Shares SCOPUS VIDEO NETWORKS LTD. ORDINARY SHARES UNDERWRITING AGREEMENT Dated [Ÿ], 2005
_______________
Shares
ORDINARY
SHARES
Dated
[Ÿ],
2005
TABLE
OF CONTENTS
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Page
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1.
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Representations
and Warranties of the Company
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2
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1.1
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Effective
Registration Statement
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2
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1.2
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Contents
of Registration Statement
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2
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1.3
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Due
Incorporation
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2
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1.4
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Subsidiaries
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2
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1.5
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3
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||
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1.6
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Description
of Ordinary Shares
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3
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1.7
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Outstanding
Securities
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3
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1.8
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Validly
Issued Shares
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3
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1.9
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Nasdaq;
Exchange Act Registration
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3
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1.10
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No
Conflict
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4
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1.11
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No
Material Adverse Change
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4
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1.12
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Legal
Proceedings; Statutes and Regulations
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4
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1.13
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Contracts
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4
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1.14
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Related
Party Transactions
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4
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1.15
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Compliance
with Securities Act
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4
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1.16
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Not
an Investment Company
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5
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1.17
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Not
an Ineligible Issuer
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5
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1.18
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General
Disclosure Package
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5
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1.19
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Individual
Free Writing Prospectuses
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5
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1.20
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Use
of Free Writing Prospectuses
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5
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1.21
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No
Violation
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6
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1.22
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Compliance
with Environmental Laws
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6
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1.23
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No
Environmental Costs
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6
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1.24
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No
Registration Rights
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6
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1.25
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Absence
of Material Charges
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6
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1.26
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Good
Title to Properties
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7
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1.27
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Intellectual
Property Rights
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7
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1.28
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No
Labor Disputes
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7
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1.29
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Insurance
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7
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1.30
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No
Price Stabilization or Manipulation
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8
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1.31
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Governmental
Permits
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8
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1.32
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Financial
Statements
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8
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1.33
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Contributions,
Gifts and Other Payments
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8
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1.34
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Audit
Committee
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8
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1.35
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Controls
and Procedures
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8
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1.36
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Xxxxxxxx-Xxxxx
Act
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9
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1.37
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Auditor
Independence
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9
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1.38
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Taxes
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9
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1.39
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Brokers
Fees
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9
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1.40
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Books
and Records
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9
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1.41
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Money
Laundering Laws
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10
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1.42
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Foreign
Asset Control
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10
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|
-i-
TABLE
OF CONTENTS
(Continued)
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Page
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1.43
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Passive
Foreign Investment Company
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10
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1.44
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Foreign
Personal Holding Company
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10
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1.45
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Approved
Enterprise Status
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10
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2.
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Purchase
and Sale Agreements.
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10
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2.1
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Firm
Shares
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10
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2.2
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Additional
Shares
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11
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2.3
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Market
Standoff Provision
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11
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2.4
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Terms
of Public Offering
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11
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2.5
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Determination
of Public Offering Price and Purchase Price
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11
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3.
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Payment
and Delivery.
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12
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3.1
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Firm
Shares
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12
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3.2
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Additional
Shares
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12
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3.3
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Delivery
of Certificates
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12
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4.
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Covenants
of the Company
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12
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4.1
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Furnish
Copies of Registration Statement and Prospectus
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12
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4.2
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Notification
of Amendments or Supplements
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12
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4.3
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Filings
of Amendments or Supplements
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13
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4.4
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Blue
Sky Laws
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13
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4.5
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Earnings
Statement
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13
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4.6
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Use
of Proceeds
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13
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4.7
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Transfer
Agent
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13
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4.8
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Reporting
Obligations; Exchange Act Compliance
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13
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4.9
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Public
Communications
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13
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5.
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Conditions
to the Underwriters’ Obligations
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14
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5.1
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Effective
Registration Statement
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14
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5.2
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Rule
462(b) Registration Statement
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14
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5.3
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Representations
and Warranties
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14
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5.4
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Prospectus
Filed with Commission
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14
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5.5
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No
Stop Order
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14
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5.6
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Nasdaq
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14
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5.7
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No
NASD Objection
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14
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5.8
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No
Debt Downgrading
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14
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5.9
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No
Material Adverse Change
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15
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5.10
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Officer’s
Certificate
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15
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5.11
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Opinions
of Company Counsel
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15
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5.12
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Opinions
of Underwriters Counsel
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21
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5.13
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Accountant’s
Comfort Letter
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21
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5.14
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Lock-Up
Agreements
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21
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5.15
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Additional
Documents
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21
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5.16
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Legal
Matters
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22
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6.
|
Expenses
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22 | |
-ii-
TABLE
OF CONTENTS
(Continued)
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Page
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7.
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Indemnity
and Contribution.
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22
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7.1
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Indemnification
of the Underwriters
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22
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7.2
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Indemnification
by the Underwriters
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23
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7.3
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Indemnification
Procedures
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23
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7.4
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Indemnification
for Directed Share Program
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24
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7.5
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Contribution
Agreement
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24
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7.6
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Contribution
Amounts
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25
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7.7
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Survival
of Provisions
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25
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8.
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Effectiveness
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25
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9.
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Termination
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25
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10.
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Defaulting
Underwriters
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26
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11.
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Counterparts
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27
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12.
|
Headings;
Table of Contents
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27
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13.
|
Notices
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27
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14.
|
Successors
|
28
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15.
|
Partial
Unenforceability
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28
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16.
|
Governing
Law
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28
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17.
|
Consent
to Jurisdiction
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28
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18.
|
Waiver
of Immunity
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28
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|
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19.
|
Entire
Agreement
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28
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20.
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Amendments
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29
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|
|
21.
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Sophisticated
Parties
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29
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Schedules
A List
of
Underwriters
Exhibits
A Form
of
Lock-Up Agreement
-iii-
[Ÿ],
2005
Xxxxxx
Xxxxxx Partners LLC
CIBC
World Markets Corp.
Xxxxxxx &
Company, LLC
Xxxxxxxxxxx &
Co. Inc.
As
Representatives of the several Underwriters
c/o
Thomas Xxxxxx Partners LLC
Xxx
Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies
and Gentlemen:
Introduction.
Scopus
Video Networks Ltd., a corporation organized under the laws of the State
of
Israel (the “Company”),
proposes to issue and sell to the several underwriters named in Schedule A
hereto
(the “Underwriters”)
an
aggregate of ____________ordinary shares (the “Firm
Shares”),
par
value NIS 0.50 per share (the “Ordinary
Shares”),
of
the Company.
The
Company also proposes to issue and sell to the several Underwriters not more
than an additional ____________ Ordinary Shares (the “Additional
Shares”),
if
and to the extent that you shall have determined to exercise, on behalf of
the
Underwriters, the right to purchase such Ordinary Shares granted to the
Underwriters in Section 2 hereof. The Firm Shares and the Additional
Shares
are hereinafter collectively referred to as the “Shares”.
Xxxxxx
Xxxxxx Partners LLC, CIBC World Markets Corp., Xxxxxxx & Company LLC
and Xxxxxxxxxxx & Co. Inc. have agreed to act as representatives of the
several Underwriters (in such capacity, the “Representatives”)
in
connection with the offering and sale of the Shares.
The
Company has prepared and filed with the Securities and Exchange Commission
(the
“Commission”),
in
accordance with the provisions of the Securities Act of 1933, as amended
(the
“Securities
Act”),
and
the applicable rules and regulations thereunder, a registration statement
on
Form F-1 (file no. 333-_____), including a prospectus, relating to
the
Shares. The term “Registration
Statement”
as used
herein means the registration statement (including all financial schedules
and
exhibits) as amended at the time it becomes effective or, if the registration
statement became effective prior to the execution of this Agreement, as
supplemented or amended prior to the execution of this Agreement and includes
information contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) of the rules under the Securities Act and
deemed
part thereof at the time of effectiveness pursuant to Rule 430A of
the
rules under the Securities Act. If it is contemplated, at the time this
Agreement is executed, that a post-effective amendment to the Registration
Statement will be filed and must be declared effective before the offering
of
the Shares may commence, the term “Registration Statement” as used herein shall
mean the Registration Statement as amended by such post-effective amendment.
If
the Company has filed or files on or after the date of this Agreement a
registration statement to register additional shares of Common Stock pursuant
to
Rule 462(b) under the Securities Act (the “Rule 462(b)
Registration Statement”),
then
any reference herein to the term “Registration
Statement”
shall
be deemed to include such Rule 462(b) Registration Statement. The
prospectus, in the form first used to confirm sales of Shares, is hereinafter
referred to as the “Prospectus.”
All
references in this Agreement to the Registration Statement, the Rule 462(b)
Registration Statement, a preliminary prospectus, the Prospectus, or any
amendments or supplements to any of the foregoing, shall include any copy
thereof filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System (“XXXXX”).
1. Representations
and Warranties of the Company.
The
Company represents and warrants to and agree with each of the Underwriters
that:
1.1 Effective
Registration Statement.
The
Registration Statement has become effective; no stop order suspending the
effectiveness of the Registration Statement is in effect, and no proceedings
for
such purpose are pending before or threatened by the Commission.
1.2 Contents
of Registration Statement.
Up to
the Closing Date and the Option Closing Date, if any: (i) The Registration
Statement, when it became effective, did not contain and, as amended or
supplemented, if applicable, will not contain any 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, (ii) the Registration
Statement and the Prospectus comply and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities Act
and the
applicable rules and regulations of the Commission thereunder, (iii) the
Prospectus does not contain and, as amended or supplemented, if applicable,
will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations
and
warranties set forth in this paragraph do not apply to statements or omissions
in the Registration Statement or the Prospectus based upon information relating
to any Underwriter set forth in the section of the Registration Statement
and
the Prospectus captioned “Underwriting” that was furnished to the Company in
writing by such Underwriter through you expressly for use therein and
(iv) the 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. With respect to the exception
set
forth at clause (iii) the Company acknowledges that the only information
furnished in writing by the Underwriters for use in the Registration Statement
or the Prospectus is the statements specifically relating to (a) the
aggregate number of Firm Shares that the Underwriters have severally agreed
to
purchase contained in the second paragraph under the section captioned
“Underwriting” in the Registration Statement and the Prospectus, (b) the
concession and reallowance figures contained in the paragraph captioned
“Commissions and Discounts” under the section caption “Underwriting” in the
Registration Statement and the Prospectus, and (c) stabilizing and
passive
market making activities under the paragraph captioned “Short Sales, Stabilizing
Transactions and Penalty Bids” under the section captioned “Underwriting” in the
Registration Statement and the Prospectus.
1.3 Due
Incorporation.
The
Company has been duly incorporated, is validly existing as a corporation
under
the laws of the State of Israel, has the corporate power and authority to
own
its property and to conduct its business as described in the Prospectus and
is
duly qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be
so
qualified or be in good standing would not have a material adverse effect
on the
Company and its subsidiaries, taken as a whole (a “Material
Adverse Effect”).
