or retained by the
Company under Rule 433 of the Securities Act. Any such free writing prospectus
consented to by the Representatives is hereinafter referred to as a "PERMITTED
FREE WRITING PROSPECTUS". The Company agrees that (i) it will treat each
Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus, and (ii)
will comply with the requirements of Rules 164 and 433 of the Securities Act
applicable to any Permitted Free Writing Prospectus, including in respect of
timely filing with the Commission, legending and record keeping.
(f) Copies of any Amendments and Supplements to the Prospectus. The Company
agrees to furnish the Representatives, without charge, during the Prospectus
Delivery Period, as many copies of the Prospectus and any amendments and
supplements thereto, including any documents incorporated or deemed incorporated
by reference therein, and the Disclosure Package as the Representatives may
reasonably request.
(g) Copies of the Registration Statement and the Prospectus. If requested,
the Company will furnish to the Representatives and counsel for the Underwriters
signed copies of the Registration Statement (including exhibits thereto) and
during the Prospectus Delivery Period, as
16
many copies of each of the Preliminary Prospectus, the Prospectus and any
supplement thereto and the Disclosure Package as the Representatives may
reasonably request.
(h) Blue Sky Compliance. The Company shall cooperate with the
Representatives and counsel for the Underwriters to qualify or register the ADSs
for sale under (or obtain exemptions from the application of) the state
securities or blue sky laws or Canadian provincial Securities laws or other
foreign laws of those jurisdictions designated by the Representatives, in their
reasonable discretion, shall comply with such laws and shall continue such
qualifications, registrations and exemptions in effect so long as required for
the distribution of the ADSs, except, in each case, where the failure to do so
would not reasonably be expected to have a Material Adverse Effect. The Company
shall not be required to qualify as a foreign corporation or to take any action
that would subject it to general service of process in any such jurisdiction
where it is not presently qualified or where it would be subject to taxation as
a foreign corporation, other than those arising out of the offering or sale of
the ADSs in any jurisdiction where it is not now so subject. The Company will
advise the Representatives promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the ADSs for offering, sale
or trading in any jurisdiction or any initiation or threat of any proceeding for
any such purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, the Company shall use its reasonable
efforts to obtain the withdrawal thereof at the earliest possible moment.
(i) Use of Proceeds. The Company shall apply the net proceeds from the sale
of the ADSs sold by it in the manner described under the caption "USE OF
PROCEEDS" in each of the Disclosure Package and the Prospectus.
(j) Depositary. The Company shall engage and maintain, at its expense, a
depositary for the ADRs evidencing the ADSs.
(k) Earning Statement. As soon as practicable, the Company will make
generally available to its security holders and to the Representatives an
earning statement (which need not be audited) covering the twelve-month period
ending December 31, 2006 that satisfies the provisions of Section 11(a) of the
Securities Act and Rule 158 under the Securities Act.
(l) Periodic Reporting Obligations. During the Prospectus Delivery Period
the Company shall file, on a timely basis, with the Commission all reports and
documents required to be filed under the Exchange Act.
(m) NASDAQ Listing. The Company will use its best efforts to list, subject
to notice of issuance, the ADSs to be listed on the Nasdaq Stock Market, Inc.
(n) Agreement Not to Offer or Sell Additional ADSs. During the period
commencing on the date hereof and ending on the 90th day following the date of
the Prospectus, the Company will not, without the prior written consent of JPMSI
and BAS (which consent may be withheld at the sole discretion of JPMSI and BAS),
directly or indirectly, sell, offer, contract or grant any option to sell,
pledge, transfer or establish an open "PUT EQUIVALENT POSITION" or liquidate or
decrease a "CALL EQUIVALENT POSITION" within the meaning of Rule 16a-1(h) under
the Exchange Act, or otherwise dispose of or transfer (or enter into any
transaction which is designed to, or
17
might reasonably be expected to, result in the disposition of), or announce the
offering of, or file any registration statement under the Securities Act (other
than a Form S-8) in respect of, any shares of Ordinary Shares, options or
warrants to acquire shares of the Ordinary Shares or securities exchangeable or
exercisable for or convertible into shares of Ordinary Shares (other than as
contemplated by this Agreement with respect to the ADSs); provided, however,
that the Company may issue shares of its Ordinary Shares or options to purchase
its Ordinary Shares, or Ordinary Shares upon exercise of options, pursuant to
any stock option, stock bonus or other stock plan or arrangement described in
the Prospectus. Notwithstanding the foregoing, if (x) during the last 17 days of
the 90-day restricted period the Company issues an earnings release or material
news or a material event relating to the Company occurs, or (y) prior to the
expiration of the 90-day restricted period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of
the 90-day period, the restrictions imposed in this clause 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
Company will provide the Representatives and any co-managers and each individual
subject to the restricted period pursuant to the lockup letters described in
Section 5(j) with prior notice of any such announcement that gives rise to an
extension of the restricted period.
