HARMONIC INC.
9,000,000 Shares
Common Stock
($0.001 par value per Share)
UNDERWRITING AGREEMENT
October 29, 2003
UNDERWRITING AGREEMENT
October 29, 2003
UBS Securities LLC
SoundView Technology Corporation
Xxxxxxx & Company, Inc.
as Managing Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Harmonic Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the underwriters named in Schedule A annexed
hereto (the "Underwriters"), for whom you are acting as representatives, an
aggregate of 9,000,000 shares (the "Firm Shares") of common stock, $0.001 par
value per share (the "Common Stock"), of the Company. In addition, solely for
the purpose of covering over-allotments, the Company proposes to grant to the
Underwriters the option to purchase from the Company up to an additional
1,350,000 shares of Common Stock (the "Additional Shares"). The Firm Shares and
the Additional Shares are hereinafter collectively sometimes referred to as the
"Shares." The Shares are described in the Prospectus which is referred to below.
The Company has prepared and filed, in accordance with the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations thereunder (collectively, the "Act"), with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(File No. 333-84430) under the Act (the "registration statement"). Amendments to
such registration statement, if necessary or appropriate, have been similarly
prepared and filed with the Commission. Such registration statement, as so
amended, has been declared by the Commission to be effective under the Act. The
Company has filed with the Commission a Prepricing Prospectus (as defined and
referred to below) pursuant to Rule 424(b) under the Act, describing the Shares
and the offering thereof, in such form as has been provided to or discussed
with, and approved by, the Underwriters. The Company will next file with the
Commission pursuant to Rule 424(b) under the Act a final prospectus supplement
to the basic prospectus, describing the Shares and the offering thereof, in such
form as has been provided to or discussed with, and approved, by the
Underwriters.
The term "Registration Statement" as used in this Agreement
means the registration statement, as amended at the time it became effective and
as supplemented or amended prior to the execution of this Agreement, including
(i) all financial schedules and exhibits thereto and (ii) all documents
incorporated by reference or deemed to be incorporated by reference therein. If
an abbreviated registration statement is prepared and filed with the Commission
in accordance with Rule 462(b) under the Act (an "Abbreviated Registration
Statement"), the term "Registration Statement" includes the Abbreviated
Registration Statement. The term "Basic Prospectus" as used in this Agreement
means the basic prospectus dated as of
April 18, 2002 and to be filed with the Commission pursuant to Rule 424(b) for
use in connection with the offer and/or sale of Shares pursuant to this
Agreement. The term "Prepricing Prospectus" as used in this Agreement means any
form of preliminary prospectus used in connection with the marketing of the
Shares, including the preliminary prospectus supplement dated as of October 16,
2003 and filed with the Commission on October 16, 2003 pursuant to Rule 424
under the Act and any basic prospectus (whether or not in preliminary form) used
with any such preliminary prospectus supplement in connection with the marketing
of the Shares, in each case as any of the foregoing may be amended or
supplemented by the Company. The term "Prospectus Supplement" as used in this
Agreement means any final prospectus supplement specifically relating to the
Shares, in the form filed with, or transmitted for filing to, the Commission
pursuant to Rule 424 under the Act. The term "Prospectus" as used in this
Agreement means the Basic Prospectus together with the Prospectus Supplement
except that if such Basic Prospectus is amended or supplemented on or prior to
the date on which the Prospectus Supplement was first filed pursuant to Rule
424, the term "Prospectus" shall refer to the Basic Prospectus as so amended or
supplemented and as supplemented by the Prospectus Supplement. Any reference
herein to the registration statement, the Registration Statement, the Basic
Prospectus, any Prepricing Prospectus, any Prospectus Supplement or the
Prospectus shall be deemed to refer to and include (i) the documents
incorporated by reference therein pursuant to Form S-3 (the "Incorporated
Documents") and (ii) the copy of the Registration Statement, the Basic
Prospectus, the Prepricing Prospectus, the Prospectus Supplement, the Prospectus
or the Incorporated Documents filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval system ("XXXXX"). Any
reference herein to the terms "amend," "amendment" or "supplement" with respect
to the Registration Statement, any Prepricing Prospectus, the Prospectus
Supplement or the Prospectus shall be deemed to refer to and include the filing
of any document under the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (collectively, the "Exchange Act") after the
effective date of the Registration Statement, or the date of the Prospectus, as
the case may be, deemed to be incorporated therein by reference.
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations
and warranties and subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule A attached hereto, subject to adjustment in accordance with Section 8
hereof, in each case at a purchase price of $6.993 per Share. The Company is
advised by you that the Underwriters intend (i) to make a public offering of
their respective portions of the Firm Shares as soon after the effective date of
the Registration Statement as in your judgment is advisable and (ii) initially
to offer the Firm Shares upon the terms set forth in the Prospectus. You may
from time to time increase or decrease the public offering price after the
initial public offering to such extent as you may determine.
In addition, the Company hereby grants to the several
Underwriters the option to purchase, and upon the basis of the representations
and warranties and subject to the terms and conditions herein set forth, the
Underwriters shall have the right to purchase, severally and not jointly, from
the Company, ratably in accordance with the number of Firm Shares to be
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purchased by each of them, all or a portion of the Additional Shares as may be
necessary to cover over-allotments made in connection with the offering of the
Firm Shares, at the same purchase price per share to be paid by the Underwriters
to the Company for the Firm Shares. This option may be exercised by UBS
Securities LLC ("UBS") on behalf of the several Underwriters at any time and
from time to time on or before the thirtieth day following the date of the
Prospectus, by written notice to the Company. Such notice shall set forth the
aggregate number of Additional Shares as to which the option is being exercised
and the date and time when the Additional Shares are to be delivered (such date
and time being herein referred to as the "additional time of purchase");
provided, however, that the additional time of purchase shall not be earlier
than the time of purchase (as defined below) nor earlier than the second
business day after the date on which the option shall have been exercised nor
later than the tenth business day after the date on which the option shall have
been exercised. The number of Additional Shares to be sold to each Underwriter
shall be the number which bears the same proportion to the aggregate number of
Additional Shares being purchased as the number of Firm Shares set forth
opposite the name of such Underwriter on Schedule A hereto bears to the total
number of Firm Shares (subject, in each case, to such adjustment as you may
determine to eliminate fractional shares), subject to adjustment in accordance
with Section 8 hereof.
2. Payment and Delivery. Payment of the purchase price for the
Firm Shares shall be made to the Company by Federal Funds wire transfer against
delivery of the certificates for the Firm Shares to you through the facilities
of The Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York
City time, on November 3, 2003 (unless another time shall be agreed to by you
and the Company or unless postponed in accordance with the provisions of Section
8 hereof). The time at which such payment and delivery are to be made is
hereinafter sometimes called "the time of purchase." Electronic transfer of the
Firm Shares shall be made to you at the time of purchase in such names and in
such denominations as you shall specify.
Payment of the purchase price for the Additional Shares shall
be made at the additional time of purchase in the same manner and at the same
office as the payment for the Firm Shares. Electronic transfer of the Additional
Shares shall be made to you at the additional time of purchase in such names and
in such denominations as you shall specify.
Deliveries of the documents described in Section 6 hereof with
respect to the purchase of the Shares shall be made at the offices of Xxxxx
Xxxxxxxxxx LLP at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 9:00
A.M., New York City time, on the date of the closing of the purchase of the Firm
Shares or the Additional Shares, as the case may be.
3. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) the Registration Statement has been declared
effective under the Act; no stop order of the Commission preventing or
suspending the use of the Basic Prospectus, any Prepricing Prospectus,
the Prospectus Supplement or the Prospectus or the effectiveness of the
Registration Statement has been issued and no proceedings for such
purpose have been instituted or, to the Company's knowledge, are
contemplated by the Commission; the Company is eligible to use Form
S-3; such registration statement at
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the date of this Agreement meets, and the offering of the Shares
complies with, the requirements of Rule 415 under the Act. The
Registration Statement complied when it became effective, complies and,
at the time of purchase, any additional time of purchase and at any
time at which the Prospectus is delivered in connection with any sale
of Shares, will comply, and the Basic Prospectus, any Prepricing
Prospectus, the Prospectus Supplement and the Prospectus conformed as
of its date, conform and, at the time of purchase, any additional time
of purchase and at any time at which the Prospectus is delivered in
connection with any sale of Shares, will conform in all material
respects with the requirements of the Act (including said Rule 415);
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
have been and will be so described or filed; the conditions to the use
of Form S-3 have been satisfied; and the Registration Statement did not
at the time of effectiveness, does not and, at the time of purchase,
any additional time of purchase and at any time at which the Prospectus
is delivered in connection with any sale of Shares, 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 not misleading, and the Basic Prospectus, any Prepricing
Prospectus, the Prospectus Supplement and the Prospectus did not as of
its date, does not and, at the time of purchase, any additional time of
purchase and at any time at which the Prospectus is delivered in
connection with any sale of Shares, 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
light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no warranty or representation
with respect to any statement contained in the Registration Statement
or the Prospectus in reliance upon and in conformity with information
concerning an Underwriter and furnished in writing by or on behalf of
such Underwriter through you to the Company expressly for use in the
Registration Statement or the Prospectus; the documents incorporated by
reference in the Basic Prospectus, any Prepricing Prospectus, the
Prospectus Supplement, the Registration Statement and the Prospectus,
at the time they became effective or were filed with the Commission,
complied in all material respects with the requirements of the Exchange
Act and did 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 light of the circumstances under which
they were made, not misleading; and the Company has not distributed and
will not distribute any offering material in connection with the
offering or sale of the Shares other than the Registration Statement,
any Prepricing Prospectus, the then most recent Prospectus Supplement
and the Prospectus;
(b) as of the date of this Agreement, the Company has
an authorized capitalization as set forth in the sections of the
Registration Statement and the Prospectus entitled "Capitalization,"
"Description of Preferred Stock" and "Description of Common Stock" and
an outstanding capitalization as set forth in the section of the
Registration Statement and the Prospectus entitled "Capitalization,"
and, as of the time of purchase and any additional time of purchase, as
the case may be, the Company shall have an authorized capitalization as
set forth in the sections of the Registration Statement and the
Prospectus entitled "Capitalization," "Description of Preferred Stock"
and "Description of Common Stock" and an outstanding capitalization as
set forth in the section of the
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Registration Statement and the Prospectus entitled "Capitalization"
(subject to the issuance of shares of Common Stock upon exercise of
stock options granted pursuant to the Company's benefit plans and
disclosed as outstanding in the Registration Statement and the
Prospectus and the grant of stock options or other stock awards
described in the Registration Statement and the Prospectus as reserved
for future issuance under existing stock option or other benefit
plans); the only shares of capital stock of the Company outstanding are
the Common Stock of the Company, and all of the issued and outstanding
shares of the Common Stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable, have been issued
in compliance with all federal and state securities laws and were not
issued in violation of any preemptive right, right of first refusal or
similar right;
(c) the Company 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,
lease and operate its properties and conduct its business as described
in the Registration Statement and the Prospectus, to execute and
deliver this Agreement and to issue, sell and deliver the Shares as
contemplated herein;
(d) the Company is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where
the ownership or leasing of its properties or the conduct of its
business requires such qualification, except where the failure to be so
qualified and in good standing would not, individually or in the
aggregate, have a material adverse effect on the business, properties,
financial condition, results of operation or prospects of the Company
and the Subsidiaries (as hereinafter defined) taken as a whole (a
"Material Adverse Effect");
(e) the Company has no subsidiaries (as defined under
the Act) other than as listed in Schedule B annexed hereto
(collectively, the "Subsidiaries"); the Company has no "significant
subsidiary," as that term is defined in Rule 1-02(w) of Regulation S-X
under the Act, and no group consisting of any or all of the
Subsidiaries would, in the aggregate, constitute a "significant
subsidiary" of the Company; other than the capital stock of the
Subsidiaries, the Company does not own, directly or indirectly, any
shares of stock or any other equity or long-term debt securities of any
corporation or have any equity interest in any firm, partnership, joint
venture, association or other entity; complete and correct copies of
the charter and the bylaws (or comparable organizational documents) of
the Company and the Subsidiaries and all amendments thereto have been
delivered to you, and, except as set forth in the exhibits to the
Registration Statement, no changes therein will be made on or after the
date hereof or on or before the time of purchase or, if later, the
additional time of purchase; other than Harmonic Lightwaves (Israel)
Ltd., the Subsidiaries do not own or possess any property or assets, or
have any obligations or liabilities, or possess any rights (by
contract, franchise, permit or otherwise) or engage in any operations
that are, individually or in the aggregate, material to the Company or
its properties, operations, business, prospects or condition (financial
or otherwise); each Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, with full corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus;
each
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Subsidiary is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified and in good
standing would not, individually or in the aggregate, have a Material
Adverse Effect; all of the outstanding shares of capital stock of each
of the Subsidiaries have been duly authorized and validly issued, are
fully paid and non-assessable and are owned by the Company and/or one
of the Subsidiaries and, except as set forth in the Registration
Statement and the Prospectus, subject to no security interest, other
encumbrance or adverse claims; no options, warrants or other rights to
purchase, agreements or other obligations to issue or other rights to
convert any obligation into shares of capital stock or ownership
interests in the Subsidiaries are outstanding;
(f) the Shares have been duly and validly authorized
and, when issued and delivered against payment therefor as provided
herein, will be duly and validly issued, fully paid and non-assessable
and free of statutory and contractual preemptive rights, rights of
first refusal and similar rights;
(g) the capital stock of the Company, including the
Shares, conforms in all material respects to the description thereof
contained in the Registration Statement and the Prospectus, and the
certificates for the Shares are in due and proper form, and the holders
of the Shares will not be subject to personal liability by reason of
being such holders;
(h) this Agreement has been duly authorized, executed
and delivered by the Company;
(i) neither the Company nor any of the Subsidiaries
is in breach or violation of or in default under (nor has any event
occurred which with notice, lapse of time or both would result in any
breach or violation of, constitute a default under or give the holder
of any indebtedness (or a person acting on such holder's behalf) the
right to require the repurchase, redemption or repayment of all or a
part of such indebtedness under) (A) its respective charter or bylaws
(or comparable organizational documents), or (B) any indenture,
mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which the Company or any of the Subsidiaries
is a party or by which any of them or any of their properties may be
bound or affected except, in the case of clause (B), to the extent that
any such breach, violation or default would not, individually or in the
aggregate, have a Material Adverse Effect; and the execution, delivery
and performance of this Agreement, the issuance and sale of the Shares
and the consummation of the transactions contemplated hereby will not
conflict with, result in any breach or violation of or constitute a
default under (nor constitute any event which with notice, lapse of
time or both would result in any breach or violation of or constitute a
default under) (X) the charter or bylaws (or comparable organizational
documents) of the Company or any of the Subsidiaries, or (Y) any
indenture, mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or any license, lease, contract or
other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which any of them or any of their
respective properties may be bound or affected, or (Z)
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any federal, state, local or foreign law, regulation or rule or any
decree, judgment or order applicable to the Company or any of the
Subsidiaries except, in the case of clause (Y), to the extent that any
such conflict, breach, violation or default would not, individually or
in the aggregate, have a Material Adverse Effect;
(j) no approval, authorization, consent or order of
or filing with any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency, or of or with
the National Association of Securities Dealers Automated Quotation
National Market System ("NASDAQ"), or approval of the shareholders of
the Company, is required in connection with the issuance and sale of
the Shares or the consummation by the Company of the transactions
contemplated hereby other than registration of the Shares under the Act
and the filing of a listing of additional shares with NASDAQ, which
have been effected, and any necessary qualification under the
securities or blue sky laws of the various jurisdictions in which the
Shares are being offered by the Underwriters or under the rules and
regulations of the National Association of Securities Dealers, Inc.
("NASD");
(k) (i) no person has the right, contractual or
otherwise, to cause the Company to issue or sell to it any shares of
Common Stock or shares of any other capital stock or other equity
interests of the Company (other than pursuant to options, rights to
purchase or other awards under the Company's benefit plans, in each
case disclosed as either outstanding or reserved for future issuance in
the Registration Statement and the Prospectus), (ii) no person has any
preemptive rights, rights of first refusal or other rights to purchase
any shares of Common Stock or shares of any other capital stock of or
other equity interests in the Company (other than pursuant to options,
rights to purchase or other awards under the Company's benefit plans,
in each case disclosed as either outstanding or reserved for future
issuance in the Registration Statement and the Prospectus) and (iii) no
person has the right to act as an underwriter or as a financial advisor
to the Company in connection with the offer and sale of the Shares, in
the case of each of the foregoing clauses (i), (ii) and (iii), whether
as a result of the filing or effectiveness of the Registration
Statement or the sale of the Shares as contemplated thereby or
otherwise; no person has the right, contractual or otherwise, to cause
the Company to register under the Act any shares of Common Stock or
shares of any other capital stock of or other equity interests in the
Company, or, except as have been waived pursuant to an effective
waiver, to include any such shares or interests in the Registration
Statement or the offering contemplated thereby, whether as a result of
the filing or effectiveness of the Registration Statement or the sale
of the Shares as contemplated thereby or otherwise;
(l) each of the Company and the Subsidiaries has all
necessary licenses, authorizations, consents and approvals and has made
all necessary filings required under any federal, state, local or
foreign law, regulation or rule, and has obtained all necessary
licenses, authorizations, consents and approvals from other persons, in
order to conduct its respective business, except in each case as would
not, individually or in the aggregate, have a Material Adverse Effect;
neither the Company nor any of the Subsidiaries is in violation of, or
in default under, or has received notice of any proceedings relating to
revocation or modification of, any such license, authorization,
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consent or approval or any federal, state, local or foreign law,
regulation or rule or any decree, order or judgment applicable to the
Company or any of the Subsidiaries, except where such violation,
default, revocation or modification would not, individually or in the
aggregate, have a Material Adverse Effect;
(m) all legal or governmental proceedings, affiliate
transactions, off-balance sheet transactions (including, without
limitation, transactions related to, and the existence of, "variable
interest entities" within the meaning of Financial Accounting Standards
Board Interpretation No. 46), contracts, licenses, agreements, leases
or documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit
to the Registration Statement have been so described or filed as
required;
(n) except as described in the Registration Statement
and the Prospectus, there are no actions, suits, claims, investigations
or proceedings pending or, to the Company's knowledge, threatened or
contemplated to which the Company or any of the Subsidiaries or any of
their respective directors or officers is or would be a party or of
which any of their respective properties is or would be subject at law
or in equity, before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or
agency, except any such action, suit, claim, investigation or
proceeding which would not result in a judgment, decree or order
having, individually or in the aggregate, a Material Adverse Effect or
preventing consummation of the transactions contemplated hereby;
(o) PricewaterhouseCoopers LLP, whose report on the
consolidated financial statements of the Company and the Subsidiaries
is included in the Registration Statement and the Prospectus, are
independent public accountants as required by the Act and by Rule 3600T
of the Public Company Accounting Oversight Board;
(p) the financial statements included in the
Registration Statement and the Prospectus, together with the related
notes and schedules, present fairly the consolidated financial position
of the Company and the Subsidiaries as of the dates indicated and the
consolidated results of operations and cash flows of the Company and
the Subsidiaries for the periods specified and have been prepared in
compliance with the requirements of the Act and in conformity with