1.4 Subsidiaries.
Each
subsidiary of the Company has been duly incorporated or organized, is validly
existing as a corporation or other legal entity in good standing (or the
foreign
equivalent thereof) under the laws of the jurisdiction of its incorporation
or
organization, has the power and authority to own, lease and operate its property
and to conduct its business as described in the Registration Statement and
the
Prospectus and is duly qualified to transact business and is in good corporate
standing in each jurisdiction in which the conduct of its business or its
ownership, leasing or operation of property requires such qualification,
except
to the extent that the failure to be so qualified or be in good standing
would
not result in a Material Adverse Effect. All of the issued shares of capital
stock or other equity interests of each subsidiary of the Company have been
duly
and validly authorized and issued, are fully paid and non-assessable and
are
owned directly by the Company or through its wholly-owned subsidiaries, free
and
clear of all liens, encumbrances, equities or claims. There is no outstanding
option, right or agreement of any kind relating to the issuance, sale or
transfer of any capital stock or other equity securities of the subsidiaries
to
any person or entity except the Company, and none of the outstanding shares
of
capital stock or other equity interests of any subsidiary was issued in
violation of the preemptive or similar rights of any securityholder of such
subsidiary. Except for its subsidiaries, the Company owns no beneficial
interest, directly or indirectly, in any corporation, partnership, joint
venture
or other business entity.
-
2
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1.5 Underwriting
Agreement.
This
Agreement has been duly authorized, executed and delivered by the Company,
and
is a valid and binding agreement of the Company, enforceable in accordance
with
its terms, except as rights to indemnification hereunder may be limited by
applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
1.6 Description
of Ordinary Shares.
The
authorized share capital of the Company conforms as to legal matters to the
description thereof contained in the Registration Statement and the Prospectus,
and as of the date thereof, the Company had authorized and outstanding Ordinary
Shares as set forth under the caption “Capitalization” in the Registration
Statement and the Prospectus.
1.7 Outstanding
Securities.
The
Ordinary Shares outstanding prior to the issuance of the Shares to be sold
by
the Company have been duly authorized and are validly issued, fully paid
and non
assessable. The Ordinary Shares outstanding prior to the issuance of the
Shares
are not subject to preemptive or similar rights to subscribe for or to purchase
or acquire any Ordinary Shares of the Company or any of its subsidiaries
or any
such rights pursuant to the Israeli Companies Law, its memorandum of
association, articles of association, or any agreement or instrument to or
by
which the Company or any of its subsidiaries is a party or bound. Except
as
disclosed in the Registration Statement and the Prospectus, the Company has
not
sold or issued any securities during the six-month period preceding the date
of
the Prospectus, including any sales pursuant to Rule 144A, or
Regulations D or Regulation S under the Securities Act, other
than
shares issued pursuant to employee benefit plans, qualified stock option
plans
or other employee compensation plans or pursuant to outstanding options,
rights
or warrants described in the Registration Statement and the
Prospectus.
1.8 Validly
Issued Shares.
The
Shares have been duly authorized and, when issued and delivered in accordance
with the terms of this Agreement, will be validly issued, fully paid and
non
assessable, and the issuance of such Shares will not be subject to any
preemptive or similar rights to subscribe for or to purchase or acquire any
Ordinary Shares of the Company or any of its subsidiaries or any such rights
pursuant to its memorandum of association, articles of association, or any
agreement or instrument to or by which the Company or any of its subsidiaries
is
a party or bound.
1.9 Nasdaq;
Exchange Act Registration.
The
Shares have been duly authorized for quotation on the National Association
of
Securities Dealers Automated Quotation (“Nasdaq”)
National Market System, subject to official notice of issuance. A registration
statement has been filed on Form 8-A pursuant to Section 12
of the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”),
which
complies in all material respects with the Exchange Act. The Company has
taken
no action designed to, or likely to have the effect of, terminating the
registration of the Ordinary Shares under the Exchange Act or the quotation
of
the Ordinary Shares on the Nasdaq National Market System, nor has the Company
received any notification that the Commission or the Nasdaq National Market
is
contemplating terminating such registration or quotation.
-
3
-
1.10 No
Conflict.
The
execution and delivery by the Company of, and the performance by the Company
of
its obligations under, this Agreement will not contravene any provision of
applicable law or the memorandum of association or articles of association
of
the Company or (with or without notice or lapse of time or both) any agreement
or other instrument binding upon the Company or any of its subsidiaries that
is
material to the Company and its subsidiaries, taken as a whole, or any judgment,
order or decree of any governmental body, agency or court having jurisdiction
over the Company or any subsidiary, and no consent, approval, authorization
or
order of, or qualification with, any governmental body or agency is required
for
the performance by the Company of its obligations under this Agreement, except
such as may be required by the securities or Blue Sky laws of the various
states
in connection with the offer and sale of the Shares.
1.11 No
Material Adverse Change.
There
has not occurred any material adverse change in the condition, financial
or
otherwise, or in the earnings, business, or operations of the Company and
its
subsidiaries, taken as a whole, from that set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement).
1.12 Legal
Proceedings; Statutes and Regulations.
To the
Company’s knowledge, there are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or
to
which any of the properties of the Company or any of its subsidiaries is
subject
that are required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes or regulations that are
required to be described in the Registration Statement or the Prospectus
that
are not described as required.
1.13 Contracts.
There
are no contracts or other documents which are required to be described in
the
Prospectus or filed as exhibits to the Registration Statement by the Securities
Act or the applicable rules and regulations thereunder which have not be
described in the Prospectus or filed as exhibits to the Registration
Statement.
1.14 Related
Party Transactions.
No
relationship, direct or indirect, exists between or among the Company, on
the
one hand, and the directors, officers, shareholders, customers or suppliers
of
the Company, on the other hand, which is required to be described in the
Registration Statement and the Prospectus and which is not so described.
There
are no outstanding loans, advances or guarantees of indebtedness by the Company
to or for the benefit of any of the officers or directors of the Company
or any
of their respective family members, except as disclosed in the Registration
Statement and the Prospectus. All transactions with office holders or control
persons of the Company have been duly approved by the appropriate corporate
organs in accordance with the requirements of Israeli law.
1.15 Compliance
with Securities Act.
Each
preliminary prospectus filed as part of the Registration Statement as originally
filed or as part of any amendment thereto, or filed pursuant to Rule 424
under
the Securities Act, complied when so filed in all material respects with
the
Securities Act and the applicable rules and regulations of the Commission
thereunder.
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4
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1.16 Not
an
Investment Company.
The
Company is not and, after giving effect to the offering and sale of the Shares
and the application of the proceeds thereof as described in the Registration
Statement and the Prospectus, will not be an “investment company” as such term
is defined in the Investment Company Act of 1940, as amended.
1.17 Not
an
Ineligible Issuer.
(i) At the time of filing the Registration Statement and (ii) at
the
date hereof, the Company was not and is not an “ineligible issuer,” as defined
in Rule 405 under the Securities Act.
1.18 General
Disclosure Package
Neither
(i) the Issuer-Represented General Free Writing Prospectus(es) and
the
Prospectus, all considered together (collectively, the “General Disclosure
Package”), nor (ii) any individual Issuer-Represented Limited-Use Free
Writing Prospectus, when considered together with the General Disclosure
Package, included any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
preceding sentence does not apply to statements in or omissions from the
Prospectus or any Issuer-Represented Free Writing Prospectus based upon and
in
conformity with written information furnished to the Company by any Underwriter
through you specifically for use therein. As used in this paragraph and
elsewhere in this Agreement:
(a) “Issuer-Represented
Free Writing Prospectus” means any “issuer free writing prospectus,” as defined
in Rule 433, relating to the Shares that (i) is required to
be filed
with the SEC by the Company, (ii) is a “road show that is a written
communication” within the meaning of Rule 433(d)(8)(i), whether or not
required to be filed with the SEC, or (iii) is exempt from filing
pursuant
to Rule 433(d)(5)(i) because it contains a description of the Shares
or of
the offering of Shares pursuant to this Agreement.
(b) “Issuer-Represented
General Free Writing Prospectus” means any “Issuer- Represented Free Writing
Prospectus that is intended for general distribution to prospective investors,
as evidenced by its being specified in a schedule to this Underwriting
Agreement.
(c) “Issuer-Represented
Limited-Use Free Writing Prospectus” means any “Issuer-Represented Free Writing
Prospectus that is not an Issuer-Represented General Free Writing
Prospectus.
1.19 Individual
Free Writing Prospectuses.
Each
Issuer-Represented Free Writing Prospectus, as of its issue date and at all
subsequent times through each Closing Date did not, does not and will not
include any information that conflicted, conflicts or will conflict with
the
information contained in the Registration Statement. If at any time following
issuance of an Issuer-Represented Free Writing Prospectus there occurred
or
occurs an event or development as a result of which such Issuer-Represented
Free
Writing Prospectus included or would include an untrue statement of a material
fact or omitted or would omit to state a material fact necessary in order
to
make the statements therein, in the light of the circumstances, not misleading,
the Company has notified or will notify promptly the Representatives so that
any
use of such Issuer-Represented Free Writing Prospectus may cease until it
is
amended or supplemented. The foregoing two sentences do not apply to statements
in or omissions from any Issuer-Represented Free Writing Prospectus based
upon
and in conformity with written information furnished to the Company by any
Underwriter through the Representatives specifically for use
therein.
1.20 Use
of
Free Writing Prospectuses.
Unless
the Company obtains the prior consent of the Representatives, it has not
made
and will not make any offer relating to the Shares that would constitute
an
“issuer free writing prospectus,” as defined in Rule 433, or that would
otherwise constitute a “free writing prospectus,” as defined in Rule 405,
required to be filed with the Commission. The Company has complied and will
comply with the requirements of Rule 433 applicable to any
Issuer-Represented Free Writing Prospectus, including timely filing with
the
Commission where required, legending and record keeping. The Company has
satisfied and will satisfy the conditions in Rule 433 to avoid a
requirement to file with the Commission any electronic road show.
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1.21 No
Violation.
The
Company is not in violation of, and no event has occurred which with notice
or
lapse of time or both would constitute a default in, its articles of association
or memorandum of association or in default in the performance or observance
of
any material obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement
or
instrument to which it is a party or by which it or any of its properties
may be
bound, or any license, permit, judgment, decree, order, statute, rule or
regulation to which it or any of its properties or its business, or a subsidiary
or its properties or business, may be subject, which would result in a Material
Adverse Effect.
1.22 Compliance
with Environmental Laws.
The
Company and its subsidiaries (i) are in compliance with any and all
applicable Israeli, United States, foreign, state and local laws, orders,
rules,
regulations, directives, decrees and judgments relating to the protection
of
human health and safety, the environment or hazardous or toxic substances
or
wastes, pollutants or contaminants (“Environmental
Laws”),
(ii) have received all permits, licenses or other approvals required
of
them under applicable Environmental Laws to conduct their respective businesses
and (iii) are in compliance with all terms and conditions of any such
permit, license or approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses
or
approvals would not, individually or in the aggregate, result in a Material
Adverse Effect.
1.23 No
Environmental Costs.
There
are no costs or liabilities associated with Environmental Laws for which
the
Company is responsible, other than as disclosed in the Registration Statement
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws
or any
permit, license or approval, any related constraints on operating activities
and
any potential liabilities to third parties) which would, individually or
in the
aggregate, result in a Material Adverse Effect.