(o) Compliance with Law. The Company will comply with all applicable
securities and other laws, rules and regulations, including, without limitation,
the Xxxxxxxx-Xxxxx Act, and use its commercially reasonable efforts to cause the
Company's directors and officers, in their capacities as such, to comply with
such laws, rules and regulations, including, without limitation, the provisions
of the Xxxxxxxx-Xxxxx Act, except where the failure to so comply would not
reasonably be expected to have a Material Adverse Effect.
(p) [Intentionally omitted.]
(q) Future Reports to the Representatives. During the period of three years
hereafter, upon the request of the Representatives, the Company will furnish to
the Representatives at 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000 as many copies as the
Representatives reasonably request of all materials furnished by the Company to
its shareholders and all public reports and all reports and financial statements
furnished by the Company to the Commission, the Nasdaq National Market, the ISA,
the Tel Aviv Stock Exchange or to any national securities exchange upon which
the Ordinary Shares or ADSs may be listed pursuant to requirements of or
agreements with such exchange, the ISA or the Commission pursuant to the
Exchange Act or any rule or regulation of the Commission thereunder, including
but not limited to: (i) as soon as practicable after the end of each fiscal
year, copies of the Annual Report of the Company containing the balance sheet of
the Company as of the close of such fiscal year and statements of income,
stockholders' equity and cash flows for the year then ended and the opinion
thereon of the Company's independent public or certified public accountants;
(ii) as soon as practicable after the filing thereof, copies of each proxy
statement, Annual Report on Form 20-F, Current Report on Form 6-K or other
report filed by the Company with the Commission, the NASD or any securities
exchange; and (iii) as soon as available, copies of any report or communication
of the Company mailed generally to holders of its capital stock; provided,
however, that any documents filed by the Company with the Commission that are
publicly available on the Commission's XXXXX system shall be deemed furnished to
the Representative at the time of such filing.
18
(r) Investment Limitation. The Company shall not invest, or otherwise use
the proceeds received by the Company from its sale of the ADSs in such a manner
as would require the Company or any of its subsidiaries to register as an
investment company under the Investment Company Act.
(s) No Manipulation of Price. The Company will not take, directly or
indirectly, any action designed to cause or result in, or that has constituted
or might reasonably be expected to constitute, under the Exchange Act or
otherwise, the stabilization or manipulation of the price of any securities of
the Company to facilitate the sale or resale of the ADSs.
(t) Existing Lock-Up Agreement. The Company will enforce all existing
agreements between the Company and any of its security holders that prohibit the
sale, transfer, assignment, pledge or hypothecation of any of the Company's
securities in connection with the offering of ADSs contemplated hereby. In
addition, the Company will direct the transfer agent, registrar and depositary,
as applicable, to place stop transfer restrictions upon any such securities of
the Company that are bound by such existing "lock-up" agreements for the
duration of the periods contemplated in such agreements.
JPMSI and BAS, on behalf of the several Underwriters, may, in their sole
discretion, waive in writing the performance by the Company of any one or more
of the foregoing covenants or extend the time for their performance.
Notwithstanding the foregoing, JPMSI and BAS, for the benefit of each of the
other Representatives, agree not to consent to any action proposed to be taken
by the Company or any other holder of the Company's securities that would
otherwise be prohibited by, or to waive compliance by the Company or any such
other security holder with the provisions of, Section 3(A)(n) above or any
lock-up agreement delivered pursuant to Section 5(j) below without giving each
of the other Representatives at least 17 days prior notice (or such shorter
notice as each of the other Representatives may deem acceptable to permit
compliance with applicable provisions of NASD Conduct Rule 2711(f) restricting
publication and distribution of research and public appearances by research
analysts before and after the expiration, waiver or termination of a lock-up
agreement).
