Exhibit 1.1
SYNERON MEDICAL LTD.
7,000,000 Ordinary Shares
(par value NIS 0.01 per share)
Underwriting Agreement
New York, New York
February [ ], 2005
▇▇▇▇▇▇ Brothers Inc.
CIBC World Markets Corp.
As Representatives of the several Underwriters,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Certain holders of ordinary shares, par value NIS 0.01 per share
("ORDINARY SHARES"), and/or options to acquire Ordinary Shares, of Syneron
Medical Ltd., a corporation organized under the laws of the State of Israel (the
"COMPANY"), named in Schedule II hereto (each, a "SELLING SHAREHOLDEr" and,
collectively, the "SELLING SHAREHOLDERS") propose to sell to the several
underwriters named in Schedule I hereto (the "UNDERWRITERS"), for whom you (the
"REPRESENTATIVES") are acting as representatives, 7,000,000 Ordinary Shares (the
"UNDERWRITTEN SHARES"). The Selling Shareholders also propose to grant to the
Underwriters an option to purchase up to 1,050,000 additional Ordinary Shares to
cover over-allotments (the "OPTION SHARES" and, together with the Underwritten
Shares, the "SHARES"). To the extent there are no additional Underwriters listed
on Schedule I other than you, the term "REPRESENTATIVES" as used herein shall
mean you, as Underwriters, and the terms "REPRESENTATIVES" and "UNDERWRITERS"
shall mean either the singular or plural as the context requires. In addition,
to the extent that there is not more than one Selling Shareholder named in
Schedule II, the term Selling Shareholders shall mean the singular. Certain
terms used herein are defined in Section 20 hereof.
1. REPRESENTATIONS AND WARRANTIES.
(a) The Company and each of the Selling Shareholders listed under the
sub-heading "MAJOR SELLING SHAREHOLDERS" on Schedule II hereto (the "MAJOR
SELLING SHAREHOLDERS"), jointly and severally, represent and warrant to, and
agree with, each Underwriter as set forth below in this Section 1(a).
(i) The Company has prepared and filed with the Commission a
registration statement (file number 333-_____) on Form F-1, including a
related preliminary prospectus, for registration under the Act of the
offering and sale of the Shares. The Company may have filed one or more
amendments thereto, including a related preliminary prospectus, each of
which has previously been furnished to you. The Company will next file
with the Commission one of the following: either (1) prior to the
Effective Date of such registration statement, a further amendment to
such registration statement (including the form of final prospectus) or
(2) after the Effective Date of such registration statement, a final
prospectus in accordance with Rules 430A and 424(b). In the case of
clause (2), the Company has included in such registration statement, as
amended at the Effective Date, all information (other than Rule 430A
Information) required by the Act and the rules thereunder to be included
in such registration statement and the Prospectus. As filed, such
amendment and form of final prospectus, or such final prospectus, shall
contain all Rule 430A Information, together with all other such required
information, and, except to the extent the Representatives shall agree in
writing to a modification, shall be in all substantive respects in the
form furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company has advised you, prior to
the Execution Time, will be included or made therein.
(ii) On the Effective Date, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in accordance
with Rule 424(b) and on the Closing Date (as defined herein) and on any
date on which Option Shares are purchased, if such date is not the
Closing Date (a "SETTLEMENT DATE"), the Prospectus (and any supplements
thereto) will, comply in all material respects with the applicable
requirements of the Act and the rules thereunder; on the Effective Date
and at the Execution Time, the Registration Statement did not or will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading; and, on the Effective Date, the
Prospectus, if not filed pursuant to Rule 424(b), will not, and on the
date of any filing pursuant to Rule 424(b) and on the Closing Date and
any settlement date, the Prospectus (together with any supplement
thereto) will not, include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; PROVIDED, HOWEVER, that the Company and the Major Selling
Shareholders make no representations or warranties as to the information
contained in or omitted from the Registration Statement, or the
Prospectus (or any supplement thereto) in reliance upon and in conformity
with information furnished in writing to the Company by or on behalf of
any Underwriter through the Representatives specifically for inclusion in
the Registration Statement or the Prospectus (or any supplement thereto).
(iii) Each of the Company and the Significant Subsidiaries has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction in which it is chartered or
organized with full corporate power and authority to own or lease, as the
case may be, and to operate its properties and conduct its business as
described in the Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification, except where the failure
to be so qualified or in good standing would not reasonably be expected
to have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and the Significant Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business (a "MATERIAL
ADVERSE EFFECT").
-2-
(iv) All the outstanding shares of capital stock of each
Significant Subsidiary have been duly and validly authorized and issued
and are fully paid and nonassessable, and, except as otherwise set forth
in the Prospectus, all outstanding shares of capital stock of the
Significant Subsidiaries are owned by the Company either directly or
through wholly owned subsidiaries free and clear of any perfected
security interest or any other security interests, claims, liens or
encumbrances.
(v) The Company's authorized equity capitalization is as set forth
in the Prospectus; the share capital of the Company conforms in all
material respects to the description thereof contained in the Prospectus;
the outstanding Ordinary Shares have been duly and validly authorized and
issued and are fully paid and nonassessable; the Shares being sold
hereunder with respect to which the Selling Shareholders have delivered
irrevocable notices of option exercise (the "OPTION EXERCISE NOTICES"
and, such Shares, the "OPTION EXERCISE SHARES") have been duly and
validly authorized and, when issued and delivered to and paid for by the
Selling Shareholders pursuant to the Option Exercise Notices, will be
fully paid and nonassessable; the Ordinary Shares, including the Shares,
have been approved for listing on the Nasdaq National Market, subject to
(in the case of the Option Exercise Shares) official notice of issuance
and evidence of satisfactory distribution; the certificates for the
Shares are in valid and sufficient form; the holders of outstanding
shares of the Company are not entitled to preemptive or other rights to
subscribe for the Shares; and, except as set forth in the Prospectus, no
options, warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert any obligations into or
exchange any securities for, shares of or ownership interests in the
Company are outstanding.
(vi) There is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not described
or filed as required; and the statements in the Prospectus under the
headings "Risk Factors - If we fail to obtain and maintain necessary U.S.
Food and Drug Administration clearances for our products and indications,
if clearances for future products and indications are delayed or not
issued, or if there are U.S. federal or state level regulatory changes,
our commercial operations could be harmed," "Risk Factors - If we or our
subcontractors fail to comply with the FDA's Quality System Regulation
and performance standards, manufacturing operations could be halted, and
our business would suffer," "Risk Factors - Under current U.S. and
Israeli law, we may not be able to enforce covenants not to compete and
therefore may be unable to prevent our competitors from benefiting from
the expertise of some of our former employees," "Risk Factors - Future
sales of our ordinary shares could reduce our stock price," "Risk Factors
- The tax benefits available to us require us to meet several conditions
and may be terminated or reduced in the future, which would increase our
costs and taxes," "Risk Factors - Provisions of our articles of
association and Israeli law may delay, prevent or make difficult an
acquisition of Syneron, which could prevent a change of control and,
therefore, depress the price of our shares," "Business - Manufacturing,"
"Business - Government Regulation," "Business - Litigation,"
"Management," "Related Party Transactions," "Description of Share
Capital," "Israeli Taxation," "United States Federal Income Tax
Considerations," and "Enforceability of Civil Liabilities", insofar as
such statements summarize legal matters, agreements,
-3-
documents or proceedings discussed therein, are accurate and fair
summaries of such legal matters, agreements, documents or proceedings.
(vii) This Agreement has been duly authorized, executed and
delivered by the Company; all corporate action required by the laws of
the State of Israel and the articles of association of the Company to be
taken by the Company for the due and proper authorization and issuance of
the Option Exercise Shares and the offering, sale and delivery of the
Shares, has been validly and sufficiently taken; the filing of the
Registration Statement and the Prospectus with the Commission has been
duly authorized by and on behalf of the Company and the Registration
Statement has been duly executed on behalf of the Company pursuant to
such authorization in accordance with the laws of the State of Israel.
(viii) The Company is not and, after giving effect to the offering
and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(ix) No consent, approval, authorization, filing with or order of
any court or governmental agency or body (including, without limitation,
the U.S. Food and Drug Administration ("FDA")) is required in connection
with the transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and distribution
of the Shares by the Underwriters in the manner contemplated herein and
in the Prospectus.
(x) Neither the issuance of the Option Exercise Shares, the sale
of the Shares to the Underwriters, the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms hereof
will conflict with, result in a breach or violation of, or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company or any of the Significant Subsidiaries pursuant to, (i) the
articles of association, charter, by-laws or other organizational
documents of the Company or any of the Significant Subsidiaries, (ii) the
terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company or any of the Significant
Subsidiaries is a party or bound or to which its or their property is
subject, or (iii) any statute, law, rule, regulation, judgment, order or
decree applicable to the Company or any of the Significant Subsidiaries
of any court, regulatory body, administrative agency or governmental body
(including, without limitation, the FDA), arbitrator or other authority
having jurisdiction over the Company or any of the Significant
Subsidiaries or any of its or their properties, except, in the case of
clauses (ii) and (iii) above, as would not reasonably be expected to have
a Material Adverse Effect.
(xi) No holders of securities of the Company have rights to the
registration of such securities or any other securities of the Company
under the Registration Statement except for such rights as have been
satisfied or waived.
-4-
(xii) The consolidated historical financial statements of the
Company and its consolidated subsidiaries included in the Prospectus and
the Registration Statement present fairly in all material respects the
financial condition, results of operations and cash flows of the Company
as of the dates and for the periods indicated, comply as to form with the
applicable accounting requirements of the Act and have been prepared in
conformity with U.S. generally accepted accounting principles applied on
a consistent basis throughout the periods involved (except as otherwise
noted therein). The selected consolidated financial data set forth under
the captions "Summary Consolidated Financial Data" and "Selected
Consolidated Financial Data" in the Prospectus and Registration Statement
fairly present, in all material respects, on the basis stated in the
Prospectus and the Registration Statement, the information included
therein. The pro forma financial information included in the Prospectus
and the Registration Statement include assumptions that provide a
reasonable basis for presenting the significant effects directly
attributable to the transactions and events described therein, the
related pro forma adjustments give appropriate effect to those
assumptions, and the pro forma adjustments reflect the proper application
of those adjustments to the historical financial statement amounts in the
pro forma financial information included in the Prospectus and the
Registration Statement.
(xiii) No action, suit or proceeding by or before any court or
governmental agency, authority or body (including, without limitation,
the FDA) or any arbitrator involving the Company or any of the
Significant Subsidiaries or its or their property is pending or, to the
best knowledge of the Company, threatened that (i) could reasonably be
expected to have a material adverse effect on the performance of this
Agreement or the consummation of any of the transactions contemplated
hereby or (ii) could reasonably be expected to have a Material Adverse
Effect, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(xiv) Each of the Company and each of the Significant Subsidiaries
owns or leases all such properties as are necessary to the conduct of its
operations as presently conducted.
(xv) Neither the Company nor any Significant Subsidiary is in
violation or default of (i) any provision of its articles of association,
charter, bylaws or other organizational documents, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or
instrument to which it is a party or bound or to which its property is
subject, or (iii) any statute, law, rule, regulation, judgment, order or
decree of any court, regulatory body, administrative agency or
governmental body (including, without limitation, the FDA), arbitrator or
other authority having jurisdiction over the Company or such Significant
Subsidiary or any of its properties, as applicable, except, in the case
of clauses (ii) and (iii) above, as would not reasonably be expected to
have a Material Adverse Effect.
(xvi) ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ and Kasierer (a member of Ernst & Young
Global), which has certified certain financial statements of the Company
and its consolidated subsidiaries and delivered its report with respect
to the audited consolidated
-5-
financial statements included in the Prospectus, is an independent
registered public accounting firm with respect to the Company within the
meaning of the Act and the applicable published rules and regulations
thereunder.
(xvii) There are no transfer taxes, stamp duties on issuance or
other similar fees or charges and no capital gains, income, withholding
or other taxes under the laws of Israel or any political subdivision
thereof, U.S. federal law or the laws of any state, or any political
subdivision thereof, required to be paid by the Underwriters in
connection with the execution and delivery of this Agreement or the sale
and delivery by the Underwriters of the Shares as contemplated herein.
(xviii) Each of the Company and the Significant Subsidiaries has
filed all Tax Returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to file
would not have a Material Adverse Effect, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto)) and
has paid all Taxes required to be paid by it and any other assessment,
fine or penalty levied against it, to the extent that any of the
foregoing is due and payable, except for any such assessment, fine or
penalty that is currently being contested in good faith or as would not
have a Material Adverse Effect, except as set forth in or contemplated in
the Prospectus (exclusive of any supplement thereto).
(xix) No labor problem or dispute with the employees of the
Company or any of the Significant Subsidiaries exists or is threatened or
imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or the Significant
Subsidiaries' principal suppliers, contractors or customers, that could
have a Material Adverse Effect, except as set forth in or contemplated in
the Prospectus (exclusive of any supplement thereto).
