1
Exhibit 1.1
5,000,000
CLICKSOFTWARE TECHNOLOGIES LTD.
ORDINARY SHARES, PAR VALUE NIS 0.02 PER SHARE
UNDERWRITING AGREEMENT
__________________, 2000
XXXXXX BROTHERS INC.
CIBC WORLD MARKETS
XX XXXXX SECURITIES CORP.
FIDELITY CAPITAL MARKETS
(a division of National Financial Services Corporation)
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
ClickSoftware Technologies Ltd., a corporation incorporated under
the laws of the State of Israel (the "Company"), proposes to sell to the
Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
5,000,000 (the "Firm Shares") of the Company's Ordinary Shares, par value NIS
0.02 per share ("Ordinary Shares"). In addition, the Company proposes to grant
to the Underwriters an option to purchase up to an additional 750,000 Ordinary
Shares on the terms and for the purposes set forth in Section 2 (the "Option
Shares"). The Firm Shares and the Option Shares, if purchased, are hereinafter
collectively called the "Shares." This is to confirm the agreement concerning
the purchase of the Shares from the Company by the Underwriters.
1. Representations, Warranties and Agreements of the Company.
Each of the Company and ClickSoftware, Inc. hereby represent, warrant and agree
that:
(a) A registration statement on Form S-1 and amendments
thereto, with respect to the Shares has (i) been prepared by the
Company in conformity with the requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and the rules and
regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, (ii) been
filed with the Commission under the Securities Act and (iii)
become effective under the Securities Act; and a second
registration statement on Form S-1 with
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respect to the Shares (i) may also be prepared by the Company in
conformity with the requirements of the Securities Act and the
Rules and Regulations and (ii) if to be so prepared, will be
filed with the Commission under the Securities Act pursuant to
Rule 462(b) of the Rules and Regulations on the date hereof.
Copies of the first such registration statement and the
amendments to such registration statement, together with the form
of any such second registration statement, have been delivered by
the Company to you as the representatives (the "Representatives")
of the Underwriters. As used in this Agreement, "Effective Time"
means (i) with respect to the first such registration statement,
the date and the time as of which such registration statement, or
the most recent post-effective amendment thereto, if any, was
declared effective by the Commission and (ii) with respect to any
second registration statement, the date and time as of which such
second registration statement is filed with the Commission, and
"Effective Times" is the collective reference to both Effective
Times; "Effective Date" means (i) with respect to the first such
registration statement, the date of the Effective Time of such
registration statement and (ii) with respect to any second
registration statement, the date of the Effective Time of such
second registration statement, and "Effective Dates" is the
collective reference to both Effective Dates; "Preliminary
Prospectus" means each prospectus included in any such
registration statement, or amendments thereof, before it became
effective under the Securities Act and any prospectus filed with
the Commission by the Company with the consent of the
Representatives pursuant to Rule 424(a) of the Rules and
Regulations; "Primary Registration Statement" means the first
registration statement referred to in this Section 1(a), as
amended at its Effective Time, "Rule 462(b) Registration
Statement" means the second registration statement, if any,
referred to in this Section 1(a), as filed with the Commission,
and "Registration Statements" means both the Primary Registration
Statement and any Rule 462(b) Registration Statement, including
in each case all information contained in the final prospectus
filed with the Commission pursuant to Rule 424(b) of the Rules
and Regulations in accordance with Section 5(a) hereof and deemed
to be a part of the Registration Statements as of the Effective
Time of the Primary Registration Statement pursuant to paragraph
(b) of Rule 430A of the Rules and Regulations; and "Prospectus"
means such final prospectus, as first filed with the Commission
pursuant to paragraph (1) or (4) of Rule 424(b) of the Rules and
Regulations. The Commission has not issued any order preventing
or suspending the use of any Preliminary Prospectus.
(b) The Primary Registration Statement conforms (and the
Rule 462(b) Registration Statement, if any, the Prospectus and
any further amendments or supplements to the Registration
Statements or the Prospectus, when they become effective or are
filed with the Commission, as the case may be, will conform) in
all respects to the requirements of the Securities Act and the
Rules and Regulations and do not and will not, as of the
applicable effective date (as to the Registration Statements and
any amendment thereto) and as of the applicable filing date (as
to the Prospectus and any amendment or supplement thereto)
contain any 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 not
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misleading; provided that no representation or warranty is made
as to information contained in or omitted from the Registration
Statements or the Prospectus in reliance upon and in conformity
with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically
for inclusion therein.
(c) The Company and each of its subsidiaries (as defined
in Section 16) have been duly incorporated and are validly
existing as corporations in good standing under the laws of their
respective jurisdictions of incorporation, are duly qualified to
do business and are in good standing as foreign corporations in
each jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires
such qualification, and have all power and authority necessary to
own or hold their respective properties and to conduct the
businesses in which they are engaged; and none of the
subsidiaries of the Company (other than ClickSoftware Inc., a
California company, and ClickService (Europe) Ltd., an English
limited company (collectively, the "Significant Subsidiaries"))
is a "significant subsidiary", as such term is defined in Rule
405 of the Rules and Regulations. The subsidiaries of the Company
listed in Exhibit 21 to the Registration Statement constitute all
of the subsidiaries of the Company required to be listed therein.
(d) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital
of the Company (both before and after giving effect to the
conversion of Shares of the Company as described in the
Prospectus) have been duly and validly authorized and issued, are
fully paid and non-assessable and conform to the description
thereof contained in the Prospectus; and all of the issued shares
of capital of each subsidiary of the Company have been duly and
validly authorized and issued and are fully paid and
non-assessable and are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities
claims, or pre-emptive rights. There are no, and after the
consummation of this offering, there will be no, preemptive or
other rights to subscribe for or to purchase, nor any restriction
upon the voting or transfer of, any Ordinary Shares pursuant to
the Company's Articles of Association, Memorandum of Association
or any agreement or other instrument.
(e) The unissued Shares to be issued and sold by the
Company to the Underwriters hereunder have been duly and validly
authorized and, when issued and delivered against payment
therefor as provided herein, will be duly and validly issued,
fully paid and non-assessable; and the Shares will conform to the
descriptions thereof contained in the Prospectus, except as
described in the Prospectus, there are no outstanding securities
convertible into or exchangeable for, or warrants, rights or
options to purchase from the Company and its subsidiaries, or
obligations of the Company and its subsidiaries to issue, any
class of capital stock of the Company or any of its subsidiaries;
and except as described in the Prospectus, there are no
restrictions on transfer or voting of any capital stock of the
Company pursuant to the Company's Amended and Restated Memorandum
of Association and Amended and Restated Articles of Association
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(the "Memorandum and Articles of Association") or any agreement
to which the Company is a party or by which it may be bound or to
which any of its property or assets may be subject.
(f) Each of the Company and ClickSoftware Inc. has the
full power and authority to enter into this Agreement and this
Agreement has been duly authorized, executed and delivered by
each of them.
(g) The execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions
contemplated hereby do not and will not conflict with or result
in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of
the properties or assets of the Company or any of its
subsidiaries is subject, nor will such actions result in any
violation of the provisions of the Memorandum and Articles of
Association of the Company or the charter or by-laws or similar
organizational documents of any of its subsidiaries or any
statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their properties or assets;
and except for the registration of the Shares under the
Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the
Exchange Act and applicable U.S. state securities laws in
connection with the purchase and distribution of the Shares by
the Underwriters, no consent, approval, authorization or order
of, or filing or registration with, any such court or
governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby.
(h) (i) There are no contracts, agreements or
understandings between the Company and any person granting such
person the right (other than rights which have been waived or
satisfied) to require the Company to file a registration
statement under the Securities Act with respect to any securities
of the Company owned or to be owned by such person, except as
described in the Prospectus, or (ii) to require the Company to
include such securities in the securities registered pursuant to
the Registration Statements or in any securities being registered
pursuant to any other registration statement filed by the Company
under the Securities Act.
(i) Except as described in the Prospectus, the Company has
not sold or issued any Ordinary Shares or securities convertible
into or exchangeable for, Ordinary Shares during the six-month
period preceding the date of the Prospectus, including any sales
pursuant to Rule 144A under, or Regulations D or S of, the
Securities Act.
(j) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial
statements included in the Prospectus,
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any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental
action, injunction, order or decree, otherwise than as set forth
or contemplated in the Prospectus; and, since such date, there
has not been any change in the share capital or long-term debt of
the Company or any of its subsidiaries or any material adverse
change, or any development that could reasonably be expected to
result in a material adverse change, in or affecting the general
affairs, management, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the Prospectus.
(k) The financial statements (including the related notes
and supporting schedules) filed as part of the Registration
Statements or included in the Prospectus present fairly the
financial condition and results of operations of the entities
purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally
accepted accounting principles in the U.S. ("U.S. GAAP") applied
on a consistent basis throughout the periods involved. The
summary consolidated financial data and selected consolidated
financial data included in the Prospectus present fairly the
financial information shown therein and have been compiled on a
basis consistent with the audited financial statements of the
Company. The pro forma consolidated financial information
included in the Prospectus (i) is presented fairly in all
material respects, (ii) has been prepared in accordance with the
Rules and Regulations with respect to pro forma financial
statements and (iii) has been properly compiled on the bases
described therein, and the assumptions used in the preparation of
the pro forma consolidated financial information included in the
Prospectus are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances
referred to therein.
(l) Luboshitz Kasierer, Member Firm of Xxxxxx Xxxxxxxx,
who have certified certain financial statements of the Company,
whose report appears in the Prospectus and who have delivered the
initial letter referred to in Section 7(j) hereof, are
independent public accountants as required by the Securities Act
and the Rules and Regulations and are duly appointed statutory
auditors of the Company pursuant to Israeli law and regulations.
(m) The Company and each of its subsidiaries have good and
marketable title to all personal property owned by them, in each
case free and clear of all liens, encumbrances and defects except
such as are described in the Prospectus or such as do not
materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of
such property by the Company and its subsidiaries; and all real
property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and
enforceable leases, with such exceptions as are not material and
do not interfere with the use made and proposed to be made of
such property and buildings by the Company and its subsidiaries.
Neither the Company nor any of its subsidiaries owns any real
property.
