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EXHIBIT 10.37
2,900,000 Shares of Common Stock
MRV COMMUNICATIONS, INC.
UNDERWRITING AGREEMENT
September 18, 1997
BEAR, XXXXXXX & CO. INC.
XXXXX XXXXX XXXXXX & COMPANY, LLC
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
MRV Communications, Inc., a corporation organized and existing under the
laws of Delaware (the "Company"), and the selling stockholders of the Company
named in Schedule I hereto (collectively, the "Selling Stockholders") propose,
subject to the terms and conditions stated herein, to issue and sell to the
several underwriters named in Schedule II hereto (the "Underwriters") an
aggregate of 2,900,000 shares (the "Firm Shares") of common stock, par value
$.0034 per share, of the Company (the "Common Stock"), and, for the sole purpose
of covering over-allotments in connection with the sale of the Firm Shares, the
Company proposes to issue
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and sell to the Underwriters, at the option of the Underwriters, up to an
additional 435,000 shares (the "Additional Shares") of Common Stock. The Firm
Shares and any Additional Shares purchased by the Underwriters are referred to
herein collectively as the "Shares". The Shares are more fully described in the
Registration Statement referred to below.
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Underwriters and the Selling
Stockholders that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement, and may have filed an
amendment or amendments thereto, on Form S-3 (No. 333-30035), for the
registration of the Shares under the Securities Act of 1933, as amended (the
"Act"). Such registration statement, including the prospectus, financial
statements and schedules, exhibits and all other documents filed as a part
thereof, as amended at the time of effectiveness of the registration statement,
including any information deemed to be a part thereof as of the time of
effectiveness pursuant to paragraph (b) of Rule 430A or Rule 434 of the Rules
and Regulations of the Commission under the Act (the "Regulations"), is herein
called the "Registration Statement". Any registration statement filed pursuant
to Rule 462(b) of the Regulations is herein called the "462(b) Registration
Statement", and after such filing the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. The prospectus, in the form
first filed with the Commission pursuant to Rule 424(b) of the Regulations or
filed as part of the Registration Statement at the time of effectiveness if no
Rule 424(b) or Rule 434 filing is required, is herein called the "Prospectus".
The term "preliminary prospectus" as used herein means a preliminary prospectus
as described in Rule 430 of the Regula-
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tions. Any reference herein to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3 that
were filed under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), on or before the effective date of the Registration Statement, the date
of such preliminary prospectus or the date of the Prospectus, as the case may
be, and any reference herein to the terms "amend", "amendment" or "supplement"
with respect to the Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to refer to and include (i) the filing of any
document under the Exchange Act after the effective date of the Registration
Statement, the date of such preliminary prospectus or the date of the
Prospectus, as the case may be, that is incorporated therein by reference and
(ii) any such document so filed. Neither the Commission nor the Blue Sky or
securities authority of any jurisdiction has issued a stop order suspending the
effectiveness of the Registration Statement, preventing or suspending the use of
any preliminary prospectus, the Prospectus, the Registration Statement or any
amendment or supplement thereto, refusing to permit the effectiveness of the
Registration Statement or suspending the registration or qualification of the
Shares, nor, to the Company's knowledge, has any of such authorities instituted
or threatened to institute any proceedings with respect to a stop order.
(b) At the respective time of the effectiveness of the
Registration Statement or any 462(b) Registration Statement or the effectiveness
of any post-effective amendment to the Registration Statement, when the
Prospectus is first filed with the Commission pursuant to Rule 424(b) or Rule
434 of the Regulations, when any supplement to or amendment of the Prospectus is
filed with the Commission, when any document filed under the Exchange Act is
filed and at the Closing Date and
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the Additional Closing Date, if any (as hereinafter respectively defined), the
Registration Statement, any 462(b) Registration Statement and the Prospectus and
any amendments thereof and supplements thereto complied or will comply in all
material respects with the applicable provisions of the Act and the Regulations
and the Exchange Act and the respective rules and regulations thereunder and
does not or will not contain an untrue statement of a material fact and does not
or will not omit to state any material fact required to be stated therein or
necessary in order to make the statements therein (i), in the case of the
Registration Statement, not misleading and (ii), in the case of the Prospectus,
in the light of the circumstances under which they were made, not misleading.
When any related preliminary prospectus was first filed with the Commission
(whether filed as part of the Registration Statement or any amendment thereto or
pursuant to Rule 424(a) of the Regulations) and when any amendment thereof or
supplement thereto was first filed with the Commission, such preliminary
prospectus and any amendments thereof and supplements thereto complied in all
material respects with the applicable provisions of the Act and the Regulations
and the Exchange Act and the respective rules and regulations thereunder and did
not contain an untrue statement of a material fact and did not omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. No representation and warranty is made in this subsection
(b), however, with respect to any information contained in or omitted from the
Registration Statement or the Prospectus or any related preliminary prospectus
or any amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of any Underwriter through you as herein stated expressly for use in connection
with the preparation thereof.
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If Rule 434 is used, the Company will comply with the requirements of Rule 434.
(c) Xxxxxx Xxxxxxxx LLP and Luboshitz, Kasierer & Co. Xxxxxx
Xxxxxxxx, who have certified the financial statements and supporting schedule
included in the Registration Statement, are independent public accountants, as
required by the Act and the Regulations.
(d) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set forth in
the Registration Statement and the Prospectus, there has been no material
adverse change or any development involving a prospective material adverse
change in the business, prospects, properties, operations, condition (financial
or other) or results of operations of the Company and its subsidiaries taken as
a whole, whether or not arising from transactions in the ordinary course of
business, and since the date of the latest balance sheet presented in the
Registration Statement and the Prospectus, neither the Company nor any of its
subsidiaries has incurred or undertaken any liabilities or obligations, direct
or contingent, which are material to the Company and its subsidiaries taken as a
whole, except for liabilities or obligations which are reflected in the
Registration Statement and the Prospectus. The Company's only significant
subsidiary, within the meaning of Rule 405 of the Regulations, is NBase
Communications, Ltd., an Israeli corporation (the "Significant Subsidiary").
(e) This Agreement and the transactions contemplated hereby have
been duly and validly authorized by the Company, and this Agreement has been
duly and validly executed and delivered by the Company.
(f) The execution, delivery and performance of this Agreement and
the consummation of the
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transactions contemplated hereby do not and will not (i) conflict with or result
in a breach of any of the terms and provisions of, or constitute a default (or
an event which with notice or lapse of time, or both, would constitute a
default) under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any agreement, instrument, franchise, license or
permit to which the Company or any of its subsidiaries is a party or by which
any of such corporations or their respective properties or assets may be bound
or (ii) violate or conflict with any provision of the charter or by-laws of the
Company or any of its subsidiaries or any judgment, decree, order, statute, rule
or regulation of any court or any public, governmental or regulatory agency or
body having jurisdiction over the Company or any of its subsidiaries or any of
their respective properties or assets. No consent, approval, authorization,
order, registration, filing, qualification, license or permit of or with any
court or any public, governmental or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
respective properties or assets is required for the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby, including the issuance, sale and delivery of the Shares to
be issued, sold and delivered by the Company hereunder, except the registration
under the Act of the Shares and such consents, approvals, authorizations,
orders, registrations, filings, qualifications, licenses and permits as may be
required under state securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the Underwriters.
(g) All of the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Stockholders hereunder) are duly
and validly authorized and issued, fully paid and nonassess-
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able, and none of such shares was issued in violation of or is now subject to
any preemptive or similar rights. The Shares to be issued and sold by the
Company hereunder, when issued, delivered and sold in accordance with this
Agreement, will be duly and validly issued and outstanding, fully paid and
nonassessable, and will not have been issued in violation of or be subject to
any preemptive or similar rights. The Company had, at June 30, 1997, authorized
and outstanding capital stock as set forth in the Registration Statement and the
Prospectus. The authorized capital stock of the Company, including the Common
Stock, the Firm Shares and the Additional Shares, conforms to the descriptions
thereof contained in the Registration Statement and the Prospectus. Except as
disclosed in or specifically contemplated by the Registration Statement and the
Prospectus and except for the Company's plan to adopt a new or amend its
existing stock option plan to increase the number of shares of Common Stock
underlying options to be granted under its stock option plan(s) to officers,
directors, employees and consultants of the Company, there are no outstanding
options, warrants or other rights calling for the issuance of, and no
commitments, obligations, plans or arrangements to issue, any shares of capital
stock of the Company or any security convertible into or exchangeable for
capital stock of the Company.