(xx) The Company and each of the Significant Subsidiaries are
insured by insurers of recognized financial responsibility, in their
respective jurisdictions, against such losses and risks and in such
amounts as are prudent and customary in the businesses within the
jurisdictions in which they are engaged; all policies of insurance and
fidelity or surety bonds insuring the Company or any of the Significant
Subsidiaries or their respective businesses, assets, employees, officers
and directors are in full force and effect; the Company and the
Significant Subsidiaries are in compliance with the terms of such
policies and instruments in all material respects; and there are no
claims by the Company or any of the Significant Subsidiaries under any
such policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause; neither the
Company nor any such Significant Subsidiary has been refused any
insurance coverage sought or applied for; and neither the Company nor any
such Significant Subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a
Material Adverse Effect, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
-6-
(xxi) No Significant Subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any dividends to the
Company, from making any other distribution on such Significant
Subsidiary's capital stock, from repaying to the Company any loans or
advances to such Significant Subsidiary from the Company or from
transferring any of such Significant Subsidiary's property or assets to
the Company or any other subsidiary of the Company, except as described
in or contemplated by the Prospectus (exclusive of any supplement
thereto).
(xxii) The Company and the Significant Subsidiaries possess all
licenses, certificates, permits and other authorizations issued by the
appropriate Israeli, U.S. federal, state or foreign regulatory
authorities necessary to conduct their respective businesses, and neither
the Company nor any such Significant Subsidiary has received any notice
of proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would have
a Material Adverse Effect, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
(xxiii) The Company and each of the Significant Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii) transactions
are recorded as necessary to permit preparation of financial statements
in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xxiv) The Company has not taken, directly or indirectly, any
action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares.
(xxv) The Company and the Significant Subsidiaries are (i) in
compliance with any and all applicable foreign, Israeli, U.S. federal,
state and local laws and regulations relating to the protection of human
health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), (ii) have
received and are in compliance with all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) have not received notice of any
actual or potential liability under any environmental law, except where
such non-compliance with Environmental Laws, failure to receive required
permits, licenses or other approvals, or liability would not,
individually or in the aggregate, have a Material Adverse Effect, except
as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto). Except as set forth in the Prospectus, neither the
Company nor any of the Significant Subsidiaries has been named as a
"potentially responsible party" under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
-7-
(xxvi) The associated costs and liabilities with the Environmental
Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws, or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to
third parties) would not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto).
(xxvii) The minimum funding standard under Section 302 of the
Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder ("ERISA"), has been
satisfied by each "pension plan" (as defined in Section 3(2) of ERISA)
which has been established or maintained by the Company and/or one or
more of its subsidiaries, and the trust forming part of each such plan
which is intended to be qualified under ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Internal Revenue Code of 1986, as amended, is so qualified; each of the
Company and its subsidiaries has fulfilled its obligations, if any, under
Section 515 of ERISA; neither the Company nor any of its subsidiaries
maintains or is required to contribute to a "welfare plan" (as defined in
Section 3(1) of ERISA) which provides retiree or other post-employment
welfare benefits or insurance coverage (other than "continuation
coverage" (as defined in Section 602 of ERISA)); each pension plan and
welfare plan established or maintained by the Company and/or one or more
of its subsidiaries is in compliance in all material respects with the
currently applicable provisions of ERISA; and neither the Company nor any
of its subsidiaries has incurred or could reasonably be expected to incur
any withdrawal liability under Section 4201 of ERISA, any liability under
Section 4062, 4063 or 4064 of ERISA, or any other liability under Title
IV of ERISA.
(xxviii) There is and has been no failure on the part of the
Company and any of the Company's directors or officers, in their
capacities as such, to comply with any applicable provisions of the
Sarbanes Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith (the "SARBANES OXLEY ACT"), including Section 402
related to loans.
(xxix) Neither the Company nor any of the Significant Subsidiaries
nor, to the knowledge of the Company, any director, officer, agent,
employee or affiliate of the Company or any of the Significant
Subsidiaries is aware of or has taken any action, directly or indirectly,
that would result in a violation by such Persons of the FCPA, including,
without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of an
offer, payment, promise to pay or authorization of the payment of any
money, or other property, gift, promise to give, or authorization of the
giving of anything of value to any "foreign official" (as such term is
defined in the FCPA) or any non-U.S. political party or official thereof
or any candidate for non-U.S. political office, in contravention of the
FCPA and the Company, the Significant Subsidiaries and, to the knowledge
of the Company, its affiliates have conducted their businesses in
compliance with the FCPA and have instituted and maintain policies and
procedures designed to ensure, and which are reasonably expected to
continue to ensure, continued compliance therewith. "FCPA" means Foreign
Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder.
-8-
(xxx) The operations of the Company and the Significant
Subsidiaries are and have been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, the
money laundering statutes of all jurisdictions to which the Company or
the Significant Subsidiaries are subject, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines,
issued, administered or enforced by any governmental agency
(collectively, the "MONEY LAUNDERING LAWS") and no action, suit or
proceeding by or before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of the Significant
Subsidiaries with respect to the Money Laundering Laws is pending or, to
the best knowledge of the Company, threatened.
(xxxi) Neither the Company nor any of the Significant Subsidiaries
nor, to the knowledge of the Company, any director, officer, agent,
employee or affiliate of the Company or any of the Significant
Subsidiaries is currently subject to any U.S. sanctions administered by
the Office of Foreign Assets Control of the U.S. Treasury Department
("OFAC"); and the Company will not directly or indirectly use the
proceeds of the offering, or lend, contribute or otherwise make available
such proceeds to any Significant Subsidiary, joint venture partner or
other person or entity, for the purpose of financing the activities of
any person currently subject to any U.S. sanctions administered by OFAC.
(xxxii) Syneron, Inc. (the "U.S. SUBSIDIARY"), Syneron Canada
Corporation (the "CANADIAN SUBSIDIARY") and Syneron GmbH (the "GERMAN
SUBSIDIARY") are the only significant subsidiaries of the Company as
defined by Rule 1-02 of Regulation S-X.
(xxxiii) The Company and the Significant Subsidiaries own,
possess, license or have other rights to use, on reasonable terms, all
patents, patent applications, trade and service marks, trademark and
service ▇▇▇▇ registrations, trade names, copyrights, licenses,
inventions, trade secrets, technology, know-how and other intellectual
property (collectively, the "INTELLECTUAL PROPERTY") necessary for the
conduct of the Company's business as now conducted or as proposed in the
Prospectus to be conducted. Except as set forth in the Prospectus under
the caption "Business--Intellectual Property," (a) there are no rights of
third parties to any such Intellectual Property; (b) to the Company's
knowledge, there is no material infringement by third parties of any such
Intellectual Property; (c) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others
challenging the Company's rights in or to any such Intellectual Property,
and the Company is unaware of any facts which would form a reasonable
basis for any such claim; (d) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others
challenging the validity or scope of any such Intellectual Property, and
the Company is unaware of any facts which would form a reasonable basis
for any such claim; (e) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others that
the Company infringes or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary rights of others, and the
Company is unaware of any other fact which would form a reasonable basis
for any such claim; (f) to the Company's knowledge, there is no U.S.
patent or published U.S. patent application which contains claims that
dominate or may dominate any Intellectual Property described in the
Prospectus as being
-9-
owned by or licensed to the Company or that interferes with the issued or
pending claims of any such Intellectual Property; and (g) there is no
prior art of which the Company is aware that may render any U.S. patent
held by the Company invalid or any U.S. patent application held by the
Company unpatentable which has not been disclosed to the U.S. Patent and
Trademark Office.
(xxxiv) The statements contained in the Prospectus under the
captions "Risk Factors - If we are unable to protect our intellectual
property rights, our competitive position could be harmed," "Risk Factors
- Third-party claims of infringement or other claims against us could
require us to redesign our products, seek licenses, or engage in future
costly intellectual property litigation, which could impact our future
business and financial performance," and "Business - Intellectual
Property," insofar as such statements summarize legal matters,
agreements, documents, or proceedings discussed therein, are accurate and
fair summaries of such legal matters, agreements, documents or
proceedings.
(xxxv) Neither the Company nor any of the Significant Subsidiaries
nor any of its or their properties or assets has any immunity from the
jurisdiction of any court or from any legal process (whether through
service or notice, attachment prior to judgment, attachment in aid of
execution or otherwise) under the laws of the State of Israel.
(xxxvi) The Company is not a Passive Foreign Investment Company
("PFIC") within the meaning of Section 1297 of the United States Internal
Revenue Code of 1986, as amended, and does not expect to become a PFIC in
the future.
(xxxvii) The Company is not a "foreign personal holding company"
or a "controlled foreign corporation" within the meaning of the United
States Internal Revenue Code of 1986, as amended.
(xxxviii) The Company is in compliance in all material respects
with all conditions and requirements stipulated by the instruments of
approval granted to it with respect to the "Approved Enterprise" status
of any of the Company's facilities as well as with respect to the other
tax benefits received by the Company as set forth under the caption
"Israeli Taxation" in the Prospectus and by Israeli laws and regulations
relating to such "Approved Enterprise" status and the aforementioned
other tax benefits received by the Company. The Company has not received
any notice of any proceeding or investigation relating to revocation or
modification of any "Approved Enterprise" status granted with respect to
any of the Company's facilities.
(xxxix) All of the information provided by the Company to the
Underwriters or to counsel for the Underwriters in connection with
letters, filings or other supplemental information provided to the NASD
pursuant to NASD Conduct Rule 2710 or 2720 is true, complete and correct
in all material respects. The Ordinary Shares are a class of equity
securities for which there exists a "bona fide independent market" within
the meaning of Section (b)(3) of NASD Conduct Rule 2720 as of the filing
date of the Registration Statement on February __, 2005 (the "FILING
DATE") and as of the Effective Date (together with the Filing Date, the
"APPLICABLE DATES") and (a) the Ordinary Shares
-10-
were registered pursuant to Section 12(g) of the Exchange Act as of the
Applicable Dates, (b) the Ordinary Shares had a market price of five
dollars or more per share as of the close of trading on the trade date
immediately preceding the Applicable Dates and traded at a price of five
dollars or more per share in at least 20 of the 30 trading days
immediately preceding each of the Applicable Dates, (c) for at least 90
calendar days immediately preceding each of the Applicable Dates, the
Ordinary Shares had been listed on, and were in compliance with the
requirements for continued listing on, the Nasdaq Stock Market and had,
for a period of at least 30 trading days immediately preceding the
Applicable Dates, at least two bona fide independent market makers
(within the meaning of Section (b)(4) of NASD Conduct Rule 2720) and (d)
for the 90 calendar day period immediately preceding each of the
Applicable Dates, the Ordinary Shares had an aggregate trading volume of
at least 500,000 shares or had outstanding a minimum of 5,000,000
publicly held shares.
Any certificate signed by any officer of the Company and delivered to the
Representatives or counsel for the Underwriters in connection with the offering
of the Shares shall be deemed a representation and warranty by the Company, as
to matters covered thereby, to each Underwriter.
(b) Each Selling Shareholder represents and warrants, severally and not
jointly, to, and agrees with, each Underwriter that:
(i) Such Selling Shareholder is (or, with respect to the Option
Exercise Shares only, immediately prior to the Closing Date will be) the
beneficial owner and (except in the case of Option Exercise Shares, of
which the Selling Shareholder will be the record owner on the Closing
Date) record owner of the Shares to be sold by such Selling Shareholder
hereunder free and clear of all liens, encumbrances, equities and claims
and has duly endorsed such Shares in blank, and, assuming that each
Underwriter acquires its interest in the Shares it has purchased from
such Selling Shareholder without notice of any adverse claim (within the
meaning of Section 8-105 of the New York Uniform Commercial Code
("UCC")), each Underwriter that has purchased such Shares delivered on
the Closing Date to The Depository Trust Company or other securities
intermediary by making payment therefor as provided herein, and that has
had such Shares credited to the securities account or accounts of such
Underwriters maintained with The Depository Trust Company or such other
securities intermediary will have acquired a security entitlement (within
the meaning of Section 8-102(a)(17) of the UCC) to such Shares purchased
by such Underwriter, and no action based on an adverse claim (within the
meaning of Section 8-105 of the UCC) may be asserted against such
Underwriter with respect to such Shares.
(ii) Such Selling Shareholder has not taken, directly or
indirectly, any action designed to or that would constitute or that might
reasonably be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares.
