Ordinary Shares INCREDIMAIL LTD. UNDERWRITING AGREEMENT
Exhibit
1.1
[___________]
Ordinary Shares
[____________],
2006
MAXIM
GROUP LLC
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
As
Representative of the Underwriters
named
on Schedule
A
hereto
Ladies
and
Gentlemen:
IncrediMail
Ltd., a company organized and existing under the laws of Israel (the
“Company”),
confirms its agreement, subject to the terms and conditions set forth herein,
with each of the underwriters listed on Schedule
A
hereto
(collectively, the “Underwriters”),
for
whom Maxim Group LLC is acting as representative (in such capacity, the
“Representative”),
to
sell and issue to the Underwriters an aggregate of [________] of its ordinary
shares (the “Firm
Shares”),
par
value NIS 0.01 per share (the “Ordinary Shares”).
In
addition, the shareholders of the Company listed on Schedule
B
hereto
(the “Selling
Shareholders”)
hereby
grant to the Underwriters, upon the terms and conditions set forth in Section
3
hereof, an option to purchase an aggregate additional amount of [_________]
Ordinary Shares (the “Additional
Shares”).
The
Firm Shares and any Additional Shares purchased by the Underwriters are referred
to herein as the “Shares.”
The
Shares are more fully described in the Registration Statement and Prospectus
referred to below. The offering and sale of the Shares contemplated by this
underwriting agreement (this “Agreement”)
is
referred to herein as the “Offering.”
1. Representations
and Warranties of the Company.
The
Company represents, warrants and covenants to, and agrees with, each of the
Underwriters that, as of the date hereof and as of the Closing Date and each
Additional Closing Date:
(a) The
Company has filed with the Securities and Exchange Commission (the “Commission”)
a
registration statement on Form F-1 (Registration No. 333-129276), and amendments
thereto, and related preliminary prospectuses for the registration under the
Securities Act of 1933, as amended (the “Securities
Act”),
of the
Shares which registration statement, as so amended (including post-effective
amendments, if any), has been declared effective by the Commission and copies
of
which have heretofore been delivered to the Underwriters. The registration
statement, as amended at the time it became effective, including the prospectus,
financial statements, schedules, exhibits and other information (if any) deemed
to be part of the registration statement at the time of effectiveness pursuant
to Rule 430A under the Securities Act, is hereinafter referred to as the
“Registration
Statement.”
If
the
Company has filed or is required pursuant to the terms hereof to file a
registration statement pursuant to Rule 462(b) under the Securities Act
registering additional Ordinary Shares (a “Rule
462(b) Registration Statement”),
then,
unless otherwise specified, any reference herein to the term “Registration
Statement” shall be deemed to include such Rule 462(b) Registration Statement.
All of the Shares have been registered under the Securities Act pursuant to
the
Registration Statement or, if any Rule 462(b) Registration Statement is filed,
will be duly registered under the Securities Act with the filing of such Rule
462(b) Registration Statement. Based on communications from the Commission,
no
stop order suspending the effectiveness of either the Registration Statement
or
the Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the Commission.
The Company, if required by the Securities Act and the rules and regulations
of
the Commission (the “Rules
and Regulations”),
proposes to file the Prospectus with the Commission pursuant to Rule 424(b)
under the Securities Act (“Rule
424(b)”).
The
prospectus, in the form in which it is to be filed with the Commission pursuant
to Rule 424(b), or, if the prospectus is not to be filed with the Commission
pursuant to Rule 424(b), the prospectus in the form included as part of the
Registration Statement at the time the Registration Statement became effective,
is hereinafter referred to as the “Prospectus,”
except
that if any revised prospectus or prospectus supplement shall be provided to
the
Underwriters by the Company for use in connection with the Offering that differs
from the Prospectus (whether or not such revised prospectus or prospectus
supplement is required to be filed by the Company pursuant to Rule 424(b)),
the
term “Prospectus” shall also refer to such revised prospectus or prospectus
supplement, as the case may be, from and after the time it is first provided
to
the Underwriters for such use. Any preliminary prospectus or prospectus subject
to completion included in the Registration Statement or filed with the
Commission pursuant to Rule 424 under the Securities Act is hereafter called
a
“Preliminary
Prospectus.”
Any
reference herein to the Registration Statement, any Preliminary Prospectus
or
the Prospectus shall be deemed to refer to and include the exhibits filed
therewith pursuant to the Rules and Regulations on or before the effective
date
of the Registration Statement, the date of such Preliminary Prospectus or the
date of the Prospectus, as the case may be. All references in this Agreement
to
the Registration Statement, the Rule 462(b) Registration Statement, a
Preliminary Prospectus and the Prospectus, or any amendments or supplements
to
any of the foregoing shall be deemed to include any copy thereof filed with
the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
System (“▇▇▇▇▇”).
Maxim
Group LLC
[_________],
2006
Page
2 of
42
(b)
At the
time of the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement or the effectiveness of any post-effective amendment
to
the Registration Statement, when the Prospectus is first filed with the
Commission pursuant to Rule 424(b), when any supplement to or amendment of
the
Prospectus is filed with the Commission, and at the Closing Date and the
Additional Closing Date (as hereinafter respectively defined), if any, the
Registration Statement and the Prospectus and any amendments thereof and
supplements or exhibits thereto complied or will comply in all material respects
with the applicable provisions of the Securities Act and the Rules and
Regulations (as the case may be), and did not and will not contain an untrue
statement of a material fact and did not and will not omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein: (i) in the case of the Registration Statement, not misleading, and
(ii)
in the case of the Prospectus, in light of the circumstances under which they
were made, not misleading. When any Preliminary Prospectus was first filed
with
the Commission (whether filed as part of the registration statement for the
registration of the Shares or any amendment thereto or pursuant to Rule 424(a)
under the Securities Act) and when any amendment thereof or supplement thereto
was first filed with the Commission, such Preliminary Prospectus and any
amendments thereof and supplements thereto complied in all material respects
with the applicable provisions of the Securities Act and the Rules and
Regulations. The documents, exhibits or other materials filed with the
Registration Statement, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the Securities Act and the Rules and Regulations, and, when
read
together with the other information in the Prospectus, do not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of
the
circumstances under which they were made, not misleading. No representation
and
warranty is made in this Section 1(b), however, with respect to any information
contained in or omitted from the Registration Statement or the Prospectus or
any
related Preliminary Prospectus or any amendment thereof or supplement thereto
in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of: (y) any Underwriter through the Representative
specifically for use therein (it being acknowledged and agreed by the parties
that such information provided by or on behalf of any Underwriter consists
solely of the subsections of the “Underwriting” section of the Prospectus
captioned “Nature of the Underwriting Commitment,” “Pricing of Securities,”
“Stabilization” and “Regulatory Restrictions on Purchase of Ordinary Shares”)
and (z) any Selling Shareholder.
Maxim
Group LLC
[_________],
2006
Page 3 of
42
(c) The
Company has filed with the Commission a Form 8-A (File Number 000-51694 (the
“Form
8-A”)
providing for the registration under the Securities Exchange Act of 1934, as
amended (together
with the Rules and Regulations promulgated thereunder, the “Exchange
Act”),
of the Ordinary Shares. The Form 8-A has been declared effective by the
Commission and such effectiveness remains as of the date hereof.
(d) Kost,
Forer, Gabbay & Kasierer, a member firm of Ernst & Young Global
(“KFGK”),
whose
reports relating to the Company are included in the Registration Statement,
are
independent registered public accountants as required by the Securities Act,
the
Rules and Regulations and the Public Company Accounting Oversight Board (the
“PCAOB”),
including the rules and regulations promulgated by the PCAOB. KFGK is duly
registered and in good standing with the PCAOB. KFGK has not, during the periods
covered by the financial statements included in the Prospectus, provided to
the
Company any non-audit services, as such term is used in Section 10A(g) of the
Exchange Act.
(e) The
Company has no subsidiaries within the meaning of Rule 405 under the Securities
Act and the Company holds no ownership or other interest, nominal or beneficial,
direct or indirect, in any corporation, partnership, limited liability company,
joint venture or other foreign or domestic business entity.
Maxim
Group LLC
[_________],
2006
Page 4 of
42
(f) Subsequent
to the respective dates as of which information is presented in the Registration
Statement and the Prospectus, and except as disclosed in the Registration
Statement and the Prospectus: (i) the Company has not declared, paid or made
any
dividends or other distributions of any kind on or in respect of its capital
stock and (ii) there has been no material adverse change (or, to the knowledge
of the Company, any development that has a high probability of involving a
material adverse change in the future), whether or not arising from transactions
in the ordinary course of business, in or affecting: (A) the business, condition
(financial or otherwise, including financial reserves or accruals), results
of
operations, shareholders’ equity, properties or prospects (as such prospects are
described in the Prospectus) of the Company; (B) the long-term debt or capital
stock of the Company; or (C) the Offering or consummation of any of the other
agreements, covenants or commitments of the Company contemplated by this
Agreement or disclosed in the Registration Statement or the Prospectus (a
“Material
Adverse Change”).
Since
the date of the latest balance sheet presented in the Registration Statement
and
the Prospectus, the Company has not incurred or undertaken any liability or
obligation, whether direct or indirect, liquidated or contingent, matured or
unmatured, or entered into any transactions, including any acquisition or
disposition of any business or asset, that is material to the Company, except
for liabilities, obligations and transactions that are disclosed in the
Registration Statement and the Prospectus.
(g) As
of the
dates indicated in the Prospectus, the authorized, issued and outstanding shares
of capital stock of the Company were: (i) as set forth in the Prospectus in
the
column headed “Actual” under the section thereof captioned “Capitalization” and
(ii) after giving effect to the Offering and the other transactions contemplated
by this Agreement and after the conversion of all of the Company’s preferred
shares into Ordinary Shares as described in the Prospectus, will be as set
forth
in the column headed “As Adjusted” in the section of the Prospectus captioned
“Capitalization”.
(h) All
of the
issued and outstanding shares of capital stock of the Company (including,
without limitation, all Additional Shares that may be sold by the Selling
Shareholders hereunder and all Relevant Securities) and all Ordinary Shares
issuable upon conversion, exercise or exchange of any Relevant Securities in
accordance with the terms thereof, are, or will be, as the case may be: (i)
fully paid and non-assessable and (ii) have been duly and validly authorized
and
issued, in compliance with the Israeli
Companies Law-1999, as amended and corresponding rules thereunder (the
“Companies
Law”),
and
all
applicable state, federal, Israeli and other foreign securities laws, rules
and
regulations and not in violation of or subject to any preemptive or similar
right that does or will entitle any foreign or domestic individual, corporation,
trust, partnership, joint venture, limited liability company or other entity
(each, a “Person”),
upon
the issuance or sale of any security, to acquire from the Company any Relevant
Security, except for such rights as may have been fully terminated, satisfied
or
waived prior to the effectiveness of the Registration Statement, the full and
complete evidence of such termination, satisfaction or waiver has been provided
to the Representative. As used herein, the term “Relevant
Security”
means
any Ordinary Shares or other security of the Company (including any preferred
shares) that are convertible into, or exercisable or exchangeable for Ordinary
Shares or equity securities, or that holds the right to acquire any Ordinary
Shares or equity securities of the Company or any other such Relevant Security.
Maxim
Group LLC
[_________],
2006
Page 5 of
42
(i)
The
Shares to be issued and sold by the Company as contemplated by this Agreement
have been duly and validly authorized. When issued, delivered and paid for
in
accordance with this Agreement and as described in the Prospectus on each of
the
Closing Date and the Additional Closing Date, as applicable, all such Shares
will be duly and validly issued, fully paid and non-assessable, will have been
issued in compliance with the Companies Law and all applicable state, federal,
Israeli and other foreign securities laws, rules and regulations and will not
have been issued in violation of or subject to any preemptive or similar right
that does or will entitle any Person to acquire any Relevant Security from
the
Company upon issuance or sale of Shares in the Offering, except for such rights
as may have been fully terminated, satisfied or waived prior to the
effectiveness of the Registration Statement, the full and complete evidence
of
such termination, satisfaction or waiver having been previously provided to
the
Representative.
(j) The
Ordinary Shares and the rights of the holders thereof under the Companies
Law or otherwise conform
to
the descriptions thereof contained in the Registration Statement and the
Prospectus.
(k) Except
as
disclosed in the Registration Statement and the Prospectus, the Company has
no
outstanding warrants, options to purchase, or any preemptive rights or other
rights to subscribe for or to purchase, or any contracts or commitments to
issue
or sell, any Ordinary Shares or any Relevant Security.
(l) The
Company has been duly incorporated and validly exists as a corporation under
the
Companies Law and other applicable laws of the State of Israel. The Company
has
all requisite power and authority to carry on its business as it is currently
being conducted and as described in the Prospectus, and to own, lease and
operate its respective properties. The Company is duly qualified to do business
and is in good standing in each jurisdiction in which the character or location
of its properties (owned, leased or licensed) or the nature or conduct of its
business makes such qualification necessary, except, in each case, for those
failures to be so qualified or in good standing which (individually and in
the
aggregate) could not reasonably be expected to have a material adverse effect
on: (i) the business, condition (financial or otherwise), results of operations,
shareholders’ equity, properties or prospects (as such prospects are described
in the Prospectus) of the Company, (ii) the long-term debt or capital stock
of
the Company or (iii) the Offering or consummation of any of the other
agreements, covenants or commitments of the Company contemplated by this
Agreement or disclosed in the Registration Statement or the Prospectus (any
such
effect being a “Material
Adverse Effect”).
(m) The
Company is not: (i) in violation of its memorandum of association or articles
of
association, (ii) in breach of, or default under, and no event has occurred
that, with notice or lapse of time or both, would constitute a breach or default
under, or result in the creation or imposition of any lien,
charge, pledge, option, right, security interest or other encumbrance
(“Lien”)
upon
any of its property or assets pursuant to, any indenture, mortgage, lease,
deed
of trust, loan agreement or other agreement or instrument to which it is a
party
or by which it is bound or to which any of its property or assets is subject
or
(iii) in violation in any respect of any law, rule, regulation, ordinance,
directive, judgment, decree or order of any judicial, regulatory or other legal
or governmental agency or body, foreign or domestic, except: (A) in the case
of
clause (ii) above, for any Lien disclosed in the Registration Statement and
the
Prospectus and (B) in the case of clauses (ii) and (iii) above, for those
defaults or Liens that, either individually or in the aggregate, would not
have
a Material Adverse Effect.
Maxim
Group LLC
[_________],
2006
Page 6 of
42
(n) The
Company has full right, power and authority to execute and deliver this
Agreement and the Representative’s Purchase Option (as hereinafter defined), to
perform its obligations hereunder and thereunder and to consummate each of
the
transactions contemplated by this Agreement. The Company has duly and validly
authorized this Agreement and the Representative’s Purchase Option and each of
the transactions contemplated by this Agreement and the Representative’s
Purchase Option. 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 Firm Shares and the
offering, sale and delivery of the Firm Shares, has been validly and
sufficiently taken. This Agreement and the Representative’s Purchase Option has
been or will be duly and validly executed and delivered by the Company and
constitutes or will constitute the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except
as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights generally
and except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(o) The
Representative’s Purchase Option, when delivered at the Closing, will conform to
the description thereof in the Registration Statement and in the Prospectus.
The
Ordinary Shares issuable upon exercise of the Representative’s Purchase Option
have been duly authorized and reserved for issuance upon exercise of the
Representative’s Purchase Option by all necessary corporate action on the part
of the Company and, when issued and delivered and paid for upon such exercise
in
accordance with the terms of the Representative’s Purchase Option, will be
validly issued, fully paid, nonassessable and free of preemptive rights and
will
conform to the description thereof in the Prospectus.
(p) The
execution, delivery, and performance of this Agreement and the Representative’s
Purchase Option and consummation of the transactions contemplated by this
Agreement and the Representative’s Purchase Option do not and, to the knowledge
of the Company, will not: (i) conflict with, require consent under or result
in
a breach of any of the terms and provisions of, or constitute a default (or
an
event which with notice or lapse of time, or both, would constitute a default)
under, or result in the creation or imposition of any Lien upon any property
or
assets of the Company pursuant to, any indenture, mortgage, deed of trust,
loan
agreement or other agreement, instrument, franchise, license or permit to which
the Company is a party or by which the Company or its properties, operations
or
assets may be bound or (ii) violate or conflict with any provision of the
memorandum of association, articles of association, or other organizational
documents of the Company, or (iii) violate or conflict with any law, rule,
regulation, ordinance, directive, judgment, decree or order of any judicial,
regulatory or other legal or governmental agency or body, domestic or foreign
except, in the case of clauses (ii) and (iii) above, for those violations or
conflicts that, either individually or in the aggregate, would not have a
Material Adverse Effect.
