EXHIBIT 1.1
FORM OF UNDERWRITING
AGREEMENT
ITURAN LOCATION AND CONTROL LTD.
[ ] Shares
Ordinary Shares
(NIS 33 1/3 Par Value)
[ ] [ ], 2005
UNDERWRITING AGREEMENT
[ ], 2005
UBS Securities LLC
as Managing Underwriter
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Ituran Location and Control Ltd., an Israeli corporation (the
"Company"), proposes to issue and sell, and the persons named in Schedule B
hereto (the "Selling Shareholders"), severally and not jointly, propose to sell,
to the underwriters named in Schedule A annexed hereto (the "Underwriters"), for
whom you are acting as representative (the "Representative"), an aggregate of
[ ] ordinary shares (the "Firm Shares"), NIS 33 1/3 par value, of the
Company (the "Ordinary Shares"), of which [ ] Ordinary Shares are to be issued
and sold by the Company and an aggregate of [ ] Ordinary Shares are to be sold
by the Selling Shareholders in the respective amounts set forth under the
caption "Firm Shares" in Schedule B annexed hereto. In addition, solely for the
purpose of covering over-allotments, the Company and the Selling Shareholders
propose to grant to the Underwriters the option to purchase from the Company and
the Selling Shareholders an additional [ ] Ordinary Shares (the "Additional
Shares") of which [ ] Ordinary Shares are to be issued and sold by the Company
and an aggregate of [ ] Ordinary Shares are to be sold by the Selling
Shareholders in the respective amounts set forth under the caption "Additional
Shares" in Schedule B annexed hereto. The Firm Shares and the Additional Shares
are hereinafter collectively sometimes referred to as the "Shares." The Shares
are described in the Prospectus which is referred to below.
The Company has filed, in accordance with the provisions of
the Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form F-1 (File No. 333-[ ])
including a prospectus, relating to the Shares. The Company has furnished to
you, for use by the Underwriters and by dealers, copies of one or more
preliminary prospectuses (each such preliminary prospectus, being herein called
a "Preliminary Prospectus") relating to the Shares. Except where the context
otherwise requires, the registration statement, as amended when it became or
becomes effective, including all documents filed as a part thereof, and
including any information contained in a prospectus subsequently filed with the
Commission pursuant to Rule 424(b) under the Act and deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430(A)
under the Act and also including any registration statement filed pursuant to
Rule 462(b) under the Act, is herein called the "Registration Statement," and
the prospectus, in the form filed by
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the Company with the Commission pursuant to Rule 424(b) under the Act on or
before the second business day after the date hereof (or such earlier time as
may be required under the Act) or, if no such filing is required, the form of
final prospectus included in the Registration Statement at the time it became
effective, is herein called the "Prospectus." Any reference herein to the
Registration Statement, a Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the copy of the Registration Statement,
Preliminary Prospectus or Prospectus, respectively, filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval System
("XXXXX"). As used herein, "business day" shall mean a day on which the National
Association of Securities Dealers Automated Quotation National Market System
("NASDAQ") is open for trading.
Each of the Company, the Underwriters and the Selling
Shareholders, severally and not jointly, agrees as follows:
1. Sale and Purchase. Upon the basis of the representations and
warranties and subject to the terms and conditions herein set forth, the Company
agrees to issue and sell, and each of the Selling Shareholders, severally and
not jointly, agrees to sell, to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company and
each Selling Shareholder the number of Firm Shares (subject to such adjustment
as UBS Securities LLC ("UBS") may determine to avoid fractional shares) set
forth opposite the name of such Underwriter in Schedule A attached hereto,
subject to adjustment in accordance with Section 11 hereof, in each case at a
purchase price of $[ ] per Share. The Company and each Selling Shareholder is
advised by you that the Underwriters intend (i) to make a public offering of
their respective portions of the Firm Shares as soon after the effective date of
the Registration Statement as in your judgment is advisable and (ii) initially
to offer the Firm Shares upon the terms set forth in the Prospectus. You may
from time to time increase or decrease the public offering price after the
initial public offering to such extent as you may determine.
In addition, the Company and each of the Selling Shareholders,
severally and not jointly, hereby grants to the several Underwriters the option
to purchase, and upon the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Underwriters shall
have the right to purchase, severally and not jointly, from the Company and the
Selling Shareholders all or a portion of the Additional Shares, as may be
necessary to cover over-allotments made in connection with the offering of the
Firm Shares, at the same purchase price per share to be paid by the Underwriters
to the Company and the Selling Shareholders for the Firm Shares. To the extent
that the Underwriters exercise the option to purchase fewer than the total
number of Additional Shares offered hereunder, the Underwriters shall purchase
Additional Shares from the Company and each Selling Shareholder in the same
proportion that the number of Additional Shares offered by the Company and such
Selling Shareholder bears to the total number of Additional Shares offered by
the Company and the Selling Shareholders, subject, in each case, to such
adjustment as UBS may determine solely to eliminate fractional shares. This
option may be exercised by UBS on behalf of the several Underwriters at any time
and from time to time on or before the thirtieth day following the date of the
Prospectus, by written notice to the Company and the Custodian (as defined
below). Such notice shall set forth the aggregate number of Additional Shares as
to which
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the option is being exercised, and the date and time when the Additional Shares
are to be delivered (such date and time being herein referred to as the
"additional time of purchase"); provided, however, that the additional time of
purchase shall not be earlier than the time of purchase (as defined below) nor
earlier than the second business day after the date on which the option shall
have been exercised nor later than the tenth business day after the date on
which the option shall have been exercised. The number of Additional Shares to
be sold to each Underwriter shall be the number which bears the same proportion
to the aggregate number of Additional Shares being purchased as the number of
Firm Shares set forth opposite the name of such Underwriter on Schedule A hereto
bears to the total number of Firm Shares (subject, in each case, to such
adjustment as you may determine to eliminate fractional shares), subject to
adjustment in accordance with Section 11 hereof.
Pursuant to powers of attorney, which shall be reasonably
satisfactory to counsel for the Underwriters, granted by each Selling
Shareholder, [ ] and [ ] will act as representatives of the Selling
Shareholders. The foregoing representatives (the "Representatives of the Selling
Shareholders") are authorized, on behalf of each Selling Shareholder, to execute
any documents necessary or desirable in connection with the sale of the Shares
to be sold hereunder by each Selling Shareholder, to make delivery of the
certificates of such Shares, to receive the proceeds of the sale of such Shares,
to give receipts for such proceeds, to pay therefrom the expenses, if any, to be
borne by each Selling Shareholder in connection with the sale and public
offering of the Shares, to distribute the balance of such proceeds to each
Selling Shareholder in proportion to the number of Shares sold by each Selling
Shareholder, to receive notices on behalf of each Selling Shareholder and to
take such other action as may be necessary or desirable in connection with the
transactions contemplated by this Agreement.
2. Payment and Delivery.
(a) Payment of the purchase price for the Firm Shares shall be
made to the Company and the Selling Shareholders by wire transfer of immediately
available funds, against delivery of the certificates for the Firm Shares to you
through the facilities of The Depository Trust Company ("DTC") for the
respective accounts of the Underwriters. Such payment and delivery shall be made
at 10:00 A.M., New York City time, on [ ], 2005 (unless another time
shall be agreed to by you, the Company and the Representatives of the Selling
Shareholders or unless postponed in accordance with the provisions of Section 11
hereof). The time at which such payment and delivery are to be made is
hereinafter sometimes called "the time of purchase." Electronic transfer of the
Firm Shares shall be made to you at the time of purchase in such names and in
such denominations as you shall specify.
Payment of the purchase price for the Additional Shares shall
be made to the Company and to the Selling Shareholders at the additional time of
purchase in the same manner and at the same office as the payment for the Firm
Shares. Electronic transfer of the Additional Shares shall be made to you at the
additional time of purchase in such names and in such denominations as you shall
specify.
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Deliveries of the documents described in Section 9 hereof with
respect to the purchase of the Shares shall be made at the offices of White &
Case LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 9:00 A.M.,
New York City time, on the date of the closing of the purchase of the Firm
Shares or the Additional Shares, as the case may be.
(b) All payments to be made by the Company to the Underwriters
under this Agreement shall be made without withholding or deduction for or on
account of any present or future taxes, assessments, imposts, duties or other
governmental charges whatsoever ("Taxes") unless the Company is compelled by law
to deduct or withhold such taxes, assessments, imposts, duties or charges. To
the extent any such Taxes are so required to be deducted or withheld, the
Company shall pay to the Underwriters such additional amounts ("Additional
Amounts") as may be necessary in order that the net amounts received by such
Underwriters after such withholding or deduction (including any withholding or
deduction in respect of such Additional Amounts) shall equal the amounts that
would have been received if no withholding or deduction had been made.
3. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that, as of
the date hereof, the time of purchase and any additional time of purchase:
(a) The Registration Statement has been declared effective
under the Act; no stop order of the Commission preventing or suspending
the use of any Preliminary Prospectus or the effectiveness of the
Registration Statement has been issued and no proceedings for such
purpose have been instituted or, to the Company's knowledge, are
threatened by the Commission; each Preliminary Prospectus, at the time
of filing thereof, complied in all material respects with the
applicable requirements of the Act and the last Preliminary Prospectus
distributed in connection with the offering of the Shares did not, as
of its date, and does not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; the Registration Statement
complied when it became effective, complies and will comply, at the
time of purchase and any additional time of purchase, in all material
respects with the applicable requirements of the Act and the Prospectus
will comply, as of its date and at the time of purchase and any
additional times of purchase, in all material respects with the
applicable requirements of the Act and any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement have been and will be so described or filed;
the conditions to the use of Form F-1 have been satisfied; the
Registration Statement did not when it became effective, does not and
will not, at the time of purchase and any additional time of purchase,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading and the Prospectus will not, as of
its date and at the time of purchase and any additional time of
purchase, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading;
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provided, however, that the Company makes no warranty or representation
with respect to any statement contained in any Preliminary Prospectus,
the Registration Statement or the Prospectus made in reliance upon and
in conformity with information concerning an Underwriter or the
activities to be taken by any Underwriter and furnished in writing by
or on behalf of such Underwriter through you to the Company expressly
for use in any Preliminary Prospectus, the Registration Statement or
the Prospectus; and the Company has not distributed and will not
distribute any offering material in connection with the offering or
sale of the Shares other than the Registration Statement, the then most
recent Preliminary Prospectus and the Prospectus; provided, however,
that if, at any time after the date hereof, the Company is obligated to
prepare and furnish to the Underwriters an amendment or supplement to
the Prospectus under Section 5(g) of this Agreement and so furnishes
such amendment or supplement, then from and after the time that such
Prospectus as amended or supplemented is furnished to the Underwriters
in accordance with Section 5(g), the term "Prospectus" shall be deemed
to mean the Prospectus as so amended or supplemented; provided,
further, that nothing in the foregoing proviso shall relieve the
Company of any liability for a breach of the representations contained
in this Section 3 during any period between the occurrence of the event
giving rise to the need to amend or supplement the Prospectus and the
actual delivery of the Prospectus, as amended or supplemented, to the
Underwriters in accordance with Section 5(b).