(iii) Certificates in negotiable form or executed Option Exercise
Notices (or both) for such Selling Shareholder's Shares have been placed
in custody, for delivery
-11-
pursuant to the terms of this Agreement, under a Custody Agreement and
Power of Attorney duly authorized, executed and delivered by such Selling
Shareholder, in the form heretofore furnished to you (the "CUSTODY
AGREEMENT") with American Stock Transfer & Trust Company, as Custodian
(the "CUSTODIAN"); the Ordinary Shares represented by the certificates or
Option Exercise Notices so held in custody for each Selling Shareholder
are subject to the interests under this Agreement of the Underwriters;
the arrangements for custody and delivery of such certificates and Option
Exercise Notices, made by such Selling Shareholder under this Agreement
and under the Custody Agreement, are not subject to termination by any
acts of such Selling Shareholder, or by operation of law, whether by the
death or incapacity of such Selling Shareholder or the occurrence of any
other event; and if any such death, incapacity or any other such event
shall occur before the delivery of the Shares under this Agreement, such
certificates and Option Exercise Notices will be delivered by the
Custodian in accordance with the terms and conditions of this Agreement
and the Custody Agreement as if such death, incapacity or other event had
not occurred, regardless of whether or not the Custodian shall have
received notice of such death, incapacity or other event.
(iv) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by such
Selling Shareholder of the transactions contemplated in this Agreement,
except such as may have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Shares by the Underwriters and such
other approvals as have been obtained.
(v) Neither the sale of the Shares nor the consummation of any
other of the transactions herein contemplated by such Selling Shareholder
or the fulfillment of the terms hereof by such Selling Shareholder will
conflict with, result in a breach or violation of, or constitute a
default under (A) the articles of association or charter or by-laws or
other organizational documents of such Selling Shareholder, (B) the terms
of any indenture or other agreement or instrument to which such Selling
Shareholder or any of its subsidiaries is a party or bound, or any
judgment, order or decree applicable to such Selling Shareholder or any
of its subsidiaries of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over such Selling
Shareholder or any of its subsidiaries, or (C) any law, except, in the
cases of clauses (B) and (C) above, as would not reasonably be expected
to have a material adverse effect on the condition (financial or
otherwise), business or properties of such Selling Shareholder and any of
its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(vi) This Agreement, the Custody Agreement and the Option Exercise
Notices have been duly authorized, executed and delivered by the Selling
Shareholders, the Custody Agreement and the Option Exercise Notices are
valid and binding on the Selling Shareholders and each Selling
Shareholder has full legal rights and authority to sell, transfer and
deliver in the manner provided in this Agreement and the Custody
Agreement the Shares being sold by such Selling Shareholder under this
Agreement.
-12-
(vii) No stamp or other issuance or transfer taxes or duties and
no capital gains, income, withholding or other taxes are payable by or on
behalf of the Underwriters to the State of Israel or to any political
subdivision or taxing authority thereof or therein in connection with the
sale and delivery by the Underwriters of the Shares being sold by such
Selling Shareholder as contemplated herein.
(viii) Each Selling Shareholder listed under the sub-heading
"NON-MAJOR SELLING SHAREHOLDERS" on Schedule II hereto (collectively, the
"NON-MAJOR SELLING SHAREHOLDERS") has no reason to believe that the
representations and warranties of the Company and Major Selling
Shareholders contained in this Section 1 are not true and correct, is
familiar with the Registration Statement and the Prospectus and has no
knowledge of any material fact, condition or information not disclosed in
the Prospectus or any supplement thereto which has adversely affected or
is reasonably likely to adversely affect the business of the Company and
the Significant Subsidiaries, taken as a whole; and the sale of Shares by
such Non-Major Selling Shareholders pursuant hereto is not prompted by
any information concerning the Company or any of its subsidiaries which
is not set forth in the Prospectus and any supplement thereto.
(ix) In respect of any statements in or omissions from the
Registration Statement, the Prospectus or any supplements thereto made in
reliance upon and in conformity with information furnished in writing to
the Company by any Non-Major Selling Shareholder specifically for use in
connection with the preparation thereof, such Non-Major Selling
Shareholder hereby makes the same representations and warranties to each
Underwriter as the Company and the Major Selling Shareholders make to
such Underwriter under paragraph (a)(ii) of this Section.
Any certificate signed by any Selling Shareholder or any officer of any
Selling Shareholder and delivered to the Representatives or counsel for the
Underwriters in connection with the offering of the Shares shall be deemed a
representation and warranty by such Selling Shareholder, as to matters covered
thereby, to each Underwriter.
2. PURCHASE AND SALE.
(a) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, each Selling Shareholder,
severally and not jointly, agrees to sell to the several Underwriters the number
of Underwritten Shares set forth opposite such Selling Shareholder's name in
Schedule II hereto, and each Underwriter, severally and not jointly, agrees to
purchase from the Selling Shareholders the number of Underwritten Shares set
forth opposite such Underwriter's name in Schedule I hereto, at a purchase price
of [_____] per share. The respective purchase obligations of the Underwriters
with respect to the Underwritten Shares shall be rounded among the Underwriters
to avoid fractional shares, as the Underwriters may determine.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, each Selling Shareholder hereby
grants an option to the several Underwriters to purchase, severally and not
jointly, from such Selling Shareholder up to the number of Option Shares set
forth opposite such Selling Shareholder's name in Schedule II
-13-
hereto, at the same purchase price per share as the Underwriters shall pay for
the Underwritten Shares. Said option may be exercised only to cover
over-allotments in the sale of the Underwritten Shares by the Underwriters. Said
option may be exercised in whole or in part at any time on or before the 30th
day after the date of the Prospectus upon written notice by the Representatives
to the Selling Shareholders setting forth the number of shares of the Option
Shares as to which the several Underwriters are exercising the option and the
settlement date. The number of Option Shares to be purchased by each Underwriter
shall be the same percentage of the total number of Option Shares to be
purchased by the several Underwriters as such Underwriter is purchasing of the
Underwritten Shares, subject to such adjustments as you in your absolute
discretion shall make to eliminate any fractional shares. No Underwriter shall
be obligated to purchase Option Shares other than in 100-share amounts.
3. DELIVERY AND PAYMENT. Delivery of and payment for the Underwritten
Shares and the Option Shares (if the option provided for in Section 2(b) hereof
shall have been exercised on or before the third Business Day prior to the
Closing Date) shall be made at 10:00 a.m., New York City time, on [ ], 2005, or
at such time on such later date not more than three Business Days after the
foregoing date as the Representatives shall designate, which date and time may
be postponed by agreement among the Representatives, the Selling Shareholders
and the Company or as provided in Section 9 hereof (such date and time of
delivery and payment for the Shares being herein called the "CLOSING DATE").
Delivery of the Shares shall be made to the Representatives for the respective
accounts of the several Underwriters against payment by the several Underwriters
through the Representatives of the aggregate purchase price thereof to or upon
the order of the Selling Shareholders by wire transfer payable in same-day funds
to the accounts specified by the Selling Shareholders at least two Business Days
prior to the Closing Date. Delivery of the Underwritten Shares and the Option
Shares shall be made through the facilities of The Depository Trust Company
unless the Representatives shall otherwise instruct.
Each Selling Shareholder will pay all applicable stamp duties and
transfer taxes, if any, involved in the transfer to the several Underwriters of
the Shares to be purchased by them from such Selling Shareholder and the
respective Underwriters will pay any additional stock transfer taxes involved in
further transfers.
If the option provided for in Section 2(b) hereof is exercised after
the third Business Day prior to the Closing Date, then the Selling Shareholders
will deliver the Option Shares (at the expense of the Company) to the
Representatives, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the date
specified by the Representatives (which shall be within three Business Days
after exercise of said option) for the respective accounts of the several
Underwriters, against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Selling Shareholders by wire transfer payable in same-day funds to the accounts
specified by the Selling Shareholders at least two Business Days prior to such
date. If settlement for the Option Shares occurs after the Closing Date, the
Selling Shareholders will deliver to the Representatives on the settlement date
for the Option Shares, and the obligation of the Underwriters to purchase the
Option Shares shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6 hereof.
-14-
4. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to offer the Shares for sale to the public as set forth in
the Prospectus.
5. AGREEMENTS.
(a) The Company agrees with the several Underwriters that:
(i) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the Shares, the Company will not file any amendment of the
Registration Statement or supplement to the Prospectus or any Rule 462(b)
Registration Statement unless the Company has furnished you a copy for
your review prior to filing and will not file any such proposed amendment
or supplement to which you reasonably object. Subject to the foregoing
sentence, if the Registration Statement has become or becomes effective
pursuant to Rule 430A, or filing of the Prospectus is otherwise required
under Rule 424(b), the Company will cause the Prospectus, properly
completed, and any supplement thereto to be filed in a form approved by
the Representatives with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to the Representatives of such timely
filing. The Company will promptly advise the Representatives (1) when the
Registration Statement, if not effective at the Execution Time, shall
have become effective, (2) when the Prospectus, and any supplement
thereto, shall have been filed (if required) with the Commission pursuant
to Rule 424(b) or when any Rule 462(b) Registration Statement shall have
been filed with the Commission, (3) when, prior to termination of the
offering of the Shares, any amendment to the Registration Statement shall
have been filed or become effective, (4) of any request by the Commission
or its staff for any amendment of the Registration Statement, or any Rule
462(b) Registration Statement, or for any supplement to the Prospectus or
for any additional information, (5) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or the institution or threatening of any proceeding for that purpose and
(6) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Shares for sale in any
jurisdiction or the institution or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of
any such stop order or the suspension of any such qualification and, if
issued, to obtain as soon as possible the withdrawal thereof.
(ii) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Prospectus to comply with
the Act or the rules thereunder, the Company promptly will (1) notify the
Representatives of any such event, (2) prepare and file with the
Commission, subject to the second sentence of paragraph (a)(i) of this
Section 5, an amendment or supplement which will correct such statement
or
-15-
omission or effect such compliance; and (3) supply any supplemented
Prospectus to you in such quantities as you may reasonably request.
(iii) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an earnings
statement or statements of the Company and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under the
Act.
(iv) The Company will furnish to the Representatives and counsel
for the Underwriters signed copies of the Registration Statement
(including exhibits thereto) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required by
the Act, as many copies of each Preliminary Prospectus and the Prospectus
and any supplement thereto as the Representatives may reasonably request.
(v) The Company will arrange, if necessary, for the qualification
of the Shares for sale under the laws of such jurisdictions as the
Representatives may designate and will maintain such qualifications in
effect so long as required for the distribution of the Shares; provided
that in no event shall the Company be obligated to qualify to do business
in any jurisdiction where it is not now so qualified or to take any
action that would subject it to service of process in suits, other than
those arising out of the offering or sale of the Shares, in any
jurisdiction where it is not now so subject.
(vi) For a period of 90 days from the date of the Prospectus (the
"RESTRICTED PERIOD"), the Company, without the prior written consent of
▇▇▇▇▇▇ Brothers Inc. ("▇▇▇▇▇▇"), on behalf of the Underwriters, 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 Ordinary Shares or securities convertible
into, or exercisable or exchangeable for, Ordinary Shares (other than
Ordinary Shares issued pursuant to employee benefit plans, qualified
stock option plans, or other employee compensation plans existing on the
date hereof) or sell or grant option, rights or warrants with respect to
any Ordinary Shares or securities convertible into, or exercisable or
exchangeable for, Ordinary Shares including the filing (or participation
in the filing) of a registration statement with the Commission (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 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.
Notwithstanding this Section 5(a)(vi), if (1) during the last 17
days of the Restricted Period, the Company issues an earnings release or
material news or a material event relating to the Company occurs or (2)
prior to the expiration of the Restricted Period the Company announces
that it will release earnings results during the 16-day period beginning
on the last day of the Restricted Period, then the restrictions imposed
by this Section 5(a)(vi) shall continue to apply until the expiration of
the 18-day period
-16-
beginning on the issuance of the earnings release or the announcement of
the material news or the occurrence of the material event, unless ▇▇▇▇▇▇
waives, in writing, such extension.
(vii) The Company will comply with, and cooperate with the
Underwriters with respect to, all applicable securities and other
applicable laws, rules and regulations, including, without limitation,
the Sarbanes Oxley Act, the Money Laundering Laws and the FCPA, and use
its best efforts to cause the Company's directors and officers, in their
capacities as such, to comply with such laws, rules and regulations,
including, without limitation, the provisions of the Sarbanes Oxley Act,
the Money Laundering Laws and the FCPA.
(viii) The Company will not take, directly or indirectly, any
action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares.
