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2,550,000 Shares of Common Stock
MRV COMMUNICATIONS, INC.
UNDERWRITING AGREEMENT
[_______], 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 2,550,000 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 and sell to the Underwriters, at the
option of the Underwriters, up to an additional 382,500 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.
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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-[______]), 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 Regulations. 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
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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
Regulation 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 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
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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. If Rule 434 is used, the Company will comply with the
requirements of Rule 434.
(c) Xxxxxx Xxxxxxxx LLP, who have certified the
financial statements and supporting schedules 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.
(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.
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(f) The execution, delivery and performance of this
Agreement and the consummation of the 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
nonassessable, 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
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have been issued in violation of or be subject to any preemptive or similar
rights. The Company had, at June [__], 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, 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. The outstanding stock
options relating to the Common Stock have been duly authorized and validly
issued and conform to the descriptions thereof contained in the Registration
Statement and the Prospectus.
(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 subsidiaries 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
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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.
(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 schedules included in the Registration Statement and
the Prospectus present
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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 schedules included in the Registration Statement present 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 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) Each of the Company and each of its subsidiaries
has good and marketable title in fee simple to all items of real property and
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.
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(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 procedures), trademarks,
service marks, trade names and other intellectual property (collectively,
"Intellectual Property") necessary to carry on the business it now operates,
and 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.
(r) Except as described in the Prospectus, 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
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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 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
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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 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 re-
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spects 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 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 between the Selling Stockholders and
[______________], 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 such Selling Stockholder and each of this Agreement and the
Custody Agreement is a valid and binding agreement of such Selling Stockholder
enforceable in accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited by applicable law.
(d) The power of attorney signed by such Selling
Stockholder appointing [___________] and [____________], or either one of them,
as such Selling
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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 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
[___________] and [____________], or either one of them, to execute and
deliver, except for this Agreement, 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, the charter or
by-laws of such Selling Stockholder, if not a natural person, or 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 such Selling Stockholder or property of
such Selling Stockholder.
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(g) The Registration Statement does not, and will
not on the Closing Date (or the Additional Closing Date, if any), 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.
(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 $_______, 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 [____________], or at such other place
as shall be agreed upon by you, the Company and the Selling Stockholders, at
[_____] A.M., [_________] time, on the third or fourth Business Day (as
permitted under Rule 15c6-1
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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 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 the option to purchase up to 382,500 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, or from time to time,
in whole or in part, 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 exer-
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cised 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 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 2,550,000, 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
[________], 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 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 (prop-
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erly 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 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
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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
amendments 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.
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(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) 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 or transfer, whether
directly or synthetically, any shares of Common Stock or any securities
convertible into, or exchangeable or exerciseable for Common Stock, and the
Company will obtain the undertaking of each of its officers and directors who
is not a Selling Stockholder and such of its other stockholders as have been
heretofore designated by you and listed in Schedule III attached hereto 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
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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.
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) the qualification
of the Shares under state or foreign securities or Blue Sky laws, including the
costs of printing and mailing a preliminary and final "Blue Sky Survey" and the
fees of counsel for the Underwriters and such counsel's disbursements in
relation thereto,] (iv) listing of the Shares on the Nasdaq National Market,
(v) filing fees of the Commission and the National Association of Securities
Dealers, Inc., (vi) the cost of printing certificates representing the Shares
and (vii) the cost and charges of any transfer agent or registrar.
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
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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 the
Closing Date, and you shall have received a certificate to such effect, dated
the Closing Date, from each Selling Stockholder.
(c) At the Closing Date, you shall have received the
opinion of Freshman, Marantz, Orlanski, Xxxxxx & Xxxxx, counsel for the Company
and the Selling Stockholders, dated the Closing Date, addressed to the
Underwriters and in form and substance satisfactory to Underwriters' Counsel,
to the effect that:
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(i) Each of the Company, each of its
subsidiaries and each Selling Stockholder that is not a natural person
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 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 subsidiaries taken as a whole. Each of
the Company and its subsidiaries 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. All of the outstanding shares of capital stock of
each subsidiary of the Company 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 of title whatsoever, and none of such shares was
issued in violation of or is now subject to any preemptive or similar
rights.