B. Covenants of the Underwriters. Each Underwriter covenants and agrees
with the Company as follows:
It has not and will not use, authorize the use of, any "free writing
prospectus", as defined in Rule 405 under the Securities Act (which term
includes use of any written information furnished to the Commission by the
Company and not incorporated by reference into the Registration Statement and
any press release issued by the Company) other than (i) a free writing
prospectus that contains no "issuer information" (as defined in Rule 433(h)(2)
under the Securities Act) that was not included (including through incorporation
by reference) in the Preliminary Prospectus or a previously filed Issuer Free
Writing Prospectus, (ii) any Issuer Free Writing Prospectus listed on Schedule B
or prepared pursuant to Sections 1(A)(f) and 3(A)(e), or (iii) any free writing
prospectus prepared by such Underwriter and approved by the Company in advance
in writing.
SECTION 4. Payment of Expenses. The Company agrees to pay all costs, fees
and expenses incurred in connection with the performance of its obligations
hereunder and in
19
connection with the transactions contemplated hereby, including without
limitation (i) all expenses incident to the issuance and delivery of the ADSs
(including all printing and engraving costs), (ii) all fees and expenses of the
registrar and transfer agent of the Ordinary Shares, if any (iii) all necessary
issue, transfer and other stamp taxes in connection with the issuance and sale
of the ADSs to the Underwriters, (iv) all fees and expenses of the Company's
counsel, independent public or certified public accountants and other advisors,
(v) all costs and expenses incurred in connection with the preparation,
printing, filing, shipping and distribution of the Registration Statement
(including financial statements, exhibits, schedules, consents and certificates
of experts), each Issuer Free Writing Prospectus, each of the Preliminary
Prospectus and the Prospectus, and all amendments and supplements thereto, and
this Agreement, (vi) all filing fees, attorneys' fees and expenses incurred by
the Company and reasonable attorney's fees and expenses incurred by the
Underwriters in connection with qualifying or registering (or obtaining
exemptions from the qualification or registration of) all or any part of the
ADSs for offer and sale under the state securities or blue sky laws or the
provincial securities laws of Canada, and, if requested by the Representatives,
preparing and printing a "BLUE SKY SURVEY" or memorandum, and any supplements
thereto, advising the Underwriters of such qualifications, registrations and
exemptions, (vii) the filing fees incident to, and the reasonable fees and
expenses of counsel for the Underwriters in connection with, the NASD's review
and approval of the Underwriters' participation in the offering and distribution
of the ADSs, (viii) the fees and expenses associated with listing of the ADSs on
the Nasdaq Stock Market, Inc. and (ix) all transportation and other expenses
incurred in connection with presentations to prospective purchasers of the ADSs.
Except as provided in this Section 4, Section 6, Section 7 and Section 8 hereof,
the Underwriters shall pay their own expenses, including the fees and
disbursements of their counsel.
SECTION 5. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the ADSs as
provided herein on the Closing Date and, with respect to the Option ADSs, any
Subsequent Closing Date, shall be subject to the accuracy of the representations
and warranties on the part of the Company set forth in Section 1 hereof as of
the date hereof and as of the Closing Date as though then made and, with respect
to the Option ADSs, as of any Subsequent Closing Date as though then made, to
the accuracy of the statements of the Company made in any certificates pursuant
to the provisions hereof, to the timely performance by the Company of its
covenants and other obligations hereunder, and to each of the following
additional conditions:
(a) Accountant's Comfort Letter. On the date hereof, the Representatives
shall have received from Kost, Forer, Gabbay & Kasierer, independent registered
public accountants for the Company, a letter dated the date hereof addressed to
the Underwriters, the form of which is attached as Exhibit A.
(b) Compliance with Registration Requirements; No Stop Order; No Objection
from NASD. For the period from and after effectiveness of this Agreement and
prior to the Closing Date and, with respect to the Option ADSs, any Subsequent
Closing Date:
(i) the Company shall have filed the Prospectus with the Commission
(including the information required by Rule 430A under the Securities Act)
in the manner and within the time period required by Rule 424(b) under the
Securities Act; or the Company
20
shall have filed a post-effective amendment to the Registration Statement
containing the information required by such Rule 430A, and such
post-effective amendment shall have become effective; or, if the Company
elected to rely upon Rule 434 under the Securities Act and obtained the
Representatives' consent thereto, the Company shall have filed a Term Sheet
with the Commission in the manner and within the time period required by
such Rule 424(b);
(ii) all material required to be filed by the Company pursuant to Rule
433(d) under the Securities Act, shall have been filed with the Commission
within the applicable time periods prescribed for such filings under such
Rule 433;
(iii) no stop order suspending the effectiveness of the Registration
Statement, or any post-effective amendment to the Registration Statement,
shall be in effect and no proceedings for such purpose shall have been
instituted or threatened by the Commission; and
(iv) the NASD shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements.