(ix) The Company agrees to pay the costs and expenses relating to
the following matters: (i) the preparation, printing or reproduction and
filing with the Commission of the Registration Statement (including
financial statements and exhibits thereto), each Preliminary Prospectus,
the Prospectus, and each amendment or supplement to any of them; (ii) the
printing (or reproduction) and delivery (including postage, air freight
charges and charges for counting and packaging) of such copies of the
Registration Statement, each Preliminary Prospectus, the Prospectus, and
all amendments or supplements to any of them, as may, in each case, be
reasonably requested for use in connection with the offering and sale of
the Shares; (iii) the preparation, printing, authentication, issuance and
delivery of certificates for the Shares, including any stamp or transfer
taxes in connection with the original issuance of the Option Exercise
Shares; (iv) the printing (or reproduction) and delivery of this
Agreement, any blue sky memorandum and all other agreements or documents
printed (or reproduced) and delivered in connection with the offering of
the Shares; (v) the registration of the Shares under the Exchange Act and
the listing of the Shares on the Nasdaq National Market; (vi) any
registration or qualification of the Shares for offer and sale under the
securities or blue sky laws of the several states (including filing fees
and the reasonable fees and expenses of counsel for the Underwriters
relating to such registration and qualification); (vii) any filings
required to be made with the National Association of Securities Dealers,
Inc. (including filing fees and the reasonable fees and expenses of
counsel for the Underwriters relating to such filings); (viii) the
transportation and other expenses incurred by or on behalf of Company
representatives in connection with presentations to prospective
purchasers of the Shares; (ix) the fees and expenses of the Company's
accountants and the fees and expenses of counsel (including local and
special counsel) for the Company; and (x) all other costs and expenses
incident to the performance by the Company and the Selling Shareholders
of their respective obligations hereunder.
Each Selling Shareholder severally agrees (in proportion to the
number of Shares being offered by each of them) to pay (i) the fees and
expenses of local and special U.S. counsel and advisors for the Selling
Shareholders; and (ii) any stamp or transfer taxes in
-17-
connection with the sale and delivery of the Shares. This paragraph shall
not affect or modify any separate agreement relating to the allocation or
payment of expenses between the Company, on the one hand, and the Selling
Shareholders on the other hand.
(b) Each Selling Shareholder agrees with the several Underwriters that:
(i) During the Restricted Period, such Selling Shareholder,
without the prior written consent of ▇▇▇▇▇▇, on behalf of the
Underwriters, 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 Ordinary Shares
(including, without limitation, Ordinary Shares that may be deemed to be
beneficially owned by the Selling Shareholder in accordance with the
rules and regulations of the Commission and Ordinary Shares that may be
issued upon exercise of any option or warrant) or securities convertible
into, or exercisable or exchangeable for, Ordinary Shares (other than the
Shares) owned by the Selling Shareholder on the date hereof or on the
Effective Date, 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 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.
Notwithstanding this Section 5(b)(i), if (1) during the last 17
days of the Restricted Period, the Company issues an earnings release or
material news or a material event relating to the Company occurs or (2)
prior to the expiration of the Restricted Period, the Company announces
that it will release earnings results during the 16-day period beginning
on the last day of the Restricted Period, then the restrictions imposed
by this Section 5(b)(i) shall continue to apply until the expiration of
the 18-day period beginning on the issuance of the earnings release or
the announcement of the material news or the occurrence of the material
event, unless ▇▇▇▇▇▇ waives, in writing, such extension. Prior to and
including the 34th day following the expiration of the Restricted Period,
the Selling Shareholder shall not (i) engage in any transaction or take
any action that is subject to the terms of this Section 5(b)(i) without
giving prior notice thereof to the Company or (ii) consummate such
transaction or take any such action unless the Selling Shareholder has
received written confirmation from the Company that the Restricted Period
(as such may have been extended pursuant to this paragraph) has expired.
(ii) Such Selling Shareholder will not take, directly or
indirectly, any action designed to or that would constitute or that might
reasonably be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares.
(iii) Such Selling Shareholder will advise you promptly, and if
requested by you, will confirm such advice in writing, so long as
delivery of a prospectus relating to the Shares by an underwriter or
dealer may be required under the Act, of (i) any material change in the
Company's condition (financial or otherwise), prospects, earnings,
business
-18-
or properties, (ii) any change in information in the Registration
Statement or the Prospectus relating to such Selling Shareholder or (iii)
any new material information relating to the Company or relating to any
matter stated in the Prospectus which comes to the attention of such
Selling Shareholder.
(iv) Such Selling Shareholder will comply with the agreement
contained in Section 5(a)(ix) hereof.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the Underwriters to purchase the Underwritten Shares and the Option Shares, as
the case may be, shall be subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Shareholders contained
herein as of the Execution Time, the Closing Date and any settlement date
pursuant to Section 3 hereof, to the accuracy of the statements of the Company
and the Selling Shareholders made in any certificates pursuant to the provisions
hereof, to the performance by the Company and the Selling Shareholders of their
respective obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to the
Execution Time, unless the Representatives agree in writing to a later time, the
Registration Statement will become effective not later than (i) 6:00 p.m. New
York City time on the date of determination of the public offering price, if
such determination occurred at or prior to 3:00 p.m. New York City time on such
date or (ii) 9:30 a.m. on the Business Day following the day on which the public
offering price was determined, if such determination occurred after 3:00 p.m.
New York City time on such date; if filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the Prospectus, and any such
supplement, will be filed in the manner and within the time period required by
Rule 424(b); and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) The Company shall have requested and caused Primes, Shiloh, ▇▇▇▇▇,
▇▇▇▇ Law Firm, Israeli counsel for the Company, to have furnished to the
Representatives its opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) the Company has been duly incorporated and is validly existing
as a corporation under the laws of the State of Israel, with full
corporate power and authority to own or lease, as the case may be, and to
operate its properties and conduct its business as described in the
Prospectus; no proceeding has been instituted by the Registrar of
Companies in Israel for the dissolution of the Company;
(ii) the Company's authorized equity capitalization is as set
forth in the Prospectus; the share capital of the Company conforms in all
material respects to the description thereof contained in the Prospectus
(other than the financial statements and other financial information
contained therein); the outstanding Ordinary Shares have been duly and
validly authorized and issued and are fully paid and nonassessable; the
Option Exercise Shares being sold hereunder have been duly and validly
authorized, and, when issued and delivered to and paid for by the Selling
Shareholders pursuant to the Option Exercise Notices, will be fully paid
and nonassessable; the holders of outstanding shares
-19-
of the Company are not entitled to preemptive or other rights to
subscribe for the Shares; except as disclosed in the Registration
Statement and the Prospectus, there are no restrictions upon the voting
or transfer of any securities (except for options) of the Company
pursuant to the Company's articles of association or, to such counsel's
knowledge after reasonable investigation, any agreements or other
instruments to which the Company is a party or by which it is bound; and,
except as set forth in the Prospectus, to such counsel's knowledge after
reasonable investigation, no options, warrants or other rights to
purchase, agreements or other obligations to issue, or rights to convert
any obligations into or exchange any securities for, shares of capital
stock of or ownership interests in the Company are outstanding;
(iii) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any Israeli court or
governmental agency, authority or body or any arbitrator involving the
Company or any of the Significant Subsidiaries or its or their properties
of a character required to be disclosed in the Registration Statement
which is not adequately disclosed in the Prospectus; and the statements
included in the Prospectus under the headings "Risk Factors - Under
current U.S. and Israeli law, we may not be able to enforce covenants not
to compete and therefore may be unable to prevent our competitors from
benefiting from the expertise of some of our former employees," "Risk
Factors - The tax benefits available to us require us to meet several
conditions and may be terminated or reduced in the future, which would
increase our costs and taxes" (excluding the statements in any other
section in the Prospectus with respect to tax matters that are
cross-referenced under such heading), "Risk Factors - Provisions of our
articles of association and Israeli law may delay, prevent or make
difficult an acquisition of Syneron, which could prevent a change of
control and, therefore, depress the price of our shares," "Business -
Litigation" (to the extent such statements relate to matters involving
Shladot Metal Works), "Management," "Description of Share Capital," and
"Enforceability of Civil Liberties" insofar as such statements summarize
legal matters as to Israeli law, provisions of the Company's articles of
association, or agreements, documents or proceedings discussed therein
governed by the laws of the State of Israel, are accurate and fair
summaries of such legal matters, provisions of the Company's articles of
association, agreements, documents or proceedings;
(iv) to the knowledge of such counsel, the Company is not in
violation or default of (a) any provision of its articles of association,
(b) the terms of any material indenture, contract, lease, mortgage, deed
of trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Company is a party or
bound or to which its property is subject, or (c) any Israeli statute,
law, rule, regulation, judgment, order or decree of any Israeli court,
regulatory body, administrative agency, governmental body, arbitrator or
other Israeli authority having jurisdiction over the Company or any of
its properties, as applicable, except, in the case of clauses (b) and
(c), for violations or defaults which may not have a Material Adverse
Effect;
(v) this Agreement has been duly authorized and executed by the
Company; all corporate action required by the laws of the State of Israel
and the articles of association of the Company to be taken by the Company
for the due and proper
-20-
authorization and issuance of the Option Exercise Shares and the
offering, sale and delivery of the Shares has been validly and
sufficiently taken; and the filing of the Registration Statement and the
Prospectus with the Commission has been duly authorized by and on behalf
of the Company and the Registration Statement has been duly executed on
behalf of the Company pursuant to such authorization in accordance with
the laws of the State of Israel;
(vi) no consent, approval, authorization, filing with or order of
any Israeli court or governmental agency or body is required in
connection with the transactions contemplated in this Agreement, except
such approvals (to be specified in such opinion) as have been obtained;
provided that with respect to the opinion set forth in this Section (vi),
such counsel has assumed, without independent verification, that, aside
from investors that are defined in or pursuant to Section 15A(b)(1) of
the Israeli Securities Law, 1968, the aggregate number of offerees to
whom the Company, the Underwriters, the Selling Shareholders, and any of
their respective representatives, have made an offering in Israel of any
securities of the Company in the past twelve months did not exceed 35
offerees.
(vii) neither the sale of the Shares to the Underwriters, the
issuance of the Option Exercise Shares, the consummation of any other of
the transactions herein contemplated nor the fulfillment of the terms
hereof will conflict with, result in a breach or violation of, or
imposition of any lien, charge or encumbrance upon any material property
or assets of the Company pursuant to, (a) the articles of association of
the Company, (b) to the knowledge of such counsel, the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or
instrument to which the Company is a party or bound or to which its
property is subject, or (c) any Israeli statute, law, rule, regulation
customarily applicable to transactions of this type, or to such counsel's
knowledge, any judgment, order or decree applicable to the Company of any
Israeli court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or any
of its material properties;
(viii) except as otherwise set forth in the Prospectus, no holders
of securities of the Company have rights to the registration of Ordinary
Shares or any other securities of the Company under the Registration
Statement;
(ix) to ensure the legality, validity or admissibility into
evidence in the State of Israel of each of this Agreement and any other
document required to be furnished thereunder, it is not necessary that
this Agreement or any such other document be filed or recorded with any
court or other authority in the State of Israel; with respect to the
opinion set forth in this Section (ix), such counsel notes that stamp
duty is imposed by Israel's Stamp Duty on Documents Law, 5721-1961, upon
any document specified in such law that is "executed in Israel or
executed outside Israel which relates to any property or other thing
situated in Israel or to any act done or about to be done in Israel";
provided that, under Israeli law, a document that is liable for stamp
duty, but is not stamped, remains a legally effective document, but such
a document will not, however, be accepted as evidence in any legal
proceeding in Israel or by any Israeli governmental
-21-
department or ministry; provided, further, that documents may, upon
payment of a penalty, be stamped after the period for stamping set by law
and then be accepted as evidence.
(x) the appointment by the Company of the U.S. Subsidiary as the
Company's designee, appointee and authorized agent for the purpose
described in Section 15 of this Agreement is legal, valid and binding
under the laws of the State of Israel; and
(xi) under the laws of Israel, the submission by the Company under
this Agreement to the jurisdiction of any court sitting in New York and
the designation of New York law to apply to this Agreement, is binding
upon the Company and, if properly brought to the attention of a court or
administrative body in accordance with the laws of Israel, would be
enforceable in any judicial or administrative proceeding in Israel;
subject to certain time limitations, Israeli courts are empowered to
enforce foreign final non-appealable executory judgments for liquidated
amounts in civil matters, obtained after completion of process before a
court of competent jurisdiction which recognizes similar Israeli
judgments, provided such judgments or the enforcement thereof are not
contrary to Israeli law, public policy, security or the sovereignty of
the State of Israel; and the enforcement of judgments is conditional
upon: (a) adequate service of process being effected and the defendant
having had a reasonable opportunity to be heard; (b) such judgment having
been obtained before a court of competent jurisdiction according to the
rules of private international law prevailing in Israel; (c) such
judgment not being in conflict with another valid judgment in the same
matter between the same parties; (d) such judgment not having been
obtained by fraudulent means; and (e) an action between the same parties
in the same matter not pending in any Israeli court at the time the
lawsuit is instituted in the foreign court.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
Israel, to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be reliable and
who are satisfactory to counsel for the Underwriters and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible officers of
the Company and public officials. References to the Prospectus in this Section 6
shall also include any supplements thereto at the Closing Date.
Such opinion shall also include statements to the effect that, based upon
such counsel's participation in the preparation of the Registration Statement,
nothing has come to its attention that causes it to believe that on the
Effective Date or the date the Registration Statement was last deemed amended
the Registration Statement contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus as of its date
and on the Closing Date included or includes any untrue statement of a material
fact or omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (in each case, other than the financial statements and
other financial information contained therein, as to which such counsel need
express no opinion).
