<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY _, 1996
REGISTRATION NO. 333-00210
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE
AMENDMENT NO. 3
TO
FORM S-1
MRV COMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 3674 06-1340090
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
8917 FULLBRIGHT AVENUE
CHATSWORTH, CALIFORNIA 91311
(818) 773-9044/(818) 773-0906 (FAX)
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)
NOAM LOTAN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
MRV COMMUNICATIONS, INC.
8917 FULLBRIGHT AVENUE
CHATSWORTH, CALIFORNIA 91311
(818) 773-9044/(818) 773-0906 (FAX)
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
COPIES TO:
<TABLE>
<S> <C> <C>
LEIB ORLANSKI, ESQ. KEN KOCH, ESQ. ASHER S. LEVITSKY, ESQ.
FRESHMAN, MARANTZ, ORLANSKI SQUADRON, ELLENOFF, PLESENT & SHEINFELD, LLP ESANU KATSKY KORINS & SIGER
COOPER & KLEIN 551 5TH AVENUE 605 THIRD AVENUE
9100 WILSHIRE BOULEVARD, 8-EAST NEW YORK, NY 10176 NEW YORK, NEW YORK 10153
BEVERLY HILLS, CALIFORNIA 90212-3480 TELEPHONE: (212) 661-6500 TELEPHONE: (212) 953-6000
TELEPHONE: (310) 273-1870 FAX: (212) 697-6686 FAX: (212) 953-6899
FAX: (310) 274-8293
</TABLE>
------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the Registration Statement becomes effective.
If any of the securities on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box. [ X ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE(2)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.0067 par value......... 1,666,391 $50.75 $84,569,343.25 $4,172.52
- ---------------------------------------------------------------------------------------------------------------------------------
Total................................................................................................. $4,172.52
=================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(c).
(2) Includes only the additional 238,430 shares underlying the Selling
Stockholder Warrants to be registered hereunder and does not include
the increase in the number of shares resulting from a 3:2 stock split
paid April 2, 1996.
-------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATES
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE> 2
MRV COMMUNICATIONS, INC.
CROSS-REFERENCE SHEET SHOWING LOCATION IN PROSPECTUS
OF INFORMATION REQUIRED BY ITEMS OF FORM S-1
<TABLE>
<CAPTION>
FORM S-1 REGISTRATION LOCATION IN PROSPECTUS
--------------------- ----------------------
<S> <C>
1. Forepart of the Registration
Statement and Outside Front Cover
Page of Prospectus.......................... Outside Front Cover Page
2. Inside Front and Outside Back Cover
Pages of Prospectus......................... Inside Front and Outside Back Cover Pages of the Prospectus.
3. Summary Information, Risk Factors
and Ratio of Earnings to Fixed
Charges.....................................
4. Use of Proceeds............................. The Company; The Offering; Use of Proceeds
5. Determination of Offering Price............ Outside Front Cover Page; Plan of Distribution
6. Dilution.................................... Not Applicable
7. Selling Security Holders.................... Principal and Selling Stockholders and Selling Warrant
Holders
8. Plan of Distribution........................ Outside Front Cover Page; Plan of Distribution
9. Description of Securities to be
Registered.................................. Dividend Policy; Price Range of Common Stock; Description
of Securities and Warrants
10. Interests with Respect to the
Registrant.................................. Outside Front Cover Page; The Company; Risk Factors;
Dividend Policy; Price Range of Common Stock;
Capitalization; Selected Financial Data; Management's
Discussion of Analysis of Financial Condition and Results of
Operations; Business; Management; Certain Transactions;
Principal and Selling Stockholders and Selling Warrant
Holders; Description of Securities and Warrants; Shares
Eligible for Future Sale; Experts; Financial Statements
11. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities................................. Not Applicable
</TABLE>
<PAGE> 3
PROSPECTUS SUBJECT TO COMPLETION DATED MAY 29, 1996
MRV COMMUNICATIONS, INC.
1,666,391 SHARES OF COMMON STOCK
Of the 1,666,391 shares (the "Shares") of common stock, $0.0067 par
value (the "Common Stock"), offered hereby, 427,464 shares are being offered by
certain stockholders of the Company named herein (the "Selling Stockholders")
and 1,238,927 Shares are being offered by certain Warrant Holders (the "Selling
Warrant Holders") upon the exercise of the Warrants (the "Warrants") held by the
Selling Warrant Holders. Included in the 1,238,927 Shares being offered by the
Selling Warrant Holders are 150,000 Shares (the "Warrant Shares") being offered
by Hampshire Securities Corporation ("Hampshire Securities") and certain of its
principals. Hampshire Securities was the representative of the underwriters in
the Company's public offering in January 1995 and the Company issued Hampshire
Securities warrants (the "Representative's Warrants") to purchase the Warrant
Shares at $11.20 per share, 140% of the initial public offering price. Hampshire
Securities subsequently made an assignment of a portion of the Representative's
Warrants covering 126,693 Warrant Shares among eight persons who are principals
of Hampshire Securities. The Company will not receive any proceeds from the sale
of Common Stock offered by the Selling Stockholders, but will realize
$13,409,383.25 from the exercise of the Warrants by Selling Warrant Holders, if
all the Warrants are exercised.
The Selling Stockholders and the Selling Warrant Holders upon exercise
of the Warrants may from time to time sell all or a portion of the Common Stock
which may be offered by them hereby upon exercise of the Warrants in routine
brokerage transactions in the over-the-counter market, at prices and terms
prevailing at the time of the Sale. The Selling Stockholders and the Selling
Warrant Holders may also make private sales directly or through brokers or may
make sales pursuant to Rule 144 of the Securities Act of 1933, as amended (the
"Securities Act"). The Selling Stockholders and the Selling Warrant Holders may
pay customary brokerage fees, commissions and expenses. The Company will pay all
other expenses of this Offering. The brokers executing selling orders on behalf
of the Selling Stockholders and the Selling Warrant Holders may be deemed to be
"underwriters" within the meaning of the Securities Act, in which event
commissions received by such brokers may be deemed underwriting commissions
under the Securities Act. Hampshire Securities may be acting as a broker for
Selling Stockholders Selling Warrant Holders. See "Plan of Distribution.
The Common Stock is traded on the NASDAQ National Market (the
"NASDAQ/NM") under the symbol "MRVC." On May 15, 1996, the closing sale price
for the Common Stock was $50-3/4 per share. See "Price Range of Common Stock."
AN INVESTMENT IN THE SHARES OF COMMON STOCK OFFERED HEREBY
INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" PAGE 10 FOR A
DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE
INVESTORS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Expenses of this offering are estimated to be $75,000 which the Company
is paying.
-----------------
The date of this Prospectus is May __, 1996
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE> 4
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the
more detailed information and financial statements and notes thereto appearing
elsewhere in this Prospectus. Unless otherwise indicated, the Information In
this Prospectus does not give effect to the exercise of (i) warrants outstanding
as of March 31, 1996 to purchase up to 1,313,430 Shares, and (ii) up to 678,900
options granted and unexercised under the Company's 1992 Stock Option Plan. See
"Management -Stock Option Plan," "Description of Securities--Warrants." Each
prospective investor is urged to read this Prospectus in its entirety. As used
in this Prospectus, the term "Company" means, unless the context requires
otherwise, MRV Communications, Inc., its subsidiaries and its predecessors. This
prospectus gives effect to a 3 for 2 stock split approved by stockholders on
March 5, 1996 for shareholders of record on March 20, 1996 and which was paid on
April 2, 1996. All share prices, warrant exercise prices, numbers of shares and
numbers of warrants both current and historical have been adjusted to reflect
the split.
THE COMPANY
The Company designs, manufactures, and markets semiconductor laser
diodes, light emitting diodes ("LEDs"), and fiber optic transmitting and
receiving modules for the transmission of large amounts of information at high
speeds over long distances and local area network ("LAN") switching products for
the computer networking industry. The Company assembles and integrates these
devices into components that are sold primarily to original equipment
manufacturers ("OEMs") in the fiber optic market. Products incorporating these
devices are used primarily in computer local and wide area networks, voice
communications, cable television, and fiber optic test instruments. The Company
markets and sells products directly to OEMs in the United States and Canada and
indirectly through independent manufacturers' representatives, value added
resellers ("VARs"), and systems integrators. Internationally, the Company
markets and sells its products primarily through approximately 80 independent
distributors in Europe, the Middle East, and the Far East. Domestic
manufacturers of fiber optic systems and instruments using the Company's
products include: General Instruments, Reliance Electric, Synoptics, Optical
Data System, Cisco Systems, Laser Precision Corp., ADC/Fibermux, 3M/Photodyne,
and Network Systems Corporation. International customers include: Exfo
Engineering, Inc., Photon Technology (China), and Kingfisher International PTY,
Ltd.
Based upon its proprietary opto-electronic chip technology, the Company
has developed and markets three product lines: laser diodes and LED-based
components; integrated transmitting and receiving modules; and stand-alone
devices. The Company's LED and laser diode product line consists of
semiconductor components intended primarily for the fiber optic communications
market. Laser diodes and LEDs are solid state semiconductor light sources that
convert electrical power to light for transmission over fiber optic cable. The
Company's laser diode and LED technology is integrated with electronics in the
Company's second product line, transmitting and receiving modules that provide
data links for the data communications market. The Company's third product line
consists of stand-alone products for bandwidth and distance enhancement in LANS.
The Company's stand-alone products Include Ethernet switches and fiber optic LAN
extenders for campus and metropolitan area networks. Ethernet switches subdivide
a LAN into smaller segments with fewer devices to improve total network
availability while providing temporary, but instant, interconnections between
the smaller network segments. The Company markets these and other related
products under the brand names NBase Communications, NBase Switch Communications
and West Hills LAN Systems.
The worldwide fiber optics market, including cables, connectors, and
transceivers, was estimated by an industry source to be approximately $6.1
billion in 1995 and is estimated to grow to $14.5 billion by 2000.
The Company believes that there are significant business opportunities
for emerging fiber optic product and component manufacturing companies as a
result of (1) the need of telecommunications companies, including the regional
Bell operating companies (the "RBOCs") and the alternative local transport
companies ("ALTs") competitive therewith, either to replace existing copper
cabling in order to increase capacity or to expand existing networks and (11)
the use of fiber optic technology as the communications medium of choice in the
data communications market. The Company believes that its extensive experience
with basic semiconductor opto-electronic technology, its knowledge and
understanding of the telecommunications and data communications markets, and its
customer base afford it a competitive advantage in such industry.
1
<PAGE> 5
The Company's operating strategy is to capitalize on the commercial
popularity of existing products and to develop and produce an increasing range
of fiber optic communications products, including transmitters, receivers, and
stand-alone products, which enhance distance and bandwidth in telecommunications
networks and LANS. The Company has implemented its operating strategy by
developing and manufacturing highly functional and powerful proprietary laser
diodes and LEDs and by applying its technology to produce stand-alone products
incorporating multiple fiber optic data link modules for use in data
communications.
The Company's predecessor, MRV Technologies, Inc., was incorporated
under the laws of the State of California on July 26,1988. The Company was
incorporated in Delaware on March 9, 1992 under the name MRV Technologies, Inc.
In April 1992, the Company's California predecessor merged into the Company and
the Company's name was changed to MRV Communications, Inc. The Company's
executive offices are located at 8917 Fullbright Avenue, Chatsworth, California
91311 and its telephone number is (818) 773-9044.
THE OFFERING
<TABLE>
<S> <C>
Common Stock Offered by the Selling Warrant 1,238,927
Holders
Common Stock Offered by the Selling
Stockholders.......................................... 427,464
Common Stock Outstanding Prior to This
Offering.............................................. 9,588,437
Common Stock Outstanding Following This
Offering............................................ 10,827,364 shares assuming the exercise of
the Warrants in full
Risk Factors............................................ The purchase of the Shares is speculative and
involves substantial risk. Prospective investors
should carefully review and consider the
information set forth under "Risk Factors."
Use of Proceeds from Exercise of Warrants............... Research and development of new products
and new generations of existing products;
capital expenditures, consisting primarily of
manufacturing and research and development
test equipment; domestic and International
marketing activities; and working capital and
general corporate purposes. See "Use of
Proceeds."