Maxim
Group LLC
[_________],
2006
Page 7 of
42
(q)
The
Company has all consents, approvals, authorizations, orders, registrations,
qualifications, licenses, filings and permits of, with and from all judicial,
regulatory and other legal or governmental agencies and bodies and all third
parties, foreign and domestic (collectively, the “Consents”),
to own, lease and operate its properties and conduct its business as disclosed
or described in the Registration Statement and the Prospectus, except for such
Consents, the absence of which, either individually or in the aggregate, would
not have a Material Adverse Effect. Each such Consent is valid and in full
force
and effect. The Company has not received notice of any investigation or
proceedings that, if decided adversely to the Company, could reasonably be
expected to result in, the revocation of, or imposition of a materially
burdensome restriction on, any Consent. No Consent contains a materially
burdensome restriction not adequately disclosed in the Registration Statement
and the Prospectus.
(r) The
Company is in compliance with all applicable Israeli and other foreign and
U.S.
laws, rules, regulations, ordinances, directives, judgments, decrees and orders
(including, without limitation, all securities and tax laws, rules and
regulations of the State of Israel), except for such non-compliance as would
not
have a Material Adverse Effect. As of the date hereof and as of the Closing
Date
and the Additional Closing Date, and except as contemplated by this Agreement,
the Company does not operate within the jurisdiction of United States or any
state or territory thereof in such a manner so as to subject the Company or
its
operations or businesses to registration as a foreign company doing business
in
any state within the United States or to any of the following laws in any
material respect: (i) the Bank Secrecy Act, as amended, (ii) the Uniting and
Strengthening of America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001, as amended, (iii) the Foreign Corrupt
Practices Act of 1977, as amended, (iv) the Currency and Foreign Transactions
Reporting Act of 1970, as amended, (v) the Employee Retirement Income Security
Act of 1974, as amended, (vi) the rules and regulations promulgated under any
such law, or any successor law, or any judgment, decree or order of any
applicable administrative or judicial body relating to such law and (vii) any
corresponding law, rule, regulation, ordinance, judgment, decree or order of
any
state or territory of the United States or any administrative or judicial body
thereof.
(s) No
Consent
of, with or from any judicial, regulatory or other legal or governmental agency
or body or any third party, foreign or domestic, is required for the execution,
delivery and performance of this Agreement or consummation of each of the
transactions contemplated by this Agreement, including the issuance, sale and
delivery of the Shares to be issued, sold and delivered hereunder, except the
registration under the Securities Act of the Shares, and such Consents as may
be
required under state securities or blue sky laws or the by-laws and rules of
The
Nasdaq Stock Market, Inc., including the Nasdaq Capital Market (“NASDAQ”),
the
National Association of Securities Dealers, Inc. (the “NASD”)
or NASD
Regulation, Inc. in connection with the purchase and distribution of the Shares
by the Underwriters, each of which has been obtained and is in full force and
effect.
Maxim
Group LLC
[_________],
2006
Page 8 of
42
(t) Except
as
disclosed in the Registration Statement and the Prospectus, there is no
judicial, regulatory, arbitral or other legal or governmental proceeding or
other litigation or arbitration, domestic or foreign, pending to which the
Company or its officers, directors or employees is a party or of which any
property, operations or assets of the Company is the subject which, individually
or in the aggregate, if determined adversely to the Company or such individuals,
could reasonably be expected to have a Material Adverse Effect. To the Company’s
knowledge, and except as disclosed in the Registration Statement and the
Prospectus, no such proceeding, litigation or arbitration is threatened or
contemplated; and the defense of all such proceedings, litigation and
arbitration against or involving the Company could not reasonably be expected
to
have a Material Adverse Effect.
(u) The
financial statements, including the notes thereto, and the supporting schedules
included in, the Registration Statement and the Prospectus present fairly the
financial position as of the dates indicated and the cash flows and results
of
operations for the periods specified of the Company. Except as otherwise stated
in the Registration Statement and the Prospectus, said financial statements
have
been prepared in conformity with United States generally accepted accounting
principles applied on a consistent basis throughout the periods involved. No
other financial statements or supporting schedules or financial footnotes are
required to be included in the Registration Statement. The other financial
and
statistical information included in the Registration Statement and the
Prospectus (including, without limitation, that presented in the section of
the
Prospectus captioned “Management’s Discussion and Analysis of Financial
Condition and Results of Operations”) present fairly the information included
therein and have been prepared on a basis consistent with that of the financial
statements that are included in the Registration Statement and the Prospectus
and the books and records of the respective entities presented therein.
(v)
There
are no pro forma or as adjusted financial statements that are required to be
included in the Registration Statement and the Prospectus in accordance with
Form F-1 and the Rules and Regulations which have not been included as so
required. The pro forma financial information included in the Registration
Statement and the Prospectus include all adjustments necessary to present
fairly, in accordance with generally accepted accounting principles of the
United States, consistently applied, the pro forma financial position of the
Company as presented.
(w) The
statistical, industry-related and market-related data included in the
Registration Statement and the Prospectus are based on or derived from sources
that the Company reasonably and in good faith believes are reliable and
accurate, and such data agree with the sources from which they are
derived.
Maxim
Group LLC
[_________],
2006
Page 9 of
42
(x) The
Company maintains a system of internal accounting and other controls sufficient
to provide reasonable assurances 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 (or reconciliation) with United States generally
accepted accounting principles and to maintain accountability for assets, (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accounting for assets is compared
with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. Since the date of the most recent balance
sheet
included in the Prospectus, there have been no significant changes in internal
controls or in other factors that could significantly affect internal controls,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
(y) Neither
the Company nor its executive officers have been advised by KFGK or any prior
auditor of the Company of: (i) any significant deficiency in the design or
operation of the Company’s internal controls over financial reporting (whether
or not remediated) that could adversely affect the Company’s ability to record,
process, summarize and report financial data, (ii) any material weakness in
such internal controls or (iii) any fraud, whether or not material, that
involves management or other employees who have a significant role in the
Company’s internal controls.
(z) The
section entitled “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” in the Prospectus accurately and fully describes: (i)
accounting policies that the Company considers to be the most important in
the
portrayal of the Company’s financial condition and results of operations
(“Critical
Accounting Policies”),
(ii)
judgments and uncertainties affecting the application of the Critical Accounting
Policies and (iii) the likelihood that materially different amounts would be
reported under different conditions or using different assumptions and an
explanation thereof. The Company’s management has reviewed and agreed with the
selection, application and disclosure of the Critical Accounting Policies and
has consulted with the Company’s independent auditors with regards to such
disclosure.
(aa) The
operations of the Company are and have been conducted at all times in compliance
with applicable financial record keeping and reporting requirements and money
laundering statutes of the State of Israel and, to the Company’s knowledge, all
other jurisdictions to which the Company is subject, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any applicable 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 with respect to the
Money Laundering Laws is pending or, to the best knowledge of the Company,
threatened.
(bb) Neither
the Company nor, to the knowledge of the Company, any director, officer, agent,
employee or affiliate of the Company (as such term is defined under Rule 144
under the Securities Act, an “Affiliate”)
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 joint venture
partner or other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered by
OFAC.
Maxim
Group LLC
[_________],
2006
Page 10 of
42
(cc) Neither
the Company nor, to the knowledge of the Company, any of its directors,
officers, Affiliates or controlling persons has taken, directly or indirectly,
any action designed, or which has constituted or would reasonably be expected
to
cause or result in, under the Exchange Act or otherwise, the stabilization
or
manipulation of the price of any security of the Company to facilitate the
sale
or resale of the Shares.
(dd) The
Company has validly and irrevocably appointed ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP as its
authorized agent for service of process pursuant to this Agreement and in
connection with the Registration Statement.
(ee) Neither
the Company nor any of its Affiliates has, prior to the date hereof, made any
offer or sale of any securities that are required to be “integrated” pursuant to
the Securities Act or the Rules and Regulations with the offer and sale of
the
Shares pursuant to the Registration Statement. Except as disclosed in the
Registration Statement or the Prospectus, neither the Company nor any of its
Affiliates has sold or issued any Relevant Security during the six-month period
preceding the date of the Prospectus, other than Ordinary Shares issued pursuant
to employee benefit plans, stock option plans or the employee compensation
plans
or pursuant to the Relevant Securities described in the Registration Statement
and the Prospectus.
(ff) Except
as
disclosed in the Registration Statement and the Prospectus, no holder of any
Relevant Security has any rights to require registration of any Relevant
Security as part or on account of, or otherwise in connection with, the offer
and sale of the Shares contemplated hereby. Any such rights so disclosed have
either been fully complied with by the Company or effectively terminated or
waived by the holders thereof or by the Company. Any such waivers or
terminations remain in full force and effect, and the full and complete evidence
of such waivers or terminations has been previously presented to the
Representative.
(gg) The
conditions for use of Form F-1 to register the Offering under the Securities
Act, as set forth in the General Instructions to such Form, have been
satisfied.
(hh) The
Company is not and, at all times up to and including consummation of the
transactions contemplated by this Agreement, and after giving effect to
application of the net proceeds of the Offering, will not be, subject to
registration as an “investment company” under the Investment Company Act of
1940, as amended, and is not and will not be an entity “controlled” by an
“investment company” within the meaning of such act.
Maxim
Group LLC
[_________],
2006
Page 11 of
42
(ii) There
are
no contracts or other documents (including, without limitation, any voting
or
employment agreement) that are required to be described in the Registration
Statement and the Prospectus or filed as exhibits to the Registration Statement
by the Securities Act or the Rules and Regulations and which have not been
so
described and/or filed. The Company and, to the best of the Company’s knowledge,
no other party is in breach of or default under any of contracts or agreements
described in or filed as exhibits to the registration statement, which breach
or
default would cause a Material Adverse Effect.
(jj) No
relationship, direct or indirect, exists between or among any of the Company
or
any Affiliate of the Company, on the one hand, and any director, officer,
shareholder, customer or supplier of the Company or any Affiliate of the
Company, on the other hand, that is required by the Securities Act or the Rules
and Regulations to be described in the Registration Statement or the Prospectus
and that is not so described as required. There are no outstanding loans,
advances (except normal advances for business expenses in the ordinary course
of
business) 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. The Company does not, in violation of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of
2002
(“Sarb-Ox”),
directly or indirectly, (other than as permitted under the Sarb-Ox for
depositary institutions), extend or maintain credit, arranged for the extension
of credit, or renew an extension of credit, in the form of a personal loan
to or
for any director or executive officer of the Company.
(kk) Except
as
disclosed in the Registration Statement and the Prospectus, there are no oral
or
written agreements, commitments or understandings between the Company and any
Person that would give rise to a valid claim against the Company or any
Underwriter for a brokerage commission, finder’s fee or other like payment in
connection with the transactions contemplated by this Agreement or, to the
Company’s knowledge, any arrangements, agreements, understandings, payments or
issuances of securities of or 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.
(ll) The
Company does not, directly or indirectly, own any real property. The Company
leases all such properties as are necessary to the conduct of its business
as
presently operated and as proposed to be operated as described in the
Registration Statement and the Prospectus. The Company owns all personal
property owned by it free and clear of all Liens except such as are described
in
the Registration Statement and the Prospectus or such as do not or will not,
with the passage of time (individually or in the aggregate), have a Material
Adverse Effect. Any real property and buildings held under lease or sublease
by
the Company are held by it under valid, subsisting and enforceable leases with
such exceptions as are not material to, and do not interfere with, the use
made
and proposed to be made of such property and buildings by the Company. The
Company has not received any notice of any claim adverse to its ownership of
any
real or personal property or of any claim against the continued possession
of
any real property, whether owned or held under lease or sublease by the Company.
Maxim
Group LLC
[_________],
2006
Page 12 of
42
(mm) Intellectual
Property Matters.
(i) As
used in
this Agreement, the term “Intellectual
Property”
shall
mean all: (A) patents, trademarks, trade names, service marks, trade dress,
copyrights and any renewal rights therefor, domain names, mask works, net lists,
schematics, technology, trade secrets, know-how, moral rights, computer software
programs or applications (in both source and object code form), applications
and
registrations for any of the foregoing owned by the Company, specifically
including but not limited to the proprietary processes embodied in the Company’s
pending patents; (B) goodwill associated with trademarks, trade names, service
marks and trade dress owned by the Company; (C) software, including, but not
limited to, the source code for the Company’s products described in the
Prospectus, as well as software, firmware listings, updated software source
code, and complete system build software and instructions related to all
software owned by the Company; (D) documents, records and files relating to
design, end user documentation, manufacturing, quality control, sales, marketing
or customer support for all intellectual property described herein owned by
the
Company; (E) other tangible or intangible proprietary information and materials
owned by the Company; and (F) license and other rights in any third party
product, intellectual property, proprietary or personal rights, documentation,
or tangible or intangible property, including without limitation the types
of
intellectual property and tangible and intangible proprietary information
described in (A) through (E) above (other than license agreements for standard
“shrink wrapped, off the shelf,” commercially available, third party products
used by the Company) that are owned or held by or on behalf of the Company
or
that are being, and/or have been, used, or are currently under development
for
use, in the business of the Company as the same is described in the Registration
Statement and the Prospectus. The Intellectual Property belonging or inuring
to
the benefit of the Company or in which the Company, directly or indirectly,
owns
any rights is referred to herein as “Company
Intellectual Property” and
Intellectual Property described in clause (F) above is referred to herein as
“Company
Licensed Intellectual Property.” Unless
otherwise specifically noted, the term “Intellectual
Property”
shall
refer collectively to both the Company Intellectual Property and the Company
Licensed Intellectual Property.
(ii) The
Company owns, possesses, licenses or has other rights to use, as the case may
be, on reasonable terms, all Intellectual Property necessary for the conduct
of
the Company’s business as the same is described in the Registration Statement
and the Prospectus, including, without limitation, and if necessary to carry
out
such activities, rights to make, use, exclude others from using, reproduce,
modify, adapt, create derivative works based on, translate, distribute (directly
and indirectly), transmit, display and perform publicly, license, rent, lease,
assign, and sell the Intellectual Property in all geographic locations and
fields of use, and to sublicense any or all such rights to third parties,
including the right to grant further sublicenses.
(iii) Except
as
set forth in the Prospectus or the Registration Statement, the Company is not
currently, nor, as a result of the execution or delivery of this Agreement,
or
performance of the Company’s obligations hereunder, will the Company be, in
violation of any license, sublicense or other agreement relating to the
Intellectual Property to which the Company is a party or otherwise bound. Except
as set forth in the Prospectus, the Registration Statement or the exhibits
thereto, the Company is not obligated to provide any consideration (whether
financial or otherwise) to any third party, nor is any third party otherwise
entitled to any consideration, with respect to any exercise of rights by the
Company or its successors in the Intellectual Property.
Maxim
Group LLC
[_________],
2006
Page 13 of
42
(iv) Except
as
set forth in the Prospectus, the Registration Statement or the exhibits thereto,
the use, reproduction, modification, distribution, licensing, sublicensing,
sale, or any other exercise of rights in any Intellectual Property or any other
authorized exercise of rights in or to any Intellectual Property by the Company
or its licensees does not and, to the knowledge of the Company, will not
infringe any copyright, patent, trade secret, trademark, service ▇▇▇▇, trade
name, firm name, domain name, logo, trade dress, mask work, moral right, other
intellectual property right, right of privacy, right of publicity or right
in
personal or other data of any Person. Except as set forth in the Prospectus
under “Business-Litigation”, no claims: (A) challenging the validity or
ownership by the Company of any of Company Intellectual Property, or (B) to
the
effect that the use, reproduction, modification, manufacturing, distribution,
licensing, sublicensing, sale or any other exercise of rights in any Company
Intellectual Property by the Company or its licensees infringes or will infringe
on any intellectual property or other proprietary or personal right of any
Person have been asserted or, to the Company’s knowledge, are threatened by any
Person. Except as set forth in the Prospectus, all granted or issued patents
and
mask works and all registered trademarks included in the Intellectual Property
and all copyright registrations held by the Company are valid, enforceable
and
subsisting. To the Company’s knowledge, there is and has been no unauthorized
use, infringement or misappropriation of any of any Intellectual Property by
any
Person (including, without limitation, any employee or former employee of the
Company).
(v) Except
as
set forth in the Prospectus, the Registration Statement or the exhibits thereto,
no parties other than the Company possess any current or contingent rights
to
any source code that is part of any Intellectual Property (including, without
limitation, through any escrow account).