(h) Each of the Company and each of its subsidiaries has been duly
organized and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation. Each of the Company and each of its
subsidiaries is duly qualified and in good standing as a foreign corporation in
each jurisdiction in which the character or location of its properties (owned,
leased or licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified or in good
standing which will not in the aggregate have a material adverse effect on the
Company and its subsid-
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iaries taken as a whole. Each of the Company and each of its subsidiaries has
all requisite power and authority, and all necessary consents, approvals,
authorizations, orders, registrations, qualifications, licenses and permits of
and from all public, regulatory or governmental agencies and bodies, to own,
lease and operate its properties and conduct its business as now being conducted
and as described in the Registration Statement and the Prospectus, and no such
consent, approval, authorization, order, registration, qualification, license or
permit contains a materially burdensome restriction not adequately disclosed in
the Registration Statement and the Prospectus. All of the outstanding shares of
capital stock of the Company's subsidiaries are duly and validly issued, fully
paid and nonassessable and are owned by the Company free and clear of any liens,
mortgages, pledges, charges, security interests, claims, encumbrances or other
defects in title whatsoever.
(i) Neither the Company nor any of its subsidiaries is in
violation of its charter or by-laws, as the case may be, or in default in the
performance or observance of any material obligation, agreement, covenant or
condition contained in any material bond, debenture, note or other evidence of
indebtedness or in any material contract, indenture, mortgage, deed of trust,
loan or credit agreement, lease, joint venture or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which any of
their properties may be bound, which default or defaults would have in the
aggregate a material adverse effect on the Company and its subsidiaries taken as
a whole, or in violation of any law, order, rule, regulation, writ, injunction,
judgment or decree of any court or governmental agency or body, the violation of
which would have in the aggregate a material adverse effect on the Company and
its subsidiaries taken as a whole.
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(j) Except as described in the Prospectus, there is no litigation
or governmental proceeding to which the Company or any of its subsidiaries is a
party or to which any property of the Company or any of its subsidiaries is
subject or which is pending or, to the knowledge of the Company, contemplated
against the Company or any of its subsidiaries which might result in any
material adverse change or any development involving a material adverse change
in the business, prospects, properties, operations, condition (financial or
other) or results of operations of the Company and its subsidiaries taken as a
whole or which is required to be disclosed in the Registration Statement and the
Prospectus.
(k) The Company has not taken and will not take, directly or
indirectly, any action designed to cause or result in, or which constitutes or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to facilitate the sale
or resale of the Shares.
(l) The financial statements, including the notes thereto, and
supporting schedule included in the Registration Statement and the Prospectus
present fairly the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates indicated and the results of their
operations for the periods specified; except as otherwise stated in the
Registration Statement, said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis; the supporting schedule included in the Registration Statement presents
fairly the information required to be stated therein; and the selected financial
data and the summary financial information included in the Registration
Statement and the Prospectus present fairly the information shown therein and
have been compiled on a basis consistent with that of the financial statements
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included in the Registration Statement and the Prospectus.
(m) The Company and its subsidiaries have filed all federal,
state, local and foreign tax returns that have been required to be filed and
have paid all taxes shown thereon and all assessments received by them or any of
them to the extent that such taxes have become due and are not being contested
in good faith. Except as disclosed in the Registration Statement and the
Prospectus, there is no tax deficiency that has been or might reasonably be
expected to be asserted or threatened against the Company or any of its
subsidiaries.
(n) Neither the Company nor any of its subsidiaries owns any items
of real property that singly or in the aggregate is or are material to the
business of the Company and its subsidiaries taken as a whole. Each of the
Company and each of its subsidiaries has good and marketable title to all
personal property owned by it, in each case free and clear of all liens,
encumbrances and defects except such as are described or referred to in the
Prospectus or such as do not materially affect the value of such property and do
not interfere with the use made or proposed to be made of such property by the
Company or its subsidiaries, as the case may be. Any real property and buildings
held under lease by the Company or any of its subsidiaries are held under valid,
existing and enforceable leases with such exceptions as are not material and do
not interfere with the use made or proposed to be made of such property and
buildings by the Company or its subsidiaries, as the case may be.
(o) Each of the Company and each of its subsidiaries owns or
possesses adequate patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or
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procedures), trademarks, service marks, trade names and other intellectual
property (collectively, "Intellectual Property") necessary to carry on the
business it now operates, and, except as disclosed in the Prospectus, neither
the Company nor any of its subsidiaries has received any notice or is otherwise
aware of (i) any claim, action or demand of any person in the United States or
elsewhere or any proceeding in the United States or elsewhere, pending or
threatened, that (A) challenges the ownership interests of the Company or any of
its subsidiaries in any of the Intellectual Property or (B) alleges that any
product or service of the Company or any of its subsidiaries infringes or
misappropriates the Intellectual Property rights of others, which claim, action,
demand or proceeding (including without limitation infringement,
misappropriation and unfair competition), if the subject of any unfavorable
decision, ruling or finding, or invalidity or inadequacy could reasonably be
expected to have, in the aggregate with all other such claims, actions, demands
and proceedings, a material adverse effect on the Company and its subsidiaries
taken as a whole or (ii) any facts or circumstances that would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of its subsidiaries therein.
(p) No relationship, direct or indirect, exists between or among
the Company or any of its subsidiaries, on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of its
subsidiaries, on the other hand, that is required by the Act to be described in
the Registration Statement and the Prospectus that is not so described.
(q) The Common Stock currently outstanding is listed, and
application has been made to list the Shares, on the Nasdaq National Market.
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(r) Except for such rights as have been waived or satisfied, no
holder of securities of the Company has any rights to the registration of
securities of the Company because of the filing of the Registration Statement or
otherwise in connection with the sale of the Shares contemplated hereby.
(s) The Company is not, and upon consummation of the transactions
contemplated hereby will not be, subject to registration as an "investment
company" under the Investment Company Act of 1940.
(t) There are no existing or, to the knowledge of the Company,
threatened labor disputes with any employees of the Company or any of its
subsidiaries that are likely in the aggregate to have a material adverse effect
on the Company and its subsidiaries taken as a whole.
(u) The Company and each of its subsidiaries (i) is in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) has received all permits, licenses or
other approvals required of it under applicable Environmental Laws to conduct
its respective business and (iii) is in compliance with all terms and conditions
of any such permit, license or approval, except where such noncompliance,
failure to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or approvals will
not in the aggregate have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(v) Each employee benefit plan, within the meaning of Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
that
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is maintained, administered or contributed to by the Company or any of its
subsidiaries for employees or former employees of the Company or any of its
subsidiaries has been maintained in compliance with its respective terms and the
requirements of any applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Internal Revenue Code of 1986, as
amended, (the "Code"). No prohibited transaction, within the meaning of Section
406 of ERISA or Section 4975 of the Code, has occurred with respect to any such
plan, excluding transactions effected pursuant to a statutory or administrative
exemption. For each such plan that is subject to the funding rules of Section
412 of the Code or Section 302 of ERISA, no "accumulated funding deficiency", as
defined in Section 412 of the Code, has been incurred, whether or not waived,
and the fair market value of the assets of each such plan (excluding for these
purposes accrued but unpaid contributions) exceeded the present value of all
benefits accrued under such plan determined using reasonable actuarial
assumptions.
(w) The Company and each of its subsidiaries maintain a system of
internal accounting controls that, taken as a whole, are sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(x) Each of the Company and each of its subsidiaries maintains
insurance of the types and in the amounts generally deemed adequate for its
respective
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business, including, without limitation, insurance covering real and personal
property owned or leased by it against theft, damage, destruction, acts of
vandalism and all other material risks customarily insured against, all of which
insurance is in full force and effect. Neither the Company nor any of its
subsidiaries has any reason to believe that it will not be able to renew
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
respective business.
(y) The conditions for use of Form S-3, as set forth in the
General Instructions thereto, have been satisfied.
(z) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with the
requirements of the Exchange Act and the rules and regulations of the Commission
under the Exchange Act, and, when read together with the other information in
the Prospectus, at the time the Registration Statement and any amendments
thereto become effective and at the Closing Date and the Additional Closing
Date, if any, will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
2. Representations and Warranties of the Selling Stockholders. Each
Selling Stockholder severally represents and warrants to the Underwriters that:
(a) Such Selling Stockholder is the lawful owner of the Shares to
be sold by such Selling Stockholder pursuant to this Agreement and has, and on
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the Closing Date will have, good and clear title to such Shares, free of all
restrictions on transfer, liens, encumbrances, security interests and claims
whatsoever.