NASDAQ/NM Trading Symbol................................ MRVC
</TABLE>
2
<PAGE> 6
SUMMARY FINANCIAL INFORMATION
STATEMENT OF OPERATIONS DATA:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
Year Ended
----------------------------------------------------------------------------------------------
December 31, December 31, December 31, December 31, December 31,
1991 1992 1993 1994 1995
------------ ---------------- ---------------- ----------------- ----------------
<S> <C> <C> <C> <C> <C>
Revenues, net ............... $2,401,000 $4,422,000 $7,426,000 $17,526,000 $39,202,000
Cost of goods sold .......... 1,434,000 2,280,000 3,936,000 10,328,000 22,608,000
Non Recurring items(3) ...... -- -- -- -- (7,676,000)(3)
Income (loss)
before income
taxes and
extraordinary
items .................... 209,000 800,000 1,326,000 2,601,000 (1,271,000)
Extraordinary items ......... -- 42,000 -- -- --
Net income (loss):
Pro forma(1) ............. 189,000
Historical(1) 560,000 839,000 1,618,000 (1,273,000)
Net earnings (loss)
per share:
Pro forma(1) ............. $ 0.06
Historical(1) $ 0.15 $ 0.14 $ 0.26(4) ($ 0.14)
Weighted average
common and
common
equivalent shares
outstanding(2) ........... 3,627,627 3,818,029 6,025,084 6,284,001(4) 9,188,737
<CAPTION>
Unaudited 3 months ended
---------------------------------
March 31, March 31,
1995 1996
------------ -----------
<S> <C> <C>
Revenues, net .................... $6,737,000 $15,529,000
Cost of goods sold ............... 4,260,000 8,989,000
Non Recurring items(3) ........... -- --
Income (loss)
before income
taxes and
extraordinary
items ......................... 1,085,000 2,800,000
Extraordinary items .............. -- --
Net income (loss):
Pro forma(1)
Historical(1) ................. 705,000 1,879,000
Net earnings (loss)
per share:
Pro forma(1)
Historical(1) ................. $ 0.08 $0.18
Weighted average
common and
common
equivalent shares
outstanding(2) ................ 8,834,375 10,706,357
<CAPTION>
BALANCE SHEET DATA:
AT DECEMBER 31,
-------------------------------------------------------------------------------------
1991 1992 1993 1994 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Working capital
(deficit) .......... $ (160,000) $3,773,000 $3,514,000 $11,303,000 22,019,000
Total assets .......... 946,000 6,389,000 7,328,000 16,667,000 33,307,000
Total liabilities ..... 1,125,000 1,437,000 1,537,000 3,761,000 8,049,000
Long-term debt,
net of current
portion ............ 161,000 34,000 -- -- 271,000
Stockholders'
equity (deficit).... (179,000) 4,952,000 5,791,000 12,906,000 25,258,000
<CAPTION>
At March 31
-------------
1996
----
<S> <C>
Working capital
(deficit).............. 23,825,000
Total assets.............. 36,687,000
Total liabilities........ 9,413,000
Long-term debt,
net of current
portion................ 319,000
Stockholders'
equity (deficit)....... 27,274,000
</TABLE>
3
<PAGE> 7
- ----------------------
(1) The pro forma income statement income tax effects of the Company's
change from a nontaxable entity (S corporation) to a taxable entity (C
corporation) are presented only for the year ended December 31, 1991.
All other periods are presented on a historical basis.
(2) See Note 1 of Notes to Financial Statements.
(3) The non-recurring items consist of purchased technology in progress and
restructuring charges. Purchased technology in progress for the year
ended December 31, 1995 was $6,211,000. The purchased technology is for
R&D projects in progress at the time of acquisition of assets from
Galcom and Ace 400 Communications, Ltd. No such purchases were made in
the comparable periods for 1994. Restructuring costs during the year
ended December 31, 1995 were $1,465,000. The restructuring is
associated with a plan adopted by the Company in 1995 calling for the
merger of the newly acquired subsidiaries and the Company's LAN product
division. The plan also calls for the closure of some facilities,
termination of redundant employees and cancellation of representation
agreements.
(4) Fully diluted earnings per share information differs from primary
earnings per share information for the year ended December 31, 1994.
See the Statements of Operations included in the Financial Statements.
4
<PAGE> 8
Pro Forma Financial Information Reflecting Galcom and Ace Acquisitions
The following unaudited pro forma financial statements reflect
adjustments to allocate the purchase price of assets acquired and liabilities
assumed from Galcom on May 2, 1995 and ACE Communications on June 29, 1995.
These adjustments are based upon the estimated fair value of the assets acquired
and the obligations assumed. The unaudited pro forma statement of operations for
the years ended December 31, 1995 and 1994 were prepared as if all transactions
had occurred as of January 1, 1995 and 1994. The objective of these pro forma
presentations are to give the reader a view of what the results of operations
may have looked like if these transactions had taken place as of the earlier
dates indicated. Since these transactions took place prior to December 31, 1995,
they are already included in the most recent balance sheet in the registration
statement. See "Business Recent Acquisitions" for further information regarding
the transactions reflected in the pro-forma financial statements.
5
<PAGE> 9
UNAUDITED PRO FORMA COMBINED STATEMENTS OF
OPERATIONS For the Year Ended December 31, 1995
(in thousands except per share amounts)
<TABLE>
<CAPTION>
For the period
For the Year For the Four January 1, 1995 to
ended months June 29, 1995,
December 31, 1995, ended Ace 400
MRV April 30, 1995, Communications
Communications, Inc. Galcom Ltd.(b) Adjustment(c)
(a) Networking, Ltd.(b)
<S> <C> <C> <C> <C>
REVENUES, net $ 39,202 $ 2,076 $ 5,727 --
COSTS AND EXPENSES
Cost of goods sold 22,608 1,285 3,607 --
Research and development 4,044 28 529 --
expenses
Selling, general and
administrative expense 6,799 964 1,894 --
Purchased technology in 6,211 -- -- 6,211
progress
Restructuring costs 1,465 -- -- --
-------- ------- ------- -----
41,127 2,277 6,030 6,211
-------- ------- ------- -----
Operating income (loss) (1,925) (201) (303) 6,211
Other income (expense) 654 (222) (517) --
Provision for income taxes 2 -- -- --
Net income (loss) (1,273) (423) (820) 6,211
<CAPTION>
Pro Forma
Balances(d)
<S> <C>
REVENUES, net $ 47,005
COSTS AND EXPENSES
Cost of goods sold 27,500
Research and development 4,601
expenses
Selling, general and
administrative expense 9,657
Purchased technology in --
progress
Restructuring costs 1,465
--------
43,223
--------
Operating income (loss) 3,782
Other income (expense) (85)
Provision for income taxes 2
Net income (loss) 3,695
</TABLE>
Note
a Includes results of operations associated with assets acquired from
Galcom Networking Ltd for the period May 2, 1995 to December 31, 1995
and also includes results of operations associated with assets acquired
from Ace 400 Communications Ltd for the period June 30, 1995 to
December 31, 1995.
b The pro forma information above shows the combined statements of
operation of MRV Communications, Inc. and operations associated with
assets acquired from Ace 400 Communications Ltd and Galcom Networking
Ltd as if the purchase of those assets had taken place as of January 1,
1995.
c Adjustment to eliminate nonrecurring purchased technology in process.
d Adjustments to amortize goodwill recorded and fair value adjustments to
property, plant and equipment are not material.
6
<PAGE> 10
UNAUDITED
ACE 400 COMMUNICATIONS, LTD.
STATEMENT OF OPERATIONS
For the Period January 1, 1995 to June 29, 1995
(In thousands US$)
REVENUES, net . . . . . . . . . . . . . . . . . . . . . . . . $ 5,727
COSTS AND EXPENSES
Cost of good sold . . . . . . . . . . . . . . . . . . . . 3,607
Research and development expenses . . . . . . . . . . . . 529
Selling, general and administrative expense . . . . . . . 1,894
--------
6,030
--------
Operating loss. . . . . . . . . . . . . . . . . . . . . . (303)
Other expense . . . . . . . . . . . . . . . . . . . . . . (517)
Provision for income tax. . . . . . . . . . . . . . . . . --
--------
Net loss . . . . . . . . . . . . . . . . . . . . . . . . $ (820)
7
<PAGE> 11
ACE 400 COMMUNICATIONS, LTD.
For the period January 1, 1995 to June 29, 1995
Unaudited
CONSOLIDATED STATEMENT OF CASH FLOWS (1,000$)
Net loss . . . . . . . . . . . . . . . . . . . . . . $ (820)
Adjustment to reconcile net loss to net cash
used in operations . . . . . . . . . . . . . . . . 211
--------
Net cash used in operating activities . . . . . . . (609)
CASH FLOWS FROM INVESTING
Purchases of property . . . . . . . . . . . . . . . (30)
CASH FLOWS FROM FINANCING
Net proceeds from borrowing . . . . . . . . . . . . 632
NET DECREASE IN CASH . . . . . . . . . . . . . . . . . . (7)
CASH, beginning of period . . . . . . . . . . . . . . . 337
--------
CASH, end of period . . . . . . . . . . . . . . . . . . 330
========
8
<PAGE> 12
ACE 400 COMMUNICATIONS, LTD.
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION -- The accompanying unaudited condensed financial
statement have been prepared in accordance with the requirements of
Regulation S-X and, therefore, do not include all information and footnotes
which would be presented if such financial statements were prepared in
accordance with generally accepted accounting principles. These statements
should be read in conjunction with the audited financial statements
presented in the Company's Annual Report for the year ended
December 31, 1995.
In the opinion of management, these interim financial statements reflect
all normal and recurring adjustments necessary for a fair presentation
of the financial position and results of operations for the period
presented. The results of operations and cash flows for such period is
not necessarily indicative of results to be expected for the full year.
2. SUBSEQUENT EVENT -- On June 29, 1995 the Ace Inc., North Hills Inc. and
North Hills Israel (hereafter "the Seller") signed agreement with N.N.H.
Computer Communications Ltd. and affiliates (hereafter "the Buyers"),
including MRV Communications, Inc. (hereafter "MRV"). The execution of the
agreement was based on meeting several pre-conditions which were
substantially fulfilled.
The main aspects of the agreement are as follows:
The sellers will sell to the buyers goodwill, know-how, fixed assets (not
including North Hills Israel's building), production files, research and
development files, agreements with customers (including backlog) and
suppliers and other agreements and contract, the right to use software
and the right to use North Hill's Israel's building up to January 31,
1996 (including right of first refusal to continue to rent or buy the
building). The total consideration for the above is expected to be
$4,316,667, as follows: MRV will issue shares to the Company and North
Hills Israel at a minimum guaranteed value of $3,000,000 (according to the
share price as defined in the agreement) and shares at a minimum
guaranteed value of $750,000 to Porta Systems. The buyers will also
pay $100,000 in cash and will pay to suppliers of the sellers $466,667.
9
<PAGE> 13
UNAUDITED
GALCOM NETWORKING, LTD.
STATEMENT OF OPERATIONS
For the Four months ended April 30, 1995
(In thousands US$)
REVENUES, net . . . . . . . . . . . . . . . . . . . . . . . . $ 2,076
COSTS AND EXPENSES
Cost of goods sold. . . . . . . . . . . . . . . . . . . . 1,285
Research and development expenses . . . . . . . . . . . . 28
Selling, general and administrative expense . . . . . . . 964
--------
2,277
--------
Operating loss . . . . . . . . . . . . . . . . . . . . . (201)
Othe expense . . . . . . . . . . . . . . . . . . . . . . (222)
Provision for income tax . . . . . . . . . . . . . . . . --
--------
Net loss . . . . . . . . . . . . . . . . . . . . . . . . $ (423)
========
10
<PAGE> 14
* * * GALCOM NETWORKING LTD.