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(n) The Company and each of its subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as
is adequate for the conduct of their respective businesses and
the value of their respective properties and as is customary for
companies engaged in similar businesses in similar industries.
(o) To the Company's knowledge, except as described in the
Prospectus, the Company and each of its subsidiaries each own or
possess the adequate right to use, or can acquire on reasonable
terms, all patents, patent rights, trademarks, trade names,
service marks, service names, copyrights, license rights,
know-how (including trade secrets and other unpatented and
unpatentable proprietary or confidential information, systems or
procedures), Internet domain names and other intellectual
property rights ("Intellectual Property") necessary to carry on
the business of the Company and the subsidiaries; except as
specifically disclosed in the Prospectus, to the Company's
knowledge, neither the Company nor any subsidiary has infringed,
or received notice of conflict with, any Intellectual Property of
any other person or entity. The Company and each of its
subsidiaries has taken all reasonable steps necessary to secure
interests in such Intellectual Property from its contractors.
There are no outstanding options, licenses or agreements of any
kind relating to the Intellectual Property of the Company or any
subsidiary that are required to be described in the Prospectus
and are not described in all material respects. Neither the
Company nor any of its subsidiaries is a party to or bound by any
options, licenses or agreements with respect to the Intellectual
Property of any other person or entity that are required to be
set forth in the Prospectus and are not described in all material
respects. None of the technology employed by the Company or any
of its subsidiaries has been obtained or is being used by the
Company or any of its subsidiaries in violation of any
contractual obligation binding on the Company or any of its
subsidiaries or, to the Company's knowledge, any of its officers,
directors or employees or otherwise in violation of the rights of
any persons. Except as specifically disclosed in the Prospectus,
the Company knows of no infringement by others of Intellectual
Property owned by or licensed to the Company.
(p) The Company and each of its subsidiaries is conducting
business, in compliance with all applicable laws, rules and
regulations, and holds all necessary licences, certificates and
permits (collectively, "Permits"), of the jurisdictions in which
it is conducting business, except where failure to be so in
compliance would not materially adversely affect the consolidated
financial position, shareholders' equity, results of operations,
business or prospects of the Company and its subsidiaries. For
purposes of this paragraph, "Permits" shall include Permits
relating to (1) any financing approved for research and
development projects through the Office of the Chief Scientist,
Ministry of Industry and Trade of the State of Israel; (2) any
Approved Enterprise status of the Company granted by the
Investment Center of the State of Israel; and (3) any grant
received from the Fund for the Encouragement of Overseas marking
Activities, the Company is in full compliance with and is not in
any default under
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the provisions of: (i) all applicable laws and regulations with
respect thereto; and (ii) all applicable letters of undertaking
and certificates of approval.
(q) Neither the Company, nor to the Company's knowledge,
any of its affiliates, has taken or may take, directly or
indirectly, any action designed to cause or result in, or which
has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the
Ordinary Shares to facilitate the sale or resale of the Shares.
The Company acknowledges that the Underwriters may engage in
passive market making transactions in the Shares on the NASDAQ
National Market System in accordance with Regulation M under the
Exchange Act.
(r) There are no legal or governmental proceedings pending
to which the Company or any of its subsidiaries is a party or of
which any property or asset of the Company or any of its
subsidiaries is the subject which are reasonably likely to have a
material adverse effect on the consolidated financial position,
shareholders' equity, results of operations, business or
prospects of the Company and its subsidiaries; and to the
Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(s) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits
to either of the Registration Statements by the Securities Act or
by the Rules and Regulations which have not been described in the
Prospectus or filed as exhibits to either of the Registration
Statements or incorporated therein by reference as permitted by
the Rules and Regulations.
(t) No relationship, direct or indirect, exists between or
among the Company on the one hand, and the directors, officers,
shareholders, customers or suppliers of the Company on the other
hand, which is required to be described in the Prospectus which
is not so described.
(u) No labor disturbance by the employees of the Company
exists or, to the knowledge of the Company, is imminent which
might be expected to have a material adverse effect on the
consolidated financial position, shareholders' equity, results of
operations, business or prospects of the Company and its
subsidiaries.
(v) The Company is in compliance in all material respects
with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA");
no "reportable event" (as defined in ERISA) has occurred with
respect to any "pension plan" (as defined in ERISA) for which the
Company would have any liability; the Company has not incurred
and does not expect to incur liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and
published
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interpretations thereunder (the "Code"); and each "pension plan"
for which the Company would have any liability that is intended
to be qualified under Section 401(a) of the Code is so qualified
in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such
qualification.
(w) Other than pursuant to applicable law, there are no
agreements or arrangements (whether legally enforceable or not)
for the payment of any pensions, allowances, lump sums or other
like benefits on retirement or on death or termination or during
periods of sickness or disablement for the benefit of any officer
or former officer or employee or former employee of the Company
or for the benefit of the dependents of any such person in
operation at the date hereof. The Company has fulfilled all its
obligations under the law to its employees, including with
respect to payment of overtime work, under the Hours of Work and
Rest Law. Other than pursuant to orders extending certain
provisions of collective bargaining agreements between the
Histadrut (General Federation of Labor in Israel) and the
Coordinating Bureau of Economic Organization (the federation of
employers' organizations) or otherwise as required by applicable
law, the Company is not bound by or subject to (and none of its
assets or properties is bound by or subject to) any written,
oral, express or implied, contract, commitment or arrangement
with any labor union, and no labor union has requested or, to the
best of the Company's knowledge, has sought to represent any of
the employees of the Company. There is no strike or other labor
dispute involving the Company pending, or to the best knowledge
of the Company threatened.
(x) Each of the Company and its subsidiaries has filed
with the U.S., English and Israeli tax authorities all income and
franchise tax returns, reports and other information required to
be filed through the date hereof and has paid all taxes due
thereon, and no tax deficiency has been determined adversely to
the Company or any of its subsidiaries which has had (nor does
the Company have any knowledge of any tax deficiency which, if
determined adversely to the Company or any of its subsidiaries,
might have) a material adverse effect on the consolidated
financial position, shareholders' equity, results of operations,
business or prospects of the Company and its subsidiaries.
(y) All dividends and other distributions properly
declared and payable on the Shares may under the current laws and
regulations of Israel be paid in Israeli currency that may be
freely converted into U.S. dollars and that may be freely
transferred from or out of Israel without the necessity of
obtaining any consents, approvals, authorizations, orders or
clearances from or registering with any governmental agency or
body or court of Israel.
(z) 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 government of
Israel or any political subdivision or taxing authority thereof
or therein in connection with (i) the issuance and sale of the
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Shares by the Company to the Underwriters in accordance with this
Agreement, (ii) the delivery of the Shares to or for the
respective accounts of the Underwriters in the manner
contemplated in this Agreement or (iii) the resale and delivery
by the Underwriters of the Shares to the initial purchasers
therefrom as contemplated in the Prospectus.
(aa) Since the date as of which information is given in
the Prospectus through the date hereof, and except as may
otherwise be disclosed in the Prospectus, the Company has not (i)
issued or granted any securities (excluding option for _________
shares granted to employees pursuant to the option plans
described in the Prospectus), (ii) incurred any liability or
obligation, direct or contingent, other than liabilities and
obligations which were incurred in the ordinary course of
business, (iii) entered into any transaction not in the ordinary
course of business or (iv) declared or paid any dividend on its
share capital.
(bb) The Company (i) makes and keeps accurate books and
records and (ii) maintains internal accounting controls which
provide reasonable assurance that (A) transactions are executed
in accordance with management's authorization, (B) transactions
are recorded as necessary to permit preparation of its financial
statements and to maintain accountability for its assets, (C)
access to its assets is permitted only in accordance with
management's authorization and (D) the reported accountability
for its assets is compared with existing assets at reasonable
intervals.
(cc) Neither the Company nor any of its subsidiaries, nor
any director, officer, agent, employee or other person associated
with or acting on behalf of the Company or any of its
subsidiaries, has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect
unlawful payment to any foreign or domestic government official
or employee from corporate funds; violated or is in violation of
any provision of the United States Foreign Corrupt Practices Act
of 1977; or made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment.
(dd) Neither the Company nor any of its subsidiaries (i)
is in violation of its memorandum and articles of association or
other similar governing documents, or (ii) is in default in any
material respect, and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the
due performance or observance of any term, covenant or condition
contained in any material indenture, mortgage, 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 properties
or assets is subject.
(ee) Neither the Company nor any of its subsidiaries has
(i) violated any material environmental statute, rule,
regulation, order, judgment, decree or permit in any jurisdiction
in which the Company or such subsidiary conducts any business or
owns or holds any properties or assets or (ii) received actual
notice of
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any actual or potential liability for the investigation or
remediation of any disposal or release of hazardous or toxic
substance or wastes, pollutants or contaminants, except where
such violation or liability could not reasonably be expected to
have a material adverse effect on the consolidated financial
position, shareholders' equity, results of operations, business
or prospects of the Company and its subsidiaries.
(ff) The Company has reviewed its operations and that of
its subsidiaries to evaluate the extent to which the business or
operations or products of the Company or its subsidiaries will be
affected by the Year 2000 Problem. As a result of such review,
the Company has no reason to believe, and does not believe, that
the Year 2000 problem will have a material adverse effect on the
financial position, shareholders' equity or results of operations
of the Company and its subsidiaries or result in any material
loss or interference with the Company's business or operations.
The "Year 2000 Problem" as used herein means any significant risk
that computer hardware or software used in the receipt,
transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data or in the operation
of mechanical or electrical systems of any kind will not, in the
case of dates or time periods occurring after December 31, 1999,
function at least as effectively as in the case of dates or time
periods occurring prior to January 1, 2000.
(gg) Neither the Company nor any of its subsidiaries is,
nor will the Company or any of its subsidiaries, as of the
Delivery Date, be, an "investment company" within the meaning of
such term under the Investment Company Act of 1940, as amended,
and the rules and regulations of the Commission thereunder.
(hh) There are no material acquisitions of businesses or
assets by the Company or any of its subsidiaries pending,
contemplated or currently being negotiated.
(ii) The Company did not constitute a passive foreign
investment company ("PFIC") as defined in Section 1296(a) of the
Code for its fiscal year ended December 31, 1999; and, based upon
current operating plans and financial projections and the nature
of the Company's business, the Company does not expect to be
classified as a PFIC for its current taxable year or for future
taxable years.