(b) as of the date of this Agreement, the Company has an
authorized and outstanding capitalization as set forth in the section
of the Prospectus entitled "Capitalization" and, as of the time of
purchase and the additional time of purchase, as the case may be, the
Company shall have an authorized and outstanding capitalization as set
forth in the section of the Prospectus entitled "Capitalization"
(subject, in each case, to the issuance of Ordinary Shares upon
exercise of stock options and warrants disclosed as outstanding in the
Prospectus, the shares disclosed as issuable to Xxxxxxxx L.P., and
grant of options under existing stock option plans described in the
Prospectus); all of the issued and outstanding share capital, including
the Ordinary Shares, of the Company have been duly authorized and
validly issued and are fully paid and non-assessable, have been issued
in compliance with all Israeli and U.S. federal and state securities
laws and were not issued in violation of any preemptive right, resale
right, right of first refusal or similar right; the Shares are, or will
be at the time of purchase, duly listed, admitted and authorized for
trading on the NASDAQ and the Tel Aviv Stock Exchange (the "TASE");
(c) the Company has been duly incorporated and is validly
existing as a company under the laws of the State of Israel, with the
requisite corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Prospectus, to
execute and deliver this Agreement and to issue, sell and deliver the
Shares as contemplated herein;
(d) the Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the
ownership or leasing of its properties or the
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conduct of its business requires such qualification, except where the
failure to be so qualified and in good standing would not, individually
or in the aggregate, have a material adverse effect on (i) the
business, properties, financial condition, results of operation or
prospects of the Company and the Subsidiaries (as hereinafter defined)
taken as a whole or on (ii) the ability of the Company and the Selling
Shareholders to consummate the transactions contemplated by this
Agreement (a "Material Adverse Effect");
(e) the Company has no material subsidiaries other than the
subsidiaries listed on Schedule C hereto (collectively, the
"Subsidiaries"); other than as set forth in the Prospectus, the Company
owns all of the issued and outstanding capital stock of each of the
Subsidiaries; other than the capital stock of the Subsidiaries, the
Company does not own, directly or indirectly, any shares of stock or
any other equity or long-term debt securities of any corporation or
have any equity interest in any firm, partnership, joint venture,
association or other entity that is, individually or together with any
other firm, partnership, joint venture, association or other entity,
material to the Company; complete and correct copies of the respective
certificates of incorporation or memorandum and articles of association
and the by-laws (or other relevant organizational document) of the
Company and each of the Subsidiaries and all amendments thereto have
been delivered to you, and except as set forth in the exhibits to the
Registration Statement no changes therein will be made subsequent to
the date hereof and prior to the time of purchase or, if later, the
additional time of purchase; each Subsidiary has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, with the requisite
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus; each
Subsidiary is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified and in good
standing would not, individually or in the aggregate, have a Material
Adverse Effect; all of the outstanding shares of capital stock of each
of the Subsidiaries have been duly authorized and validly issued, are
fully paid and non-assessable and other than as set forth in the
Prospectus, are owned by the Company; none of such outstanding shares
of Capital Stock is subject to any security interest, other encumbrance
or adverse claims; and, other than as set forth in the Prospectus, no
options, warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligation into
shares of capital stock or ownership interests in the Subsidiaries are
outstanding;
(f) the Shares have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and non-assessable and free of
statutory and contractual preemptive rights, resale rights, rights of
first refusal and similar rights and free of liens, encumbrances and
adverse claims;
(g) the share capital of the Company, including the Shares,
conforms in all material respects to the description thereof contained
in the Registration Statement and the
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Prospectus and the certificates evidencing the Shares are in due and
proper form and the holders of the Shares will not be subject to
personal liability by reason of being such holders;
(h) this Agreement has been duly authorized, executed and
delivered by the Company;
(i) neither the Company nor any of the Subsidiaries is in
breach or violation of or in default under (nor has any event occurred
which with notice, lapse of time or both would result in any breach or
violation of, constitute a default under or give the holder of any
indebtedness (or a person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a part of
such indebtedness under) (x) its respective memorandum of association,
articles of association, charter or by-laws (or other relevant
organizational document), or (y) any indenture, mortgage, deed of
trust, bank loan or credit agreement or other evidence of indebtedness,
or any license, lease, contract or other agreement or instrument to
which the Company or any of the Subsidiaries is a party or by which any
of them or any of their properties may be bound or affected, except in
the case of sub-clause (y) above, and except as described in the
Prospectus, for such breaches, violations or defaults that would not,
individually or in the aggregate, result in a Material Adverse Effect;
(j) the execution, delivery and performance of this Agreement,
the issuance and sale of the Shares and the consummation of the
transactions contemplated hereby will not conflict with, result in any
breach or violation of or constitute a default under (nor constitute
any event which with notice, lapse of time or both would result in any
breach or violation of or constitute a default under) (x) the
respective memorandum of association, articles of association, charter
or by-laws (or other relevant organizational document) of the Company
or any of the Subsidiaries, or (y) any indenture, mortgage, deed of
trust, bank loan or credit agreement or other evidence of indebtedness,
or any license, lease, contract or other agreement or instrument to
which the Company or any of the Subsidiaries is a party or by which any
of them or any of their respective properties may be bound or affected,
or any federal, state, local or foreign law, regulation or rule or any
decree, judgment or order applicable to the Company or any of the
Subsidiaries, except in the case of sub-clause (y) above for such
breaches, violations or defaults that would not, individually or in the
aggregate, result in a Material Adverse Effect;
(k) no approval, authorization, consent or order of or filing
with any Israeli or U.S. federal, state, local or other foreign
governmental or regulatory commission, board, body, authority or agency
is required in connection with the issuance and sale of the Shares or
the consummation by the Company of the transactions contemplated hereby
other than registration of the offer and sale of the Shares under the
Act and the registration of the Shares under the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder
(collectively, the "Exchange Act"), which has been or will be effected,
and any necessary qualification under the securities or blue sky laws
of the various jurisdictions in which the Shares are being offered by
the Underwriters or under the rules and regulations of
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the NASD and the approval of the TASE and of the Israeli Ministry of
Telecommunications, which approvals have been obtained as of the date
hereof;
(l) except as set forth in the Prospectus, (i) no person has
the right, contractual or otherwise, to cause the Company to issue or
sell to it any Ordinary Shares or shares of any other share capital or
other equity interests of the Company, (ii) no person has any
preemptive rights, resale rights, rights of first refusal or other
rights to purchase any Ordinary Shares or any other share capital or
other equity interests of the Company, and (iii) no person has the
right to act as an underwriter or as a financial advisor to the Company
in connection with the offer and sale of the Shares, in the case of
each of the foregoing clauses (i), (ii) and (iii), whether as a result
of the filing or effectiveness of the Registration Statement or the
sale of the Shares as contemplated thereby except as set forth in the
Prospectus; no person has the right, contractual or otherwise, to cause
the Company to register under the Act any Ordinary Shares or any other
share capital or other equity interests of the Company, or to include
any such shares or interests in the Registration Statement or the
offering contemplated thereby, whether as a result of the filing or
effectiveness of the Registration Statement or the sale of the Shares
as contemplated thereby or otherwise;
(m) each of the Company and the Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all
necessary filings required under any Israeli or U.S. federal, state,
local or other foreign law, regulation or rule, and has obtained all
necessary authorizations, consents and approvals from other persons, in
each case, that are, either individually or in the aggregate, material
to the to conduct its respective business; neither the Company nor any
of the Subsidiaries is in violation of, or in default under, or has
received notice of any proceedings relating to revocation or
modification of, any such license, authorization, consent or approval
or any Israeli or U.S. federal, state, local or other foreign law,
regulation or rule or any decree, order or judgment applicable to the
Company or any of the Subsidiaries, except where such violation,
default, revocation or modification would not, individually or in the
aggregate, have a Material Adverse Effect;
(n) all legal or governmental proceedings, affiliate
transactions, off-balance sheet transactions, contracts, licenses,
agreements, leases or documents of a character required to be described
in the Prospectus or to be filed as an exhibit to the Registration
Statement have been so described or filed as required;
(o) except as set forth in the Prospectus, there are no
actions, suits, claims, investigations or proceedings pending or, to
the Company's knowledge, threatened, to which the Company or any of the
Subsidiaries or any of their respective directors or officers is or
would be a party or of which any of their respective properties is or
would be subject at law or in equity, before or by any Israeli or U.S.
federal, state, local or other foreign governmental or regulatory
commission, board, body, authority or agency, except any such action,
suit, claim, investigation or proceeding which would not result in a
judgment, decree or order having, individually or in the aggregate, a
Material Adverse Effect or preventing consummation of the transactions
contemplated hereby;
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(p) Xxxx Xxxxx & Co., a member of Xxxxx Xxxxxxxx
International, whose report on the consolidated financial statements of
the Company and the Subsidiaries is filed with the Commission as part
of the Registration Statement and the Prospectus, are independent
public accountants as required by the Act;
(q) the audited consolidated financial statements of the
Company included in the Prospectus, together with the related notes,
present fairly, in all material respects, the consolidated financial
position of the Company and the Subsidiaries as of the dates indicated
and the consolidated results of operations and cash flows of the
Company and the Subsidiaries for the periods specified and have been
prepared in compliance with the requirements of the Act and in
conformity with generally accepted accounting principles applied on a
consistent basis during the periods involved; there are no financial
statements (historical or pro forma) that are required to be included
in the Registration Statement and the Prospectus that are not included
as required; and the Company and the Subsidiaries do not have any
material liabilities or obligations, direct or contingent (including
any off-balance sheet obligations), not disclosed in the Registration
Statement and the Prospectus;
(r) subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, there has
not been (i) any material adverse change, or any development involving
a prospective material adverse change, in the business, properties,
management, financial condition or results of operations of the Company
and the Subsidiaries taken as a whole, (ii) any transaction which is
material to the Company and the Subsidiaries taken as a whole, (iii)
any obligation, direct or contingent (including any off-balance sheet
obligations), incurred by the Company or the Subsidiaries, which is
material to the Company and the Subsidiaries taken as a whole, (iv)
except as described in or contemplated by the Prospectus, any change in
the share capital or outstanding indebtedness of the Company or the
Subsidiaries or (v) any dividend or distribution of any kind declared,
paid or made on the share capital of the Company;
(s) the Company is not and, after giving effect to the
offering and sale of the Shares, will not become (i) an "investment
company" or an entity "controlled" by an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended
(the "Investment Company Act") or (ii) a "controlled foreign
corporation" as defined in Section 957 of the Internal Revenue Code.