1.24 No
Registration Rights.
There
are no contracts, agreements or understandings between the Company and any
person or entity granting such person or entity the right, contractually
or
otherwise, to require the Company to file a registration statement under
the
Securities Act with respect to any securities of the Company or to require
the
Company to include such securities with the Shares registered pursuant to
the
Registration Statement other than as described in the Registration Statement.
1.25 Absence
of Material Charges.
Subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, (1) the Company and its
subsidiaries have not incurred any material liability or obligation, direct
or
contingent, nor entered into any material transaction not in the ordinary
course
of business; (2) neither the Company nor its subsidiaries has purchased
any
of the Company’s outstanding share capital, nor declared, paid or otherwise made
any dividend or distribution of any kind on the Company’s share capital; and
(3) there has not been any material change in the share capital, short-term
debt or long-term debt of the Company and its subsidiaries, except in each
case
as described in the Registration Statement and the Prospectus.
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1.26 Good
Title to Properties.
The
Company and its subsidiaries do not own any real property. The Company and
its
subsidiaries have good and marketable title to all personal property owned
by
them which is material to the business of the Company and its subsidiaries,
in
each case free and clear of all liens, encumbrances and defects except such
as
are described in the Prospectus or such as do not materially affect the value
of
such property and do not interfere with the use made and proposed to be made
of
such property by the Company and its subsidiaries; and any real property
and
buildings held under lease by the Company and its subsidiaries are held by
them
under valid, subsisting and enforceable leases with such exceptions as are
not
material and do not interfere with the use made and proposed to be made of
such
property and buildings by the Company and its subsidiaries, in each case
except
as described in the Prospectus.
1.27 Intellectual
Property Rights.
The
Company and its subsidiaries own or possess, or can acquire on commercially
reasonable terms, legally enforceable rights to use all trademarks, service
marks, trade names, domain names, copyrights, patents, inventions, know how
(including trade secrets and other unpatented and/or unpatentable proprietary
or
confidential information, systems or procedures), and other intellectual
property rights (“Intellectual
Property”)
as are
necessary for the conduct of their respective businesses as described in
the
Prospectus, except where failure to own, possess or acquire such rights would
not result in a Material Adverse Effect. Except as described in the Registration
Statement and Prospectus, (i) to the knowledge of the Company, there
is no
infringement, misappropriation or violation by third parties of any such
Intellectual Property; (ii) there is no pending or, to the knowledge
of the
Company, threatened action, suit, proceeding or claim by others challenging
the
Company’s or any of its subsidiaries’ rights in or to any such Intellectual
Property; (iii) the Intellectual Property owned by the Company and
its
subsidiaries and to the knowledge of the Company, the Intellectual Property
licensed to the Company and its subsidiaries has not been adjudged invalid
or
unenforceable, in whole or in part, and there is no pending or threatened
action, suit, proceeding or claim by others challenging the validity or scope
of
any such Intellectual Property; (iv) there is no pending or, to the
knowledge of the Company, threatened action, suit, proceeding or claim by
others
against the Company or any of its subsidiaries that the Company or any of
its
subsidiaries infringes, misappropriates or otherwise violates any Intellectual
Property or other proprietary rights of others, and neither the Company nor
any
of its subsidiaries has received any written notice of such claim; and
(v) to the Company’s knowledge, no employee of the Company or any of its
subsidiaries is the subject of any claim or proceeding involving a violation
of
any term of any employment contract, patent disclosure agreement, invention
assignment agreement, non-competition agreement, non-solicitation agreement,
nondisclosure agreement or any restrictive covenant to or with a former employer
where the basis of such violation relates to such employee’s employment with the
Company or any of the Company’s subsidiaries or actions undertaken by the
employee while employed with the Company or any of the Company’s subsidiaries,
except, in each case, for any instances which would not, individually or
in the
aggregate, result in a Material Adverse Effect.
1.28 No
Labor Disputes.
To the
Company’s knowledge, no material labor dispute with the employees of the Company
or any of its subsidiaries exists, or, to the knowledge of the Company, is
imminent; and the Company is not aware of any existing, threatened or imminent
labor disturbance by the employees of any of its principal suppliers,
manufacturers or contractors that could have a Material Adverse
Effect.
1.29 Insurance.
The
Company and its subsidiaries are insured by the insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which they are engaged; and neither the
Company nor any of its subsidiaries has any reason to believe that it will
not
be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not have a Material Adverse
Effect.
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1.30 No
Price Stabilization or Manipulation.
The
Company has not taken, directly or indirectly, any action designed to or
that
could reasonably be expected to cause or result in any stabilization or
manipulation of the price of the Shares.
1.31 Governmental
Permits.
The
Company and its subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct their respective business, and neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authorization or permit which, individually or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
1.32 Financial
Statements.
The
financial statements of the Company and its subsidiaries (including all notes
and schedules thereto) included in the Registration Statement and Prospectus
present fairly the financial position of the Company and the Company’s
consolidated subsidiaries at the dates indicated and the statement of
operations, shareholders’ equity and cash flows of the Company, and the
Company’s consolidated subsidiaries for the periods specified; and such
financial statements and related schedules and notes thereto, and the unaudited
financial information filed with the Commission as part of the Registration
Statement, have been prepared in conformity with generally accepted accounting
principles, consistently applied throughout the periods involved. The summary
and selected financial data included in the Registration Statement and the
Prospectus present fairly the information shown therein as at the respective
dates and for the respective periods specified and have been presented on
a
basis consistent with the consolidated financial statements set forth in
the
Registration Statement and the Prospectus and other financial
information.
1.33 Contributions,
Gifts and Other Payments.
Neither
the Company nor, to the knowledge of the Company, any other person associated
with or acting on behalf of the Company, including without limitation any
director, officer, agent or employee of the Company or its subsidiaries has,
directly or indirectly, while acting on behalf of the Company or its
subsidiaries (i) used any corporate funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political activity,
(ii) made any unlawful payment to foreign or domestic government officials
or employees or to foreign or domestic political parties or campaigns from
corporate funds, (iii) violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended or (iv) made any other unlawful
payment.
1.34 Audit
Committee.
The
Company’s board of directors has validly appointed an audit committee whose
composition satisfies the requirements of the Exchange Act, the rules and
regulations of the Commission adopted there under and Rules 4200 and
4350
of the rules of the National Association of Securities Dealers (the
“NASD”),
as
applicable to foreign private issuers. The Company’s audit committee has adopted
a charter that satisfies the Exchange Act, the rules and regulations of the
Commission adopted thereunder and Rules 4200 and 4350 of the NASD
Rules.
1.35 Controls
and Procedures.
The
Company and each of its subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation
of
financial statements in conformity with generally accepted accounting principles
and to maintain asset accountability; (iii) access to assets is permitted
only in accordance with management’s general or specific authorization; and
(iv) the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect
to
any differences. Management has established disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15 and 15d-15) for the Company
and
designed such disclosure controls and procedures to ensure that material
information relating to the Company and its subsidiaries is made known to
the
Company’s principal executive officer and principal financial officer, or
persons performing similar functions, by others within those entities. Based
on
the evaluation of its disclosure controls and procedures, the Company’s auditors
and the Company’s audit committee (or persons fulfilling the equivalent
function) are not aware of (a) any significant deficiency in the design
or
operation of internal controls which could adversely affect the Company’s
ability to record, process, summarize and report financial data nor any material
weaknesses in internal controls; (b) any fraud, whether or not material,
that involves management or other employees who have a significant role in
the
Company’s internal controls. Since the date of the most recent evaluation of
such disclosure controls and procedures, there has been no change in the
Company’s internal controls that has materially affected, or is reasonably
likely to materially affect, the Company’s internal controls, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
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1.36 Xxxxxxxx-Xxxxx
Act.
The
Company is in compliance with all provisions of the Xxxxxxxx-Xxxxx Act of
2002
and the rules and regulations promulgated thereunder (the “Xxxxxxxx-Xxxxx
Act”)
that
are applicable, or will be applicable as of the date of payment for and delivery
of the Firm Shares pursuant hereto, to the Company.
1.37 Auditor
Independence.
Xxxxxxxxx Almagor & Co., which has expressed its opinion with respect
to the financial statements and schedules filed as a part of the Registration
Statement and included in the Registration Statement and the Prospectus,
is and,
during the periods covered by their reports, was an independent public
accounting firm within the meaning of Article 2-01 of Regulation S-X
under the Securities Act and the rules and regulations promulgated thereunder,
to the knowledge of the Company, such accountants are not in violation of
the
auditor independence requirements of the Xxxxxxxx-Xxxxx Act, and the rules
and
regulations promulgated thereunder, set forth in Section 10A of the
Exchange Act.
1.38 Taxes.
Each of
the Company and its subsidiaries has filed all Israeli and United States
federal, state, local and foreign tax returns and tax forms required to be
filed. Such returns and forms are complete and correct in all material respects.
All payroll withholdings required to be made by of the Company and its
subsidiaries with respect to employees have been made. There have been no
tax
deficiencies asserted against the Company or its subsidiaries and, to the
knowledge of the Company, no tax deficiency might be reasonably asserted
or
threatened against the Company or its subsidiaries that could, individually
or
in the aggregate, result in a Material Adverse Effect.
1.39 Brokers
Fees.
Except
as disclosed in the Registration Statement and the Prospectus, there are
no
contracts, agreements or understandings between the Company and any person
that
would give rise to a valid claim against the Company or any of the Underwriters
for a brokerage commission, finder’s fee or other like payment in connection
with the transactions contemplated herein, the Registration Statement and
the
Prospectus or in any contracts, agreements, understandings, payments,
arrangements or issuances with respect to the Company or any of its officers,
directors, shareholders, partners, employees or affiliates that may affect
the
Underwriters’ compensation as determined by the NASD.
1.40 Books
and Records.
The
minute books of the Company and each of its subsidiaries have been made
available to the Underwriters and counsel for the Underwriters, and such
books
(i) contain a complete summary of all meetings and actions of the
board of
directors or comparable body (including each committee thereof) of the Company
and each of its subsidiaries since the time of its respective incorporation
or
formation through the date of the latest meeting and action and
(ii) accurately reflect all transactions referred to in such
minutes.
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1.41 Money
Laundering Laws.
The
operations of the Company and its Subsidiaries are and have been conducted
at
all times in compliance with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as
amended, the money laundering statutes of all jurisdictions to which the
Company
or its Subsidiaries are subject, the rules and regulations there under and
any
related or similar rules, regulations or guidelines, issued, administered
or
enforced by any governmental agency (collectively, the “Money Laundering Laws”)
and no action, suit or proceeding by or before any court or governmental
agency,
authority or body or any arbitrator involving the Company or any of its
Subsidiaries with respect to the Money Laundering Laws is pending or, to
the
best knowledge of the Company, threatened.
1.42 Foreign
Asset Control.
