Underwriting Agreement (2005)Full Document 

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                               5,750,000 SHARES

                           SAIFUN SEMICONDUCTORS LTD.

              ORDINARY SHARES, NOMINAL VALUE NIS 0.01 PER SHARE

                             UNDERWRITING AGREEMENT

                                                                          , 2005
LEHMAN BROTHERS INC.
DEUTSCHE BANK SECURITIES INC.
CIBC WORLD MARKETS CORP.
WILLIAM BLAIR & COMPANY, L.L.C.
RAYMOND JAMES & ASSOCIATES, INC.
As Representatives of the several
Underwriters named in Schedule 1,
  c/o Lehman Brothers Inc.
  745 Seventh Avenue
  New York, New York 10019



Dear Sirs:

            Saifun Semiconductors Ltd., a company organized under the laws of
the State of Israel (the "COMPANY"), proposes to sell an aggregate of 5,000,000
shares (the "FIRM SHARES") of the Company's ordinary shares, nominal value NIS
0.01 (the "ORDINARY SHARES").

            In addition, the Company proposes to grant to the Underwriters (the
"UNDERWRITERS") named in Schedule 1 attached to this agreement (the "AGREEMENT")
an option to purchase up to an additional 750,000 Ordinary Shares on the terms
set forth in Section 2 (the "OPTION SHARES"). The Firm Shares and the Option
Shares, if purchased, are hereinafter collectively called the "SHARES." This is
to confirm the agreement concerning the purchase of the Shares from the Company
by the Underwriters.

            Lehman Brothers Inc. ("LEHMAN") has agreed to reserve a portion of
the Shares to be purchased by it under this Agreement for sale to the Company's
directors, officers and business associates and other parties related to the
Company (collectively, "PARTICIPANTS"), as set forth in the Prospectus under the
heading "Underwriting" (the "DIRECTED SHARE PROGRAM"). The Shares to be sold by
Lehman and its affiliates pursuant to the Directed Share Program are referred to
hereinafter as the "DIRECTED SHARES." Any Directed Shares not confirmed for
purchase by any Participants by the end of the business day on which this
Agreement is executed will be offered to the public by the Underwriters as set
forth in the Prospectus.
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      SECTION 1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:

            (a) A registration statement on Form F-1 with respect to the Shares
has (i) been prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "SECURITIES ACT"), and the rules and
regulations (the "RULES AND REGULATIONS") of the Securities and Exchange
Commission (the "COMMISSION") thereunder, (ii) been filed with the Commission
under the Securities Act and (iii) become effective under the Securities Act.
Copies of such registration statement and each of the amendments thereto have
been delivered by the Company to you as the representatives (the
"REPRESENTATIVES") of the Underwriters. As used in this Agreement, "EFFECTIVE
TIME" means the date and the time as of which such registration statement, or
the most recent post-effective amendment thereto, if any, was declared effective
by the Commission; "EFFECTIVE DATE" means the date of the Effective Time;
"PRELIMINARY PROSPECTUS" means each prospectus included in such registration
statement, or amendments thereto, before such registration statement became
effective under the Securities Act and any prospectus filed with the Commission
by the Company with the consent of the Representatives pursuant to Rule 424(a)
of the Rules and Regulations; "REGISTRATION Statement" means such registration
statement, as amended at the Effective Time, including all information contained
in the final prospectus filed with the Commission pursuant to Rule 424(b) of the
Rules and Regulations and deemed to be a part of the registration statement as
of the Effective Time pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations; and "PROSPECTUS" means such final prospectus, as first filed with
the Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the Rules and
Regulations. Any reference to the term "Registration Statement" shall be deemed
to include the abbreviated registration statement to register additional
Ordinary Shares under Rule 462(b) under the Rules and Regulations (the "RULE 462

REGISTRATION STATEMENT"). The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus or Prospectus or suspending the
effectiveness of the Registration Statement, and no proceeding for such purpose
has been instituted or to the Company's knowledge threatened by the Commission.