Based upon the composition of its gross income and the composition and
value of its gross assets, and applying the rules regarding "passive
foreign investment companies" ("PFIC") as of the date hereof, the
Company believes that it will not be a PFIC for the taxable year of
2005 and the Company has no reason to believe that the composition of
its gross income or the composition or value of its gross assets will
change in a manner that would cause it to become a PFIC;
(t) the Company and each of the Subsidiaries has good and
marketable title to all property (real and personal) described in the
Prospectus as being owned by each of them, free and clear of all liens,
claims, security interests or other encumbrances; other than as
described in the Registration Statement or the Prospectus or such that
do not materially affect the value
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of such property and do not interfere with the use made or proposed to
be made of such property by the Company; all the property described in
the Prospectus as being held under lease by the Company or a Subsidiary
is held thereby under valid, subsisting and enforceable leases with
such exceptions as are not material and do not interfere with the use
made or proposed to be made of such property by the Company;
(u) except as described in the Prospectus, the Company and the
Subsidiaries own, or have obtained valid and enforceable licenses for,
or other rights to use, the inventions, patent applications, patents,
trademarks (both registered and unregistered), tradenames, copyrights,
trade secrets and other proprietary information described in the
Prospectus as being owned or licensed by them except where the failure
to own, license or have such rights would not, individually or in the
aggregate, have a Material Adverse Effect (collectively, "Intellectual
Property"); (i) to the Company's knowledge, there are no third parties
who have or will be able to establish rights to any Intellectual
Property of the Company or its Subsidiaries, except for the ownership
rights of the owners of the Intellectual Property which is licensed to
the Company and its Subsidiaries and the rights of other licensees of
Intellectual Property that are not licensed to any of the Company's
Subsidiaries on an exclusive basis; (ii) to the Company's knowledge,
there is no infringement by third parties of any Intellectual Property;
(iii) there is no pending or threatened action, suit, proceeding or
claim by others challenging the Company's rights in or to any
Intellectual Property, and the Company is unaware of any facts which
could form a reasonable basis for any such claim; (iv) there is no
pending or threatened action, suit, proceeding or claim by others
challenging the validity or scope of any Intellectual Property, and the
Company is unaware of any facts which could form a reasonable basis for
any such claim; (v) there is no pending or threatened action, suit,
proceeding or claim by others that the Company infringes or otherwise
violates any patent, trademark, copyright, trade secret or other
proprietary rights of others, and the Company is unaware of any facts
which could form a reasonable basis for any such claim; (vi) there is
no patent or patent application that contains claims that interfere
with the issued or pending claims of any of the Intellectual Property;
and (vii) to the Company's knowledge, there is no prior art that may
render any patent application owned by the Company of the Intellectual
Property unpatentable that has not been disclosed to the U.S. Patent
and Trademark Office and/or the Israeli Registrar of Patents, Designs
and Trademarks, as applicable;
(v) neither the Company nor any of the Subsidiaries is engaged
in any unfair labor practice; except for matters which would not,
individually or in the aggregate, have a Material Adverse Effect, (i)
there is (A) no unfair labor practice complaint pending or, to the
Company's knowledge, threatened against the Company or any of the
Subsidiaries before the National Labor Relations Board or any other
comparable board or governmental body, and no grievance or arbitration
proceeding arising out of or under collective bargaining agreements is
pending or threatened, (B) no strike, labor dispute, slowdown or
stoppage pending or, to the Company's knowledge after due inquiry,
threatened against the Company or any of the Subsidiaries and (C) no
union representation dispute currently existing concerning the
employees of the Company or any of the Subsidiaries, and (ii) to the
Company's knowledge,
-11-
(A) no union organizing activities are currently taking place
concerning the employees of the Company or any of the Subsidiaries and
(B) there has been no violation of any federal, state, local or foreign
law relating to discrimination in the hiring, promotion or pay of
employees, any applicable wage or hour laws or any provision of the
Employee Retirement Income Security Act of 1974 ("ERISA") or the rules
and regulations promulgated thereunder concerning the employees of the
Company or any of the Subsidiaries; the Company is in compliance with
the labor and employment laws and collective bargaining agreements
applicable to its employees in Israel; no labor disturbance by the
employees of the Company exists or, to the knowledge of the Company, is
imminent;
(w) the Company and the Subsidiaries and their properties,
assets and operations are in compliance with, and hold all permits,
authorizations and approvals required under, Environmental Laws (as
defined below), except to the extent that failure to so comply or to
hold such permits, authorizations or approvals would not, individually
or in the aggregate, have a Material Adverse Effect; there are no past,
present or, to the Company's knowledge, reasonably anticipated future
events, conditions, circumstances, activities, practices, actions,
omissions or plans that would reasonably be expected to give rise to
any material costs or liabilities to the Company or the Subsidiaries
under, or to interfere with or prevent compliance by the Company or the
Subsidiaries with, Environmental Laws; except as would not,
individually or in the aggregate, have a Material Adverse Effect,
neither the Company nor any of the Subsidiaries (i) is, to the
Company's knowledge, the subject of any investigation, (ii) has
received any notice or claim, (iii) is a party to or affected by any
pending or threatened action, suit or proceeding, (iv) is bound by any
judgment, decree or order or (v) has entered into any agreement, in
each case relating to any alleged violation of any Environmental Law or
any actual or alleged release or threatened release or cleanup at any
location of any Hazardous Materials (as defined below) (as used herein,
"Environmental Law" means any Israeli or U.S. federal, state, local or
other foreign law, statute, ordinance, rule, regulation, order, decree,
judgment, injunction, permit, license, authorization or other binding
requirement, or common law, applicable to the Company that relates to
health, safety or the protection, cleanup or restoration of the
environment or natural resources, including those relating to the
distribution, processing, generation, treatment, storage, disposal,
transportation, other handling or release or threatened release of
Hazardous Materials, and "Hazardous Materials" means any material
(including, without limitation, pollutants, contaminants, hazardous or
toxic substances or wastes) that is regulated by or may give rise to
liability under any Environmental Law);
(x) all tax returns required to be filed by the Company and
each of the Subsidiaries have been filed, and all taxes and other
assessments of a similar nature (whether imposed directly or through
withholding) including any interest, additions to tax or penalties
applicable thereto due or claimed to be due from such entities have
been paid, other than those being contested in good faith and for which
adequate reserves have been provided except where the failure to file
to such tax returns or to pay such taxes would not, individually or in
the aggregate, have a Material Adverse Effect;
-12-
(y) no stamp or other issuance or transfer taxes or duties and
capital gains, income, withholding or other taxes are payable by or on
behalf of the Underwriters to the United States, any state, or any
political subdivision thereof, or any taxing authority in any
jurisdiction, in connection with the sale or issuance of any Shares,
except for any New York State stock transfer tax payable upon the sale
and delivery of the Shares by the Selling Shareholders to the
Underwriters (which will be paid by the Selling Shareholders at the
time and to the extent required by, and in accordance with, New York
State law);
(z) the Company and each of the Subsidiaries maintains
insurance covering its properties, operations, personnel and businesses
as the Company deems adequate; such insurance insures against such
losses and risks to an extent which is adequate in accordance with
customary industry practice to protect the Company and the Subsidiaries
and their businesses; the Company has not received any notice from any
insurance carrier of the cancellation or revocation of any of its
policies; all such insurance is fully in force on the date hereof and
will be fully in force at the time of purchase and any additional time
of purchase;
(aa) neither the Company nor any of the Subsidiaries has
sustained since the date of the last audited financial statements
included in the Registration Statement and the Prospectus any loss or
interference with its respective business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree;
(bb) except as described in the Prospectus, the Company has
not sent or received any communication regarding termination of, or
intent not to renew, any of the contracts or agreements referred to or
described in, or filed as an exhibit to, the Registration Statement,
and no such termination or non-renewal has been threatened by the
Company or, to the Company's knowledge, any other party to any such
contract or agreement;
(cc) the Company and each of the Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization;
and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences;
(dd) the Company has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-15 and
15d-15 under the Exchange Act; such disclosure controls and procedures
are designed to ensure that material information relating to the
Company, including its consolidated subsidiaries, is made known to the
Company's Chief Executive Officer and its Chief Financial Officer by
others within those entities, and such disclosure controls and
procedures are effective to perform the functions for which they were
established; the Company's auditors and the Audit Committee of the
Board of Directors have
-13-
been advised of: (i) any significant deficiencies in the design or
operation of internal controls which could adversely affect the
Company's ability to record, process, summarize, and report financial
data; and (ii) any fraud, whether or not material, that involves
management or other employees who have a role in the Company's internal
controls; any material weaknesses in internal controls have been
identified for the Company's auditors; and since the date of the most
recent evaluation of such disclosure controls and procedures, there
have been no significant changes in internal controls or in other
factors that could significantly affect internal controls, including
any corrective actions with regard to significant deficiencies and
material weaknesses;
(ee) the Company has provided you true, correct, and complete
copies of all documentation pertaining to any extension of credit in
the form of a personal loan made, directly or indirectly, by the
Company to any director or executive officer of the Company, or to any
family member or affiliate of any director or executive officer of the
Company; and since July 30, 2002, the Company has not, directly or
indirectly, including through any Subsidiary: (i) extended credit,
arranged to extend credit, or renewed any extension of credit, in the
form of a personal loan, to or for any director or executive officer of
the Company, or to or for any family member or affiliate of any
director or executive officer of the Company; or (ii) made any material
modification, including any renewal thereof, to any term of any
personal loan to any director or executive officer of the Company, or
any family member or affiliate of any director or executive officer,
which loan was outstanding on July 30, 2002;
(ff) any statistical and market-related data included in the
Registration Statement and the Prospectus are based on or derived from
sources that the Company believes to be reliable and accurate, and the
Company has obtained the written consent to the use of such data from
such sources to the extent required;
(gg) neither the Company nor any of the Subsidiaries nor, to
the Company's knowledge, any employee or agent of the Company or the
Subsidiaries has made any payment of funds of the Company or the
Subsidiaries or received or retained any funds in violation of any law,
rule or regulation, which payment, receipt or retention of funds is of
a character required to be disclosed in the Registration Statement or
the Prospectus;
(hh) neither the Company nor any of the Subsidiaries nor any
of their respective directors, officers, affiliates or controlling
persons has taken, directly or indirectly, any action designed, or
which has constituted or would reasonably be expected to cause or
result in, under the Exchange Act, the Israel Securities Law of 1968,
as amended (the "ISL") or otherwise, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or
resale of the Shares;
(ii) to the Company's knowledge after due inquiry, there are
no affiliations or associations between any member of the NASD and any
of the Company's officers, directors or 5% or greater securityholders,
or any of the Selling Shareholders, except as set forth in the
Registration Statement and the Prospectus;
-14-
(jj) there is no 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, in any material respect, with any
provision of the rules of the TASE;
(kk) neither the Company nor any of the Subsidiaries nor, to
the knowledge after due inquiry of the Company, any director, officer,
agent or employee of the Company or any of the Subsidiaries is aware of
any action taken or has taken any action, directly or indirectly for or
on behalf of the Company or any Subsidiary, that would result in a
violation by such persons of the Foreign Corrupt Practices Act of 1977,
as amended, and the rules and regulations thereunder ("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 and its Subsidiaries have conducted their
businesses in compliance with the FCPA and have instituted and maintain
policies and procedures designed to ensure, and which are reasonably
expected to continue to ensure, continued compliance therewith;
(ll) the operations of the Company and the Subsidiaries are
and have been conducted at all times in compliance in all material
respects with applicable financial recordkeeping and reporting
requirements, to the extent applicable, of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all 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 (or any director,
officer, agent or employee of any such entity) with respect to the
Money Laundering Laws is pending or threatened that could have a
Material Adverse Effect;
(mm) neither the Company nor any of its Subsidiaries nor, to
the knowledge of the Company, any director, officer, agent or employee
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") in connection with his or her
actions for or on behalf of the Company; and the Company will not
directly or indirectly use the proceeds of the sale of the Shares, 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;
(nn) the Company is in compliance with all conditions and
requirements stipulated by the instruments of approval entitling it or
any of its operations to the status of "Approved Enterprise" under
Israeli law and by Israeli laws and regulations relating to such
Approved Enterprise status, except for any noncompliance that would
not, individually or in the aggregate, result in a Material Adverse
Effect. All information supplied by the Company with
-15-
respect to such applications was true, correct and complete in all
material respects when supplied to the appropriate authorities;
(oo) 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) under the laws of the State of Israel or any
other jurisdiction;
(pp) the Company believes that its subsidiary, Telematics
Wireless Ltd., qualified for 2004 as an "Industrial Company" within the
definition of the Israeli Law for the Encouragement of Industry
(Taxes), 1969; and absent a change in such law, the Company believes
that such subsidiary it will to continue to so qualify for 2005;
(qq) Assuming the Underwriters are not otherwise subject to
Israeli taxation by the conduct of their general business activities,
(A) the sale and delivery to the Underwriters of the Shares as
contemplated in this Agreement and the sale and delivery of the Shares
by the Underwriters to subsequent purchasers as contemplated by this
Agreement, are not subject to any tax imposed by Israel or any
political subdivision or taxing authority thereof or therein or any
stamp or other issuance or transfer tax, duty, capital gain tax or
withholding tax imposed by federal law, the laws of any state, or any
political subdivision thereof, or any taxing authority in any
jurisdiction, except for any Israeli stamp taxes applicable to this
Agreement (which will be paid by the Company on a timely basis after
the time for payment, to the extent required by, and in accordance
with, Israeli law) and to the issuance of the Shares to be sold by the
Company under this Agreement (which will be paid by the Company at the
time for payment, or promptly and on a timely basis after the time for
payment, to the extent required by, and in accordance with, Israeli
law) and (B) except as disclosed in the Registration Statement or
Prospectus, (1) payments with respect to the Shares will not be subject
to withholding taxes imposed under the laws of Israel or any political
subdivision or taxing authority thereof or therein and (2) the proceeds
from any sale or other disposition of securities will not be subject to
any capital gains, withholding or other taxes imposed by Israel or any
political subdivision or taxing authority thereof or therein.
(rr) the Company has validly and irrevocably appointed Ituran
USA, Inc. as its authorized agent for service of process pursuant to
this Agreement and in connection with the Registration Statement;
(ss) subject to the conditions and qualifications set forth in
the Registration Statement and the Prospectus, a final and conclusive
judgment against the Company for a definitive sum of money entered by
any court in the United States would be enforced by an Israeli court;
(tt) as of the date hereof, to the Company's knowledge, each
of the Selling Shareholders is the holder and legal and beneficial
owner of at least that number of Shares of the Company opposite such
Selling Shareholder's name as set forth on Schedule B hereto;
-16-
and, to the Company's knowledge, as of date of the closing of the
purchase of the Additional Shares, each of the Selling Shareholders
will be the holder and legal and beneficial owner of at least that
number of Shares opposite such Shareholder's name as set forth on
Schedule B hereto; the Company is not aware of, and has not received
any notice of, any adverse claim relating to any Shares. No adverse
claim has been recorded against any share capital of the Company in the
Company's share registry; all recordations in the Company's share
registry have been made in compliance with applicable law;
(uu) for a period of twelve months prior to and including the
date of the sale of the Firm Shares, the Company has not offered or
sold any of its securities in Israel, except for (i) options issued to
its employees and directors in Israel and (ii) other securities that
may be offered in Israel, in each case which issuance of options or
sale of securities was made pursuant to an exemption from the
prospectus delivery requirements under Israeli Securities Law 5728-1968
and the regulations promulgated thereunder;
(vv) the Company has taken all necessary actions to ensure
that, upon and at all times after the effectiveness of the Registration
Statement, the Company and the Subsidiaries and their respective
officers and directors, in their capacities as such, will be in
compliance in all material respects with the provisions of the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated
thereunder, it being understood that the Company may rely on certain
available exceptions from such requirements due to its status as a
foreign private issuer.