(vii)
Except
as
set forth in the Prospectus, the Registration Statement or the exhibits thereto,
there is no Person who has created any material portion of, or otherwise have
any rights in or to, any Intellectual Property (other than employees of the
Company whose work product was created by them entirely within the scope of
their employment by the Company and constitutes works made for hire owned by
the
Company). The Company has secured from all parties who have created any material
portion of, or otherwise have any rights in or to, any Intellectual Property
valid and enforceable written assignments or licenses of any such work or other
rights to the Company.
(viii)
The
Company has obtained legally binding written agreements from all employees
of
the Company and third parties with whom the Company has shared confidential
proprietary information: (A) of the Company, or (B) received from others that
the Company is obligated to treat as confidential, which agreements require
such
employees and third parties to keep such information confidential.
Maxim
Group LLC
[_________],
2006
Page 14 of
42
(nn) The
Company maintains insurance of the types and in the amounts which are
customary
for companies engaged in similar businesses,
including, but not limited to: (A) directors’ and officers’ insurance (including
insurance
covering the Company, its directors and officers for liabilities or losses
arising in connection with this Offering, including, without limitation,
liabilities or losses arising under the Securities Act, the Exchange Act, the
Rules and Regulations and all applicable Israeli and other foreign securities
laws) and (B)
insurance covering real and personal property owned or leased by the Company
against theft, damage, destruction, and all other risks customarily insured
against in the State of Israel. There
are
no claims by the Company under any policy or instrument described in this
subparagraph as to which any insurance company is denying liability or defending
under a reservation of rights clause. All
of the insurance policies described in this Section 1(nn) are in full force
and
effect.
The
Company has not been refused any insurance coverage sought or applied for.
The
Company has no 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 cause a Material Adverse Effect.
(oo) There
are no transfer taxes, stamp duties on issuance or other similar fees or charges
and no capital gains, income, withholding or other taxes under U.S. federal
law
or the laws of any state, or any political subdivision thereof, required to
be
paid by the Underwriters in connection with the execution and delivery of this
Agreement or the sale and delivery by the Underwriters of the Shares as
contemplated herein.
(pp) The
Company has accurately prepared and timely filed all Israeli and other tax
returns that are required to be filed by it and has paid or made provision
for
the payment of all taxes, assessments, governmental or other similar charges,
including without limitation, all sales and use taxes and all taxes that the
Company is obligated to withhold from amounts owing to employees, creditors
and
third parties, with respect to the periods covered by such tax returns (whether
or not such amounts are shown as due on any tax return), except for such tax
filings that would not, either individually or in the aggregate, cause a
Material Adverse Effect. No deficiency assessment with respect to a proposed
adjustment of the Company’s foreign or other taxes is pending or, to the
Company’s knowledge, threatened. The accruals and reserves on the books and
records of the Company in respect of tax liabilities for any taxable period
not
finally determined are adequate to meet any assessments and related liabilities
for any such period and, since the date of the Company’s most recent audited
financial statements, the Company has not incurred any liability for taxes
other
than in the ordinary course of its business. There is no tax lien, whether
imposed by any federal, state, foreign or other taxing authority, outstanding
against the assets, properties or business of the Company.
(qq) The
Company has at all times operated its business in material compliance with
all
Environmental Laws, and no material expenditures are or will be required in
order to comply therewith. The Company has not received any notice or
communication that relates to or alleges any actual or potential violation
or
failure to comply with any Environmental Laws that will result in a Material
Adverse Effect. As used herein, the term “Environmental
Laws”
means
all applicable Israeli and other applicable laws and regulations, including
any
licensing, permits or reporting requirements, and any action by a government
entity pertaining to the protection of the environment, protection of public
health, protection of worker health and safety, or the handling of hazardous
materials.
Maxim
Group LLC
[_________],
2006
Page 15 of
42
(rr) The
Company is in compliance with all applicable labor and employment laws, rules
and regulations applicable to its employees (including, without limitation,
the
Israeli Law of Work Hours and Rest-1951, as amended, and other laws, rules
and
regulations relating to discrimination in the hiring, promotion or pay of
employees and any wage or hour laws), except for matters that would not,
individually or in the aggregate, have a Material Adverse Effect. The Company
and its operations are not subject to any collective bargaining agreements.
There is not presently, nor has there been, any strike, labor dispute, slowdown
or stoppage pending or, to the Company’s knowledge, threatened against the
Company. To the Company’s knowledge, no union organizing activities are
currently taking place concerning the employees of the Company.
(ss) The
Registration Statement and the Prospectus disclose, describe or have filed
as
exhibits all Benefit Arrangements (as defined below) of the Company required
to
be so disclosed, described or filed under the Securities Act and the Rules
and
Regulations (including Form F-1). Each Benefit Arrangement of the Company
described in the Registration Statement or the Prospectus or which the Company
is required by law, rule or regulation to maintain or be a party to is in full
force and effect and has been maintained in substantial compliance with its
terms and with requirements prescribed by any and all applicable statutes,
orders, rules and regulations that are applicable to the Company or such Benefit
Arrangement. Except as set forth in the Registration Statement or the
Prospectus, there is no liability of the Company in respect of any severance
or
post-retirement health and medical benefits for retired employees of the Company
or any of its Affiliates. The execution of this Agreement and the consummation
of the Offering does not constitute a triggering event under any Company Benefit
Arrangement that (either alone or upon the occurrence of any additional or
subsequent event) will or may result in any payment (of severance pay or
otherwise), acceleration, increase in vesting, or increase in benefits to
Person. As used in this Agreement, the term “Benefit
Arrangement”
means
any employment, employment-related, severance, pension or other similar
agreement, arrangement, policy or plan or any agreement, plan or arrangement
providing for insurance coverage for any purpose relating to the foregoing
(including any self-insured arrangements), workers’ compensation, disability
benefits, severance benefits, supplemental unemployment benefits, vacation
benefits, retirement or other pension benefits or for deferred compensation,
profit-sharing, bonuses, stock options, stock appreciation or other forms of
incentive compensation, or post-retirement insurance, compensation or benefits
to which the Company is party. The term “Benefit Arrangement” shall include,
without limitation, those undertaken voluntarily by the Company and those
required by Israeli or other applicable law, rule or regulation.
(tt)
The
Company has not offered, or caused the Underwriters to offer, the Firm Shares
to
any Person or entity with the intention of unlawfully influencing: (i) a
customer or supplier of the Company to alter the customer’s or supplier’s level
or type of business with the Company or (ii) a journalist or publication to
write or publish favorable information about the Company or its products or
services.
Maxim
Group LLC
[_________],
2006
Page 16 of
42
(uu) Neither
the Company nor any of its properties or assets has any immunity from the
jurisdiction of any court or from any legal process (whether through service
or
notice, attachment prior to judgment, attachment in aid of execution or
otherwise) under the laws of the State of Israel.
(vv) 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.
(ww) 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 the Company or 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.
(xx) Assuming
the Underwriters are not otherwise subject to Israeli taxation by the conduct
of
their general business activities: (i) the sale and delivery to the Underwriters
of the Shares as contemplated in this Agreement and the sale and delivery of
the
Shares by the Underwriters to subsequent purchasers as contemplated by this
Agreement, are not subject to any tax imposed by Israel or any political
subdivision or taxing authority thereof, except for any Israeli stamp taxes
applicable to this Agreement (which will be paid by the Company on a timely
basis after the time for payment, to the extent required by, and in accordance
with, Israeli law) and to the issuance of the Shares to be sold by the Company
under this Agreement (which will be paid by the Company at the time for payment,
or promptly and on a timely basis after the time for payment, to the extent
required by, and in accordance with, Israeli law) and (ii) except as disclosed
in the Registration Statement or Prospectus: (A) payments with respect to the
Shares will not be subject to withholding taxes imposed under the laws of Israel
or any political subdivision or taxing authority thereof or therein and (B)
the
proceeds from any sale or other disposition of securities will not be subject
to
any capital gains, withholding or other taxes imposed by Israel or any political
subdivision or taxing authority thereof or therein.
(yy) All
of the
information provided by or on behalf of the Company in writing to the
Underwriters or to Underwriters’ Counsel (as defined below) specifically for use
by Underwriters’ Counsel in connection with its COBRADesk filings (and related
disclosures) made to the NASD pursuant to NASD Rule 2710 or 2720 is true,
complete and correct in all material respects.
(zz) (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.
Maxim
Group LLC
[_________],
2006
Page 17 of
42
(aaa) Neither:
(i) the Issuer-Represented General Free Writing Prospectus(es) (as defined
below) 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
the
Representative specifically for use therein.
(bbb) 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 or the Prospectus. 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 Representative 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 the Representative specifically for use therein.
(ccc) Unless
the Company obtains the prior consent of the Representative, 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 under the Securities Act, or
that would otherwise constitute a “free writing prospectus,”
as defined in Rule 405 under the Securities Act, required to be filed with
the
Commission. The Company has complied and will comply with the requirements
of
Rule 433 under the Securities Act 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
under the Securities Act to avoid a requirement to file with the Commission
any
electronic road show.
(ddd) As
used in this Agreement, the terms:
(i) “Issuer-Represented
Free
Writing Prospectus”
means any “issuer free
writing prospectus”
or
any
“issuer-information” as defined in and filed or required to be filed pursuant to
Rule 433 under
the Securities Act relating to the Shares that: (A) is required to be filed
with the Commission by the Company, (ii) is a “road show that is a written
communication” within the meaning of Rule 433(d)(8)(i) under the Securities
Act, whether or not required to be filed with the Commission, or (iii) is
exempt from filing pursuant to Rule 433(d)(5)(i) under the Securities Act
because it contains a description of the Shares or of the offering of Shares
pursuant to this Agreement.
Maxim
Group LLC
[_________],
2006
Page 18 of
42
(ii) “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 on Annex
IV
to this Underwriting Agreement.
(iii) “Issuer-Represented
Limited-Use Free
Writing Prospectus”
means any “Issuer-Represented Free
Writing Prospectus
that is not an Issuer-Represented General Free
Writing Prospectus.
(eee) As
used in
this Agreement, references to matters being “material”
with
respect to the Company shall mean a material event, change, condition, status
or
effect related to the condition (financial or otherwise), properties, assets
(including intangible assets), liabilities, business, prospects (as such
Prospects are disclosed in the Prospectus), operations or results of operations
of the Company.
(fff) As
used in
this Agreement, the term “knowledge
of the Company”
(or
similar language) shall mean the knowledge of the officers and directors of
the
Company who are named in the Prospectus, with the assumption that such officers
and directors shall have made reasonable and diligent inquiry of the matters
presented (with reference to what is customary and prudent for the applicable
individuals in connection with the discharge by the applicable individuals
of
their duties as officers, directors or managers of the Company).
Any
certificate signed by or on behalf of the Company and delivered to the
Representative or to Ellenoff ▇▇▇▇▇▇▇▇ & Schole LLP, counsel for the
Representative (“Underwriters’
Counsel”)
shall
be deemed to be a representation and warranty by the Company to each Underwriter
listed on Schedule
A
hereto as
to the matters covered thereby.
2. Representations
and Warranties of the Selling Shareholders.
Each
Selling Shareholder, severally and not jointly, represents, warrants and
covenants to, and agrees with, each of the Underwriters that, as of the date
hereof and as of the Closing Date and any Additional Closing Date:
(a) Such
Selling Shareholder is the record and beneficial owner of the Additional Shares
to be sold by it hereunder free and clear of all Liens. Delivery of the
Additional Shares to be sold by such Selling Shareholder and payment therefor
pursuant to this Agreement will pass valid title to such Additional Shares,
free
and clear of any adverse claim within the meaning of Section 8-102 of the
New York Uniform Commercial Code, to each Underwriter who has purchased such
Shares without notice of an adverse claim.
Maxim
Group LLC
[_________],
2006
Page 19 of
42
(b) The
execution and delivery by such Selling Shareholder of, and the performance
by
such Selling Shareholder of its obligations under, this Agreement, the Custody
Agreement signed by such Selling Shareholder and American Stock Transfer &
Trust Company, as Custodian, relating to the deposit of the Additional Shares
to
be sold by such Selling Shareholder (the “Custody
Agreement”)
and the
Power of Attorney appointing certain individuals as such Selling Shareholder’s
attorneys-in-fact to the extent set forth therein, relating to the transactions
contemplated hereby and by the Registration Statement (the “Power
of Attorney”)
will
not contravene any provision of applicable law, or the certificate of
incorporation, by-laws or other organizational instrument or document of such
Selling Shareholder (if such Selling Shareholder is an entity), or any agreement
or other instrument binding upon such Selling Shareholder or any judgment,
order
or decree of any governmental body, agency or court having jurisdiction over
such Selling Shareholder, and no consent, approval, authorization or order
of,
or qualification with, any governmental body or agency is required for the
performance by such Selling Shareholder of its obligations under this Agreement
or the Custody Agreement or Power of Attorney of such Selling Shareholder,
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.
(c) This
Agreement, the Custody Agreement, the Power of Attorney and the “lock-up”
agreement attached as Annex
I
hereto to
be executed by such Selling Shareholder each constitute the valid and binding
agreement of such Selling Shareholder, enforceable in accordance with its terms,
except as the enforcement thereof 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, and the
consummation by such Selling Shareholder of the transactions contemplated hereby
and thereby will not: (i) conflict with or result in a breach or violation
of
any of the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which such Selling Shareholder is a party or by which such Selling Shareholder
is bound or to which any of the property or assets of such Selling Shareholder
is subject, (ii) result in any violation, as applicable, of the governing
documents of such Selling Shareholder, if any, or (iii) result in the violation
of any statute or any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over such Selling
Shareholder or any of their properties or assets.
(d) Such
Selling Shareholder has all authorization and approval required by law to enter
into this Agreement, the Custody Agreement, the Power of Attorney and the
“lock-up” agreement attached as Annex
I
hereto
and to sell, transfer and deliver the Shares to be sold by such Selling
Shareholder.
(e) No
consent, approval, authorization or order of or filing with any Israeli or
U.S.
court or governmental agency or body is required for the consummation by such
Selling Shareholder of the transactions contemplated hereby, except such as
may
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
Additional
Shares
by the Underwriters and such other approvals as have been obtained.
Maxim
Group LLC
[_________],
2006
Page 20 of
42
(f) Such
Selling Shareholder has not taken, directly or indirectly, any action designed
to or that would constitute or that might reasonably be expected to cause or
result in, under the Exchange Act or otherwise, stabilization or manipulation
of
the price of any security of the Company to facilitate the sale or resale of
the
Shares.
(g)
The
sale of Additional Shares by such Selling Shareholder pursuant to this Agreement
is not prompted by the knowledge by such Selling Shareholder of any “material
non-public information” concerning the Company.
(h) Such
Selling Shareholder has reviewed
the General Disclosure Package and, to the knowledge of such Selling
Shareholder, the information regarding such Selling Shareholder (including,
without limitation, the Ordinary Share ownership of such Selling Shareholder)
in
the General Disclosure Package: (i) is accurate and complete in all material
respects, and (ii) does not contain any untrue statement of a material fact
or
omit to state a material fact required to be stated therein or necessary in
order to make the statements appearing therein not misleading in the light
of
the circumstances in which they were made.
(i) 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
Additional Shares being sold by such Selling Shareholder as contemplated
herein.
(j) Neither
the Selling Shareholder nor any of his immediate family members or affiliates,
either directly or indirectly through one or more intermediaries, controls,
or
is controlled by, or is under common control with, or has any other association
with (within the meaning of Article I, Section 1(m) of the By-laws of the NASD),
any member firm of the NASD.
Any
certificate signed by any Selling Shareholder or, if applicable, any authorized
officer of any Selling Shareholder, and delivered to the Underwriters or counsel
for the Underwriters in connection with the offering of the Additional
Shares
shall be deemed a representation and warranty by such Selling Shareholder,
as to
matters covered thereby, to each Underwriter.
3. Purchase,
Sale and Delivery of the Shares and the Representative’s Purchase
Option.
(a) On
the
basis of the representations, warranties, covenants and agreements herein
contained, but subject to the terms and conditions herein set forth, the Company
agrees to sell to each Underwriter and each Underwriter, severally and not
jointly, agrees to purchase from the Company, at a purchase price per share
of
$[__________], the number of Firm Shares set forth opposite their respective
names on Schedule
A
hereto
together with any additional number of Shares which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
Maxim
Group LLC
[_________],
2006
Page 21 of
42
(b)
Payment of the purchase price for, and delivery of certificates representing,
the Firm Shares shall be made at the offices of the Underwriters’ Counsel, ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other place as shall
be
agreed upon by the Representative and the Company, at 10:00 A.M., New York
City
time, on the third (3rd) or, as permitted under Rule 15c6-1 under the Exchange
Act, fourth (4th) business day (unless postponed in accordance with the
provisions of Section 10 hereof) following the date of the effectiveness of
the
Registration Statement, or such other time not later than ten (10) business
days
after such date as shall be agreed upon by the Representative and the Company
as
permitted under Rule 15c6-1 under the Exchange Act (such time and date of
payment and delivery being herein called the “Closing Date”).