generally accepted accounting principles applied on a consistent basis
during the periods involved; any pro forma financial statements or data
included in the Registration Statement and the Prospectus comply with
the requirements of Regulation S-X of the Act, including, without
limitation, Article 11 thereof, and the assumptions used in the
preparation of such pro forma financial statements and data are
reasonable, the pro forma adjustments used therein are appropriate to
give effect to the transactions or circumstances described therein and
the pro forma adjustments have been properly applied to the historical
amounts in the compilation of those statements and data; the other
financial and statistical data set forth in the Registration Statement
and the Prospectus are accurately presented and prepared on a basis
consistent with the financial statements and books and records of the
Company; there are no financial statements (historical or pro forma)
that are required to be included in the Registration Statement and the
Prospectus (including, without limitation, as
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required by Rules 3-12 or 3-05 or Article 11 of Regulation S-X under
the Act) that are not included as required; the Company and the
Subsidiaries do not have any material liabilities or obligations,
direct or contingent (including any off-balance sheet obligations or
any "variable interest entities" within the meaning of Financial
Accounting Standards Board Interpretation No. 46), not disclosed in the
Registration Statement and the Prospectus; and all disclosures
contained in the Registration Statement or the Prospectus regarding
"non-GAAP financial measures" (as such term is defined by the rules and
regulations of the Commission) comply with Regulation G of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (collectively, the "Exchange Act") and Item 10
of Regulation S-K under the Act, to the extent applicable;
(q) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
there has not been (i) any material adverse change, or any development
involving a prospective material adverse change, in the business,
properties, management, financial condition or results of operations of
the Company and the Subsidiaries taken as a whole, (ii) any transaction
which is material to the Company and the Subsidiaries taken as a whole,
(iii) any obligation, direct or contingent (including any off-balance
sheet obligations), incurred by the Company or the Subsidiaries, which
is material to the Company and the Subsidiaries taken as a whole, (iv)
any change in the capital stock (other than as a result of the exercise
of options or the grant of stock options or other stock awards under
the Company's benefit plans, in each case disclosed as either
outstanding or reserved for future issuance in the Registration
Statement and the Prospectus) or increase in outstanding indebtedness
of the Company or the Subsidiaries or (v) any dividend or distribution
of any kind declared, paid or made on the capital stock of the Company;
(r) the Company has obtained for the benefit of the
Underwriters the agreement (a "Lock-Up Agreement"), in the form set
forth as Exhibit A hereto, of each of its directors and executive
officers;
(s) neither the Company nor any of the Subsidiaries
is, nor, after giving effect to the offering and sale of the Shares,
will any of them be an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act") or a
"passive foreign investment company" or a "controlled foreign
corporation" as such terms are defined in the Internal Revenue Code;
(t) except as set forth in the Registration Statement
and the Prospectus, the Company and each of the Subsidiaries have good
and marketable title to all property (real and personal) described in
the Registration Statement and the Prospectus as being owned by each of
them, free and clear of all liens, claims, security interests or other
encumbrances; all the property described in the Registration Statement
and the Prospectus as being held under lease by the Company or a
Subsidiary is held thereby under valid, subsisting and enforceable
leases;
(u) the Company and the Subsidiaries own, or have
obtained valid and enforceable licenses for, or other rights to use,
the inventions, patent applications,
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patents, trademarks (both registered and unregistered), tradenames,
service names, copyrights, trade secrets and other proprietary
information described in the Registration Statement and the Prospectus
as being owned or licensed by them or which are necessary for the
conduct of their respective businesses, except where the failure to
own, license or have such rights would not, individually or in the
aggregate, have a Material Adverse Effect (collectively, "Intellectual
Property"); except as set forth in the Registration Statement and the
Prospectus or as would not, individually or in the aggregate, have a
Material Adverse Effect, (i) there are no third parties who have or, to
the Company's knowledge, will be able to establish rights to any
Intellectual Property, except for the ownership rights of the owners of
the Intellectual Property which is licensed to the Company; (ii) to the
Company's knowledge, there is no infringement by third parties of any
Intellectual Property; (iii) 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 Intellectual Property,
and the Company is unaware of any facts which could form a reasonable
basis for any such action, suit, proceeding or claim; (iv) 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
Intellectual Property, and the Company is unaware of any facts which
could form a reasonable basis for any such action, suit, proceeding or
claim; (v) there is no pending or, to the Company's knowledge,
threatened action, suit, proceeding or claim by others that the Company
or any Subsidiary infringes or otherwise violates any patent,
trademark, tradename, service name, copyright, trade secret or other
proprietary rights of others, and the Company is unaware of any facts
which could form a reasonable basis for any such action, suit,
proceeding or claim; (vi) to the Company's knowledge, there is no
patent or patent application that contains claims that interfere with
the issued or pending claims of any of the Intellectual Property; and
(vii) to the Company's knowledge, there is no prior art that may render
any patent application owned by the Company or any Subsidiary of the
Intellectual Property unpatentable that has not been disclosed to the
U.S. Patent and Trademark Office;
(v) neither the Company nor any of the Subsidiaries
is engaged in any unfair labor practice; except for matters which would
not, individually or in the aggregate, have a Material Adverse Effect,
(i) there is (A) no unfair labor practice complaint pending or, to the
Company's knowledge, threatened against the Company or any of the
Subsidiaries before the National Labor Relations Board, and no
grievance or arbitration proceeding arising out of or under collective
bargaining agreements is pending or threatened, (B) no strike, labor
dispute, slowdown or stoppage pending or, to the Company's knowledge,
threatened against the Company or any of the Subsidiaries and (C) no
union representation dispute currently existing concerning the
employees of the Company or any of the Subsidiaries, and (ii) to the
Company's knowledge, (A) no union organizing activities are currently
taking place concerning the employees of the Company or any of the
Subsidiaries and (B) there has been no violation of any federal, state,
local or foreign law relating to discrimination in the hiring,
promotion or pay of employees, any applicable wage or hour laws or any
provision of the Employee Retirement Income Security Act of 1974
("ERISA") or the rules and regulations promulgated thereunder
concerning the employees of the Company or any of the Subsidiaries;
(w) the Company and the Subsidiaries and their
properties, assets and
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operations are in compliance with, and hold all permits, authorizations
and approvals required under, Environmental Laws (as defined below),
except to the extent that failure to so comply or to hold such permits,
authorizations or approvals would not, individually or in the
aggregate, have a Material Adverse Effect; there are no past, present
or, to the Company's knowledge, reasonably anticipated future events,
conditions, circumstances, activities, practices, actions, omissions or
plans that could reasonably be expected to give rise to any material
costs or liabilities to the Company or the Subsidiaries under, or to
interfere with or prevent compliance by the Company or the Subsidiaries
with, Environmental Laws, except as would not, individually or in the
aggregate, have a Material Adverse Effect; except as would not,
individually or in the aggregate, have a Material Adverse Effect,
neither the Company nor any of the Subsidiaries (i) is the subject of
any investigation, (ii) has received any notice or claim, (iii) is a
party to or affected by any pending or threatened action, suit or
proceeding, (iv) is bound by any judgment, decree or order or (v) has
entered into any agreement, in each case relating to any alleged
violation of any Environmental Law or any actual or alleged release or
threatened release or cleanup at any location of any Hazardous
Materials (as defined below) (as used herein, "Environmental Law" means
any federal, state, local or foreign law, statute, ordinance, rule,
regulation, order, decree, judgment, injunction, permit, license,
authorization or other binding requirement, or common law, relating to
health, safety or the protection, cleanup or restoration of the
environment or natural resources, including those relating to the
distribution, processing, generation, treatment, storage, disposal,
transportation, other handling or release or threatened release of
Hazardous Materials, and "Hazardous Materials" means any material
(including, without limitation, pollutants, contaminants, hazardous or
toxic substances or wastes) that is regulated by or may give rise to
liability under any Environmental Law);
(x) except as disclosed in the Registration Statement
and the Prospectus, all tax returns required to be filed by the Company
and each of the Subsidiaries have been filed, and all taxes and other
assessments of a similar nature (whether imposed directly or through
withholding) including any interest, additions to tax or penalties
applicable thereto due or claimed to be due from such entities have
been paid, other than those being contested in good faith and those
described in the Registration Statement and the Prospectus, in each
case for which adequate reserves have been provided;
(y) the Company and each of the Subsidiaries
maintains insurance covering its properties, operations, personnel and
businesses as the Company deems adequate; such insurance insures
against such losses and risks to an extent which is adequate in
accordance with customary industry practice to protect the Company and
the Subsidiaries and their businesses; all such insurance is fully in
force on the date hereof and will be fully in force at the time of
purchase and any additional time of purchase;
(z) except as disclosed in the Registration Statement
and the Prospectus, neither the Company nor any of the Subsidiaries has
sustained since the date of the last audited financial statements
included in the Registration Statement and the Prospectus any loss or
interference with its respective business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any
labor dispute or court
-11-
or governmental action, order or decree, except as would not,
individually or in the aggregate, have a Material Adverse Effect;
(aa) the Company has not sent or received any
communication regarding termination of, or intent not to renew, any of
the contracts or agreements referred to or described in, or filed as an
exhibit to, the Registration Statement, and no such termination or
non-renewal has been threatened by the Company or, to the Company's
knowledge, any other party to any such contract or agreement;
(bb) the Company and each of the Subsidiaries
maintains a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets
is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences;
(cc) the Company has established and maintains and
evaluates "disclosure controls and procedures" (as such term is defined
in Rule 13a-14 and 15d-14 under the Exchange Act) and "internal control
over financial reporting" (as such term is defined in Rule 13a-15 and
15d-15 under the Exchange Act); such disclosure controls and procedures
are designed to ensure that material information relating to the
Company, including its consolidated subsidiaries, is made known to the
Company's Chief Executive Officer and its Chief Financial Officer by
others within those entities, and such disclosure controls and
procedures are effective to perform the functions for which they were
established; the Company's auditors and the Audit Committee of the
Board of Directors of the Company have been advised of: (i) any
significant deficiencies in the design or operation of internal
controls which could adversely affect the Company's ability to record,
process, summarize, and report financial data; and (ii) any fraud,
whether or not material, that involves management or other employees
who have a role in the Company's internal controls; any material
weaknesses in internal controls have been identified for the Company's
auditors; and since the date of the most recent evaluation of such
disclosure controls and procedures, there have been no significant
changes in internal controls or in other factors that could
significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material
weaknesses;
(dd) neither the Company nor any Subsidiary has,
directly or indirectly, made any extension of credit in the form of a
personal loan to any director or executive officer of the Company, or
to any family member or affiliate of any director or executive officer
of the Company or any of the Subsidiaries; and on or after July 30,
2002, the Company has not, directly or indirectly, including through
any Subsidiary: (i) extended credit, arranged to extend credit, or
renewed any extension of credit, in the form of a personal loan, to or
for any director or executive officer of the Company, or to or for any
family member or affiliate of any director or executive officer of the
Company; or (ii)
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made any material modification, including any renewal thereof, to any
term of any personal loan to any director or executive officer of the
Company, or any family member or affiliate of any director or executive
officer, which loan was outstanding on July 30, 2002;
(ee) all statistical or market-related data included
in the Registration Statement or the Prospectus are based on or derived
from sources that the Company believes to be reliable and accurate, and
the Company has obtained the written consent to the use of such data
from such sources to the extent required;
(ff) neither the Company nor any of the Subsidiaries
nor, to the Company's knowledge, any employee or agent of the Company
or the Subsidiaries has made any payment of funds of the Company or the
Subsidiaries or received or retained any funds in violation of any law,
rule or regulation, which payment, receipt or retention of funds is of
a character required to be disclosed in the Registration Statement or
the Prospectus;
(gg) except pursuant to this Agreement, neither the
Company nor any of the Subsidiaries has incurred any liability for any
finder's or broker's fee or agent's commission in connection with the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby or by the Prospectus;
(hh) neither the Company nor any of the Subsidiaries
nor any of their respective directors, officers, affiliates or
controlling persons has taken, directly or indirectly, any action
designed, or which has constituted or might reasonably be expected to
cause or result in, under the Exchange Act or otherwise, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares; and
(ii) to the Company's knowledge, there are no
affiliations or associations between any member of the NASD and any of
the Company's officers, directors or 5% or greater stockholders, except
as set forth in the Registration Statement and the Prospectus.