(b) Upon delivery of and payment for such Shares pursuant to this
Agreement, good and clear title to such Shares will pass to the Underwriters,
free of all restrictions on transfer, liens, encumbrances, security interests
and claims whatsoever.
(c) Such Selling Stockholder has, and on the Closing Date will
have, full legal right, power and authority to enter into this Agreement and the
Custody Agreement, dated as of the date hereof, between the Selling Stockholders
and American Stock Transfer & Trust Company, as Custodian (the "Custody
Agreement"), and to sell, assign, transfer and deliver such Shares in the manner
provided herein and therein, and this Agreement and the Custody Agreement have
been duly authorized, executed and delivered by or on behalf of such Selling
Stockholder and each of this Agreement and the Custody Agreement is a valid and
binding agreement of such Selling Stockholder enforceable against such Selling
Stockholder in accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited by applicable law and except as the
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles.
(d) The power of attorney signed by such Selling Stockholder
appointing Xxxx Xxxxx, Zeev Rav-Noy and Xxxxxx Xxxxxx, or any one of them, as
such Selling Stockholder's attorney-in-fact, to the extent set forth therein
with regard to the transactions contemplated hereby and by the Registration
Statement and the Custody Agreement, has been duly authorized, executed and
delivered by or on behalf of such Selling Stockholder and is
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a valid and binding instrument of such Selling Stockholder enforceable in
accordance with its terms, and, pursuant to such power of attorney, such Selling
Stockholder has authorized Xxxx Xxxxx, Zeev Rav-Noy and Xxxxxx Xxxxxx, or any
one of them, to execute and deliver this Agreement and any document necessary or
desirable in connection with the transactions contemplated hereby and to deliver
the Shares to be sold by such Selling Stockholder pursuant to this Agreement.
(e) Such Selling Stockholder has not taken, and will not take,
directly or indirectly, any action designed to, or which might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Shares
pursuant to the distribution contemplated by this Agreement, and other than as
permitted by the Act, such Selling Stockholder has not distributed and will not
distribute any prospectus or other offering material in connection with the
offering and sale of the Shares.
(f) The execution, delivery and performance of this Agreement by
such Selling Stockholder, compliance by such Selling Stockholder with all the
provisions hereof and the consummation of the transactions contemplated hereby
will not require any consent, approval, authorization or other order of any
court, regulatory body, administrative agency or other governmental body (except
as such may be required under the Act, state securities laws or Blue Sky laws)
and will not conflict with or constitute a breach of any of the terms or
provisions of, or a default under, any agreement, indenture or other instrument
to which such Selling Stockholder is a party or by which such Selling
Stockholder or property of such Selling Stockholder is bound, or violate or
conflict with any laws, administrative regulation or ruling or court decree
applicable to
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such Selling Stockholder or property of such Selling Stockholder.
(g) All information furnished by or on behalf of such Selling
Stockholder relating to such Selling Stockholder and the Selling Stockholder's
Shares that is set forth in the Registration Statement and the Prospectus is,
and at the time the Registration Statement became or becomes, as the case may
be, effective and at all times subsequent thereto up to and on the Closing Date
(as hereafter defined) was or will be, true, correct and complete, and does not,
and at the time the Registration Statement became or becomes, as the case may
be, effective and at all times subsequent thereto up to and on the Closing Date,
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(h) Neither such Selling Stockholder nor any of such Selling
Stockholder's affiliates directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
or had any other association with (within the meaning of Article I of the Bylaws
of the National Association of Securities Dealers, Inc. (the "NASD")), any
member firm of the NASD.
(i) At any time during the period described in Section 5(b)
hereof, if there is any change in the information referred to in Section 2(g)
above, such Selling Stockholder will immediately notify you of such change.
3. Purchase, Sale and Delivery of the Shares.
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(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company and the Selling Stockholders agree to issue and sell, as
applicable, to the Underwriters the number of Firm Shares set forth opposite
their respective names in Schedule I hereto, and the Underwriters, severally and
not jointly, agree to purchase from the Company and the Selling Stockholders, at
a purchase price per share of $33.784, the number of Firm Shares set forth
opposite the respective names of the Underwriters in Schedule II hereto, plus
any additional number of Shares which they may individually become obligated to
purchase pursuant to the provisions of Section 10 hereof.
(b) Payment of the purchase price for the Firm Shares shall be
made at the offices of Freshman, Marantz, Orlanski, Xxxxxx & Xxxxx, a law
corporation, Xxxxxx Xxxxx, Xxxx Xxxxx, 0000 Xxxxxxxx Xxxxxxxxx, Beverly Hills,
California, or at such other place as shall be agreed upon by you, the Company
and the Selling Stockholders, at 7:00 A.M., Pacific Daylight Time, on the third
or fourth Business Day (as permitted under Rule 15c6-1 under the Exchange Act)
(unless postponed in accordance with the provisions of Section 10 hereof)
following the date of the effectiveness of the Registration Statement (or, if
the Company has elected to rely upon Rule 430A of the Regulations, the third or
fourth Business Day (as permitted under Rule 15c6-1 under the Exchange Act)
after the determination of the public offering price of the Shares), or such
other time not later than ten Business Days after such date as shall be agreed
upon by you, the Company and the Selling Stockholders (such time and date of
payment and delivery being herein called the "Closing Date"). As used herein,
the term "Business Day" means any day other than a day on which banks are
permitted or required to be closed in New York City. Payment shall be made by
wire
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transfer in same day funds against delivery to you at the offices of Bear,
Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 for the respective
accounts of the Underwriters of certificates for the Shares to be purchased by
them. Certificates for the Shares shall be registered in such name or names and
in such authorized denominations as you may request in writing at least two full
Business Days prior to the Closing Date. The Company and the Selling
Stockholders shall permit you to examine and package such certificates for
delivery at least one full Business Day prior to the Closing Date.
(c) In addition, the Company hereby grants to the Underwriters a
nontransferable option to purchase up to 435,000 Additional Shares at the same
purchase price per share to be paid by the Underwriters to the Company and the
Selling Stockholders for the Firm Shares as set forth in this Section 3, for the
sole purpose of covering over-allotments in the sale of Firm Shares by the
Underwriters. This option may be exercised at any time on or before the
thirtieth day following the date of the Prospectus, by written notice by you to
the Company. Such notice shall set forth the aggregate number of Additional
Shares as to which the option is being exercised and the date and time, as
reasonably determined by you, when the Additional Shares are to be delivered
(such date and time being herein sometimes referred to as the "Additional
Closing Date"); provided, however, that the Additional Closing Date shall not be
earlier than the Closing Date or earlier than the second full Business Day after
the date on which the option shall have been exercised nor later than the eighth
full Business Day after the date on which the option shall have been exercised
(unless such time and date are postponed in accordance with the provisions of
Section 10 hereof). Certificates for the Additional Shares shall be registered
in such name or names and in such authorized denominations as you may request in
writing at
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least two full Business Days prior to the Additional Closing Date. The Company
shall permit you to examine and package such certificates for delivery at least
one full Business Day prior to the Additional Closing Date.
The number of Additional Shares to be sold to each Underwriter shall be
the number which bears the same ratio to the aggregate number of Additional
Shares being purchased as the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule II hereto (or such number increased as set forth
in Section 10 hereof) bears to 2,900,000, subject, however, to such adjustments
to eliminate any fractional shares as you in your sole discretion shall make.
Payment of the purchase price for the Additional Shares shall be made to
the Company by wire transfer in same day funds at the offices of Freshman,
Marantz, Orlanski, Xxxxxx & Xxxxx, a law corporation, Xxxxxx Xxxxx, Xxxx Xxxxx,
0000 Xxxxxxxx Xxxxxxxxx, Beverly Hills, California, or at such other place as
shall be agreed upon by you and the Company, against delivery to you at the
offices of Bear, Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
for the respective accounts of the Underwriters of certificates for the
Additional Shares to be purchased by them.
4. Offering. Upon your authorization of the release of the Firm Shares,
the Underwriters propose to offer the Shares for sale to the public upon the
terms set forth in the Prospectus.
5. Covenants of the Company. The Company covenants and agrees with the
Underwriters that:
(a) If the Registration Statement has not yet been declared
effective, the Company will use its best efforts to cause the Registration
Statement and any amendments thereto to become effective as promptly
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as possible, and if Rule 430A is used or the filing of the Prospectus is
otherwise required under Rule 424(b) or Rule 434, the Company will file the
Prospectus (properly completed if Rule 430A has been used) pursuant to Rule
424(b) or Rule 434 within the prescribed time period and will provide evidence
satisfactory to you of such timely filing. If the Company elects to rely on Rule
434, the Company will prepare and file a term sheet that complies with the
requirements of Rule 434.