(c) No Material Adverse Change or Ratings Agency Change. For the period
from and after the date of this Agreement and prior to the Closing Date and,
with respect to the Option ADSs, any Subsequent Closing Date:
(i) in the judgment of the Representatives there shall not have
occurred any Material Adverse Change;
(ii) there shall not have been any change or decrease specified in the
letter or letters referred to in paragraph (a) of this Section 5 which is,
in the sole judgment of the Representatives, so material and adverse as to
make it impractical or inadvisable to proceed with the offering or delivery
of the ADSs as contemplated by the Registration Statement and the
Prospectus; and
(iii) no downgrading shall have occurred in the rating accorded any
securities of or guaranteed by the Company or any of its subsidiaries by
any "nationally recognized statistical rating organization", as such term
is defined by the Commission for purposes of Rule 436(g)(2) under the
Securities Act and no such organization shall have publicly announced that
it intends to downgrade or has under surveillance or review, or has changed
its outlook with respect to, its rating of any securities of or guaranteed
by the Company or any of its subsidiaries (other than an announcement with
positive implications of a possible upgrading).
(d) Opinion of Israeli Counsel for the Company. On each of the Closing Date
and any Subsequent Closing Date, the Representatives shall have received the
opinion of Goldfarb, Levy, Eran & Co., the Israeli counsel for the Company,
dated as of such Closing Date, in substantially the form attached as Exhibit B.
(e) Opinion of U.S. Counsel for the Company. On each of the Closing Date
and any Subsequent Closing Date, the Representatives shall have received the
opinion of Xxxxx Xxxx
21
LLP, the U.S. counsel for the Company, dated as of such Closing Date, in
substantially the form attached as Exhibit C.
(f) Opinion of Counsel for the Depositary. On each of the Closing Date and
any Subsequent Closing Date, the Representatives shall have received the opinion
of Xxxxx, Xxxxxx & Xxxxxx, LLP, the counsel for the Depositary, dated as of such
Closing Date, in substantially the form attached as Exhibit D.
(g) Opinions of Counsels for the Underwriters. On each of the Closing Date
and any Subsequent Closing Date, the Representatives shall have received the
favorable opinions of Xxxxx Xxxx & Xxxxxxxx, U.S. counsel for the Underwriters
and Meitar Liquornik Geva & Leshem Xxxxxxxxx, Israeli counsel for the
Underwriters, respectively, both dated as of such Closing Date, in form and
substance satisfactory to, and addressed to, the Representatives, with respect
to the issuance and sale of the ADSs, the Registration Statement, the Prospectus
(together with any supplement thereto) and other related matters as the
Representatives may reasonably require, and the Company shall have furnished to
such counsels such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.
(h) Officers' Certificate. On each of the Closing Date and any Subsequent
Closing Date, the Representatives shall have received a written certificate
executed by the Chairman of the Board, Chief Executive Officer or President of
the Company and the Chief Financial Officer or Chief Accounting Officer of the
Company, dated as of such Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the Prospectus
and any amendment or supplement thereto, any Issuer Free Writing Prospectus and
any amendment or supplement thereto and this Agreement, to the effect set forth
in subsections (b) and (c)(iii) of this Section 5, and further to the effect
that:
(i) for the period from and after the date of this Agreement and prior
to such Closing Date, there has not occurred any Material Adverse Change;
(ii) the representations, warranties and covenants of the Company set
forth in Section 1(A) of this Agreement are true and correct on and as of
the Closing Date with the same force and effect as though expressly made on
and as of such Closing Date; and
(iii) the Company has complied in all material respects with all the
agreements hereunder and satisfied in all material respects all the
conditions on its part to be performed or satisfied hereunder at or prior
to such Closing Date.
(i) Bring-down Comfort Letter. On each of the Closing Date and any
Subsequent Closing Date, the Representatives shall have received from Kost,
Forer, Gabbay & Kasierer, independent registered public accountants for the
Company, letter dated such date, in form and substance satisfactory to the
Representatives, to the effect that it reaffirms the statements made in the
letter furnished pursuant to subsection (a) of this Section 5, except that the
specified date referred to therein for the carrying out of procedures shall be
no more than three business days prior to the Closing Date or Subsequent Closing
Date, as the case may be.