In addition, any certificate signed by any officer of the
Company or any of the Subsidiaries and delivered to the Underwriters or counsel
for the Underwriters in connection with the offering of the Shares shall be
deemed to be a representation and warranty by the Company or Subsidiary, as the
case may be, as to matters covered thereby, to each Underwriter.
4. Certain Covenants of the Company. The Company hereby
agrees:
(a) to furnish such information as may be required
and otherwise to cooperate in qualifying the Shares for offering and
sale under the securities or blue sky laws of such states or other
jurisdictions as you may designate and to maintain such qualifications
in effect so long as you may request for the distribution of the
Shares; provided, however, that the Company shall not be required to
qualify as a foreign corporation or to consent to the service of
process under the laws of any such jurisdiction (except service of
process with respect to the offering and sale of the Shares); and to
-13-
promptly advise you of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Shares for
offer or sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose;
(b) to make available to the Underwriters in New York
City, as soon as practicable after this Agreement becomes effective,
and thereafter from time to time to furnish to the Underwriters, as
many copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments or
supplements thereto after the effective date of the Registration
Statement) as the Underwriters may request for the purposes
contemplated by the Act; in case any Underwriter is required to deliver
a prospectus after the nine-month period referred to in Section
10(a)(3) of the Act in connection with the sale of the Shares, the
Company will prepare, at its expense, promptly upon request such
amendment or amendments to the Registration Statement and the
Prospectus as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Act;
(c) if, at the time this Agreement is executed and
delivered, it is necessary for the Registration Statement or any
post-effective amendment thereto to be declared effective before the
Shares maybe sold, the Company will endeavor to cause the Registration
Statement or such post-effective amendment to become effective as soon
as possible, and the Company will advise you promptly and, if requested
by you, will confirm such advice in writing, (i) when the Registration
Statement and any such post-effective amendment thereto has become
effective, and (ii) if Rule 430A under the Act is used, when the
Prospectus is filed with the Commission pursuant to Rule 424(b) under
the Act (which the Company agrees to file in a timely manner under such
Rule);
(d) to advise you promptly, confirming such advice in
writing, of any request by the Commission for amendments or supplements
to the Registration Statement or the Prospectus or for additional
information with respect thereto, or of notice of institution of
proceedings for, or the entry of a stop order, suspending the
effectiveness of the Registration Statement and, if the Commission
should enter a stop order suspending the effectiveness of the
Registration Statement, to use its best efforts to obtain the lifting
or removal of such order as soon as possible; to advise you promptly of
any proposal to amend or supplement the Registration Statement or the
Prospectus, including by filing any documents that would be
incorporated therein by reference, and to provide you and Underwriters'
counsel copies of any such documents for review and comment a
reasonable amount of time prior to any proposed filing and to file no
such amendment or supplement to which you shall object in writing;
provided, however, the Company's obligations under this Section 4(d)
shall terminate when delivery of a prospectus is no longer required
under applicable law in connection with the offering or sale of the
Shares;
(e) to file promptly all reports and any definitive
proxy or information statement required to be filed by the Company with
the Commission in order to comply with the Exchange Act subsequent to
the date of the Prospectus and for so long as the delivery of a
prospectus is required under applicable law in connection with the
offering or sale of the Shares; and, as long as the delivery of a
prospectus is required under applicable law in connection with the
offering or sale of the Shares, to provide you with a
-14-
copy of such reports and statements and other documents to be filed by
the Company pursuant to Section 13, 14 or 15(d) of the Exchange Act
during such period a reasonable amount of time prior to any proposed
filing, and to promptly notify you of such filing;
(f) if necessary or appropriate, to file a
registration statement pursuant to Rule 462(b) under the Act and pay
the applicable fees in accordance with the Act;
(g) to advise the Underwriters promptly of the
happening of any event within the time during which a prospectus
relating to the Shares is required to be delivered under the Act which
could require the making of any change in the Prospectus then being
used so that the Prospectus would not include an untrue statement of
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
are made, not misleading, and, during such time, subject to Section
4(d) hereof, to prepare and furnish, at the Company's expense, to the
Underwriters promptly such amendments or supplements to such Prospectus
as may be necessary to reflect any such change;
(h) to make generally available to its security
holders, and to deliver to you, an earnings statement of the Company
(which will satisfy the provisions of Section 11(a) of the Act)
covering a period of twelve months beginning after the effective date
of the Registration Statement (as defined in Rule 158(c) under the Act)
as soon as is reasonably practicable after the termination of such
twelve-month period but in any case not later than March 1, 2005;
(i) to furnish to its stockholders after the end of
each fiscal year an annual report (including a consolidated balance
sheet and statements of income, shareholders' equity and cash flow of
the Company and the Subsidiaries for such fiscal year, accompanied by,
to the extent required, a copy of the certificate or report thereon of
nationally recognized independent certified public accountants duly
registered with the Public Company Oversight Accounting Board);
(j) to furnish to you five copies of the Registration
Statement, as initially filed with the Commission, and of all
amendments thereto (including all exhibits thereto) and sufficient
copies of the foregoing (other than exhibits) for distribution of a
copy to each of the other Underwriters;
(k) to furnish to you promptly and, upon request, to
each of the other Underwriters for a period of five years from the date
of this Agreement (i) copies of any reports, proxy statements, or other
communications which the Company shall send to its stockholders or
shall from time to time publish or publicly disseminate, (ii) copies of
all annual, quarterly and current reports filed with the Commission on
Forms 10-K, 10-Q or 8-K, or such other similar forms as may be
designated by the Commission, (iii) copies of documents or reports
filed with any national securities exchange on which any class of
securities of the Company is listed and (iv) such other information as
you may reasonably request regarding the Company or the Subsidiaries;
(l) to furnish to you as early as practicable prior
to the time of
-15-
purchase and any additional time of purchase, as the case may be, but
not later than two business days prior thereto, a copy of the latest
available unaudited interim and monthly consolidated financial
statements, if any, of the Company and the Subsidiaries as to which
procedures shall have been performed by the Company's independent
certified public accountants, as stated in their letter to be furnished
pursuant to Section 6(c) hereof;
(m) to apply the net proceeds from the sale of the
Shares in the manner set forth under the caption "Use of proceeds" in
the Prospectus;
(n) to pay all costs, expenses, fees and taxes in
connection with (i) the preparation and filing of the Registration
Statement, the Basic Prospectus, each Prepricing Prospectus, each
Prospectus Supplement, the Prospectus and any amendments or supplements
thereto, and the printing and furnishing of copies of each thereof to
the Underwriters and to dealers (including costs of mailing and
shipment), (ii) the registration, issue, sale and delivery of the
Shares including any stock or transfer taxes and stamp or similar
duties payable upon the sale, issuance or delivery of the Shares to the
Underwriters, (iii) the producing, word processing and/or printing of
this Agreement, any Agreement Among Underwriters, any dealer
agreements, any Powers of Attorney and any closing documents (including
compilations thereof) and the reproduction and/or printing and
furnishing of copies of each thereof to the Underwriters and (except
closing documents) to dealers (including costs of mailing and
shipment), (iv) the qualification of the Shares for offering and sale
under state or foreign laws and the determination of their eligibility
for investment under state or foreign law as aforesaid (including the
filing fees and reasonable legal fees and other disbursements of
counsel for the Underwriters) and the printing and furnishing of copies
of any blue sky surveys or legal investment surveys to the Underwriters
and to dealers, (v) any listing of the Shares on any securities
exchange or qualification of the Shares for quotation on the NASDAQ and
any registration thereof under the Exchange Act, (vi) any filing for
review of the public offering of the Shares by the NASD, including the
filing fees and reasonable legal fees and other disbursements of
counsel to the Underwriters, (vii) the fees and disbursements of any
transfer agent or registrar for the Shares, (viii) the costs and
expenses of the Company relating to presentations or meetings
undertaken in connection with the marketing of the offering and sale of
the Shares to prospective investors and the Underwriters' sales forces,
including, without limitation, expenses associated with the production
of road show slides and graphics, fees and expenses of any consultants
engaged in connection with the road show presentations, travel, lodging
and other expenses incurred by the officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with
the road show and (ix) the performance of the Company's other
obligations hereunder;
(o) not to sell, offer to sell, contract or agree to
sell, hypothecate, pledge, grant any option to purchase or otherwise
dispose of or agree to dispose of, directly or indirectly, any Common
Stock or securities convertible into or exchangeable or exercisable for
Common Stock or warrants or other rights to purchase Common Stock or
any other securities of the Company that are substantially similar to
Common Stock, or file or cause to be declared effective a registration
statement under the Act relating to the offer and sale of any shares of
Common Stock or securities convertible into or
-16-
exercisable or exchangeable for Common Stock or warrants or other
rights to purchase Common Stock or any other securities of the Company
that are substantially similar to Common Stock for a period of 90 days
after the date hereof (the "Lock-Up Period"), without the prior written
consent of UBS, except for (i) the registration of the Shares and the
sales to the Underwriters pursuant to this Agreement, (ii) issuances of
Common Stock upon the exercise of options, stock purchase rights or
other awards disclosed as outstanding in the Registration Statement and
the Prospectus pursuant to the Company's benefit plans described in or
filed as an exhibit to the Registration Statement and the Prospectus,
(iii) the issuance of employee stock options, stock purchase rights and
other awards not exercisable during the Lock-Up Period (in each case
described as reserved for future issuance in the Registration Statement
and the Prospectus) pursuant to the Company's benefit plans described
in or filed as an exhibit to the Registration Statement and the
Prospectus and (iv) pursuant to the Preferred Stock Rights Agreement
dated July 24, 2002 between the Company and Mellon Investor Services
LLC;
(p) to use its reasonable best efforts to cause the
Common Stock to be listed for quotation on the NASDAQ and to maintain
such listing; and
(q) to maintain a transfer agent and, if necessary
under the jurisdiction of incorporation of the Company, a registrar for
the Common Stock.