The closing of the payment of the purchase price for, and delivery of
certificates representing, the Firm Shares is referred to herein as the
“Closing.”
(c) Payment
of
the purchase price for the Firm Shares shall be made by wire transfer in
immediately available funds to or as directed by the Company upon delivery
of
certificates for the Firm Shares to the Representative through the facilities
of
The Depository Trust Company for the respective accounts of the several
Underwriters. Certificates for the Firm Shares shall be registered in such
name
or names and shall be in such denominations as the Representative may request
at
least two (2) business days before the Closing Date. The Company will permit
the
Representative to examine and package such certificates for delivery at least
one (1) full business day prior to the Closing Date.
(d) In
addition, on the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein
set
forth, the Selling Shareholders hereby grant to the Underwriters an option
to
purchase up to an aggregate of [_________]
Additional Shares (in the amount relating to each Selling Shareholder as set
forth on Schedule
B
hereto)
at the same purchase price per share to be paid by the Underwriters for the
Firm
Shares as set forth in Section 3(a) above, for the sole purpose of covering
over-allotments in the sale of Firm Shares by the Underwriters. This option
may
be exercised at any time and from time to time on or before the forty-fifth
(45th)
day
following the final date of the Prospectus, by written notice from the
Representative to the Company. Such notice shall set forth the aggregate number
of Additional Shares as to which the option is being exercised and the date
and
time, as reasonably determined by the Representative, when the Additional Shares
are to be delivered (any such date and time being herein sometimes referred
to
as the “Additional
Closing Date”).
Upon
any exercise of the option as to all or any portion of the Additional Shares,
each Underwriter, acting severally and not jointly, agrees to purchase from
the
Selling Shareholders, ratably, the number of Additional Shares that bears the
same proportion of the total number of Additional Shares then being purchased
as
the number of Firm Shares set forth opposite the name of such Underwriter on
Schedule
A
hereto
(or such number increased as set forth in Section 10 hereof) bears to the total
number of Firm Shares that the Underwriters have agreed to purchased hereunder,
subject, however, to such adjustments to eliminate fractional shares as the
Representative in its sole discretion shall make.
Maxim
Group LLC
[_________],
2006
Page 22 of
42
(e) Payment
of
the purchase price for, and delivery of certificates representing, the
Additional Shares shall be made at the office of Underwriters’ Counsel, or at
such other place as shall be agreed upon by the Representative and the Company,
at 10:00 A.M., New York City time, on the Additional Closing Date (unless
postponed in accordance with the provisions of Section 10 hereof), or such
other
time as shall be agreed upon by the Representative and the Company.
(f) Each
Selling Shareholder will pay all applicable stamp duties and transfer taxes,
if
any, involved in the transfer to the Underwriters of the shares to be purchased
by them from such Selling Shareholder.
(g) Payment
of
the purchase price for the Additional Shares shall be made by wire transfer
in
immediately available funds to or as directed by the Selling Shareholders upon
delivery of certificates for the Additional Shares to the Representative through
the facilities of The Depository Trust Company for the respective accounts
of
the several Underwriters. Certificates for the Additional Shares shall be
registered in such name or names and shall be in such denominations as the
Representative may request at least two (2) business days before the Additional
Closing Date. The Company will permit the Representative to examine and package
such certificates for delivery at least one full business day prior to the
Additional Closing Date.
(h) On
the
Closing Date, the Company will issue and sell to the Representative or, at
the
direction of the Representative, to other Underwriters or selling group members
or bona fide officers of the Underwriters or selling group members, for an
aggregate purchase price of $100, a purchase option (the “Representative’s
Purchase Option”)
entitling the holders thereof to purchase an aggregate of [________] Ordinary
Shares for a period of five years, such period to commence on the Closing Date.
The Representative’s Purchase Option shall not be redeemable. The
Representative’s Purchase Option shall be exercisable at a price equal to 125%
of the initial public offering price of the Shares and shall contain terms
and
provisions more fully described herein below and as set forth more particularly
in the Representative’s Purchase Option to be executed by the Company and
delivered to the Representative on the Closing Date, including, but not limited
to: (i) cashless exercise, (ii) customary anti-dilution provisions (to the
extent permitted by NASD Rule 2710(f)(2)(H)(vi)) and (iii) prohibitions of
mergers, consolidations or other reorganizations of or by the Company or the
taking by the Company of other action during the five-year period following
the
effective date of the Registration Statement unless adequate provision is made
to preserve, in substance, the rights and powers incidental to the
Representative’s Purchase Option. Pursuant to NASD Rule 2710(g)(1) (and except
as provided for in NASD Rule 2710(g)(2)), the Representative’s Purchase Option
(including the securities thereunder) shall not be sold during the offering
contemplated hereby, nor sold, transferred, assigned, pledged, or hypothecated,
or be the subject of any hedging, short sale, derivative, put, or call
transaction that would result in the effective economic disposition thereof
by
any person for a period of one (1) year immediately following the Closing
Date.
Maxim
Group LLC
[_________],
2006
Page 23 of
42
The
Representative’s Purchase Option shall provide for (i) one demand registration
right of the sale of the underlying Ordinary Shares for a period of five (5)
years after the Closing at the Company’s expense, (ii) an additional demand
registration right at the Representative’s expense and (iii) “piggyback”
registration rights for a period of five (5) years after the Closing at the
Company’s expense. The Representative shall furnish to the Company all
information with respect to the Representative required under applicable
securities regulations to accurately complete the registration statements
contemplated herein. The Representative agrees that it shall only use the
prospectuses provided to the Company to sell the shares covered by such
registration statements and will immediately cease to use any prospectus
furnished by the Company if the Company advises the representative that such
prospectus may no longer be used due to a material misstatement or
omission.
(i) Each
Underwriter agrees that, unless it obtains the prior written consent of the
Company, it will not make any offer relating to the Shares that would constitute
an Issuer-Represented
Free
Writing Prospectus or that would otherwise (without taking into account any
approval, authorization, use or reference thereto by the Company) constitute
a
“free writing prospectus” required to be filed by the Company with the
Commission or retained by the Company under Rule 433 of the Securities Act;
provided that the prior written consent of the Company hereto shall be deemed
to
have been given in respect of any Issuer-Represented
General Free
Writing Prospectuses referenced on Annex
IV
hereto.
4. Offering.
Upon
authorization of the release of the Firm Shares by the representative, the
Underwriters propose to offer the Shares for sale to the public upon the terms
and conditions set forth in the Prospectus.
5. Covenants
of the Company.
The
Company acknowledges, covenants and agrees with the Underwriters
that:
(a) The
Registration Statement and any amendments thereto have been declared effective,
and if Rule 430A is used or the filing of the Prospectus is otherwise required
under Rule 424(b), the Company will file the Prospectus (properly completed
if
Rule 430A has been used) pursuant to Rule 424(b) within the prescribed time
period and will provide evidence satisfactory to the Representative of such
timely filing. The Company will notify the Representative immediately (and,
if
requested by the Representative, will confirm such notice in writing): (i)
when
the Registration Statement and any amendments thereto become effective, (ii)
of
any request by the Commission for any amendment of or supplement to the
Registration Statement or the Prospectus or for any additional information,
(iii) of the Company’s intention to file or prepare any supplement or amendment
to the Registration Statement or the Prospectus, (iv) of the mailing or the
delivery to the Commission for filing of any amendment of or supplement to
the
Registration Statement or the Prospectus, including but not limited to Rule
462(b) under the Securities Act, (v) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of the initiation, or the threatening,
of
any proceedings therefor, it being understood that the Company shall make every
effort to avoid the issuance of any such stop order, (vi) of the receipt of
any
comments from the Commission, and (vii) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Shares
for sale in any jurisdiction or the initiation or threatening of any proceeding
for that purpose. If the Commission shall propose or enter a stop order at
any
time, the Company will make every reasonable effort to prevent the issuance
of
any such stop order and, if issued, to obtain the lifting of such order as
soon
as possible. The Company will not file any amendment to the Registration
Statement or any amendment of or supplement to the Prospectus (including the
prospectus required to be filed pursuant to Rule 424(b)) that differs from
the
prospectus on file at the time of the effectiveness of the Registration
Statement which the Representative shall reasonably and timely object in writing
after being timely furnished in advance a copy thereof. The Company will provide
the Representative with copies of all such amendments, filings and other
documents a sufficient time prior to any filing or other publication thereof
to
permit the Representative a reasonable opportunity to review and comment
thereon.
Maxim
Group LLC
[_________],
2006
Page 24 of
42
(b) The
Company shall comply with the Securities Act, the Exchange Act and all
applicable Rules and Regulations to permit completion of the distribution as
contemplated in this Agreement, the Registration Statement and the Prospectus.
If, at any time when a prospectus relating to the Shares is required to be
delivered under the Securities Act, the Exchange Act and all applicable Rules
and Regulations in connection with the sales of Shares, any event shall have
occurred as a result of which the Prospectus as then amended or supplemented
would, in the judgment of the Underwriters or the Company, include an untrue
statement of a material fact or omit to state any material fact required to
be
stated therein or necessary to make the statements therein, in the light of
the
circumstances existing at the time of delivery to the purchaser, not misleading,
or if, to comply with the Securities Act or the Rules and Regulations, it shall
be necessary at any time to amend or supplement the Prospectus or Registration
Statement, or to file any document which is an exhibit to the Registration
Statement or the Prospectus or in any amendment thereof or supplement thereto,
the Company will notify the Representative promptly and prepare and file with
the Commission, subject to Section 5(a) hereof, an appropriate amendment or
supplement (in form and substance satisfactory to the Representative) that
will
correct such statement or omission or which will effect such compliance and
will
use its commercially reasonable best efforts to have any amendment to the
Registration Statement declared effective as soon as possible.
(c) The
Company will comply with the Securities Act, the Exchange Act, the Rules and
Regulations thereunder and all other applicable federal, foreign and state
securities local laws, rules, regulations, orders, decrees and judgments.
(d) The
Company will promptly deliver to the Underwriters and Underwriters’ Counsel a
signed copy of the Registration Statement, as initially filed and all amendments
thereto, including all consents and exhibits filed therewith, and will maintain
in the Company’s files manually signed copies of such documents for at least
five (5) years after the date of filing thereof. The Company will promptly
deliver to each of the Underwriters such number of copies of any Preliminary
Prospectus, the Prospectus, the Registration Statement, and all amendments
of
and supplements to such documents, if any, and all documents which are exhibits
to the Registration Statement and Prospectus or any amendment thereof or
supplement thereto, as the Underwriters may reasonably request. Prior to 10:00
A.M., New York time, on the business day next succeeding the date of this
Agreement and from time to time thereafter, the Company will furnish the
Underwriters with copies of the Prospectus in New York City in such quantities
as the Underwriters may reasonably request.
Maxim
Group LLC
[_________],
2006
Page 25 of
42
(e) The
Company consents to the use and delivery of the Preliminary Prospectus by the
Underwriters in accordance with Rule 430 and Section 5(b) of the Securities
Act.
(f) If
the Company elects to rely on Rule 462(b) under the Securities Act, the Company
shall both file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with
Rule
111 of the Act by the earlier of: (i) 10:00 p.m., New York City time, on the
date of this Agreement, and (ii) the time that confirmations are given or sent,
as specified by Rule 462(b)(2).
(g) The
Company will use its best efforts, in cooperation with the Representative,
at or
prior to the time of effectiveness of the Registration Statement, to qualify
the
Shares for offering and sale under the securities laws relating to the offering
or sale of the Shares of such jurisdictions, domestic or foreign, as the
Representative may designate and to maintain such qualification in effect for
so
long as required for the distribution thereof; except that in no event shall
the
Company be obligated in connection therewith to qualify as a foreign corporation
or to execute a general consent to service of process.
(h) The
Company will make generally available to its security holders and to the
Underwriters as soon as practicable, but in any event not later than twelve
(12)
months after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Securities Act), an audited earnings statement of the
Company complying with Section 11(a) of the Securities Act and the Rules and
Regulations (including, at the option of the Company, Rule 158).
(i) During
the
six (6) months following the Closing Date, without the consent of the
Representative, which shall not be unreasonably withheld, the Company will
not
file any registration statement relating to the offer or sale of any of the
Company’s securities, including any Registration Statement on Form S-8, except
Form S-8 filed with the Commission in connection with the Company’s stock option
plans.
(j) For
a
period of six (6) months following the Closing, the Company shall not offer,
sell or distribute any of its securities, other than pursuant to the Company’s
employee stock option plans at the then Fair Market Value, or pursuant to the
terms of any securities exercisable or convertible into shares of the Company’s
capital stock that are outstanding at the Closing, without the prior written
consent of the Representative.
Maxim
Group LLC
[_________],
2006
Page 26 of
42
(k) During
the
twelve (12) months following the Closing, the Company shall not offer, sell
or
distribute any convertible securities convertible at a price that may, at the
time of conversion, be less than the Fair Market Value of the Ordinary Shares
on
the date of the original sale, without the consent of the Representative. For
purposes of this Section 5, the term “Fair
Market Value”
shall
mean the greater of: (i) the average of the volume weighted average price of
the
Ordinary Shares for each of the 10 trading days prior to the date of the
original sale; and (ii) the last sale price of the Ordinary Shares, during
normal operating hours, as reported on the
NASDAQ,
or any
other exchange or electronic quotation system on which the Ordinary Shares
are
then listed.
(l) The
Company shall, subject to applicable phase-in provisions, use its best efforts
to comply in all material respects with the applicable provisions of Sarb-Ox
and
the Rules and Regulations promulgated thereunder and related or similar rules,
regulations and listing requirements promulgated by NASDAQ or any other
applicable governmental or self regulatory entity or agency. Without limiting
the generality of the foregoing: (i) the
Company’s Board of Directors (the “Board
of Directors”)
shall, when required, appoint an audit committee whose composition satisfies
the
requirements of Rule 4350(d)(2) of the Rules of the NASD (the “NASD
Rules”),
(ii) the Board of Directors and/or the audit committee thereof shall adopt
a
charter that satisfies the requirements of Rule 4350(d)(1) of the NASD Rules,
(iii) all
members of the Board of Directors who are required to be “independent” (as that
term is defined under applicable laws, rules and regulations), including,
without limitation, all members of the audit committee of the Board of
Directors, shall meet the qualifications of independence as set forth under
applicable laws, rules and regulations (including the NASD Rules), and (iv)
the
audit committee of the Board of Directors shall have at least one member who
is
an “audit committee financial expert” (as that term is defined under applicable
laws, rules and regulations).
(m) For
a period of three (3) years from the effective date of the Registration
Statement, the Company, at its expense, shall obtain
and
keep current a listing in the Standard & Poors Corporation Record Service.
(n) The
Company will not issue press releases or engage in any other publicity, without
the Representative’ prior written consent, which shall not be unreasonably or
untimely withheld, for a period ending at 5:00 p.m. Eastern time on the first
business day following the fortieth (40th)
day
following the Closing Date, other than normal and customary releases issued
in
the ordinary course of the Company’s business.
(o) The
Company has obtained and will use its good faith best efforts to maintain its
key person life insurance with The
▇▇▇▇▇▇
Group in
the amount of $1,500,000 on the life of ▇▇▇▇▇ ▇▇▇▇▇ in full force and effect
for
a period of three (3) years from the Closing Date.”
The Company is and shall be the sole beneficiary of such policy.
Maxim
Group LLC
[_________],
2006
Page 27 of
42
(p) Upon
conclusion of the Offering, the Company will engage (for no less than two (2)
year from the date of the Closing Date, subject to the Company’s satisfaction
with the services provided) a financial public relations firm (the “PR
Firm”)
mutually acceptable to the Company and the Representative.
(q) The
Company has or will retain a transfer agent reasonably acceptable to the
Representative for the Shares and shall continue to retain such transfer agent
for a period of three (3) years following the Closing Date,
subject to the Company’s satisfaction with the services provided.
(r) The
Company will apply the net proceeds from the sale of the Shares as set forth
under the caption “Use of Proceeds” in the Prospectus. Without
the written consent of the Representative, no proceeds of the Offering will
be
used to pay outstanding loans from officers, directors or
shareholders.
(s) The
Company will use its best efforts to effect and maintain the listing of the
Shares on the
NASDAQ
and
will
use its commercially reasonable efforts to maintain such listing for a period
of
at least three (3) years after the Closing.
(t) The
Company, during the period when the Prospectus is required to be delivered
under
the Securities Act or the Exchange Act, will file all documents required to
be
filed with the Commission pursuant to the Securities Act, the Exchange Act
and
the Rules and Regulations within the time periods required thereby.