Neither
the Company nor any of its Subsidiaries nor, to the knowledge of the Company,
any director, officer, agent, employee or affiliate of the Company or any
of its
Subsidiaries is currently subject to any U. S. sanctions administered by
the
Office of Foreign Assets Control of the U. S. Treasury Department (“OFAC”); and
the Company will not directly or indirectly use the proceeds of the offering,
or
lend, contribute or otherwise make available such proceeds to any Subsidiary,
joint venture partner or other person or entity, for the purposes of financing
the activities of any person subject to any U. S. sanctions administered
by the
OFAC.
1.43 Passive
Foreign Investment Company.
The
Company is not a Passive Foreign Investment Company (“PFIC”) within the meaning
of Section 1297 of the United States Internal Revenue Code of 1986,
as
amended, and does not expect to become a PFIC in the future.
1.44 Foreign
Personal Holding Company.
The
Company is not a “foreign personal holding company” or a “controlled foreign
corporation” within the meaning of the United States Internal Revenue Code of
1986, as amended.
1.45 Approved
Enterprise Status.
The
Company is in compliance in all material respects with all conditions and
requirements stipulated by the instruments of approval granted to it with
respect to the “Approved Enterprise” status of any of the Company’s facilities
as well as with respect to the other tax benefits received by the Company
as set
forth under the caption “Israeli Taxation” in the Prospectus and by Israeli laws
and regulations relating to such “Approved Enterprise” status and the
aforementioned other tax benefits received by the Company. The Company has
not
received any notice of any proceeding or investigation relating to revocation
or
modification of any “Approved Enterprise” status granted with respect to any of
the Company’s facilities.
2. Purchase
and Sale Agreements.
2.1 Firm
Shares.
The
Company hereby agrees to sell to the several Underwriters, and each Underwriter,
upon the basis of the representations and warranties herein contained, but
subject to the conditions hereinafter stated, agrees, severally and not jointly,
to purchase from the Company at $______ a share (the “Purchase
Price”)
the
number of Firm Shares (subject to such adjustments to eliminate fractional
shares as you may determine) that bears the same proportion to the number
of
Firm Shares to be sold by the Company as the number of Firm Shares set forth
in
Schedule A
hereto
opposite the name of such Underwriter bears to the total number of Firm
Shares.
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2.2 Additional
Shares.
On the
basis of the representations and warranties contained in this Agreement,
and
subject to its terms and conditions, the Company agrees to sell to the
Underwriters the Additional Shares, and the Underwriters shall have a one-time
right to purchase, severally and not jointly, up to _______________ Additional
Shares at the Purchase Price. If you, on behalf of the Underwriters, elect
to
exercise such option, you shall so notify the Company in writing not later
than
thirty (30) days after the date of this Agreement, which notice shall specify
the number of Additional Shares to be purchased by the Underwriters and the
date
on which such shares are to be purchased (an “Option
Exercise Notice)”.
Such
date may be the same as the Closing Date (as defined below) but not earlier
than
the Closing Date nor later than ten (10) business days after the date of
such
notice. Additional Shares may be purchased as provided in Section 3
hereof
solely for the purpose of covering over- allotments made in connection with
the
offering of the Firm Shares. If any Additional Shares are to be purchased,
each
Underwriter agrees, severally and not jointly, to purchase the number of
Additional Shares (subject to such adjustments to eliminate fractional shares
as
you may determine) that bears the same proportion to the total number of
Additional Shares to be purchased as the number of Firm Shares set forth
in
Schedule A
hereto
opposite the name of such Underwriter bears to the total number of Firm
Shares.
2.3 Market
Standoff Provision.
The
Company hereby agrees that, without the prior written consent of Xxxxxx Xxxxxx
Partners LLC (which consent may be withheld in its sole discretion), it will
not, during the period ending 180 days after the date of the Prospectus (the
“Restricted
Period”),
(i) offer, pledge, sell, contract to sell, sell any option or contract
to
purchase, purchase any option or contract to sell, grant any option, right
or
warrant to purchase, lend, or otherwise transfer or dispose of, directly
or
indirectly, any Ordinary Shares or any securities convertible into or
exercisable or exchangeable for Ordinary Shares or (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 the Ordinary Shares, whether any such
transaction described in clause (i) or (ii) above is to be settled
by
delivery of Ordinary Shares or such other securities, in cash or otherwise.
The
foregoing sentence shall not apply to (A) the Shares to be sold hereunder
or (B) the issuance by the Company of Ordinary Shares upon the exercise
of
options or warrants or the conversion of a security outstanding on the date
hereof of which the Underwriters have been advised in writing and which is
described in the Prospectus. Notwithstanding the foregoing, if (1) during
the last eighteen (18) days of the Restricted Period the Company issues an
earnings release or material news or a material event relating to the Company
occurs or (2) prior to the expiration of the Restricted Period the
Company
announces that it will release earnings results during the 16-day period
beginning on the last day of the Restricted Period, the restrictions imposed
by
this Section 2.3 shall continue to apply until the expiration of the
19-day
period beginning on the issuance of the earnings release or the occurrence
of
the material news or material event, as applicable, unless Xxxxxx Xxxxxx
Partners LLC waives, in writing, such extension.
2.4 Terms
of Public Offering.
The
Company is advised by you that the Underwriters propose to make a public
offering of their respective portions of the Shares as soon after the
Registration Statement and this Agreement have become effective as in your
judgment is advisable. The Company is further advised by you that the Shares
are
to be offered to the public initially at a price of $________ per share (the
“Public
Offering Price”)
and to
certain dealers selected by you at a price that represents a selling concession
of not more than $________ per share below the Public Offering Price, and
that
any Underwriter may allow, and such dealers may re-allow, a selling concession,
not in excess of $________ per share, to any Underwriter or to certain other
dealers.
2.5 Determination
of Public Offering Price and Purchase Price.
The
Company acknowledges that the Public Offering Price and the Purchase Price
have
been arrived at through arms-length negotiation between its representatives
and
the Underwriters and that although the Underwriters have provided them with
information regarding prices at which certain prospective purchasers have
expressed an interest in acquiring Shares, the Underwriters have not verified
that those prices are the highest prices at which all of the Shares could
be
sold, can give no assurances with respect to the prices at which the Shares
will
trade in the public market, and have not represented that the Public Offering
Price is the highest prices at which all of the Shares could be
sold.
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3. Payment
and Delivery.
3.1 Firm
Shares.
Payment
for the Firm Shares shall be made to the Company in immediately available
funds
against delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on ____________, 2005, or
at
such other time on the same or such other date, not later than _________,
2005,
as shall be designated in writing by you. The time and date of such payment
are
hereinafter referred to as the “Closing
Date”.
3.2 Additional
Shares.
Payment
for any Additional Shares shall be made to the Company in immediately available
funds in New York City against delivery of such Additional Shares for the
respective accounts of the several Underwriters at 10:00 a.m., New York City
time, on the date specified in the notice described in Section 3.2
or at
such other time on the same or on such other date, in any event not later
than
_______, 2005, as shall be designated in writing by you. The time and date
of
such payment are hereinafter referred to as the “Option
Closing Date”.
3.3 Delivery
of Certificates.
Certificates for the Firm Shares and Additional Shares shall be in definitive
form and registered in such names and in such denominations as you shall
request
in writing not later than one (1) full business day prior to the Closing
Date or
the Option Closing Date, as the case may be. The certificates evidencing
the
Firm Shares and Additional Shares shall be delivered to you on the Closing
Date
or the Option Closing Date, as the case may be, for the respective accounts
of
the several Underwriters, with any transfer taxes payable in connection with
the
transfer of the Shares to the Underwriters duly paid, against payment of
the
Purchase Price therefor.
4. Covenants
of the Company.
In
further consideration of the agreements of the Underwriters herein contained,
the Company covenants with each Underwriter as follows:
4.1 Furnish
Copies of Registration Statement and Prospectus.
To
furnish to you, without charge, three signed copies of the Registration
Statement (including exhibits thereto) and for delivery to each other
Underwriter a conformed copy of the Registration Statement (without exhibits
thereto) and to furnish to you in New York City, without charge, prior to
10:00 a.m. New York City time on the business day next succeeding
the date
of this Agreement and during the period mentioned in Section 4.3 below,
as
many copies of the Prospectus and any supplements and amendments thereto
or to
the Registration Statement as you may reasonably request.
4.2 Notification
of Amendments or Supplements.
Before
amending or supplementing the Registration Statement or the Prospectus, to
furnish to you a copy of each such proposed amendment or supplement and not
to
file any such proposed amendment or supplement to which you reasonably object,
and to file with the Commission within the applicable period specified in
Rule
424(b) under the Securities Act any prospectus required to be filed pursuant
to
such rule. In addition, during the Prospectus Delivery Period (as defined
in
Section 4.3), the Company will promptly advise the Representatives
(i) of any communications (written or oral) with the Commission with
regard
to the Registration Statement, the Prospectus, any amendments or supplements
of
the Registration Statement or the Prospectus or any other matters in connection
with the offering of the Shares; (ii) of any filings made by the Company
with the Commission in connection with the offering of the Shares;
(iii) when any amendment to the Registration Statement relating to
the
Shares shall have become effective, (iv) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement
or
the institution or threatening of any proceeding for that purpose and
(v) of the receipt by the Company of any notification with respect
to the
suspension of the approval of the Shares for quotation in the Nasdaq National
Market or qualification of the Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. The Company
will
use its commercially reasonable best efforts to prevent the issuance or
invocation of any such stop order or suspension and, if any such stop order
or
suspension is so issued or invoked, to obtain as soon as possible the withdrawal
or removal thereof.
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4.3 Filings
of Amendments or Supplements.
If,
during such period after the first date of the public offering of the Shares
as
in the opinion of counsel for the Underwriters the Prospectus is required
by law
to be delivered in connection with sales by an Underwriter or dealer (the
“Prospectus
Delivery Period”),
any
event shall occur or condition exist as a result of which it is necessary
to
amend or supplement the Prospectus in order to make the statements therein,
in
the light of the circumstances when the Prospectus is delivered to a purchaser,
not misleading, or if, in the opinion of counsel for the Underwriters, it
is
necessary to amend or supplement the Prospectus to comply with applicable
law,
forthwith to prepare, file with the Commission and furnish, at its own expense,
to the Underwriters and to the dealers (whose names and addresses you will
furnish to the Company) to which Shares may have been sold by you on behalf
of
the Underwriters and to any other dealers upon request, either amendments
or
supplements to the Prospectus so that the statements in the Prospectus as
so
amended or supplemented will not, in the light of the circumstances when
the
Prospectus is delivered to a purchaser, be misleading or so that the Prospectus,
as amended or supplemented, will comply with law.
4.4 Blue
Sky Laws.
To
endeavor to qualify the Shares for offer and sale under the securities or
Blue
Sky laws of such jurisdictions as you shall reasonably request.
4.5 Earnings
Statement.
To make
generally available to its securityholders as soon as practicable, but in
any
event not later than eighteen (18) months after the effective date of the
Registration Statement (as defined in Rule 158(c) under the Securities Act),
an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Securities Act and the
rules
and regulations thereunder (including, at the option of the Company,
Rule 158).
4.6 Use
of
Proceeds.
The
Company shall apply the net proceeds from the sale of the Shares sold by
it in
the manner described under the caption “Use of Proceeds” in the
Prospectus.