5. Reimbursement of Underwriters' Expenses. If the Shares are
not delivered for any reason other than the termination of this Agreement
pursuant to the fifth paragraph of Section 8 hereof or the default by one or
more of the Underwriters in its or their respective obligations hereunder, the
Company shall, in addition to paying the amounts described in Section 4(n)
hereof, reimburse the Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of their counsel.
6. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties on the part of the Company on the date hereof, at
the time of purchase and, if applicable, at the additional time of purchase, the
performance by the Company of its obligations hereunder and to the following
additional conditions precedent:
(a) The Company shall furnish to you at the time of
purchase and, if applicable, at the additional time of purchase, an
opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C., counsel for the
Company, addressed to the Underwriters, and dated the time of purchase
or the additional time of purchase, as the case may be, with executed
copies for each of the other Underwriters, and in form and substance
satisfactory to Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters, in
the form set forth in Exhibit B hereto.
(b) The Company shall furnish to you at the time of
purchase and, if applicable, at the additional time of purchase, an
opinion of Goldfarb, Levy, Eran & Co., special Israel counsel for the
Company with respect to Harmonic Lightwaves (Israel) Ltd., addressed to
the Underwriters, and dated the time of purchase or the additional time
of purchase, as the case may be, with executed copies for each of the
other Underwriters, and in form and substance satisfactory to Xxxxx
Xxxxxxxxxx LLP, counsel for the
-17-
Underwriters, in the form set forth in Exhibit C hereto.
(c) You shall have received from
PricewaterhouseCoopers LLP letters dated, respectively, the date of
this Agreement, the time of purchase and, if applicable, the additional
time of purchase, and addressed to the Underwriters and the Company
(with executed copies for each of the Underwriters) in the forms agreed
to by UBS and PricewaterhouseCoopers LLP.
(d) You shall have received at the time of purchase
and, if applicable, at the additional time of purchase, the favorable
opinion of Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters, dated
the time of purchase or the additional time of purchase, as the case
may be, in form and substance reasonably satisfactory to UBS.
(e) No Prospectus or amendment or supplement to the
Registration Statement or the Prospectus, including documents deemed to
be incorporated by reference therein, shall have been filed to which
you object in writing.
(f) The Prospectus Supplement shall have been filed
with the Commission pursuant to Rule 424(b) under the Act at or before
5:30 P.M., New York City time, on or prior to the second full business
day after the date of this Agreement and any registration statement
pursuant to Rule 462(b) under the Act required in connection with the
offering and sale of the Shares shall have been filed and become
effective no later than 10:00 P.M., New York City time, on the date of
this Agreement.
(g) Prior to the time of purchase, and, if
applicable, the additional time of purchase, (i) no stop order with
respect to the effectiveness of the Registration Statement shall have
been issued under the Act or proceedings initiated under Section 8(d)
or 8(e) of the Act; (ii) the Registration Statement and all amendments
thereto shall 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 not misleading; and (iii) the
Prospectus and all amendments or supplements thereto shall not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they are made,
not misleading.
(h) Between the time of execution of this Agreement
and the time of purchase or the additional time of purchase, as the
case may be, no transaction which is material and adverse to the
Company has been entered into by the Company or any of the
Subsidiaries.
(i) The Company will, at the time of purchase and, if
applicable, at the additional time of purchase, deliver to you a
certificate of its Chief Executive Officer and its Chief Financial
Officer, executed by each in his capacity as such officer, in the form
attached as Exhibit D hereto.
(j) You shall have received signed Lock-up Agreements
referred to in Section 3(r) hereof.
-18-
(k) The Company shall have furnished to you such
other documents and certificates as to the accuracy and completeness of
any statement in the Registration Statement and the Prospectus as of
the time of purchase and, if applicable, the additional time of
purchase, as you may reasonably request.
(l) The Shares shall have been approved for quotation
on the NASDAQ, subject only to notice of issuance at or prior to the
time of purchase or the additional time of purchase, as the case may
be.
7. Effective Date of Agreement; Termination. This Agreement
shall become effective (i) if Rule 430A under the Act is not used, when you
shall have received notification of the effectiveness of the Registration
Statement, or (ii) if Rule 430A under the Act is used, when the parties hereto
have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of UBS or any group of
Underwriters (which may include UBS) which has agreed to purchase in the
aggregate at least 50% of the Firm Shares, if (x) since the time of execution of
this Agreement or the earlier respective dates as of which information is given
in the Registration Statement and the Prospectus, there has occurred or become
known any material adverse change or any development involving a prospective
material adverse change in the business, properties, management, financial
condition or results of operations of the Company and the Subsidiaries taken as
a whole, which would, in UBS' judgment or in the judgment of such group of
Underwriters, make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement and the Prospectus, or (y) since
execution of this Agreement, there shall have occurred: (i) a suspension or
material limitation in trading in securities generally on the New York Stock
Exchange, the American Stock Exchange or the NASDAQ; (ii) a suspension or
material limitation in trading in the Company's securities on NASDAQ; (iii) a
general moratorium on commercial banking activities declared by either federal
or New York State authorities or a material disruption in commercial banking or
securities settlement or clearance services in the United States; (iv) an
outbreak or escalation of hostilities or acts of terrorism involving the United
States or a declaration by the United States of a national emergency or war; or
(v) any other calamity or crisis or any change in financial, political or
economic conditions in the United States or elsewhere, if the effect of any such
event specified in clause (iv) or (v) in UBS' judgment or in the judgment of
such group of Underwriters makes it impracticable or inadvisable to proceed with
the public offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement and the Prospectus, or (z) since the
time of execution of this Agreement, there shall have occurred any downgrading,
or any notice or announcement shall have been given or made of (i) any intended
or potential downgrading or (ii) any watch, review or possible change that does
not indicate an affirmation or improvement in the rating accorded any securities
of or guaranteed by the Company or any Subsidiary by any "nationally recognized
statistical rating organization," as that term is defined in Rule 436(g)(2)
under the Act.
If UBS or any group of Underwriters elects to terminate this
Agreement as provided in this Section 7, the Company and each other Underwriter
shall be notified promptly in writing.
-19-
If the sale to the Underwriters of the Shares, as contemplated
by this Agreement, is not carried out by the Underwriters for any reason
permitted under this Agreement, or if such sale is not carried out because the
Company shall be unable to comply with any of the terms of this Agreement, the
Company shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 4(n), 5 and 9 hereof), and the
Underwriters shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 9 hereof) or to one another
hereunder.
8. Increase in Underwriters' Commitments. Subject to Sections
6 and 7 hereof, if any Underwriter shall default in its obligation to take up
and pay for the Firm Shares to be purchased by it hereunder (otherwise than for
a failure of a condition set forth in Section 6 hereof or the termination of
this Agreement pursuant to the provisions of Section 7 hereof) and if the number
of Firm Shares which all Underwriters so defaulting shall have agreed but failed
to take up and pay for does not exceed 10% of the total number of Firm Shares,
the non-defaulting Underwriters shall take up and pay for (in addition to the
aggregate number of Firm Shares they are obligated to purchase pursuant to
Section 1 hereof) the number of Firm Shares agreed to be purchased by all such
defaulting Underwriters, as hereinafter provided. Such Shares shall be taken up
and paid for by such non-defaulting Underwriters in such amount or amounts as
you may designate with the consent of each Underwriter so designated or, in the
event no such designation is made, such Shares shall be taken up and paid for by
all non-defaulting Underwriters pro rata in proportion to the aggregate number
of Firm Shares set forth opposite the names of such non-defaulting Underwriters
in Schedule A.
Without relieving any defaulting Underwriter from its
obligations hereunder, the Company agrees with the non-defaulting Underwriters
that it will not sell any Firm Shares hereunder unless all of the Firm Shares
are purchased by the Underwriters (or by substituted Underwriters selected by
you with the approval of the Company or selected by the Company with your
approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and the
Prospectus and other documents may be effected.
The term "Underwriter" as used in this Agreement shall refer
to and include any Underwriter substituted under this Section 8 with like effect
as if such substituted Underwriter had originally been named in Schedule A
hereto.