-22-
(c) The Company shall have requested and caused ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP,
U.S. counsel for the Company, to have furnished to the Representatives their
opinion, dated the Closing Date and addressed to the Representatives, to the
effect that:
(i) the U.S. Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with full corporate power and authority to own or lease, as the
case may be, and to operate its properties and conduct its business as
described in the Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each
jurisdiction set forth on Schedule A to such counsel's opinion;
(ii) all the outstanding shares of capital stock of the U.S.
Subsidiary have been duly and validly authorized and issued and are fully
paid and nonassessable, and all outstanding shares of capital stock of
the U.S. Subsidiary are, to the knowledge of such counsel, after due
inquiry, directly owned by the Company free and clear of any perfected
security interest and, to the knowledge of such counsel, after due
inquiry, any other security interest, claim, lien or encumbrance;
(iii) the Ordinary Shares, including the Shares, have been
approved for quotation on the Nasdaq National Market, subject to (in the
case of the Option Exercise Shares) official notice of issuance and
evidence of satisfactory distribution;
(iv) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any U.S. federal or
state court or governmental agency, authority or body or any arbitrator
involving the Company or any of the Significant Subsidiaries or its or
their property of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the
Prospectus, and, to such counsel's knowledge, and relying as to matters
of fact on certificates of responsible officers of the Company and public
officials, there is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not described
or filed as required; and the statements included in the Prospectus under
the heading "Business - Litigation" (to the extent such statements relate
to matters involving Lumenis Ltd. and Thermage, Inc.) insofar as such
statements summarize legal matters, agreements, documents or proceedings
discussed therein are accurate and fair summaries in all material
respects of such legal matters agreements, documents or proceedings;
(v) the statements included in the Prospectus under the heading
"United States Federal Income Tax Considerations" to the extent that such
statements constitute matters of U.S. federal income tax law or legal
conclusions with respect thereto are accurate and fair summaries in all
material respects of such matters or conclusions;
(vi) assuming this Agreement has been duly authorized, executed
and delivered under Israeli law, this Agreement has been duly authorized,
executed and delivered by the Company to the extent governed by New York
law;
-23-
(vii) the Registration Statement has become effective under the
Act; any required filing of the Prospectus, and any supplements thereto,
pursuant to Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b); to the knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement has been
issued, no proceedings for that purpose have been instituted or
threatened and the Registration Statement and the Prospectus (other than
the financial statements and other financial information contained
therein, as to which such counsel need express no opinion) comply as to
form in all material respects with the applicable requirements of the Act
and the rules thereunder;
(viii) the Company is not and, immediately after giving effect to
the offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be, an "investment
company" as defined in the Investment Company Act of 1940, as amended;
(ix) no consent, approval, authorization, filing with or order of
any U.S. federal or state court or governmental agency or body is
required in connection with the transactions contemplated herein, except
such as have been obtained under the Act and such as may be required
under the blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Shares by the Underwriters in the manner
contemplated in this Agreement and in the Prospectus and such other
approvals (specified in such opinion) as have been obtained;
(x) neither the sale of the Shares to the Underwriters, the
issuance of the Option Exercise Shares, the consummation of any other of
the transactions herein contemplated nor the fulfillment of the terms
hereof will conflict with, result in a breach or violation of, or
imposition of any lien, charge or encumbrance upon any property or assets
of the U.S. Subsidiary pursuant to, (a) the charter or by-laws of the
U.S. Subsidiary, (b) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument known to such
counsel to which the U.S. Subsidiary is a party or bound or to which its
property is subject, or (c) any statute, law, rule, regulation, judgment,
order or decree known to such counsel to be applicable to the U.S.
Subsidiary or any U.S. federal or state court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the U.S. Subsidiary or any of its properties;
(xi) except as otherwise set forth in the Prospectus, no holders
of securities of the Company have rights to the registration of Ordinary
Shares or any other securities of the Company under the Registration
Statement;
(xii) assuming the appointment by the Company of the U.S.
Subsidiary as the Company's designee, appointee and authorized agent for
the purpose described in Section 15 of this Agreement is legal, valid and
binding under the laws of the State of Israel, under the laws of the
State of New York relating to personal jurisdiction, (a) the Company has,
under this Agreement, validly submitted to the personal jurisdiction of
any state or federal court located in the State of New York, County of
New York in any action arising out of or relating to this Agreement and
the transactions contemplated
-24-
herein and have validly and effectively waived any objection to the venue
of a proceeding in any such court as provided in Section 15 hereof, (b)
its appointment thereunder of the U.S. Subsidiary as its authorized agent
for service of process is valid, legal and binding, and (c) service of
process in the manner set forth in Section 15 hereof will be effective to
confer valid personal jurisdiction of such court over the Company; and
(xiii) the Underwriters may rely on the non-infringement opinions
issued by such counsel, one of which is dated September 15, 2003 and two
of which are dated May 13, 2004.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the DGCL, the
State of New York or the federal laws of the United States, to the extent they
deem proper and specified in such opinion, upon the opinion of other counsel of
good standing whom they believe to be reliable and who are satisfactory to
counsel for the Underwriters and (B) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the Company or the U.S.
Subsidiary and public officials.
Such opinion shall also include statements to the effect that, based upon
such counsel's participation in the preparation of the Registration Statement,
nothing has come to its attention that causes it to believe that on the
Effective Date or the date the Registration Statement was last deemed amended
the Registration Statement contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus as of its date
and on the Closing Date included or includes any untrue statement of a material
fact or omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (in each case, other than the financial statements and
other financial information contained therein, as to which such counsel need
express no opinion).
(d) The Company shall have requested and caused Israeli tax counsel for
the Company to have furnished to the Representatives its opinion, dated the
Closing Date and addressed to the Representatives, to the effect that:
(i) the statements included in the Prospectus under the headings
"Risk Factors - The tax benefits available to us require us to meet
several conditions and may be terminated or reduced in the future, which
would increase our costs and taxes" and "Israeli Taxation," insofar as
such statements summarize legal matters as to Israeli law, are accurate
and fair summaries of such legal matters; and
(ii) no stamp or other issuance or transfer taxes or duties and no
capital gains, income, withholding or other taxes are payable by or on
behalf of the Underwriters to the State of Israel or to any political
subdivision or taxing authority thereof or therein
-25-
in connection with the sale and delivery by the Underwriters of the
Shares as contemplated herein.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
Israel, to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be reliable and
who are satisfactory to counsel for the Underwriters and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible officers of
the Company and public officials.
(e) The Company shall have requested and caused Ropes & ▇▇▇▇ LLP, special
counsel for the Company, to have furnished to the Representatives their opinion,
dated the Closing Date and addressed to the Representatives, to the effect that
such counsel is of the opinion that the statements in the Registration Statement
under the captions "Risk Factors" - "If we fail to obtain and maintain necessary
U.S. Food and Drug Administration clearances for our products and indications,
if clearances for future products are delayed or not issued, or if there are
U.S. federal or state level regulatory changes, our commercial operations could
be harmed," "Risk Factors - If we or our subcontractors fail to comply with the
FDA's Quality System Regulation and performance standards, manufacturing
operations could be halted, and our business would suffer" and "Business" -
"Government Regulation" (collectively, the "REGULATORY PORTION"), solely to the
extent that such statements purport to summarize applicable provisions of the
Federal Food, Drug, and Cosmetic Act, as amended (the "FFDCA"), and the
regulations promulgated thereunder, are accurate summaries in all material
respects of the provisions of the FFDCA and the regulations thereunder purported
to be summarized under such captions in the Registration Statement; PROVIDED,
HOWEVER, such counsel shall not be required to express an opinion with respect
to the Regulatory Portion as it relates to the Company's ▇▇▇▇ system.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the federal
laws of the United States, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel of good standing whom they believe to
be reliable and who are satisfactory to counsel for the Underwriters and (B) as
to matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and public officials.
Such opinion shall also include statements to the effect that, based upon
such counsel's participation in the preparation of the Registration Statement,
nothing has come to its attention that causes it to believe that, on the
Effective Date or the date the Registration Statement was last deemed amended,
the Regulatory Portion of the Registration Statement and the Prospectus (other
than with respect to matters relating solely to the Company's ▇▇▇▇ system)
contained any untrue statement of a material fact or omitted to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(f) The Company shall have requested and caused ▇▇▇▇▇▇▇▇ Ingersoll PC,
special counsel for the Company, to have furnished to the Representatives a
letter, dated the Closing Date and addressed to the Representatives, describing
the Company's January 27, 2005 meeting with the FDA with regard to the
regulatory status of the ▇▇▇▇ system.
-26-
(g) The Company shall have requested and caused ▇▇▇▇▇▇ & Neimark,
intellectual property counsel for the Company, to have furnished to the
Representatives their opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) the Company's patents other than U.S. Patent No. 5,569,242
(collectively, the "OPINION PATENTS") are valid and subsisting; provided,
that such opinion shall include a description of such counsel's prior art
searches in a form satisfactory to counsel to the Representatives;
(ii) the Company's issued Opinion Patents and filed patent
applications filed in the U.S. (the "APPLICATIONS") have been properly
prepared and filed on behalf of the Company, are being diligently pursued
by the Company and to the best of such counsel's knowledge, the Company
has complied with all applicable examination requirements of duty of
candor and disclosure; the inventions described in the Applications are
assigned or licensed to the Company to the best of such counsel's
knowledge, except for Applications where the Company has obtained a field
of use license, and/or where certain rights have been retained by the
licensor or the U.S. government, no other entity or individual has any
right or claim in any of the inventions, Applications, or any patent to
be issued therefrom, and in such counsel's opinion, each of the
Applications discloses patentable subject matter;
(iii) the statements contained in the Registration Statement and
Prospectus including, but not limited to, the statements under the
captions "Risk Factors - If we are unable to protect our intellectual
property rights, our competitive position could be harmed," "Risk Factors
- Third party claims of infringement or other claims against us could
require us to redesign our products, seek licenses, or engage in future
costly intellectual property litigation, which could impact our future
business and financial performance" and "Business - Intellectual
Property," other than statements related to U.S. Patent No. 5,569,242
(collectively, the "INTELLECTUAL PROPERTY PORTION") are accurate
descriptions of the Company's patent applications, issued and allowed
patents, and fairly summarize the legal matters, documents and
proceedings relating thereto of which such counsel is aware;
(iv) except as disclosed in the Prospectus, such counsel is not
aware or has not been put on notice of any valid patent that is or would
be infringed by the activities of the Company in the manufacture, use or
sale of any presently proposed product, as described in the Prospectus;
(v) except as disclosed in the Prospectus, such counsel is not
aware of any pending or threatened judicial or governmental proceedings
relating to patents or proprietary information to which the Company is a
party or of which any property of the Company is subject, including any
interference, reexamination, reissue or declaratory action proceeding,
and such counsel is not aware of any pending or threatened action, suit
or claim by others that the Company is infringing or otherwise violating
any patent rights of others, nor is such counsel aware of any rights of
third parties to any of the Company's inventions described in the
Applications, issued, approved or licensed patents which
-27-
could reasonably be expected to materially affect the ability of the
Company to conduct its business as described in the Registration
Statement and Prospectus; and
(vi) such counsel has no reason to believe that the information
contained in the Intellectual Property Portion of the Registration
Statement and the Prospectus at the time each became effective, contained
any untrue statement of a material fact or omitted to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the federal
laws of the United States, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel of good standing whom they believe to
be reliable and who are satisfactory to counsel for the Underwriters and (B) as
to matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and public officials.
(h) The Company shall have requested and caused ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP,
Canadian counsel for the Company, to have furnished to the Representatives their
opinion, dated the Closing Date and addressed to the Representatives, to the
effect that:
(i) The Canadian Subsidiary is incorporated and existing under the
Business Corporations Act (Ontario), with the corporate power and
capacity to own or lease, as the case may be, its properties and assets
and to carry on its business as it is currently being conducted;
(ii) the authorized capital of the Canadian Subsidiary consists of
an unlimited number of common shares, of which 1 common share has been
duly issued and is outstanding as a fully paid and non-assessable share,
and the 1 outstanding share in the capital of the Canadian Subsidiary is
owned by the Company free and clear of any security interest perfected in
the Province of Ontario and, to the knowledge of such counsel, after a
search of such counsel's records and based on an officer's certificate,
any other security interest, claim, lien or encumbrance;
(iii) to the knowledge of such counsel, after a search of such
counsel's records and based on an officer's certificate, there are no
pending or overtly threatened actions, suits or proceedings affecting the
Canadian Subsidiary or the Company or their respective properties or
assets before any court, governmental agency or arbitrator in Canada
which may, individually or collectively, materially adversely affect the
financial condition or operations of the Canadian Subsidiary or the
Company; and
(iv) neither the sale of the Shares to the Underwriters, the
issuance of the Option Exercise Shares, the consummation of any other of
the transactions herein contemplated nor the fulfillment of the terms of
this Agreement will conflict with, result in a breach or violation of, or
imposition of any material lien, charge or encumbrance upon any property
or assets in Canada of the Company or the Canadian Subsidiary pursuant
to, (a) the organizational documents of the Canadian Subsidiary or (b)
any statute, law, rule, regulation, judgment, order or decree that a
lawyer exercising
-28-
customary professional diligence would reasonably recognize as being
directly applicable to the Company or the Canadian Subsidiary of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority in Canada having jurisdiction over the
Company or the Canadian Subsidiary or any of their respective properties
or assets.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the Province of
Ontario and the laws of Canada applicable therein, to the extent they deem
proper and specified in such opinion, upon the opinion of other counsel of good
standing whom they believe to be reliable and who are satisfactory to counsel
for the Underwriters and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and public
officials.