4.7 Transfer
Agent.
The
Company shall engage and maintain, at its expense, a registrar and transfer
agent in the United States for the Ordinary Shares.
4.8 Reporting
Obligations; Exchange Act Compliance.
During
the Prospectus Delivery Period, the Company shall file, on a timely basis,
with
the Commission and the Nasdaq National Market all reports and documents required
to be filed under the Exchange Act. Additionally, the Company shall file
with
the Commission such information on Form 20-F may be required by Rule 463
under
the Securities Act.
4.9 Public
Communications.
Prior
to the Closing Date, the Company will issue no press release or other
communications directly or indirectly and hold no press conference with respect
to the Company, the condition, financial or otherwise, or the earnings,
business, operations or prospects of any of them, or the offering of the
Shares
without the prior written consent of the Representatives unless in the judgment
of the Company and its counsel, and after notification to the Representatives,
such press release or communication is required by law.
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5. Conditions
to the Underwriters’ Obligations.
The
obligations of the Company to sell the Shares to the several Underwriters
and
the several obligations of the Underwriters to purchase and pay for the Shares
on the Closing Date are subject to the following conditions:
5.1 Effective
Registration Statement.
The
Registration Statement shall have become effective not later than [__________]
(New
York City time) on the date hereof.
5.2 Rule
462(b) Registration Statement.
If the
Company elects to rely upon Rule 462(b), the Company shall file a
Rule 462(b) Registration Statement with the Commission in compliance
with
Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement
or
give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Securities Act.
5.3 Representations
and Warranties.
The
representations and warranties of the Company contained in this Agreement
and in
the certificate delivered pursuant to Section 5.10 shall be true and
correct in all material respects when made and on and as of each Closing
Date as
if made on such date (except that those representations and warranties that
address matters only as of a particular date shall remain true and correct
as of
such date). The Company shall have performed all covenants and agreements
and
satisfied all the conditions contained in this Agreement required to be
performed or satisfied by the Company at or before such Closing
Date.
5.4 Prospectus
Filed with Commission.
The
Company shall have filed the Prospectus with the Commission (including the
information required by Rule 430A under the Securities Act) in the manner
and
within the time period required by Rule 424(b) under the Securities Act;
or the
Company shall have filed a post-effective amendment to the Registration
Statement containing the information required by such Rule 430A, and such
post-effective amendment shall have become effective.
5.5 No
Stop Order.
No stop
order suspending the effectiveness of the Registration Statement, any
Rule 462(b) Registration Statement, or any post-effective amendment
to the
Registration Statement, shall be in effect and no proceedings for such purpose
shall have been instituted or threatened by the Commission.
5.6 Nasdaq.
The
Shares have been listed for quotation on the Nasdaq National Market
System.
5.7 No
NASD Objection.
The
NASD shall have raised no objection to the fairness and reasonableness of
the
underwriting terms and arrangements.
5.8 No
Debt Downgrading.
There
shall not have occurred any downgrading, nor shall any notice have been given
of
any intended or potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change, in the rating
accorded any of the Company’s securities by any “nationally recognized
statistical rating organization,” as such term is defined for purposes of Rule
436(g)(2) under the Securities Act.
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5.9 No
Material Adverse Change.
There
shall not have occurred any change, or any development involving a prospective
change, in the condition, financial or otherwise, or in the earnings, business,
operations or prospects of the Company and its subsidiaries, taken as a whole,
from that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement) that, in your
judgment, is material and adverse and that makes it, in your judgment,
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus.
5.10 Officer’s
Certificate.
The
Underwriters shall have received on each Closing Date a certificate, dated
such
Closing Date and signed by the Chief Executive Officer or President of the
Company, to the effect that (i) Sections 5.3, 5.4, 5.5, 5.8
and 5.9
above are true and correct in all material respects as of such Closing Date
(except that those representations and warranties that address matters only
as
of a particular date shall remain true and correct as of such date),
(ii) they have carefully examined the Registration Statement and the
Prospectus and, in their opinion, since the Effective Date no event has occurred
which should have been set forth in a supplement or otherwise required an
amendment to the Registration Statement or the Prospectus and (iii) the
Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or before
such
Closing Date.
5.11 Opinions
of Company Counsel.
The
Underwriters shall have received the legal opinions specified in this
Section 5.11.
(a) The
Company shall have requested and caused Gross, Kleinhendler, Hodak, Halevy,
Xxxxxxxxx & Co., Israeli counsel for the Company, to have furnished to
the Representatives its opinion, dated the Closing Date and addressed to
the
Representatives, to the effect that:
(i) the
Company has been duly incorporated and is validly existing as a corporation
under the laws of the State of Israel, with full corporate power and authority
to own or lease, as the case may be, and to operate its properties and conduct
its business as described in the Prospectus; no proceeding has been instituted
by the Registrar of Companies in Israel for the dissolution of the
Company;
(ii) the
Company’s authorized share capital is as set forth in the Prospectus; the share
capital of the Company conforms in all material respects to the description
thereof contained under the caption “Description of Share Capital” in the
Prospectus; the Ordinary Shares outstanding prior to the issuance of the
Shares
have been, and the Shares when issued pursuant to this Agreement will be,
duly
and validly authorized and issued and fully paid and nonassessable, except
as
disclosed in the Registration Statement and the Prospectus; the holders of
outstanding shares of the Company are not entitled to preemptive or other
rights
to subscribe for the Shares; except as disclosed in the Registration Statement
and the Prospectus, there are no restrictions upon the voting or transfer
of any
securities (except for options) of the Company pursuant to the Company’s
articles of association or, to such counsel’s knowledge, any agreements or other
instruments to which the Company is a party or by which it is bound; and,
except
as set forth in the Prospectus, to such counsel’s knowledge no options, warrants
or other rights to purchase, agreements or other obligations to issue, or
rights
to convert any obligations into or exchange any securities for, shares of
capital stock of or ownership interests in the Company are
outstanding;
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(iii) to
the
knowledge of such counsel, there is no pending or threatened action, suit
or
proceeding by or before any Israeli court or governmental agency, authority
or
body or any arbitrator involving the Company or any of its subsidiaries or
its
or their properties of a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Prospectus; and the
statements included in the Prospectus under the heading “Risk Factors -
Provisions of our articles of association, other corporate documents,
etc.,”“Risk Factors - The tax benefits available to us under Israeli law
etc.,”“Management,”“Description of Share Capital,”“Israeli Taxation,” and
“Enforceability of Civil Liabilities” insofar as such statements summarize legal
matters as to Israeli law, provisions of the Company’s articles of association,
or agreements, documents or proceedings discussed therein governed by the
laws
of the State of Israel, are accurate and fair summaries in all material respects
of such legal matters, provisions of the Company’s articles of association,
agreements, documents or proceedings;
(iv) to
the
knowledge of such counsel, the Company is not in violation or default of
(a) any
provision of its articles of association, (b) the terms of any material
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument
to
which the Company is a party or bound or to which its property is subject,
or
(c) any Israeli statute, law, rule, regulation, judgment, order or decree
of any
Israeli court, regulatory body, administrative agency, governmental body,
arbitrator or other Israeli authority having jurisdiction over the Company
or
any of its properties, as applicable, except, in the case of clauses (b)
and (c), for violations or defaults which may not have a Material Adverse
Effect;
(v) this
Agreement has been duly authorized and executed by the Company; all corporate
action required by the laws of the State of Israel and the articles of
association of the Company to be taken by the Company for the due and proper
authorization and issuance of the Additional Shares and the offering, sale
and
delivery of the Shares has been validly and sufficiently taken; and the filing
of the Registration Statement and the Prospectus with the Commission has
been
duly authorized by and on behalf of the Company and the Registration Statement
has been duly executed on behalf of the Company pursuant to such authorization
in accordance with the laws of the State of Israel;
(vi) no
consent, approval, authorization, filing with or order of any Israeli court
or
governmental agency or body is required in connection with the transactions
contemplated in this Agreement, except such approvals (to be specified in
such
opinion) as have been obtained;
(vii) neither
the sale of the Shares to the Underwriters, nor the issuance of the Additional
Shares, nor the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will conflict with,
result
in a breach or violation of, or imposition of any lien, charge or encumbrance
upon any material property or assets of the Company pursuant to, (a) the
articles of association of the Company, (b) to the knowledge of such counsel,
the terms of any material indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company is a party or bound or to which
its
property is subject, or (c) any Israeli statute, law, rule, regulation
customarily applicable to transactions of this type, or to such counsel’s
knowledge, any judgment, order or decree applicable to the Company of any
Israeli court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or any
of its
material properties;
(viii) except
as
otherwise set forth in the Prospectus, to the knowledge of such counsel no
holders of securities of the Company have rights to the registration of Ordinary
Shares or any other securities of the Company under the Registration
Statement;
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(ix) to
ensure
the legality, validity or admissibility into evidence in the State of Israel
of
each of this Agreement and any other document required to be furnished there
under, it is not necessary that this Agreement or any such other document
be
filed or recorded with any court or other authority in the State of Israel,
provided (a) such documents are executed outside of the State of Israel,
or (b)
any stamp, registration or similar tax be paid on or in respect of any such
document or the Shares in connection with the sale of the Shares to the
Underwriters;
(x) the
appointment by the Company of Scopus Video Networks Inc. (the “U.S. Subsidiary”)
as the Company’s designee, appointee and authorized agent for the purpose
described in Section 14 of this Agreement is legal, valid and binding
under
the laws of the State of Israel;
(xi) under
the
laws of Israel, the submission by the Company under this Agreement to the
jurisdiction of any court sitting in New York and the designation of New
York
law to apply to this Agreement, is binding upon the Company and, if properly
brought to the attention of a court or administrative body in accordance
with
the laws of Israel, would be enforceable in any judicial or administrative
proceeding in Israel; subject to certain time limitations, Israeli courts
are
empowered to enforce foreign final non-appealable executory judgments for
liquidated amounts in civil matters, obtained after completion of process
before
a court of competent jurisdiction which recognizes similar Israeli judgments,
provided such judgments or the enforcement thereof are not contrary to Israeli
law, public policy, security or the sovereignty of the State of Israel; and
the
enforcement of judgments is conditional upon: (a) adequate service of process
being effected and the defendant having had a reasonable opportunity to be
heard; (b) such judgment having been obtained before a court of competent
jurisdiction according to the rules of private international law prevailing
in
Israel; (c) such judgment not being in conflict with another valid judgment
in
the same matter between the same parties; (d) such judgment not having been
obtained by fraudulent means; and (e) an action between the same parties
in the
same matter not pending in any Israeli court at the time the lawsuit is
instituted in the foreign court; and
(xii) no
stamp
or other issuance or transfer taxes or duties and no capital gains, income,
withholding or other taxes are payable by or on behalf of the Underwriters
to
the State of Israel or to any political subdivision or taxing authority thereof
or therein in connection with the sale and delivery by the Underwriters of
the
Shares as contemplated herein.