(jj) None of the Company, any subsidiary of the Company or
any director or officer of the Company (other than Xxxx Xxxxxx)
or of any subsidiary of the Company is (i) a director, officer,
or partner of any brokerage firm, broker or dealer that is a
member of the National Association of Securities Dealers, Inc.
("NASD"; and each such member, an "NASD member") or (ii) directly
or indirectly, a "person associated with" a NASD member or an
"affiliate" of a NASD member, as such terms are used in the NASD
by-laws or rules.
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(kk) 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 or any of
its subsidiaries to or for the benefit of any of the officers or
directors of the Company or any of the members of any of them,
except as disclosed in the Prospectus.
(ll) The Ordinary Shares have been approved for quotation
on the NASDAQ National Market System, subject to official notice
of issuance.
(mm) The Company has not distributed and will not
distribute prior to the later of (i) the Delivery Date, or any
date on which Option Shares are to be purchased, as the case may
be, and (ii) completion of the distribution of the Shares, any
offering material in connection with the offering and sale of the
Shares other than any preliminary prospectuses, the Prospectus,
the Registration Statement and other materials, if any, permitted
by the Act.
(nn) The distribution of each Preliminary Prospectus did
not violate, and the distribution of the Prospectus and any
further amendments or supplements to the Prospectus will not
violate, in any material respect, any applicable law or
regulation of non-U.S. jurisdictions in which such documents are
distributed in connection with the Directed Share Program; and no
consent, approval, authorization or order of, or filing or
registration with, any governmental agency or body or court is
required or advisable under any applicable laws or regulations of
non-U.S. jurisdictions in which the Directed Shares are offered
outside the United States.
(oo) Under the laws of Israel, the submission by the
Company to the jurisdiction of any U.S. Federal or state court
sitting in the State of New York and the designation of the law
of the State of New York to apply to this Agreement will be
binding upon the Company and, if properly brought to the
attention of the court or administrative body in accordance with
the laws of Israel, would be enforceable in any judicial or
administrative proceeding in Israel (subject to any applicable
exceptions to the recognition or enforcement of foreign judgments
in Israel).
(pp) All offers and sales of the securities of the Company
by the Company prior to the date hereof were made in compliance
with the Securities Act and all other applicable state and
federal laws or regulations, except to the extent that
noncompliance with such laws would not have a material adverse
effect on the of the Company and CTS subsidiaries, Consolidated
financial provision, shareholder's equity, result of operations,
business or prospects.
(qq) Insofar as matters of Israeli law are concerned, the
Registration Statement and the Filing of the Registration
Statement have been duly authorized by and on behalf of the
Company, and the Registration Statement has been duly executed
pursuant to such authorization by and on behalf of the Company.
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(rr) Each of the Company's 2000 Share Option Plan, 2000
U.S. Option Plan, 2000 Israeli Plan, 2000 U.K. Unapproved Share
Option Scheme and 2000 U.K. Approved Share Option Scheme provide
that vesting of options issued thereunder does not begin for a
minimum of 1 year from the date of grant of such options (the
"Option Plans").
(ss) The Company has duly and validly appointed CT
Corporation as its agent for service of process in New York.
2. Purchase of the Shares by the Underwriters. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 5,000,000 shares of
the Firm Shares to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Shares set opposite that Underwriter's name in Schedule 1 hereto. The respective
purchase obligations of the Underwriters with respect to the Firm Shares shall
be rounded among the Underwriters to avoid fractional shares, as the
Representatives may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to 750,000 shares of Option Shares. Such option is granted solely
for the purpose of covering over-allotments in the sale of Firm Shares and is
exercisable as provided in Section 4 hereof. Shares of Option Shares shall be
purchased severally for the account of the Underwriters in proportion to the
number of shares of Firm Shares set opposite the name of such Underwriters in
Schedule 1 hereto. The respective purchase obligations of each Underwriter with
respect to the Option Shares shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Shares other than in 100 share
amounts.
The price of both the Firm Shares and any Option Shares shall be
$_____ per share.
The Company shall not be obligated to deliver any of the Shares
to be delivered on the First Delivery Date or the Second Delivery Date (as
hereinafter defined), as the case may be, except upon payment for all the Shares
to be purchased on such Delivery Date as provided herein.
3. Offering of Shares by the Underwriters. Upon authorization by
the Representatives of the release of the Firm Shares, the several Underwriters
propose to offer the Firm Shares for sale upon the terms and conditions set
forth in the Prospectus; provided, however, that no Shares registered pursuant
to the Rule 462(b) Registration Statement, if any, shall be offered prior to the
Effective Time thereof.
4. Delivery of and Payment for the Shares. Delivery of and
payment for the Firm Shares shall be made in New York, New York with a
concurrent closing at the offices of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx,
professional corporation, 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx at 10:00
A.M., New York time, on ________, 2000, the fourth full business day following
the date of this Agreement, or at such other date or place as shall be
determined by agreement between the Representatives and the Company. This date
and time are sometimes referred to as the "First Delivery Date." On the First
Delivery Date, the Company shall deliver or cause to be
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delivered certificates representing the Firm Shares to the Representatives for
the account of each Underwriter against payment to or upon the order of the
Company of the purchase price by wire transfer of immediately available funds to
a bank account designated by the Company. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligation of each Underwriter hereunder. Upon delivery, the
Firm Shares shall be registered in such names and in such denominations as the
Representatives shall request in writing not less than two full business days
prior to the First Delivery Date. For the purpose of expediting the checking and
packaging of the certificates for the Firm Shares, the Company shall make the
certificates representing the Firm Shares available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York time,
on the business day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of this
Agreement the option granted in Section 2 may be exercised by written notice
being given to the Company by the Representatives. Such notice shall set forth
the aggregate number of shares of Option Shares as to which the option is being
exercised, the names in which the shares of Option Shares are to be registered,
the denominations in which the shares of Option Shares are to be issued and the
date and time, as determined by the Representatives, when the shares of Option
Shares are to be delivered; provided, however, that this date and time shall not
be earlier than the First Delivery Date nor earlier than the second business day
after the date on which the option shall have been exercised nor later than the
fifth business day after the date on which the option shall have been exercised.
The date and time the shares of Option Shares are delivered are sometimes
referred to as the "Second Delivery Date" and the First Delivery Date and the
Second Delivery Date are sometimes each referred to as a "Delivery Date").
Delivery of and payment for the Option Shares shall be made at
the place specified in the first sentence of the first paragraph of this Section
4 (or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New York time, on the Second
Delivery Date. On the Second Delivery Date, the Company shall deliver or cause
to be delivered the certificates representing the Option Shares to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire transfer of immediately
available funds to a bank account designated by the Company. Time shall be of
the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Option Shares shall be registered in such names
and in such denominations as the Representatives shall request in the aforesaid
written notice. For the purpose of expediting the checking and packaging of the
certificates for the Option Shares, the Company shall make the certificates
representing the Option Shares available for inspection by the Representatives
in New York, New York, not later than 2:00 P.M., New York time, on the business
day prior to the Second Delivery Date.
5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Rule 462(b) Registration Statement, if
necessary, in a form approved by the Representatives and to file
such Rule 462(b) Registration Statement with the Commission on
the date hereof; to prepare the Prospectus in a form approved by
the Representatives and to file such Prospectus pursuant to Rule
424(b) under the Securities Act not later than the Commission's
close of
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business, on the business day following the execution and
delivery of this Agreement; to make no further amendment or any
supplement to the Registration Statements or to the Prospectus
except as permitted herein; to advise the Representatives,
promptly after it receives notice thereof, of the time when any
amendment to either Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish the
Representatives with copies thereof; to advise the
Representatives, promptly after it receives notice thereof, of
the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or
the Prospectus, of the suspension of the qualification of the
Shares for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose,
or of any request by the Commission for the amending or
supplementing of the Registration Statements or the Prospectus or
for additional information; and, in the event of the issuance of
any stop order or of any order preventing or suspending the use
of any Preliminary Prospectus or the Prospectus or suspending any
such qualification, to use promptly its best efforts to obtain
its withdrawal;
(b) To furnish promptly to each of the Representatives and
to counsel for the Underwriters a signed copy of each of the
Registration Statements as originally filed with the Commission,
and each amendment thereto filed with the Commission, including
all consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives in New York
City such number of the following documents as the
Representatives shall reasonably request: (i) conformed copies of
the Registration Statements as originally filed with the
Commission and each amendment thereto (in each case excluding
exhibits other than this Agreement, and (ii) each Preliminary
Prospectus, the Prospectus (not later than 10:00 A.M., New York
time, of the day following the execution and delivery of this
Agreement) and any amended or supplemented Prospectus (not later
than 10:00 A.M., New York time, on the day following the date of
such amendment or supplement); and, if the delivery of a
prospectus is required at any time prior to the expiration of
nine months after the Effective Time of the Primary Registration
Statement in connection with the offering or sale of the Shares
(or any other securities relating thereto) and if at such time
any event shall have occurred as a result of which the Prospectus
as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light
of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary during such same period to amend or
supplement the Prospectus in order to comply with the Securities
Act, to notify the Representatives and, upon their request, to
prepare and furnish without charge to each Underwriter and to any
dealer in securities as many copies as the Representatives may
from time to time reasonably request of an amended or
supplemented Prospectus which will correct such statement or
omission or effect such compliance, and in case any Underwriter
is required to deliver a prospectus in connection with sales of
any of the Shares at any time nine months or more after the
Effective Time of the Primary Registration Statement,
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upon the request of the Representatives but at the expense of
such Underwriter, to prepare and deliver to such Underwriter as
many copies as the Representatives may from time to time
reasonably request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Securities Act;
(d) To file promptly with the Commission any amendment to
the Registration Statements or the Prospectus or any supplement
to the Prospectus that may, in the judgment of the Company or the
Representatives, be required by the Securities Act or requested
by the Commission;
(e) Prior to filing with the Commission (i) any amendment
to either of the Registration Statements or supplement to the
Prospectus or (ii) any Prospectus pursuant to Rule 424 of the
Rules and Regulations, to furnish a copy thereof to the
Representatives and counsel for the Underwriters and obtain the
consent of the Representatives to the filing;
(f) As soon as practicable after the Effective Date of the
Primary Registration Statement (it being understood that the
Company shall have until at least 410 days after the end of the
Company's current fiscal quarter), to make generally available to
the Company's security holders and to deliver to the
Representatives an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section
11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158);
(g) For a period of five years following the Effective
Date of the Primary Registration Statement, to furnish to the
Representatives copies of all materials furnished by the Company
to its shareholders and all public reports and all reports and
financial statements furnished by the Company to the principal
national securities exchange or automatic quotation system upon
which the Ordinary Shares may be listed or quoted pursuant to
requirements of or agreements with such exchange or system or to
the Commission pursuant to the Exchange Act or any rule or
regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Shares for
offering and sale under the securities laws of such jurisdictions
as the Representatives may request and to comply with such laws
so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete
the distribution of the Shares; provided that in connection
therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of
process in any jurisdiction;
(i) (i) For a period of 180 days from the date of the
Prospectus, not to, directly or indirectly, (a) offer for sale,
sell or contract to sell, pledge or otherwise dispose of, or
announce an offering of (or enter into any transaction or device
which is designed to, or could reasonably be expected to, result
in the disposition or purchase by any person at any time in the
future of) any Ordinary Shares or other equity securities of the
Company or any securities convertible into or
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exchangeable for any Ordinary Shares or other equity securities,
or sell or grant options, rights or warrants with respect to any
Ordinary Shares or equity securities of the Company or any
securities convertible into or exchangeable for any Ordinary
Shares or other equity securities (other than (i) shares issued
pursuant to the share option plans described in the Prospectus
and (ii) pursuant to currently outstanding options, warrants or
rights, in each case as in effect on the date hereof, provided
that the recipient of such shares has executed a lock-up
agreement referred to below or (b) enter into any swap or other
derivatives transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of any
Ordinary Shares or other equity securities, whether any such
transaction described in clause (a) or (b) above is to be settled
by delivery of Shares or other equity securities in cash or
otherwise, in each case without the prior written consent of
Xxxxxx Brothers on behalf of the Underwriters and (ii) to cause
each director, executive officer, employee, whether holding
options or warrants, and shareholder of the Company to furnish to
the Representatives, prior to the First Delivery Date, a
"lock-up" letter (each, a "Lock-up Letter"), substantially in the
form of Exhibit A hereto in each case except as set forth on
Exhibit B;
(j) Prior to the Effective Date, to apply for the listing
of the Shares on the Nasdaq National Market System and to use its
best efforts to complete that listing, subject only to official
notice of issuance and evidence of satisfactory distribution,
prior to the First Delivery Date;
(k) To apply the net proceeds from the sale of the Shares
being sold by the Company as set forth in the Prospectus; and
(l) To take such steps as shall be necessary to ensure
that neither the Company nor any subsidiary shall become an
"investment company" within the meaning of such term under the
United States Investment Company Act of 1940 and the rules and
regulations of the Commission thereunder.