(u) The
Company will use its best efforts to do and perform all things required to
be
done or performed under this Agreement by the Company prior to the Closing
Date
or the Additional Closing Date, as the case may be, and to satisfy all
conditions precedent to the delivery of the Firm Shares and the Additional
Shares.
(v) The
Company will not take, and will cause its Affiliates not to take, directly
or
indirectly, any action which constitutes or is designed to cause or result
in,
or which could reasonably be expected to constitute, cause or result in, the
stabilization or manipulation of the price of any security to facilitate the
sale or resale of the Shares.
(w) The
Company shall cause to be prepared and delivered to the Representative, at
its
expense, within one (1) business day from the effective date of this Agreement,
an Electronic Prospectus
to be used by the Underwriters in connection with the Offering. As used herein,
the term “Electronic
Prospectus”
means a form of prospectus, and any amendment or supplement thereto, that meets
each of the following conditions: (i) it shall be encoded in an electronic
format, satisfactory to the Representative, that may be transmitted
electronically by the other Underwriters to offerees and purchasers of the
Shares for at least the period during which a Prospectus relating to the Shares
is required to be delivered under the Securities Act; (ii) it shall disclose
the
same information as the paper prospectus and prospectus filed pursuant to ▇▇▇▇▇,
except to the extent that graphic and image material cannot be disseminated
electronically, in which case such graphic and image material shall be replaced
in the electronic prospectus with a fair and accurate narrative description
or
tabular representation of such material, as appropriate; and (iii) it shall
be
in or convertible into a paper format or an electronic format, satisfactory
to
the Representative, that will allow recipients thereof to store and have
continuously ready access to the prospectus at any future time, without charge
to such recipients (other than any fee charged for subscription to the Internet
as a whole and for on-line time). The Company hereby confirms that it has
included or will include in the Prospectus filed pursuant to ▇▇▇▇▇ or otherwise
with the Commission and in the Registration Statement at the time it was
declared effective an undertaking that, upon receipt
of a request by an investor or his or her representative within the period
when
a prospectus relating to the Shares is required to be delivered under the
Securities Act, the Company shall transmit or cause to be transmitted promptly,
without charge, a paper copy of the Prospectus.
Maxim
Group LLC
[_________],
2006
Page 28 of
42
(y)
The
Company agrees that during the one (1) year period following the Closing of
the
Offering, the Company’s Board of Directors shall include at least one
“independent” director (as that term is defined in the NASD rules) who shall be
reasonably satisfactory to the Representative. The Representative agrees that
▇▇▇▇▇ ▇. ▇▇▇ is reasonably satisfactory for such purposes.
Maxim
Group LLC
[_________],
2006
Page 29 of
42
6. Consideration;
Payment of Expenses.
(a) In
additional to selling the Shares to the Underwriters at the price per Share
set
forth in Section 3(a) hereof, in consideration of the services to be provided
for hereunder, the Company shall pay to the Underwriters or their respective
designees their pro rata portion (based on the Shares purchased) of a
non-accountable expense allowance equal to two percent (2.0%) of the gross
proceeds of the Offering (excluding proceeds from the sale of Additional
Shares); provided,
however,
that such allowance shall not exceed a total of four hundred thousand ($400,000)
dollars. The Company has heretofore paid advances of $50,000 in the aggregate
which are creditable towards such non-accountable expense allowance.
(b) Whether
or
not the transactions contemplated by this Agreement, the Registration Statement
and the Prospectus are consummated or this Agreement is terminated, the Company
hereby agrees to pay all costs and expenses incident to the offering of the
Shares contemplated hereby and the performance of its obligations hereunder,
including the following:
(i) all
expenses in connection with the preparation, printing, “edgarization” and filing
of the Registration Statement, any Preliminary Prospectus and the Prospectus
and
any and all amendments and supplements thereto including, but not limited to,
the SEC filing fees, and the mailing and delivering of copies thereof to the
Underwriters and dealers;
(ii) the
cost
of producing this Agreement and any agreement among Underwriters, blue sky
survey, closing documents and other instruments, agreements or documents
(including any compilations thereof) in connection with the Offering and the
cost of three (3) bound volumes of such documents for the
Representative;
(iii) all
expenses in connection with the qualification of the Shares for offering and
sale under state or foreign securities or blue sky laws, including (subject
to
the provisions of Section 6(d) hereof) the fees and disbursements of counsel
for
the Underwriters in connection with such qualification and in connection with
any blue sky survey undertaken by such counsel;
(iv) the
filing
fees incident to securing any required review by the NASD of the terms of the
Offering;
(v) all
fees
and expenses in connection with listing the Shares on the NASDAQ;
(vi) all
travel
expenses of the Company’s officers and employees and any other expense of the
Company incurred in connection with attending or hosting meetings with
prospective purchasers of the Shares;
Maxim
Group LLC
[_________],
2006
Page 30 of
42
(vii) any
stock
transfer taxes incurred in connection with this Agreement or the
Offering
(viii) the
cost
for the preparation, printing, authentication, issuance and delivery of the
stock certificates representing the Shares, including, but not limited to,
any
stamp or transfer tax;
(ix)
the
cost and charges of any transfer agent or registrar for the Shares;
(x) the
fees
and expenses of the PR Firm; and
(xi) the
fees
and expenses of the Company’s accountants, auditors and legal
counsel.
(c)
In
addition to the costs and expenses set forth in Section 6(b) hereof, the
Company
will be responsible for the cost (up to a maximum of $20,000) for “tombstone”
advertisements to be placed in appropriate, national editions of daily or
weekly
periodicals of the Representative’s choice (i.e., The Wall Street Journal and
The New York Times).
(d) The
Company shall pay up to a $20,000 fee to Underwriters’
Counsel
in
connection with “Blue Sky” work, including out-of-pocket disbursements ($10,000
of which has previously been paid upon the commencement of such work, with
the
balance to be paid at the Closing, if necessary). The
Company shall also
pay, as due, state registration, qualification and filing fees and NASD filing
fees in connection with such registration, qualification or filing.
It is
understood that any expense in excess of the initial payment of ten thousand
($10,000) referred to above, shall be subject to the prior approval by the
Company, which approval shall not be unreasonable withheld or
delayed.
(e) It
is
understood and agreed that, except as provided for in this Section 6, and
Sections 8 and 11 hereof, the Underwriters will pay all of their own costs
and
expenses, including the fees of their counsel. Notwithstanding anything to
the
contrary in this Section 6, in the event that this Agreement is terminated
pursuant to Section 6 or 12(b) hereof, or subsequent to a Material Adverse
Change, the Company will pay all accountable expenses of the Underwriters
(including but not limited to fees and disbursements of counsel to the
Underwriters) incurred in connection herewith, up to a maximum of $50,000 (less
any advances previously paid).
Maxim
Group LLC
[_________],
2006
Page 31 of
42
7. Conditions
of Underwriters’ Obligations.
The
obligations of the Underwriters to purchase and pay for the Firm Shares and
the
Additional Shares as provided herein shall be subject to: (i) the accuracy
of
the representations and warranties of the Company herein contained, as of the
date hereof and as of the Closing Date (ii) the absence from any certificates,
opinions, written statements or letters furnished to the Representative or
to
Underwriters’ Counsel pursuant to this Section 7 of any misstatement or omission
(iii) the performance by the Company of its obligations hereunder, and (iv)
each
of the following additional conditions. For purposes of this Section 7, the
terms “Closing Date” and “Closing” shall refer to the Closing Date for the Firm
Shares and any Additional Closing Date, if different, for the Additional Shares,
and each of the foregoing and following conditions must be satisfied as of
each
Closing.
(a) The
Registration Statement shall have become effective and all necessary regulatory
or listing approvals shall have been received not later than 5:30 P.M., New
York
time, on the date of this Agreement, or at such later time and date as shall
have been consented to in writing by the Representative. If the Company shall
have elected to rely upon Rule 430A under the Securities Act, the Prospectus
shall have been filed with the Commission in a timely fashion in accordance
with
the terms hereof and a form of the Prospectus containing information relating
to
the description of the Shares and the method of distribution and similar matters
shall have been filed with the Commission pursuant to Rule 424(b) within the
applicable time period; and, at or prior to the Closing Date or the actual
time
of the Closing, no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereof shall have been issued and
no
proceedings therefor shall have been initiated or threatened by the Commission.
(b) The
Representative shall have received, as of the effective date of the Registration
Statement, a “lock-up” agreement from each Selling Shareholder and each officer
and director of the Company and shareholders
of the Company who own more than 2.5% of Ordinary Shares
prior to
the consummation of the Offering, but not the exercise of the Underwriter’s
over-allotment option described in Section 3(d) hereof (each, a “Lock-Up
Party”),
duly
executed by the applicable Lock-Up Party, in each case substantially in the
form
attached hereto as Annex
I.
(c) The
Representative shall have received the favorable written opinion of ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇ LLP, legal counsel for the Company, dated as of the Closing Date
addressed to the Underwriters in the form attached hereto as Annex
II.
(d) The
Representative shall have received the favorable written opinion of Erdinast,
▇▇▇ ▇▇▇▇▇▇ & Co., Israeli legal counsel for the Company, dated as of the
Closing Date addressed to the Underwriters in the form attached hereto as
Annex
III.
(e) The
Representative shall have received the favorable written legal opinions of
Israeli tax counsel and intellectual property counsel in a form acceptable
to
the Representative and, respectively, such counsels.
Maxim
Group LLC
[_________],
2006
Page 32 of
42
(f) All
proceedings taken in connection with the sale of the Firm Shares and the
Additional Shares as herein contemplated shall be satisfactory in form and
substance to the Representative and to Underwriters’ Counsel.
(g) The
Representative shall have received a certificate of the Chief Executive Officer
and Chief Financial Officer of the Company, dated as of the Closing Date to
the
effect that: (i) the condition set forth in subsection (a) of this Section
7 has
been satisfied, (ii) as of the date hereof and as of the applicable Closing
Date, the representations and warranties of the Company set forth in Section
1
hereof are true and correct in all material respects, (iii) as of the applicable
Closing Date, all agreements, conditions and obligations of the Company to
be
performed or complied with hereunder on or prior thereto have been duly
performed or complied with in all material respects, (iv) the Company has not
sustained any material loss or interference with their respective businesses,
whether or not covered by insurance, or from any labor dispute or any legal
or
governmental proceeding, (v) no stop order suspending the effectiveness of
the
Registration Statement or any post-effective amendment thereof has been issued
and no proceedings therefor have been initiated or threatened by the Commission
and (vi) subsequent to the respective dates as of which information is given
in
the Registration Statement and the Prospectus, there has not been any Material
Adverse Change, whether or not arising from transactions in the ordinary course
of business.
(h) On
the date of this Agreement, on the Closing Date and, as the case may be, on
each
Additional Closing Date, the Representative shall have received a “cold comfort”
letter from KFGK,
dated, respectively, as of the date of the date of delivery and addressed to
the
Underwriters and in form and substance satisfactory to the Representative and
Underwriters’ Counsel,
confirming that they are registered independent certified public accountants
with respect to the Company under the PCAOB and within the meaning of the
Securities Act and the Rules and Regulations, and stating, as of the date of
delivery (or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is given in
the
Prospectus,
as of a date not more than five (5) days prior to the date of such letter),
the
conclusions and findings of such firm with respect to the financial information
and other matters relating to the Registration Statement covered by such letter
and, with respect to letters issued as of Additional Closing Dates, confirming
the conclusions and findings set forth in such prior letter.
(i) Subsequent
to the execution and delivery of this Agreement or, if earlier, the dates as
of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement thereto),
there shall not have been any change in the capital stock or long-term debt
of
the Company or any change or development involving a change, whether or not
arising from transactions in the ordinary course of business, in the business,
condition (financial or otherwise), results of operations, shareholders’ equity,
properties or prospects of the Company, taken as a whole, including but not
limited to the occurrence of any fire, flood, storm, explosion, accident, act
of
war or terrorism or other calamity, the effect of which, in any such case
described above, is, in the sole judgment of the Representative, so material
and
adverse as to make it impracticable or inadvisable to proceed with the Offering
on the terms and in the manner contemplated in the Prospectus (exclusive of
any
supplement).
Maxim
Group LLC
[_________],
2006
Page 33 of
42
(j) The
Company shall have obtained insurance on the life of ▇▇▇▇▇ ▇▇▇▇▇ as provided
for
in Section 5(o) hereof.
(k) The
Shares
shall have been approved for quotation on NASDAQ.
(l) The
NASD
shall have confirmed that it has not raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(m) No
action
shall have been taken and no statute, rule, regulation or order shall have
been
enacted, adopted or issued by any federal, state or foreign governmental or
regulatory authority that would, as of the Closing Date, prevent the issuance
or
sale of the Shares; and no injunction or order of any federal, state or foreign
court shall have been issued that would, as of the Closing Date, prevent the
issuance or sale of the Shares.
(n) The
Company shall have filed with the Commission all Issuer-Represented
Free
Writing Prospectuses or other information required to be filed by the Company
under the Securities Act and the Rules and Regulations.
(o) The
Company shall have furnished the Underwriters and Underwriters’ Counsel with
such other certificates, opinions or other documents as they may have reasonably
requested.
If
any of
the conditions specified in this Section 7 shall not have been fulfilled when
and as required by this Agreement, or if any of the certificates, opinions,
written statements or letters furnished to the Representative or to
Underwriters’ Counsel pursuant to this Section 7 shall not be reasonably
satisfactory in form and substance to the Representative and to Underwriters’
Counsel, all obligations of the Underwriters hereunder may be cancelled by
the
Representative at, or at any time prior to, the consummation of the Closing,
and
the obligations of the Underwriters to purchase the Additional Shares may be
cancelled by the Representative at, or at any time prior to, the Additional
Closing Date. Notice of such cancellation shall be given to the Company in
writing, or by telephone. Any such telephone notice shall be confirmed promptly
thereafter in writing.
8. Indemnification.
(a) The
Company and each Selling Shareholder, severally and not jointly, shall indemnify
and hold harmless each Underwriter and each Person, if any, who controls each
Underwriter within the meaning of Section 15 of the Securities Act or Section
20
of the Exchange Act, against any and all losses, liabilities, claims, damages
and expenses whatsoever as incurred (including, but not limited to, reasonable
attorneys’ fees and any and all expenses whatsoever incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or
any
claim whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of
a
material fact made by such party contained in the Registration Statement, as
originally filed or any amendment thereof, or any related Preliminary
Prospectus, the Prospectus or in any Issuer-Represented
Free
Writing Prospectus, Issuer-Represented
General Free
Writing Prospectus, Issuer-Represented
Limited-Use Free
Writing Prospectus and/or 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 (any such
application, document or information being hereinafter referred to as a
“Blue
Sky Application”),
or in
any supplement thereto or amendment thereof, or arise out of or are based upon
the omission or alleged omission made by such party to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided,
however,
that
neither the Company nor any Selling Shareholder will be liable in any such
case
to the extent (but only to the extent) that: (x) any such loss, liability,
claim, damage or expense arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished
to
the Company by or on behalf of any Underwriter through the Representative
expressly for use therein, which written information, it is agreed, shall
consist solely of the subsections of the “Underwriting” section of the
Prospectus captioned “Nature of the Underwriting Commitment,” “Pricing of
Securities,” “Stabilization” and “Regulatory Restrictions on Purchase of
Ordinary Shares” (the “Underwriter
Information”)
or (y)
such statement or omission was contained or made in any Preliminary Prospectus
and corrected
in
the Prospectus in conformity with the requirements of the Securities Act and
the
Rules and Regulations; and,
provided, further,
that each Selling Shareholder shall only be liable for indemnification under
this Section 8 for information appearing in the Registration Statement, any
Preliminary Prospectus or the Prospectus which was furnished
to the Company or approved by or on behalf of such Selling Shareholder for
use
in the Registration
Statement, any Preliminary Prospectus or the Prospectus.
This
indemnity agreement will be in addition to any liability, which the Company
or
any Selling Shareholder may otherwise have, including but not limited to other
liability under this Agreement.
Maxim
Group LLC
[_________],
2006
Page 34 of
42
Notwithstanding
the foregoing: (i) except in the case of fraud or other willful misconduct,
no
Selling Shareholder shall be liable in indemnification under this Section 8(a)
in an amount to exceed the net proceeds received by such Selling Shareholder
from the sale, if any, of the Additional Shares, and (ii) the foregoing
indemnity agreement, with respect to the Preliminary Prospectus only and not
any
Issuer-Represented
Free
Writing Prospectus or any other writing or instrument, shall not inure to the
benefit of any Underwriter (including or any person controlling such
Underwriter) from whom the person asserting any such losses, claims, damages
or
liabilities purchased Shares, if a copy of the General Disclosure Package or
the
Prospectus (in each case, as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or given
by
or on behalf of such Underwriter to such person, if required by law to have
been
delivered, at or prior to the written confirmation of the sale of the Shares
to
such person, and if the General Disclosure Package or the Prospectus (in each
case, as so amended or supplemented), as applicable, would have cured the defect
giving rise to such losses, claims, damages or liabilities, unless such failure
is the result of noncompliance by the Company with Section 5(d) hereof.