The Company will notify you immediately (and, if requested by you,
will confirm such notice in writing) (i) when the Registration Statement and any
amendments thereto become effective, (ii) of any request by the Commission for
any amendment of or supplement to the Registration Statement or the Prospectus
or for any additional information, (iii) of the mailing or the delivery to the
Commission for filing of any amendment of or supplement to the Registration
Statement or the Prospectus, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of the initiation, or the threatening, of
any proceedings therefor, (v) of the receipt of any comments from the
Commission, and (vi) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for that
purpose. If the Commission shall propose or enter a stop order at any time, the
Company will make every reasonable effort to prevent the issuance of any such
stop order and, if issued, to obtain the lifting of such order as soon as
possible. The Company will not file any amendment to the Registration Statement,
any filing under Rule 462(b) of the Regulations, or any amendment of or
supplement to the Prospectus (including the prospectus required to be filed
pursuant to Rule 424(b) or Rule 434 of the Regulations that differs from the
prospectus on file at the time of the
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effectiveness of the Registration Statement before or after the effective date
of the Registration Statement or file any document under the Exchange Act if
such document would be deemed to be incorporated by reference into the
Prospectus to which you shall reasonably object in writing after being timely
furnished in advance a copy thereof.
(b) If at any time when a prospectus relating to the Shares is
required to be delivered under the Act any event shall have occurred as a result
of which the Prospectus as then amended or supplemented would, in the judgment
of the Underwriters or the Company, include an untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it shall be necessary at any
time to amend or supplement the Prospectus or Registration Statement to comply
with the Act or the Regulations, or to file under the Exchange Act so as to
comply therewith any document incorporated by reference in the Registration
Statement or the Prospectus or in any amendment thereof or supplement thereto,
the Company will notify you promptly and prepare and file with the Commission an
appropriate amendment or supplement (in form and substance satisfactory to you)
which will correct such statement or omission or which will effect such
compliance and will use its best efforts to have any amendment to the
Registration Statement declared effective as soon as possible.
(c) The Company will promptly deliver to you three signed copies
of the Registration Statement, including exhibits and all documents incorporated
by reference therein and all amendments thereto, and the Company will promptly
deliver to each of the Underwriters such number of copies of any preliminary
prospectus, the Prospectus, the Registration Statement, all amend-
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ments of and supplements to such documents, if any, and all documents
incorporated by reference in the Registration Statement and Prospectus or any
amendment thereof or supplement thereto, without exhibits, as you may reasonably
request.
(d) The Company will endeavor in good faith, in cooperation with
you, at or prior to the time of effectiveness of the Registration Statement, to
qualify the Shares for offering and sale under the securities laws relating to
the offering or sale of the Shares of such jurisdictions as you may designate
and to maintain such qualification in effect for so long as required for the
distribution thereof; except that in no event shall the Company be obligated in
connection therewith to qualify as a foreign corporation or to execute a general
consent to service of process.
(e) The Company will make generally available (within the meaning
of Section 11(a) of the Act) to its security holders and to you as soon as
practicable, but not later than 45 days after the end of its fiscal quarter in
which the first anniversary date of the effective date of the Registration
Statement occurs, an earning statement (in form complying with the provisions of
Rule 158 of the Regulations) covering a period of at least twelve consecutive
months beginning after the effective date of the Registration Statement.
(f) Except for shares of Common Stock issuable upon exercise of
warrants or options outstanding on the date hereof or options granted under its
stock option plans, during the period of 90 days from the date of the
Prospectus, the Company will not, without the prior written consent of Bear,
Xxxxxxx & Co. Inc., directly or indirectly, sell, offer or agree to sell, grant
any option for the sale of, or otherwise dispose of, whether directly or
synthetically, any shares of Common Stock or any securities convertible
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into, or exchangeable or exercisable for Common Stock, and the Company will
obtain the undertaking of each of its executive officers, within the meaning of
Rule 405 of the Regulations (each, an "Executive Officer") and directors who is
not a Selling Stockholder not to engage in any of the aforementioned
transactions on their own behalf.
(g) During a period of three years from the effective date of the
Registration Statement, the Company will furnish to you copies of (i) all
reports to its stockholders; and (ii) all reports, financial statements and
proxy or information statements filed by the Company with the Commission or any
national securities exchange.
(h) The Company will apply the proceeds from the sale of the
Shares as set forth under "Use of Proceeds" in the Prospectus.
(i) The Company will use its best efforts to cause the Shares to
be listed on the Nasdaq National Market and to maintain such listing so long as
any of the Shares are outstanding.
(j) The Company, during the period when the Prospectus is required
to be delivered under the Act or the Exchange Act, will file all documents
required to be filed with the Commission pursuant to Section 13, 14 or 15 of the
Exchange Act within the time periods required by the Exchange Act and the rules
and regulations thereunder.
(k) The Company will use its best efforts to do and perform all
things required or necessary to be done and performed under this Agreement by
the Company prior to or after the Closing Date or any Additional Closing Date,
as the case may be, and to satisfy all conditions precedent to the delivery of
the Shares.
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6. Payment of Expenses. Whether or not the transactions contemplated by
this Agreement are consummated or this Agreement is terminated, the Company
hereby agrees to pay all costs and expenses incident to the performance of the
obligations of the Company and the Selling Stockholders hereunder, including
those in connection with (i) preparing, printing, duplicating, filing and
distributing the Registration Statement, as originally filed and all amendments
thereof (including all exhibits thereto), any preliminary prospectus, the
Prospectus and any amendments or supplements thereto (including, without
limitation, fees and expenses of the Company's accountants and counsel), the
underwriting documents (including this Agreement and the Master Agreement among
Underwriters and the Master Selling Agreement) and all other documents related
to the public offering of the Shares (including those supplied to the
Underwriters in quantities as hereinabove stated), (ii) the issuance, transfer
and delivery of the Shares to the Underwriters, including any transfer or other
taxes payable thereon, (iii) listing of the Shares on the Nasdaq National
Market, (iv) filing fees of the Commission and the National Association of
Securities Dealers, Inc., (v) the cost of printing certificates representing the
Shares and (vi) the cost and charges of any transfer agent or registrar. Any
additional expenses incurred as a result of the sale of the Shares by the
Selling Stockholders will be borne collectively by the Company and the Selling
Stockholders. The provisions of this Section 6 are intended to relieve the
Underwriters from the payment of the expenses and costs that the Selling
Stockholders and the Company hereby agree to pay, but shall not affect any
agreement that the Selling Stockholders and the Company may make, or may have
made, for the sharing of expenses and costs. Any such agreement shall not impair
the respective obligations of the Company and the Selling Stockholders hereunder
to the several Underwriters.
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7. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Firm Shares and the Additional Shares,
as provided herein, shall be subject to the accuracy of the representations and
warranties of the Company herein contained, as of the date hereof and as of the
Closing Date (for purposes of this Section 7, "Closing Date" shall refer to the
Closing Date for the Firm Shares and any Additional Closing Date, if different,
for the Additional Shares), to the absence from any certificates, opinions,
written statements or letters furnished to you or to Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP ("Underwriters' Counsel") pursuant to this Section 7 of any
misstatement or omission, to the performance by the Company and the Selling
Stockholders of their respective obligations hereunder, and to the following
additional conditions:
(a) The Registration Statement, including any Rule 462(b)
Registration Statement, shall have become effective and all necessary approvals
of the Nasdaq National Market shall have been received not later than 5:30 P.M.,
New York City time, on the date of this Agreement, or at such later time and
date as shall have been consented to in writing by you; if the Company shall
have elected to rely upon Rule 430A or Rule 434 of the Regulations, the
Prospectus shall have been filed with the Commission in a timely fashion in
accordance with Section 5(a) hereof; and at or prior to the Closing Date, no
stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereof shall have been issued and no proceedings
therefor shall have been initiated or threatened by the Commission.
(b) All the representations and warranties of the Selling
Stockholders contained in this Agreement shall be true and correct on the
Closing Date with the same force and effect as if made on and as of
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27
the Closing Date, and you shall have received a certificate to such effect,
dated the Closing Date, from each Selling Stockholder or his attorney-in-fact.