(m) Between the date hereof and the First Delivery Date
(both dates inclusive), to notify and consult with the
Representatives, and to cause its subsidiaries and all other
parties acting on its or their behalf to notify and consult with
the Representatives, prior to issuing any press release or other
announcement which could be material in the context of the
distribution of the Shares;
(n) From and after the First Delivery Date, to use its
best efforts to maintain the Shares as "marketable securities"
within the meaning of Section 1296(e) of the Internal Revenue
Code and the regulations, rulings and interpretations thereunder;
to monitor its PFIC status and take all reasonable steps to
notify U.S. shareholders as promptly as practicable in the event
that the Company believes it will become a PFIC in any taxable
year; and if the Company becomes a PFIC, to provide U.S.
shareholders, upon request, with the annual information statement
and any other information necessary for U.S. shareholders to make
a "qualified electing fund" election under Section 1295 of the
Internal Revenue Code and the regulations thereunder;
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(o) In connection with the Directed Share Program, to
ensure that the Directed Shares shall be restricted to the extent
required by the NASD or pursuant to the rules of the NASD from
sale, transfer, assignment, pledge or hypothecation for a period
of six months following the Effective Dates and also to direct
the transfer agent to place stop transfer restrictions upon such
shares for such period of time;
(p) To comply with all applicable laws and regulations in
each non-U.S. jurisdiction in which the Directed Shares are
offered or sold;
(q) To use its best efforts to ensure that all shares
issuable upon exercise of outstanding options are restricted from
sale, transfer, assignment, pledge or hypothecation to the same
extent as set forth in Exhibit A hereto for a period of six
months following the Effective Dates and also to direct the
transfer agent to place stop transfer restrictions upon such
shares for such period of time; and
(r) Not to accelerate, or enter into any agreement to
accelerate or take any action, directly or indirectly, that has
the effect of causing the acceleration of the vesting schedules
in its Option Plans, without the consent of Xxxxxx Brothers.
6. Expenses. The Company agrees to pay (a) the costs incident to
the authorization, issuance, sale and delivery of the Shares and any taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statements and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statements as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus,
all as provided in this Agreement; (d) the costs of reproducing and distributing
this Agreement; (e) the costs of distributing the terms of agreement relating to
the organization of the underwriting syndicate and selling group to the members
thereof by mail, telex or other means of communication; (f) the filing fees
incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of sale of the Shares; (g) any applicable
listing or other fees (including any fees incurred in listing the Shares on the
NASDAQ National Market System); (h) the fees and expenses of qualifying the
Shares under the securities laws of the several jurisdictions as provided in
Section 5(h) and of preparing, printing and distributing a Blue Sky Memorandum
(including related fees and expenses of counsel to the Underwriters); (i) all
costs and expenses of the Underwriters, including the fees and disbursements of
counsel for the Underwriters, incident to the offer and sale of Shares by the
Underwriters to officers, directors, employees and consultants of the Company
and their family members and to other persons having business relationships with
the Company and its subsidiaries, as described in Section 9; and (j) all other
costs and expenses incident to the performance of the obligations of the Company
under this Agreement; provided that, except as provided in this Section 6 and in
Sections 8 and 12, the Underwriters shall pay their own costs and expenses,
including the costs and expenses of their counsel, any transfer taxes on the
Shares which they may sell and the expenses of advertising any offering of the
Shares made by the Underwriters.
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7. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Rule 462(b) Registration Statement, if any, and
the Prospectus shall have been timely filed with the Commission
in accordance with Section 5(a); no stop order suspending the
effectiveness of either of the Registration Statements or any
part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of
additional information in either of the Registration Statements
or the Prospectus or otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to
the Company on or prior to such Delivery Date that either of the
Registration Statements or the Prospectus or any amendment or
supplement thereto contains any untrue statement of a fact which,
in the opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the
Underwriters, is material or omits to state any fact which, in
the opinion of such counsel, is material and is required to be
stated therein or is necessary to made the statements therein not
misleading.
(c) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this
Agreement, the Shares, the Registration Statements and the
Prospectus, and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be
reasonably satisfactory in all material respects to counsel for
the Underwriters, and the Company shall have furnished to such
counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
(d) Efrati, Galili & Co. shall have furnished to the
Representatives its written opinion, as Israeli counsel to the
Company, addressed to the Underwriters and dated such Delivery
Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a company under the laws of the State
of Israel, is duly qualified to do business in Israel and
has all corporate power and authority necessary to own or
hold its respective properties and conduct the businesses
in which it is engaged as described in the Prospectus.
(ii) The Company has the authorized capitalization
as set forth under the caption "Capitalization" in the
Prospectus, and all of the issued shares of capital of the
Company outstanding prior to the issuance of the Shares by
the Company in the offering (the "Offering"), including
all options and/or shares issued to directors of the
Company, have been duly
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and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof
contained in the Prospectus and the share split, issuance
of bonus shares, conversion of all outstanding preferred
shares and the conversion of all outstanding Ordinary A
and Ordinary B shares as described on page __ of the
Prospectus have been duly and validly authorized and
completed by the Company in accordance with its Articles
of Association and all applicable Israeli law.
(iii) The Company has all requisite corporate power
and authority to issue, sell and deliver the Shares to be
sold by the Company in the Offering in accordance with and
upon the terms and conditions set forth in this Agreement;
the filing of the Registration Statement and the
Prospectus with the Commission and, to the extent
required, with the appropriate Israeli authorities, has
been duly authorized by and on behalf of the Company and
the Registration Statement has been duly executed, no
further approval or authority of the shareholders or the
Board of Directors of the Company is required for the
issuance of the Shares to be sold by the Company in
performance of this Agreement.
(iv) To the knowledge of such counsel, after
reasonable inquiry, in connection with the Offering there
are no, and after the consummation of the Offering, there
will be no preemptive or other rights to subscribe for or
to purchase, nor any restriction upon the voting or
transfer of, any Ordinary Shares pursuant to the Company's
Articles of Association, Memorandum of Association or any
contract filed as an exhibit to the Registration Statement
or other contracts known to such counsel after due
inquiry.
(v) Except as described in or contemplated by the
Prospectus, to the knowledge of such counsel, there are no
outstanding equity securities of the Company convertible
or exchangeable into or evidencing the right to purchase
for any shares of capital of the Company and there are no
outstanding or authorized options, warrants or rights of
any character obligating the Company to issue any shares
of its share capital or any securities convertible or
exchangeable into or evidencing the right to purchase or
subscribe for any such shares; and except as described in
the Prospectus, to the knowledge of such counsel, no
holder of any securities of the Company or any other
person has the contractual right, which has not been
satisfied or effectively waived, to cause the Company to
sell or otherwise issue to them, or to permit them to
underwrite the sale of, any of the Shares or the right to
have any Ordinary Shares or other securities of the
Company included in the Registration Statement or the
right, as a result of the filing of the Registration
Statement, to require registration under the Act of any
Ordinary Shares or other securities of the Company.
(vi) The Shares to be sold by the Company pursuant
to this Agreement have been duly and validly authorized,
and upon issuance and delivery of such Shares, pursuant to
this Agreement and payment therefor
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as contemplated herein, such Shares will be fully paid and
non-assessable, and the Underwriters will receive good,
valid and marketable title to the Shares being sold by the
Company thereunder, free and clear of all liens,
encumbrances and claims.