(j) Lock-Up Agreement from Certain Securityholders of the Company. On or
prior to the date hereof, the Company shall have furnished to the
Representatives agreements in the form of
22
Exhibit E hereto from directors and officers of the Company identified on
Exhibit E-1 hereto, and such agreement shall be in full force and effect on each
of the Closing Date and any Subsequent Closing Date.
(k) Listing of ADSs. The ADSs are approved for listing on the Nasdaq Stock
Market, Inc.
(l) Additional Documents. On or before each of the Closing Date and any
Subsequent Closing Date, the Representatives and counsel for the Underwriters
shall have received such information, documents and opinions as they may
reasonably require for the purposes of enabling them to pass upon the issuance
and sale of the ADSs as contemplated herein, or in order to evidence the
accuracy of any of the representations and warranties, or the satisfaction of
any of the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company at any time on or prior to the Closing
Date and, with respect to the Option ADSs, at any time prior to the applicable
Subsequent Closing Date, which termination shall be without liability on the
part of any party to any other party, except that Section 4, Section 6, Section
7 and Section 8 shall at all times be effective and shall survive such
termination.
SECTION 6. Reimbursement of Underwriters' Expenses. If this Agreement is
terminated by the Representatives pursuant to Section 5, (other than pursuant to
Section 5(b)(iii) ) or Section 10, or if the sale to the Underwriters of the
ADSs on the Closing Date is not consummated because of any refusal, inability or
failure on the part of the Company to perform any agreement herein or to comply
with any provision hereof, the Company agrees to reimburse the Representatives
and the other Underwriters (or such Underwriters as have terminated this
Agreement with respect to themselves), severally, upon demand for all
out-of-pocket expenses that shall have been reasonably incurred by the
Representatives and the Underwriters in connection with the proposed purchase
and the offering and sale of the ADSs, including but not limited to reasonable
fees and disbursements of counsel, printing expenses, travel expenses, postage,
facsimile and telephone charges.
SECTION 7. Indemnification.
(a) Indemnification of the Underwriters. The Company agrees to indemnify
and hold harmless each Underwriter, its directors, officers, employees and
agents, and each person, if any, who controls any Underwriter within the meaning
of the Securities Act and the Exchange Act against any loss, claim, damage,
liability or expense, as incurred, to which such Underwriter or such controlling
person may become subject, insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of or
is based (i) upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any amendment thereto,
including any information deemed to be a part thereof pursuant to Rule 430A,
Rule 430B or Rule 430C under the Securities Act, or the omission or alleged
omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading; or (ii) upon any untrue statement
or alleged untrue statement of a material fact contained in any Issuer Free
Writing Prospectus, the Preliminary
23
Prospectus, the Disclosure Package or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and to reimburse each
Underwriter, its officers, directors, employees, agents and each such
controlling person for any and all expenses (including the reasonable fees and
disbursements of counsel chosen by JPMSI and BAS) as such expenses are
reasonably incurred by such Underwriter, or its officers, directors, employees
and agents or such controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the foregoing indemnity
agreement shall not apply to any loss, claim, damage, liability or expense to
the extent, but only to the extent, arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company by the Representatives expressly for use in the Registration Statement,
any Issuer Free Writing Prospectus, the Preliminary Prospectus, the Disclosure
Package or the Prospectus (or any amendment or supplement thereto). The
indemnity agreement set forth in this Section 7(a) shall be in addition to any
liabilities that the Company may otherwise have.
(b) Indemnification of the Company and its Directors and Officers. Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act, against any loss, claim,
damage, liability or expense, as incurred, to which the Company, or any such
director, officer or controlling person may become subject, insofar as such
loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, any Issuer
Free Writing Prospectus, the Preliminary Prospectus, the Disclosure Package or
the Prospectus (or any amendment or supplement thereto), or arises out of or is
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, and only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in the Registration Statement, any Issuer Free Writing Prospectus, and the
Preliminary Prospectus, the Disclosure Package or the Prospectus (or any
amendment or supplement thereto), in reliance upon and in conformity with
written information furnished to the Company by the Representatives expressly
for use therein and to reimburse the Company, or any such director, officer or
controlling person for any legal and other expense reasonably incurred by the
Company, or any such director, officer or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action as such expenses are reasonably incurred.