= = =
CONSOLIDATED STATEMENT OF CASH FLOWS
Four months ended
April 30, 1995
-----------------
US$ (In thousands)
------------------
Unaudited
Cash flows from operations activities
Net loss .................................................. $ (489)
Adjustments to reconcile net loss to cash used
in operating activities ................................. (2,914)
(See Appendix A)
Net cash used in operating activities ..................... (3,403)
---------
Cash flows from investing activities
Proceeds from sale of marketable securities ............... 255
Investment in subsidiary, net of cash acquired
(Appendix B) ............................................ (172)
Purchase of fixed assets .................................. (129)
Redemption of short term loans ............................ 2,025
---------
Net cash provided by investing activities ................. 1,979
---------
Cash flows from financing activities
Increase in short-term bank credits, net .................. 1,392
Repayment of long-term loans .............................. (125)
Net cash provided by financing activities ................. 1,267
---------
Decrease in cash and cash equivalents ..................... (157)
Balance of cash and cash equivalents at the
beginning of the period ................................. 477
---------
Balance of cash and cash equivalents at the
end of the period ....................................... 320
=========
Appendix A
Adjustments to reconcile net loss to cash flows
used in operating activities
Items not involving cash flows:
Gain from marketable securities ........................... (131)
Depreciation of fixed assets and amortization
of other assets ......................................... 136
Increase in provision for severance pay, net .............. 67
Minority interest in net loss ............................. (61)
Changes in assets and liabilities:
Decrease in trade receivables ............................. 143
Increase in other receivables ............................. (2,410)
Increase in inventories ................................... (207)
Decrease in trade payables ................................ (251)
Decrease in other payables ................................ (200)
---------
(2,914)
=========
Appendix B
Investment in subsidiary, net of cash acquired
Working capital - excluding cash .......................... (375)
Fixed assets .............................................. 18
Goodwill .................................................. 529
---------
172
---------
11
<PAGE> 15
GALCOM NETWORKING, LTD.
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION -- The accompanying unaudited condensed financial
statements have been prepared in accordance with the requirements of
Regulation S-X and, therefore, do not include all information and
footnotes which would be presented if such financial statements were
prepared in accordance with generally accepted audited financial
statements presented in the Company's Annual Report for the year ended
December 31, 1995.
In the opinion of management, these interim financial statements reflect
all normal and recurring adjustments necessary for a fair presentation
of the financial position and results of operations for the period
presented. The results of operations and cash flows for such period is
not necessarily indicative of results to be expected for the full year.
2. SUBSEQUENT EVENT -- On May 2, 1995 the Company sold, to a third party, its
business and rights (including the manufacturing rights, know-how,
technology, fixed assets, inventory, etc.) and its holdings in subsidiaries
in the United States and the United Kingdom for consideration of
US$900 thousand in cash and the assignment of its obligations up to an
amount of US$1.8 million. In addition, the purchaser will act so that its
parent company in the United States will issue to the Company an option
(available for 5 years) to purchase 60,000 shares of the parent company,
traded on a foreign stock exchange, at the price per share at the date of
closing of the contract ("the closing price") and a further option
(available for five years) to purchase an additional 15,000 shares
at 150% of the closing price.
12
<PAGE> 16
THE COMPANY
The Company designs, manufactures, and markets semiconductor laser diodes,
LEDs, and fiber optic transmitting and receiving modules for the transmission of
large amounts of information at high speeds over long distances and LAN
switching products for the computer networking Industry. The Company assembles
and integrates these devices into components that are sold primarily to OEMs in
the fiber optic market. Products incorporating these devices are used primarily
In computer local and wide area networks, voice communications, cable
television, and fiber optic test Instruments. The Company markets and sells
products directly to OEMs in the United States and Canada and indirectly through
independent manufacturers' representatives, VARS, and systems integrators.
Internationally, the Company markets and sells its products primarily through
approximately 80 independent distributors in Europe, the Middle East, and the
Far East.
Based upon its proprietary opto-electronic chip technology, the Company has
developed and markets three product lines: laser diodes and LED-based
components; integrated transmitting and receiving modules; and stand-alone
devices. The Company's LED and laser diode product line consists of
semiconductor components intended primarily for the fiber optic communications
market. Laser diodes and LEDs are solid state semiconductor light sources that
convert electrical power to light for transmission over fiber optic cable. The
Company's laser diode and LED technology is integrated with electronics in the
Company's second product line, transmitting and receiving modules that provide
data links for the data communications market. The Company's third product line
consists of stand-alone products for bandwidth and distance enhancement in LANS.
The Company's stand-alone products include Ethernet switches and fiber optic LAN
extenders for campus and metropolitan area networks. Ethernet switches subdivide
a LAN into smaller segments with fewer devices to improve total network
availability while providing temporary, but instant, interconnections between
the smaller network segments. The Company markets these and other related
products under the brand names NBase Communications and West Hills LAN Systems.
RISK FACTORS
An investment in the Shares is highly speculative, involves a high degree of
risk, and should only be made by investors who can afford a loss of their entire
investment. Prospective investors, prior to making an investment decision,
should carefully consider, together with the other matters referred to herein,
including the financial statements and notes thereto, the following risk
factors.
1. UNCERTAIN MARKET ACCEPTANCE. Since inception, the Company has been engaged
in the design and development of semiconductor laser diodes, LEDs, and
transmitting and receiving modules for fiber optic applications. As with any new
technology, there is a substantial risk that the marketplace may not accept the
potential benefits of the technology utilized in the Company's products. Market
acceptance of the Company's products will depend, in large part, upon the
ability of the Company to demonstrate the performance advantages and
cost-effectiveness of its products over competing products. There can be no
assurance that the Company will be able to market its technology successfully or
that any of the Company's current or future products will be accepted in the
marketplace.
2. PRODUCT DEVELOPMENT AND TECHNOLOGICAL CHANGE. The fiber optic
communication, computer networking, and telecommunications industries are
characterized by rapidly changing technology, evolving industry standards, and
frequent new product introductions. The Company's success will depend upon its
ability to enhance existing products and to introduce new products to meet
changing customer requirements. The Company will be required to devote continued
efforts and financial resources to develop and enhance its existing products and
conduct research to develop new products. There can be no assurance that the
Company will be successful in identifying, developing, and marketing new
products or enhancing its existing products. Moreover, there can be no assurance
that the development by others of new or improved products, processes, or
technologies will not render the Company's products or proposed products
obsolete or be more efficient or cost-effective than those of the Company.
3. COMPETITION. The fiber optic instrumentation and component industries are
highly competi- tive. The Company competes and will compete with numerous types
of competitors, including companies which have been established for many years
and have considerably greater financial, marketing, technical, human,
13
<PAGE> 17
and other resources than the Company, which may give such competitors certain
competitive advantages, including the ability to negotiate lower prices on raw
materials and components than those available to the Company. There can be no
assurance that the Company will be able to compete successfully with existing or
future competitors or that competitive pressures faced by the Company will not
materially and adversely affect the business, operating results, and financial
condition of the Company.
4. MANAGEMENT OF GROWTH. The Company has grown rapidly in recent years, with
revenues increasing from $2.4 million for the year ended December 31, 1991, to
$7.4 million, $17.5 million and $39.2 million for the years ended December 31,
1993, 1994 and 1995, respectively.The Company intends to continue to pursue its
growth strategy through increasing sales of existing and new products. This
strategy will require increased personnel, expanded information systems, and
additional financial and administrative control procedures. There can be no
assurance that the Company will be able to attract and retain qualified
personnel or successfully manage expanding operations. Further, there can be no
assurance that the Company will be able to sustain its recent rate of growth or
continue its profitable operations.
5. LIMITED EXPERIENCE IN MANUFACTURING AND MARKETING STAND-ALONE PRODUCT
LINE. The Company has limited experience in manufacturing and marketing its
stand-alone networking products for the LAN environment. There can be no
assurance that the Company will be successful in manufacturing these products in
commercial quantities or that the performance of the stand-alone products will
satisfy customer expectations. In addition, there can be no assurance that the
Company will successfully market any of its existing or future products.
6. RELIANCE ON MAJOR CUSTOMERS. For the years ended December 31, 1992, 1993,
1994 and 1995, the Company's three largest customers accounted for an aggregate
of approximately 28%, 22%, 13% and 14%, respectively, of the Company's net
revenues. Management believes that if the Company continues to expand and
diversify Its product lines and customer base, of which there can be no
assurance, its reliance on any single customer or small group of customers
should not be as significant to the Company's operations in the future. The loss
of any major customer presently or in the future could, however, have a material
adverse effect on the Company's business.
7. LACK OF PATENT PROTECTION. The Company holds no patents and has not filed
any patent applications with respect to its technology. The Company currently
relies on unpatented proprietary know-how, which may be duplicated, and employs
various methods, including confidentiality agreements with employees, to protect
its proprietary know-how. Such methods may not afford complete protection,
however, and there can be no assurance that others will not independently
develop such know-how or obtain access to it. If any patent applications are
filed by the Company, there can be no assurance that any patents will be issued,
or, if issued, would provide the Company with meaningful protection from
competition. In addition, there can be no assurance that the Company's products
will not be found to infringe on any patent held by others. In the event that
any such products are found to so infringe, the Company would be required to
seek a license with respect to such patented technology, or incur substantial
costs to redesign the infringing products. There can be no assurance that any
such license would be available on terms acceptable to the Company or at all,
that any of the Company's products could be redesigned on an economical basis or
at all, or that any such redesigned products would be competitive with the
products of the Company's competitors.
8. INTERNATIONAL SALES. For the year ended December 31, 1995, international
sales accounted for approximately 45% of net revenues. Approximately 27%, 18%
and 19% of the Company's net revenues for the years ended December 1992, 1993
and 1994, respectively, were from sales to foreign countries, and approximately
13% of the Company's backlog as of December 31, 1995 consisted of orders placed
by foreign customers. Sales to foreign customers are subject to government
controls and other risks associated with international sales, including
difficulties in obtaining export licenses, fluctuations in currency exchange
rates, political instability, trade restrictions, and changes In duty rates.
Although the Company has not experienced any material difficulties in this
regard to date, there can be no assurance that it will not experience any such
material difficulties In the future. The Company sells products and receives
payments for such products in U.S. dollars. The Company has not entered into
forward exchange contracts or otherwise engaged in hedging activities.
14
<PAGE> 18
9. DEPENDENCE ON SUPPLIERS. The Company relies primarily on outside suppliers
for substantially all of its parts, components, and manufacturing supplies.
Certain materials are available from only a limited number of suppliers. While
the Company has not encountered any difficulty in obtaining an adequate supply
of parts, components, and manufacturing supplies during Its development and
initial marketing phases, there can be no assurance that the Company's suppliers
will continue to meet all of the Company's needs on a timely basis or at all.
Although the Company maintains a reserve of necessary parts and raw materials, a
shortage of the necessary parts and components or the Inability of the Company
to obtain such parts and components from alternative suppliers would have a
material adverse effect on the Company's operations.
10. POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS. The Company's
quarterly operating results could fluctuate substantially. The Company's expense
levels during any particular period are based, in part, on expectations of
future sales. If sales in a particular quarter do not meet expectations,
operating results could be materially adversely affected. Factors affecting
quarterly operating results include, without limitation, the timing of delivery
and availability of products from suppliers, the product mix sold by the
Company, and price competition for products sold by the Company. In addition,
price competition for the products sold by the Company is intense and could
result in gross margin declines, which could have a material adverse effect on
the Company's results of operations.
11. DEPENDENCE ON KEY PERSONNEL. The Company is substantially dependent upon
a number of key employees, including Dr. Shlomo Margalit, its Chairman of the
Board of Directors and Chief Technical Officer, Dr. Zeev Rav-Noy, its Chief
Operating Officer, and Noam Lotan, its President and Chief Executive Officer.
The loss of the services of any one or more of these officers could have a
material adverse effect on the Company. The Company has entered into employment
agreements with each officer, and owns and is the beneficiary of key man life
insurance policies in the amounts of $1,000,000 each on the lives of Drs.
Margalit and Rav-Noy and Mr. Lotan.
12. ATTRACTION AND RETENTION OF QUALIFIED PERSONNEL. The Company's ability to
develop, manufacture, and market its products, and its ability to compete with
its current and future competitors, depends, and will depend, in large part, on
its ability to attract and retain qualified personnel. Competition for qualified
personnel in the fiber optics industry is intense, and the Company will be
required to compete for such personnel with companies having substantially
greater financial and other resources than the Company. If the Company should be
unable to attract and retain qualified personnel, the business of the Company
could be materially adversely effected. The Company relies exclusively on its
own production capability for critical semiconductor lasers and LED's. In
addition, the Company has a limited number of employees dedicated to the
operation of its wafer fabrication equipment, a loss of which could result in
the Company's inability to effectively operate such equipment for a limited
period of time, until it was able to train new employees.