(b) Each
Underwriter, severally and not jointly, shall indemnify and hold harmless the
Company, each Selling Shareholder, each of the directors of the Company, each
of
the officers of the Company who shall have signed the Registration Statement,
and each other Person, if any, who controls the Company within the meaning
of
Section 15 of the Securities Act or Section 20 of the Exchange Act, against
any
losses, liabilities, claims, damages and expenses whatsoever as incurred
(including, but not limited to, reasonable attorneys’ fees and any and all
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation), joint or several,
to
which they or any of them may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon
any
untrue statement or alleged untrue statement of a material fact contained in
the
Registration Statement, as originally filed or any amendment thereof, or any
related Preliminary Prospectus or the Prospectus, or in any amendment thereof
or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage
or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with the Underwriter Information; provided,
however,
that in
no case shall any Underwriter be liable or responsible for any amount in excess
of the underwriting discount applicable to the Shares to be purchased by such
Underwriter hereunder. The parties agree that such information provided by
or on
behalf of any Underwriter through the Representative consists solely of the
material referred to in the last sentence of Section 1(b) hereof.
(c) Promptly
after receipt by an indemnified party under subsection (a) or (b) above of
notice of any claims or the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification
is
to be sought in writing of the claim or the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve the indemnifying
party from any liability which it may have under this Section 8 to the extent
that it is not materially prejudiced as a result thereof and in any event shall
not relieve it from any liability that such indemnifying party may have
otherwise than on account of the indemnity agreement hereunder). In case any
such claim or action is brought against any indemnified party, and it notifies
an indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate, at its own expense in the defense of such action,
and to the extent it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified party,
to assume the defense thereof with counsel satisfactory to such indemnified
party; provided however, that counsel to the indemnifying party shall not
(except with the written consent of the indemnified party) also be counsel
to
the indemnified party. Notwithstanding the foregoing, the indemnified party
or
parties shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of
such
indemnified party or parties unless: (i) the employment of such counsel shall
have been authorized in writing by one of the indemnifying parties in connection
with the defense of such action, (ii) the indemnifying parties shall not have
employed counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, (iii) the
indemnifying party does not diligently defend the action after assumption of
the
defense, or (iv) such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are different
from or additional to those available to one or all of the indemnifying parties
(in which case the indemnifying parties shall not have the right to direct
the
defense of such action on behalf of the indemnified party or parties), in any
of
which events such fees and expenses shall be borne by the indemnifying parties.
No indemnifying party shall, without the prior written consent of the
indemnified parties, effect any settlement or compromise of, or consent to
the
entry of judgment with respect to, any pending or threatened claim,
investigation, action or proceeding in respect of which indemnity or
contribution may be or could have been sought by an indemnified party under
this
Section 8 or Section 9 hereof (whether or not the indemnified party is an actual
or potential party thereto), unless (x) such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such claim, investigation, action or proceeding and
(ii) does not include a statement as to or an admission of fault, culpability
or
any failure to act, by or on behalf of the indemnified party, and (y) the
indemnifying party confirms in writing its indemnification obligations hereunder
with respect to such settlement, compromise or judgment.
Maxim
Group LLC
[_________],
2006
Page 35 of
42
9.
Contribution. In order to provide for contribution in circumstances in
which the indemnification provided for in Section 8 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to
hold
harmless a party indemnified thereunder, the Company, the Selling Shareholders
and the Underwriters shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any reasonable investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claims asserted, but after deducting in the case
of
losses, claims, damages, liabilities and expenses suffered by the Company,
any
contribution received by the Company from Persons, other than the Underwriters,
who may also be liable for contribution, including Persons who control the
Company within the meaning of Section 15 of the Securities Act or Section
20 of
the Exchange Act, officers of the Company who signed the Registration Statement
and directors of the Company) as incurred to which the Company and the Selling
Shareholders and one or more of the Underwriters may be subject, in such
proportions as is appropriate to reflect the relative benefits received by
the
Company, the Selling Shareholders and the Underwriters from the Offering
or, if
such allocation is not permitted by applicable law, in such proportions as
are
appropriate to reflect not only the relative benefits referred to above but
also
the relative fault of the Company, the Selling Shareholders and the Underwriters
in connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company,
the
Selling Shareholder and the Underwriters shall be deemed to be in the same
proportion as (x) the total proceeds from the Offering (net of underwriting
discounts and commissions but before deducting expenses) received by the
Company
or each Selling Shareholder bears to (y) the underwriting discount or
commissions received by the Underwriters, in each case as set forth in the
table
on the cover page of the Prospectus. The relative fault of each of the Company,
the Selling Shareholders and of the Underwriters 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, an applicable Selling
Shareholder or the Underwriters and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or
omission. The Company, the Selling Shareholders and the Underwriters agree
that
it would not be just and equitable if contribution pursuant to this Section
9
were determined by pro rata allocation (even if the Underwriters were treated
as
one entity for such purpose) or by any other method of allocation which does
not
take account of the equitable considerations referred to above in this Section.
The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 9
shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any judicial, regulatory
or
other legal or governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission. Notwithstanding the provisions of this Section
9:
(i) no Underwriter shall be required to contribute any amount in excess of
the
amount by which the underwriting discount applicable to the Shares underwritten
by it and distributed to the public exceeds the amount of any damages which
such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission and (ii) 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. For purposes of this Section
9,
each Person, if any, who controls an Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act shall have the
same
rights to contribution as such Underwriter, and each Person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act
or
Section 20 of the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall
have
the same rights to contribution as the Company, subject in each case to clauses
(i) and (ii) of the immediately preceding sentence. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim
for
contribution may be made against another party or parties, notify each party
or
parties from whom contribution may be sought, but the omission to so notify
such
party or parties shall not relieve the party or parties from whom contribution
may be sought from any obligation it or they may have under this Section
9 or
otherwise. The obligations of the Underwriters to contribute pursuant to
this
Section 9 are several in proportion to the respective number of Shares to
be
purchased by each of the Underwriters hereunder and not
joint.
Maxim
Group LLC
[_________],
2006
Page 36 of
42
10. Underwriter
Default.
(a) If
any
Underwriter or Underwriters shall default in its or their obligation to purchase
Firm Shares or Additional Shares hereunder, and if the Firm Shares or Additional
Shares with respect to which such default relates (the “Default
Shares”)
do not
(after giving effect to arrangements, if any, made by the Representative
pursuant to subsection (b) below) exceed in the aggregate 10% of the number
of
Firm Shares or Additional Shares, each non-defaulting Underwriter, acting
severally and not jointly, agrees to purchase from the Company that number
of
Default Shares that bears the same proportion of the total number of Default
Shares then being purchased as the number of Firm Shares set forth opposite
the
name of such Underwriter on Schedule
A
hereto
bears to the aggregate number of Firm Shares set forth opposite the names of
the
non-defaulting Underwriters, subject, however, to such adjustments to eliminate
fractional shares as the Representative in its sole discretion shall make.
(b) In
the
event that the aggregate number of Default Shares exceeds 10% of the number
of
Firm Shares or Additional Shares, as the case may be, the Representative may
in
their discretion arrange for themselves or for another party or parties
(including any non-defaulting Underwriter or Underwriters who so agree) to
purchase the Default Shares on the terms contained herein. In the event that
within five calendar days after such a default the Representative do not arrange
for the purchase of the Default Shares as provided in this Section 10, this
Agreement or, in the case of a default with respect to the Additional Shares,
the obligations of the Underwriters to purchase and of the Company to sell
the
Additional Shares shall thereupon terminate, without liability on the part
of
the Company with respect thereto (except in each case as provided in Sections
5,
7, 8, 10 and 11(d)) or the Underwriters, but nothing in this Agreement shall
relieve a defaulting Underwriter or Underwriters of its or their liability,
if
any, to the other Underwriters and the Company for damages occasioned by its
or
their default hereunder.
(c) In
the
event that any Default Shares are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as aforesaid,
the Representative or the Company shall have the right to postpone the Closing
Date or Additional Closing Date, as the case may be for a period, not exceeding
five (5) business days, in order to effect whatever changes may thereby be
made
necessary in the Registration Statement or the Prospectus or in any other
documents and arrangements, and the Company agrees to file promptly any
amendment or supplement to the Registration Statement or the Prospectus which,
in the reasonable opinion of Underwriters’ Counsel, may thereby be made
necessary or advisable. The term “Underwriter” as used in this Agreement shall
include any party substituted under this Section 10 with like effect as if
it
had originally been a party to this Agreement with
respect
to
such Firm Shares and Additional Shares.
11. Survival
of Representations and Agreements.
All
representations and warranties, covenants and agreements of the Company and
the
Underwriters contained in this Agreement or in certificates of officers of
the
Company submitted pursuant hereto, including the agreements contained in Section
6, the indemnity agreements contained in Section 8 and the contribution
agreements contained in Section 9 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or any controlling Person thereof or by or on behalf of the Company,
any of its officers and directors or any controlling Person thereof, and shall
survive delivery of and payment for the Shares to and by the Underwriters.
The
representations contained in Section 1 and 2 hereof and the covenants and
agreements contained in Sections 6(b), 6(d), 6(e), 8, 9, this Section 11 and
Sections 13 through 22 inclusive hereof shall survive any termination of this
Agreement, including termination pursuant to Section 10 or 12 hereof.
Maxim
Group LLC
[_________],
2006
Page 37 of
42
12. Effective
Date of Agreement; Termination.
(a) This
Agreement shall become effective upon the later of: (i) receipt by the
Representative and the Company of notification of the effectiveness of the
Registration Statement or (ii) the execution of this Agreement.
(b)
The
Representative shall have the right to terminate this Agreement at any time
prior to the consummation of the Closing or to terminate the obligations of
the
Underwriters to purchase the Additional Shares at any time prior to the
consummation of any closing to occur on an Additional Closing Date, as the
case
may be, if: (i) any domestic or international event or act or occurrence has
materially disrupted, or in the opinion of the Representative will in the
immediate future materially disrupt, the market for the Company’s securities or
securities in general; or (ii) trading on the New York Stock Exchange, The
Nasdaq National Market or AMEX shall have been suspended or been made subject
to
material limitations, or minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for securities shall have been required,
on
the New York Stock Exchange, The Nasdaq National Market or the AMEX or by order
of the Commission or any other governmental authority having jurisdiction;
or
(iii) a banking moratorium has been declared by any state or federal authority
or if any material disruption in commercial banking or securities settlement
or
clearance services shall have occurred; or (iv) (A) there shall have occurred
any outbreak or escalation of hostilities or acts of terrorism involving the
United States or there is a declaration of a national emergency or war by the
United States or (B) there shall have been any other calamity or crisis or
any
change in political, financial or economic conditions if the effect of any
such
event in (A) or (B), in the judgment of the Representative, makes it
impracticable or inadvisable to proceed with the offering, sale and delivery
of
the Firm Shares or the Additional Shares, as the case may be, on the terms
and
in the manner contemplated by the Prospectus.
(c) Any
notice
of termination pursuant to this Section 12 shall be in writing.
(d) If
this
Agreement shall be terminated pursuant to any of the provisions hereof (other
than pursuant to Section 10(b) hereof), or if the sale of the Shares provided
for herein is not consummated because any condition to the obligations of the
Underwriters set forth herein is not satisfied or because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or comply with any provision hereof, the Company will, subject to demand by
the
Representative, reimburse the Underwriters for all out-of-pocket expenses
(including the fees and expenses of their counsel) incurred by the Underwriters
in connection herewith up to a maximum of $50,000 (less any advances previously
paid).
Maxim
Group LLC
[_________],
2006
Page 38 of
42
13. Notices.
All
communications hereunder, except as may be otherwise specifically provided
herein, shall be in writing, and:
(a) if
sent to
the Representative or any Underwriter, shall be mailed, delivered, or faxed
and
confirmed in writing, to Maxim Group LLC, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇
▇▇▇▇ ▇▇▇▇▇, Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Managing
Director, in each case, with a copy to Underwriters’ Counsel at Ellenoff
▇▇▇▇▇▇▇▇ & Schole LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇, Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.;
and
(b) if
sent to
the Company or a Selling Shareholder, shall be mailed, delivered, or faxed
and
confirmed in writing to the Company and its counsel at the addresses set forth
in the Registration Statement or their last known fax numbers, in each case,
with a copy to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇, Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Esq.
provided,
however,
that any
notice to an Underwriter pursuant to Section 8 shall be delivered or sent by
mail or facsimile transmission to such Underwriter at its address set forth
in
its acceptance facsimile to the Representative, which address will be supplied
to any other party hereto by the Representative upon request. Any such notices
and other communications shall take effect at the time of receipt thereof.
14. Parties.
This
Agreement shall inure solely to the benefit of, and shall be binding upon,
the
Underwriters, the Company and the Selling Shareholders and the controlling
Persons, directors, officers, employees and agents referred to in Sections
8 and
9 hereof, and their respective successors and assigns, and no other Person
shall
have or be construed to have any legal or equitable right, remedy or claim
under
or in respect of or by virtue of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the parties hereto and said
controlling Persons and their respective successors, officers, directors, heirs
and legal representative, and it is not for the benefit of any other Person.
The
term “successors and assigns” shall not include a purchaser, in its capacity as
such, of Shares from any of the Underwriters.
Maxim
Group LLC
[_________],
2006
Page 39 of
42
15. Governing
Law.
This
Agreement shall be deemed to have been executed and delivered in New York and
both this Agreement and the transactions contemplated hereby shall be governed
as to validity, interpretation, construction, effect, and in all other respects
by the laws of the State of New York pursuant to Section 5-1401 of the New
York
General Obligations Law, without regard to the conflicts of laws principals
thereof (other than Section 5-1401 of The New York General Obligations Law).
Each of the Underwriters, the Company and each Selling Shareholder: (a) agrees
that any legal suit, action or proceeding arising out of or relating to this
Agreement and/or the transactions contemplated hereby shall be instituted
exclusively in the Supreme Court of the State of New York, New York County,
or
in the United States District Court for the Southern District of New York,
(b)
waives any objection which it may have or hereafter to the venue of any such
suit, action or proceeding, and (c) irrevocably consents to the jurisdiction
of
Supreme Court of the State of New York, New York County, or in the United States
District Court for the Southern District of New York in any such suit, action
or
proceeding. Each of the Company and each Selling Shareholder has appointed
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP as its authorized agent (the “Authorized
Agent”)
upon
whom process may be served in any suit, action or proceeding arising out of
or
based upon this Agreement or the transactions contemplated herein which may
be
instituted in any New York Court, by any Underwriter, the directors, officers,
employees and agents of any Underwriter, or by any person who controls any
Underwriter, and expressly accepts the exclusive jurisdiction of any such court
in respect of any such suit, action or proceeding. Each of the Company and
the
Selling Shareholders hereby represents and warrants that the Authorized Agent
has accepted such appointment and has agreed to act as said agent for service
of
process, and the Company agrees to take any and all action, including the filing
of any and all documents that may be necessary to continue such appointment
in
full force and effect as aforesaid. Service of process upon the Authorized
Agent
shall be deemed, in every respect, effective service of process upon the Company
and the Selling Shareholders. Notwithstanding the foregoing, the Company and
the
Selling Shareholders each hereby agrees to the exclusive jurisdiction of the
Supreme Court of the State of New York, New York County, or in the United States
District Court for the Southern District of New York in connection with any
action brought by them arising out of or based upon this Agreement or the sale
of the Shares. Each of the Underwriters and the Company further agrees to accept
and acknowledge service of any and all process which may be served in any such
suit, action or proceeding in the Supreme Court of the State of New York, New
York County, or in the United States District Court for the Southern District
of
New York and agrees that service of process upon the Company mailed by certified
mail to the Company’s address or delivered by Federal Express via overnight
delivery shall be deemed in every respect effective service of process upon
the
Company, in any such suit, action or proceeding, and service of process upon
the
Underwriters mailed by certified mail to the Underwriters’ address or delivered
by Federal Express via overnight delivery shall be deemed in every respect
effective service process upon the Underwriter, in any such suit, action or
proceeding. THE COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT
PERMITTED BY LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS)
AND
THE SELLING SHAREHOLDERS HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY
JURY
IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE REGISTRATION
STATEMENT AND THE PROSPECTUS.