In addition, any certificate signed by any officer of the
Company or any of the Subsidiaries and delivered to the Underwriters or counsel
for the Underwriters in connection with the offering of the Shares shall be
deemed to be a representation and warranty by the Company or such Subsidiary, as
the case may be, as to matters covered thereby, to each Underwriter.
4. Representations and Warranties of the Selling Shareholders.
Each of the Selling Shareholders, severally and not jointly, represents and
warrants to and agrees with each of the Underwriters that, as of the date
hereof, the time of purchase and any additional time of purchase:
(a) such Selling Shareholder now is and, at the time of
delivery of such Shares (whether the time of purchase or any additional
time of purchase, as the case may be), will be the beneficial owner of
the number of Shares to be sold by such Selling Shareholder pursuant to
this Agreement and has and, at the time of delivery thereof, will have
valid and marketable title to such Shares, and upon delivery of and
payment for such Shares (whether at the time of purchase or any
additional time of purchase, as the case may be), the Underwriters will
acquire valid and marketable title to such Shares free and clear of any
claim, lien, encumbrance, security interest, community property right,
restriction on transfer or other defect in title;
(b) such Selling Shareholder has and, at the time of delivery
of the Shares to be sold by such Selling Shareholder pursuant to this
Agreement (whether the time of purchase or
-17-
any additional time of purchase, as the case may be), will have the
legal right, power and capacity, and all authorizations and approvals
required by law (other than those imposed by the Act and state
securities or blue sky laws), to (i) enter into this Agreement and the
Custody Agreement (as defined below) and to execute the Power of
Attorney (as defined below), (ii) sell, assign, transfer and deliver
the Shares to be sold by such Selling Shareholder pursuant to this
Agreement in the manner provided in this Agreement and (iii) make the
representations, warranties and agreements made by such Selling
Shareholder herein;
(c) this Agreement and the custody agreement (the "Custody
Agreement"), dated [a recent date before the trade date], between
[ ], as custodian (the "Custodian"), and the Selling Shareholders
and the power of attorney signed in connection with the Custody
Agreement (the "Power of Attorney") have each been duly executed and
delivered by such Selling Shareholder, and each is a legal, valid and
binding agreement of such Selling Shareholder enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(d) each Preliminary Prospectus distributed in connection with
the offering of the Shares, as such Preliminary Prospectus relates to
such Selling Shareholder, did not, as of its date, and does not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; the Registration Statement, as it relates to such Selling
Shareholder, did not when it became effective, does not and, at the
time of purchase and any additional time of purchase and any time at
which any sales with respect to which the Prospectus is delivered, will
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and the Prospectus, as it relates to
such Selling Shareholder, will not, as of its date and at the time of
purchase and any additional time of purchase and any time at which any
sales with respect to which the Prospectus is delivered, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided that, with respect to each of the non-executive
selling shareholders named in Schedule B (each, a "Non-Executive
Selling Shareholder"), this subclause (d) shall apply solely with
respect to statements or omissions from the Registration Statement,
any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto of which such Non-Executive Selling Shareholder
has knowledge or made in reliance upon written information furnished to
the Company by such Non-Executive Selling Shareholder expressly for use
therein;
(e) all information with respect to such Selling Shareholder
included in the Registration Statement or the Prospectus complied and
will comply with all applicable provisions of the Act;
-18-
(f) such Selling Shareholder has duly and irrevocably
authorized the Representatives of the Selling Shareholders, on behalf
of such Selling Shareholder, to execute and deliver this Agreement and
any other documents necessary or desirable in connection with the
transactions contemplated hereby or thereby and to deliver the Shares
to be sold by such Selling Shareholder pursuant to this Agreement and
receive payment therefore pursuant hereto;
(g) the sale of the Shares to be sold by such Selling
Shareholder pursuant to this Agreement is not prompted by any
information concerning the Company or any Subsidiary which is not set
forth in the Prospectus;
(h) neither such Selling Shareholder nor any of its affiliates
has taken, directly or indirectly, any action designed to, or which has
constituted or might reasonably be expected to cause or result in,
under the Exchange Act, the ISL or otherwise, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares;
(i) there are no affiliations or associations between any
member of the NASD and such Selling Shareholder, except as set forth in
the Registration Statement and the Prospectus; none of the proceeds
received by such Selling Shareholder from the sale of the Shares to be
sold by such Selling Shareholder pursuant to this Agreement will be
paid to a member of the NASD or any affiliate of such member;
(j) at the time of purchase and each additional time of
purchase, all stock transfer or other taxes (other than income taxes),
if any, that are required to be paid in connection with the sale and
transfer of the Shares to be sold by such Selling Shareholder to the
several Underwriters hereunder shall have been fully paid or provided
for by such Selling Shareholder, and all laws imposing such taxes shall
have been fully complied with;
(k) no approval, authorization, consent or order of or filing
with any Israeli or United States federal, state, local or foreign
governmental or regulatory commission, court, board, body, authority or
agency, or of or with any self-regulatory organization or other
non-governmental regulatory authority (including, without limitation,
the NASDAQ), is required by such Selling Shareholder in connection with
the sale of the Shares to be sold by such Selling Shareholder pursuant
to this Agreement or the consummation by such Selling Shareholder of
the transactions contemplated hereby, by the Custody Agreement or by
the Power of Attorney other than registration of such Shares under the
Act, which has been effected, and any necessary qualification under the
ISL, the securities or blue sky laws of the various jurisdictions in
which such Shares are being offered by the Underwriters or under the
rules and regulations of the NASD, which approvals have been obtained
as of the date hereof;
(l) such Selling Shareholder has not, prior to the execution
of this Agreement, distributed any "prospectus" (within the meaning of
the Act) or offering material in connection with the offering or sale
of the Shares other than the Registration Statement and
-19-
the then most recent Preliminary Prospectus and will not, at any time
on or after the execution of this Agreement, distribute any
"prospectus" (within the meaning of the Act) or offering material in
connection with the offering or sale of the Shares other than the
Registration Statement and the then most recent Prospectus;
(m) share certificates accompanied by duly executed share
transfer deeds with respect to the Shares to be sold by the Selling
Shareholders have been placed in custody, for delivery pursuant to the
terms of this Agreement, under the Custody Agreement and Power of
Attorney duly authorized (if applicable), executed and delivered by
such Selling Shareholder, in the form heretofore furnished to you with
the Company, as Custodian (the "Custodian") and the Attorneys-in-Fact
appointed therein; the Ordinary Shares represented by the certificates
so held in custody for each Selling Shareholder are subject to the
interests hereunder of the Underwriters; the arrangements for custody
and delivery of such certificates, made by such Selling Shareholder
hereunder and under the Custody Agreement, are not subject to
termination by any acts of such Selling Shareholder, or by operation of
law, whether by the death or incapacity of such Selling Shareholder or
the occurrence of any other event; and if any such death, incapacity
or, if the Selling Shareholder is a corporate entity, by dissolution or
other termination of corporate existence, or any other such event shall
occur before the delivery of such Shares hereunder, such certificates
will be delivered by the Custodian in accordance with the terms and
conditions of this Agreement and the Custody Agreement and Power of
Attorney as if such death, incapacity or, if the Selling Shareholder is
a corporate entity, such dissolution or other termination of corporate
existence, or other event had not occurred, regardless of whether or
not the Custodian shall have received notice of such death, incapacity,
dissolution or other termination of corporate existence or other event;
(n) neither the execution, delivery and performance of this
Agreement, the Custody Agreement or the Power of Attorney nor the sale
by such Selling Shareholder of the Shares to be sold by such Selling
Shareholder pursuant to this Agreement nor the consummation of the
transactions contemplated hereby or thereby will conflict with, result
in any breach or violation of or constitute a default under (or
constitute any event which with notice, lapse of time or both would
result in any breach or violation of or constitute a default under) (i)
the memorandum of association, articles of association, charter or
by-laws or other relevant organizational documents or (ii) any
indenture, mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or any license, lease, contract or
other agreement or instrument to which such Selling Shareholder is a
party or by which such Selling Shareholder or any of its properties may
be bound or affected, or (iii) any federal, state, local or foreign
law, regulation or rule, or (iv) any decree, judgment or order
applicable to such Selling Shareholder, except in the case of
sub-clause (ii) above for such breaches, violations or defaults that
would not, individually or in the aggregate, result in a Material
Adverse Effect;
-20-
(o) each Selling Shareholder has validly appointed an
authorized agent for service of process in the United States pursuant
to this Agreement and in connection with the Registration Statement;
and
(p) upon payment of the purchase price for the Shares to be
sold by such Selling Shareholder pursuant to this Agreement, delivery
of such Shares, as directed by the Underwriters, to Cede & Co. ("Cede")
or such other nominee as may be designated by The Depository Trust
Company ("DTC"), registration of such Shares in the name of Cede or
such other nominee, and the crediting of such Shares on the books of
DTC to securities accounts of the Underwriters (assuming that neither
DTC nor any such Underwriter has notice of any "adverse claim," within
the meaning of Section 8-105 of the New York Uniform Commercial Code
(the "UCC"), to such Shares), (A) DTC shall be a "protected purchaser,"
within the meaning of Section 8-303 of the UCC, of such Shares and will
acquire its interest in the Shares (including, without limitation, all
rights that such Selling Shareholder had or has the power to transfer
in such Shares) free and clear of any adverse claim within the meaning
of Section 8-102 of the UCC, (B) under Section 8-501 of the UCC, the
Underwriters will acquire a valid security entitlement in respect of
such Shares and (C) no action (whether framed in conversion, replevin,
constructive trust, equitable lien, or other theory) based on any
"adverse claim," within the meaning of Section 8-102 of the UCC, to
such Shares may be asserted against the Underwriters with respect to
such security entitlement. For purposes of this representation, such
Selling Shareholder may assume that when such payment, delivery and
crediting occur, (x) such Shares will have been registered in the name
of Cede or another nominee designated by DTC, in each case in the
Company's share registry in accordance with its articles of association
and applicable law, (y) DTC will be registered as a "clearing
corporation," within the meaning of Section 8-102 of the UCC, and (z)
appropriate entries to the accounts of the several Underwriters on the
records of DTC will have been made pursuant to the UCC.
In addition, any certificate signed by any officer of any
Selling Shareholder or any of such Selling Shareholder's subsidiaries or by any
Selling Shareholder or by any Representative of the Selling Shareholders and
delivered to the Underwriters or counsel for the Underwriters in connection with
the offering of the Shares shall be deemed to be a representation and warranty
by such Selling Shareholder as to matters covered thereby, to each Underwriter.