If the aggregate number of Firm Shares which the defaulting
Underwriter or Underwriters agreed to purchase exceeds 10% of the total number
of Firm Shares which all Underwriters agreed to purchase hereunder, and if
neither the non-defaulting Underwriters nor the Company shall make arrangements
within the five business day period stated above for the purchase of all the
Firm Shares which the defaulting Underwriter or Underwriters agreed to purchase
hereunder, this Agreement shall terminate without further act or deed and
without any liability on the part of the Company to any non-defaulting
Underwriter and without any liability on the part of any non-defaulting
Underwriter to the Company. Nothing in this paragraph, and
-20-
no action taken hereunder, shall relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
9. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold
harmless each Underwriter, its partners, directors and officers, and
any person who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, and the successors and
assigns of all of the foregoing persons, from and against any loss,
damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, any such Underwriter or any
such person may incur under the Act, the Exchange Act, the common law
or otherwise, insofar as such loss, damage, expense, liability or claim
arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement
(or in the Registration Statement as amended by any post-effective
amendment thereof by the Company) or in a Prospectus (the term
Prospectus for the purpose of this Section 9 being deemed to include
the Basic Prospectus, any Prepricing Prospectus, any Prospectus
Supplement or the Prospectus, as any of the foregoing may be amended or
supplemented by the Company), or arises out of or is based upon any
omission or alleged omission to state a material fact required to be
stated in either such Registration Statement or such Prospectus or
necessary to make the statements made therein not misleading, except
insofar as any such loss, damage, expense, liability or claim arises
out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in, and in conformity with
information concerning such Underwriter furnished in writing by or on
behalf of such Underwriter through you to the Company expressly for use
in, such Registration Statement or such Prospectus or arises out of or
is based upon any omission or alleged omission to state a material fact
in connection with such information required to be stated in such
Registration Statement or such Prospectus or necessary to make such
information not misleading; provided, however, that the indemnity
agreement contained in this subsection (a) with respect to any
Prepricing Prospectus or amended Prepricing Prospectus shall not inure
to the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) from whom the person asserting any such
loss, damage, expense, liability or claim purchased the Shares which is
the subject thereof if the Prospectus corrected any such alleged untrue
statement or omission and if such Underwriter failed to send or give a
copy of the Prospectus to such person at or prior to the written
confirmation of the sale of such Shares to such person, unless the
failure is the result of noncompliance by the Company with paragraph
(b) of Section 4 hereof (as it relates to the delivery of sufficient
copies of the Prospectus to the Underwriters).
If any action, suit or proceeding (each, a
"Proceeding") is brought against an Underwriter or any such person in
respect of which indemnity may be sought against the Company pursuant
to the foregoing paragraph, such Underwriter or such person shall
promptly notify the Company in writing of the institution of such
Proceeding and the Company shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses; provided,
however, that the omission to so notify the Company shall not relieve
the Company from any liability which the Company may have to any
Underwriter
-21-
or any such person or otherwise unless the Company was unaware of the
proceeding to which such notice would have related and was materially
prejudiced by the failure to give such notice. Such Underwriter or such
person shall have the right to employ its or their own counsel in any
such case, but the fees and expenses of such counsel shall be at the
expense of such Underwriter or of such person unless the employment of
such counsel shall have been authorized in writing by the Company in
connection with the defense of such Proceeding or the Company shall not
have, within a reasonable period of time in light of the circumstances,
employed counsel to have charge of the defense of such Proceeding or
such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from,
additional to or in conflict with those available to the Company (in
which case the Company shall not have the right to direct the defense
of such Proceeding on behalf of the indemnified party or parties), in
any of which events such fees and expenses shall be borne by the
Company and paid as incurred (it being understood, however, that the
Company shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one Proceeding or
series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). The Company
shall not be liable for any settlement of any Proceeding effected
without its written consent but, if settled with the written consent of
the Company, the Company agrees to indemnify and hold harmless any
Underwriter and any such person from and against any loss or liability
by reason of such settlement. Notwithstanding the foregoing sentence,
the settlement of any Proceeding by an indemnified party made without
the consent of an indemnifying party shall not relieve such
indemnifying party of any indemnification obligation it may have under
this Section 9 if (i) such indemnified party shall have requested such
indemnifying party to reimburse such indemnified party for fees and
expenses of counsel as contemplated by the second sentence of this
paragraph, (ii) such settlement is entered into more than 90 business
days after receipt of such indemnifying party of the aforesaid request,
(iii) such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such
settlement and (iv) such indemnified party shall have given the
indemnifying party at least 60 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder
by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such Proceeding and does not
include an admission of fault, culpability or a failure to act, by or
on behalf of such indemnified party.
(b) Each Underwriter severally agrees to indemnify,
defend and hold harmless the Company, its directors and officers, and
any person who controls the Company within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, and the successors and
assigns of all of the foregoing persons, from and against any loss,
damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, the Company or any such
person may incur under the Act, the Exchange Act, the common law or
otherwise, insofar as such loss, damage, expense, liability or claim
arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in, and in conformity with
information concerning
-22-
such Underwriter furnished in writing by or on behalf of such
Underwriter through you to the Company expressly for use in, the
Registration Statement (or in the Registration Statement as amended by
any post-effective amendment thereof by the Company) or in a
Prospectus, or arises out of or is based upon any omission or alleged
omission to state a material fact in connection with such information
required to be stated in such Registration Statement or such Prospectus
or necessary to make such information not misleading.
If any Proceeding is brought against the Company or
any such person in respect of which indemnity may be sought against any
Underwriter pursuant to the foregoing paragraph, the Company or such
person shall promptly notify such Underwriter in writing of the
institution of such Proceeding and such Underwriter shall assume the
defense of such Proceeding, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all
fees and expenses; provided, however, that the omission to so notify
such Underwriter shall not relieve such Underwriter from any liability
which such Underwriter may have to the Company or any such person or
otherwise unless such Underwriter was unaware of the proceeding to
which such notice would have related and was materially prejudiced by
the failure to give such notice. The Company or such person shall have
the right to employ its own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of the Company or such
person unless the employment of such counsel shall have been authorized
in writing by such Underwriter in connection with the defense of such
Proceeding or such Underwriter shall not have, within a reasonable
period of time in light of the circumstances, employed counsel to
defend such Proceeding or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them
which are different from or additional to or in conflict with those
available to such Underwriter (in which case such Underwriter shall not
have the right to direct the defense of such Proceeding on behalf of
the indemnified party or parties, but such Underwriter may employ
counsel and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such Underwriter),
in any of which events such fees and expenses shall be borne by such
Underwriter and paid as incurred (it being understood, however, that
such Underwriter shall not be liable for the expenses of more than one
separate counsel (in addition to any local counsel) in any one
Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such
Proceeding). No Underwriter shall be liable for any settlement of any
such Proceeding effected without the written consent of such
Underwriter but, if settled with the written consent of such
Underwriter, such Underwriter agrees to indemnify and hold harmless the
Company and any such person from and against any loss or liability by
reason of such settlement. Notwithstanding the foregoing sentence, the
settlement of any Proceeding by an indemnified party made without the
consent of an indemnifying party shall not relieve such indemnifying
party of any indemnification obligation it may have under this Section
9 if (i) such indemnified party shall have requested such indemnifying
party to reimburse such indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this paragraph, (ii)
such settlement is entered into more than 90 business days after
receipt of such indemnifying party of the aforesaid request, (iii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and
-23-
(iv) such indemnified party shall have given the indemnifying party at
least 60 days' prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened Proceeding in
respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject
matter of such Proceeding.
(c) If the indemnification provided for in this
Section 9 is unavailable to an indemnified party under subsections (a)
and (b) of this Section 9 or insufficient to hold an indemnified party
harmless in respect of any losses, damages, expenses, liabilities or
claims referred to therein, then each applicable indemnifying party
shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, damages, expenses, liabilities or
claims (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and of the Underwriters on the
other in connection with the statements or omissions which resulted in
such losses, damages, expenses, liabilities or claims, as well as any
other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other shall
be deemed to be in the same respective proportions as the total
proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company, and
the total underwriting discounts and commissions received by the
Underwriters, bear to the aggregate public offering price of the
Shares. The relative fault of the Company on the one hand and of the
Underwriters on the other shall be determined by reference to, among
other things, whether the untrue statement or alleged untrue statement
of a material fact or omission or alleged omission relates to
information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
amount paid or payable by a party as a result of the losses, damages,
expenses, liabilities and claims referred to in this subsection shall
be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating, preparing to
defend or defending any Proceeding.
(d) The Company and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this
Section 9 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in subsection (c) above. Notwithstanding the
provisions of this Section 9, 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 such Underwriter and distributed to
the public were offered to the public exceeds the amount of any damage
which such Underwriter has otherwise been required to pay by reason of
such untrue statement 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
-24-
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant
to this Section 9 are several in proportion to their respective
underwriting commitments and not joint.
(e) The indemnity and contribution agreements
contained in this Section 9 and the covenants, warranties and
representations of the Company contained in this Agreement shall remain
in full force and effect regardless of any investigation made by or on
behalf of any Underwriter, its partners, directors or officers or any
person (including each partner, officer or director of such person) who
controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, or by or on behalf of the Company, its
directors or officers or any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and
shall survive any termination of this Agreement or the issuance and
delivery of the Shares. The Company and each Underwriter agree promptly
to notify each other of the commencement of any Proceeding against it
and, in the case of the Company, against any of the Company's officers
or directors in connection with the issuance and sale of the Shares, or
in connection with the Registration Statement or the Prospectus.
10. Information Furnished by the Underwriters. The statements
set forth in the sixth, twelfth, thirteenth, fourteenth, fifteenth, sixteenth,
seventeenth and eighteenth paragraphs under the caption "Underwriting" in the
Prospectus, insofar as such statements relate to (i) amount of selling
concession and reallowance, (ii) over-allotment and stabilization and (iii)
price stabilization and short positions, constitute the only information
furnished by or on behalf of the Underwriters as such information is referred to
in Sections 3 and 9 hereof.
11. Notices. Except as otherwise herein provided, all
statements, requests, notices and agreements shall be in writing or by telegram
and, if to the Underwriters, shall be sufficient in all respects if delivered or
sent to UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000-0000, Attention:
Syndicate Department and, if to the Company, shall be sufficient in all respects
if delivered or sent to the Company at the offices of the Company at 000 Xxxxxx
Xxx, Xxxxxxxxx, XX 00000, Attention: Xxxxx X. Xxxxxxx.
12. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
13. Submission to Jurisdiction. Except as set forth below, no
Claim may be commenced, prosecuted or continued in any court other than the
courts of the State of New York located in the City and County of New York or in
the United States District Court for the Southern District of New York, which
courts shall have jurisdiction over the adjudication of such matters, and the
Company consents to the jurisdiction of such courts and personal service with
respect thereto. The Company hereby consents to personal jurisdiction, service
and venue in any court in which any Claim arising out of or in any way relating
to this Agreement is brought by any third party against UBS or any indemnified
party. Each of UBS and the Company (on its behalf and, to the extent permitted
by applicable law, on behalf of its stockholders and affiliates)
-25-
waives all right to trial by jury in any action, proceeding or counterclaim
(whether based upon contract, tort or otherwise) in any way arising out of or
relating to this Agreement. The Company agrees that a final judgment in any such
action, proceeding or counterclaim brought in any such court shall be conclusive
and binding upon the Company and may be enforced in any other courts to the
jurisdiction of which the Company is or may be subject, by suit upon such
judgment.