(c) At the Closing Date, you shall have received the opinion of
Freshman, Marantz, Orlanski, Xxxxxx & Xxxxx, a law corporation, counsel for the
Company and the Selling Stockholders, dated the Closing Date, addressed to the
Underwriters and in form and substance reasonably satisfactory to Underwriters'
Counsel, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware. The Company is duly qualified and in good standing as a foreign
corporation in each jurisdiction in which the character or location of its
properties (owned, leased or licensed) or the nature or conduct of its
business makes such qualification necessary, except for those failures to
be so qualified or in good standing which will not in the aggregate have a
material adverse effect on the Company and its subsidiaries taken as a
whole. The Company has all requisite corporate authority to own, lease and
license its properties and conduct its business as now being conducted and
as described in the Registration Statement and the Prospectus.
(ii) The Company had, at June 30, 1997, authorized capital
stock as set forth in the Registration Statement and the Prospectus. All
of the outstanding shares of capital stock of the Company (including the
Shares to be sold by the Selling Stockholders) are duly and validly
authorized and issued,
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28
are fully paid and nonassessable, and none of such shares was issued in
violation of or is now subject to any preemptive or similar rights. The
Shares have been duly and validly authorized and, when delivered by the
Company and the Selling Stockholders in accordance with this Agreement,
will be duly and validly issued, fully paid and nonassessable and will not
have been issued in violation of or be subject to any preemptive or
similar rights. The Common Stock conforms to the description thereof
contained in the Registration Statement and the Prospectus.
(iii) This Agreement has been duly and validly authorized,
executed and delivered by the Company and each of the Selling Stockholders
and is a valid and binding agreement of the Company and each Selling
Stockholder enforceable in accordance with its terms.
(iv) To such counsel's knowledge, there is no litigation or
governmental or other action, suit, proceeding or investigation before any
court or before or by any public, regulatory or governmental agency or
body pending or, to such counsel's knowledge, threatened against, or
involving the respective properties or businesses of, the Company, any of
its subsidiaries or any Selling Shareholder, of a character required to be
disclosed in the Registration Statement or the Prospectus by the Act or
the Regulations, other than those disclosed therein.
(v) The execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated
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hereby by the Company (other than the performance of the Company's
indemnification obligations, hereunder, concerning which no opinion need
be expressed) do not and will not (A) conflict with or result in a breach
of any of the terms and provisions of, or constitute a default (or an
event which with notice or lapse of time, or both, would constitute a
default) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company pursuant
to, any agreement, instrument, franchise, license or permit known to such
counsel to which the Company is a party or by which the Company may be
bound and which is material to the Company and its subsidiaries taken as a
whole, (B) violate or conflict with any provision of the charter or
by-laws of the Company or, to the knowledge of such counsel, any judgment,
decree, order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body of the State of California or
the State of Delaware having jurisdiction over the Company the result of
which would have a material adverse effect on the Company and its
subsidiaries taken as a whole. No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any
court or any public, governmental, or regulatory agency or body of the
State of Delaware or the State of California having jurisdiction over the
Company is required for the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated hereby,
including the issuance, sale and delivery of the Shares, except (1) such
consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses and permits
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as may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the Underwriters (as
to which such counsel need express no opinion) and (2) such as have been
made or obtained under the Act.
(vi) The Company is not an "investment company", as such term
is defined in the Investment Company Act of 1940.
(vii) The Registration Statement and the Prospectus, and each
amendment or supplement thereto (other than the financial statements and
schedule and financial data derived therefrom as to which such counsel
need express no opinion), as of the effective date of the Registration
Statement, complied as to form in all material respects with the
requirements of the Act and the applicable Regulations; and each of the
documents incorporated by reference into the Registration Statement (other
than the financial statements and schedule and the financial data derived
therefrom as to which such counsel need express no opinion) complied when
filed pursuant to the Exchange Act as to form in all material respects
with the requirements of the Act and the Regulations and the Exchange Act
and the applicable rules and regulations of the Commission thereunder.
(viii) Based upon telephonic confirmation to such counsel by a
member of the staff of the Commission, the Registration Statement is
effective under the Act, all filings required by Rule 424(b) of the
Regulations have been made and, to the knowledge of such counsel, no stop
order suspending the
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31
effectiveness of the Registration Statement or any post-effective
amendment thereof or supplement thereto has been issued and no proceedings
therefor have been initiated or threatened by the Commission.
(ix) The execution, delivery and performance of this
Agreement by the Selling Stockholders will not contravene any agreement or
other instrument binding upon any Selling Stockholder known to such
counsel or any judgment, order or decree known to such counsel of any
governmental body, agency or court of the State of Delaware or the State
of California having jurisdiction over any Selling Stockholder, and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency of the State of Delaware of the State of
California is required for the performance by any Selling Stockholder of
his obligations under this Agreement or the Custody Agreement.
(x) The statements in the Registration Statement and the
Prospectus set forth (A) in the first two paragraphs under the captions
"Business -- Facilities", (B) under the captions "Management -- Employment
Agreements, -- Stock Option Plan, -- Limitation on Liability and
Indemnification Matters" and "Description of Capital Stock" and (C) in
Item 15 of Part II of the Registration Statement, to the extent such
statements constitute a matter of law or legal conclusion, have been
reviewed by such counsel and are correct in all material respects.
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32
(xi) The form of certificate used to evidence the Common
Stock complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the certificate of
incorporation and by-laws of the Company and the requirements of the
Nasdaq National Market.
(xii) The Custody Agreement has been duly authorized, executed
and delivered by each Selling Stockholder and is a valid and binding
agreement of each Selling Stockholder enforceable in accordance with its
terms.
(xiii) Each Selling Stockholder has full legal right, power
and authority, and any approval required by law (other than any approval
imposed by the applicable state securities and Blue Sky laws), to sell,
assign, transfer and deliver the Shares to be sold by such Selling
Stockholder in the manner provided in this Agreement and the Custody
Agreement.
(xiv) Each Selling Stockholder has full right, power and
authority to enter into and to perform his obligations under this
Agreement and to sell, transfer, assign and deliver the Shares to be sold
by such Selling Stockholder hereunder. Upon the delivery of and payment
for the Shares as contemplated in this Agreement, each of the Underwriters
will receive valid and marketable title to the Shares purchased by it from
such Selling Stockholder, free and clear of any pledge, lien, security
interest, encumbrance, claim or equitable interest. In rendering such
opinion, such counsel may assume that the Under-
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33
writers are without notice of any defect in the title of the Shares being
purchased from the Selling Stockholders.
(xv) The power of attorney signed by each Selling Stockholder
appointing Xxxx Xxxxx, Zeev Rav-Noy and Xxxxxx Xxxxxx, or any of them, as
such Selling Stockholder's attorney-in-fact, to the extent set forth
therein with regard to the transactions contemplated hereby and by the
Registration Statement, has been duly authorized, executed and delivered
by such Selling Stockholder and is the valid and binding instrument of
such Selling Stockholder enforceable in accordance with its terms.
(xvi) In addition, such opinion shall also contain a statement
that such counsel has participated in conferences with officers and
representatives of the Company, representatives of the independent public
accountants for the Company and 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 any responsibility for, the accuracy, completeness or fairness of
the statements contained in the Registration Statement or Prospectus, on
the basis of the foregoing no facts have come to the attention of such
counsel which would lead such counsel to believe that either the
Registration Statement at the time it became effective (including the
information deemed to be part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A(b) or Rule 434, if applicable), or any
amendment thereof made prior to the Closing Date as of
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34
the date of such amendment, contained an untrue statement of a material
fact or omitted to state any material fact required to be stated therein
or necessary to make the statements therein not misleading or that the
Prospectus as of its date (or any amendment thereof or supplement thereto
made prior to the Closing Date as of the date of such amendment or
supplement) and as of the Closing Date contained or contains an untrue
statement of a material fact or omitted or omits to state any material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no belief
or opinion with respect to the financial statements and schedules and
other financial data included or incorporated by reference therein).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance reasonably satisfactory to Underwriters'
Counsel) of other counsel reasonably acceptable to Underwriters' Counsel,
familiar with the applicable laws; (B) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the Company and
certificates or other written statements of officers of departments of various
jurisdictions having custody of documents respecting the corporate existence or
good standing of the Company, provided that copies of any such statements or
certificates shall be delivered to Underwriters' Counsel. The opinion of such
counsel for the Company shall state that the opinion of any such
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35
other counsel is in form satisfactory to such counsel and, in their opinion, you
and they are justified in relying thereon.