5. Certain Covenants of the Company. The Company hereby agrees:
(a) to furnish such information as may be required and
otherwise to cooperate in qualifying the Shares for offering and sale
under the securities or blue sky laws of such states or other
jurisdictions as you may designate and to maintain such qualifications
in effect so long as you may request for the distribution of the
Shares; provided that the Company shall not be required to qualify as a
foreign corporation or to consent to the service of process under the
laws of any such jurisdiction (except service of process with respect
to the offering and sale of the Shares); and to promptly advise you of
the receipt by the Company of any
-21-
notification with respect to the suspension of the qualification of the
Shares for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose;
(b) to make available to the Underwriters in New York City, as
soon as practicable after the Registration Statement becomes effective,
and thereafter from time to time to furnish to the Underwriters, as
many copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments or
supplements thereto after the effective date of the Registration
Statement) as the Underwriters may request for the purposes
contemplated by the Act; in case any Underwriter is required to deliver
a prospectus after the nine-month period referred to in Section
10(a)(3) of the Act in connection with the sale of the Shares, the
Company will prepare, at its expense, promptly upon request such
amendment or amendments to the Registration Statement and the
Prospectus as may be necessary to permit compliance with the applicable
requirements of Section 10(a)(3) of the Act;
(c) if, at the time this Agreement is executed and delivered,
it is necessary for the Registration Statement or any post-effective
amendment thereto to be declared effective before the Shares may be
sold, the Company will endeavor to cause the Registration Statement or
such post-effective amendment to become effective as soon as possible
and the Company will advise you promptly and, if requested by you, will
confirm such advice in writing, (i) when the Registration Statement and
any such post-effective amendment thereto has become effective, and
(ii) if Rule 430A under the Act is used, when the Prospectus is filed
with the Commission pursuant to Rule 424(b) under the Act (which the
Company agrees to file in a timely manner under such Rule);
(d) to advise you promptly, confirming such advice in writing,
of any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information
with respect thereto, or of notice of the institution of proceedings
for, or the entry of a stop order, suspending the effectiveness of the
Registration Statement and, if the Commission should enter a stop order
suspending the effectiveness of the Registration Statement, to use its
best efforts to obtain the lifting or removal of such order as soon as
possible; to advise you promptly of any proposal to amend or supplement
the Registration Statement or the Prospectus, and to provide you and
Underwriters' counsel copies of any such documents for review and
comment a reasonable amount of time prior to any proposed filing and to
file no such amendment or supplement to which you shall reasonably
object in writing;
(e) subject to Section 5(d) hereof, to file promptly all
reports and any definitive proxy or information statement required to
be filed by the Company with the Commission in order to comply with the
Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus is required in connection with the
offering or sale of the Shares; and to provide you with a copy of such
reports and statements and other documents to be filed by the Company
pursuant to Section 13, 14 or 15(d) of the Exchange Act during such
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period a reasonable amount of time prior to any proposed filing, and to
promptly notify you of such filing;
(f) if necessary or appropriate, to file a registration
statement pursuant to Rule 462(b) under the Act;
(g) to advise the Underwriters promptly of the happening of
any event within the time during which a prospectus relating to the
Shares is required to be delivered under the Act which could require
the making of any change in the Prospectus then being used so that the
Prospectus would not include an untrue statement of material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they are made, not
misleading, and, during such time, subject to Section 5(d) hereof, to
prepare and furnish, at the Company's expense, to the Underwriters
promptly such amendments or supplements to such Prospectus as may be
necessary to reflect any such change;
(h) to make generally available to its security holders, and
to deliver to you, an earning statement of the Company (which will
satisfy the provisions of Section 11(a) of the Act) covering a period
of twelve months beginning after the effective date of the Registration
Statement (as defined in Rule 158(c) under the Act) as soon as is
reasonably practicable after the termination of such twelve-month
period but not later than [Insert date twelve months after date of
execution], 2006;
(i) to furnish to its shareholders as soon as practicable
after the end of each fiscal year an annual report (including a
consolidated balance sheet and statements of income, shareholders'
equity and cash flow of the Company and the Subsidiaries for such
fiscal year, accompanied by a copy of the certificate or report thereon
of nationally recognized independent certified public accountants), for
so long as the Company shall have a legal obligation to do so;
(j) to furnish to you and your counsel copies of the
Registration Statement, as initially filed with the Commission, and of
all amendments thereto (including all exhibits thereto and documents
incorporated by reference therein) and sufficient copies of the
foregoing (other than exhibits) for distribution of a copy to each of
the other Underwriters;
(k) to the extent not otherwise available on XXXXX, to furnish
to you promptly and, upon request, to you and to each of the other
Underwriters for a period of two years from the date of this Agreement
(i) copies of any reports, proxy statements, or other communications
which the Company shall send to its Shareholders or shall from time to
time publish or publicly disseminate, (ii) copies of all annual,
quarterly and current reports filed with the Commission on Forms 20-F
and 6-K, or such other similar forms as may be designated by the
Commission, (iii) copies of documents or reports filed with any
national securities exchange on which any class of securities of the
Company is listed, and (iv) such other information as you may
reasonably request regarding the Company or the Subsidiaries;
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(l) to furnish to you as early as practicable prior to the
time of purchase and any additional time of purchase, as the case may
be, but not later than two business days prior thereto, a copy of the
latest available unaudited interim and monthly (to the extent
available) consolidated financial statements, if any, of the Company
and the Subsidiaries which have been read by the Company's independent
certified public accountants, as stated in their letter to be furnished
pursuant to Section 8(f) hereof;
(m) to apply the net proceeds from the sale of the Shares sold
by the Company in the manner set forth under the caption "Use of
Proceeds" in the Prospectus;
(n) not to (i) sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose
of or agree to dispose of, directly or indirectly, any Ordinary Shares
or securities convertible into or exchangeable or exercisable for
Ordinary Shares or warrants or other rights to purchase Ordinary Shares
or any other securities of the Company that are substantially similar
to Ordinary Shares, or file or cause to be declared effective a
registration statement under the Act relating to the offer and sale of
any shares of Ordinary Shares or securities convertible into or
exercisable or exchangeable for Ordinary Shares or other rights to
purchase Ordinary Shares or any other securities of the Company that
are substantially similar to Ordinary Shares, (ii) enter into any swap
or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of Ordinary Shares or any
securities convertible into or exercisable or exchangeable for Ordinary
Shares, or warrants or other rights to purchase Ordinary Shares,
whether any such transaction is to be settled by delivery of Ordinary
Shares or such other securities, in cash or otherwise, or (iii)
publicly announce an intention to effect any transaction specified in
clause (i) or (ii), in each case, for a period of 180 days after the
date hereof (the "Lock-Up Period"), without the prior written consent
of UBS, except for (i) the registration of the Shares and the sales to
the Underwriters pursuant to this Agreement, (ii) issuances of Ordinary
Shares upon the exercise of options or warrants disclosed as
outstanding in the Registration Statement and the Prospectus or the
2,802 ordinary shares reserved for issuance to Xxxxxxxx L.P., and (iii)
the issuance of employee stock options not exercisable during the
Lock-Up Period pursuant to stock option plans described in the
Registration Statement and the Prospectus.
Notwithstanding the foregoing, if (1) during the period that
begins on the date that is 15 calendar days plus 3 business days before
the last day of the Lock-Up Period and ends on the last day of the
Lock-Up Period, the Company issues an earnings release or material news
or a material event relating to the Company occurs, or (2) prior to the
expiration of the Lock-Up Period, the Company announces that it will
release earnings results during the 16-day period beginning on the last
day of the 180-day period, in either case, the restrictions imposed by
this Section 5(n) shall continue to apply until the expiration of the
date that is 15 calendar days plus 3 business days after the date on
which the issuance of the earnings release or the material news or
material event occurs;
(o) to use its best efforts to cause the Shares to be approved
for quotation on the NASDAQ and the TASE; and
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(p) to maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar for the
Ordinary Shares.
6. Certain Covenants of the Selling Shareholders. The Selling
Shareholders, jointly and severally, hereby agree:
(a) not, at any time on or after the execution of this
Agreement, to distribute any "prospectus" (within the meaning of the
Act) or offering material in connection with the offering or sale of
the Shares other than the Registration Statement and the then most
recent Prospectus;
(b) not to take, directly or indirectly, any action designed
to or which may constitute or which might reasonably be expected to
cause or result in, under the Exchange Act, the ISL or otherwise, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares;
(c) to pay all expenses incident to the performance of their
respective obligations under, and the consummation of the transactions
contemplated by this Agreement, including (i) any stamp duties, capital
duties and stock transfer taxes, if any, due and payable by them upon
the sale of the Shares to the Underwriters, and (ii) the fees and
disbursements of their respective counsel and other advisors; and
(d) to advise you promptly, and if requested by you, will
confirm such advice in writing, so long as delivery of a prospectus
relating to the Securities by an underwriter or dealer may be required
under the Act or the Exchange Act, of (i) any material change in the
Company's condition (financial or otherwise), prospects, earnings,
business or properties of which such Selling Shareholder has knowledge,
(ii) any change in information in the Registration Statement or the
Prospectus relating to the Selling Shareholder or (iii) any new
material information relating to the Company or relating to any matter
stated in the Prospectus which comes to the attention of such Selling
Shareholder.
7. Payment of Costs. The Company and each Selling Shareholder
jointly and severally agree to pay all costs, expenses, fees and taxes (other
than fees and disbursements of counsel for the Underwriters except as described
in items (iv) and (vi) below and as provided in Section 8 hereof) in connection
with (i) their costs in the preparation and filing of the Registration
Statement, each Preliminary Prospectus, the Prospectus and any amendments or
supplements thereto, and the printing and furnishing of copies of each thereof
to the Underwriters and to dealers (including costs of mailing and shipment),
(ii) the registration, issue, sale and delivery of the Shares including any
stock or transfer taxes and stamp or similar duties payable upon the sale,
issuance or delivery of the Shares to the Underwriters, (iii) the producing,
word processing and/or printing of this Agreement, any Agreement Among
Underwriters, any dealer agreements, the Power of Attorney, the Custody
Agreement and any closing documents (including compilations thereof) and the
reproduction and/or printing and furnishing of copies of each thereof to the
Underwriters and (except closing documents) to dealers (including costs of
mailing and shipment), (iv) the qualification of the Shares for offering
-25-
and sale under state or foreign laws and the determination of their eligibility
for investment under state or foreign law as aforesaid (including the reasonable
legal fees and filing fees and other disbursements of counsel for the
Underwriters incurred in connection with such qualifications and determinations,
which, together with such other fees described in item (vi) below, shall not
exceed $15,000) and the printing and furnishing of copies of any blue sky
surveys or legal investment surveys to the Underwriters and to dealers, (v) any
listing of the Shares on any securities exchange or qualification of the Shares
for quotation on the NASDAQ and any registration thereof under the Exchange Act,
(vi) any filing for review of the public offering of the Shares by the NASD,
including the reasonable legal fees and filing fees and other disbursements of
counsel to the Underwriters incurred in connection with such qualifications and
determinations, which, together with such other fees described in item (vi)
below, shall not exceed $30,000, (vii) the fees and disbursements of any
transfer agent or registrar for the Shares, (viii) the costs and expenses of the
Company and each Selling Shareholder relating to presentations or meetings
undertaken in connection with the marketing of the offering and sale of the
Shares to prospective investors and the Underwriters' sales forces, including,
without limitation, expenses associated with the production of road show slides
and graphics, fees and expenses of any consultants engaged in connection with
the road show presentations, travel, lodging and other expenses incurred by the
officers of the Company or by any Selling Shareholder and any such consultants,
and the cost of any aircraft chartered in connection with the road show, (ix)
the costs and expenses of qualifying the Shares for inclusion in the book-entry
settlement system of the Depositary Trust Company (the "DTC"), (x) the
preparation and filing of the Exchange Act Registration Statement, including any
amendments thereto, and (xi) the performance of the Company's and each Selling
Shareholder's other obligations hereunder. The Company hereby agrees with the
Underwriters that it will pay any such amounts not so paid by any Selling
Shareholder.
8. Reimbursement of Underwriters' Expenses. If the Shares are
not delivered for any reason other than the termination of this Agreement
pursuant to the fifth paragraph of Section 11 hereof or the default by one or
more of the Underwriters in its or their respective obligations hereunder, the
Company shall, in addition to paying the amounts described in Section 7 hereof,
reimburse the Underwriters for all of their reasonable out-of-pocket expenses
including the reasonable fees and disbursements of their counsel.
9. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties on the part of the Company and each Selling
Shareholder on the date hereof, at the time of purchase and, if applicable, at
the additional time of purchase, the performance by the Company and each Selling
Shareholder of each of their respective obligations hereunder and to the
following additional conditions precedent:
(a) The Company shall furnish to you at the time of purchase
and, if applicable, at the additional time of purchase, an opinion of
Proskauer Rose LLP, counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the
other
-26-
Underwriters, in form and substance reasonably satisfactory to UBS and
covering the matters set forth in Exhibit B hereto and such other
matters as UBS may reasonably request.
(b) The Company shall furnish to you at the time of purchase
and, if applicable, at the additional time of purchase, an opinion of
Xxx Xxxxxxxx, in-house counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the
other Underwriters, in form and substance reasonably satisfactory to
UBS and covering the matters set forth in Exhibit C hereto and such
other matters as UBS may reasonably request.
(c) The Company shall furnish to you at the time of purchase
and, if applicable, at the additional time of purchase, an opinion of
Xxxxx Lahat & Co., Israel counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the
other Underwriters, in form and substance reasonably satisfactory to
UBS and covering the matters set forth in Exhibit D hereto and such
other matters as UBS may reasonably request.
(d) The Company shall furnish to you at the time of purchase
and, if applicable, at the additional time of purchase, an opinion of
[ ], special Argentine counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the
other Underwriters, in form and substance reasonably satisfactory to
UBS and covering the matters set forth in Exhibit E hereto and such
other matters as UBS may reasonably request.