In
rendering such opinion, such counsel may rely (A) as to matters involving
the
application of laws of any jurisdiction other than the State of Israel, to
the
extent they deem proper and specified in such opinion, upon the opinion of
other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters and (B) as to matters of fact,
to
the extent they deem proper, on certificates of responsible officers of the
Company and public officials. References to the Prospectus in this
Section 5 shall also include any supplements thereto at the Closing
Date.
Such
opinion shall also include statements to the effect that, based upon such
counsel’s participation in the preparation of the Registration Statement,
nothing has come to its attention that causes it to believe that on the
Effective Date or the date the Registration Statement was last deemed amended
the Registration Statement contained any untrue statement of a material fact
or
omitted to state a material fact required to be stated therein or necessary
to
make the statements therein not misleading or that the Prospectus or the
General
Disclosure Package as of its date and on the Closing Date included or includes
any untrue statement of a material fact or omitted or omits to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (in each case, other than the
financial statements, financial schedules and other financial and statistical
information contained therein, and any information contained therein related
to
intellectual property rights or matters, as to which such counsel need express
no opinion or belief).
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(b) The
Company shall have requested and caused Xxxxx & Xxxxxxx LLP, U.S.
counsel for the Company, to have furnished to the Representatives their opinion,
dated the Closing Date and addressed to the Representatives, to the effect
that:
(i) the
U.S.
Subsidiary has been duly incorporated and is validly existing as a corporation
in good corporate standing under the laws of the State of Delaware, with
full
corporate power and authority to own or lease, as the case may be, and to
operate its properties and conduct its business as described in the Prospectus,
and is duly qualified to do business as a foreign corporation and is in good
corporate standing under the laws of each jurisdiction set forth on Schedule
A
to such counsel’s opinion;
(ii) all
the
outstanding shares of capital stock of the U.S. Subsidiary have been duly
authorized and validly issued and are fully paid and nonassessable, and all
outstanding shares of capital stock of the U.S. Subsidiary are, to the knowledge
of such counsel, directly owned by the Company free and clear of any security
interest, claim, lien or encumbrance, except as disclosed in the Registration
Statement and the Prospectus;
(iii) the
Ordinary Shares, including the Shares, have been approved for quotation on
the
Nasdaq National Market, subject to (in the case of the Additional Shares)
official notice of issuance and evidence of satisfactory
distribution;
(iv) to
the
knowledge of such counsel, there is no pending or threatened action, suit
or
proceeding by or before any U.S. federal or state court or governmental agency,
authority or body or any arbitrator involving the Company or any of its
subsidiaries or its or their property of a character required to be disclosed
in
the Registration Statement which is not adequately disclosed in the Prospectus,
and, to such counsel’s knowledge, and relying as to matters of fact on
certificates of responsible officers of the Company and public officials,
there
is no franchise, contract or other document of a character required to be
described in the Registration Statement or Prospectus, or to be filed as
an
exhibit thereto, which is not described or filed as required;
(v) the
statements included in the Prospectus under the heading “U.S. Federal Income Tax
Considerations” to the extent that such statements constitute matters of U.S.
federal income tax law or legal conclusions with respect thereto are accurate
and fair summaries in all material respects of such matters or
conclusions;
(vi) assuming
this Agreement has been duly authorized, executed and delivered under Israeli
law, this Agreement has been duly authorized, executed and delivered by the
Company to the extent governed by New York law;
(vii) the
Registration Statement has become effective under the Act; any required filing
of the Prospectus, and any supplements thereto, pursuant to Rule 424(b) has
been
made in the manner and within the time period required by Rule 424(b); to
the
knowledge of such counsel, no stop order suspending the effectiveness of
the
Registration Statement has been issued, no proceedings for that purpose have
been instituted or threatened and the Registration Statement and the Prospectus
(other than the financial statements and other financial and statistical
information contained therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the applicable requirements
of
the Act and the rules thereunder;
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(viii) the
Company is not and, immediately after giving effect to the offering and sale
of
the Shares and the application of the proceeds thereof as described in the
Prospectus, will not be, an “investment company” as defined in the Investment
Company Act of 1940, as amended;
(ix) no
consent, approval, authorization, filing with or order of any U.S. federal
or
state court or governmental agency or body is required in connection with
the
transactions contemplated herein, except such as have been obtained under
the
Act and such as may be required under the blue sky laws of any jurisdiction
in
connection with the purchase and distribution of the Shares by the Underwriters
in the manner contemplated in this Agreement and in the Prospectus and such
other approvals (specified in such opinion) as have been obtained;
(x) neither
the sale of the Shares to the Underwriters, the issuance of the Option Exercise
Shares, the consummation of any other of the transactions herein contemplated
nor the fulfillment of the terms hereof will conflict with, result in a breach
or violation of, or imposition of any lien, charge or encumbrance upon any
property or assets of the U.S. Subsidiary pursuant to, (a) the charter or
by-laws of the U.S. Subsidiary, (b) the terms of any material indenture,
contract, lease, mortgage, deed of trust, note agreement, loan agreement
or
other agreement, obligation, condition, covenant or instrument known to such
counsel to which the U.S. Subsidiary is a party or bound or to which its
property is subject, or (c) any statute, law, rule, regulation, judgment,
order
or decree known to such counsel to be applicable to the U.S. Subsidiary or
any
U.S. federal or state court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over
the
U.S. Subsidiary or any of its properties;
(xi) to
the
knowledge of such counsel, except as otherwise set forth in the Prospectus,
no
holders of securities of the Company have rights to the registration of Ordinary
Shares or any other securities of the Company under the Registration
Statement;
(xii) assuming
the appointment by the Company of the U.S. Subsidiary as the Company’s designee,
appointee and authorized agent for the purpose described in Section 14
of
this Agreement is legal, valid and binding under the laws of the State of
Israel, under the laws of the State of New York relating to personal
jurisdiction, (a) the Company has, under this Agreement, validly submitted
to
the personal jurisdiction of any state or federal court located in the State
of
New York, County of New York in any action arising out of or relating to
this
Agreement and the transactions contemplated herein and have validly and
effectively waived any objection to the venue of a proceeding in any such
court
as provided in Section 14 hereof, (b) its appointment thereunder of
the
U.S. Subsidiary as its authorized agent for service of process is valid,
legal
and binding, and (c) service of process in the manner set forth in
Section 14 hereof will be effective to confer valid personal jurisdiction
of such court over the Company; and
In
rendering such opinion, such counsel may rely (A) as to matters involving
the
application of laws of any jurisdiction other than the DGCL, the State of
New
York or the federal laws of the United States, to the extent they deem proper
and specified in such opinion, upon the opinion of other counsel of good
standing whom they believe to be reliable and who are satisfactory to counsel
for the Underwriters and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company or the U.S.
Subsidiary
and public officials.
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Such
opinion shall also include statements to the effect that, based upon such
counsel’s participation in the preparation of the Registration Statement,
nothing has come to its attention that causes it to believe that on the
Effective Date or the date the Registration Statement was last deemed amended
the Registration Statement contained any untrue statement of a material fact
or
omitted to state any material fact required to be stated therein or necessary
to
make the statements therein not misleading or that the Prospectus or the
General
Disclosure Package as of its date and on the Closing Date included or includes
any untrue statement of a material fact or omitted or omits to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (in each case, other than the
financial statements, financial schedules and other financial and statistical
information contained therein, and any information contained therein related
to
intellectual property rights or matters governed by Israeli law, as to which
such counsel need express no opinion). With respect to this paragraph, counsel
may state that their opinions and beliefs are based upon their participation
in
the preparation of the Registration Statement and Prospectus and the General
Disclosure Package and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification, except as specified.
(c) The
Company shall have requested and caused Shiboleth, Roberts, Xxxxxx &
Co., intellectual property counsel for the Company, to have furnished to
the
Representatives their opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) the
Company’s patents (collectively, the “OPINION PATENTS”) are valid and
subsisting; provided, that such opinion shall include a description of such
counsel’s prior art searches in a form satisfactory to counsel to the
Representatives;
(ii) the
Company’s issued Opinion Patents and filed patent applications filed in the U.S.
(the “APPLICATIONS”) have been properly prepared and filed on behalf of the
Company, are being diligently pursued by the Company and to the best of such
counsel’s knowledge, the Company has complied with all applicable examination
requirements of duty of candor and disclosure; the inventions described in
the
Applications are assigned or licensed to the Company to the best of such
counsel’s knowledge, except for Applications where the Company has obtained a
field of use license, and/or where certain rights have been retained by the
licensor or the U.S. government, no other entity or individual has any right
or
claim in any of the inventions, Applications, or any patent to be issued
therefrom, and in such counsel’s opinion, each of the Applications discloses
patentable subject matter;
(iii) the
statements contained in the Registration Statement and Prospectus including,
but
not limited to, the statements under the captions “Risk Factors - If we are
unable to protect our intellectual property rights, our competitive position
could be harmed,”“Risk Factors - Third party claims of infringement could
require us to redesign our products, seek licenses, or engage in future,
costly
intellectual property litigation, which could impact our future business
and
financial performance” and “Business - Intellectual Property,” (collectively,
the “INTELLECTUAL PROPERTY PORTION”) are accurate descriptions of the Company’s
patent applications, issued and allowed patents, and fairly summarize the
legal
matters, documents and proceedings relating thereto of which such counsel
is
aware;
(iv) except
as
disclosed in the Prospectus, such counsel is not aware or has not been put
on
notice of any valid patent that is or would be infringed by the activities
of
the Company in the manufacture, use or sale of any presently proposed product,
as described in the Prospectus;
(v) except
as
disclosed in the Prospectus, such counsel is not aware of any pending or
threatened judicial or governmental proceedings relating to patents or
proprietary information to which the Company is a party or of which any property
of the Company is subject, including any interference, reexamination, reissue
or
declaratory action proceeding, and such counsel is not aware of any pending
or
threatened action, suit or claim by others that the Company is infringing
or
otherwise violating any patent rights of others, nor is such counsel aware
of
any rights of third parties to any of the Company’s inventions described in the
Applications, issued, approved or licensed patents which could reasonably
be
expected to materially affect the ability of the Company to conduct its business
as described in the Registration Statement and Prospectus; and
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(vi) such
counsel has no reason to believe that the information related to patent,
trademanrk, copyright and other intellectual property rights or matters
contained in the Registration Statement and the Prospectus at the time each
became effective, and the General Disclosure Package contained any untrue
statement of a material fact or omitted to state any material fact necessary
to
make the statements therein, in the light of the circumstances under which
they
were made, not misleading.
In
rendering such opinion, such counsel may rely (A) as to matters involving
the
application of laws of any jurisdiction other than the State of Israel and
federal laws of the United States, to the extent they deem proper and specified
in such opinion, upon the opinion of other counsel of good standing whom
they
believe to be reliable and who are satisfactory to counsel for the Underwriters
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials.
5.12 Opinions
of Underwriters Counsel.
The
Underwriters shall have received on the Closing Date opinions of
Xxxxxxxx & Xxxxxxxx LLP, United States counsel for the Underwriters,
and Naschitz, Xxxxxxx & Co., Israeli counsel for the Underwriters,
dated the Closing Date, in form and substance reasonably satisfactory to
the
Underwriters.
5.13 Accountant’s
Comfort Letter.