(vii) The form of share certificates for the
Shares, delivered on such Delivery Date, are in due and
proper form under Israeli Law;
(viii) This Agreement has been duly authorized,
executed and delivered by the Company;
(ix) Each of the Directors named in the
Registration Statement and who are signatories thereto
have been duly elected to hold office for the terms set
forth in the Registration Statement;
(x) The Company has good and marketable title to
all personal property owned by it in Israel, in each case
free and clear of all liens encumbrances and defects
except such as described in the Prospectus or such as do
not materially affect the value of such property and do
not materially interfere with the use made and proposed to
be made of such property by the Company; and all real
property and buildings held under lease by the Company in
Israel is held by it under valid, subsisting and
enforceable leases, with such exceptions as are not
material and do not interfere with the use made and
proposed to be made of such property and buildings by the
Company. To the knowledge of such counsel, after
reasonable inquiry, the Company does not have any real
property.
(xi) To the best of our knowledge, after reasonable
enquiry, and except as described in the Prospectus, there
are no legal or governmental proceedings or investigations
pending to which the Company is a party or of which any
property or assets of the Company or any of its
subsidiaries is the subject which, if determined adversely
to the Company or any of its subsidiaries, might have a
material adverse effect on the general affairs, financial
position, shareholders' equity or results of operations of
the Company and its subsidiaries; and, to the best of such
counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others;
(xii) The Company (i) is not in violation of its
Articles or Memorandum of Association or other
organizational documents, (ii) to the best of such
counsel's knowledge, is in default in any material
respect, and no event has occurred which with notice or
lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or
condition contained in any indenture, mortgage, deed of
trust, loan agreement or other material agreement or
instrument known to such counsel, after reasonable
inquiry, to which it is a party or by which it is bound or
to which any of its properties or assets is subject or
(iii) to the knowledge of such counsel, after reasonable
inquiry, the Company is not
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in violation in any material respect of any Israeli law,
ordinance, governmental rule, regulation or court decree
to which it or its property or assets may be subject or
has failed to obtain any material license, permit,
certificate, franchise or other governmental authorization
or permit necessary to the ownership of its property or to
the conduct of its business, except in the case of clauses
(ii) and (iii) for such defaults, violations or failures,
individually or in the aggregate, would not have a
material adverse effect on the general affairs, financial
position, shareholders' equity or results of operations of
the Company and its subsidiaries, taken as a whole;
(xiii) The statements in the Registration Statement
and the Prospectus, including but not limited to the
statements under the captions "Risk Factors - Risks
Relating to Our Location in Israel," "Dividend Policy,"
"Management's Discussion and Analysis of Financial
Condition and Results of Operations - Grants from the
Government of the State of Israel," "Business -
Employees," "- Facilities," "- Legal Proceedings,"
"Management" (to the extent summarizing or describing
provisions of the Israeli Companies Law), "Certain
Relationships and Related Transactions," "Description of
Share Capital," "Israeli Taxation and Investment
Programs," "Conditions in Israel," "Enforceability of
Civil Liabilities" and "ISA Exemption" insofar as such
statements constitute a summary of contracts, governed by
Israeli law or written in Hebrew, or Israeli statutes,
rules or regulations are correct in all material respects.
(xiv) The issuance, delivery and sale to the
Underwriters of the Shares to be sold by the Company are
not subject to any tax imposed by Israel or any political
subdivision thereof except to Israeli stamp taxes
applicable to the issuance of Shares by the Company and
payable by the Company.
(xv) To the best of our knowledge, after reasonable
inquiry, as specified in such opinion, the Company is in
compliance with all material conditions and requirements
stipulated by the instruments of approval granted to it
with respect to the "approved enterprise" status of the
Company's facilities, and has the right to receive the tax
benefits under Israeli laws and regulations relating to
such "approved enterprise" status.
(xvi) The issue and sale of the Shares being
delivered on such Delivery Date by the Company and the
compliance by the Company with all of the provisions of
this Agreement and the consummation of the transactions
contemplated hereby do not and will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to such counsel to
which the Company or any of its subsidiaries is a party or
by which the Company is bound or to which any of the
properties or assets of the Company is subject, nor will
such actions result in any violation of the
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provisions of the Memorandum and Articles of Association
of the Company or any statute or any order, rule or
regulation known to such counsel of any Israeli court or
governmental agency or body having jurisdiction over the
Company or any of their properties or assets;
(xvii) The Company has obtained all Israeli
governmental authorizations, consents and exemptions
necessary for the execution, delivery and performance of
this Agreement and the consummation of the transaction
contemplated hereby (including, but not limited to, the
issuance and sale of the Shares as contemplated by this
Agreement); to the best of such counsel's knowledge, no
proceedings to rescind or modify such authorizations and
consents have been instituted and are pending or
contemplated by any Israeli authority; a draft Prospectus
has been filed with the ISA and an exemption exempting the
Company from the obligation to publish the Prospectus in
the manner required pursuant to the prevailing laws in
Israel, in connection with the Offering contemplated by
the Registration Statement, assuming compliance by the
Underwriters with conditions imposed in connection with
such exemption, has been granted; and no other consent,
approval, authorization or order of, or filing with, any
Israeli court or governmental agency in Israel is required
for the consummation of the transactions contemplated by
this Agreement except for any of the foregoing which have
been obtained and are in full force and effect;
(xviii)Under the laws of Israel, the submission by
the Company to the jurisdiction of any federal or state
court sitting in the county of New York and the
designation of the law of the State of New York to apply
to the Underwriting Agreement is binding upon the Company
and, if properly brought to the attention of the court or
administrative body in accordance with the laws of Israel,
would be enforceable in any judicial or administrative
proceedings in Israel; provide, however, that in the event
there is not a specific exclusion of Israeli jurisdiction,
Israeli courts have discretion to exercise jurisdiction
over such proceedings;
(xix) The Company can xxx and be sued in its own
name and, under Israeli law, the agreement by the Company
that this Agreement be governed by and construed in
accordance with the laws of New York will be recognized by
the courts of the State of Israel; and
(xx) Subject to the limitations set forth under the
caption "Enforceability of Civil Liabilities" in the
Prospectus, under the laws of Israel, the submission by
the Company to the jurisdiction of any federal or state
court sitting in the county of New York and the
designation of the law of the State of New York to apply
to this Agreement are binding upon the Company and, if
properly brought to the attention of the court or
administrative body in accordance with the laws of Israel,
would be enforceable in any judicial or administrative
proceeds in Israel. Subject to certain time limitations
and the conditions set forth under the caption
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"Enforceability of Civil Liabilities" in the Prospectus,
Israeli courts are empowered to enforce foreign final
executory judgements, including those of the United
States, for liquidated amounts in civil matters. The
Company has irrevocably appointed CT Corporation, as the
Company's agent to receive service of process in any
action against the Company in any federal or state court
sitting in New York County, State of New York arising out
of the Offerings made pursuant to this Agreement or any
purchase or sale of securities in connection therewith.
Foreign judgements enforced by Israeli courts generally
will be payable in Israeli currency and will be freely
convertible into dollars or other foreign currency and may
be transferred out of Israel.
In rendering such opinion, such counsel may (i) state that its
opinion is limited to matters governed by the laws of the State of
Israel and (ii) rely (to the extent such counsel deems proper and
specifies in its opinion), as to matters involving the application of
the laws of other states or countries upon the opinion of other counsel
of good standing, provided that such other counsel is satisfactory to
counsel for the Underwriters and furnishes a copy of its opinion to the
Representatives. Such counsel shall also have furnished to the
Representatives a written statement, addressed to the Underwriters and
dated such Delivery Date, in form and substance satisfactory to the
Representatives, to the effect that (x) such counsel has acted as
counsel to the Company on a regular basis since September 1999, has
acted as counsel to the Company in connection with its financing
transactions in December 1999 and has acted as counsel to the Company in
connection with the preparation of the Registration Statements, and (x)
such counsel has participated in conferences with representatives of the
Underwriters, officers of the Company and representatives of the
independent certified public accountants of the Company, at which
conferences the contents of the Registration Statement and the
Prospectus and related matters were discussed and (y) based on the
foregoing, no facts have come to the attention of such counsel which
lead it to believe that the Registration Statements, as of their
respective Effective Dates, contained any untrue statement of a material
fact or omitted to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading, or
that the Prospectus contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The foregoing
opinion and statement may be qualified by a statement to the effect that
such counsel does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statements or the Prospectus, including the financial statements,
supporting schedules or other financial and statistical data, except as
provided in paragraphs (ii) and (xiii) above.
(e) Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx shall have furnished
to the Representatives its written opinion, as counsel to the
Company, addressed to the Underwriters and dated such Delivery
Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
(i) ClickSoftware Inc. has been duly organized and
is validly existing as a corporation in good standing
under the laws of California;
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(ii) All of the issued shares of capital of
ClickSoftware Inc. have been duly and validly authorized
and issued and are fully paid, non-assessable and are
owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims; and,
to the knowledge of such counsel, after reasonable
inquiry, no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights
to convert any obligations into any shares of capital or
of ownership interests in such subsidiaries are
outstanding;
(iii) All real property and buildings held under
lease in Campbell, California and Boston, Massachusetts by
the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases, with such
exceptions as are not material and do not interfere with
the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries;
(iv) To the best of such counsel's knowledge, and
other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which
any property or asset of the Company or any of its
subsidiaries is the subject which, if determined adversely
to the Company or any of its subsidiaries, might have a
material adverse effect on the consolidated financial
position, shareholders' equity, results of operations,
business or prospects of the Company and its subsidiaries;
and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(v) The Primary Registration Statement was declared
effective under the Securities Act, the Rule 462(b)
Registration Statement, if any, was filed with the
Commission on the date specified therein, the Prospectus
was filed with the Commission pursuant to the subparagraph
of Rule 424(b) of the Rules and Regulations specified in
such opinion on the date specified therein and no stop
order suspending the effectiveness of the either of the
Registration Statements has been issued and, to the
knowledge of such counsel, no proceeding for that purpose
is pending or threatened by the Commission;
(vi) The Registration Statements, as of their
respective Effective Dates, and the Prospectus, as of its
date, and any further amendments or supplements thereto,
as of their respective dates, made by the Company prior to
such Delivery Date (other than the financial statements
and related notes and schedules and other financial or
statistical data contained therein, as to which such
counsel need express no opinion) complied as to form in
all material respects with the requirements of the
Securities Act and the Rules and Regulations;
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(vii) The statements under the captions "Certain
Transactions," "Shares Eligible for Future Sale" and
"United States Federal Income Tax Considerations" in the
Prospectus, insofar as such statements constitute a
summary of contracts or documents governed by U.S. federal
or state law and written in the English language
constitute accurate and complete summaries of such
contracts, documents, statutes, rules or regulations.