13. CONTROL OF THE COMPANY. The officers and directors of the Company
beneficially own approximately 28% of the outstanding shares of Common Stock. As
such, such persons will continue to exert substantial influence over the affairs
and policies of the Company, including the election of the directors thereof.
14. SALES PURSUANT TO RULE 144; SHARES ELIGIBLE. The sale, or availability
for sale, of a substantial number of shares of Common Stock in the public market
subsequent to this offering pursuant to Rule 144 under the Securities Act ("Rule
144") or otherwise could materially adversely affect the market price of the
Common Stock and could impair the Company's ability to raise additional capital
through the sale of its equity securities or debt financing. The availability of
Rule 144 to the holders of restricted securities of the Company is conditioned
on, among other factors, the availability of certain public information
concerning the Company. Of the 10,827,364 shares of Common Stock to be
outstanding following this offering, assuming the exercise of the Warrants in
full by the Selling Warrant Holders, 2,627,004 shares are "restricted
securities" as that term is defined in Rule 144 and may, under certain
circumstances, be sold without registration under the Securities Act. All of
such shares of Common Stock are currently eligible for sale under Rule 144. In
addition, the holders of the Representative's Warrants will have certain demand
registration rights with respect to such warrants and the Common Stock
underlying such warrants.
15
<PAGE> 19
15. SHARE PRICES MAY BE HIGHLY VOLATILE. The market prices of the Common
Stock may be highly volatile. Factors such as announcements by the Company or
its competitors concerning acquisitions or dispositions, technological
innovations, new procedures, proposed governmental regulations, and general
market conditions may have a significant Impact on the market price of the
Common Stock.
16. NO DIVIDENDS. The Company has not paid dividends on its Common Stock
since its inception and does not intend to pay any dividends to its stockholders
in the foreseeable future. The Company currently intends to reinvest earnings,
if any, in the development and expansion of its business. See "Dividend Policy."
17. POSSIBLE ISSUANCE OF PREFERRED STOCK. The Company is authorized to issue
up to 1,000,000 shares of Preferred Stock, par value $.01 per share. The
Preferred Stock may be issued in one or more series, the terms of which may be
determined at the time of issuance by the Board of Directors without further
action by stockholders. The terms of any such series of preferred stock may
include voting rights (including the right to vote as a series on particular
matters), preferences as to dividend, liquidation, conversion, and redemption
rights, and sinking fund provisions. No preferred stock is currently
outstanding, and the Company has no present plan for the issuance thereof. The
Company has agreed not to issue any shares of preferred stock until December 7,
1997, without the prior written consent of Thomas James Associates, Inc. the
Company's underwriter in its initial public stock offering. The issuance of any
such preferred stock could materially adversely affect the rights of the holders
of Common Stock, and therefore, reduce the value of the Common Stock. In
particular, specific rights granted to future holders of preferred stock could
be used to restrict the Company's ability to merge with, or sell its assets to,
a third party, thereby preserving control of the Company by the present owners.
18. RECENT ACQUISITIONS. The Company has recently acquired certain assets and
liabilities of Galcom and Ace 400 Communications, Ltd, both of which had
incurred substantial losses prior to their acquisitions. While the Company
believes it can operate the acquired assets profitably, there can be no
assurance of this. See "Business - Recent Acquisitions."
USE OF PROCEEDS
The net proceeds to be received by the Company from the exercise of all the
Warrants, assuming the exercise of all the Warrants by the Selling Warrant
Holders at the varying Warrant exercise prices, after deducting the expenses
payable by the Company, are estimated to be approximately $13,409,383.
The Company presently intends to use the net proceeds from the exercise of
the Warrants as follows: approximately 30% of the net proceeds for research and
development activities, primarily development of new products and new
generations of existing products; approximately 20% of the net proceeds for
capital expenditures, primarily manufacturing and research and development test
equipment; approximately 10% of the net proceeds for domestic and international
marketing activities; and the balance of the net proceeds for working capital
and general corporate purposes, including the possible acquisition of, or
investment in, complementary businesses, products, or technologies. If less than
all of the Warrants are exercised, the Company will apply the proceeds actually
received in the order of priority set forth in the immediately preceding
sentence. There are no present understandings, commitments, or agreements with
respect to any such acquisition or investment.
The allocation of the net proceeds set forth above represents the Company's
best estimate based upon its present plans and certain assumptions regarding
general economic and industry conditions and the Company's future revenues and
expenditures. The Company reserves the right to reallocate the net proceeds
within the above described categories or to other purposes in response to, among
other things, changes in its plans, industry conditions, and the Company's
future revenues and expenditures.
Proceeds not immediately required for the purposes described above will be
invested principally in U.S. government securities, short-term certificates of
deposit, money market funds, and interest bearing savings and management
accounts.
16
<PAGE> 20
DIVIDEND POLICY
The Company has not paid dividends on the Common Stock since its inception
and does not intend to pay any dividends to its stockholders in the foreseeable
future. The Company currently intends to reinvest earnings, if any, in the
development and expansion of its business. The declaration of dividends in the
future will be at the election of the Board of Directors and will depend upon
the earnings, capital requirements, and financial position of the Company,
general economic conditions, and other pertinent factors.
17
<PAGE> 21
CAPITALIZATION
The following table sets forth the Company's capitalization at March 31,
1996 which gives effect to the Galcom and Ace 400 Communications, Ltd.
Acquisitions.
<TABLE>
<CAPTION>
MARCH 31, 1996
--------------
<S> <C>
Long-term debt: $ 340,000
Stockholders' equity:
Preferred Stock, $0.01 par value, 1,000,000 shares
authorized; no shares outstanding actual, pro
forma, and as adjusted --
Common Stock, $0.0067 par value, 20,000,000 shares
authorized; 9,587,714 shares outstanding 64,000
Capital in excess of par value.......................... 23,627,000
Retained earnings ......................................... 3,583,000
-----------
Total stockholders' equity and capitalization......... $27,274,000
===========
</TABLE>
PRICE RANGE OF COMMON STOCK
The Common Stock has been quoted on the NASDAQ/NM under the symbol "MRVC"
since February 28, 1994. The Company effected its initial public offering of
Common Stock on December 7, 1992 at a price of $4.00 per share and was listed on
the NASDAQ SmallCap Market. The following table sets forth the high and low
closing bid prices quoted with respect to the Common Stock for the period from
December 7, 1992 to February 27, 1994, as reported by the NASDAQ SmallCap Market
and the high and low closing sale prices of the Common Stock for the period from
February 28, 1994 through March 31, 1996, as reported by the NASDAQ/NM. Such
prices do not include retail markups, markdowns, or commissions and, with
respect to the period from December 7, 1992 through February 27, 1994, do not
necessarily reflect actual transactions. At December 31, 1995, the Company had
approximately 115 stockholders of record and 4200 beneficial owners.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
1993:
First Quarter........................... $4.17 $3.33
Second Quarter.......................... 3.92 3.50
Third Quarter........................... 3.42 3.00
Fourth Quarter.......................... 3.08 2.42
1994:
First Quarter........................... 3.46 2.83
Second Quarter.......................... 4.42 3.08
Third Quarter........................... 6.92 4.25
Fourth Quarter.......................... 8.08 6.42
1995:
First Quarter .......................... 9.83 7.17
Second Quarter.......................... 8.92 7.25
Third Quarter........................... 14.25 8.50
Fourth Quarter.......................... 16.92 11.00
1996:
First Quarter .......................... 35.33 16.83
</TABLE>
On May 15, 1996, the last sale price of the Common Stock as reported by
the NASDAQ/ NM was $50.75 per share.
18
<PAGE> 22
SELECTED FINANCIAL DATA
The following selected statement of operations data for the three years in
the period ended December 31, 1995 and the balance sheet data as of December 31,
1994 and 1995 are derived from the financial statements and notes thereto
included elsewhere herein audited by Arthur Andersen LLP, independent public
accountants, as set forth in their report also included elsewhere herein. The
selected statement of operations data for the two years in the period ended
December 31, 1992 and the balance sheet data as of December 31, 1991, 1992 and
1993 are derived from audited financial statements not included herein. The pro
forma selected statement of operations data for the year ended December 31, 1995
is derived from audited financial statements of the Company and the acquired
Companies. The following data should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Financial Statements of the Company and the notes thereto included elsewhere
in this Prospectus.
STATEMENT OF OPERATIONS DATA:
<TABLE>
<CAPTION>
Year Ended
--------------------------------------------------------------------------------
December 31, December 31, December 31, December 31, December 31,
1991 1992 1993 1994 1995
------------ ------------ ------------ ------------ ------------
Revenues, net ....... $ 2,401,000 $ 4,422,000 $ 7,426,000 $ 17,526,000 $ 39,202,000
Cost of goods sold .. 1,434,000 2,280,000 3,936,000 10,328,000 22,608,000
Non Recurring
Charges(5) .......... -- -- -- -- (7,676,000)(5)
Income (loss) before
income taxes and
extraordinary item .. 209,000 800,000 1,326,000 2,601,000 (1,271,000)
Extraordinary item .. -- 42,000 -- -- --
Net income (loss):
Pro forma(1) ...... 189,000
Historical ........ 560,000 839,000 1,618,000 (1,273,000)
Net income (loss)
per share:
Pro forma(1) ...... $ 0.06
Historical ........ $ 0.15 $ 0.14 $ 0.26(4) $ (0.14)
Weighted average
common and
common equivalent
shares outstanding(2) 3,627,627 3,818,029 6,025,084 6,284,001 9,188,737
============ ============ ============ ============ ============
<CAPTION>
Actual Three
Months Ended
PRO FORMA (3) (unaudited)
------------- ----------------------------
December 31, March 31, March 31,
1995 1995 1996
------------ ----------- -----------
<S> <C> <C> <C>
Revenues, net ............... $47,005,000 $ 6,737,000 $15,529,000
Cost of goods sold .......... 27,500,000 4,260,000 8,989,000
Non Recurring
Charges(5) .................. -- -- --
Income (loss) before
income taxes and
extraordinary item .......... 5,247,000 1,085,000 2,800,000
Extraordinary item .......... --
Net income (loss):
Pro forma(1)
Historical ................ -- 705,000 1,879,000
Net income (loss)
per share:
Pro forma(1)
Historical ................ -- $ 0.08 $ 0.18
Weighted average
common and
common equivalent
shares outstanding(2) ....... 9,188,737 8,834,375 10,706,357
=========== =========== ===========
</TABLE>
19
<PAGE> 23
<TABLE>
<CAPTION>
BALANCE SHEET DATA:
At December 31 At March 31
------------------------------------------------------------------ -----------
1991 1992 1993 1994 1995 1996
----------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Working capital
(deficit) ....... $ (160,000) $3,773,000 $ 3,514,000 $11,303,000 $22,019,000 23,825,000
Total assets .... 946,000 6,389,000 7,328,000 16,667,000 33,307,000 36,687,000
Total liabilities 1,125,000 1,437,000 1,537,000 3,761,000 8,049,000 9,413,000
Long-term debt,
net of current .. 161,000 34,000 -- -- 271,000 319,000
portion
Stockholders'
equity (deficit) (179,000) 4,952,000 5,791,000 12,906,000 25,258,000 27,274,000
</TABLE>
- --------------------
(1) The pro forma Income statement income tax effects of the Company's change
from a nontaxable entity (S corporation) to a taxable entity (C
corporation) are presented for all periods, except for the periods ended
December 31, 1992, 1993, 1994 and 1995, which are presented on a historical
basis.
(2) See Note 1 of Notes to Financial Statements.
(3) Pro forma data gives effect to the Galcom and Ace North Hills Acquisitions
as if the acquisitions had occurred on January 1, 1995.
(4) Fully diluted earnings per share information differs from primary earnings
per share information for the year ended December 31, 1994. See the
Statements of Operations included in the Financial Statements.
(5) The non-recurring items consist of purchased technology in progress and
restructuring charges. Purchased technology in progress for the year ended
December 31, 1995 was $6,211,000. The purchased technology is for R&D
projects in progress at the time of acquisition of assets from Galcom and
Ace 400 Communications, Ltd. Restructuring costs during the year ended
December 31, 1995 were $1,465,000. The restructuring is associated with a
plan adopted by the Company in 1995 calling for the merger of the newly
acquired subsidiaries and the Company's LAN product division. The plan also
calls for the closure of some facilities, termination of redundant
employees and cancellation of representation agreements.