The Company hereby acknowledges that the only information that the Underwriters
have furnished to the Company expressly for use in the Registration Statement,
any Issuer Free Writing Prospectus, the Preliminary Prospectus, the Disclosure
Package or the Prospectus (or any amendment or supplement thereto) are the names
of the Underwriters in the first paragraph and the statements set forth as the
third, eighth, ninth, tenth, eleventh, twelfth and thirteenth paragraphs and the
last sentence of the last paragraph under the caption "UNDERWRITING" in the
Prospectus; The indemnity agreement set forth in this Section 7(b) shall be in
addition to any liabilities that each Underwriter may otherwise have.
24
(c) Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 7 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 7, notify
the indemnifying party in writing of the commencement thereof; but the failure
to so notify the indemnifying party (i) will not relieve it from liability under
paragraph (a) or (b) above unless and to the extent it did not otherwise learn
of such action and such failure results in the forfeiture by the indemnifying
party of substantial rights and defenses and (ii) will not, in any event,
relieve the indemnifying party from any liability other than the indemnification
obligation provided in paragraph (a) or (b) above. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
satisfactory to such indemnified party; provided, however, if the defendants in
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that a conflict may
arise between the positions of the indemnifying party and the indemnified party
in conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of such indemnifying party's election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 7 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (other than local counsel), reasonably approved by the
indemnifying party (or by JPMSI and BAS in the case of Section 8), representing
the indemnified parties who are parties to such action) or (ii) the indemnifying
party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying party.
(d) Settlements. The indemnifying party under this Section 7 shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by Section
7(c) hereof, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying
25
party shall, without the prior written consent of the indemnified party, effect
any settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could reasonably be expected to be a party and indemnity was or could
reasonably be expected to be sought hereunder by such indemnified party, unless
such settlement, compromise or consent (i) includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding 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.
SECTION 8. Contribution. If the indemnification provided for in Section 7
is for any reason unavailable to or otherwise insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount paid or payable by such indemnified party, as incurred, as
a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) 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 hand, from the offering of the ADSs pursuant to this Agreement 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 hand, in connection with the
statements or omissions or inaccuracies in the representations and warranties
herein which resulted in such losses, claims, damages, liabilities or expenses,
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
hand, in connection with the offering of the ADSs pursuant to this Agreement
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the ADSs pursuant to this Agreement (before
deducting expenses) received by the Company, and the total underwriting discount
received by the Underwriters, in each case as set forth on the front cover page
of the Prospectus bear to the aggregate initial public offering price of the
ADSs as set forth on such cover. The relative fault of the Company, on the one
hand, and the Underwriters, on the other hand, shall be determined by reference
to, among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact or any
such inaccurate or alleged inaccurate representation or warranty relates to
information supplied by the Company, on the one hand, or the Underwriters, on
the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 7(c), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in Section 7(c) with
respect to notice of commencement of any action shall apply if a claim for
contribution is to be made under this Section 8; provided, however, that no
additional notice shall be required with respect to any action for which notice
has been given under Section 7(c) for purposes of indemnification.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the
26
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 in this Section 8.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the underwriting commissions
received by such Underwriter in connection with the ADSs underwritten by it and
distributed to the public. 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 pursuant to this
Section 8 are several, and not joint, in proportion to their respective
underwriting commitments as set forth opposite their names in Schedule A. For
purposes of this Section 8, each director, officer, employee and agent of an
Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement and each person, if any,
who controls the Company with the meaning of the Securities Act and the Exchange
Act shall have the same rights to contribution as the Company.
SECTION 9. Default of One or More of the Several Underwriters. If, on the
Closing Date or a Subsequent Closing Date, as the case may be, any one or more
of the several Underwriters shall fail or refuse to purchase ADSs that it or
they have agreed to purchase hereunder on such date, and the aggregate number of
ADSs which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase does not exceed 10% of the aggregate number of the ADSs to
be purchased on such date, the other Underwriters shall be obligated, severally,
in the proportions that the number of Firm ADSs set forth opposite their
respective names on Schedule A bears to the aggregate number of Firm ADSs set
forth opposite the names of all such non-defaulting Underwriters, or in such
other proportions as may be specified by the Representatives with the consent of
the non-defaulting Underwriters, to purchase the ADSs which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date. If, on the Closing Date or a Subsequent Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase ADSs and
the aggregate number of ADSs with respect to which such default occurs exceeds
10% of the aggregate number of ADSs to be purchased on such date, and
arrangements satisfactory to the Representatives and the Company for the
purchase of such ADSs are not made within 48 hours after such default, this
Agreement shall terminate without liability of any party to any other party
except that the provisions of Section 4, Section 6, Section 7 and Section 8
shall at all times be effective and shall survive such termination. In any such
case either the Representatives or the Company shall have the right to postpone
the Closing Date or a Subsequent Closing Date, as the case may be, but in no
event for longer than seven days in order that the required changes, if any, to
the Registration Statement and the Prospectus or any other documents or
arrangements may be effected. No action taken pursuant to this Section 9 shall
relieve any defaulting Underwriter from liability in respect of its default.