(ii) The Company had, at June [__], 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, 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 in accordance with this Agreement, will be
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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, the Firm Shares and the Additional
Shares conform to the descriptions thereof contained in the
Registration Statement and the Prospectus.
(iii) The Common Stock currently outstanding
is listed, and the Shares are duly authorized for listing, on the
Nasdaq National Market.
(iv) 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 (except as rights to indemnity and contribution hereunder
may be limited by applicable law).
(v) 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 respective properties or businesses of, the
Company, any of its subsidiaries or any Selling Shareholder, which is
of a character required to be disclosed in the Registration Statement
and the Prospectus which has not been properly disclosed therein.
(vi) The execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated hereby by the Company and each Selling Stockholder 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
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or assets of the Company or any of its subsidiaries pursuant to, any
agreement, instrument, franchise, license or permit known to such
counsel to which the Company, any of its subsidiaries or any Selling
Stockholder is a party or by which any of such persons or their
respective properties or assets may be bound or (B) violate or
conflict with any provision of the charter or by-laws of the Company
or any of its subsidiaries or of any of the Selling Stockholders that
is not a natural person or, 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 having
jurisdiction over the Company or any of its subsidiaries or any of the
Selling Stockholders, 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 the Selling
Stockholders, 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, 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.
(vii) 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.
(viii) The Registration Statement and the
Prospectus and any amendments
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thereof or supplements thereto (other than the financial statements
and schedules and other financial data included or incorporated by
reference therein, as to which no opinion need be rendered) comply as
to form in all material respects with the requirements of the Act and
the Regulations. The documents filed under the Exchange Act and
incorporated by reference in the Registration Statement and the
Prospectus or any amendment thereof or supplement thereto (other than
the financial statements and schedules and other financial data
included or incorporated by reference therein, as to which no opinion
need be rendered) when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material
respects with the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder; and such counsel
has no reason to believe that any of such documents, when such
documents became effective or were so filed, as the case may be,
contained, in the case of a registration statement which became
effective under the Act, an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or, in the
case of other documents which were filed under the Exchange Act with
the Commission, an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made
when such documents were so filed, not misleading.
(ix) The Registration Statement is effective
under the Act, all filings required by Rule 424(b) of the Regulations
have been made and, to the best knowledge of such counsel, no stop
order suspending the 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.
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(x) Except as disclosed in or specifically
contemplated by the Registration Statement and the Prospectus, to such
counsel's knowledge, 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. The outstanding stock options
relating to the Common Stock have been duly authorized and validly
issued and conform to the descriptions thereof contained in the
Registration Statement and the Prospectus.
(xi) The statements in the Registration Statement
and the Prospectus under the captions "The Company", "Business --
Proprietary Rights, -- Facilities, -- Legal Proceedings", "Management"
and "Description of Capital Stock", and in Item 15 of Part II of the
Registration Statement, insofar as such statements constitute a
summary of the terms of the Shares, legal matters, documents or
proceedings referred to therein, fairly present the information called
for with respect to such terms, legal matters, documents or
proceedings.
(xii) 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.
(xiii) 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.
(xiv) Each Selling Stockholder has full
legal right, power and authority, and
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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.
(xv) Each Selling Stockholder has good and clear
title to the certificates for the Shares to be sold by such Selling
Stockholder, and upon delivery thereof pursuant hereto and payment
therefor, good and clear title will pass to the Underwriters,
severally, free of all restrictions on transfer, liens, encumbrances,
security interests and claims whatsoever.