20
<PAGE> 24
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company was organized and commenced operations in July 1988. Since its
inception, the Company has manufactured and marketed semiconductor laser diodes
and LEDs for the fiber optics industry. The Company began volume shipments of
discrete lasers and LED devices in 1989. In 1990, the Company introduced lasers
and LEDs mounted in industry standard fiber optic receptacles designed and
manufactured by the Company. In 1991, the Company introduced a line of
transmitting and receiving modules. In 1992, the Company introduced its first
stand-alone product, a wavelength converter that allows the connection of
certain telephone exchanges or private automatic branch exchanges over single
mode fiber optic cable. In 1993, the Company expanded its stand-alone product
line to Include products incorporating Ethernet switching technology aimed at
improving network throughput and distance enhancement in LANS.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, statement of
operations data of the Company expressed as a percentage of revenues.
<TABLE>
<CAPTION>
Year Ended Actual Three Months Ended
-------------------------------------------- -------------------------
December 31, December 31, December 31, MARCH 31, MARCH 31,
1993 1994 1995 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Revenues, net ................................ 100% 100% 100% 100% 100%
Cost of goods sold ........................... 53% 59% 58% 63% 58%
Gross profit ................................. 47% 41% 42% 37% 42%
Operating expenses:
Research and development .................. 15% 12% 10% 10% 11%
Selling, general, and
administrative .......................... 17% 15% 17% 14% 14%
Purchased technology in
progress ..................................... 16% -- --
Restructuring costs ....................... 4% -- --
Operating income ............................. 15% 14% (5%) 13% 17%
Other income (expense),
net ....................................... 3% 1% 2% 3% 1%
Income (loss)before taxes..................... 18% 15% (3%) 16% 18%
Pro Forma Financial data
(Excluding non-recurring
charges, net of tax effects)
Operating income .......................... -- -- 15% -- --
Income before taxes ....................... -- -- 17%
</TABLE>
During the year ended December 31, 1995, the Company acquired
assets of Galcom and Ace 400 Communications, Ltd.
QUARTERS ENDED MARCH 31, 1996 AND 1995
Revenues for the quarter ended March 31, 1996 from product sales were
$15,529,000 as compared to $6,737,000 for the quarter ended March 31, 1995, an
increase of $8,792,000 or 131 percent. Revenues
21
<PAGE> 25
increased as a result of greater marketing efforts and greater market acceptance
of the Company's products, both domestically and internationally. International
sales accounted for approximately 39 percent of revenues for the period ended
March 31, 1996 as compared to 25 percent of revenues for the period ended March
31, 1995. International sales grew as a percentage of sales because of greater
marketing efforts in overseas markets as well as increased sales and marketing
resources put in place by the Company to service overseas markets.
GROSS PROFIT
Gross profit was $6,540,000 for the quarter ended March 31, 1996 as compared
to $2,477,000 for the same period in 1995, an increase of 164 percent. Gross
profit as a percentage of revenues increased from 37% to 42% primarily as a
result of lower cost production techniques and improved discounts obtained from
vendors as the Company has increased the volume of its purchases.
RESEARCH AND DEVELOPMENT
Research and development ("R&D") expenses were $1,684,000 and $702,000 and
represented 11 percent and 10 percent respectively of revenues for the quarters
ended March 31, 1996 and 1995. The 140 percent increase in R&D spending was
attributable to the continued development of the Company's fiber optic and
networking products, including two-way simultaneous fiber optic transmission
modules, Ethernet/Fast Ethernet Switches and ATM products. Additional costs were
also associated with the hiring of additional research and development personnel
and consultants. The Company intends to continue to invest in the research and
development of new products. Management believes that the ability of the Company
to develop and commercialize new products is a key competitive factor.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, General and Administrative ("SG&A") expenses increased to $2,136,000
for the quarter ended March 31, 1996 from $917,000 for the quarter ended March
31, 1995. The increase was due primarily to increased marketing and personnel
costs, as well as other administrative expenses. As a percentage of revenues,
SG&A was unchanged at 14 percent.
NET INCOME
Net income increased to $1,879,000 for the quarter ended March 31, 1996
compared with a net income of $705,000 for the quarter March 31, 1995. This
increase of 167 percent is primarily due to substantially increased sales and
higher gross profit margins.
YEARS ENDED DECEMBER 31, 1994 AND 1995
Revenues
Revenues for the year ended December 31, 1995 were $39,202,000, as compared
to $17,526,000 for the year ended 1994. The changes represented an increase of
$21,676,000 or 124 percent for the year ended 1995. Revenues increased as a
result of greater marketing efforts and greater market acceptance of the
Company's products, both domestically and internationally. Additional sales and
marketing resources obtained in the acquisition of assets during the year ended
December 31, 1995 also contributed additional revenues. International sales
accounted for approximately 45 percent of revenues for the year ended 1995 as
compared to 19 percent of revenues for the year ended 1994. International sales,
as a percentage of total revenues increased because of greater marketing efforts
in overseas markets and a larger presence of sales resources, obtained in the
acquisition of assets, in those markets.
Gross Profit
Gross profit for the year ended 1995 was $16,594,000 as compared to
$7,198,000 for the year ended 1994. The change represented an increase of
$9,396,000 or 131 percent for the year ended 1995. The
22
<PAGE> 26
increase in gross profit was primarily due to increased sales. Gross profit as a
percentage of revenues for the years ended 1994 and 1995 was 41% and 42%
respectively.
Research and Development
Research and development ("R&D") expenses for the years ended December 31,
1994 and 1995, were $2,144,000 and $4,044,000 which represented 12 percent and
10 percent of revenues, respectively. The percent decrease in R&D spending was
attributable to the increased revenues. The Company intends to continue
development of the Company's fiber optic products, including new stand-alone
products and to invest in the research and development of other new products.
Management believes that the ability of the Company to develop and commercialize
new products is a key competitive factor.
Selling, General and Administrative
Selling, General and Administrative ("SG&A") expenses for the year ended
December 31, 1995 increased to $6,799,000 from $2,615,000. As a percentage of
revenues, SG&A increased from 15 to 17 percent for the year ended December 31,
1994 and December 31, 1995, respectively. The increase in SG&A expenses is due
primarily to additional personnel and overhead costs at the newly acquired
subsidiaries and increased marketing and personnel costs at the parent company.
Purchased Technology in Progress and Restructuring Costs
In connection with the Company's acquisition of certain assets of Galcom and
ACE Communications, Inc., the Company acquired incomplete research and
development (R&D) projects that will be included in the current R&D activities
of the Company. For projects that will have no alternative future use to the
Company and where technological feasibility had not yet been established, the
Company allocated $6,211,000 of the purchase price to technology in progress and
recorded the expense during the year ended December 31, 1995.
Also in connection with the Company's acquisitions, during the year period
ended December 31, 1995 the Company recorded $1,465,000 as restructuring costs,
which primarily related to the closing of several Company facilities, a
reduction of its workforce, and the settlement of distribution agreements.
Immediately after the acquisition of the businesses, the Company undertook a
restructuring plan that called for a merger of the two operations into one and
an assumption by the remaining entity of certain international and U.S.
operations previously undertaken directly by MRV. This included, for example,
sales by the subsidiary of MRV's LAN products into some of the sale channels
developed by MRV prior to the acquisitions. Since the operating plans of the
Company did not call for distinctions of these operations from those of the
businesses acquired, it is not practicable to quantify their impact. The product
lines of the businesses acquired are aimed at computer connecting for the IBM
AS400 and mainframe environment. The Company's LAN products are aimed also at
the computer connectivity environment although primarily for PCs.
Inventories
Inventories have increased as a result of increased sales. Inventories as a
percentage of assets have increased because an increasing portion of the
Company's business has come from LAN products which have longer production
cycles than the Company's opto-electronic products.
Commitments and Contingent Liabilities of Acquired Companies
Royalties are payable by both Galcom and Ace to the office of the Chief
Scientist of Israel ("OCS") at the rate of 3%, in the case of Galcom and at the
rate of 2-3% in the case of Ace on proceeds from the sale of products arising
from the research and development activities for which OCS has provided grants.
Ace has received to date $5,150,000 and Galcom has received $648,000 in grants
from OCS. Ace has paid royalties to date to OCS of $685,000 and Galcom has paid
royalties to OCS to date of $27,000. The total amount of
23
<PAGE> 27
royalties may not exceed the amount of the grants. The Company does not expect
that revenues from royalty bearing products will result in material royalty
payment obligations in the future.
Net Income
Net income decreased from $1,618,000 for the year ended December 31, 1994 to
a net loss of $1,273,000 for the year ended December 31, 1995. The decrease in
net income is principally due to non-recurring charges during the year ended
December 31, 1995 of $7,676,000 for the cost of purchased technology in progress
acquired in the acquisitions of subsidiaries and costs associated with the
adoption of a restructuring plan. Excluding the non-recurring charges, net of
their tax effects, net income would have increased to $4,345,000 for the year
ended December 31, 1995. The increase of 169 percent over the same period in
1994 is primarily due to substantially increased sales.
YEAR ENDED DECEMBER 31, 1994 AS COMPARED TO YEAR ENDED DECEMBER 31, 1993.
Revenues
Revenues for the year ended December 31, 1994 from products sales were
$17,526,000, as compared to $7,426,000 for the year ended December 31, 1993, an
increase of 136%. International sales accounted for approximately 19% of
revenues for the year ended December 31, 1994 as compared to 18% of revenues for
the year ended December 31, 1993. Revenues increased primarily as a result of
greater market acceptance of the Company's products, both domestically and
internationally. New product introductions in 1994 included Sonet Transmitters,
ATM Transmitters, Return Path Isolator Lasers, Multimode/Singlemode converters
for ATM and FDDI transmission. These products contributed to the increase in
sales along with increases in the sales of existing products.
Gross Profit
Gross profit was $7,198,000 for the year ended December 31, 1994 as compared
to $3,490,000 for 1993, due to increased revenues. Gross profit as a percentage
of revenues decreased from 47% in 1993 to 41% in 1994. Gross profit as a
percentage of revenues declined primarily as a result of a change in the mix of
products sold to include more items with lower gross margins.
Research and Development
Research and development ("R&D") expenses were $2,144,000 and $1,103,000 and
represented 12% and 15% respectively, of revenues for the years ended December
31, 1994 and 1993, respectively. The 94% increase in R&D spending was
attributable to the continued development of the Company's fiber optic and
networking products, including new stand-alone LAN products as well as to costs
associated with the hiring of additional research and development personnel and
consultants. The Company intends to continue to invest in the research and
development of new products. Management believes that the ability of the Company
to develop and commercialize new products is a key competitive factor.
Selling, General and Administrative
Selling, General & Administrative ("SG&A") expenses increased to $2,615,000
for the year ended December 31, 1994 from $1,259,000 for the year ended December
31, 1993. As a percentage of revenue, SG&A decreased to 15% from 17%. The
increase is due primarily to increased marketing and personnel costs, as well as
other administrative expenses.
Net Income
Net income increased to $1,618,000 for the year ended December 31, 1994
compared to $839,000 for the year ended December 31, 1993. The increase is
primarily due to substantially increased revenues and resulting operating
efficiencies.
24
<PAGE> 28
YEARS ENDED DECEMBER 31, 1993 AND 1992
Revenues from products sales for the year ended December 31, 1993 were
$7,426,000, as compared to $4,080,000 for the year ended December 31, 1992, an
increase of $3,346,000 or 82%. During the year ended December 31, 1993, the
Company had no revenue from technology transfer contracts, as compared to
$342,000 during the year ended December 31, 1992. International sales accounted
for approximately 18% of revenues for the year ended December 31, 1993, as
compared to 27% of revenues for the year ended December 31, 1992. Revenues
increased primarily as a result of greater market acceptance of the Company's
products, both domestically and internationally.
Gross profit for the year ended December 31, 1993 increased to $3,490,000
from $2,142,000 for the year ended December 31, 1992. Such increase was
attributable primarily to increased sales. Gross profit as a percentage of
revenues remained relatively unchanged in 1993 from 1992.
R&D expenses for the year ended December 31, 1993 were $1,103,000, as
compared to $589,000 for the year ended December 31, 1992, which represented 15%
and 13%, respectively, of revenues, respectively. The 87% increase in R&D
spending was attributable to the continued development of the Company's fiber
optic and networking products, including new stand-alone LAN products, as well
as to costs associated with the hiring of additional R&D personnel and
consultants.