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
9. Any action taken under this Section 9 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
27
SECTION 10. Termination of this Agreement. Prior to the Closing Date this
Agreement may be terminated by the Representatives by notice given to the
Company if at any time (i) trading or quotation in any of the Company's
securities shall have been suspended or limited by the Commission or by the
Nasdaq Stock Market, Inc. or trading in securities generally on New York Stock
Exchange or the Nasdaq Stock Market, Inc. shall have been suspended or limited,
or minimum or maximum prices shall have been generally established on any of
such stock exchange or market by the Commission or the NASD; (ii) a general
banking moratorium shall have been declared by federal or New York authorities
or a material disruption in commercial banking or securities settlement or
clearance services in the United States has occurred; or (iii) there shall have
occurred any outbreak or escalation of national or international hostilities or
any crisis or calamity, or any change in the United States or international
financial markets, or any substantial change or development involving a
prospective substantial change in United States' or international political,
financial or economic conditions, as in the judgment of the Representatives is
material and adverse and makes it impracticable or inadvisable to market the
ADSs in the manner and on the terms described in the Prospectus or to enforce
contracts for the sale of securities. Any termination pursuant to this Section
10 shall be without liability on the part of (a) the Company to any Underwriter,
except that the Company shall be obligated to reimburse the expenses of the
Representatives and the Underwriters pursuant to Sections 4 and 6 hereof or (b)
any Underwriter to the Company.
SECTION 11. No Advisory or Fiduciary Responsibility. The Company
acknowledges and agrees that: (i) the purchase and sale of the ADSs pursuant to
this Agreement, including the determination of the public offering price of the
ADSs and any related discounts and commissions, is an arm's-length commercial
transaction between the Company, on the one hand, and the several Underwriters,
on the other hand, and the Company is capable of evaluating and understanding
and understands and accepts the terms, risks and conditions of the transactions
contemplated by this Agreement; (ii) in connection with each transaction
contemplated hereby and the process leading to such transaction each Underwriter
is and has been acting solely as a principal and is not the financial advisor,
agent or fiduciary of the Company or its affiliates, stockholders, creditors or
employees or any other party; (iii) no Underwriter has assumed or will assume an
advisory, agency or fiduciary responsibility in favor of the Company with
respect to any of the transactions contemplated hereby or the process leading
thereto (irrespective of whether such Underwriter has advised or is currently
advising the Company on other matters) and no Underwriter has any obligation to
the Company with respect to the offering contemplated hereby except the
obligations expressly set forth in this Agreement; (iv) the several Underwriters
and their respective affiliates may be engaged in a broad range of transactions
that involve interests that differ from those of the Company and that the
several Underwriters have no obligation to disclose any of such interests by
virtue of any advisory, agency or fiduciary relationship; and (v) the
Underwriters have not provided any legal, accounting, regulatory or tax advice
with respect to the offering contemplated hereby and the Company has consulted
its own legal, accounting, regulatory and tax advisors to the extent it deemed
appropriate.
This Agreement supersedes all prior agreements and understandings (whether
written or oral) between the Company and the several Underwriters, or any of
them, with respect to the subject matter hereof. The Company hereby waives and
releases, to the fullest extent permitted by law, any claims that the Company
may have against the several Underwriters with respect to any breach or alleged
breach of agency or fiduciary duty.
28
SECTION 12. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Underwriters set
forth in or made pursuant to this Agreement (i) will remain operative and in
full force and effect, regardless of any (A) investigation, or statement as to
the results thereof, made by or on behalf of any Underwriter, the officers or
employees of any Underwriter, or the Company, the officers or employees of the
Company, or any person controlling the Company, as the case may be or (B)
acceptance of the ADSs and payment for them hereunder and (ii) will survive
delivery of and payment for the ADSs sold hereunder and any termination of this
Agreement.
SECTION 13. Notices. All communications hereunder shall be in writing and
shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Representatives:
X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Syndicate Desk
with a copy to:
Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Syndicate Department
If to the Company:
NICE-Systems Ltd.