(viii) To the best of such counsel's knowledge,
there are no contracts or other documents which are
required to be described in the Prospectus or filed as
exhibits to the Registration Statements by the Securities
Act or by the Rules and Regulations which have not been
described or filed as exhibits to the Registration
Statements or incorporated therein by reference as
permitted by the Rules and Regulations;
(ix) This Agreement has been duly authorized,
executed and delivered by ClickSoftware, Inc.
(x) The issue and sale of the Shares being
delivered on such Delivery Date by the Company and the
compliance by the Company with all of the provisions of
this Agreement and the consummation of the transactions
contemplated hereby do not and will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument governed by U.S. federal or
state law and written in the English language known to
such counsel to which the Company or any of its
subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the
properties or assets of the Company or any of its
subsidiaries is subject, nor will such actions result in
any violation of the provisions of the charter or by-laws
of ClickSoftware Inc. or any U.S. statute or any order,
rule or regulation known to such counsel of any U.S. court
or U.S. federal or state governmental agency or body
having jurisdiction over the Company or any of its
subsidiaries or any of their properties or assets; and,
except for the registration of the Shares under the
Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state
securities laws in the U.S. in connection with the
purchase and distribution of the Shares by the
Underwriters, no consent, approval, authorization or order
of, or filing or registration with, any such court or
governmental agency or body in the U.S. is required for
the execution, delivery and performance of this Agreement
by the Company and the consummation of the transactions
contemplated hereby;
(xi) The Company is not, and will not become, as a
result of the consummation of the transactions
contemplated by this Agreement, and application of the net
proceeds therefrom as described in the Prospectus,
required to register as an investment company under the
1940 Act;
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(xii) To the best of such counsel's knowledge (i)
there are no contracts, agreements or understandings
between the Company and any person governed by U.S. law
and written in the English language granting such person
the right (other than rights which have been waived or
satisfied) to require, except as described in the
Prospectus of the Company to file a registration statement
under the Securities Act with respect to any securities of
the Company owned or to be owned by such person, except as
described in the Prospectus, and (ii) or to require the
Company to include such securities in the securities
registered pursuant to the Registration Statements or in
any securities being registered pursuant to any other
registration statement filed by the Company under the
Securities Act;
(xiv) To the best knowledge of such counsel, except
as disclosed in the Prospectus, the Company and its
subsidiaries own, possess or can acquire on reasonable
terms, adequate trademarks, trade names, uniform resource
locators (URLs) and other intellectual property rights
necessary to conduct the business now operated by them or
presently employed by them and, in addition, have not
received any notice of infringement of or conflict with
asserted rights of others with respect to any such
intellectual property rights.
In rendering such opinion, such counsel may (i) state that its
opinion is limited to matters governed by the Federal laws of the
United States of America and the laws of the State of California;
and (ii) rely as to matters involving the Laws of Israel upon the
opinion of Efrati, Galili & Co. rendered pursuant to Section 7(d)
of this Agreement and (iii) rely (to the extent such counsel
deems proper and specifies in its opinion), as to matters
involving the application of the laws of other states upon the
opinion of other counsel of good standing, provided that such
other counsel is satisfactory to counsel for the Underwriters and
furnishes a copy of its opinion to the Representatives. Such
counsel shall also have furnished to the Representatives a
written statement, addressed to the Underwriters and dated such
Delivery Date, in form and substance satisfactory to the
Representatives, to the effect that (x) such counsel has acted as
counsel to the Company on a regular basis (although the Company
is also represented by other outside counsel with respect to
matters relating to Israeli law), has acted as counsel to the
Company in connection with the preparation of the Registration
Statements, and (y) based on the foregoing, no facts have come to
the attention of such counsel which lead it to believe that the
Registration Statements, as of their respective Effective Dates,
contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading,
or that the Prospectus contains any untrue statement of a
material fact or omits to state any material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading. The foregoing opinion and statement may be
qualified by a statement to the effect that such counsel does not
assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration
Statements or the
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Prospectus except for the statements made in the Prospectus under
the captions "United States Federal Income Tax Considerations"
the caption referred to in paragraphs (viii) and (xiv) above,
insofar as such statements concern legal matters.
(f) Bird & Bird, English counsel to the Company, shall
have furnished to the Representatives their written opinion,
addressed to the Underwriters and dated such Delivery Date, in
form and substance satisfactory to the Representatives, to the
effect that:
(i) ClickService Software (Europe) Ltd., the "UK
Subsidiary" was duly incorporated under the laws of
England and Wales on 15 March 1995;
(ii) The U.K. Subsidiary has the necessary
corporate power and authority to own, lease and operate
its properties and assets and conduct the businesses in
which it is engaged;
(iii) the UK Subsidiary is duly organized, validly
existing and in good standing in the sense that the
Company Microfiche did not reveal any application or order
or resolution for the winding-up of the UK Subsidiary and
no notice of the appointment of a receiver or manager or
administrative receiver or administrator or of an
administration order having been made in respect of the UK
Subsidiary;
(iv) the UK Subsidiary has the requisite corporate
power and authority to own, lease and operate its
properties and assets and conduct the business in which it
is engaged;
(v) the issued share capital of the UK Subsidiary
comprises 100 ordinary shares of Pound Sterling1.00
nominal value each. All such issued shares have been
validly issued as fully paid and comprise part of the
authorized share capital of the UK Subsidiary;
(vi) the Register of Members of the UK Subsidiary
discloses that 100 issued shares of the UK Subsidiary are
registered in the name of the Company;
(vii) there are no pre-emptive or other rights to
subscribe for or purchase, nor any restriction upon voting
of, any shares of the UK Subsidiary pursuant to its
Memorandum and Articles of Association or English law; and
(viii) Regulation 57 of Table A of the Companies
(Tables A to F) Regulations 1985 (SI 1985 No 805) has been
adopted by the UK Subsidiary and provides that no member
may vote at any general meeting unless all moneys payable
by him in respect of his shares have been paid.
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Any shares issued by the UK Subsidiary that are not fully
paid will therefore not carry the right to vote.
In rendering the foregoing opinion, such counsel may state
that their opinion is limited to matters governed by the laws of
the United Kingdom.
(g) The Representatives shall have received from Xxxxxxx
Xxxxxxx & Xxxxxxxx, U.S. counsel for the Underwriters, such
opinion or opinions, dated such Delivery Date, with respect to
the issuance and sale of the Shares, the Registration Statement,
the Prospectus and other related matters as the Representatives
may reasonably require, and the Company shall have furnished to
such counsel such documents as they reasonably request for the
purpose of enabling them to pass upon such matters.
(h) The Representatives shall have received from Xxxxx
Xxxxx -- Xxxxx Xxxxx, Law Offices, Israeli counsel for the
Underwriters, such opinion or opinions, dated such Delivery Date,
with respect to the issuance and sale of the Shares, the
Registration Statement, the Prospectus and other related matters
as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass upon
such matters.
(i) At the time of execution of this Agreement, the
Representatives shall have received from Luboshitz Kasierer,
Member Firm of Xxxxxx Xxxxxxxx, a letter, in form and substance
satisfactory to the Representatives, addressed to the
Underwriters and dated the date hereof (i) confirming that they
are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as
of the date hereof (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 days prior to the date hereof), the
conclusions and findings of such firm with respect to the
financial information and other matters ordinarily covered by
accountants' "comfort letters" to underwriters in connection with
registered public offerings.
(j) With respect to the letter of Luboshitz Kasierer,
Member Firm of Xxxxxx Xxxxxxxx, referred to in the preceding
paragraph and delivered to the Representatives concurrently with
the execution of this Agreement (as used in this paragraph, the
"initial letter"), the Company shall have furnished to the
Representatives a letter (as used in this paragraph, the
"bring-down letter") of such accountants, addressed to the
Underwriters and dated such Delivery Date (i) confirming that
they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as
of the date of the bring-down letter (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
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more than five days prior to the date of the bring-down letter),
the conclusions and findings of such firm with respect to the
financial information and other matters covered by the initial
letter and (iii) confirming in all material respects the
conclusions and findings set forth in the initial letter.
(k) The Company shall have furnished to the
Representatives a certificate, dated such Delivery Date, of its
Chairman of the Board, its President or a Vice President and its
chief financial officer stating that:
(i) The representations, warranties and agreements
of the Company in Section 1 are true and correct as of
such Delivery Date; the Company has complied with all its
agreements contained herein; and the conditions set forth
in Section 7(a) have been fulfilled;
(ii) They have carefully examined the Registration
Statements and the Prospectus and, in their opinion (A)
the Registration Statements, as of their respective
Effective Dates, and the Prospectus, as of each of the
Effective Dates, did not include any untrue statement of a
material fact and did not omit to state any material fact
required to be stated therein or necessary to make the
statements therein not misleading, and (B) since the
Effective Date of the Primary Registration Statement, no
event has occurred which should have been set forth in a
supplement or amendment to either of the Registration
Statements or the Prospectus.
(iii) To their knowledge, no stop order suspending
the effectiveness of either of the Registration Statements
or any part thereof has been issued and no proceeding for
that purpose has been initiated or threatened by the
Commission.
(l) (i) Neither the Company nor any of its subsidiaries
shall have sustained since the date of the latest audited
financial statements included in the Prospectus any loss or
interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus or
(ii) since such date there shall not have been any change in the
share capital or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs,
management, financial position, shareholders' equity or results
of operations of the Company and its subsidiaries, otherwise than
as set forth or contemplated in the Prospectus, the effect of
which, in any such case described in clause (i) or (ii), is, in
the judgment of the Representatives, so material and adverse as
to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares being delivered on
such Delivery Date on the terms and in the manner contemplated in
the Prospectus.