SG&A expenses for the year ended December 31, 1993 were $1,259,000, as
compared to $631,000 for the year ended December 31, 1992, which represented 17%
and 14% of revenues, respectively. The increase was attributable primarily to
increased marketing and personnel costs, as well as other administrative
expenses.
Net income for the year ended December 31, 1993 increased to $839,000 from
$560,000 for the year ended December 31, 1992. Income before extraordinary item
increased from $518,000 to $839,000, an increase of 62%. The increase was
primarily attributable to increased sales and resulting operating efficiencies.
INTERNATIONAL SALES
International sales are not concentrated in any specific geographic regions.
None of the geographic regions sold to constituted, individually, a material
amount of overall sales. The estimated operating profit from international sales
for the periods ended December 31, 1995, 1994 and 1993 were $2,646,000, $466,000
and $201,000, respectively. The amount shown for 1995 is before nonrecurring
charges. Other than 16% of assets in Israel, there were no significant assets
located outside of the U.S. for 1995. In prior years substantially all the
assets were located in the U.S.
LIQUIDITY AND CAPITAL RESOURCES
In December 1992, the Company completed an initial public offering of 488,750
units consisting of four and a half shares of Common Stock and three Redeemable
Common Stock Warrants. The net proceeds of the initial public offering were
$4,529,000.
The Company used a portion of the net proceeds of its initial public offering
to repay certain of its outstanding notes payable. On December 31, 1995, there
were no outstanding loans and notes payable. The Company is continuing to
utilize the proceeds of the public offering to fund working capital, research
and development activity, marketing and for planned capital expenditures.
Pending utilization, proceeds have been invested in short-term and long-term
interest-bearing government securities.
In 1994, the Company received proceeds of approximately $5,497,000 from the
issuance of 1,719,715 shares of Common Stock, upon exercise of the same number
of IPO Warrants.
Net cash used in operating activities for the year ended December 31, 1995
was $6,198,000 and $2,087,000, for the same period in 1994. For the year ended
December 31, 1995, the funds were used for increased inventories and receivables
as a result of increased revenues. Net cash provided by financing activities for
the years ended December 31, 1995 and 1994 were $9,669,000 and $5,492,000. In
1995, the cash provided by financing activities resulted primarily from the
issuance of 1,350,000 shares of common
25
<PAGE> 29
stock at $8.00 per share less offering costs and the issuance of 94,325 shares
in connection with the exercise of stock warrants and options. For the year
ended December 31, 1994, the cash provided by financing activities were the
result of the exercise of IPO Warrants. Net cash used in investing activities
for the year ended December 31, 1995 was $5,565,000 which resulted primarily
from the restriction of the Company's cash as security against letters of credit
issued by a bank on behalf of the Company.
EFFECTS OF INFLATION
The Company believes that the relatively moderate rate of inflation over the
past few years has not had a significant impact on the Company's sales or
operating results, or on the prices of raw materials.
INCOME TAXES
Through December 31, 1991, the Company elected treatment as an S corporation
under provisions of the Internal Revenue Code of 1986, as amended. While this
election was in effect, the Company's income, whether distributed or not, was
taxed at the stockholder level. Effective January 1, 1992, the Company
terminated the S corporation election and became a C corporation.
In February 1992, the Financial Accounting Standards Board issued a new
standard with respect to the accounting for income taxes, Statement of Financial
Accounting Standards No. 109 (SFAS 109).
The Company has adopted this new standard effective January 1, 1992.
POST-RETIREMENT BENEFITS
The Company does not provide post-retirement benefits affected by SFAS 106.
26
<PAGE> 30
BUSINESS
GENERAL
The Company designs, manufactures, and markets semiconductor laser diodes,
LEDs, and fiber optic transmitting and receiving modules for the transmission of
large amounts of information at high speeds over long distances and LAN
switching products for the computer networking industry. The Company assembles
and integrates these devices into components that are sold primarily to OEMs in
the fiber optic market. Products incorporating these devices are used primarily
in computer local and wide area networks, voice communications, cable
television, and fiber optic test instruments. The Company markets and sells
products directly to OEMs in the United States and Canada and indirectly through
independent manufacturers' representatives, VARS, and systems integrators.
Internationally, the Company markets and sells its products primarily through
approximately 80 independent distributors in Europe, the Middle East, and the
Far East. Domestic manufacturers of fiber optic systems and instruments using
the Company's products include: General Instruments, Reliance Electric,
Synoptics, Optical Data System, Cisco Systems, Laser Precision Corp.,
ADC/Fibermux, 3M / Photodyne, and Network Systems Corporation. International
customers include: Exfo Engineering, Inc., Photon Technology (China), and
Kingfisher International PTY, Ltd.
Based upon its proprietary opto-electronic chip technology, the Company has
developed and markets three product lines: laser diodes and LED-based
components; integrated transmitting and receiving modules; and stand-alone
devices. The Company's LED and laser diode product line consists of
semiconductor components intended primarily for the fiber optic communications
market. Laser diodes and LEDs are solid state semiconductor light sources that
convert electrical power to light for transmission over fiber optic cable. The
Company's laser diode and LED technology is integrated with electronics in the
Company's second product line, transmitting and receiving modules that provide
data links for the data communications market. The Company's third product line
consists of stand-alone products for bandwidth and distance enhancement in LANS.
The Company's stand-alone products include Ethernet switches and fiber optic LAN
extenders for campus and metropolitan area networks. Ethernet switches subdivide
a LAN into smaller segments with fewer devices to improve total network
availability while providing temporary, but instant, interconnections between
the smaller network segments. The Company markets these and other related
products under the brand names NBase Communications and West Hills LAN Systems.
The worldwide fiber optics market, including cables, connectors, and
transceivers, was estimated by an industry source to be approximately $5.7
billion in 1994 and is estimated to grow to $14.5 billion by 1999. According to
Bellcore (Bell Communications Research), in 1993 there were over 8 million
kilometers (km) of telecommunications of optical fiber installed in the United
States and, by the year 2000, the installed base is expected to reach 25 million
km.
The Company believes that there are significant business opportunities for
emerging fiber optic product and component manufacturing companies as a result
of (I) the need of telecommunications companies, including the RBOCs and the
ALTs competitive therewith, either to replace existing copper cabling in order
to increase capacity or to expand existing networks and (II) the use of fiber
optic technology as the communications medium of choice in the data
communications market. The Company believes that its extensive experience with
basic semiconductor opto-electronic technology, its knowledge and understanding
of the telecommunications and data communications markets, and its customer base
afford it a competitive advantage in such industry.
The Company's operating strategy is to capitalize on the commercial
popularity of existing products and to develop and produce an increasing range
of fiber optic communications products, including transmitters, receivers, and
stand-alone products, which enhance distance and bandwidth in telecommunications
networks and LANS. The Company has implemented its operating strategy by
developing and manufacturing highly functional and powerful proprietary laser
diodes and LEDs and by applying its technology to produce stand-alone products
incorporating multiple fiber optic data link modules for use in data
communications. As part of the Company's operating strategy, the Company intends
to use a portion of the proceeds of this offering to enhance its basic
optoelectronic components technology and to develop and design new subsystems
and stand-alone products for use in the LAN and MAN environments.
27
<PAGE> 31
Recent Acquisitions
The Company recently acquired certain assets of Galcom Networking Ltd.
("Galcom") and Ace Communications Inc./Electronics Inc. ("Ace/North Hills"),
both of Israel. The assets acquired were contributed by the Company to a new
wholly-owned subsidiary called NBase Communications, Inc. This allows the
Company to combine its MRV LAN Connectivity and LAN Switching Products under the
NBase brand. The Galcom and Ace/North Hills acquisitions provided the Company
with experienced personnel and technology for the Token Ring LAN, IBM
Connectivity and Multi-Platform Network Management IBM NetView and HP OpenView
markets. The Company recently opened a new ATM design center in Israel.
In addition to these acquisitions, the Company under the NBase trademark was
among the first in the industry to ship Fast Ethernet Segment Switches Testing
at NSTL (a division of McGraw-Hill, Inc.) placed the NBase MegaSwitch second
highest, comparing 23 industry-leading brands of Ethernet Switches, and Byte
Magazine named the Company's MegaSwitch "Best stackable switch" in the July 1995
issue.
While MRV continues to serve the OEM customer with opto-electronic components
for fiber optic transmission, the Company intends to offer end users and
carriers products for Ethernet Switching, ATM, remote office connectivity
purposes, and other protocols. The Company's in-house semiconductor laser
foundry allows the Company to provide high speed LAN Connectivity products
for applications and distances exceeding 50 km for office, campus, and
metropolitan network applications.
On May 1, 1995, the Company completed the acquisition of certain assets and
the distribution business of Galcom Networking, Ltd. ("Galcom") pursuant to the
Agreement for the Sale and Purchase of Assets between Galcom and the Company.
The purchase price paid by the Company was approximately $900,000 in cash and
the assumption of approximately $1,800,000 in trade liabilities and debt, which
the Company believed was the fair market value for the acquisition. The source
of the funds used for the acquisition was from the proceeds of the Company's
public offering in January 1995. The assets acquired by the Company consisted of
fixed assets, inventory, intangible assets, and other assets and rights used in
Galcom's business as a manufacturer of computer connectivity equipment and
related products, and the Company intends to continue to use such assets for
those purposes.
In connection with the acquisition of assets from Galcom Networking, Ltd the
Company issued Warrants (the "Galcom Warrants") to purchase 112,500 shares at
prices ranging from $9.83 to $14.75 per share. The Galcom Warrants are
exercisable for a period of 5 years. The 112,500 shares underlying the Galcom
warrants are included in this Prospectus. Also in connection with the
acquisition of Galcom assets, the Company issued 37,500 Warrants to Messrs.
Henri Telner, Philipe Scwarc, Danny Yellin, Yakov Sfadya, who were then
employees of Galcom, at prices ranging from $8.50 to $9.50 per share. These
Warrants are exercisable for a period of 5 years. The majority of these warrants
were sold in a private sale in January 1996 to several parties who are listed in
the Selling Warrant Holders table. See "Principal and Selling Stockholders and
Selling Warrant Holders" below.
On June 29, 1995, the Company completed the acquisition of certain assets and
the distribution business of Ace 400 Communications Ltd. ("Ace") pursuant to the
Agreement for the Sale and Purchase of Assets among Ace and the Company. The
purchase price paid by the Company was approximately $4,316,000 comprised of
$100,000 in cash, assumption of approximately $466,000 in trade liabilities and
debt and the issuance of MRV Communications common stock at a fair market value
of approximately $3,750,000. In addition, the Company extended a right to Ace to
sell to the Company up to $400,000 of inventory. Ace, however, could sell that
inventory to other parties if it could receive a higher price. The source of the
funds used for the acquisition was from the proceeds of the Company's public
offering in January 1995. The assets acquired by the Company consisted of fixed
assets, inventory, intangible assets and other assets and rights used in Ace's
business as a manufacturer and distributor of computer connectivity equipment
and related products, and the Company intends to continue to use such assets for
those purposes.
In connection with the acquisition of assets from Ace 400 Communications, Ltd
the Company issued Warrants (the "Ace Warrants" ) to Lipa Meir/Alon Cohen
Trustees to purchase 150,000 shares at $9.15 per share. The Ace Warrants are
exercisable for a period of 5 years. Also in connection with the acquisition of
Ace assets, the Company issued 15,000 Warrants to Benny Glazer who was then an
employee of Ace
28
<PAGE> 32
at a price of $9.33 per share. These Warrants are exercisable for a period of 5
years. In April and May 1996, Lipa Meir/Alon sold all of their shares and
141,500 warrants in a private sale to several parties who are listed in the
Selling Warrant Holders table. See "Principal and Selling Stockholders and
Selling Warrant Holders" below.
INDUSTRY BACKGROUND
FIBER OPTICS
Fiber optic cable is highly transparent glass capable of carrying thousands
of pieces of information simultaneously through light conduction. Laser diodes,
LEDs, and optical transmitting and receiving modules, such as those manufactured
and marketed by the Company, enable the transmission of light over fiber optic
cable.