(d) At the Closing Date, you shall have received the opinion of
Eckhouse, Talmor, Shilo & Dichno, counsel for NBase Communications, Ltd. and
NBase Fibronics, Ltd., each an Israeli corporation (collectively, the "Israeli
Subsidiaries"), dated the Closing Date, addressed to the Underwriters and in
form and substance reasonably satisfactory to Underwriters' Counsel, to the
effect that:
(i) Each of the Israeli Subsidiaries has been duly organized
and is validly existing as a corporation in good standing under the laws
of Israel. Each of the Israel Subsidiaries is duly qualified and in good
standing as a foreign corporation in each jurisdiction in which the
character or location of its properties (owned, leased or licensed) or the
nature or conduct of its business makes such qualification necessary,
except for those failures to be so qualified or in good standing which
will not in the aggregate have a material adverse effect on the Company
and its subsidiaries taken as a whole. Each of the Israel Subsidiaries has
all requisite corporate authority to own, lease and license its properties
and conduct its business as now being conducted. All of the outstanding
shares of capital stock of each of the Israel Subsidiaries have been duly
and validly issued, are fully paid and nonassessable and are owned
directly or indirectly by the Company, free and clear of any lien,
encumbrance, claim, security interest, restriction on transfer,
stockholders' agreement, voting trust or other defect or title whatso-
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36
ever, and none of such shares was issued in violation of or is now subject
to any preemptive or similar rights.
(ii) There is no litigation or governmental or other action,
suit, proceeding or investigation before any court or before or by any
public, regulatory or governmental agency or body pending or, to the best
of such counsel's knowledge, threatened against, or involving the
properties or businesses of the Israel Subsidiaries, which is of a
character required to be disclosed in the Registration Statement and the
Prospectus which has not been properly disclosed therein.
(iii) The execution, delivery, and performance of the
Underwriting Agreement and the consummation of the transactions
contemplated in the Underwriting Agreement by the Company do not and will
not (A) conflict with or result in a breach of any of the terms and
provisions of, or constitute a default (or an event which with notice or
lapse of time, or both, would constitute a default) under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Israel Subsidiaries pursuant to, any agreement,
instrument, franchise, license or permit known to such counsel to which
either of the Israel Subsidiaries is a party or by either of the Israel
Subsidiaries or its properties or assets may be bound or (B) violate or
conflict with any provision of the charter or by-laws of either of the
Israel Subsidiaries, to the best knowledge of such counsel, any judgment,
decree, order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body hav-
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37
ing jurisdiction over the Israel Subsidiaries, or any of its properties or
assets. No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any public,
governmental, or regulatory agency or body having jurisdiction over the
Israel Subsidiaries or any of its properties or assets is required for the
execution, delivery and performance of the Underwriting Agreement or the
consummation of the transactions contemplated thereby, including the
issuance, sale and delivery of the Shares, except (1) such consents,
approvals, authorizations, orders, registrations, filings, qualifications,
licenses and permits as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Shares by the
Underwriters (as to which such counsel need express no opinion) and (2)
such as have been made or obtained under the Act.
(e) All proceedings taken in connection with the sale of the Firm
Shares and the Additional Shares as hereby contemplated shall be reasonably
satisfactory in form and substance to you and to Underwriters' Counsel, and the
Underwriters shall have received from said Underwriters' Counsel a favorable
opinion, dated as of the Closing Date, with respect to the issuance and sale of
the Shares, the Registration Statement and the Prospectus and such other related
matters as you may reasonably require, and the Company and the Selling
Stockholders shall have furnished to Underwriters' Counsel such documents as
they may reasonably request for the purpose of enabling them to pass upon such
matters.
(f) At the Closing Date you shall have received a certificate of
the Chief Executive Officer
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and Chief Financial Officer of the Company, dated the Closing Date, to the
effect that (i) the condition set forth in subsection (a) of this Section 7 has
been satisfied, (ii) as of the date hereof and as of the Closing Date, the
representations and warranties of the Company set forth in Section 1 hereof are
accurate, (iii) as of the Closing Date, the obligations of the Company to be
performed hereunder on or prior thereto have been duly performed and (iv)
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, the Company and its subsidiaries have
not sustained any material loss or interference with their respective businesses
or properties from fire, flood, hurricane, accident or other calamity, whether
or not covered by insurance, or from any labor dispute or any legal or
governmental proceeding, and there has not been any material adverse change, or
any development involving a material adverse change, in the business prospects,
properties, operations, condition (financial or otherwise), or results of
operations of the Company and its subsidiaries taken as a whole, except in each
case as described in or contemplated by the Prospectus.
(g) At the time this Agreement is executed and at the Closing
Date, you shall have received a letter from Xxxxxx Xxxxxxxx LLP, independent
public accountants for the Company, dated, respectively, as of the date of this
Agreement and as of the Closing Date addressed to the Underwriters and in form
and substance satisfactory to you, stating that: (i) they are independent
certified public accountants with respect to the Company within the meaning of
the Act and the Regulations and that the answer to Item 10 of the Registration
Statement is correct insofar as it relates to them; (ii) in their opinion, the
financial statements and schedules of the Company included in and incorporated
by reference in the Registration Statement and the Prospectus and covered by
their opinion therein comply as to form in
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39
all material respects with the applicable accounting requirements of the Act and
the Exchange Act and the applicable published rules and regulations of the
Commission thereunder; (iii) on the basis of procedures consisting of a reading
of the latest available unaudited interim consolidated financial statements of
the Company and its subsidiaries, a reading of the minutes of meetings and
consents of the stockholders and boards of directors of the Company and its
subsidiaries and the committees of such boards subsequent to December 31, 1996,
inquiries of officers and other employees of the Company and its subsidiaries
who have responsibility for financial and accounting matters of the Company and
its subsidiaries with respect to transactions and events subsequent to December
31, 1996 and other specified procedures and inquiries to a date not more than
five days prior to the date of such letter, nothing has come to their attention
that would cause them to believe that: (A) the unaudited consolidated financial
statements and schedules of the Company presented in the Registration Statement
and the Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Act and, if applicable, the Exchange
Act and the applicable published rules and regulations of the Commission
thereunder or that such unaudited consolidated financial statements are not
fairly presented in conformity with generally accepted accounting principles,
except to the extent certain footnote disclosures have been omitted in
accordance with applicable rules of the Commission under the Exchange Act,
applied on a basis substantially consistent with that of the audited
consolidated financial statements incorporated by reference in the Registration
Statement and the Prospectus; (B) with respect to the period subsequent to
December 31, 1996, there were, as of the date of the most recent available
monthly consolidated financial statements of the Company and its subsidiaries,
if any, and as of a specified date not more than five days prior to the date of
such letter, any changes in the capital
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40
stock or long-term indebtedness of the Company or any decrease in the net
current assets or stockholders' equity of the Company, in each case as compared
with the amounts shown in the most recent balance sheet presented in the
Registration Statement and the Prospectus, except for changes or decreases which
the Registration Statement and the Prospectus disclose have occurred or may
occur or which are set forth in such letter; or (C) that during the period from
January 1, 1997 to the date of the most recent available monthly consolidated
financial statements of the Company and its subsidiaries, if any, and to a
specified date not more than five days prior to the date of such letter, there
was any decrease, as compared with the corresponding period in the prior fiscal
year, in total revenues, or total or per share net income, except for decreases
which the Registration Statement and the Prospectus disclose have occurred or
may occur or which are set forth in such letter; and (iv) they have compared
specific dollar amounts, numbers of shares, percentages of revenues and
earnings, and other financial information pertaining to the Company and its
subsidiaries set forth in the Registration Statement and the Prospectus, which
have been specified by you prior to the date of this Agreement, to the extent
that such amounts, numbers, percentages and information may be derived from the
general accounting and financial records of the Company and its subsidiaries or
from schedules furnished by the Company, and excluding any questions requiring
an interpretation by legal counsel, with the results obtained from the
application of specified readings, inquiries, and other appropriate procedures
specified by you set forth in such letter, and found them to be in agreement.
(h) At the Closing Date you shall have received a certificate of
each Selling Stockholder who is not a U.S. Person to the effect that such
Selling Stockholder is not a U.S. Person (as defined under applicable U.S.
federal tax legislation), which certifi-
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41
cate may be in the form of a properly completed and executed United States
Treasury Department Form W-8 (or other applicable form or statement specified by
Treasury Department regulations in lieu thereof).
(i) Prior to the Closing Date, the Company and the Selling
Stockholders shall have furnished to you such further information, certificates
and documents as you may reasonably request.