(m) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following: (i)
trading in securities generally on the New York Stock Exchange or
the American Stock Exchange or in the over-the-counter market, or
trading in any securities of the Company on any exchange
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or in the over-the-counter market, shall have been suspended or
minimum prices shall have been established on any such exchange
or such market by the Commission, by such exchange or by any
other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been declared
by Federal or state authorities, (iii) the United States shall
have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or there
shall have been a declaration of a national emergency or war by
the United States or (iv) there shall have occurred such a
material adverse change in general economic, political or
financial conditions (or the effect of international conditions
on the financial markets in the United States shall be such) as
to make it, in the judgment of a majority in interest of the
several Underwriters, impracticable or inadvisable to proceed
with the public offering or delivery of the Shares being
delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(n) The NASDAQ National Market System shall have approved
the Shares for inclusion, subject only to official notice of
issuance and evidence of satisfactory distribution.
All opinions, letters, evidence and certificates mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each
Underwriter, its officers and employees and each person, if any, who controls
any Underwriter within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Shares), to which that Underwriter,
officer, employee or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in any Preliminary Prospectus, either
of the Registration Statements or the Prospectus, or in any amendment or
supplement thereto or (B) in any materials or information provided to investors
by, or with the approval of, the Company in connection with the marketing of the
offering of the Shares, including any marketing or investor presentation made to
investors by the Company (whether in person or electronically ) ("Marketing
Materials"), (ii the omission or alleged omission to state in any Preliminary
Prospectus, either of the Registration Statements or the Prospectus, or in any
amendment or supplement thereto, or in any Marketing Materials any material fact
required to be stated therein or necessary to make the statements therein not
misleading or (iii) any act or failure to act, or any alleged act or failure to
act, by any Underwriter in connection with, or relating in any manner to, the
Shares or the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon matters covered by clause (i) or (ii) above (provided that the
Company shall not be liable in the case of any matter covered by this clause
(iii) to the extent that it is determined in a final judgement by a court of
competent jurisdiction that such loss, claim, damage, liability or action
resulted directly from any such act or failure to act undertaken or omitted to
be taken by such Underwriter through
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its gross negligence or wilful misconduct), and shall reimburse each Underwriter
and each such officer, employee and controlling person promptly upon demand for
any legal or other expenses reasonably incurred by that Underwriter, officer,
employee or controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statements or the Prospectus, or in any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or on behalf
of any Underwriter specifically for inclusion therein and described in Section
8(e); and provided further that as to any Preliminary Prospectus this indemnity
agreement shall not inure to the benefit of any Underwriter, its officers or
employees or any person controlling that Underwriter on account of any loss,
claim, damage, liability or action arising from the sale of Shares to any person
by that Underwriter if that Underwriter failed to send or give a copy of the
Prospectus, as the same may be amended or supplemented, to that person within
the time required by the Securities Act, and the untrue statement or alleged
untrue statement of any material fact or omission or alleged omission to state a
material fact in such Preliminary Prospectus was corrected in the Prospectus,
unless such failure resulted from non-compliance by the Company with Section
5(c). The foregoing indemnity agreement is in addition to any liability which
the Company may otherwise have to any Underwriter or to any officer, employee or
controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify
and hold harmless the Company, its officers and employees, each of its directors
and each person, if any, who controls the Company who within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company or any such
director, officer or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, either of
the Registration Statements or the Prospectus, or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state in any Preliminary
Prospectus, either of the Registration Statements or the Prospectus, or in any
amendment or supplement thereto, any material fact required to be stated therein
or necessary to make the statements therein not misleading, but in each case
only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company through the Representatives by or
on behalf of that Underwriter specifically for inclusion therein and described
in Section 8(e), and shall reimburse the Company and any such director, officer
or controlling person for any legal or other expenses reasonably incurred by the
Company or any such director, officer or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Underwriter may
otherwise have to the Company or any such director, officer or controlling
person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in
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respect thereof is to be made against the indemnifying party under this Section
8, notify the indemnifying party in writing of the claim or the commencement of
that action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under this
Section 8 except to the extent it has been materially prejudiced by such failure
and, provided further, that the failure to notify the indemnifying party shall
not relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 8. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 8 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that the Representatives
shall have the right to employ counsel to represent jointly the Representatives
and those other Underwriters and their respective officers, employees and
controlling persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Underwriters against the Company
under this Section 8 if, in the reasonable judgment of the Representatives, it
is advisable for the Representatives and those Underwriters, officers, employees
and controlling persons to be jointly represented by separate counsel, and in
that event the fees and expenses of such separate counsel shall be paid by the
Company, any indemnified party shall have the right to employ separate counsel
in any such action and to participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the employment thereof has been specifically authorized by the
indemnifying party in writing, (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, that the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys at any
time for all such indemnified parties, which firm shall be designated in writing
by the Representatives, if the indemnified parties under this Section 8 consist
of any Underwriter or any of their respective officers, employees or controlling
persons, or by the Company, if the indemnified parties under this Section
consist of the Company or any of the Company's directors, officers, employees or
controlling persons. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding, or (ii) be liable for any settlement
of any such action
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effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a final
judgment of the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss of
liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall
for any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or 8(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other from
the offering of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Underwriters on
the other with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other with respect to such
offering shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Shares purchased under this Agreement (before deducting
expenses) received by the Company, on the one hand, and the total underwriting
discounts and commissions received by the Underwriters with respect to the
Shares purchased under this Agreement, on the other hand, bear to the total
gross proceeds from the offering of the Shares under this Agreement, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Underwriters, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 8(d) were to be 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 into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 8(d) shall be deemed to include, for
purposes of this Section 8(d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8(d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by it and distributed
to the public was offered to the public exceeds the amount of any damages which
such Underwriter has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters' obligations
to contribute as provided in this Section 8(d) are several in proportion to
their respective underwriting obligations and not joint.
(e) The Underwriters severally confirm that the statements with
respect to the public offering of the Shares set forth on the cover page of, and
under the caption "Underwriting"
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in, the Prospectus are correct and constitute the only information furnished in
writing to the Company by or on behalf of the Underwriters specifically for
inclusion in the Registration Statements and the Prospectus.
9. Directed Share Program. It is understood that approximately
300,000 shares of the Firm Shares ("Directed Shares") will initially be reserved
by the Underwriters for offer and sale to officers, directors, employees and
consultants of the Company and their family members and to other persons having
business relationships with the Company and its subsidiaries ("Directed Share
Participants") upon the terms and conditions set forth in the Prospectus and in
accordance with the rules and regulations of the National Association of
Securities Dealers, Inc. Under no circumstances will Xxxxxx Brothers Inc. or any
Underwriter be liable to the Company or to any Directed Share Participant for
any action taken or omitted to be taken in good faith in connection with such
Directed Share Program. To the extent that any Directed Shares are not
affirmatively confirmed for purchase by any Directed Share Participant on or
immediately after the date of this Agreement, such Directed Shares may be
offered to the public upon the terms and conditions set forth in the Prospectus.
The Company agrees to pay all fees and disbursements incurred by
the Underwriters in connection with the Directed Share Program, including
counsel fees and any stamp duties or other taxes incurred by the Underwriters in
connection with the Directed Share Program.
In connection with the offer and sale of the Directed Shares, the
Company agrees, promptly upon a request in writing, to indemnify and hold
harmless Xxxxxx Brothers Inc. and the other Underwriters from and against any
loss, claim, damage, expense, liability or action which (i) arises out of, or is
based upon, any untrue statement or alleged untrue statement of a material fact
contained in any material prepared by or with the approval of the Company for
distribution to Directed Share Participants in connection with the Directed
Share Program or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (ii) arises out of the failure of any Directed Share Program
participant to pay for and accept delivery of Directed Shares that the
Participant agreed to purchase or (iii) is otherwise related to the Directed
Share Program, other than losses, claims, damages or liabilities (or expenses
relating thereto) that are finally judicially determined to have resulted
directly from the bad faith or gross negligence of Xxxxxx Brothers Inc.
10. Defaulting Underwriters. If, on either Delivery Date, any
Underwriter defaults in the performance of its obligations under this Agreement,
the remaining non-defaulting Underwriters shall be obligated to purchase the
Shares which the defaulting Underwriter agreed but failed to purchase on such
Delivery Date in the respective proportions which the number of shares of the
Firm Shares set opposite the name of each remaining non-defaulting Underwriter
in Schedule 1 hereto bears to the total number of shares of the Firm Shares set
opposite the names of all the remaining non-defaulting Underwriters in Schedule
1 hereto; provided, however, that the remaining non-defaulting Underwriters
shall not be obligated to purchase any of the Shares on such Delivery Date if
the total number of Shares which the defaulting Underwriter or Underwriters
agreed but failed to purchase on such date exceeds 9.09% of the total number of
Shares to be purchased on such Delivery Date, and any remaining non-defaulting
Underwriter shall not be obligated to purchase more than 110% of the number of
Shares which it agreed to
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35
purchase on such Delivery Date pursuant to the terms of Section 2. If the
foregoing maximums are exceeded, the remaining non-defaulting Underwriters, or
those other underwriters satisfactory to the Representatives who so agree, shall
have the right, but shall not be obligated, to purchase, in such proportion as
may be agreed upon among them, all the Shares to be purchased on such Delivery
Date. If the remaining Underwriters or other underwriters satisfactory to the
Representatives do not elect to purchase the shares which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such Delivery Date,
this Agreement (or, with respect to the Second Delivery Date, the obligation of
the Underwriters to purchase, and of the Company to sell, the Option Shares)
shall terminate without liability on the part of any non-defaulting Underwriter
or the Company, except that the Company will continue to be liable for the
payment of expenses to the extent set forth in Sections 6 and 12. As used in
this Agreement, the term "Underwriter" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 10, purchases Firm Shares which
a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter
of any liability it may have to the Company for damages caused by its default.