(i) The Company shall have requested and caused Flick ▇▇▇▇▇ Schaumburg,
German counsel for the Company, to have furnished to the Representatives their
opinion, dated the Closing Date and addressed to the Representatives, to the
effect that:
(i) The German Subsidiary has been duly organized and is validly
existing as a limited liability company (GESELLSCHAFT MIT BESCHRANKTER
HAFTUNG - GMBH) under the laws of the Federal Republic of Germany, with
full corporate power and authority to own or lease, as the case may be,
and to operate its properties and conduct its business as described in
the Prospectus;
(ii) all the outstanding shares of capital stock of the German
Subsidiary have been duly and validly authorized and issued and are, to
the knowledge of such counsel (based on the review of corporate and other
documents which have been presented to such counsel by the German
Subsidiary as the only relevant documents for purposes of such opinion),
fully paid and nonassessable, and all outstanding shares of capital stock
of the German Subsidiary are, to the knowledge of such counsel (based on
the review of corporate and other documents which have been presented to
such counsel by the German Subsidiary as the only relevant documents for
purposes of such opinion), wholly owned by the Company free and clear of
any security interest, claim, lien or encumbrance; provided that, under
German law, it is generally not possible to absolutely verify and
ascertain the ownership and the absence of any encumbrances with respect
to shares in a German limited liability company (GESELLSCHAFT MIT
BESCHRANKTER HAFTUNG - GMBH); however, such counsel does not have any
indication that the German Subsidiary is not wholly owned by the Company
or that the shares are subject to any encumbrances;
(iii) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any German court or
governmental agency, authority or body or any arbitrator involving the
Company or the German Subsidiary or either of their property, except as
set forth on an exhibit attached to such counsel's opinion; and
(iv) neither the sale of the Shares to the Underwriters, the
issuance of the Option Exercise Shares, the consummation of any other of
the transactions herein contemplated nor the fulfillment of the terms
hereof will conflict with, result in a breach
-29-
or violation of, or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or the German Subsidiary pursuant
to, (a) the organizational documents of the German Subsidiary or (b)
based on the facts presented to such counsel, any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or the
German Subsidiary of any German court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or the German Subsidiary or any of their
properties, provided that such counsel does not express any opinion as to
the violation or breach of or conflict with German securities laws,
including, without limitation, the German Sales Prospectus Act
(Verkaufsprospektgesetz).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than Germany, to the
extent they deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of the
Company and public officials.
(j) The Selling Shareholders shall have requested and caused ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP, U.S. counsel for the Selling Shareholders, to have furnished to
the Representatives their opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) this Agreement, the Custody Agreement and the Option Exercise
Notices have been duly authorized, executed and delivered by the Selling
Shareholders (provided, that such counsel shall be entitled to assume
such due authorization, execution and delivery by Selling Shareholders
who are not U.S. persons); the Custody Agreement is valid and binding on
the Selling Shareholders (except to the extent that enforceability of the
Custody Agreement may be limited by applicable bankruptcy, insolvency,
reorganization or other laws of general application relating to or
affecting the enforcement of creditors' rights and the application of
equitable principles relating to the availability of remedies);
(ii) assuming that each Underwriter acquires its interest in the
Shares it has purchased from such Selling Shareholder without notice of
any adverse claim (within the meaning of Section 8-105 of the UCC), each
Underwriter that has purchased such Shares delivered on the Closing Date
to The Depository Trust Company or other securities intermediary by
making payment therefor as provided herein, and that has had such Shares
credited to the securities account or accounts of such Underwriters
maintained with The Depository Trust Company or such other securities
intermediary, will have acquired a security entitlement (within the
meaning of Section 8-102(a)(17) of the UCC) to such Shares purchased by
such Underwriter, and no action based on an adverse claim (within the
meaning of Section 8-105 of the UCC) may be asserted against such
Underwriter with respect to such Shares;
(iii) no consent, approval, authorization or order of any U.S.
federal or New York State court or governmental agency or body is
required for the consummation by any Selling Shareholder of the
transactions contemplated herein, except such as may
-30-
have been obtained under the Act and such as may be required under the
blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Shares by the Underwriters, such as relate to the
review of the transaction by the National Association of Securities
Dealers, Inc., and such other approvals (specified in such opinion) as
have been obtained;
(iv) to such counsel's knowledge, neither the sale of the Shares
being sold by any Selling Shareholder nor the consummation of any other
of the transactions contemplated in this Agreement by any Selling
Shareholder or the fulfillment of the terms hereof by any Selling
Shareholder will conflict with, result in a breach or violation of, or
constitute a default under any U.S. federal or New York state law or any
judgment, order or decree applicable to any Selling Shareholder or any of
its subsidiaries of any U.S. federal or New York state court, regulatory
body, administrative agency, governmental body or arbitrator having
jurisdiction over any Selling Shareholder or any of its subsidiaries; and
(v) assuming the appointment by the Selling Shareholders of the
U.S. Subsidiary as the Company's designee, appointee and authorized agent
for the purpose described in Section 15 of this Agreement is legal, valid
and binding under the laws of the State of Israel, Canada or any other
jurisdiction outside of the United States where any of the Selling
Shareholders resides, under the laws of the State of New York relating to
personal jurisdiction, (a) the Selling Shareholders have, under this
Agreement, validly submitted to the personal jurisdiction of any state or
federal court located in the State of New York, County of New York in any
action arising out of or relating to this Agreement and the transactions
contemplated herein and have validly and effectively waived any objection
to the venue of a proceeding in any such court as provided in Section 15
hereof, (b) their appointment thereunder of the U.S. Subsidiary as their
authorized agent for service of process is valid, legal and binding, and
(c) service of process in the manner set forth in Section 15 hereof will
be effective to confer valid personal jurisdiction of such court over the
Selling Shareholders.
In rendering such opinion, such counsel may rely as to matters of fact,
to the extent they deem proper, on certificates of responsible officers of the
Selling Shareholders and public officials.
(k) The Selling Shareholders shall have requested and caused ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ LLP, Canadian counsel for the Selling Shareholders, to have furnished to
the Representatives their opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) this Agreement, the Custody Agreement and the Option Exercise Notices
have been duly authorized, executed and delivered by the Selling Shareholders
(provided, that such counsel shall be entitled to assume such due authorization,
execution and delivery by Selling Shareholders who are not Canadian persons);
the Custody Agreement is valid and binding on the Selling Shareholders (except
to the extent that enforceability of the Custody Agreement may be limited by
applicable bankruptcy, insolvency, reorganization or other laws of general
application relating to or affecting the
-31-
enforcement of creditors' rights and the application of equitable principles
relating to the availability of remedies);
(ii) no consent, approval, authorization or order of any court or
governmental agency or body in Canada is required for the consummation by
the Selling Shareholders of the transactions contemplated herein;
(iii) to such counsel's knowledge, neither the sale of the Shares
being sold by any Selling Shareholder nor the consummation of any other
of the transactions herein contemplated by any Selling Shareholder or the
fulfillment of the terms hereof by any Selling Shareholder will conflict
with, result in a breach or violation of, or constitute a default under
any Canadian law or any Canadian judgment, order or decree applicable to
any Selling Shareholder or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body or arbitrator
in Canada having jurisdiction over any Selling Shareholder or any of its
subsidiaries; and
(iv) under the laws of Canada or any relevant province therein,
the submission by each Selling Shareholder under this Agreement to the
jurisdiction of any court sitting in New York and the designation of New
York law to apply to this Agreement, is binding upon such Selling
Shareholder and, if properly brought to the attention of the court or
administrative body in accordance with the laws of Canada or relevant
province therein, would be enforceable in any judicial or administrative
proceeding in Canada.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than Canada, to the
extent they deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of the
Selling Shareholders and public officials.
(l) CDS Edel GmbH ("EDEL"), as a Selling Shareholder, shall have
requested and caused Flick ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, German counsel for Edel, to have
furnished to the Representatives their opinion, dated the Closing Date and
addressed to the Representatives, to the effect that:
(i) this Agreement and the Custody Agreement have been duly
authorized, executed and delivered by Edel; the Custody Agreement is
valid and binding on Edel (except to the extent that enforceability of
the Custody Agreement may be limited by applicable bankruptcy,
insolvency, reorganization or other laws of general application relating
to or affecting the enforcement of creditors' rights and the application
of equitable principles relating to the availability of remedies);
(ii) no consent, approval, authorization or order of any court or
governmental agency or body in Germany is required for the consummation
by Edel of the transactions contemplated herein;
(iii) to such counsel's knowledge, neither the sale of the Shares
being sold by Edel nor the consummation of any other of the transactions
herein contemplated by
-32-
Edel or the fulfillment of the terms hereof by Edel will conflict with,
result in a breach or violation of, or constitute a default under any
German law or any German judgment, order or decree applicable to Edel or
any of its subsidiaries of any court, regulatory body, administrative
agency, governmental body or arbitrator in Germany having jurisdiction
over Edel or any of its subsidiaries; and
(iv) under the laws of Germany, the submission by Edel under this
Agreement to the jurisdiction of any court sitting in New York and the
designation of New York law to apply to this Agreement, is binding upon
Edel and, if properly brought to the attention of the court or
administrative body in accordance with the laws of Germany or relevant
province therein, would be enforceable in any judicial or administrative
proceeding in Germany.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than Germany, to the
extent they deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of Edel and
public officials.
(m) Starlight Capital Ltd., as Selling Shareholders, shall have requested
and caused its counsel to have furnished to the Representatives such counsel's
opinion, dated the Closing Date and addressed to the Representatives, to the
effect that:
(i) this Agreement and the Custody Agreement have been duly
authorized, executed and delivered by such Selling Shareholder; the
Custody Agreement is valid and binding on such Selling Shareholder
(except to the extent that enforceability of the Custody Agreement may be
limited by applicable bankruptcy, insolvency, reorganization or other
laws of general application relating to or affecting the enforcement of
creditors' rights and the application of equitable principles relating to
the availability of remedies);
(ii) to such counsel's actual knowledge, no consent, approval,
authorization or order of any court or governmental agency or body having
jurisdiction over such Selling Shareholder is required for the
consummation by such Selling Shareholder of the transactions
contemplated herein;
(iii) to such counsel's actual knowledge, neither the sale of the
Shares by such Selling Shareholder nor the consummation of any other of
the transactions herein contemplated by such Selling Shareholder or the
fulfillment of the terms hereof by such Selling Shareholder will conflict
with, result in a breach or violation of, or constitute a default under
any law or judgment, order or decree applicable to such Selling
Shareholder or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over such Selling Shareholder or any of its subsidiaries;
and
-33-
(iv) under the laws of the jurisdiction in which such Selling
Shareholder is organized, the submission by such Selling Shareholder
under this Agreement to the jurisdiction of any court sitting in New York
and the designation of New York law to apply to this Agreement is binding
upon such Selling Shareholders and, if properly brought to the attention
of the court or administrative body in accordance with the laws of such
jurisdiction of organization, respectively, would be enforceable in any
judicial or administrative proceeding in such jurisdiction.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than Israel, to the
extent they deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of such
Selling Shareholder and public officials.