(j) You shall have received from each person who is a director or
Executive Officer of the Company (excluding Selling Stockholders) an agreement
to the effect that such person will not, without the prior written consent of
Bear, Xxxxxxx & Co. Inc., directly or indirectly, sell, offer or agree to sell,
grant any option for the sale of, or otherwise dispose of or transfer, whether
directly or synthetically, any shares of Common Stock or any securities
convertible into, or exchangeable or exercisable for Common Stock (or any
options or rights to purchase or acquire, shares of Common Stock or shares of
Common Stock issuable upon the exercise of options) for a period of 90 days
after the date of the Prospectus.
(k) At the Closing Date, the Shares shall have been approved for
listing on the Nasdaq National Market.
If any of the conditions specified in this Section 7 shall not have been
fulfilled when and as required by this Agreement, or if any of the certificates,
opinions, written statements or letters furnished to you or to Underwriters'
Counsel pursuant to this Section 7 shall not be in all material respects
reasonably satisfactory in form and substance to you and to Underwriters'
Counsel, all obligations of the
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Underwriters hereunder may be cancelled by you on, or at any time prior to, the
Closing Date and the obligations of the Underwriters to purchase the Additional
Shares may be cancelled by you on, or at any time prior to, the Additional
Closing Date. Notice of such cancellation shall be given to the Company in
writing or by telephone, facsimile, telex or telegraph, confirmed in writing.
8. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act against
any and all losses, liabilities, claims, damages and expenses whatsoever as
incurred (including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, as originally filed or any amendment thereof, or any related
preliminary prospectus or the Prospectus, or in any supplement thereto or
amendment thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
the Company will not be liable in any such case to the extent but only to the
extent that any such loss, liability, claim, damage or expense arises out of or
is based upon any such untrue statement or alleged untrue statement or omission
or alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Under-
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43
writer through you expressly for use therein; and, provided further, that the
indemnity agreement provided in this Section 8(a) with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any losses, claims, damages, liabilities or actions
based upon any untrue statement or alleged untrue statement of material fact or
omission or alleged omission to state therein a material fact purchased Shares,
if a copy of the corrected Prospectus in which such untrue statement or alleged
untrue statement or omission or alleged omission was corrected, as previously
filed with the Commission, had not been sent or given to such person within the
time required by the Act and the Regulations, unless such failure is the result
of noncompliance by the Company with Section 5(b) hereof. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have, including under this Agreement.
(b) Each Selling Stockholder, severally and not jointly, agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act against any and all losses, liabilities, claims,
damages and expenses whatsoever as incurred (including but not limited to
attorneys' fees and any and all expenses whatsoever incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, as originally filed or
any amendment thereof, or any related preliminary prospectus or the Prospectus,
or in
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44
any supplement thereto or amendment thereof, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company or such Underwriter
by such Selling Stockholder, directly or through such Selling Stockholder's
representatives, specifically for use in the preparation thereof; provided,
however, that the indemnity agreement provided in this Section 8(b) with respect
to any preliminary prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any losses, claims, damages, liabilities or
actions based upon any untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state therein a material fact
purchased Shares, if a copy of the corrected Prospectus in which such untrue
statement or alleged untrue statement or omission or alleged omission was
corrected, as previously filed with the Commission, had not been sent or given
to such person within the time required by the Act and the Regulations, unless
such failure is the result of noncompliance by the Company with Section 5(b)
hereof. This indemnity agreement will be in addition to any liability which the
Selling Stockholders may otherwise have, including under this Agreement.
(c) Each Underwriter severally, and not jointly, agrees to
indemnify and hold harmless the Company, each of the directors of the Company,
each of the officers of the Company who shall have signed the Registration
Statement, each Selling Stockholder, and each other person, if any, who controls
the Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act against any losses, liabilities, claims, damages and expenses
whatsoever as incurred
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45
(including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, as originally filed or any amendment thereof, or any related
preliminary prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through you expressly for use therein; provided,
however, that in no case shall any Underwriter be liable or responsible for any
amount in excess of the underwriting discount applicable to the Shares purchased
by such Underwriter hereunder. This indemnity will be in addition to any
liability which any Underwriter may otherwise have, including under this
Agreement. The Company acknowledges that the statements set forth in the last
paragraph of the outside cover page, the last two paragraphs on the inside front
cover page and the first three and last paragraphs under the caption
"Underwriting" in the Prospectus constitute the only information furnished in
writing by or on behalf of any Underwriter expressly for use in the Registration
Statement or in any amendment thereof, any related prelimi-
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46
nary prospectus or the Prospectus or in any amendment thereof or supplement
thereto, as the case may be.
(d) Promptly after receipt by an indemnified party under
subsection (a), (b) or (c) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify each party against
whom indemnification is to be sought in writing of the commencement of such
action (but the failure so to notify an indemnifying party shall not relieve it
from any liability which it may have under this Section 8). In case any such
action is brought against any indemnified party, and it notifies an indemnifying
party of the commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent it may elect by written notice delivered
to the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel satisfactory to
such indemnified party. Notwithstanding the foregoing, the indemnified party or
parties shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel shall
have been authorized in writing by one of the indemnifying parties in connection
with the defense of such action, (ii) the indemnifying parties shall not have
employed counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) the
defendants in any such action include both the indemnified party and the
indemnifying party and such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are different
from or additional to those available to one or all of the indemnifying parties
(in which case the indemnifying parties shall not have the right to direct the
defense of such action
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47
on behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by the indemnifying parties. Anything in this
subsection to the contrary notwithstanding, an indemnifying party shall not be
liable for any settlement of any claim or action effected without its written
consent; provided, however, that such consent was not unreasonably withheld.
9. Contribution. In order to provide for contribution in circumstances
in which the indemnification provided for in Section 8 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company, the Selling Stockholders
and the Underwriters shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting, in the case of losses,
claims, damages, liabilities and expenses suffered by the Company or any Selling
Stockholder, any contribution received by the Company or such Selling
Stockholder from persons, other than the Underwriters, who may also be liable
for contribution, including persons who control the Company within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, officers of the
Company who signed the Registration Statement and directors of the Company) as
incurred to which the Company and the Selling Stockholders and one or more of
the Underwriters may be subject, in such proportions as is appropriate to
reflect the relative benefits received by the Company and the Selling
Stockholders on the one hand and the Underwriters on the other hand from the
offering of the Shares or, if such allocation is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to above
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48
but also the relative fault of the Company, the Selling Stockholders and the
Underwriters in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Selling Stockholders and the Underwriters shall be deemed to be in the
same proportion as (x) the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Company
and the Selling Stockholders and (y) the underwriting discounts and commissions
received by the Underwriters, respectively, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault of the Company and
the Selling Stockholders and of the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, the Selling Stockholders or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company,
the Selling Stockholders 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 above. Notwithstanding the provisions of
this Section 9, (i) in no case shall any Underwriter be liable or responsible
for any amount in excess of the underwriting discount applicable to the Shares
purchased by such Underwriter hereunder, and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. Notwithstanding the provisions of this Section 9 and the
preceding sentence, no Under-
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49
writer shall be required to contribute any amount in excess of the amount by
which the total price at which the Shares underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. For purposes of this
Section 9, each person, if any, who controls an Underwriter within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act shall have the
same rights to contribution as such Underwriter, each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to clauses (i) and
(ii) of this Section 9. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties, notify each party or parties from whom contribution may be
sought, but the omission to so notify such party or parties shall not relieve
the party or parties from whom contribution may be sought from any obligation it
or they may have under this Section 9 or otherwise. No party shall be liable for
contribution with respect to any action or claim settled without its consent;
provided, however, that such consent was not unreasonably withheld.
10. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in its or
their obligation to purchase Firm Shares or Additional Shares hereunder, and if
the Firm Shares or Additional Shares to which such default relates do not (after
giving effect to arrangements, if
49
50
any, made by you pursuant to subsection (b) below) exceed in the aggregate 10%
of the total number of Firm Shares or Additional Shares, as the case may be, the
Firm Shares or Additional Shares to which such default relates shall be
purchased by the non-defaulting Underwriters in proportion to the respective
proportions which the numbers of Firm Shares set forth opposite their respective
names in Schedule II hereto bear to the aggregate number of Firm Shares set
forth opposite the names of the non-defaulting Underwriters.