14. Parties at Interest. The Agreement herein set forth has
been and is made solely for the benefit of the Underwriters and the Company and
to the extent provided in Section 9 hereof the controlling persons, partners,
directors and officers referred to in such Section, and their respective
successors, assigns, heirs, personal representatives and executors and
administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from any of the Underwriters) shall
acquire or have any right under or by virtue of this Agreement.
15. Counterparts. This Agreement may be signed by the parties
in one or more counterparts which together shall constitute one and the same
agreement among the parties.
16. Successors and Assigns. This Agreement shall be binding
upon the Underwriters and the Company and their successors and assigns and any
successor or assign of any substantial portion of the Company's and any of the
Underwriters' respective businesses and/or assets.
17. Miscellaneous. UBS, an indirect, wholly owned subsidiary
of UBS AG, is not a bank and is separate from any affiliated bank, including any
U.S. branch or agency of UBS AG. Because UBS is a separately incorporated
entity, it is solely responsible for its own contractual obligations and
commitments, including obligations with respect to sales and purchases of
securities. Securities sold, offered or recommended by UBS are not deposits, are
not insured by the Federal Deposit Insurance Corporation, are not guaranteed by
a branch or agency, and are not otherwise an obligation or responsibility of a
branch or agency.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
-26-
If the foregoing correctly sets forth the understanding
between the Company and the several Underwriters, please so indicate in the
space provided below for that purpose, whereupon this agreement and your
acceptance shall constitute a binding agreement between the Company and the
Underwriters, severally.
Very truly yours,
HARMONIC INC.
/s/ Xxxxx X. Xxxxxxx
By:_______________________________
Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
Accepted and agreed to as of the
date first above written, on
behalf of themselves
and the other several Underwriters
named in Schedule A
UBS SECURITIES LLC
SOUNDVIEW TECHNOLOGY CORPORATION
XXXXXXX & COMPANY, INC.
as Managing Underwriters
By: UBS SECURITIES LLC
/s/ Xxxxx Xxxxxxxx
By:_____________________________________
Name: Xxxxx Xxxxxxxx
Title: Director
/s/ Ankur Kamalia
By:_____________________________________
Name: Ankur Kamalia
Title: Director
SCHEDULE A
Number of Firm
Underwriter Shares
-------------------------------------------------- --------------
UBS SECURITIES LLC................................ 5,130,000
SOUNDVIEW TECHNOLOGY CORPORATION.................. 1,923,750
XXXXXXX & COMPANY, INC. .......................... 1,496,250
XXXXX XXXXXX & CO., INC. ......................... 150,000
XXXXXXX BROS., L.P. .............................. 150,000
XXXXXX & XXXXXXX, INC. ........................... 150,000
---------
Total........................................ 9,000,000
=========
SCHEDULE B
Subsidiaries
Name Jurisdiction of Incorporation
---- -----------------------------
Harmonic (Asia Pacific) Ltd. Hong Kong, China
Harmonic Data Systems Ltd. Israel
Harmonic Europe S.A.S. France
Harmonic Germany GmbH Germany
Harmonic International Inc. U.S.A.
Harmonic International Limited Bermuda
Harmonic Lightwaves (Israel) Ltd. Israel
Harmonic (UK) Ltd. United Kingdom
1
EXHIBIT A
Harmonic Inc.
Common Stock
($0.001 Par Value)
[Date]
UBS Securities LLC
SoundView Technology Corporation
Xxxxxxx & Company, Inc.
As Managing Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in
connection with the proposed Underwriting Agreement (the "Underwriting
Agreement") to be entered into by Harmonic Inc. (the "Company") and you, as
Representatives of the several Underwriters named therein, with respect to the
public offering (the "Offering") of common stock, par value $0.001 per share, of
the Company (the "Common Stock").
In order to induce you to enter into the Underwriting
Agreement, the undersigned agrees that for a period from the date hereof until
the expiration of 90 days after the date of the Underwriting Agreement the
undersigned will not, without the prior written consent of UBS Securities LLC
("UBS"), (i) sell, offer to sell, contract or agree to sell, hypothecate,
pledge, grant any option to purchase or otherwise dispose of or agree to dispose
of, directly or indirectly, or file (or participate in the filing of) a
registration statement with the Securities and Exchange Commission (the
"Commission") in respect of, or establish or increase a put equivalent position
or liquidate or decrease a call equivalent position within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder with respect to, any Common
Stock of the Company or any securities convertible into or exercisable or
exchangeable for Common Stock, or warrants or other rights to purchase Common
Stock, (ii) enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, or warrants or other rights to purchase Common Stock, whether any
such transaction is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, or (iii) publicly announce an
1
intention to effect any transaction specified in clause (i) or (ii). The
foregoing sentence shall not apply to (a) the registration of or sale to the
Underwriters of any Common Stock pursuant to the Offering and the Underwriting
Agreement, (b) bona fide gifts, provided the recipient thereof agrees in writing
with the Underwriters to be bound by the terms of this Lock-Up Letter Agreement,
(c) dispositions to any trust, family partnership or similar entity for the
direct or indirect benefit of the undersigned and/or the immediate family of the
undersigned, provided that such trust, family partnership or similar entity
agrees in writing with the Underwriters to be bound by the terms of this Lock-Up
Letter Agreement, (d) the receipt of options or shares pursuant to an
equity-based compensation or benefit plan of the Company described in the
Registration Statement and the Prospectus (as defined in the Underwriting
Agreement) and in effect on the date of the final prospectus supplement relating
to the Offering (and public announcements of such receipt in connection with
applicable securities laws) and (e) the exercise of options by the undersigned
in accordance with the terms thereof (but not the sale of the Common Stock
issued as a result thereof), which options were disclosed as outstanding in the
Registration Statement and the Prospectus (as defined in the Underwriting
Agreement) and were outstanding on the date of the final prospectus supplement
relating to the Offering or issued in accordance with the foregoing clause (d)
(and public announcement of such exercises in connection with applicable
securities laws)(T).
In addition, the undersigned hereby waives any rights the
undersigned may have to require registration of Common Stock in connection with
the filing of a registration statement relating to the Offering. The undersigned
further agrees that, for a period from the date hereof until the expiration of
90 days after the date of the Underwriting Agreement, the undersigned will not,
without the prior written consent of UBS, make any demand for, or exercise any
right with respect to, the registration of (i) Common Stock of the Company, (ii)
any securities convertible into or exercisable or exchangeable for Common Stock,
or (iii) warrants or other rights to purchase Common Stock.
* * *
-----------------
(T) The letters to be delivered by Messrs. Ley, Xxxxxxx, Xxxx, Xxxxxx and
Xxxxxxxx would include the additional exception:
"(f) dispositions of not more than _______ shares of Common Stock issued to the
undersigned (and public announcements related to such dispositions in connection
with applicable securities laws), provided that the parenthetical clause in
clause (e) of such letters would clarify that the prohibitions on sales
contained in such parenthetical clause would not extend to sales permitted by
clause (f) of such letter. The number of shares of Common Stock to be set forth
in clause (f) of such letter shall be as follows: Xx. Xxx, 60,000 shares of
Common Stock; Xx. Xxxxxxx, 30,000 shares of Common Stock; Xx. Xxxx, 15,000
shares of Common Stock; Xx. Xxxxxx, 10,000 shares of Common Stock; and Xx.
Xxxxxxxx, 4,000 shares of Common Stock.
2
If (i) the Underwriting Agreement is not executed and
delivered by the Company before November 14, 2004, (ii) the Company notifies you
in writing that it does not intend to proceed with the Offering, (iii) the
registration statement filed with the Securities and Exchange Commission with
respect to the Offering is withdrawn or (iv) for any reason the Underwriting
Agreement shall be terminated prior to the time of purchase (as defined in the
Underwriting Agreement), this Lock-Up Letter Agreement shall be terminated and
the undersigned shall be released from its obligations hereunder.
Yours very truly,
__________________________________
Name:
3
EXHIBIT B
OPINION OF XXXXXX XXXXXXX XXXXXXXX & XXXXXX, P.C.
1. The Company 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, lease and operate its
properties and conduct its business as described in the Registration
Statement and the Prospectus, to execute and deliver this Agreement and
to issue, sell and deliver the Shares as contemplated herein.
2. The Company is duly qualified to do business as a foreign corporation
and in good standing in each state where the ownership or leasing of
their properties or the conduct of its business requires such
qualification, except where the failure to be so qualified and in good
standing would not, individually or in the aggregate, have a Material
Adverse Effect.
3. This Agreement has been duly authorized, executed and delivered by the
Company.
4. The Shares have been duly authorized and validly issued and are fully
paid and non-assessable.
5. The Company has an authorized capitalization as set forth in the
Registration Statement and the Prospectus under the caption
"Capitalization" and, as of September 26, 2003, had an outstanding
capitalization as set forth in the Registration Statement and the
Prospectus under the caption "The offering" and no outstanding shares
of preferred stock; all of the issued and outstanding shares of capital
stock of the Company have been duly authorized and validly issued, are
fully paid and non-assessable and are free of preemptive rights and
rights of first refusal pursuant to any agreement, instrument or other
document currently filed as an exhibit to the Registration Statement or
currently filed as an exhibit to any document incorporated by reference
in the Registration Statement or the Prospectus or any agreement,
document or instrument listed on Schedule B attached to such opinion;
the Shares are free of preemptive rights under the Delaware General
Corporations Law (the "DGCL") and the Company's Certificate of
Incorporation and bylaws, each as amended through the date of such
opinion, or any preemptive rights or rights of first refusal pursuant
to any agreement, instrument or other document currently filed as an
exhibit to the Registration Statement and the Prospectus or currently
filed as an exhibit to a document incorporated by reference in the
Registration Statements or the Prospectus or any agreement, document or
instrument listed on Schedule B attached to such opinion; the
certificates for the Shares, if any, comply in all material respects
with the applicable provisions of the DGCL, and the holders of the
Shares will not (based on facts and law in existence on the date of
such opinion) be subject to personal liability by reason of being such
holders.