(n) Primes, Shiloh, ▇▇▇▇▇, ▇▇▇▇ Law Firm shall have furnished to the
Representatives their opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) this Agreement and the Custody Agreement and any Option
Exercise Notices have been duly authorized, executed and delivered by
M.N.M.M. Holdings Ltd., A.N. Dereg Systems Ltd., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (collectively, the "ISRAELI MANAGEMENT SELLING
SHAREHOLDERS"); assuming this Agreement, the Custody Agreement and any
Option Exercise Notices have been duly authorized, executed and delivered
by the Selling Shareholders resident in Israel other than the Israeli
Management Selling Shareholders, the Custody Agreement and the Option
Exercise Notices are valid and binding on the Selling Shareholders
(except to the extent that enforceability of the Custody Agreement may be
limited by applicable bankruptcy, insolvency, reorganization or other
laws of general application relating to or affecting the enforcement of
creditors' rights and the application of equitable principles relating to
the availability of remedies, and except as rights to indemnity or
contribution may be limited by Israeli laws and the public policy
underlying such laws);
(ii) to such counsel's knowledge, no consent, approval,
authorization or order of any Israeli court or governmental agency or
body is required for the consummation by the Selling Shareholders of the
transactions contemplated herein, except such as may have been obtained
under the Israel Securities Act of 1968, as amended, to which such
counsel expresses no opinion;
(iii) to such counsel's knowledge, neither the sale of the Shares
by the Selling Shareholders nor the consummation of any other of the
transactions herein contemplated by the Selling Shareholders or the
fulfillment of the terms hereof by the Selling Shareholders will conflict
with, result in a breach or violation of, or constitute a default under
any Israeli law or any Israeli judgment, order or decree applicable to
the Selling Shareholders or any of their respective subsidiaries of any
Israeli court, regulatory body, administrative agency, governmental body
or arbitrator having jurisdiction over the Selling Shareholders or any of
their respective subsidiaries;
-34-
(iv) under the laws of Israel, the submission by the Selling
Shareholders under this Agreement to the jurisdiction of any court
sitting in New York and the designation of New York law to apply to this
Agreement, is binding upon the Selling Shareholders 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 certain time
limitations, Israeli courts are empowered to enforce foreign final
non-appealable executory judgments for liquidated amounts in civil
matters, obtained after completion of process before a court of competent
jurisdiction which recognizes similar Israeli judgments, provided such
judgments or the enforcement thereof are not contrary to Israeli law,
public policy, security or the sovereignty of the State of Israel; the
enforcement of judgments is conditional upon: (a) adequate service of
process being effected and the defendant having had a reasonable
opportunity to be heard; (b) such judgment having been obtained before a
court of competent jurisdiction according to the rules of private
international law prevailing in Israel; (c) such judgment not being in
conflict with another valid judgment in the same matter between the same
parties; (d) such judgment not having been obtained by fraudulent means;
and (e) an action between the same parties in the same matter not pending
in any Israeli court at the time the lawsuit is instituted in the foreign
court.
In rendering such opinion, such counsel may rely as to matters of fact,
to the extent they deem proper, on certificates of responsible officers of the
Selling Shareholders, the Company and public officials.
(o) Israel Health Care Ventures LP ("ISRAEL HEALTH CARE"), as one of the
Selling Shareholders, shall have requested and caused ▇. ▇▇▇▇▇▇ & Co. Law
Offices, counsel for Israel Health Care, to have furnished to the
Representatives their opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) this Agreement and the Custody Agreement have been duly
authorized, executed and delivered by Israel Health Care; the Custody
Agreement is valid and binding on Israel Health Care (except to the
extent that enforceability of the Custody Agreement may be limited by
applicable bankruptcy, insolvency, reorganization or other laws of
general application relating to or affecting the enforcement of
creditors' rights and the application of equitable principles relating to
the availability of remedies, and except as rights to indemnity or
contribution may be limited by Israeli laws and the public policy
underlying such laws);
(ii) to such counsel's actual knowledge, no consent, approval,
authorization or order of any Israeli court or governmental agency or
body is required for the consummation by Israel Health Care of the
transactions contemplated herein, except such as may have been obtained
under the Israel Securities Act of 1968, as amended, to which such
counsel expresses no opinion;
(iii) to such counsel's actual knowledge, neither the sale of the
Shares by Israel Health Care nor the consummation of any other of the
transactions herein contemplated by Israel Health Care or the fulfillment
of the terms hereof by Israel Health Care will conflict with, result in a
breach or violation of, or constitute a default under any
-35-
Israeli law or any Israeli judgment, order or decree applicable to Israel
Health Care or any of its subsidiaries of any Israeli court, regulatory
body, administrative agency, governmental body or arbitrator having
jurisdiction over Israel Health Care or any of its subsidiaries; and
(iv) under the laws of Israel, the submission by Israel Health
Care under this Agreement to the jurisdiction of any court sitting in New
York and the designation of New York law to apply to this Agreement, is
binding upon Israel Health Care 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 certain time limitations, Israeli courts are
empowered to enforce foreign final non-appealable executory judgments for
liquidated amounts in civil matters, obtained after completion of process
before a court of competent jurisdiction which recognizes similar Israeli
judgments, provided such judgments or the enforcement thereof are not
contrary to Israeli law, public policy, security or the sovereignty of
the State of Israel; the enforcement of judgments is conditional upon:
(a) adequate service of process being effected and the defendant having
had a reasonable opportunity to be heard; (b) such judgment having been
obtained before a court of competent jurisdiction according to the rules
of private international law prevailing in Israel; (c) such judgment not
being in conflict with another valid judgment in the same matter between
the same parties; (d) such judgment not having been obtained by
fraudulent means; and (e) an action between the same parties in the same
matter not pending in any Israeli court at the time the lawsuit is
instituted in the foreign court.
In rendering such opinion, such counsel may rely as to matters of fact,
to the extent they deem proper, on certificates of responsible officers of
Israel Health Care, the Company and public officials.
(p) Lintech International Inc., a corporation organized under the laws of
Panama ("LINTECH"), shall have requested and caused its counsel to have
furnished to the Representatives their opinion, dated the Closing Date and
addressed to the Representatives, to the effect that:
(i) this Agreement and the Custody Agreement have been duly
authorized, executed and delivered by Lintech; the Custody Agreement is
valid and binding on Lintech (except to the extent that enforceability of
the Custody Agreement may be limited by applicable bankruptcy,
insolvency, reorganization or other laws of general application relating
to or affecting the enforcement of creditors' rights and the application
of equitable principles relating to the availability of remedies);
(ii) no consent, approval, authorization or order of any court or
governmental agency or body in Panama is required for the consummation by
Lintech of the transactions contemplated herein;
(iii) to such counsel's knowledge, neither the sale of the Shares
being sold by Lintech nor the consummation of any other of the
transactions herein contemplated by Lintech or the fulfillment of the
terms hereof by Lintech will conflict with, result in
-36-
a breach or violation of, or constitute a default under any Panamanian
law or any Panamanian judgment, order or decree applicable to Lintech or
any of its subsidiaries of any court, regulatory body, administrative
agency, governmental body or arbitrator in Panama having jurisdiction
over Lintech or any of its subsidiaries; and
(iv) under the laws of Panama, the submission by Lintech under
this Agreement to the jurisdiction of any court sitting in New York and
the designation of New York law to apply to this Agreement, is binding
upon Lintech and, if properly brought to the attention of the court or
administrative body in accordance with the laws of Panama or relevant
province therein, would be enforceable in any judicial or administrative
proceeding in Panama.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than Panama, to the
extent they deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of Lintech
and public officials.
(q) The Representatives shall have received from DLA ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ US LLP, U.S. counsel for the Underwriters, and Naschitz, ▇▇▇▇▇▇▇ & Co.,
Israeli counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and addressed to the Representatives, with respect to the
authorization of the Shares, the Registration Statement, the Prospectus
(together with any supplement thereto) and other related matters as the
Representatives may reasonably require, and the Company and each Selling
Shareholder shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters.
(r) The Company shall have furnished to the Representatives a certificate
of the Company, signed by the Chairman of the Board or the President and the
principal financial or accounting officer of the Company, dated the Closing
Date, to the effect that the signers of such certificate have carefully examined
the Registration Statement, the Prospectus, any supplements to the Prospectus
and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct on and as of the Closing Date with the
same effect as if made on the Closing Date and the Company has complied
with all the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge, threatened;
and
(iii) since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto), there
has been no Material Adverse Effect, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto).
-37-
(s) Each Selling Shareholder shall have furnished to the Representatives
a certificate, dated the Closing Date, to the effect that such Selling
Shareholders have carefully examined the Registration Statement, the Prospectus,
any supplement to the Prospectus and this Agreement and the representations and
warranties of such Selling Shareholder in this Agreement are true and correct in
all material respects on and as of the Closing Date to the same effect as if
made on the Closing Date.
(t) The Company shall have requested and caused ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ and
Kasierer (a Member of Ernst & Young Global) to have furnished to the
Representatives, at the Execution Time and at the Closing Date, letters, dated
respectively as of the Execution Time and as of the Closing Date, in form and
substance satisfactory to the Representatives, confirming that they are an
independent registered public accounting firm within the meaning of the Act and
the applicable rules and regulations adopted by the Commission thereunder and
stating in effect that:
(i) in their opinion the audited financial statements included in
the Registration Statement and the Prospectus and reported on by them
comply as to form in all material respects with the applicable accounting
requirements of the Act and the related rules and regulations adopted by
the Commission;
(ii) on the basis of [a reading of the latest unaudited financial
statements made available by the Company and the Significant
Subsidiaries;] carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing standards)
which would not necessarily reveal matters of significance with respect
to the comments set forth in such letter; a reading of the minutes of the
meetings of the shareholders and directors of the Company and the
Significant Subsidiaries; and inquiries of certain officials of the
Company who have responsibility for financial and accounting matters of
the Company and the Significant Subsidiaries as to transactions and
events subsequent to December 31, 2004, nothing came to their attention
which caused them to believe that:
(A) with respect to the period subsequent to December 31,
2004, there were any changes, at a specified date not more than
five days prior to the date of the letter, in the share capital of
the Company, increase in its long-term debt or decreases in
consolidated net current assets or shareholders' equity of the
Company as compared with the amounts shown on the December 31,
2004 consolidated balance sheet included in the Registration
Statement and the Prospectus, or for the period from January 1,
2005 to such specified date there were any decreases, as compared
with the corresponding period in the preceding quarter in
revenues, income before taxes on income or in total or per share
amounts of net income of the Company and the Significant
Subsidiaries, except in all instances for changes or decreases set
forth in such letter, in which case the letter shall be
accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not deemed
necessary by the Representatives; and
(B) the unaudited "Selected Financial Data" and "Executive Officer
and Directors Compensation" do not comply with Items 3A and 6B of
Form 20-F;
-38-
and
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the general
accounting records of the Company and the Significant Subsidiaries) set
forth in the Registration Statement and the Prospectus, including the
information set forth under the captions "Summary Consolidated Financial
Data," "Capitalization" and "Selected Consolidated Financial Data" in the
Prospectus, agrees with the accounting records of the Company and the
Significant Subsidiaries, excluding any questions of legal
interpretation.
(u) Subsequent to the date of the latest audited financial statements
included in the Registration Statement (exclusive of any amendment thereof) and
the Prospectus (exclusive of any supplement thereto), (i) there shall not have
been any change or decrease specified in the letter or letters referred to in
paragraph (t) of this Section 6; (ii) neither the Company nor any of the
Significant Subsidiaries shall have sustained 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; and
(iii) there shall not have been any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and the
Significant Subsidiaries except as set forth or contemplated in the Prospectus,
the effect of which, in any such case described in clauses (i), (ii) or (iii),
is, in the sole 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 as contemplated by the Registration Statement (exclusive
of any amendment thereof) and the Prospectus (exclusive of any supplement
thereto).
(v) Prior to the Closing Date, the Company and the Selling
Shareholders shall have furnished to the Representatives such further
information, certificates and documents as the Representatives may
reasonably request.
(w) The Shares shall have been approved for quotation on the
Nasdaq National Market, subject to (in the case of the Option Exercise
Shares) notice of official issuance and evidence of satisfactory
distribution.
(x) Subsequent to the Execution Time, there shall not have been
any decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any
intended or potential decrease in any such rating or of a possible change
in any such rating that does not indicate the direction of the possible
change.
(y) At or prior to the Execution Time, the Company shall have
furnished to the Representatives a letter substantially in the form of
Exhibit A hereto from each officer, director and shareholder of the
Company addressed to the Representatives.
-39-
If any of the conditions specified in this Section 6 shall not have been
fulfilled when and as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Representatives and counsel
for the Underwriters, this Agreement and all obligations of the Underwriters
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company and
each Selling Shareholder in writing or by telephone or facsimile confirmed in
writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of DLA ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ US LLP, U.S. counsel for
the Underwriters, at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, on the Closing Date.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the Shares
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth in Section 6 hereof is not satisfied, because of
any termination pursuant to Section 10 hereof or because of any refusal,
inability or failure on the part of the Company or any Selling Shareholder to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any of the Underwriters, the Company will reimburse the
Underwriters severally through ▇▇▇▇▇▇ on demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the
Shares.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) (I) The Company and the Major Selling Shareholders jointly and
severally agree to indemnify and hold harmless each Underwriter, its officers
and employees and each person, if any, who controls any Underwriter within the
meaning of either the Act or the Exchange 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 Act or the Exchange
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, the
Registration Statement 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 ("MARKETING MATERIALS"), including any road show or
investor presentations made to investors by the Company (whether in person or
electronically), (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement 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 that 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 neither
the Company nor the Major Selling Shareholders shall be liable under this clause
(iii) to the extent that it is determined in a final
-40-
judgment by a court of competent jurisdiction that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct), and shall reimburse each Underwriter and each
such officer, employee or 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 neither the Company nor the Major
Selling Shareholders shall 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 Statement or the
Prospectus, or in any such amendment or supplement, in reliance upon and in
conformity with written information concerning such Underwriter furnished to the
Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein which information consists solely of the
information specified in Section 8(e); PROVIDED, FURTHER, that the liability of
each Major Selling Shareholder with respect to written information furnished to
the Company or the Underwriters on behalf of such Major Selling Shareholders
specifically for inclusion in the documents referred to in the foregoing
indemnity shall be several and not joint. This indemnity agreement is in
addition to any liability that the Company or the Major Selling Shareholders may
otherwise have to any Underwriter or to any officer, employee or controlling
person of that Underwriter.