The
Underwriters shall have received, on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may
be, in
form and substance satisfactory to the Underwriters, from Xxxxxxxxx
Almagor & Co., independent public auditors, containing statements and
information of the type ordinarily included in accountants’“comfort letters” to
Underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus;
provided
that the
letter delivered on the Closing Date shall use a “cut-off date” not earlier than
the date hereof.
5.14 Lock-Up
Agreements.
The
“lock-up” agreements, each substantially in the form of Exhibit A
hereto,
between you and each of the shareholders, officers and directors of the Company,
delivered to you on or before the date hereof, shall be in full force and
effect
on the Closing Date and action satisfactory to you shall have been taken
to
restrict the sale or transfer of any Ordinary Shares issued after the date
hereof upon the exercise of options or warrants outstanding on the date hereof
in a manner substantially similar to that applicable to shareholders executing
lock-up agreements.
5.15 Additional
Documents.
On the
Closing Date, the Representatives and counsel for the Underwriters shall
have
received such information, documents and opinions as they may reasonably
require
for the purposes of enabling them to pass upon the issuance and sale of the
Shares as contemplated herein, or in order to evidence the accuracy of any
of
the representations and warranties, or the satisfaction of any of the conditions
or agreements, herein contained.
The
several obligations of the Underwriters to purchase Additional Shares hereunder
are subject to the satisfaction of each of the above conditions on or prior
to
the Option Closing Date and to the delivery to you on the Option Closing
Date of
such documents as you may reasonably request with respect to the good standing
of the Company, the due authorization and issuance of the Additional Shares
and
other matters related to the issuance of the Additional Shares.
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5.16 Legal
Matters.
All
corporate proceedings and other legal matters incident to the authorization,
form and validity of this Agreement, the Shares, the Registration Statement
and
the Prospectus, and all other legal matters relating to this Agreement and
the
transactions contemplated hereby shall be reasonably satisfactory to counsel
for
the Underwriters, and the Company shall have furnished to such counsel all
documents and information that they may reasonably request to enable them
to
pass upon such matters.
6. Expenses.
Whether
or not the transactions contemplated in this Agreement are consummated or
this
Agreement is terminated, the Company agrees to pay or cause to be paid all
expenses incident to the performance of its obligations under this Agreement,
including: (i) the fees, disbursements and expenses of the Company’s
counsel and the Company’s accountants in connection with the preparation and
negotiation of this Agreement and the registration and delivery of the Shares
under the Securities Act and all other fees or expenses in connection with
the
preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the mailing
and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related
to
the transfer and delivery of the Shares to the Underwriters, including any
transfer or other taxes payable thereon, (iii) the cost of printing
or
producing any Blue Sky or legal investment memorandum in connection with
the
offer and sale of the Shares under state securities laws and all expenses
in
connection with the qualification of the Shares for offer and sale under
state
securities laws as contemplated by Section 4.4 hereof, including filing
fees and the reasonable fees and disbursements of counsel for the Underwriters
in connection with such qualification and in connection with the Blue Sky
or
legal investment memorandum, (iv) all filing fees and the reasonable
fees
and disbursements of counsel to the Underwriters incurred in connection with
the
review and qualification of the offering of the Shares by the NASD, (v) all
fees and expenses in connection with the preparation and filing of the
registration statement on Form 8-A relating to the Ordinary Shares
and all
costs and expenses incident to listing the Shares on the Nasdaq National
Market,
(vi) the cost of printing certificates representing the Shares,
(vii) the costs and charges of any transfer agent, registrar or depositary,
(viii) the costs and expenses of the Company relating to investor
presentations on any “road show” undertaken in connection with the marketing of
the offering of the Shares, 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 with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and
the
cost of any aircraft chartered in connection with the road show, (ix) all
expenses in connection with any offer and sale of the Shares outside of the
United States, including filing fees and the reasonable fees and disbursements
of counsel for the Underwriters in connection with offers and sales outside
of
the United States, (x) all reasonable fees and disbursements of counsel
incurred by the Underwriters in connection with the Directed Share Program
and
stamp duties, similar taxes or duties or other taxes, if any, incurred by
the
Underwriters in connection with the Directed Share Program and (xi) all
other costs and expenses incident to the performance of the obligations of
the
Company hereunder for which provision is not otherwise made in this Section.
It
is understood, however, that except as provided in this Section, Section 7
entitled “Indemnity and Contribution”, and the last paragraph of Section 10
below, the Underwriters will pay all of their costs and expenses, including
fees
and disbursements of their counsel and any advertising expenses connected
with
any offers they may make.
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7. Indemnity
and Contribution.
7.1 Indemnification
of the Underwriters.
The
Company agrees to indemnify and hold harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange
Act,
from and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) arising
out
of, based upon, or caused by any untrue statement or alleged untrue statement
of
a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus, or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or any Issuer-Represented Free Writing Prospectus or in any Blue
Sky
application or other information or other documents executed by the Company
filed in any state or other jurisdiction to qualify any or all of the Shares
under the securities laws thereof or arising out of, based upon, or caused
by
any omission or alleged omission to state therein a material fact required
to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused
by any
such untrue statement or omission or alleged untrue statement or omission
based
upon information relating to any Underwriter furnished to the Company in
writing
by such Underwriter through you expressly for use therein.
7.2 Indemnification
by the Underwriters.
Subject
to the last sentence in Section 1.2 above, each Underwriter agrees,
severally and not jointly, to indemnify and hold harmless the Company, the
directors of the Company, the officers of the Company who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of
the
Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) arising out of, based upon or caused by any untrue statement
or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), or any Issuer-Represented Free Writing Prospectus,
or
arising out of, based upon or caused by any omission or alleged omission
to
state therein a material fact required to be stated therein or necessary
to make
the statements therein not misleading, but only with reference to information
relating to such Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use in the Registration Statement,
any
preliminary prospectus, the Prospectus, any Issuer-Represented Free Writing
Prospectus, or any amendments or supplements thereto.
7.3 Indemnification
Procedures.
In case
any proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant
to
this Section 7, such person (the “indemnified
party”)
shall
promptly notify the person against whom such indemnity may be sought (the
“indemnifying
party”)
in
writing and the indemnifying party, upon request of the indemnified party,
shall
retain counsel reasonably satisfactory to the indemnified party to represent
the
indemnified party and any others the indemnifying party may designate in
such
proceeding and shall pay the fees and disbursements of such counsel related
to
such proceeding. In any such proceeding, any indemnified party shall have
the
right to retain its own counsel, but the fees and expenses of such counsel
shall
be at the expense of such indemnified party unless (a) the indemnifying
party and the indemnified party shall have mutually agreed to the retention
of
such counsel or (b) the named parties to any such proceeding (including
any
impleaded parties) include both the indemnifying party and the indemnified
party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the indemnifying party shall not, in respect of the legal expenses of
any
indemnified party in connection with any proceeding or related proceedings
in
the same jurisdiction, be liable for (i) the fees and expenses of
more than
one separate firm (in addition to any local counsel) for all Underwriters
and
all persons, if any, who control any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange
Act,
and (ii) the fees and expenses of more than one separate firm (in
addition
to any local counsel) for the Company, its directors, its officers who sign
the
Registration Statement and each person, if any, who controls the Company
within
the meaning of either such Section, and that all such fees and expenses shall
be
reimbursed as they are incurred. In the case of any such separate firm for
the
Underwriters and such control persons of any Underwriters, such firm shall
be
designated in writing by Xxxxxx Xxxxxx Partners LLC. In the case of any such
separate firm for the Company, and such directors, officers and control persons
of the Company, such firm shall be designated in writing by the Company.
The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or
if
there be a final judgment for the plaintiff, the indemnifying party agrees
to
indemnify the indemnified party from and against any loss or liability by
reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if
at
any time an indemnified party shall have requested an indemnifying party
to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (x) such settlement is entered into
more
than 30 days after receipt by such indemnifying party of the aforesaid request
and (y) such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such settlement.
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 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.
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Notwithstanding
anything contained herein to the contrary, if indemnity may be sought pursuant
to Section 7.7 hereof in respect of such action or proceeding, then
in
addition to such separate firm for the indemnified parties, the indemnifying
party shall be liable for the reasonable fees and expenses of not more than
one
separate firm (in addition to any local counsel) for Xxxxxx Xxxxxx Partners
LLC,
and all persons, if any, who control Xxxxxx Xxxxxx Partners LLC within the
meaning of either Section 15 of the Act or Section 20 of the
Exchange
Act for the defense of any losses, claims, damages and liabilities arising
out
of any Directed Share Program.
7.4 Indemnification
for Directed Share Program.
The
Company agrees to indemnify and hold harmless Xxxxxx Xxxxxx Partners LLC
and
each person, if any, who controls Xxxxxx Xxxxxx Partners LLC within the meaning
of either Section 15 of the Securities Act or Section 20 of
the
Exchange Act (“Xxxxxx
Xxxxxx Partners Entities”),
from
and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim)
(i) caused by any untrue statement or alleged untrue statement of
a
material fact contained in the prospectus wrapper material prepared by or
with
the consent of the Company for distribution in foreign jurisdictions in
connection with the Directed Share Program attached to the Prospectus or
any
preliminary prospectus, or caused by any omission or alleged omission to
state
therein a material fact required to be stated therein or necessary to make
the
statement therein, when considered in conjunction with the Prospectus or
any
applicable preliminary prospectus, not misleading; (ii) caused by
the
failure of any Participant to pay for and accept delivery of the shares which,
immediately following the effectiveness of the Registration Statement, were
subject to a properly confirmed agreement to purchase; or (iii) related
to,
arising out of, or in connection with the Directed Share Program, provided
that,
the Company shall not be responsible under this subparagraph (iii) for
any losses, claim, damages or liabilities (or expenses relating thereto)
that
are finally judicially determined to have resulted from the bad faith or
gross
negligence of Xxxxxx Xxxxxx Partners Entities.
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7.5 Contribution
Agreement.
To the
extent the indemnification provided for in this Section 7 is unavailable
to
an indemnified party or insufficient in respect of any losses, claims, damages
or liabilities referred to therein, then each indemnifying party under such
paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion
as is
appropriate to reflect the relative benefits received by the indemnifying
party
or parties on the one hand and the indemnified party or parties on the other
hand from the offering of the Shares or (ii) if the allocation provided
by
clause 8.7 above is not permitted by applicable law, in such proportion
as
is appropriate to reflect not only the relative benefits referred to in
clause 8.7 above but also the relative fault of the indemnifying party
or
parties on the one hand and of the indemnified party or parties on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand
and the Underwriters on the other hand in connection with the offering of
the
Shares shall be deemed to be in the same respective proportions as the net
proceeds from the offering of the Shares (before deducting expenses) received
by
the Company and the total underwriting discounts and commissions received
by the
Underwriters, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate Public Offering Price of the Shares. The
relative fault of the Company on the one hand and the Underwriters on the
other
hand shall be determined by reference to, among other things, whether the
untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company
or by the Underwriters and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Underwriters’ respective obligations to contribute pursuant to this
Section 7 are several in proportion to the respective number of Shares
they
have purchased hereunder, and not joint.
7.6 Contribution
Amounts.