            (b) The Registration Statement conformed in all material respects at
the Effective Time and conforms in all material respects, and any post-effective
amendment to the Registration Statement filed after the date hereof will conform
in all material respects on the applicable Effective Date, to the requirements
of the Securities Act and the Rules and Regulations. The Prospectus will conform
in all material respects when filed with the Commission pursuant to Rule 424(b)
and on the applicable Delivery Date (as defined in Section 4) to the
requirements of the Securities Act and the Rules and Regulations. The
Registration Statement, at the Effective Time, and the Prospectus, as of its
date and on the applicable Delivery Date, do not and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made) not
misleading; provided that no representation or warranty is made as to
information contained in or omitted from the


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Registration Statement or the Prospectus in reliance upon and in conformity
with written information furnished to the Company through the Representatives by
or on behalf of any Underwriter specifically for inclusion therein, which
information is specified in Section 8(e).

            (c) The Company has been duly incorporated and is validly existing
under the laws of the State of Israel, is duly qualified to do business in each
jurisdiction in which its ownership or lease of property or the conduct of its
businesses requires such qualification, and has all power and authority
necessary to own or hold its properties and to conduct the businesses in which
it is engaged, except where the failure to be so qualified or in good standing,
individually or in the aggregate, would not reasonably be expected to have a
material adverse effect on the condition (financial or otherwise), results of
operations, shareholders' equity, properties, business or prospects of the
Company and its subsidiaries taken as a whole (a "MATERIAL ADVERSE EFFECT"). No
proceeding has been instituted by the Registrar of Companies in Israel for the
dissolution of the Company.

            (d) Except with respect to Saifun Ventures Ltd., which is currently
in the process of liquidation (which liquidation will not result in the Company
or any subsidiary thereof incurring material costs, expenses or any other
material liabilities), each subsidiary (as defined in Section 18) of the Company
has been duly organized, is validly existing and is in good standing, where
applicable, as a corporation or other business entity under the laws of its
jurisdiction of organization and is duly qualified to do business and in good
standing, where applicable, as a foreign corporation or other business entity in
each jurisdiction in which its ownership or lease of property or the conduct of
its businesses requires such qualification, except where the failure to be in
good standing or so qualified, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. Except with respect to
Saifun Ventures Ltd., which is currently in the process of liquidation, each
subsidiary of the Company has all power and authority necessary to own or hold
its properties and to conduct the businesses in which it is engaged. The Company
does not own or control, directly or indirectly, any corporation, association or
other entity other than the subsidiaries listed in Exhibit 21 to the
Registration Statement. None of the subsidiaries of the Company is a
"significant subsidiary," as such term is defined in Rule 405 of the Rules and
Regulations.

            (e) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of the Company have been duly
authorized and validly issued and, as except as set forth in the Prospectus, are
fully paid and non-assessable, conform to the description thereof contained in
the Prospectus and were issued in compliance with federal and state securities
laws and not in violation of any preemptive right, resale right, right of first
refusal or similar right. All of the Company's options, warrants and other
rights to purchase or exchange any securities for Ordinary Shares have been duly
authorized and validly issued, conform to the description thereof contained in
the Prospectus and were issued in compliance with the laws of the State of
Israel. All of the issued shares of each subsidiary of the Company have been
duly authorized and validly issued and are fully paid and non-assessable and are
owned


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directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims, except for such liens, encumbrances, equities
or claims as could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

            (f) The Shares to be issued and sold by the Company to the
Underwriters hereunder have been duly authorized and, upon payment and delivery
therefor in accordance with this Agreement, will be validly issued, fully paid
and non-assessable, will conform to the description thereof contained in the
Prospectus, will be issued in compliance with federal, state and foreign
securities laws, including the laws of the State of Israel, and will be free of
statutory and contractual preemptive rights, resale rights, rights of first
refusal and similar rights.

            (g) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement. This
Agreement has been duly and validly authorized, executed and delivered by the
Company.

            (h) The execution, delivery and performance of this Agreement by the
Company, the consummation of the transactions contemplated hereby and the
application of the proceeds from the sale of Shares as described under "Use of
Proceeds" in the Prospectus will not (i) conflict with or result in a breach or
violation of any of the terms or provisions of, impose any lien, charge or
encumbrance upon any property or assets of the Company and its subsidiaries, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement, license or other agreement or instrument to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject; (ii) result in any violation of the
provisions of the memorandum of association, articles of association, charter or
bylaws (or similar organizational documents) of the Company or any of its

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