Maxim
Group LLC
[_________],
2006
Page 40 of
42
16. Currency.
Each
reference in this Agreement to U.S. Dollar or “$” (the “Relevant
Currency”)
is of
the essence. To the fullest extent permitted by law, the obligations of each
of
the Company and the Selling Shareholders in respect of any amount due under
this
Agreement will, notwithstanding any payment in any other currency (whether
pursuant to a judgment or otherwise), be discharged only to the extent of the
amount in the Relevant Currency that the party entitled to receive such payment
may, in accordance with its normal procedures, purchase with the sum paid in
such other currency (after any premium and costs of exchange) on the business
day immediately following the day on which such party receives such payment.
If
the amount in the Relevant Currency that may be so purchased for any reason
falls short of the amount originally due, the Company or the Selling Shareholder
making such payment will pay such additional amounts, in the Relevant Currency,
as may be necessary to compensate for the shortfall. Any obligation of any
of
the Company or the Selling Shareholders not discharged by such payment will,
to
the fullest extent permitted by applicable law, be due as a separate and
independent obligation and, until discharged as provided herein, will continue
in full force and effect.
17. Waiver
Of Immunity.
To the
extent that any of the Company or the Selling Shareholders has or hereafter
may
acquire any immunity (sovereign or otherwise) from any legal action, suit or
proceeding, from jurisdiction of any court or from set-off or any legal process
(whether service or notice, attachment in aid or otherwise) with respect to
itself or any of its property, each of the Company and the Selling Shareholders
hereby irrevocably waives and agrees not to plead or claim such immunity in
respect of its obligations under this Agreement.
18. Entire
Agreement.
This
Agreement, together with the schedule and exhibits attached hereto and as the
same may be amended from time to time in accordance with the terms hereof,
contains the entire agreement among the parties hereto relating to the subject
matter hereof and there are no other or further agreements outstanding not
specifically mentioned herein.
19. Severability.
If any
term or provision of this Agreement or the performance thereof shall be invalid
or unenforceable to any extent, such invalidity or unenforceability shall not
affect or render invalid or unenforceable any other provision of this Agreement
and this Agreement shall be valid and enforced to the fullest extent permitted
by law.
20. Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument. Delivery of a signed counterpart of this Agreement
by facsimile transmission shall constitute valid and sufficient delivery
thereof.
21. Headings.
The
headings herein are inserted for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this
Agreement.
22. Time
is
of the Essence.
Time
shall be of the essence of this Agreement. As used herein, the term “business
day” shall mean any day when the Commission’s office in Washington, D.C. is open
for business.
23. Amendment.
This Agreement may only be amended by a written instrument executed by each
of
the parties hereto.
Maxim
Group LLC
[_________],
2006
Page 41 of
42
If
the
foregoing correctly sets forth your understanding, please so indicate in the
space provided below for that purpose, whereupon this letter shall constitute
a
binding agreement among us.
| Very truly yours, | ||
| INCREDIMAIL LTD. | ||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
| SELLING SHAREHOLDERS: | ||
|
▇▇▇▇ ▇▇▇▇▇ |
||
| By: |
__________________________,
as Attorney-in-fact
|
|
|
▇▇▇▇▇ ▇▇▇▇▇ |
||
| By: |
__________________________,
as Attorney-in-fact
|
|
|
▇▇▇ ▇▇▇-▇▇▇▇▇ |
||
| By: |
__________________________,
as Attorney-in-fact
|
|
Maxim
Group LLC
[________],
2006
Page 42 of
42
Accepted
by the Representative, acting for itself and as
Representative
of the Underwriters named on Schedule
A
attached hereto,
as
of the date first written above:
| MAXIM GROUP LLC | |||
| By: | |||
|
|
|||
| Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Title: Director of Investment Banking |
[End
of
Signature Pages to Underwriting Agreement]
SCHEDULE
A
Underwriters
|
Underwriter
|
Total
Number of Firm
Shares
to be Purchased
|
Number
of Additional Shares
to
be Purchased if Option is
Fully
Exercised
|
|
Maxim
Group LLC
|
||
SCHEDULE
B
Selling
Shareholders
|
Selling
Shareholder
|
Ordinary
Shares
Subject
to Over-Allotment Option
|
|
▇▇▇▇
▇▇▇▇▇
|
198,833
|
|
▇▇▇▇▇
▇▇▇▇▇
|
159,067
|
|
▇▇▇
▇▇▇-▇▇▇▇▇
|
17,100
|
ANNEX
I
Form
of Lock-Up Agreement
Lock-Up
Agreement
[Date]
MAXIM
GROUP LLC
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Re:
IncrediMail
Ltd. Lock-Up Agreement
Ladies
and
Gentlemen:
This
letter agreement (this “Agreement”)
relates
to the public offering (the “Offering”)
by
IncrediMail Ltd., a company organized and existing under the laws of the State
of Israel (the “Company”),
of an
aggregate of [_________] of its ordinary shares, par value NIS 0.01 per share
(the “Ordinary Shares”).
The
Offering is governed by the certain Underwriting Agreement, dated as of
[________] (the “Underwriting
Agreement”),
by and
between the Company and Maxim Group LLC (the “Representative”),
as
representative of the several underwriters named therein.
In
order
to induce the Representative to underwrite the Offering, the undersigned hereby
agrees that, without the prior written consent of the Representative, which
consent shall not be unreasonably withheld, during the period from the date
hereof until and through the twelve (12) month anniversary of the closing of
the
offering contemplated by the Underwriting Agreement (the “Lock-Up
Period”),
the
undersigned: (a) will not, directly or indirectly, offer, sell, agree to offer
or sell, solicit offers to purchase, grant any call option or purchase any
put
option with respect to, pledge, borrow or otherwise dispose of any Relevant
Security (as defined below), and (b) will not establish or increase any “put
equivalent position” or liquidate or decrease any “call equivalent position”
with respect to any Relevant Security (in each case within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, and the rules
and
regulations promulgated thereunder), or otherwise enter into any swap,
derivative or other transaction or arrangement that transfers to another, in
whole or in part, any economic consequence of ownership of a Relevant Security,
whether or not such transaction is to be settled by delivery of Relevant
Securities, other securities, cash or other consideration [; provided,
however,
and
notwithstanding the foregoing, beginning on the sixth month anniversary of
the
closing of the Offering and prior to the one year anniversary of the closing
of
the Offering, the undersigned shall be permitted to sell,
encumber, grant any option for sale of or otherwise dispose of up to 20% of
the
Relevant Securities held by the undersigned per calendar month](1).
As
used
herein, the term “Relevant
Security”
means
any Ordinary Shares or other security of the Company thereof that is convertible
into, or exercisable or exchangeable for Ordinary Shares or equity securities
of
the Company or that holds the right to acquire any Ordinary Shares or equity
securities of the Company or any other such Relevant Security.
(1)
Bracketed language to be added for each Lock-Up Party who is not a director,
officer or employee of the Company or a Selling Shareholder in the
Offering.
The
undersigned hereby authorizes the Company during the Lock-Up Period to cause
any
transfer agent for the Relevant Securities to decline to transfer, and to note
stop transfer restrictions on the stock register and other records relating
to,
Relevant Securities for which the undersigned is the record holder and, in
the
case of Relevant Securities for which the undersigned is the beneficial but
not
the record holder, agrees during the Lock-Up Period to cause the record holder
to cause the relevant transfer agent to decline to transfer, and to note stop
transfer restrictions on the stock register and other records relating to,
such
Relevant Securities.
The
undersigned hereby further agrees that, without the prior written consent of
the
Representative, which consent shall not be unreasonably withheld, during the
Lock-Up Period the undersigned will not: (x) file or participate in the filing
with the Securities and Exchange Commission of any registration statement,
or
circulate or participate in the circulation of any preliminary or final
prospectus or other disclosure document with respect to any proposed offering
or
sale of a Relevant Security and (y) exercise any rights the undersigned may
have
to require registration with the Securities and Exchange Commission of any
proposed offering or sale of a Relevant Security.
The
undersigned hereby represents and warrants to the Representative and the Company
that the undersigned has full power and authority to enter into this Agreement
and that this Agreement constitutes the legal, valid and binding obligation
of
the undersigned, enforceable in accordance with its terms. Upon request, the
undersigned will execute any additional documents necessary in connection with
enforcement hereof. Any obligations of the undersigned shall be binding upon
the
successors and assigns of the undersigned from the date first above written.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York, without regard to the conflicts of laws principles thereof.
Delivery of a signed copy of this letter by facsimile transmission shall be
effective as delivery of the original hereof.
| Very truly yours, | ||
| |
|
|
|
|
||
ANNEX
II
Form
of Opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
[DATE]
Maxim
Group LLC
As
Representative of the Several Underwriters
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
| Re: | IncrediMail Ltd. — [____________] Ordinary Shares |
Ladies
and
Gentlemen:
We
have
acted as U.S. securities counsel to IncrediMail Ltd., an Israeli company
(the
“Company”), in connection with the issuance and sale by the Company of
[________] ordinary shares (the “Shares”), NIS 0.01 par value per share,
pursuant to the terms of the Underwriting Agreement dated ________ __, 2006
(the
“Underwriting Agreement”) between the Company and the several Underwriters named
in Schedule A thereto, acting through Maxim Group LLC as their Representative.
In addition, we have acted as U.S. securities counsel to the “Selling
Shareholders” listed on Schedule B to the Underwriting Agreement in connection
with the possible sale of the Additional Shares under the Underwriting
Agreement. This opinion is furnished to you pursuant to Section 7(c) of the
Underwriting Agreement. All capitalized terms used herein and not otherwise
defined shall have the respective meanings assigned to them in the Underwriting
Agreement.
In
connection with this opinion, we have examined such corporate records,
documents, instruments, certificates of public officials and of the Company
and
such questions of law as we have deemed necessary for the purpose of rendering
the opinions set forth herein. We have also examined the Registration Statement
on Form F-1 (No. 333-129246) filed by the Company relating to the Shares
and
Amendments No. 1, 2, 3, 4 and 5 thereto as filed with the Securities and
Exchange Commission (the “Commission”) in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the “Act”), and evidence satisfactory to us
that the Registration Statement, as so amended, became effective under the
Act
on ________ __, 2006. The Registration Statement, as amended when it became
effective, is hereinafter referred to as the “Registration Statement,” and the
Prospectus in the form filed with the Commission pursuant to its Rule 424(b)
is
hereinafter referred to as the “Prospectus.”
Maxim
Group LLC
[DATE]
Page
Two
In
such
examination, we have assumed the genuineness of all signatures and the
authenticity of all items submitted to us as originals and the conformity
with
originals of all items submitted to us as copies. In making our examination
of
documents executed by parties other than the Company or the Selling
Shareholders, we have assumed that each other party has the power and authority,
or capacity, to execute and deliver, and to perform and observe the provisions
of, such documents, and the due authorization by each such party of all
requisite action and the due execution and delivery of such documents by
each
such party, and that such documents constitute the legal, valid and binding
obligations of each such party enforceable against such party in accordance
with
their terms.
With
respect to the opinions expressed in paragraphs 6 (but only with respect
to
threatened actions, suits or proceedings), 9, 10, 11 and 12 below, we have
relied solely with respect to certain factual matters upon a Certificate
of the
Company attached hereto as Exhibit A. We have made no independent
investigation as to whether the matters addressed in such certificate are
accurate or complete.
The
opinions hereinafter expressed are subject to the following qualifications
and
exceptions:
(i)
The
effect of bankruptcy, insolvency, reorganization, arrangement, moratorium
or
other similar laws relating to or affecting the rights of creditors generally,
including, without limitation, laws relating to fraudulent transfers or
conveyances, preferences and equitable subordination.
(ii)
Limitations imposed by general principles of equity upon the availability
of
equitable remedies or the enforcement of provisions of the Underwriting
Agreement, and the effect of judicial decisions which have held that certain
provisions are unenforceable where their enforcement would violate the implied
covenant of good faith and fair dealing, or would be commercially unreasonable,
or where their breach is not material.
(iii)
The
provisions of Section 8 of the Underwriting Agreement purporting to provide
for
indemnification under certain circumstances may be unenforceable as violative
of
public policy expressed in the Act, and accordingly, we are unable to render
an
opinion as to the enforceability of such provisions.
(iv)
Our
opinion is based upon current statutes, rules, regulations, cases and official
interpretive opinions, and it covers certain items that are not directly
or
definitively addressed by such authorities.
(v)
We
have assumed that the Underwriting Agreement, Custody Agreements and Powers
of
Attorney have been duly authorized, executed and delivered by the Company
and
the Selling Shareholders, as applicable, under the laws of the State of Israel.
We have also assumed that the appointment by each of the Company and the
Selling
Shareholders of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP as their designee, appointee and
authorized agent for the purpose described in Section 15 of the Underwriting
Agreement is legal, valid and binding under the laws of the State of
Israel.
Maxim
Group LLC
[DATE]
Page
Three
(vi)
Except to the extent encompassed by an opinion set forth below with respect
to
the Company or the Selling Shareholders, we express no opinion as to the
effect
on the opinions expressed herein of (1) the compliance or non-compliance
of any
party to the Underwriting Agreement with any law, regulation or order applicable
to it, or (2) the legal or regulatory status or the nature of the business
of
any such party.
(vii)
We
express no opinion as to whether the provision of the Underwriting Agreement
under which the Company or the Selling Shareholders submit to the jurisdiction
of one or more federal courts located in the State of New York is subject
to
application of the doctrine of forum non conveniens or a similar
statutory principal, or as to the subject matter jurisdiction of the United
States District Court for the Southern District of New York.
When
reference is made herein to our knowledge, it means the actual knowledge
attributable to our representation of the Company of only those partners
and
associates who have given substantive attention to the Prospectus, the
Underwriting Agreement, the preparation and negotiation thereof and the
transactions contemplated thereby.
Based
upon
and subject to the foregoing, we are of the opinion that:
1.
The
Underwriting Agreement constitutes the legal, valid and binding obligation
of
the Company and each Selling Shareholder.
2.
The
Registration Statement has been declared effective under the Act, and we
are not
aware that any stop order suspending the effectiveness thereof has been issued
or any proceedings for that purpose have been instituted or are pending or
threatened under the Act.
3.
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).
4.
The
Registration Statement, as of the effective date thereof, complied as to
form in
all material respects with the requirements of the Act, including the
requirements of Form F-1 (except as to the financial statements, supporting
schedules, footnotes and other financial and statistical information included
therein, as to which we express no opinion).
5.
The
Ordinary Shares, including the Firm Shares and the Additional Shares, have
been
approved for quotation on the Nasdaq Capital Market, subject to official
notice
of issuance and evidence of satisfactory distribution.
6.
To our
knowledge, 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
having jurisdiction over the Company, its business or property, and specifically
naming the Company, of a character required to be disclosed in the Prospectus
that is not adequately disclosed in the Prospectus.
Maxim
Group LLC
[DATE]
Page
Four
7.
To our
knowledge, there is no contract or other document of a character required
to be
described in the Prospectus or to be filed as an exhibit to the Registration
Statement that is not described or filed as required.
8.
The
statements included in the Prospectus under the captions “Risk Factors - New
laws and regulations applicable to e-commerce, Internet advertising, privacy
and
data collection, and uncertainties regarding the application or interpretation
of existing laws and regulations, could harm our business,” “Business -
Government Regulations” and “Shares Eligible for Future Sale,” insofar as and
solely to the extent that such statements summarize United States federal
laws,
rules and regulations, and agreements, documents or proceedings discussed
therein, fairly present and summarize, in all material respects, the information
referred to therein.
9.
The
statements included in the Prospectus under the captions “Risk Factors - U.S.
investors in our company could suffer adverse tax consequences if we are
characterized as a passive foreign investment company” and “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, fairly
presents and summarize, in all material respects, the information referred
to
therein.
10.
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 required to register as an “investment company” as
defined in the Investment Company Act of 1940, as amended.
11.
Except
as otherwise set forth in the Prospectus, to our knowledge, 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 pursuant
to
any contract or other instrument except for such rights as may have been
fully
terminated, satisfied or waived prior to the effectiveness of the Registration
Statement, copies of which terminations, satisfactions or waivers have been
provided to us.
12.
To our
knowledge, neither the Company nor any of its Affiliates has, prior to the
date
hereof, made any offer or sale of any securities that is required to be
“integrated” pursuant to the Act with the offer and sale of the Shares pursuant
to the Registration Statement.
13.
The
Company has appointed ▇▇▇▇▇▇▇ & Associates as the Company’s authorized
representative in the United States in conformity with the Act and, to our
knowledge, such appointment is in full force and effect.