If other underwriters are obligated or agree to purchase the Shares of a
defaulting or withdrawing Underwriter, either the Representatives or the Company
may postpone the First Delivery Date for up to seven full business days in order
to effect any changes that in the opinion of counsel for the Company or counsel
for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
11. Termination. The obligations of the Underwriters hereunder
may be terminated by the Representatives by notice given to and received by the
Company prior to delivery of and payment for the Firm Shares if, prior to that
time, any of the events described in Sections 7(l) or 7(m) shall have occurred
or if the Underwriters shall decline to purchase the Shares for any reason
permitted under this Agreement.
12. Reimbursement of Underwriters' Expenses. If (a) the Company
shall fail to tender the Shares for delivery to the Underwriters for any reason
permitted under this Agreement, or (b) the Underwriters shall decline to
purchase the Shares for any reason permitted under this Agreement (including the
termination of this Agreement pursuant to Section 11), the Company shall
reimburse the Underwriters for the reasonable fees and expenses of their counsel
and for such other out-of-pocket expenses as shall have been incurred by them in
connection with this Agreement and the proposed purchase of the Shares, and upon
demand the Company shall pay the full amount thereof to the Representatives. If
this Agreement is terminated pursuant to Section 11 by reason of the default of
one or more Underwriters, the Company shall not be obligated to reimburse any
defaulting Underwriter on account of those expenses.
13. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent
by mail, telex or facsimile transmission to:
XXXXXX BROTHERS INC.
Three World Xxxxxxxxx Xxxxxx
-00-
00
Xxx Xxxx, Xxx Xxxx 00000
Attention: Syndicate Department
Fax: 000-000-0000
(b) if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set
forth in the Primary Registration Statement, Attention: Xx. Xxxxx
Xxx-Xxxxxx (Fax: 000-000-0000);
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by Xxxxxx Brothers Inc. on behalf of the
Representatives.
14. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the Company
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the officers and
employees of each Underwriter and the person or persons, if any, who control
each Underwriter within the meaning of Section 15 of the Securities Act and (B)
the indemnity agreement of the Underwriters contained in Section 8(b) of this
Agreement shall be deemed to be for the benefit of directors, officers and
employees of the Company and any person controlling the Company within the
meaning of Section 15 of the Securities Act. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 14, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
15. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Shares and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
16. Definition of the Terms "Business Day" and "Subsidiary." For
purposes of this Agreement, (a) "business day" means any day on which the NASDAQ
National Market is open for trading and (b) "subsidiary" has the meaning set
forth in Rule 405 of the Rules and Regulations.
17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK.
18. Consent to Jurisdiction. (a) The Company irrevocably agrees
that any legal suit, action or proceeding arising out of or based upon this
Agreement or the transactions contemplated hereby ("Related Proceedings") may be
instituted in the federal courts of the United States of America located in the
City of New York or the courts of the State of New York in each case located in
the Borough of Manhattan in the City of New York (collectively, the
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37
"Specified Courts"), and irrevocably submits to the non-exclusive jurisdiction
of such courts in any such suit, action or proceeding. The Company further
agrees that service of any process, summons, notice or document by mail to such
party's address set forth above shall be effective service of process for any
lawsuit, action or other proceeding brought in any such court. The Company
hereby irrevocably and unconditionally waives any objection to the laying of
venue of any lawsuit, action or other proceeding in the Specified Courts, and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such lawsuit, action or other proceeding
brought in any such court has been brought in an inconvenient forum.
(b) The Company to the fullest extent permitted by applicable
law, irrevocably and fully waive the defense of an inconvenient forum to the
maintenance of such suit or proceeding and hereby irrevocably designates and
appoints CT Corporation System, with offices at 0000 Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (the "Authorized Agent"), as its authorized agent upon whom process
may be served in any such suit or proceeding. The Company represents that it has
notified its Authorized Agent of such designation and appointment and that its
Authorized Agent has accepted the same in writing. The Company hereby
irrevocably authorizes and directs its Authorized Agent to accept such service.
The Company further agrees that service of process upon its Authorized Agent and
written notice of said service to the Company mailed by first class mail or
delivered to its Authorized Agent shall be deemed in every respect effective
service of process upon the Company in any such suit or proceeding. Nothing
herein shall affect the right of any person to serve process in any other manner
permitted by law.
The Company agrees that a final judgment in any such suit or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other lawful manner.
19. Waiver of Immunity. With respect to any Related Proceeding,
the Company irrevocably waives, to the fullest extent permitted by applicable
law, all immunity (whether on the basis of sovereignty or otherwise) from
jurisdiction, service of process, attachment (both before and after judgment)
and execution to which it might otherwise be entitled in the Specified Courts,
and with respect to any Related Judgment, each party waives any such immunity in
the Specified Courts or any other court of competent jurisdiction, and will not
raise or claim or cause to be pleaded any such immunity at or in respect of any
such Related Proceeding or Related Judgment, including, without limitation, any
immunity pursuant to the United States Foreign Sovereign Immunities Act of 1976,
as amended.
20. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
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.
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38
If the foregoing correctly sets forth the agreement between the
Company and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
CLICKSOFTWARE TECHNOLOGIES LTD.
By:
--------------------------------------
Name: Xxxxx Xxx-Xxxxxx
Title: Chief Executive Officer
CLICKSOFTWARE INC.,
for itself and as Authorized
Representative of the Company in the
United States
By:
--------------------------------------
Name: Xxxxx Xxx-Xxxxxx
Title: Chief Executive Officer
Accepted:
XXXXXX BROTHERS INC.
CIBC WORLD MARKETS
XX XXXXX SECURITIES CORP.
FIDELITY CAPITAL MARKETS
(a division of National Financial Services Corporation)
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By: XXXXXX BROTHERS INC.
By:
---------------------------------
Authorized Representative
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39
SCHEDULE 1
Number of
Underwriters Shares
------------ ---------
Xxxxxx Brothers Inc.
CIBC World Markets .......................................................
XX Xxxxx Securities Corp. ................................................
Fidelity Capital Markets .................................................
---------
Total................................................................
=========
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40
EXHIBIT A
FORM OF LOCK-UP LETTER
XXXXXX BROTHERS INC.
As Representatives of the several
Underwriters,
c/x Xxxxxx Brothers Inc.
Three World Financial Center
New York New York 10285
Dear Sirs:
The undersigned understands that you and certain other firms propose to
enter into an Underwriting Agreement (the "UNDERWRITING AGREEMENT") providing
for the purchase by you and such other firms (the "UNDERWRITERS") of shares (the
"SHARES") of ordinary shares, par value NIS 0.01 nominal value per share (the
"ORDINARY SHARES"), of ClickSoftware Technologies Ltd., an Israeli corporation
(formerly known as IET - Intelligent Electronics Ltd., the "COMPANY"), and that
the Underwriters propose to reoffer the Shares to the public (the "OFFERING").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Xxxxxx
Brothers Inc. ("XXXXXX BROTHERS"), on behalf of the Underwriters, the
undersigned will not, directly or indirectly, (1) offer for sale, sell, pledge,
or otherwise dispose of (or enter into any transaction or device that is
designed to, or could be expected to, result in the disposition by any person at
any time in the future of) any shares of Ordinary Shares (including, without
limitation, shares of Ordinary Shares that may be deemed to be beneficially
owned by the undersigned in accordance with the rules and regulations of the
Securities and Exchange Commission and shares of Ordinary Shares that may be
issued upon exercise of any option or warrant) or securities convertible into or
exchangeable for Ordinary Shares or substantially similar securities owned by
the undersigned on the date of execution of this Lock-Up Letter Agreement or on
the date of the completion of the Offering, or sell or grant options, rights or
warrants with respect to any shares of Ordinary Shares or substantially similar
securities (other than the grant of options pursuant to option plans existing on
the date hereof) or (2) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the economic benefits or
risks of ownership of such shares of Ordinary Shares, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Ordinary Shares or other securities, in cash or otherwise, for a period of 180
days after the effective date of the Underwriting Agreement relating to the
Offering.
Notwithstanding the foregoing, if the undersigned is an individual, he
or she may transfer any Ordinary Shares or securities convertible into or
exchangeable or exercisable for Ordinary Shares either during his or her
lifetime or upon death by will or intestacy to his or her immediate family or to
a trust if the beneficiaries of such trust are exclusively the undersigned
and/or a member or members of his or her immediate family; provided, however ,
that prior to any such transfer each transferee shall execute an agreement
substantially identical to this agreement and which shall be satisfactory to
Xxxxxx Brothers, pursuant to which each transferee shall agree to receive and
hold such Ordinary Shares, or securities convertible into or exchangeable or
exercisable for Ordinary Shares, subject to the provisions hereof, and there
shall be no further
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41
transfer except in accordance with the provisions hereof. In addition, if the
undersigned is a partnership, the partnership may transfer any Ordinary Shares
or securities convertible into or exchangeable or exercisable for Ordinary
Shares to a partner of such partnership, to a retired partner of such
partnership, or to the estate of any such partner or retired partner, and any
such partner who is an individual may transfer such Ordinary Shares or
securities convertible into or exchangeable or exercisable for Ordinary Shares
by gift, will or intestacy to a member or members of his or her immediate
family; provided, however, that prior to any such transfer each transferee shall
execute an agreement substantially identical to this agreement and which shall
be satisfactory to Xxxxxx Brothers, pursuant to which each transferee shall
agree to receive and hold such Ordinary Shares or securities convertible into or
exchangeable or exercisable for Ordinary Shares, subject to the provisions
hereof, and there shall be no further transfer except in accordance with the
provisions hereof. For purposes of this paragraph, "immediate family" shall mean
spouse, lineal descendant, father, mother, brother, sister or domestic partner
of the transferor.
In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
It is understood that, if Xxxxxx Brothers notifies the undersigned that
it does not intend to proceed with the Offering or if the Underwriting Agreement
(other than the provisions thereof which survive termination), after it becomes
effective, shall terminate or be terminated prior to payment for and delivery of
the Shares, the undersigned will be released from its obligations under this
Lock-Up Letter Agreement.
The undersigned understands that the Company and the Underwriters will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will only be made pursuant to
an Underwriting Agreement, the terms of which are subject to negotiation between
the Company and the Underwriters.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
Very truly yours,
By:
---------------------------------
Name:
Title:
Date:
-2-
42
EXHIBIT B
PERSONS WHO HAVE NOT SIGNED
LOCK-UP AGREEMENTS
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