6. The capital stock of the Company, including the Shares, conforms to the
description thereof under the headings "Description of Preferred Stock"
and "Description of Common Stock," and conforms to the description
thereof (relating to authorized capitalization and par value thereof)
under the heading "Capitalization," contained in the
B-1
Registration Statement and the Prospectus.
7. (A) The Registration Statement and the Prospectus (except as to the
financial statements and schedules, and other financial and statistical
data derived therefrom, contained therein, as to which such counsel
need express no opinion) comply as to form in all material respects
with the requirements of the Act; and (B) the documents incorporated by
reference in the Registration Statement and the Prospectus, at the time
they became effective or were filed with the Commission, complied as to
form in all material respects with the requirements of the Exchange Act
(except as to the financial statements and schedules, and other
financial and statistical data derived therefrom, contained therein, as
to which such counsel need express no opinion).
8. The Registration Statement has become effective under the Act and, to
such counsel's knowledge based on a conversation with the Office of the
Secretary of the Commission, no stop order proceedings with respect
thereto are pending or threatened under the Act, and any required
filing of the Prospectus and any supplement thereto pursuant to Rule
424 under the Act has been made in the manner and within the time
period required by such Rule 424.
9. No approval, authorization, consent or order of or filing with any
governmental or regulatory commission, board, body, authority or
agency, or of or with the NASDAQ, or approval of the stockholders of
the Company, is required in connection with the issuance and sale of
the Shares or with the consummation by the Company of the transactions
contemplated hereby other than registration of the Shares under the Act
and a filing of a listing of additional shares application with NASDAQ,
which has been effected (except such counsel need express no opinion as
to any necessary qualification under the state or foreign securities or
blue sky laws of the various jurisdictions in which the Shares are
being offered by the Underwriters).
10. The execution, delivery and performance of this Agreement by the
Company, the issuance and sale of the Shares by the Company and the
consummation by the Company of the transactions contemplated hereby do
not, and, based on facts and law in existence at the date of such
opinion, will not, conflict with, result in any breach or violation of
or constitute a default under (nor constitute any event which with
notice, lapse of time or both would result in any breach or violation
of or constitute a default under) (A) the charter or bylaws of the
Company, or (B) any indenture, mortgage, deed of trust, bank loan or
credit agreement, other evidence of indebtedness, license, lease,
contract or other agreement or instrument to which the Company or any
of the Subsidiaries is a party or by which any of them or any of their
respective properties may be bound or affected currently filed as an
exhibit to the Registration Statement or currently filed as an exhibit
to any document incorporated by reference in the Registration Statement
or the Prospectus or any agreement, document or instrument listed on
Schedule B attached to such opinion, or (C) any federal, state, local
or foreign law, regulation or rule known by such counsel to be
applicable to transactions of this nature or any decree, judgment or
order applicable to the Company and known to such counsel.
11. To such counsel's knowledge, there are no affiliate transactions,
contracts, licenses,
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agreements, leases or documents of a character which are required to be
described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement which have not been
so described or filed.
12. To such counsel's knowledge, there are no actions, suits, claims,
investigations or proceedings pending, threatened or contemplated to
which the Company or any of the Subsidiaries or any of their respective
directors or officers is or would be a party or to which any of their
respective properties is or would be subject at law or in equity,
before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency which are
required to be described in the Registration Statement or the
Prospectus but are not so described.
13. Neither the Company nor any of the Subsidiaries is, nor after giving
effect to the offering and sale of the Shares, will any of them be, an
"investment company" or an entity "controlled" by an "investment
company," as such terms are defined in the Investment Company Act.
14. The information in (A) the Registration Statement and the Prospectus
under the headings "Description of Preferred Stock" and "Description of
Common Stock," and "Risk Factors -- Some anti-takeover provisions
contained in our certificate of incorporation, bylaws and stockholder
rights plan, as well as provisions of Delaware law, could impair a
takeover attempt," (B) the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2002 under the heading "Part II - Item
7. Management's Discussion and Analysis of Financial Condition and
Results of Operations - Factors That May Affect Results of Operations
-- Some Anti-Takeover Provisions Contained in Our Certificate of
Incorporation, Bylaws and Stockholder Rights Plan, As Well As
Provisions of Delaware Law, Could Impair a Takeover Attempt," (C) the
Company's Quarterly Report on Form 10-Q for the period ending March 28,
2003 under the heading "Part I - Item 2. Management's Discussion and
Analysis of Financial Condition and Results of Operations - Factors
That May Affect Results of Operations -- Some Anti-Takeover Provisions
Contained in Our Certificate of Incorporation, Bylaws and Stockholder
Rights Plan, As Well As Provisions of Delaware Law, Could Impair a
Takeover Attempt," (D) the Company's Quarterly Report on Form 10-Q for
the period ending June 30, 2003 under the heading "Part I - Item 2.
Management's Discussion and Analysis of Financial Condition and Results
of Operations - Factors That May Affect Results of Operations - Some
Anti-Takeover Provisions Contained in Our Certificate of Incorporation,
Bylaws and Stockholder Rights Plan, As Well As Provisions of Delaware
Law, Could Impair a Takeover Attempt," (E) the Company's proxy
statement pursuant to Section 14(a) of the Exchange Act on Schedule 14A
filed with the Commission on April 10, 2003 under the captions "Certain
Relationships and Related Transactions" and "Transactions with
Directors, Executive Officers and 5% Stockholders" and (F) the
Company's Form 8-A filed with the Commission on April 6, 1995 pursuant
to Section 12(g) of the Exchange Act, insofar as such statements
constitute a summary of documents or legal matters, or refer to
statements of law or legal conclusions, fairly summarize in all
material respects the information required to be shown.
15. Except as have been waived pursuant to an effective waiver, with
respect to the offering
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of the Shares, no person has the right, pursuant to the terms of any
contract, agreement or other instrument currently filed as an exhibit
to the Registration Statement or currently filed as an exhibit to any
document incorporated by reference in the Registration Statement or the
Prospectus or any agreement, document or instrument listed on Schedule
B attached to such opinion, to cause the Company to register under the
Act any shares of Common Stock or shares of any other capital stock or
other equity interest in the Company or to include any such shares or
interest in the Registration Statement or the offering contemplated
thereby, whether as a result of the filing or effectiveness of the
Registration Statement or the sale of the Shares as contemplated
thereby or otherwise.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants of the Company
and representatives of the Underwriters at which the contents of the
Registration Statement and the Prospectus and related matters were discussed
and, although such counsel is not passing upon and does not assume
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus (except as and to the
extent stated in subparagraphs 5, 6 and 14 above), on the basis of the foregoing
nothing has come to the attention of such counsel that causes such counsel to
believe that the Registration Statement or any amendment thereto at the time
such Registration Statement or amendment became effective contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus or any supplement thereto at the date of such Prospectus or
such supplement, and at the time of purchase or the additional time of purchase,
as the case may be, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading (it being understood that such counsel need express no opinion
with respect to the financial statements and schedules, and other financial and
statistical data derived therefrom, included in the Registration Statement or
the Prospectus).
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EXHIBIT C
OPINION OF GOLDFARB, LEVY, ERAN & CO.
1. Harmonic Lightwaves (Israel) Ltd., a company organized under the laws
of Israel (the "Israel Subsidiary"), has been duly incorporated and is
validly existing as a corporation under the laws of Israel, with all
requisite power and authority to own, lease and operate its properties
and to conduct its business as currently conducted.
2. All of the issued and outstanding shares of capital stock of the Israel
Subsidiary have been duly authorized and validly issued, are fully paid
and non-assessable and, except as otherwise stated in the Registration
Statement and the Prospectus, are owned by the Company; and to such
counsel's knowledge, no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligation into shares of capital stock or ownership interests in the
Israel Subsidiary are outstanding.
3. To such counsel's knowledge, there is no litigation or governmental or
other action, suit, proceedings or investigations before any court or
before or by any public, regulatory or governmental agency or body
pending or, to such counsel's knowledge, threatened in Israel against
or involving the properties or business of the Israel Subsidiary in
Israel which, if determined adversely to the Israel Subsidiary, would
have a material adverse effect on the business, properties, financial
condition, results of operation or prospects of the Company and the
Israel Subsidiary taken as a whole.
4. To such counsel's knowledge, the execution, delivery and performance of
this Agreement by the Company, the issuance and sale of the Shares by
the Company and the consummation by the Company of the transactions
contemplated hereby do not, and, based on facts and law in existence at
the date of such opinion, will not, conflict with, result in any breach
or violation of or constitute a default under (nor constitute any event
which with notice, lapse of time or both would result in any breach or
violation of or constitute a default under) (A) the Memorandum and
Articles of Association of the Israel Subsidiary, or (B) any indenture,
mortgage, deed of trust, bank loan or credit agreement, other evidence
of indebtedness, license, lease, contract or other agreement or
instrument to which the Israel Subsidiary is a party or by which it or
any of its properties may be bound filed as an exhibit to the
Registration Statement or any document incorporated by reference in the
Registration Statement or the Prospectus or any document or instrument
which has otherwise been identified to such counsel by the Company or
the Israel Subsidiary in writing as being material, or (C) any Israeli
law, regulation or rule or any decree, judgment or order applicable to
the Israel Subsidiary and known to such counsel.
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EXHIBIT D
OFFICERS' CERTIFICATE
1. I have reviewed the Registration Statement and the Prospectus.
2. The representations and warranties of the Company as set forth in this
Agreement are true and correct as of the time of purchase and, if
applicable, the additional time of purchase.
3. The Company has performed all of its obligations under this Agreement
as are to be performed at or before the time of purchase and at or
before the additional time of purchase, as the case may be.
4. The conditions set forth in paragraphs (g) and (h) of Section 6 of this
Agreement have been met.
5. Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, no
material adverse change or any development involving a prospective
material adverse change in the business, properties, management,
financial condition or results of operations of the Company and the
Subsidiaries taken as a whole has occurred or become known.
6. The financial statements and other financial information included in
the Registration Statement and the Prospectus fairly present the
financial condition, results of operations and cash flows of the
Company as of, and for, the periods presented in the Registration
Statement.
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