Maxim
Group LLC
[DATE]
Page
Five
14.
The
Custody Agreement and the Power of Attorney of each Selling Shareholder is
legally binding upon each such Selling Shareholder.
15.
No
authorization, approval or consent of, and no filing with or order of, any
court
or governmental authority or agency is required in connection with the purchase
of the Shares by the Underwriters pursuant to the Underwriting Agreement,
except
such as have been obtained under the Act and such as may be required under
the
Exchange Act, under applicable state securities or blue sky laws and by the
NASD
Corporate Financing Department.
16.
Under
the laws of the State of New York relating to personal jurisdiction: (a)
the
Company and the Selling Shareholders have, under the Underwriting Agreement,
and
the Company, under the Representative’s Purchase Option, 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,
respectively, the Underwriting Agreement and the Purchase Option and the
transactions contemplated thereby and have validly and effectively waived
any
objection to the venue of a proceeding in any such court as provided in Section
15 of the Underwriting Agreement, (b) their appointment thereunder of ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇ LLP as their authorized agent for service of process is valid,
legal and binding and (c) service of process in the manner set forth in Section
15 of the Underwriting Agreement and Section 9.5 of the Purchase Option will
be
effective to confer valid personal jurisdiction of such court over the Company
and Selling Shareholders.
In
addition, we have participated in conferences with your representatives and
with
representatives of the Company and its accountants concerning the Registration
Statement, the Prospectus and the General Disclosure Package and have considered
the matters required to be stated therein and the statements contained therein,
although we have not independently verified the accuracy, completeness or
fairness of such statements. Based upon and subject to the foregoing, nothing
has come to our attention that leads us to believe that (i) the Registration
Statement, at the time it became effective, contained an untrue statement
of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, (ii) the Prospectus,
at the time it was filed with the Commission pursuant to Rule 424(b) under
the
Act or as of the date hereof, contained an untrue statement of a material
fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they
were made, not misleading or (iii) the General Disclosure Package as of its
date
or, as the case may be, dates, 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 in light of the circumstances under which
they
were made, not misleading (it being understood that we have not been requested
to and do not make any comment in this paragraph with respect to the financial
statements and other financial information contained in the Registration
Statement or Prospectus and with respect to the statistical data and other
information contained in any industry report mentioned in the Prospectus).
We do
not assume any responsibility for the accuracy, completeness or fairness
of the
statements contained in the Registration Statement, Prospectus and the General
Disclosure Package except as set forth in paragraphs 8 and 9
hereof.
Maxim
Group LLC
[DATE]
Page
Six
We
express
no opinion as to matters governed by laws of any jurisdiction other than
the
laws of the State of New York and the federal laws of the United States of
America, as in effect on the date hereof.
This
letter is furnished by us to you as the Representative of the several
Underwriters, and is solely for the benefit of the several Underwriters.
Neither
this letter nor any opinion expressed herein may be relied upon by, nor may
copies be delivered or disclosed to, any other person or entity without our
prior written consent.
| Very truly yours, | ||
| |
|
|
|
|
||
ANNEX
III
Form
of Opinion of Erdinast, ▇▇▇ ▇▇▇▇▇▇ & Co.
We
are
Israeli counsel to IncrediMail, Ltd., a company organized under the laws
of the
State of Israel (the “Company”), and have been retained by the
Company to act on its behalf on matters relating to the issuance and sale
by the
Company of [ ] ordinary shares, NIS 0.01 par value per share, of the Company
(the “Shares”) pursuant to the terms of an Underwriting
Agreement, dated _____________, 2006 (the “Underwriting
Agreement”) between the Company and the several Underwriters named in
Schedule A thereto, acting through you as their Representative. In addition,
we
have acted as Israeli counsel to the Selling Shareholders listed on Schedule
B
to the Underwriting Agreement in connection with the possible sale of the
Additional Shares under the Underwriting Agreement. In such capacities we
are
furnishing this opinion to you pursuant to Section 7(d) of the Underwriting
Agreement. This opinion does not address any tax issues and any intellectual
property issues which issues, are explicitly excluded from the scope of this
opinion.
All
capitalized terms used herein have the meanings defined for them in the
Underwriting Agreement unless otherwise defined herein and reference to the
Underwriting Agreement is made to said agreement in its entirety, including
all
schedules and exhibits thereto, and all references included therein.
We
have
examined (i) the Underwriting Agreement and all exhibits and schedules attached
thereto, (ii) the Company’s incorporation documents and certain minutes and
unanimous written consents provided to us by the Company’s officers, and (iii)
the Registration Statement on Form F-1 (No. 333-129246) filed by the Company
relating to the Shares and Amendments No. 1, 2, 3 [ ] thereto as filed with
the
Securities and Exchange Commission. The Registration Statement, as amended
when
it became effective, is hereinafter referred to as the “Registration Statement,”
and the Prospectus in the form filed with the Commission pursuant to its
Rule
424(b) is hereinafter referred to as the “Prospectus.”
In
rendering an opinion on the matters hereinafter set forth, we have assumed
the
authenticity of all original documents submitted to us as certified, conformed
or photographic copies thereof, the genuineness of all signatures and the
due
authenticity of all persons executing such documents. We have assumed the
same
to have been properly given and to be accurate, we have assumed the truth
of all
facts communicated to us by the Company or the Selling Shareholders, and
we have
also assumed that all minutes and protocols of meetings of the Company’s board
of directors and shareholders meetings of the Company which have been provided
to us are true, accurate and have been properly prepared in accordance with
the
Company’s incorporation documents and all applicable laws.
With
respect to the opinions expressed in Paragraphs 5 (but only with respect
to
threatened actions, suits or proceedings), 7(b), 10(b), 10(d) and 12, insofar
as
such opinions relate to factual matters, we have relied solely upon the
Certificate of the Company, attached hereto as Exhibit A. We have made no
independent investigation as to whether the foregoing certificate is accurate
or
complete.
As
used in
this opinion, the expressions “to our knowledge”, “known to us”, “we are not
aware” or similar language with reference to matters of fact means that our
knowledge is based solely on inquiries of officers of the Company and review
of
the documentation provided to us by the Company but without any further
independent factual investigation, and the actual knowledge of the lawyers
currently of this firm who have worked on this transaction. In connection
with
this opinion, we have not undertaken any independent investigation to determine
the existence or absence of any fact, and no inference as to our knowledge
of
the existence or absence of any fact should be drawn from our representation
of
the Company and the Selling Shareholders or the rendering of the opinion
set
forth below.
For
purposes of this opinion, we are not members of the Bar of any jurisdiction
other than the State of Israel and we do not opine with respect to the laws
of
any jurisdiction other than the State of Israel.
Our
opinion below is further subject to the following qualifications and exceptions:
(i) the effect of laws, judicial determination or governmental actions affecting
creditors’ rights or the Company’s performance of its obligations under the
Underwriting Agreement; (ii) limitations imposed by general principles of
equity
or law upon the availability of equitable remedies or the enforcement of
provisions of any documents referred to herein and the effect of judicial
decisions which have held that certain provisions are unenforceable where
their
enforcement would violate the implied covenant of good faith and fair dealing,
would violate minority shareholders rights or would be commercially
unreasonable; and (iii) our opinion expressed herein is based upon current
statutes, rules, regulations, cases and official interpretive opinions which,
in
our experience, are normally applicable to the type of transaction provided
for
in the Underwriting Agreement and the Offering.
Based
upon
and subject to the foregoing, we are of the opinion that:
1.
The
Company has been duly incorporated and is validly existing as a company 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, and to the best of our knowledge,
no
proceeding has been instituted by the Registrar of Companies in Israel for
the
striking off of the Company.
2.
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 descriptions
thereof contained in the Prospectus. All of the issued and outstanding shares
of
capital of the Company (including, without limitation, all Additional Shares
which may be sold by the Selling Shareholders pursuant to the Underwriting
Agreement and all Relevant Securities and all Ordinary Shares issuable upon
conversion, exercise or exchange of any Relevant Securities in accordance
with
the terms thereof), are, or will be when issued, as the case may be duly
and
validly authorized and issued and, to the best of our knowledge, not in
violation of or subject to any preemptive or similar right granted by the
Company that does or will entitle any foreign or domestic individual,
corporation, trust, partnership, joint venture, limited liability company
or
other entity (each, a “Person”), upon the issuance or sale of
any security, to acquire from the Company any Relevant Security, except for
such
rights as may have been fully terminated, satisfied or waived prior to the
Closing Date.
3.
The
Shares to be issued and sold by the Company as contemplated by the Underwriting
Agreement have been duly and validly authorized. When issued, delivered and
paid
for in accordance with the Underwriting Agreement and as described in the
Prospectus on the Closing Date all such Shares will be duly and validly issued
and fully paid, will have been issued in compliance with the Companies Law,
and
assuming that the Shares were not offered in Israel to investors that are
not
qualified under Section 15A(b) of the Securities Law, 5729-1968 (the
“Securities Law”), in excess of the number of non-qualified
investors permitted under Section 15A(a)(1) thereof, under the Securities
Law
and the rules and regulations promulgated thereunder and, to the best of
our
knowledge, will not have been issued in violation of or subject to any
preemptive or similar right granted by the Company that does or will entitle
any
Person to acquire any Relevant Security from the Company upon issuance or
sale
of Shares in the Offering, except for such rights as may have been fully
terminated, satisfied or waived prior to the Closing Date.
2
4.
All
private offers and sales of Company securities made prior to the date hereof
by
the Company have been validly undertaken under the Companies Law, and assuming
that the securities were not offered in Israel to investors that are not
qualified under Section 15A(b) of the Securities Law, in excess of the number
of
non-qualified investors permitted under Section 15A(a)(1) thereof, under
the
Securities Law and the rules and regulations promulgated
thereunder.
5.
To the
best of our knowledge, there are no pending or threatened actions, suits
or
proceedings by or before any Israeli (i) court or governmental agency, (ii)
authority or body or (iii) any arbitrator, involving the Company, which are
not
adequately disclosed in the Prospectus.
6.
The
statements included in the Sections of the Prospectus captioned “Description of
Share Capital,” “Management,” “Enforceability of Civil Liabilities,” and the
following Sub-Sections of the “Business” Section of the Prospectus: “Government
Regulation,” “Facilities and Equipment,” Litigation,” and “Corporate
Information,”, insofar as such statements summarize legal matters as to Israeli
law (excluding tax and intellectual property matters), provisions of the
Company’s articles of association, or agreements, documents or proceedings
discussed therein (insofar that all of such agreements, documents or proceedings
are 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.
7.
To the
best of our knowledge, the Company is not in violation or default of: (a)
any
provision of its articles of association, as currently in effect or as proposed
to be in effect as of the Closing Date or (b) any Israeli statute, law, rule
or
regulation applicable to the Company or any of its properties, as applicable,
provided, however that for purposes of the opinion contained in this Paragraph
7(b) we make no opinion as to Israeli labor law.
8.
The
Underwriting Agreement has been duly authorized, executed and delivered by
the
Company, and all corporate action required by the laws of the State of Israel
and the articles of association of the Company (as currently in effect) to
be
taken by the Company for the due and proper authorization and issuance of
the
Firm Shares and the offering, sale and delivery of the Firm Shares has been
validly and sufficiently taken. 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.
9.
Assuming that the securities are not offered in Israel to investors that
are not
qualified under Section 15A(b) of the Securities Law, in excess of the number
of
non-qualified investors permitted under Section 15A(a)(1), thereof, no consent,
approval, authorization, filing with or order of any Israeli (i) court or
(ii)
governmental agency or body is required in connection with the transactions
contemplated by the Underwriting Agreement, except for the approval of the
Investment Center of the Israel Ministry of Industry and Trade, which has
been
obtained by the Company.
3
10.
Neither the sale of the Shares to the Underwriters, the consummation of any
other of the transactions contemplated by the Underwriting Agreement nor
the
fulfillment of the terms of the Underwriting Agreement, the Custody Agreement
or
the Power of Attorney by, as the case may be, the Company or the Selling
Shareholders 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
Company, except for conflicts, violations or defaults which would not have
a
Material Adverse Effect, pursuant to: (a) the articles of association of
the
Company (as currently in effect or as proposed to be in effect as of the
Closing
Date), (b) to the best of our knowledge, the terms of any 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 (an
“Obligation”), provided that such Obligation is governed by
Israeli law, or (c) any Israeli statute, law, rule or regulation applicable
to
transactions of this type (assuming that the securities are not offered in
Israel to investors that are not qualified under Section 15A(b) of the
Securities Law, in excess of the number of non-qualified investors permitted
under Section 15A(a)(1), thereof), or (d) to the best of our knowledge, any
judgment, order or decree applicable to the Company or any Selling Shareholder
of any Israeli court, regulatory body, administrative agency, governmental
body,
arbitrator or other authority having jurisdiction over the Company or any
of its
properties.
11.
Each
of the Underwriting Agreement, the Custody Agreement and the Power of Attorney
has been duly authorized, executed and delivered by each Selling Shareholder,
and all corporate or other legal action required by the laws of the State
of
Israel and, as the case may be, under the governing documents of the Selling
Shareholders, to be taken by the Selling Shareholders for the due and proper
sale of the Additional Shares has been validly and sufficiently
taken.
12.
To the
best of our knowledge and except as otherwise set forth in the Prospectus,
no
holders of securities of the Company have rights under any written agreement
with the Company to the registration of Ordinary Shares or any other securities
of the Company under the Registration Statement.
13.
It is
not necessary that the Underwriting Agreement or any document required to
be
furnished thereunder be filed or recorded with any court or other governmental
authority in the State of Israel in order to ensure the legality, validity
or
admissibility into evidence in the State of Israel of each of the Underwriting
Agreement and any such other document.
14.
To the
best of our knowledge, the Company has such authorizations of, and has made
all
filings with and notices to, all Israeli governmental or regulatory authorities
and all Israeli courts and other Israeli tribunals, as are necessary to own,
lease, license and operate its properties and to conduct its businesses as
described in the Prospectus, except where the failure to have any such
authorization or to make any such filing or notice would not, singly or in
the
aggregate, have a Material Adverse Effect. To the best of our knowledge,
each
such authorization is valid and in full force and effect and the Company
is in
compliance with all the terms and conditions thereof and with the rules and
regulations of the Israeli authorities and governing bodies having jurisdiction
with respect thereto. To the best of our knowledge, no event has occurred
(including, without limitation, the receipt of any notice from any authority
or
governing body) which allows or, after notice or lapse of time or both, would
allow, revocation, suspension or termination of any such authorization or
results or, after notice or lapse of time or both, would result in any other
impairment of the rights of the holder of any such authorization.
4
15.
The
appointment by the Company and each Selling Shareholder of ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP as the Company’s authorized agent for the purpose described in
Section 15 of the Underwriting Agreement is legal, valid and binding under
the
laws of the State of Israel.
16.
The
appointment by the Company of ▇▇▇▇▇▇▇ & Associates as the Company’s
authorized representative in the United States in connection with the execution
and filing of the Registration Statement with the Securities and Exchange
Commission is valid and binding under the laws of the State of Israel.
17.
Under
the laws of the State of Israel, the submission by the Company and each Selling
Shareholder under the Underwriting 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 each such Selling Shareholder.
If
properly and timely brought to the attention of a court in accordance with
the
laws of Israel, and subject to the court’s inherent discretion, the absence of
“special circumstances” and the application of the rule of
“forum-non-convenience” (each as defined under Israeli law), the submission by
the Company and each Selling Shareholder under the Underwriting Agreement
to the
jurisdiction of any court sitting in New York and the designation of New
York
law to apply to this Agreement would be enforceable in any judicial proceeding
in Israel.
18.
Subject to the conditions and qualifications set forth in the Registration
Statement and the Prospectus, a final, unappealable and conclusive judgment
against the Company or any Selling Shareholder for a definitive sum of money
entered by a court of competent jurisdiction in the United States could be
enforced by an Israeli court.
This
opinion shall be governed by the laws of the State of Israel, and exclusive
jurisdiction with respect thereto under all and any circumstances, and under
all
and any proceedings shall be vested only and exclusively with the courts
of Tel
Aviv in the State of Israel. This opinion is rendered to you subject to,
based
and in reliance on your agreement to comply with the exclusive choice of
law and
jurisdiction contained herein and to refrain under all and any circumstances
from initiating any proceedings or taking any legal action relating to this
opinion outside the State of Israel.
The
opinions expressed herein are rendered to you and may be relied upon only
by
you, and only in relation with the Underwriting Agreement. This opinion may
not
be used or relied upon by any other person or for any other purpose without
our
express prior written consent.
5
ANNEX
IV
ISSUER-REPRESENTED
FREE
WRITING PROSPECTUSES
[to
be
completed]