The
Company and the Underwriters agree that it would not be just or equitable
if
contribution pursuant to this Section 7 were determined by pro
rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account
of the
equitable considerations referred to in Section 7.8. The amount paid
or
payable by an indemnified party as a result of the losses, claims, damages
and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which
the Shares underwritten by it and distributed to the public were offered
to the
public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement
or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall
be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are
not
exclusive and shall not limit any rights or remedies which may otherwise
be
available to any indemnified party at law or in equity.
7.7 Survival
of Provisions.
The
indemnity and contribution provisions contained in this Section 7
and the
representations, warranties and other statements of the Company contained
in
this Agreement shall remain operative and in full force and effect regardless
of
(i) any termination of this Agreement, (ii) any investigation
made by
or on behalf of any Underwriter or any person controlling any Underwriter,
or
the Company, its officers or directors or any person controlling the Company
and
(iii) acceptance of and payment for any of the Shares.
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25
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8. Effectiveness.
This
Agreement shall become effective upon the execution and delivery hereof by
the
parties hereto.
9. Termination.
This
Agreement shall be subject to termination by notice given by you to the Company,
if (a) after the execution and delivery of this Agreement and prior
to the
Closing Date (i) trading generally shall have been suspended or materially
limited on or by, as the case may be, any of the New York Stock Exchange,
the
American Stock Exchange, the National Association of Securities Dealers,
Inc.,
the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or
the
Chicago Board of Trade, (ii) trading of any securities of the Company
shall
have been suspended on any exchange or in any over the counter market,
(iii) a general moratorium on commercial banking activities in New
York,
Delaware or California shall have been declared by either federal or New
York,
Delaware or California state authorities or (iv) there shall have
occurred
any outbreak or escalation of hostilities or any change in financial markets
or
any calamity or crisis that, in your judgment, is material and adverse, or
(v) in the judgment of the Representatives, there shall have occurred
any
material adverse change, or any development that could reasonably be expected
to
result in a material adverse change, in the condition, financial or otherwise,
or in the earnings, business, operations or prospects, whether or not arising
from transactions in the ordinary course of business, of the Company and
its
subsidiaries, taken as a whole, and (b) in the case of any of the
events
specified in clauses 10(a)(i) through 10(a)(v), such event, individually
or
together with any other such event, makes it, in your judgment, impracticable
to
market the Shares on the terms and in the manner contemplated in the
Prospectus.
10. Defaulting
Underwriters.
If, on
the Closing Date or the Option Closing Date, as the case may be, any one
or more
of the Underwriters shall fail or refuse to purchase Shares that it has or
they
have agreed to purchase hereunder on such date, and the aggregate number
of
Shares which such defaulting Underwriter or Underwriters agreed but failed
or
refused to purchase is not more than one-tenth of the aggregate number of
the
Shares to be purchased on such date, the other Underwriters shall be obligated
severally in the proportions that the number of Firm Shares set forth opposite
their respective names in Schedule A
bears to
the aggregate number of Firm Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may specify,
to
purchase the Shares which such defaulting Underwriter or Underwriters agreed
but
failed or refused to purchase on such date; provided that in no event shall
the
number of Shares that any Underwriter has agreed to purchase pursuant to
this
Agreement be increased pursuant to this Section 10 by an amount in
excess
of one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall
fail
or refuse to purchase Firm Shares and the aggregate number of Firm Shares
with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm Shares to be purchased, and if arrangements satisfactory to
you
and the Company for the purchase of such Firm Shares are not made within
36
hours after such default, this Agreement shall terminate (other than with
respect to (i) expenses to be borne by the Company and the Underwriters
as
provided in Section 6 hereof and (ii) the indemnification and
contribution obligations of the Company and the Underwriters as provided
in
Section 7 hereof) without liability on the part of any non-defaulting
Underwriter or the Company. In any such case you shall have the right to
postpone the Closing Date, but in no event for longer than seven (7) days,
in
order that the required changes, if any, in the Registration Statement and
in
the Prospectus or in any other documents or arrangements may be effected.
If, on
the Option Closing Date, any Underwriter or Underwriters shall fail or refuse
to
purchase Additional Shares and the aggregate number of Additional Shares
with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder
to
purchase Additional Shares or (ii) purchase not less than the number
of
Additional Shares that such non-defaulting Underwriters would have been
obligated to purchase in the absence of such default. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability
in
respect of any default of such Underwriter under this Agreement.
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If
this
Agreement shall be terminated by the Underwriters, or any of them, because
of
any failure or refusal on the part of the Company to comply with the terms
or to
fulfill any of the conditions of this Agreement, the Company will reimburse
the
Underwriters or such Underwriters as have so terminated this Agreement with
respect to themselves, severally, for all out of pocket expenses (including
the
fees and disbursements of their counsel) reasonably incurred by such
Underwriters in connection with this Agreement or the offering contemplated
hereunder.
11. Counterparts.
This
Agreement may be signed in counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same
instrument.
12. Headings;
Table of Contents.
The
headings of the sections of this Agreement and the table of contents have
been
inserted for convenience of reference only and shall not be deemed a part
of
this Agreement.
13. Notices.
All
communications hereunder shall be in writing and shall be mailed, hand delivered
or telecopied and confirmed to the parties hereto as follows:
If
to the
Representatives:
Xxxxxx
Xxxxxx Partners LLC
Xxx
Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxx Xxx
with
a
copy to:
Xxxxxx
Xxxxxx Partners LLC
Xxx
Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile:
(000) 000-0000
Attention:
Xxxx Xxxxxxx, Esq.
If
to the
Company:
Xxxxx
Xxxxxx, Chief Executive Officer
10
Ha’amal St., Park Afek
Rosh
Ha’ayin 00000, Xxxxxx
Facsimile:
x000-0-000-0000
with
a
copy to:
Xxxx
Xxxxxxxxxxxx
Gross,
Kleinhendler, Hodak, Halevy, Xxxxxxxxx & Co.
One
Azrieli Center (Round Building), 40th
Fl.
Xxx
Xxxx
00000, Xxxxxx
Facsimile:
x000-0-000-0000
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Any
party
hereto may change the address for receipt of communications by giving written
notice to the others.
14. Successors.
This
Agreement will inure to the benefit of and be binding upon the parties hereto,
including any substitute Underwriters pursuant to Section 10 hereof,
and to
the benefit of the officers and directors and controlling persons referred
to in
Section 7, and in each case their respective successors, and no other
person will have any right or obligation hereunder. The term “successors” shall
not include any purchaser of the Shares as such from any of the Underwriters
merely by reason of such purchase.
15. Partial
Unenforceability.
The
invalidity or unenforceability of any Section, paragraph or provision of
this
Agreement shall not affect the validity or enforceability of any other Section,
paragraph or provision hereof. If any Section, paragraph or provision of
this
Agreement is for any reason determined to be invalid or unenforceable, there
shall be deemed to be made such minor changes (and only such minor changes)
as
are necessary to make it valid and enforceable.
16. Governing
Law.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
IN SUCH STATE.
17. Consent
to Jurisdiction.
Any
legal suit, action or proceeding arising out of or based upon this Agreement
or
the transactions contemplated hereby (“Related
Proceedings”)
may be
instituted in the state and federal courts of the United States of America
located in the County of New York, State of New York (collectively, the
“Specified
Courts”),
and
each party irrevocably submits to the exclusive jurisdiction (except for
proceedings instituted in regard to the enforcement of a judgment of any
such
court (a “Related
Judgment”),
as to
which such jurisdiction is non-exclusive) of such courts in any such suit,
action or proceeding. Service of any process, summons, notice or document
by
mail to such party’s address set forth above shall be effective service of
process for any suit, action or other proceeding brought in any such court.
The
parties irrevocably and unconditionally waive any objection to the laying
of
venue of any suit, action or other proceeding in the Specified Courts and
irrevocably and unconditionally waive and agree not to plead or claim in
any
such court that any such suit, action or other proceeding brought in any
such
court has been brought in an inconvenient forum. Each party not located in
the
United States irrevocably appoints CT Corporation System, which currently
maintains a New York office at 000 Xxxxxx Xxxxxx, 13th
Floor,
New York, New York 10011, United States of America, as its agent to receive
service of process or other legal summons for purposes of any such suit,
action
or proceeding that may be instituted in any state or federal court in the
County
of New York.
18. Waiver
of Immunity.
With
respect to any Related Proceeding, each party irrevocably waives, to the
fullest
extent permitted by applicable law, all immunity (whether on the basis of
sovereignty or otherwise) from jurisdiction, service of process, attachment
(both before and after judgment) and execution to which it might otherwise
be
entitled in the Specified Courts, and with respect to any Related Judgment,
each
party waives any such immunity in the Specified Courts or any other court
of
competent jurisdiction, and will not raise or claim or cause to be pleaded
any
such immunity at or in respect of any such Related Proceeding or Related
Judgment, including, without limitation, any immunity pursuant to the United
States Foreign Sovereign Immunities Act of 1976, as amended.
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19. Entire
Agreement.
This
Agreement constitutes the entire agreement of the parties to this Agreement
and
supersedes all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter
hereof.
20. Amendments.
This
Agreement may only be amended or modified in writing, signed by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to
benefit.
21. Sophisticated
Parties.
Each of
the parties hereto acknowledges that it is a sophisticated business person
who
was adequately represented by counsel during negotiations regarding the
provisions hereof, including, without limitation, the indemnification and
contribution provisions of Section 7, and is fully informed regarding
said
provisions. Each of the parties hereto further acknowledges that the provisions
of Section 7 hereto fairly allocate the risks in light of the ability
of
the parties to investigate the Company, its affairs and its business in order
to
assure that adequate disclosure has been made in the Registration Statement,
any
preliminary prospectus and the Prospectus (and any amendments and supplements
thereto), as required by the Securities Act and the Exchange Act.
[Remainder
of page intentionally left blank]
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29
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If
the
foregoing is in accordance with your understanding of our agreement, kindly
sign
and return to the Company the enclosed copies hereof, whereupon this instrument,
along with all counterparts hereof, shall become a binding agreement in
accordance with its terms.
| Very truly yours, | ||
| Scopus Video Networks Ltd. | ||
| |
|
|
| Date: | By: | |
|
Name: |
||
| Title: | ||
Accepted
as of the date hereof
Xxxxxx
Xxxxxx Partners LLC
CIBC
World Markets Corp.
Xxxxxxx &
Company, LLC
Xxxxxxxxxxx &
Co. Inc.
Acting
severally on behalf
of
themselves and the
several
Underwriters named
in
Schedule A
hereto.
By: Xxxxxx
Xxxxxx Partners LLC
By:
______________________________
Name:
Title:
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SCHEDULE
A
|
Underwriter
|
Number
of Firm Shares
To
Be Purchased
|
|
|
Xxxxxx
Xxxxxx Partners LLC
|
||
|
CIBC
World Markets Corp.
|
||
|
Xxxxxxx &
Company, LLC
|
||
|
Xxxxxxxxxxx &
Co. Inc.
|
||
|
Total
|
EXHIBIT
A
FORM
OF LOCK-UP AGREEMENT
[Provided
separately]
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