(II) The Non-Major Selling Shareholders, severally and not jointly, agree
to indemnify and hold harmless each Underwriter, and each of its officers and
employees and each person, if any, who controls such Underwriter within the
meaning of either the Act or the Exchange Act, all to the same extent as the
foregoing indemnity provided by the Company and the Major Selling Shareholders,
but only with respect to written information furnished to the Company or the
Underwriters on behalf of such Non-Major Selling Shareholder specifically for
inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement is in addition to any liability that the Non-Major Selling
Shareholders may otherwise have to any Underwriter or to any officer, employee
or controlling person of any of them.
(b) Each Underwriter, severally and not jointly, shall indemnify and hold
harmless the Company, its officers who have signed the Registration Statement,
each of its directors and each person, if any, who controls the Company within
the meaning of the Act or the Exchange Act and each Selling Shareholder and each
of its officers and directors and each person who controls such Selling
Shareholder within the meaning of either the Act or the Exchange Act, from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof, to which the Company or such Selling Shareholder or any such
director, officer or controlling person may become subject, under the Act or the
Exchange 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, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, or (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement 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
-41-
alleged omission was made in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company through the
Representatives by or on behalf of that Underwriter specifically for inclusion
therein, and shall reimburse the Company and such Selling Shareholder and any
such director, officer or controlling person for any legal or other expenses
reasonably incurred by the Company, such Selling Shareholder 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, such Selling Shareholder or any such director, officer, employee 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 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 or the Selling Shareholders 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. 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
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party 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 or liability by reason of such settlement or judgment.
-42-
(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 Selling
Shareholders 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 and the Selling Shareholders 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 Selling Shareholders 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 Selling Shareholders, 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 Selling Shareholders on the one hand or the Underwriters on the
other hand, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 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
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 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 and the Company and the Selling
Shareholders acknowledge that the statements with respect to the public offering
of the Shares by the Underwriters set forth on the cover page of, the legend
concerning over-allotments on the inside front cover page of and the concession
and reallowance figures appearing under the
-43-
caption "Underwriting" in, the Prospectus are correct and constitute the only
information concerning such Underwriters furnished in writing to the Company and
the Selling Shareholders by or on behalf of the Underwriters specifically for
inclusion in the Registration Statement and the Prospectus.
(f) The liability of each Selling Shareholder under such Selling
Shareholder's representations and warranties contained in Section 1 hereof and
under the indemnity and contribution agreements contained in this Section 8
shall be limited to an amount equal to the public offering price of the Shares
sold by such Selling Shareholder to the Underwriters. The Company and the
Selling Shareholders may agree, as among themselves and without limiting the
rights of the Underwriters under this Agreement, as to the respective amounts of
such liability for which they each shall be responsible.
9. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall fail
to purchase and pay for any of the Shares agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Shares set forth
opposite their names in Schedule I hereto bears to the aggregate amount of
Shares set forth opposite the names of all the remaining Underwriters) the
Shares which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Shares which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Shares set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Shares, and
if such nondefaulting Underwriters do not purchase all the Shares, this
Agreement will terminate without liability to any nondefaulting Underwriter, the
Selling Shareholders or the Company. In the event of a default by any
Underwriter as set forth in this Section 9, the Closing Date shall be postponed
for such period, not exceeding five Business Days, as the Representatives shall
determine in order that the required changes in the Registration Statement and
the Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Underwriter of
its liability, if any, to the Company, the Selling Shareholders and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
10. TERMINATION. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Shares, if at any time prior to such time (i)
trading in securities generally on the Nasdaq National Market, 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 or in the
over-the-counter market, shall have been suspended or the settlement of such
trading generally shall have been materially disrupted 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,
state or Israeli authorities, (iii) the United States or Israel shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or Israel or there shall have been a
declaration of a national emergency or war by the United States or Israel, (iv)
there shall have occurred such a material adverse change in general economic,
-44-
political or financial conditions, including without limitation as a result of
terrorist activities after the date hereof (or the effect of international
conditions on the financial markets in the United States or Israel shall be
such) as to make it, in the judgment of the Representatives, impracticable or
inadvisable to proceed with the public offering or delivery of the Shares being
delivered on such date of delivery on the terms and in the manner contemplated
in the Prospectus or (v) any of the events described in Section 6(r) shall have
occurred.
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers, of each Selling Shareholder and of the Underwriters set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter, any
Selling Shareholder or the Company or any of the officers, directors, employees,
agents or controlling persons referred to in Section 8 hereof, and will survive
delivery of and payment for the Shares. The provisions of Sections 7 and 8
hereof shall survive the termination or cancellation of this Agreement.
12. NOTICES. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Representatives, will be mailed, delivered
or telefaxed to ▇▇▇▇▇▇ Brothers Inc., 1285 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Syndicate Registration Department (Fax:
(▇▇▇) ▇▇▇-▇▇▇▇), with a copy, in the case of any notice pursuant to Section
8(c), to the Director of Litigation, Office of the General Counsel, ▇▇▇▇▇▇
Brothers Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇; or, if sent to
the Company, will be mailed, delivered or telefaxed to Syneron Medical Ltd. (fax
no.: (▇▇▇-▇) ▇▇▇-▇▇▇▇) and confirmed to it at Industrial Zone, Yokneam Illit,
20692, P.O.B. 550 Israel, attention of the Chief Executive Officer; or, if sent
to any Major Selling Shareholder, will be mailed, delivered or telefaxed and
confirmed to it at the address set forth in Schedule II hereto; or, if sent to
any Non-Major Selling Shareholder, will be mailed, delivered or telefaxed to it
care of the Company at the facsimile number and address of the Company set forth
in this paragraph.
13. SUCCESSORS. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers,
directors, employees, agents and controlling persons referred to in Section 8
hereof, and no other person will have any right or obligation hereunder.
14. APPLICABLE LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
15. JURISDICTION. Each of the Company and the Selling Shareholders agrees
that any suit, action or proceeding against the Company brought by any
Underwriter, the directors, officers, employees and agents of any Underwriter,
or by any person who controls any Underwriter, arising out of or based upon this
Agreement or the transactions contemplated hereby may be instituted in any New
York Court, and waives any objection which it may now or hereafter have to the
laying of venue of any such proceeding, and irrevocably submits to the
non-exclusive jurisdiction of such courts in any suit, action or proceeding.
Each of the Company and each Selling Shareholder has appointed the U.S.
Subsidiary as its authorized agent (the "AUTHORIZED AGENT") upon whom process
may be served in any suit, action or proceeding arising out of or
-45-
based upon this Agreement or the transactions contemplated herein which may be
instituted in any New York Court, by any Underwriter, the directors, officers,
employees and agents of any Underwriter, or by any person who controls any
Underwriter, and expressly accepts the non-exclusive jurisdiction of any such
court in respect of any such suit, action or proceeding. Each of the Company and
the Selling Shareholders hereby represents and warrants that the Authorized
Agent has accepted such appointment and has agreed to act as said agent for
service of process, and the Company agrees to take any and all action, including
the filing of any and all documents that may be necessary to continue such
appointment in full force and effect as aforesaid. Service of process upon the
Authorized Agent shall be deemed, in every respect, effective service of process
upon the Company and the Selling Shareholders. Notwithstanding the foregoing,
the Company and the Selling Shareholders each hereby agrees to the exclusive
jurisdiction of the New York Courts in connection with any action brought by
them arising out of or based upon this Agreement or the sale of the Shares.
The provisions of this Section 15 shall survive any termination of this
Agreement, in whole or in part.
16. CURRENCY. Each reference in this Agreement to U.S. Dollar or "$" (the
"RELEVANT CURRENCY") is of the essence. To the fullest extent permitted by law,
the obligations of each of the Company and the Selling Shareholders in respect
of any amount due under this Agreement will, notwithstanding any payment in any
other currency (whether pursuant to a judgment or otherwise), be discharged only
to the extent of the amount in the relevant currency that the party entitled to
receive such payment may, in accordance with its normal procedures, purchase
with the sum paid in such other currency (after any premium and costs of
exchange) on the Business Day immediately following the day on which such party
receives such payment. If the amount in the relevant currency that may be so
purchased for any reason falls short of the amount originally due, the Company
or the Selling Shareholder making such payment will pay such additional amounts,
in the relevant currency, as may be necessary to compensate for the shortfall.
Any obligation of any of the Company or the Selling Shareholders not discharged
by such payment will, to the fullest extent permitted by applicable law, be due
as a separate and independent obligation and, until discharged as provided
herein, will continue in full force and effect.
17. WAIVER OF IMMUNITY. To the extent that any of the Company or the
Selling Shareholders has or hereafter may acquire any immunity (sovereign or
otherwise) from any legal action, suit or proceeding, from jurisdiction of any
court or from set-off or any legal process (whether service or notice,
attachment in aid or otherwise) with respect to itself or any of its property,
each of the Company and the Selling Shareholders hereby irrevocably waives and
agrees not to plead or claim such immunity in respect of its obligations under
this Agreement.
18. COUNTERPARTS. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
19. HEADINGS. The section headings used herein are for convenience only
and shall not affect the construction hereof.
-46-
20. DEFINITIONS. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"ACT" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"COMMISSION" shall mean the Securities and Exchange Commission.
"EFFECTIVE DATE" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"EXECUTION TIME" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"NEW YORK COURTS" shall mean the U.S. federal or state courts located in
the State of New York, County of New York.
"PRELIMINARY PROSPECTUS" shall mean any preliminary prospectus referred
to in paragraph 1(a)(i) above and any preliminary prospectus included in the
Registration Statement at the Effective Date that omits Rule 430A Information.
"PROSPECTUS" shall mean the prospectus relating to the Shares that is
first filed pursuant to Rule 424(b) after the Execution Time or, if no filing
pursuant to Rule 424(b) is required, shall mean the form of final prospectus
relating to the Shares included in the Registration Statement at the Effective
Date.
"REGISTRATION STATEMENT" shall mean the registration statement referred
to in paragraph 1(a)(i) above, including exhibits and financial statements, as
amended at the Execution Time (or, if not effective at the Execution Time, in
the form in which it shall become effective) and, in the event any
post-effective amendment thereto or any Rule 462(b) Registration Statement
becomes effective prior to the Closing Date, shall also mean such registration
statement as so amended or such Rule 462(b) Registration Statement, as the case
may be. Such term shall include any Rule 430A Information deemed to be included
therein at the Effective Date as provided by Rule 430A.
"RULE 424", "RULE 430A" and "RULE 462" refer to such rules under the Act.
"RULE 430A INFORMATION" shall mean information with respect to the Shares
and the offering thereof permitted to be omitted from the Registration Statement
when it becomes effective pursuant to Rule 430A.
-47-
"RULE 462(B) REGISTRATION STATEMENT" shall mean a registration statement
and any amendments thereto filed pursuant to Rule 462(b) relating to the
offering covered by the registration statement referred to in Section 1(a)
hereof.
"SIGNIFICANT SUBSIDIARIES" shall mean, collectively, the U.S. Subsidiary,
the Canadian Subsidiary and the German Subsidiary.
"TAXES" includes all forms of taxation (including, without limitation,
any net income or gains, minimum, gross income, gross receipts, sales, use, ad
valorem, value-added, transfer, franchise, profits, license, withholding,
payroll, employment, excise, severance, stamp, capital stock, occupation,
property, custom, environmental or windfall tax or duty), together with
interest, penalties and additions imposed with respect to the foregoing, imposed
by any local, municipal, state, provincial, Federal or other government,
governmental entity or political subdivision, whether of Israel, the United
States or other country or political unit.
"TAX RETURN" means all returns, declarations, statements, reports,
schedules, forms and information returns, whether original or amended, relating
to Taxes.
[remainder of page intentionally left blank]
-48-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, the Selling Shareholders and the several Underwriters.
Very truly yours,
SYNERON MEDICAL LTD.
By:
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Executive Officer
THE SELLING SHAREHOLDERS LISTED ON SCHEDULE II
HERETO
By:
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
As Attorney-in-Fact acting on behalf of the
Selling Shareholders
By:
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
As Attorney-in-Fact acting on behalf of the
Selling Shareholders
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
▇▇▇▇▇▇ BROTHERS INC.
CIBC WORLD MARKETS CORP.
By: ▇▇▇▇▇▇ Brothers Inc.
By:
----------------------------------------
Name:
Title:
For themselves and the other several Underwriters named in Schedule I to the
foregoing Agreement.