Since the turn of the century, scientists and engineers have been aware of
the inherent transmission capabilities of optical fibers. In the 1970's
researchers were able to exploit the fiber optic technology for commercial
applications and produce fiber optic cable in commercial quantities. With this
commercialization, fiber optic technology emerged as an alternative medium of
transmission to metallic cable.
During the last 15 years, significant advances have been made in fiber optic
technology resulting in the displacement of metallic cable technology in many
areas of communications. Due to its ability to carry greater quantities of data
and information over greater distances, without interference from power lines,
lightning, or other electrical or radio signals, fiber optic technology has
become the technology of choice for telecommunications, high speed data
communications, cable television, and broadcast-quality television. In addition,
as a result of the extreme difficulty in accessing data transmitted by way of a
fiber optic cable without detection, fiber optic technology has also become an
effective medium of transmission for secure communications in government and
military applications. As a result of these advantages, the market for fiber
optic products continues to grow both domestically and internationally in
several sectors, including: telecommunications; data communications, especially
for LANS; and test and measurement equipment.
TELECOMMUNICATIONS
The most common deployment of fiber optic cable and equipment is currently in
high capacity trunk lines for long distance and inter-exchange
telecommunications. According to Bellcore (Bell Communications Research), in
1993 there were over 8 million kilometers (km) of telecommunications fiber
installed in the United States and, by the year 2000, the installed base is
expected to reach 25 million km. As long distance carriers have installed fiber
optic technology in their networks generally, the Company believes that the
future growth of the fiber optic market will result, in part, from the
conversion of copper cable to higher capacity fiber optic cable and the
installation of new fiber optic cable by the RBOCS, regional carriers, and ALTS.
The Company believes that there will be a substantial increase in the
utilization of fiber optics as the ALTs begin to compete with the RBOCs and the
local telephone companies. In addition, the Company believes that trends such as
dispersion of business offices to suburban and rural areas, increased
telecommuting, and interactive services, including home shopping,
video-on-demand, and video conferencing, will require substantial deployment of
fiber optic cable to neighborhoods and individual subscribers.
The installation of fiber optic cable is also being undertaken
internationally. The Company believes that expanded business demand for global
communications will drive trunk capacity expansion.
DATA COMMUNICATIONS
Local Area Networks. Data communications is currently the fastest growing
sector of the fiber optic market. The proliferation of personal computers
("PCs") and workstations during the 1980s has created an installed base of
millions of users connected to LANS. According to an industry source, by 1994,
over 60 million PCs or 40% of all PCs worldwide, will be connected to a LAN.
Such industry source also forecasts that the average number of users per LAN
will increase from 12 in 1990 to 21 in 1994, reducing the
29
<PAGE> 33
available bandwidth per user by 43%. This reduction comes at a time when the
trend is toward applications that require more network bandwidth per user. Using
fiber optic cable as the transmission medium in such networks enhances the
transmission speed by increasing bandwidth, distance, reliability, and data
integrity of the transmission of data.
Enterprise-wide networks facilitate efficient and rapid data communication
among connected workgroups and provide for more effective utilization of
information and computer resources. This permits the sharing of information and
resources across the organization for applications such as electronic mail,
decentralized databases, multi-site engineering and product development,
transaction processing, and electronic image transfer.
LANs currently rely on one of two primary connection technologies: Ethernet
or Token Ring. Ethernet was introduced in the early 1980s and was subsequently
adopted and promoted by companies such as Digital Equipment Corporation,
Hewlett-Packard Company, and Sun Microsystems, Inc. The wide availability of
Ethernet led to its early and widespread acceptance. Users on Ethernet networks
share a bandwidth of 10 megabits per second ("Mb/s"). Initially, these networks
were developed around a single cable system (bus) and evolved to a star network
topology based on existing twisted-pair wiring. A second connectivity standard,
Token Ring, emerged after Ethernet in the mid-1980s and was introduced and
promoted by IBM as its preferred LAN technology for supporting large data
processing requirements.
The LAN industry is characterized by rapidly changing technology and evolving
industry standards. LAN technology developed as the demand for more bandwidth
grew and now includes several different current and emerging network standards,
including 100 Mb/s Ethernet ("Fast Ethernet") and Asynchronous Transfer Mode
("ATM").
Networks have become increasingly oriented toward client/server computing.
The client/server approach is based upon the use of a central, high-powered
resource (the "server") to serve a number of user stations such as PCs or
workstations (the "clients"). The client/server model is used for such
applications as central file storage and sharing, printer sharing, and database
transaction processing.
LAN Congestion Problems and Ethernet Switching. The rapid advances in
microprocessor and personal computer technology have brought increasingly
powerful applications that are taking advantage of the dramatic rise in raw
computing power. To keep up with the growing number of users and increased
traffic flow on their LANS, network managers have learned to subdivide, or
"segment" their LANs to localize the traffic.
By subdividing the Ethernet LAN into multiple 10Mb/s segments, each with f
ewer devices, LAN segmentation temporarily solved the congestion problem,
because fewer devices are sharing a single 10 Mb/s Ethernet segment. However,
this segmentation increased the need for intersegment connectivity, which was
initially provided through the use of local bridges and routers. Switching
technology provides inter-segment connectivity with higher throughput and lower
delay than local bridges and routers. Ethernet switches allow simultaneous "data
conversations" between multiple 10 Mb/s segments. The technology also allows
network managers to allocate greater bandwidth to centralized servers, thereby
improving throughput in client/server computing.
In comparison to bridges, routers, and other high speed technologies,
Ethernet switches have the following advantages: ease of installation; low cost;
compatibility with existing legacy LAN technologies; use of existing cables; and
no changes at the desktop.
Through the use of fiber optic transceivers, Ethernet switching technology
can be deployed in a building, campus, or metropolitan area. An industry source
has estimated that the total worldwide market for switching hubs will increase
from $90 million in 1993 to more than $550 million in 1998.
High-Speed Networks. The growing importance of LANs and the increasing
complexity of desktop computing applications has fueled the need for high-speed
networks. A number of highspeed LAN technologies have been proposed to provide
greater bandwidth and alleviate traffic "bottlenecks."
30
<PAGE> 34
FDDI. Fiber distributed data interface ("FDDI") is a high speed (100 Mb/s)
LAN standard that was developed in the 1980s to meet the demand for a high
speed, reliable network. This high speed network is based on a fiber optic ring
that extends to up to 500 stations (nodes) and over a total fiber length of 1 00
km. As the use of FDDI becomes more cost effective, the market for fiber optic
cable and components is expected to increase. Presently, several regional and
national carriers are offering FDDI in their MANs for high speed data
transmission.
Fast Ethernet. In 1993, a group of networking companies, including
Cabletron, 3 Corn, Intel, and Synoptics, formed the Fast Ethernet alliance. The
group drafted specifications for the use of Ethernet LAN at the speed of 100
Mb/s, over unshielded and shield twisted pair wiring, as well as over fiber
optic media. Implemented in desktop Ethernet adapter cards, shared hubs, and
switched Ethernet hubs, Fast Ethernet technology allows for simultaneous
implementation of existing 10 Mb/s legacy and 100 Mb/s Fast Ethernet in the same
LAN.
ATM. ATM is now being standardized by the Consultative Committee for
International Telephone and Telegraph and the ATM Forum. ATM can run at speeds
between 25 Mb/s and 622 Mb/s. ATM has the ability to work as a wide area network
and LAN backbone, as well as a desktop solution, and is currently viewed by
industry sources as the most effective choice for merging voice, video, and
data. At higher speeds, such as 622 Mb/s, ATM becomes the ideal backbone for
FDDI and Fast Ethernet networks. Some vendors have already announced technology
that integrates ATM backbones with 10 Mb/s Ethernet, 100 Mb/s Ethernet, and
10/100 Mb/s Ethernet switches for the desktop.
TEST AND MEASUREMENT EQUIPMENT
Fiber optic testing and measuring equipment, primarily hand-held optical
power and "loss" meters, sophisticated fault locators, and optical time domain
reflectometers ("OTDRs") is required to install, operate, and maintain fiber
optic networks. OTDRs are field portable instruments that transmit pulses of
light into an optical fiber and recapture the reflection of the pulses generated
by a laser diode. By analyzing these reflections, the OTDR identifies faulty
connectors and splices, and cable breaks. Management believes that the Company
is currently one of three or four suppliers of pulsed lasers to U.S. OTDR
manufacturers.
Fiber optic testing and measurement equipment is sold primarily in the
telecommunication and data communication markets. Growth in this market segment
is derived from the general demand for optical fiber installations in these
sectors.
BUSINESS STRATEGY AND PRODUCTS
The Company believes that there are significant business opportunities for
emerging fiber optic product and component manufacturing companies as a result
of (i) the need of telecommunications companies, including the RBOCs and the
ALTs competitive therewith, either to replace existing copper cable with higher
capacity fiber optic cable or to expand existing networks, and (II) the use of
fiber optic technology as the communications medium of choice in the data
communications market. The Company believes that its extensive experience with
basic semiconductor optoelectronic technology, its knowledge and understanding
of the telecommunications and data communications markets, and its customer base
afford it a competitive advantage in such industry.
The Company's operating strategy is to capitalize on the commercial
popularity of existing products and to develop and produce an increasing range
of fiber optic communications products, including transmitters, receivers, and
stand-alone products, which enhance distance and bandwidth in telecommunications
networks and LANS. The Company has implemented its operating strategy by
developing and manufacturing highly functional and powerful proprietary laser
diodes and LEDs and by applying its technology to produce stand-alone products
incorporating multiple fiber optic data link modules for use in data
communications. As part of the Company's operating strategy, the Company intends
to use a portion of the net proceeds from this offering to enhance its basic
optoelectronic components technology and to develop and design new subsystem and
stand-alone products for use in the LAN and MAN environment.
31
<PAGE> 35
The Company offers a family of laser diodes and LEDs, data links products,
and stand-alone products.
Laser Diodes and LEDs. Every fiber optic communication system utilizes
semiconductor laser diodes or LEDs as its source of optical power. A laser
diode, the smallest of the commercial laser devices, is a solid state
semiconductor device that efficiently converts electronic signals into pulses of
light of high purity and brightness. By varying the drive current, the light
output is modulated and can carry information in the form of voice, video, or
data signals. The light output of a laser diode travels through an optical fiber
carrying the information over distances ranging from a few meters to 100 km.
Although LEDs function in a manner similar to laser diodes, generally LEDs have
less power and produce a wider spectrum of light than optical laser diodes. The
Company believes that its LEDs, which can carry data over distances in excess of
20 km, are among the most powerful in their wavelength range in terms of optical
power coupled into single mode fiber. There are several applications, such as in
general purpose LANs and in FDDI applications covering distances of up to 20 km,
where the use of LEDs is more appropriate than laser diodes due to cost,
simplicity of drive circuitry, and lower requirements of LEDs with respect to
transmission speed and optical power.
The Company's semiconductor laser diodes are discrete components in the 1,300
manometer (nm) to 1,550 nm (infrared) spectral range. The laser diodes may
contain a thermoelectric cooler (used for temperature stabilization) and a
photo-detector used to monitor the optical output power of the device. For
applications such as multi-channel analog cable television, which requires a
high signal-to-noise ratio for clear pictures, certain of the Company's laser
diodes are supplied with optical isolators that minimize optical reflections,
thus providing reduction in noise level. The Company's discrete components are
provided in various industry standard packages to facilitate mounting on
electronic circuit boards. These packages are also compatible with certain
standard optical interfaces, including fiber 11 pigtail," ST connector, FC/PC
connector, and SC connector. To meet various optical specifications and package
types, the Company manufactures approximately 250 different laser diodes and
LEDs.
Data Links Product Line. In September 1991, the Company introduced an LED or
laser based single mode transmitter/ receiver product line, designed for data
communications applications, including LANs and FDDI. Such product line consists
of products compatible with single mode fiber optic cable, which is more
suitable for long distance and high speed transmission than multimode fiber
optic cable. For example, the Company's single mode laser transmitter operates
over 70 km of fiber at a transmission speed of 125 Mb/s. As most currently
available data link modules are designed for multimode fiber optic cable, the
Company has designed its products to be adaptable, providing for easy conversion
from a multimode type data link to a single mode optical fiber. The devices are
pin compatible with other standard multimode type data links and with industry
standard electrical interfaces, and include additional options such as choice of
wavelength and optical interface. The Company has recently introduced data link
products designed for a synchronous optical network, a telecommunications
transmissional standard ("SONET"), and ATM transmission.