(xvi) The power of attorney signed by each
Selling Stockholder appointing [__________] and [_________], or either
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 or on behalf of each Selling Stockholder and
is the valid and binding instrument of such Selling Stockholder
enforceable in accordance with its terms, and pursuant to such power
of attorney, each of the Selling Stockholders has authorized
[___________] and [_________], or either of them, to execute and
deliver on such Selling Stockholder's behalf this Agreement and any
other 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.
(xvii) 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
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at which the contents of the Registration Statement and the Prospectus
and related matters were discussed and that 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 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 and its subsidiaries,
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29
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 other counsel is in form satisfactory to
such counsel and, in their opinion, you and they are justified in relying
thereon.
(d) All proceedings taken in connection with the
sale of the Firm Shares and the Additional Shares as hereby contemplated shall
be 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 request for the purpose of enabling them to pass upon such
matters.
(e) At the Closing Date you shall have received a
certificate of the Chief Executive Officer 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.
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(f) 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 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
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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 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
Registra- tion 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.
(g) 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 certificate may be in the form of a
properly completed and
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executed United States Treasury Department Form W-8 (or other applicable form
or statement specified by Treasury Department regulations in lieu thereof).
(h) 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.
(i) You shall have received from each person who is
a director or officer of the Company (excluding Selling Stockholders) and such
stockholders as have been heretofore designated by you and listed in Schedule
III hereto 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 exerciseable 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.
(j) 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 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.
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8. Indemnification.
(a) The Company and each Selling Stockholder,
jointly and severally, agree 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 neither the Company nor any Selling Stockholder will 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 Underwriter through you expressly for use
therein. This indemnity agreement will be in addition to any liability which
the Company or the Selling Stockholders may otherwise have, including under
this Agreement.
(b) 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
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the Exchange Act against any 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 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 cover page and in the [______] paragraph[s]]
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
preliminary prospectus or the Prospectus or in any amendment thereof or
supplement thereto, as the case may be.
(c) Promptly after receipt by an indemnified party
under subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
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35
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) 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 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
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36
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 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
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37
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 Underwriter shall be required to contribute any amount
in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public 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. Each of
the Company and each Selling Stockholder hereby designates CT Corporation,
whose address is 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, as its authorized
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38
agent, upon which process may be served in any action, suit or proceeding which
may be instituted in any state or federal court in the State of New York by any
Underwriter or person controlling an Underwriter asserting a claim for
indemnification or contribution under or pursuant to Section 8 hereof or this
Section 9, and each of the Company and each Selling Stockholder shall accept
the jurisdiction of such court in such action, and waives, to the fullest
extent permitted by applicable law, any defense based upon lack of personal
jurisdiction or venue together with any right to trial by jury. A copy of any
such process shall be sent or given to the Company or such Selling Stockholder
at the address for notices specified in Section 13 hereof.
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 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 Com-
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pany 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 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 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 agree-
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ments 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.
(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 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 or the Additional Shares has become effective,
(iv) if any downgrading in the rating of the Company's debt
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securities or preferred stock by any "nationally recognized statistical
rating-organization" (as defined for purposes of Rule 436(g) under the Act has
occurred or (v) (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 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 and each Selling Stockholder, jointly
and severally, agree to reimburse the Underwriters, subject to demand by you,
for all out-of-pocket expenses (including the 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., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Gal
Israely, Facsimile No. 212-272-4041; 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.
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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 [Attorney-in-Fact] [address of Attorney-in-Fact], Facsimile No.
[__________].
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 provision 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: ________________________
Name:
Title:
THE SELLING STOCKHOLDERS NAMED
IN SCHEDULE I HERETO
By: ________________________
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: _______________
Name:
Title:
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000
[Selling Stockholders] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
[list names and number of shares]
__________
Total 2,550,000
==========
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SCHEDULE II
Number of Firm
Name of Underwriter Shares to Be Purchased
------------------- ----------------------
Bear, Xxxxxxx & Co. Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Xxxxx Xxxxx Xxxxxx & Company, LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
__________
Total 2,550,000
==========
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SCHEDULE III
[Names of stockholders subject to lock-up]
46