8 Xxxxxxx Xxxxxx
X.X. Xxx 000
Xx'xxxxx 00000, Xxxxxx
Facsimile: (000) 0-000-0000
Attention: Chief Financial Officer and General Counsel
with a copy to:
NICE Systems Inc.
000 Xxxxx 00 Xxxxx 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: President and General Counsel
Any party hereto may change the address for receipt of communications by
giving written notice to the others.
29
SECTION 14. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Underwriters pursuant
to Section 9 hereof, and to the benefit of (i) the Company, its directors, any
person who controls the Company within the meaning of the Securities Act and the
Exchange Act and any officer of the Company who signs the Registration
Statement, (ii) the Underwriters, the officers, directors, employees and agents
of the Underwriters, and each person, if any, who controls any Underwriter
within the meaning of the Securities Act and the Exchange Act, and (iii) the
respective successors and assigns of any of the above, all as and to the extent
provided in this Agreement, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "SUCCESSORS AND ASSIGNS" shall
not include a purchaser of any of the ADSs from any of the several Underwriters
merely because of such purchase.
SECTION 15. Partial Unenforceability. The invalidity or unenforceability of
any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
SECTION 16. Governing Law Provisions. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
(a) Consent to Jurisdiction. Any legal suit, action or proceeding arising
out of or based upon this Agreement or the transactions contemplated hereby
("RELATED PROCEEDINGS") may be instituted in the federal courts of the United
States of America located in the City and County of New York, Borough of
Manhattan, or the courts of the State of New York in each case located in the
City and County of New York, Borough of Manhattan (collectively, the "SPECIFIED
COURTS"), and each party irrevocably submits to the exclusive jurisdiction
(except for proceedings instituted in regard to the enforcement of a judgment of
any such court (a "RELATED JUDGMENT"), as to which such jurisdiction is
non-exclusive) of such courts in any such suit, action or proceeding. Service of
any process, summons, notice or document by registered mail, return receipt
requested, to such party's address set forth above shall be effective service of
process for any suit, action or other proceeding brought in any such court. The
parties irrevocably and unconditionally waive any objection to the laying of
venue of any suit, action or other proceeding in the Specified Courts and
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such suit, action or other proceeding brought in any such
court has been brought in an inconvenient forum.
(b) Agent for Service; Submission to Jurisdiction; Waiver of Immunities. By
execution and delivery of this Agreement, the Company hereby designates and
appoints Nice Systems, Inc. as the authorized agent of the Company upon whom
process may be served in any Related Proceedings in the Specified Courts. 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. The Company further
agrees that service of process upon its authorized agent or successor shall be
deemed in
30
every respect personal service of process upon the Company in any Related
Proceedings. 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 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 ADSs or underlying Ordinary 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.
(b) Waiver of Immunity. To the extent that the Company has or hereafter may
acquire any immunity (sovereign or otherwise) from any legal action, suit or
proceeding, from jurisdiction of any court or from set-off or any legal process
(whether service or notice, attachment in aid or otherwise) with respect to
itself or any of its property, the Company hereby irrevocably waives and agrees
not to plead or claim such immunity in respect of its obligations under this
Agreement.
SECTION 17. General Provisions. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Section headings herein are for the convenience of the parties only and
shall not affect the construction or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated business
person who was adequately represented by counsel during negotiations regarding
the provisions hereof, including, without limitation, the indemnification
provisions of Section 7 and the contribution provisions of Section 8, and is
fully informed regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Sections 7 and 8 hereto fairly allocate the
risks in light of the ability of the parties to investigate the Company, its
affairs and its business in order to assure that adequate disclosure has been
made in the Registration Statement, the Preliminary Prospectus, the Disclosure
Package and the Prospectus (and any amendments and supplements thereto), as
required by the Securities Act and the Exchange Act.
31
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become a binding agreement
in accordance with its terms.
Very truly yours,
NICE-SYSTEMS LTD.
By: /s/ Xxxx Xxxxx
----------------------------------
Name: Xxxx Xxxxx
Title: Chief Executive Officer
By: /s/ Ran Oz
----------------------------------
Name: Ran Oz
Title: Corporate Vice President
and Chief Financial Officer
The foregoing Underwriting Agreement is hereby confirmed and accepted by
the Representatives as of the date first above written.
X.X. XXXXXX SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
Acting as Representatives of the
several Underwriters named in
the attached Schedule A.
By X.X. Xxxxxx Securities Inc.
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Managing Director
By Banc of America Securities LLC
By: /s/ Xxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxx
Title: Managing Director
32