(e) The Company shall furnish to you at the time of purchase
and, if applicable, at the additional time of purchase, an opinion of
[ ], special Brazil counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the
other Underwriters, in form and substance reasonably satisfactory to
UBS and covering the matters set forth in Exhibit E hereto and such
other matters as UBS may reasonably request.
(f) The Selling Shareholders shall furnish to you at the time
of purchase and, if applicable, the additional time of purchase, an
opinion of [ ], U.S. counsel for the Selling Shareholders
addressed to the Underwriters, and dated the time of purchase or the
additional time of purchase, as the case may be, with reproduced copies
for each of the other Underwriters, in form and substance reasonably
satisfactory to UBS and covering the matters set forth in Exhibit F
hereto and such other matters as UBS may reasonably request.
(g) The Selling Shareholders shall furnish to you at the time
of purchase and, if applicable, the additional time of purchase, an
opinion of [ ], Israel counsel for the Selling Shareholders
addressed to the Underwriters, and dated the time of purchase or the
additional time of purchase, as the case may be, with reproduced copies
for each of the other Underwriters, in form and substance reasonably
satisfactory to UBS and covering the matters set forth in Exhibit G
hereto and such other matters as UBS may reasonably request.
-27-
(h) You shall have received from Xxxx Xxxxx & Co., a member of
Xxxxx Xxxxxxxx International, letters dated, respectively, the date of
this Agreement, the time of purchase and, if applicable, the additional
time of purchase, and addressed to the Underwriters (with reproduced
copies for each of the Underwriters) in the forms heretofore approved
by UBS.
(i) You shall have received at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of each of
White & Case LLP, U.S. counsel for the Underwriters, and of Xxxxxx, Xxx
& Xxxxxx, Israeli counsel for the Underwriters, dated the time of
purchase or the additional time of purchase, as the case may be, with
respect to the issuance and sale of the Shares, the Registration
Statement and the Prospectus and other related matters as you may
reasonably require, and the Company shall have furnished to each such
counsel such documents as they may reasonably request for the purpose
of enabling them to pass upon such matters.
(j) No Prospectus or amendment or supplement to the
Registration Statement or the Prospectus shall have been filed to which
you reasonably object in writing.
(k) The Registration Statement shall become effective not
later than 5:30 P.M. New York City time, on the date of this Agreement
and, if Rule 430A under the Act is used, the Prospectus shall have been
filed with the Commission pursuant to Rule 424(b) under the Act at or
before 5:30 P.M., New York City time, on the second full business day
after the date of this Agreement and any registration statement
pursuant to Rule 462(b) under the Act required in connection with the
offering and sale of the Shares shall have been filed and become
effective no later than 10:00 p.m., New York City time, on the date of
this Agreement.
(l) Prior to the time of purchase, and, if applicable, the
additional time of purchase, (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued
under the Act or proceedings initiated under Section 8(d) or 8(e) of
the Act; (ii) the Registration Statement and all amendments thereto
shall not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and (iii) the Prospectus
and all amendments or supplements thereto shall not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they are made, not
misleading.
(m) Between the time of execution of this Agreement and the
time of purchase or the additional time of purchase, as the case may
be, no material adverse change or any development involving a
prospective material adverse change in the business, properties,
management, financial condition or results of operations of the Company
and the Subsidiaries taken as a whole shall occur or become known.
-28-
(n) The Company will, at the time of purchase and, if
applicable, at the additional time of purchase, deliver to you a
certificate of its Chief Executive Officer and its Chief Financial
Officer in the form attached as Exhibit H hereto.
(o) The Selling Shareholders will, at the time of purchase
and, if applicable, at the additional time of purchase, deliver to you
a certificate of the Representative of the Selling Shareholders on
behalf of each of the Selling Shareholders, in the form attached as
Exhibit I hereto.
(p) You shall have received a duly executed agreement (a
"Lock-up Agreement"), in the form set forth as Exhibit A hereto, from
each of the Selling Shareholders and each of the Company's directors
and executive officers and holders of the Company's Ordinary Shares
listed under the heading "Management" and "Principal and Selling
Shareholders" in the Registration Statement and the Prospectus.
(q) Each Selling Shareholders will have delivered to you a
duly executed Power of Attorney and a duly executed Custody Agreement,
in each case in form and substance reasonably satisfactory to UBS.
(r) The Company and the Selling Shareholders shall have
furnished to you such other documents and certificates as to the
accuracy and completeness of any statement in the Registration
Statement and the Prospectus as of the time of purchase and, if
applicable, the additional time of purchase, as you may reasonably
request.
(s) The Shares shall have been approved for quotation on the
NASDAQ and listing on the TASE, subject only to notice of issuance at
or prior to the time of purchase or the additional time of purchase, as
the case may be.
10. Effective Date of Agreement; Termination. This Agreement
shall become effective (i) if Rule 430A under the Act is not used, when you
shall have received notification of the effectiveness of the Registration
Statement, or (ii) if Rule 430A under the Act is used, when the parties hereto
have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of UBS or any group of
Underwriters (which may include UBS) which has agreed to purchase in the
aggregate at least 50% of the Firm Shares, if (x) since the time of execution of
this Agreement or the earlier respective dates as of which information is given
in the Registration Statement and the Prospectus, there has been any material
adverse change or any development involving a prospective material adverse
change in the business, properties, management, financial condition or results
of operations of the Company and the Subsidiaries taken as a whole, which would,
in UBS' judgment or in the judgment of such group of Underwriters, make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares on the terms and in the manner contemplated in the Registration
Statement and the Prospectus, or (y) since of execution of this Agreement, there
shall have occurred: (i) a suspension or material limitation in trading in
-29-
securities generally on the New York Stock Exchange, the American Stock
Exchange, the NASDAQ or the TASE; (ii) a suspension or material limitation in
trading in the Company's securities on the NASDAQ or on the TASE; (iii) a
general moratorium on commercial banking activities declared by either U.S.
federal, New York State or Israeli authorities or a material disruption in
commercial banking or securities settlement or clearance services in the United
States or Israel; (iv) an outbreak or escalation of hostilities or acts of
terrorism involving the United States, an escalation of existing hostilities or
an outbreak of additional acts of terrorism involving Israel, or a declaration
by the United States or Israel of a national emergency or war; or (v) any other
calamity or crisis or any change in financial, political or economic conditions
in the United States, Israel or elsewhere, if the effect of any such event
specified in clause (iv) or (v) in UBS' judgment or in the judgment of such
group of Underwriters makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement and the Prospectus.
If UBS or any group of Underwriters elects to terminate this
Agreement as provided in this Section 10, the Company, the Representatives of
the Selling Shareholders and each other Underwriter shall be notified promptly
in writing.
If the sale to the Underwriters of the Shares, as contemplated
by this Agreement, is not carried out by the Underwriters for any reason
permitted under this Agreement or if such sale is not carried out because the
Company or the Selling Shareholders, as the case may be, shall be unable to
comply with any of the terms of this Agreement, the Company or the Selling
Shareholders, as the case may be, shall not be under any obligation or liability
under this Agreement (except to the extent provided in Sections 7, 8 and 12
hereof), and the Underwriters shall be under no obligation or liability to the
Company or any Selling Shareholders under this Agreement (except to the extent
provided in Section 12 hereof) or to one another hereunder.
11. Increase in Underwriters' Commitments. Subject to Sections
9 and 10 hereof, if any Underwriter shall default in its obligation to take up
and pay for the Firm Shares to be purchased by it hereunder (otherwise than for
a failure of a condition set forth in Section 9 hereof or a reason sufficient to
justify the termination of this Agreement under the provisions of Section 10
hereof) and if the number of Firm Shares which all Underwriters so defaulting
shall have agreed but failed to take up and pay for does not exceed 10% of the
total number of Firm Shares, the non-defaulting Underwriters shall take up and
pay for (in addition to the aggregate number of Firm Shares they are obligated
to purchase pursuant to Section 1 hereof) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such
Shares shall be taken up and paid for by such non-defaulting Underwriters in
such amount or amounts as you may designate with the consent of each Underwriter
so designated or, in the event no such designation is made, such Shares shall be
taken up and paid for by all non-defaulting Underwriters pro rata in proportion
to the aggregate number of Firm Shares set opposite the names of such
non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its
obligations hereunder, the Company and the Selling Shareholders each agree with
the non-defaulting Underwriters that it will
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not sell any Firm Shares hereunder unless all of the Firm Shares are purchased
by the Underwriters (or by substituted Underwriters selected by you with the
approval of the Company or selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and the
Prospectus and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to
and include any Underwriter substituted under this Section 11 with like effect
as if such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Firm Shares which the defaulting
Underwriter or Underwriters agreed to purchase exceeds 10% of the total number
of Firm Shares which all Underwriters agreed to purchase hereunder, and if
neither the non-defaulting Underwriters nor the Company shall make arrangements
within the five business day period stated above for the purchase of all the
Firm Shares which the defaulting Underwriter or Underwriters agreed to purchase
hereunder, this Agreement shall terminate without further act or deed and
without any liability on the part of the Company to any non-defaulting
Underwriter and without any liability on the part of any non-defaulting
Underwriter to the Company or to any Selling Shareholder. Nothing in this
paragraph, and no action taken hereunder, shall relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
12. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter, its partners, directors and officers, and any person who controls
any Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing persons,
from and against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, any such
Underwriter or any such person may incur under the Act, the Exchange Act, common
law or otherwise, insofar as such loss, damage, expense, liability or claim
arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus (the term Prospectus for the purpose of this Section
12 being deemed to include any Preliminary Prospectus, the Prospectus and the
Prospectus as amended or supplemented by the Company), or arises out of or is
based upon any omission or alleged omission to state a material fact required to
be stated in either such Registration Statement or such Prospectus or necessary
to make the statements made therein not misleading, except insofar as any such
loss, damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in and
in
-31-
conformity with information concerning such Underwriter furnished in writing by
or on behalf of such Underwriter through you to the Company expressly for use in
either such Registration Statement or such Prospectus or arises out of or is
based upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in such Registration
Statement or such Prospectus or necessary to make such information not
misleading, (ii) the failure by the Company to perform when and as required any
agreement or covenant contained herein or (iii) any untrue statement or alleged
untrue statement of any material fact contained in any audio or visual materials
provided by the Company or based upon written information furnished by or on
behalf of the Company including, without limitation, slides, videos, films or
tape recordings used in connection with the marketing of the Shares; provided
that the foregoing indemnity is subject to the condition that, insofar as it
relates to any untrue statement or omission, or any alleged untrue statement or
omission, made in a Preliminary Prospectus but corrected, eliminated or remedied
in the Prospectus, or any amendment or supplement thereto, it shall not inure to
the benefit of any Underwriter from whom the person asserting the claim
purchased the Shares (or to the benefit of any person who controls such
Underwriter within the meaning of Section 15 of the Securities Act) if the
Company had previously furnished copies of the Prospectus or such amendment or
supplement to such Underwriter in the requisite quantity and on a timely basis
to permit proper delivery and such person was not sent a copy of the Prospectus
at or prior to the written confirmation of the sale of such Share to such person
and the untrue statement or omission contained in the Preliminary Prospectus was
corrected in the Prospectus or such amendment or supplement.
(b) Each senior executive Selling Shareholder named in Schedule B
(each a "Senior Executive Selling Shareholder") agrees to indemnify, severally
and not jointly, defend and hold harmless each Underwriter, its partners,
directors and officers, and any person who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the
successors and assigns of all of the foregoing persons, from and against any
loss, damage, expense, liability or claim (including reasonable cost of
investigation) which, jointly or severally, any such Underwriter or any such
person may incur under the Act, the Exchange Act, common law or otherwise,
insofar as such loss, damage, expense, liability or claim arises out of or is
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or in the Registration Statement
as amended by any post-effective amendment thereof by the Company) or in a
Prospectus, or arises out of or is based upon any omission or alleged omission
to state a material fact required to be stated in either such Registration
Statement or Prospectus or necessary to make the statements made therein (in the
case of a Prospectus, in light of the circumstances under which they are made)
not misleading; or (ii) the failure by such Senior Executive Selling Shareholder
to perform when and as required pursuant to any agreement or covenant contained
herein, except insofar as any such loss, damage, expense, liability or claim
arises out of or is based upon any untrue statement or alleged untrue statement
of a material fact contained in and in conformity with information concerning
such Underwriter furnished in writing by or on behalf of such Underwriter to the
Company expressly for use in such Registration Statement or such Prospectus or
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arises out of or is based upon any omission or alleged omission to state a
material fact in connection with such information required to be stated in such
Registration Statement or such Prospectus or necessary to make such information
not misleading; provided that no Senior Executive Selling Shareholder shall be
responsible, either pursuant to this Section 12(b) or Section (f) or as a result
of any breach of this Agreement, for losses, expenses, liability or claims for
an amount in excess of the proceeds (net of underwriting discounts and
commissions but before deducting expenses) received by such Senior Executive
Selling Shareholder from the sale of Shares hereunder.