(b) In the event that such default relates to more than 10% of the
total number of Firm Shares or Additional Shares, as the case may be, you may in
your discretion arrange for yourself or for another party or parties (including
any non-defaulting Underwriter or Underwriters who so agree) to purchase the
Firm Shares or Additional Shares to which such default relates on the terms
contained herein. In the event that within five calendar days after such default
you do not arrange for the purchase of the Firm Shares or Additional Shares to
which such default relates as provided in this Section 10, this Agreement or, in
the case of a default with respect to Additional Shares, the obligations of the
Underwriters to purchase, and of the Company to sell, the Additional Shares
shall thereupon terminate without liability on the part of the Company, the
Selling Stockholders (except, in each case, as provided in Section 6, 8(a) and 9
hereof) or the Underwriters with respect thereto, but nothing in this Agreement
shall relieve a defaulting Underwriter or Underwriters of its or their
liability, if any, to the other Underwriters and to the Company and the Selling
Stockholders for damages occasioned by its or their default hereunder.
(c) In the event that the Firm Shares or Additional Shares to
which such default relates are to be purchased by the non-defaulting
Underwriters or are
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51
to be purchased by another party or parties as aforesaid, either you on the one
hand or the Company and the Selling Stockholders on the other hand shall have
the right to postpone the Closing Date or Additional Closing Date, as the case
may be, for a period not exceeding five Business Days, in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus or in any other documents and arrangements, and the Company
agrees to file promptly any amendment or supplement to the Registration
Statement or the Prospectus which, in the opinion of Underwriters' Counsel, may
thereby be made necessary or advisable. The term "Underwriter" as used in this
Agreement shall include any party substituted under this Section 10 with like
effect as if it had originally been a party to this Agreement with respect to
such Firm Shares or Additional Shares, as the case may be.
11. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Underwriters, the Company and the
Selling Stockholders contained in this Agreement, including the agreements
contained in Section 6 hereof, the indemnity agreements contained in Section 8
hereof and the contribution agreements contained in Section 9 hereof, shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any Underwriter or any controlling person thereof, by or
on behalf of the Company, any of its officers and directors or any controlling
person thereof or by or on behalf of any of the Selling Stockholders, and shall
survive delivery of and payment for the Shares to and by the Underwriters. The
representations contained in Section 1 and Section 2 hereof and the agreements
contained in Sections 6, 8, 9 and 12(d) hereof shall survive the termination of
this Agreement, including termination pursuant to Section 10 or 12 hereof.
12. Effective Date of Agreement; Termination.
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(a) This Agreement shall become effective upon the later of (i)
such time as you and the Company shall have received notification of the
effectiveness of the Registration Statement and (ii) the execution of this
Agreement. If either the public offering price or the purchase price per Share
has not been agreed upon prior to 5:00 P.M., New York City time, on the fifth
full Business Day after the Registration Statement shall have become effective,
this Agreement shall thereupon terminate without liability to the Company, the
Selling Stockholders or the Underwriters except as herein expressly provided.
Until this Agreement becomes effective as aforesaid, it may be terminated by the
Company by notifying you or by you notifying the Company. Notwithstanding the
foregoing, the provisions of this Section 12 and of Sections 1, 2, 6, 8 and 9
hereof shall at all times be in full force and effect.
(b) You shall have the right to terminate this Agreement at any
time prior to the Closing Date or the obligations of the Underwriters to
purchase the Additional Shares at any time prior to the Additional Closing Date,
as the case may be, if (i) any domestic or international event or act or
occurrence has materially disrupted, or in your opinion will in the immediate
future materially disrupt, the market for the Company's securities or securities
in general, (ii) if trading on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market has been suspended, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices for securities
have been required, on the New York Stock Exchange, the American Stock Exchange
or the Nasdaq National Market by the New York Stock Exchange, the American Stock
Exchange or The Nasdaq Stock Market or by order of the Commission or any other
governmental authority having jurisdiction, (iii) if a banking moratorium has
been declared by a state or federal authority or if any new restriction
materially adversely affecting the distribution of the Firm Shares
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or the Additional Shares has become effective or (iv) (A) if the United States
becomes engaged in hostilities or there is an escalation of hostilities
involving the United States or there is a declaration of a national emergency or
war by the United States or (B) if there has been a change in political,
financial or economic conditions and the effect of any such event in (A) or (B),
in your reasonable judgment, makes it impracticable or inadvisable to proceed
with the offering, sale and delivery of the Firm Shares or the Additional
Shares, as the case may be, on the terms contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 12 shall be
by telephone, facsimile, telex, or telegraph, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to (i) notification by you as
provided in Section 12(a) hereof or (ii) Section 10(b) or 12(b) hereof), or if
the sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company or the Selling Stockholders to perform any agreement herein or comply
with any provision hereof, the Company agrees to reimburse the Underwriters,
subject to demand by you, for all their reasonable out-of-pocket expenses
(including the reasonable fees and expenses of their counsel) incurred by the
Underwriters in connection herewith.
13. Notice. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to any
Underwriter, shall be mailed or delivered, or sent by facsimile, telex or
telegraph and confirmed in writing by letter, to such Underwriter c/o Bear,
Xxxxxxx & Co. Inc., 245
53
00
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxx, Facsimile
No. 000-000-0000; if sent to the Company, shall be mailed or delivered, or sent
by facsimile, telex or telegraph and confirmed in writing by letter, to the
Company, 0000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxx
Xxxxx, Facsimile No. 000-000-0000; and if sent to any Selling Stockholder, shall
be mailed or delivered, or sent by facsimile, telex or telegraph and confirmed
in writing by letter, to Xxxx Xxxxx, Xxxx Rav-Noy and Xxxxxx Xxxxxx, 0000
Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxx 00000, Facsimile No. 000-000-0000.
14. Agreements of the Selling Stockholders. Each Selling Stockholder
severally covenants and agrees with the Underwriters and the Company:
(a) To pay or to cause to be paid all transfer taxes with respect
to the Shares to be sold by such Selling Stockholder; and
(b) To take all reasonable actions in cooperation with the Company
and the Underwriters to cause the Registration Statement to become effective at
the earliest possible time, to do and perform all things to be done and
performed under this Agreement prior to the Closing Date and to satisfy all
conditions precedent to the delivery of the Shares pursuant to this Agreement.
15. Parties. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Underwriters, the Company and the Selling
Stockholders and the controlling persons, directors, officers, employees and
agents referred to in Sections 8 and 9 hereof, and their respective successors
and assigns, and no other person shall have or be construed to have any legal or
equitable right, remedy or claim under or in respect of or by virtue of this
Agreement or any provi-
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55
sion contained herein. The term "successors and assigns" shall not include a
purchaser, in its capacity as such, of Shares from any of the Underwriters.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, but without regard to
principles of conflicts of law.
17. Counterparts. This Agreement may be executed in counterparts, each
of which shall be an original and all of which together shall constitute one and
the same instrument.
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If the foregoing correctly sets forth the understanding between you, the
Company and the Selling Stockholders, please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a binding
agreement among us.
Very truly yours,
MRV COMMUNICATIONS, INC.
By: /s/ Xxxx Xxxxx
---------------------------------------
Name: Xxxx Xxxxx
Title: President and CEO
THE SELLING STOCKHOLDERS NAMED
IN SCHEDULE I HERETO
By: /s/ Xxxx Xxxxx
---------------------------------------
Name: Xxxx Xxxxx
Title: Attorney-in-Fact
Accepted as of the date first above written:
BEAR, XXXXXXX & CO. INC.
XXXXX XXXXX XXXXXX & COMPANY, LLC
By: Bear, Xxxxxxx & Co. Inc.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Managing Director
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On behalf of themselves and the other Underwriters named in Schedule II hereto.
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SCHEDULE I
Number of Firm
Name Shares to Be Sold
---- -----------------
Company................................................................. 2,350,000
Xxxxxx Xxxxxxxx......................................................... 200,000
Zeev Rav-Noy............................................................ 200,000
Xxxx Xxxxx.............................................................. 100,000
Xxxxxx Xxxxx............................................................ 25,000
Xxxx Xxx................................................................ 13,000
Xxxxxx Xxxxxx........................................................... 12,000
----------
Total 2,900,000
==========
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SCHEDULE II
Number of Firm
Name of Underwriter Shares to Be Purchased
------------------- ----------------------
Bear, Xxxxxxx & Co. Inc................................................. 1,833,000
Xxxxx Xxxxx Xxxxxx & Company, LLC ...................................... 611,000
Xxxxxx Xxxx LLC......................................................... 114,000
Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated..................................... 114,000
Preferred Technology, Inc............................................... 114,000
Hampshire Securities Corporation........................................ 57,000
Pennsylvania Merchant Group Ltd......................................... 57,000
----------
Total 2,900,000
==========
59