Each Non-Executive Selling Shareholder agrees to indemnify, severally
and not jointly, defend and hold harmless each Underwriter, its partners,
directors and officers, and any person who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the
successors and assigns of all of the foregoing persons, from and against any
loss, damage, expense, liability or claim (including reasonable cost of
investigation) which, jointly or severally, any such Underwriter or any such
person may incur under the Act, the Exchange Act, common law or otherwise,
insofar as such loss, damage, expense, liability or claim arises out of or is
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or in the Registration Statement
as amended by any post-effective amendment thereof by the Company) or in a
Prospectus, or arises out of or is based upon any omission or alleged omission
to state a material fact required to be stated in either such Registration
Statement or Prospectus or necessary to make the statements made therein (in the
case of a Prospectus, in light of the circumstances under which they are made)
not misleading, in each case with reference only to untrue statements or alleged
untrue statements or any omission or alleged omission to state a material fact
of which such Non-Executive Selling Shareholder has knowledge or is based on
written information furnished to the Company by or on behalf of such
Non-Executive Selling Shareholder specifically for inclusion in the Registration
Statement or Prospectus; or (ii) the failure by such Non-Executive Selling
Shareholder to perform when and as required pursuant to any agreement or
covenant contained herein; provided that no Non-Executive Shareholder shall be
responsible, either pursuant to this Section 12(b) or Section (f) or as a result
of any breach of this Agreement, for losses, expenses, liability or claims for
an amount in excess of the proceeds (net of underwriting discounts and
commissions but before deducting expenses) received by such Non-Executive
Selling Shareholder from the sale of Shares hereunder.
(c) If any action, suit or proceeding (each, a "Proceeding") is
brought against an Underwriter or any such person in respect of which indemnity
may be sought against the Company or the Selling Shareholders pursuant to the
foregoing Sections 12(a) or (b), such Underwriter or such person shall promptly
notify the Company and the Representative of the Selling Shareholders in writing
of the institution of such Proceeding and the Company or such Selling
Shareholder, as applicable (each an "Indemnifying Party", as the case may be),
shall assume the defense of such Proceeding, including the employment of counsel
reasonably satisfactory to such Indemnified Party and payment of all fees and
expenses; provided, however, that the omission to so notify the
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Indemnifying Party shall not relieve the Indemnifying Party from any liability
which the Indemnifying Party may have to any Underwriter or any such person or
otherwise except to the extent that the Indemnifying Party is materially
prejudiced by, and is foreclosed from asserting any material defenses as a
result of, such failure to give timely notice. Such Underwriter or such person
shall have the right to employ its or their own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense of such
Underwriter or of such person unless the employment of such counsel shall have
been authorized in writing by the Indemnifying Party in connection with the
defense of such Proceeding or the Indemnifying Party shall not have, within a
reasonable period of time in light of the circumstances, employed counsel to
have charge of the defense of such Proceeding or such Indemnified Party or
parties shall have reasonably concluded that there may be defenses available to
it or them which are different from, additional to or in conflict with those
available to the Indemnifying Party (in which case the Indemnifying Party shall
not have the right to direct the defense of such Proceeding on behalf of the
Indemnified Party or parties but may employ counsel and participate in the
defense thereof, provided that the fees and expenses of such counsel shall be at
the expense of the Indemnifying Party), in any of which events such fees and
expenses shall be borne by the Indemnifying Party and paid as incurred (it being
understood, however, that the Indemnifying Party shall not be liable for the
expenses of more than one separate counsel (in addition to any local counsel) in
any one Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such Proceeding). The
Indemnifying Party shall not be liable for any settlement of any Proceeding
effected without its written consent but if settled with the written consent of
the Indemnifying Party, the Indemnifying Party agrees to indemnify and hold
harmless any Underwriter and any such person from and against any loss or
liability by reason of such settlement. 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 the second sentence of this paragraph, then 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 60 business days after receipt by such Indemnifying Party of the aforesaid
request, (ii) such Indemnifying Party shall not have fully reimbursed the
Indemnified Party in accordance with such request prior to the date of such
settlement and (iii) such Indemnified Party shall have given the Indemnifying
Party at least 30 days' prior notice of its intention to settle. No Indemnifying
Party shall, without the prior written consent of the Indemnified Party, effect
any settlement of any pending or threatened Proceeding in respect of which any
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding and does not include an admission
of fault, culpability or a failure to act, by or on behalf of such Indemnified
Party.
(d) Each Underwriter severally agrees to indemnify, defend and
hold harmless the Company, its directors and officers, each Selling Shareholder
and its directors and officers and any person who controls the Company or any
Selling Shareholder within the meaning of Section 15 of the
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Act or Section 20 of the Exchange Act, and the successors and assigns of all of
the foregoing persons, from and against any loss, damage, expense, liability or
claim (including the reasonable cost of investigation) which, jointly or
severally, the Company, any Selling Shareholder or any such person may incur
under the Act, the Exchange Act, the common law or otherwise, insofar as such
loss, damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in and
in conformity with information concerning such Underwriter furnished in writing
by or on behalf of such Underwriter through you to the Company expressly for use
in the Registration Statement (or in the Registration Statement as amended by
any post-effective amendment thereof by the Company) or in a Prospectus, or
arises out of or is based upon any omission or alleged omission to state a
material fact in connection with such information required to be stated in such
Registration Statement or such Prospectus or necessary to make such information
not misleading.
(e) If any Proceeding is brought against the Company, any Selling
Shareholder, or any such person in respect of which indemnity may be sought
against any Underwriter pursuant to Section 12(e), the Company, the Selling
Shareholder or such person shall promptly notify such Underwriter in writing of
the institution of such Proceeding and such Underwriter shall assume the defense
of such Proceeding, including the employment of counsel reasonably satisfactory
to such indemnified party and payment of all fees and expenses; provided,
however, that the omission to so notify such Underwriter shall not relieve such
Underwriter from any liability which such Underwriter may have to the Company,
any Selling Shareholder or any such person or otherwise except to the extent
that the Underwriter is materially prejudiced by, and is foreclosed from
asserting any material defenses as a result of, such failure to give timely
notice. The Selling Company, the Selling Shareholder or such person shall have
the right to employ its own counsel in any such case, but the fees and expenses
of such counsel shall be at the expense of the Company, the Selling Shareholders
or such person unless the employment of such counsel shall have been authorized
in writing by such Underwriter in connection with the defense of such Proceeding
or such Underwriter shall not have, within a reasonable period of time in light
of the circumstances, employed counsel to defend such Proceeding or such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to or in
conflict with those available to such Underwriter (in which case such
Underwriter shall not have the right to direct the defense of such Proceeding on
behalf of the indemnified party or parties, but such Underwriter may employ
counsel and participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such Underwriter), in any of which events
such fees and expenses shall be borne by such Underwriter and paid as incurred
(it being understood, however, that such Underwriter shall not be liable for the
expenses of more than one separate counsel (in addition to any local counsel) in
any one Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such Proceeding). No
Underwriter shall be liable for any settlement of any such Proceeding effected
without the written consent of such Underwriter but if settled with the written
consent of such Underwriter, such Underwriter agrees to indemnify and hold
harmless the Company, any Selling Shareholder and any such person from and
against any loss or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party hereunder to reimburse the indemnified party for
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fees and expenses of counsel as contemplated by the second sentence of this
Section 12(f), then such 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 60 business days after receipt by such
Indemnifying Party of the aforesaid request, (ii) such Indemnifying Party shall
not have reimbursed the indemnified party in accordance with such request prior
to the date of such settlement and (iii) such indemnified party shall have given
the Indemnifying Party at least 30 days' prior notice of its intention to
settle. No indemnifying party hereunder shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
Proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
Proceeding, and does not include an admission of fault, culpability, or failure
to act, by or on behalf of such indemnified party.
(f) If the indemnification provided for in this Section 12 is
unavailable to an indemnified party under subsections (a), (b), (c), (d) and (e)
of this Section 12 or insufficient to hold an indemnified party harmless in
respect of any losses, damages, expenses, liabilities or claims referred to
therein, then each applicable indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, damages,
expenses, liabilities or claims (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters on the other hand from the
offering of the Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company or the Selling Shareholders on the one hand and of
the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, damages, expenses, liabilities or claims, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and the Selling Shareholders on the one hand and the Underwriters
on the other shall be deemed to be in the same respective proportions as the
total proceeds from the offering (net of underwriting discounts and commissions
but before deducting expenses) received by the Company and the Selling
Shareholders and the total underwriting discounts and commissions received by
the Underwriters, bear to the aggregate public offering price of the Shares. The
relative fault of the Company and the Selling Shareholders on the one hand and
of the Underwriters on the other shall be determined by reference to, among
other things, whether the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission relates to information supplied by
the Company, the Selling Shareholders or by the Underwriters 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, damages, expenses, liabilities and claims referred to in
this subsection shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating, preparing to
defend or defending any Proceeding.
(g) The Company, the Selling Shareholders and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 12 were determined by pro rata allocation
-36-
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in subsection (f) above. Notwithstanding the
provisions of this Section 12, (i) no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Shares underwritten by such Underwriter and distributed to the public were
offered to the public exceeds the amount of any damage which such Underwriter
has otherwise been required to pay by reason of such untrue statement or alleged
untrue statement or omission or alleged omission and (ii) no Selling Shareholder
shall be required to contribute any amount in excess of the proceeds (net of
underwriting discounts but before deducting expenses) to be received by such
Selling Shareholder in respect of the Shares sold by such Selling Shareholder
hereunder less any amounts for which such Selling Shareholder has previously
made an indemnification payment to any indemnified party pursuant to Section
12(b) above. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 12 are several
in proportion to their respective underwriting commitments and not joint. The
Selling Shareholders' obligations to contribute pursuant to this Section 12 are
several in proportion to their respective proceeds (net of underwriting
discounts but before deducting expenses) to be received by such Selling
Shareholder in respect of the Shares sold by such Selling Shareholder hereunder
and not joint.
(h) The indemnity and contribution agreements contained in this
Section 12 and the covenants, warranties and representations of the Company and
the Selling Shareholders contained in this Agreement shall remain in full force
and effect regardless of any investigation made by or on behalf of any
Underwriter, its partners, directors or officers or any person (including each
partner, officer or director of such person) who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, or by or
on behalf of the Company, its directors or officers, any Selling Shareholder,
its directors and officers or any person who controls the Company or any Selling
Shareholder within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and shall survive any termination of this Agreement or the
issuance and delivery of the Shares. The Company, each Selling Shareholder and
each Underwriter agree promptly to notify each other of the commencement of any
Proceeding against it and, in the case of the Company or the Selling
Shareholders, against any of the Company's or the Selling Shareholder's officers
or directors, as the case may be, in connection with the issuance and sale of
the Shares, or in connection with the Registration Statement or the Prospectus.
13. Information Furnished by the Underwriters. The statements set
forth in the last paragraph on the cover page of the Prospectus and the
statements set forth in the sections "Over-Allotment Options," "Commissions and
Discounts" and "Price Stabilization, Short Positions" under the caption
"Underwriting" in the Prospectus constitute the only information furnished by or
on behalf of the Underwriters as such information is referred to in Sections 3
and 12 hereof.
14. Notices. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all
-37-
respects if delivered or sent to UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, 00000-0000, Attention: Syndicate Department; if to the Company, shall
be sufficient in all respects if delivered or sent to the Company at the offices
of the Company at 0 Xxxxxxxx Xxxxxx, Xxxxx, Xxxxxx 00000, Attention: General
Counsel; Facsimile: 011-972-3-557-133 and if to the Selling Shareholders, shall
be sufficient in all respects if delivered or sent to the Representative of the
Selling Shareholders at [ ], Attention: [ ], Facsimile:
[ ].
15. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
16. Submission to Jurisdiction. Except as set forth below, no
Claim may be commenced, prosecuted or continued in any court other than the
courts of the State of New York located in the City and County of New York or in
the United States District Court for the Southern District of New York, which
courts shall have jurisdiction over the adjudication of such matters, and the
Company and each of the Selling Shareholders each consent to the jurisdiction of
such courts and personal service with respect thereto. The Company and each of
the Selling Shareholders each hereby consent to personal jurisdiction, service
and venue in any court in which any Claim arising out of or in any way relating
to this Agreement is brought by any third party against the Underwriters or any
indemnified party. Each of UBS, the Company (on its behalf and, to the extent
permitted by applicable law, on behalf of its Shareholders and affiliates) and
the Selling Shareholders waives all right to trial by jury in any action,
proceeding or counterclaim (whether based upon contract, tort or otherwise) in
any way arising out of or relating to this Agreement. The Company and each of
the Selling Shareholders each agree that a final judgment in any such action,
proceeding or counterclaim brought in any such court shall be conclusive and
binding upon the Company and each of the Selling Shareholders and may be
enforced in any other courts to the jurisdiction of which the Company or any
Selling Shareholder is or may be subject, by suit upon such judgment. The
Company and each of the Selling Shareholders hereby appoint, without power of
revocation, [Ituran U.S.A., Inc.] (which hereby accepts such appointment), as
its agent to accept and acknowledge on its behalf service of any and all process
which may be served in any action, proceeding or counterclaim in any way
relating to or arising out of this Agreement.
17. Parties at Interest. The Agreement herein set forth has been
and is made solely for the benefit of the Underwriters, the Company and the
Selling Shareholders and to the extent provided in Section 12 hereof the
controlling persons, partners, directors and officers referred to in such
section, and their respective successors, assigns, heirs, personal
representatives and executors and administrators. No other person, partnership,
association or corporation (including a purchaser, as such purchaser, from any
of the Underwriters) shall acquire or have any right under or by virtue of this
Agreement.
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18. Absence of Fiduciary Relationship. The Company acknowledges
and agrees that:
(a) the Representative has been retained solely to act as
underwriter in connection with the sale of the Shares and that no fiduciary,
advisory or agency relationship between the Company and the Representative has
been created in respect of any of the transactions contemplated by this
Agreement, irrespective of whether the Representative has advised or is advising
the Company on other matters;
(b) the price of the Shares set forth in this Agreement was
established by the Company following discussions and arms-length negotiations
with the Representative 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;
(c) it has been advised that the Representative and its
affiliates are engaged in a broad range of transactions which may involve
interests that differ from those of the Company and that the Representative has
no obligation to disclose such interests and transactions to the Company by
virtue of any fiduciary, advisory or agency relationship; and
(d) the Company waives, to the fullest extent permitted by law,
any claims it may have against the Representative for breach of fiduciary duty
or alleged breach of fiduciary duty and agrees that the Representative shall
have no liability (whether direct or indirect) to the Company in respect of such
fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf
of or in right of the Company, including shareholders, employees or creditors of
the Company.
19. Counterparts. This Agreement may be signed by the parties in
one or more counterparts which together shall constitute one and the same
agreement among the parties.
20. Successors and Assigns. This Agreement shall be binding upon
the Underwriters, the Company and the Selling Shareholders and their successors
and assigns and any successor or assign of any substantial portion of the
Company's, any of the Selling Shareholders' and any of the Underwriters'
respective businesses and/or assets.
21. Miscellaneous. UBS, an indirect, wholly owned subsidiary of
UBS AG, is not a bank and is separate from any affiliated bank, including any
U.S. branch or agency of UBS AG. Because UBS is a separately incorporated
entity, it is solely responsible for its own contractual obligations and
commitments, including obligations with respect to sales and purchases of
securities. Securities sold, offered or recommended by UBS are not deposits, are
not insured by the Federal Deposit Insurance Corporation, are not guaranteed by
a branch or agency, and are not otherwise an obligation or responsibility of a
branch or agency.
[Remainder of the page intentionally left blank.]
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If the foregoing correctly sets forth the understanding among the
Company, the Selling Shareholders and the several Underwriters, please so
indicate in the space provided below for that purpose, whereupon this agreement
and your acceptance shall constitute a binding agreement among the Company, the
Selling Shareholders and the Underwriters, severally.
Very truly yours,
ITURAN LOCATION AND CONTROL LTD.
By:
-----------------------------------
Title:
[ITURAN USA, INC.]
(Solely in respect of Section 16 hereof)
By:
---------------------------------------
Name:
Title:
THE SELLING SHAREHOLDERS NAMED IN
SCHEDULE B ATTACHED HERETO
By: [Representative], Attorney-in-fact
By:
----------------------------------------
Name:
Title:
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Accepted and agreed to as of the
date first above written, on
behalf of itself and the
other several Underwriters
named in Schedule A
UBS SECURITIES LLC
By:
-----------------------------
Title:
By:
-----------------------------
Title:
SCHEDULE A
----------
UNDERWRITERS
Number of Number of
Underwriter Firm Shares Additional Shares
----------- ----------- -----------------
UBS Securities LLC
X.X. Xxxxxx Securities Inc.
X.X. Xxxxxxxxx, Towbin, LLC
Xxxxxxx Xxxxx & Company, LLC
----------- -----------
Total......................
=========== ===========
SCHEDULE B
----------
SELLING SHARHOLDERS
Number of Number of
Name of Shareholder Firm Shares Additional Shares
------------------- ----------- -----------------
Senior Executive Selling Shareholders:
--------------------------------------
Non-Executive Selling Shareholders:
-----------------------------------
----------- -----------
Total.................................
=========== ===========
SCHEDULE C
----------
SUBSIDIARIES
Telematics Wireless Ltd.
Ituran Beheer B.V.
Ituran-Network Ltd.
Ituran Cellular Communications Ltd.
Hotas Holding Ltd.
Ituran U.S.A. Inc.
Ituran NY Corporation
Ituran Florida Corporation
Ituran License Corporation
Ituran de Argentina S.A.
Ituran Holding Ltda.
Teleran Localizacao Ltda.
Ituran Servicios Ltda.
EXHIBIT A
---------
LOCK-UP LETTER AGREEMENT
ITURAN LOCATION AND CONTROL, LTD.
Ordinary Shares
(NIS 1.00 Par Value)
, 2005
UBS Securities LLC
As Representative of the several Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in
connection with the proposed Underwriting Agreement (the "Underwriting
Agreement") to be entered into by Ituran Location and Control Ltd. (the
"Company"), the Selling Shareholders named therein and you, as Representative of
the several Underwriters named therein, with respect to the public offering (the
"Offering") of ordinary shares, par value NIS 1.00 per share, of the Company
(the "Ordinary Shares").
In order to induce you to enter into the Underwriting
Agreement, the undersigned agrees that for a period of 180 days after the date
of the final prospectus relating to the Offering the undersigned will not,
without the prior written consent of UBS Securities, LLC, (i) sell, offer to
sell, contract or agree to sell, hypothecate, pledge, grant any option to
purchase or otherwise dispose of or agree to dispose of, directly or indirectly,
or file (or participate in the filing of) a registration statement with the
Securities and Exchange Commission (the "Commission") in respect of, or
establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Commission
promulgated thereunder with respect to, any Ordinary Shares of the Company or
any securities convertible into or exercisable or exchangeable for Ordinary
Shares, or warrants or other rights to purchase Ordinary Shares, (ii) enter into
any swap or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of Ordinary Shares or any
securities convertible into or exercisable or exchangeable for Ordinary Shares,
or warrants or other rights to purchase Ordinary Shares, whether any such
transaction is to be settled by delivery of Ordinary Shares or such other
securities, in cash or otherwise, or (iii) publicly announce an intention to
effect any transaction specified in clause (i) or (ii). The foregoing sentence
shall not apply to (a) the registration of or sale to the Underwriters of any
Ordinary Shares pursuant to the Offering and the Underwriting Agreement, (b)
bona fide gifts, provided the recipient thereof agrees in writing with the
Underwriters to be bound by the terms of this Lock-Up Letter Agreement, (c)
dispositions to any trust for the direct or indirect benefit of the undersigned
and/or the immediate family of the undersigned or to a partnership, limited
liability company or other entity, all of the beneficial interests of which are
held by the undersigned or by a member of the undersigned's immediate family,
provided that such trust, partnership, limited liability company or other entity
agrees in writing with the Underwriters to be bound by the terms of this Lock-Up
Letter Agreement, (d) the exercise of stock options granted pursuant to the
Company's stock option/incentive plans or otherwise outstanding on the date
hereof, provided that it shall apply to any Ordinary Shares issued upon such
exercise, (e) transfers by way of testate or intestate succession or by
operation of law, provided that the relevant transferee agrees in writing with
the Underwriters to be bound by the terms of this Lock-Up Letter Agreement, or
(f) if the undersigned is, or controls, a corporation, partnership, limited
liability company or similar entity, transfers to the stockholders, partners,
members or similar persons of such entity, provided that such stockholders,
partners, members or similar persons of such entity agree in writing with the
Underwriters to be bound by the terms of this Lock-Up Letter Agreement.
In addition, the undersigned hereby waives any rights the
undersigned may have to require registration of Ordinary Shares in connection
with the filing of a registration statement relating to the Offering, other than
as provided for in the Underwriting Agreement. The undersigned further agrees
that, for a period of 180 days after the date of the final prospectus relating
to the Offering, the undersigned will not, without the prior written consent of
UBS, make any demand for, or exercise any right with respect to, the
registration of Ordinary Shares of the Company or any securities convertible
into or exercisable or exchangeable for Ordinary Shares, or warrants or other
rights to purchase Ordinary Shares.
Notwithstanding the foregoing, if (1) during the period that
begins on the date that is 15 calendar days plus 3 business days before the last
day of the 180-day restricted period and ends on the last day of the 180-day
restricted period, the Company issues a earnings release or material news or a
material event relating to the Company occurs, or (2) prior to the expiration of
the 180-day restricted period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the
180-day period, in either case, the restrictions imposed by this Lock-Up Letter
Agreement shall continue to apply until the expiration of the date that is 15
calendar days plus 3 business days after the date on which the issuance of the
earnings release or the material news or material event occurs.
If (i) the Company notifies you in writing that it does not
intend to proceed with the Offering, (ii) the registration statement filed with
the Securities and Exchange Commission with respect to the Offering is
withdrawn, (iii) for any reason the Underwriting Agreement shall be terminated
prior to the time of purchase (as defined in the Underwriting Agreement) or (iv)
the Offering is not consummated prior to December 31, 2005, this Lock-Up Letter
Agreement shall,
immediately and without any further action, be terminated and the undersigned
shall be released from its obligations hereunder.
Yours very truly,
Name:
EXHIBIT B
---------
[FORM OF OPINION OF COMPANY U.S. COUNSEL]
EXHIBIT C
---------
[FORM OF OPINION OF COMPANY IN-HOUSE COUNSEL]
EXHIBIT D
---------
[FORM OF OPINION OF COMPANY ISRAEL COUNSEL]
EXHIBIT E
---------
[FORM OF LOCAL COUNSEL OPINION]
EXHIBIT F
---------
[FORM OF SELLING SHAREHOLDER U.S. COUNSEL OPINION](1)
(1) Opinions to be provided by either Israel or U.S. Selling Shareholders
Counsel, as appropriate.
EXHIBIT G
---------
[FORM OF SELLING SHAREHOLDER ISRAEL COUNSEL OPINION]
EXHIBIT H
---------
Officers' Certificate
---------------------
1. I have reviewed the Registration Statement and the Prospectus.
2. The representations and warranties of the Company as set forth in this
Agreement are true and correct as of the time of purchase and, if
applicable, the additional time of purchase.
3. The Company has performed all of its obligations under this Agreement
as are to be performed at or before the time of purchase and at or
before the additional time of purchase, as the case may be.
4. The conditions set forth in paragraphs (k) and (l) of Section 9 of this
Agreement have been met.
5. The financial statements and other financial information included in
the Registration Statement and the Prospectus fairly present in all
material respects the financial condition, results of operations, and
cash flows of the Company as of, and for, the periods presented in the
Registration Statement.
EXHIBIT I
---------
Selling Shareholders' Certificate
---------------------------------
1. Each Selling Shareholder has reviewed the Registration Statement and
the Prospectus.
2. The representations and warranties of each Selling Shareholder as set
forth in the Underwriting Agreement are true and correct as of the time
of purchase and, if applicable, the additional time of purchase.
3. Each Selling Shareholder has performed all of its respective
obligations under this Agreement as are to be performed at or before
the time of purchase and at or before the additional time of purchase,
as the case may be.