The Company believes that a significant market exists for single mode
transmitter/receivers for transmitting data over long distance at high speeds.
The Company also believes that the price/performance ratio of Rs module level
products have allowed, and will continue to allow, it to compete effectively in
this market segment. Currently, the Company manufactures approximately 150
transmitter/receiver modules, which are utilized in stand-alone products and
systems manufactured by the Company's customers.
32
<PAGE> 36
Figure 1 illustrates an example of a MAN consisting of LANs In five different
locations in a metropolitan area that are connected by way of a high speed fiber
optic network. This type of MAN facilitates efficient and rapid data
communications among connected workgroups. The Company's products (represented
by the triangles) provide the fiber optic transmission between the nodes on the
MAN.
FIGURE 1
ENTERPRISE-WIDE METROPOLITAN AREA NETWORK (MAN)
[GRAPHIC - FLOWCHART]
33
<PAGE> 37
Stand-Alone Products. The Company has developed stand-alone products
for multimode fiber optic cable to single mode fiber optic cable conversion in
the LAN and MAN environments. Single mode fiber optic cable is more suitable for
long distance and high speed transmission than multimode fiber optic cable and
generally requires long wavelength light sources. Introduced in 1992, the
Company's stand-alone products allow the connection, through single mode fiber
optic cable, of remote LANS, Including LANs utilizing FDDI and ATM.
In November 1993, the Company introduced its NBase Switch NH203, a
four port workgroup Ethernet switch. Utilizing a non-blocking, "cut-through"
multiple bus architecture, the NH203 forwards data between four Ethernet
segments, with up to 1,024 users. The NH203, the first of a family of Ethernet
switches, also provides full duplex Ethernet connectivity into servers, to boost
performance in a client/server environment. Full duplex Ethernet allows two
nodes sharing a dedicated segment to simultaneously send and receive data in a
"collision free" mode. Used in conjunction with the Company's single mode fiber
optic cable compatible Ethernet transceivers, full duplex mode also allows the
connection of Ethernet LANs to distances of over 50 km, via single mode fiber
optic cable. The NH203 was recently superseded by the NH204, providing more
advanced features, including support for 2,024 users and network management in
the form of standard-based simple network management protocol software.
In November 1994, the Company announced two new NBase Switch
products supporting the new 100 Mb/s Fast Ethernet standard: The MegaSwitch
NH208 and NH215. The NH208 and NH215 consist of 6 and 13 switched Ethernet
ports, respectively, as well as two 100 Mb/s Fast Ethernet modules. Each
switched Ethernet port can accommodate a single LAN user or and entire network
segment. Up to 4,096 Ethernet users and two Fast Ethernet connections are
supported. The Company plans to introduce modules supporting the 25 Mb/s and 155
Mb/s ATM standard in the future.
Figure 2 illustrates a network in which the Company's Ethernet switch is
used to connect clients to file servers, using high speed, Fast Ethernet. This
network relieves server bottlenecks and alleviates network congestion, while
preserving user's investment in Ethernet network equipment.
FIGURE 2
FAST ETHERNET SWITCH IN A CLIENT/SERVER ENVIRONMENT
[GRAPHIC - FLOW CHART]
34
<PAGE> 38
TECHNOLOGY OVERVIEW
PROPRIETARY CHIP TECHNOLOGY
The Company's three product lines are based upon its proprietary
opto-electronic chip technology. The Company manufactures the chips
incorporating a proprietary composition and geometric structure that gives its
laser diodes and LEDs the following characteristics:
- - Low threshold current. Threshold current is the minimum current
required for the light emitting process to begin. A low threshold current is an
indication of high efficiency and high reliability.
- - Operating temperature in excess of 100(degree) C. The laser diodes and
LEDs are designed to operate at high ambient temperature, which expands the
range of applications and enhances reliability.
- - High Facet Power, in excess of 150mW. Facet power is a measure of the
raw optical intensity of the light generated by the laser diode or LED prior to
coupling into optical fiber.
- High transmission speed. Frequency response above 10 GHz.
- - High linearity. Laser linearity is a significant parameter for analog
applications, such as cable TV and video transmission.
- - High operating current tolerance. The Company's laser chip tolerates
drive current substantially higher than normal operating current, an indication
of the chip's high reliability.
The Company has utilized its chip technology to become, to the
Company's knowledge, one of three or four U.S. semiconductor laser manufacturers
for the OTDR market.
The Company's LEDs are able to couple high power to single mode fiber
optic cable, which enables the LEDs to be used in applications where high power
is required for long distance transmission. For example, fiber optic
transmitters using the Company's LEDs achieved transmission distances in excess
of 20 km at data rates of 125 Mb/s.
PROPRIETARY PACKAGING TECHNIQUE
The Company has developed a proprietary method for fiber optic cable
and active device alignment, which maximizes coupling efficiency between the
light emerging from the laser chip and the single mode fiber optic cable. This
technology also enhances long-term power stability over a wide range of
temperatures, thus enabling devices to operate at temperatures above 90(degree)
C and to be stored at temperatures exceeding 130(degree) C. This feature is
significant for devices, such as portable testing and measuring equipment, that
must operate under severe environmental conditions.
PROPRIETARY LAN SWITCHING TECHNOLOGY
The Company has developed expertise in the areas of high speed
network switching, network management software, and network traffic
optimization. The Company has developed products based on its proprietary
switching technology that improve network throughput and enhance the distance
for which fiber optic cable is an effective transmission medium. In addition,
the Company has developed a proprietary flow control technology that prevents
loss of data when destination segments are too congested to receive new data
traffic from the switch. The Company believes that by developing products
combining its switching technology with its fiber optic transmission technology
it can increase performance and lower LAN interconnection delays in campus and
metropolitan area fiber networks.
MARKETING AND SALES
The Company has established a direct and indirect sales and
distribution network to serve the fiber optic component and instrumentation
markets. The Company markets its products directly in the United States
35
<PAGE> 39
and Canada to systems and instruments manufacturers, and indirectly through
independent manufacturers' representatives, VARS, and system integrators.
International marketing is conducted primarily by approximately 80 independent
distributors.
UNITED STATES DIRECT SALES
In order to meet the needs of customers with diverse and complex
fiber optic transmission, measurement, and computer networking requirements, the
Company markets and sells its products in the United States through its in-house
sales force. The Company believes that direct sales communication with customers
results in better service and also provides the Company with a better
understanding of customers' current and future needs.
UNITED STATES INDIRECT SALES
The Company currently utilizes independent manufacturers'
representatives on a commission basis to supplement its domestic sales efforts.
As of December 31, 1995, the Company had arrangements with two manufacturers'
representatives which are terminable upon 60 days prior notice. The Company
intends to seek agreements with additional manufacturers' representatives.
INTERNATIONAL SALES
For the years ended December 31, 1994 and 1995, approximately 19% and
45%, respectively, of the Company's revenues were attributable to international
sales. The Company's international sales force is composed of two full-time
sales people located In Germany and England. International sales are made
primarily, however, through approximately 80 independent distributors in Europe,
the Middle East, and the Far East. To the extent that certain of such
relationships are based upon written agreements, some of such distribution
agreements provide for exclusive distribution rights within certain territories,
such agreements generally do not require the distributors to purchase minimum
quantities of the Company's products; such agreements are, however, generally
terminable by the Company upon 60 days notice. The Company is currently
negotiating with additional distributors to expand its international network.
Sales to foreign distributors are subject to government controls and other risks
associated with international sales, including difficulties in obtaining export
licenses, fluctuations in currency exchange rates, political instability, trade
restrictions, and changes in duty rates. Although the Company has not
experienced any material difficulties related to such factors to date, there can
be no assurance that it will not experience material difficulties in the future.
Additionally, foreign countries may impose restrictions on the ability of
foreign manufacturers to change or terminate distributors. Although the Company
is not aware of any restrictions in those countries where it currently has
agreements, there can be no assurance that such restrictions will not be adopted
in the future or that the Company will not enter into distribution agreements in
other countries where such restrictions have been adopted. As a result of its
recent acquisitions, the Company obtained additional sales offices and personnel
in Israel and Europe. These resources are being utilized to expand the sales of
MRV's LAN products as well as to continue sales of some products previously
marketed by Galcom Networking, Ltd and Ace 400 Communications, Ltd. The Company
receives payment for its products in U.S. dollars. The Company has not entered
into any forward exchange contracts or otherwise engaged in any hedging
activities.
MAJOR CUSTOMERS
The Company has sold its products worldwide to over 500 customers. The
Company anticipates that these parties will continue to be major customers in
the foreseeable future. The loss of any of these major customers, however, could
have a material adverse effect on the Company's business. Management believes
that if the Company continues to expand and diversify its product lines and
customer base, of which there can be no assurance, its reliance in the future on
any single customer or small groups of customers will not be as significant.
Current customers include:
36
<PAGE> 40
DATA COMMUNICATIONS VIDEO/VOICE COMMUNICATIONS
ADC/Fibermux Corp. Industrial Technology
Racal Datacom The Grass Valley Group
Optical Data Systems General Instruments
Bay Networks Optelecom
Cisco Systems
Network Systems Corporation
Pandacom
RAD
Retix
Lannet
Canoga Perkins
Nichimen Data Systems
Nortel
Connectware
Anixter
TELECOMMUNICATIONS INSTRUMENTATION
Broadband Network Laser Precision Corp.
Reliance Electric Exfo Engineering, Inc.
Asea Brown Boveri 3M/Photodyne
Photon Technology (China) Photon Kinetics
Kingfisher International PTY, Ltd.
Wandell & Goltermann
Noyes
RESEARCH AND DEVELOPMENT
The market for fiber optic components and data links is characterized by
rapidly changing technology and customer requirements. The Company has focused
on developing (I) high performance chip structures, device packaging, and single
mode fiber alignment technology, (II) opto-electronic transmitter/receiver
technology, and (III) LAN switching technology. The Company believes its future
success depends in part upon its ability to continue to enhance its existing
products and to develop new products. The Company has devoted, and will be
required to continue to devote, significant resources to the development of new
transmission /reception devices and data links to address specific market needs,
such as SONET and ATM, and to expand the Company's stand-alone product line. The
Company also expanded its stand-alone product line to include Ethernet switching
and fiber optic multimode to single mode converters.
MANUFACTURING
The Company's manufacturing operations are currently located at the Company's
headquarters in Chatsworth, California and in Yokneam Israel. The Company's
manufacturing operations consist of (1) a wafer processing facility for
semiconductor, laser diode, and LED chip manufacturing, (II) high precision
optical, electronic, and mechanical assembly, and (iii) final assembly and
testing. Many of the key processes used in the Company's products are
proprietary. Consequently, many of the key components of the Company's products
are designed and produced internally. Although the Company generally uses only
standard parts and raw materials, certain parts and components are available
from only a limited number of suppliers. The Company's policy is to maintain a
reserve of necessary parts and raw materials to help minimize any disruption to
the Company as a result of temporary unavailability of such parts or raw
materials or delays in the receipt thereof by the Company. An inability of the
Company to obtain limited source components in adequate quantities on a timely
basis could have a material adverse effect on the Company's operating results.
In addition, operating results could be materially adversely affected by the
receipt of a significant number of defective components, a delay in component
delivery, an increase in
37
<PAGE> 41
component prices, or the inability of the Company to obtain lower component
prices in response to competitive pressures on the pricing of the Company's
products. To date, the Company has generally been able to obtain adequate
supplies of all of its parts and raw materials in a timely manner from existing
sources at competitive prices.
The Company relies exclusively on its own production capability for critical
semiconductor lasers and LEDs used in its products. These semiconductor devices
are manufactured under stringent and accurate procedures using state-of-the-art
wafer fabrication technology. Because the Company manufactures these and other
key components of its products at its own facility and such components are not
readily available from other sources, any interruption of the Company's
manufacturing process could have a material adverse effect on the Company's
operations. Furthermore, the Company has a limited number of employees dedicated
to the operation and maintenance of its wafer fabrication equipment, the loss of
any of whom could result in the Company's inability to effectively operate and
service such equipment. Wafer fabrication is sensitive to a wide variety of
factors, including variations and impurities in the raw materials, difficulties
in the fabrication process, performance of the manufacturing equipment, defects
in the masks used to print circuits on a wafer, and the level of contaminants in
the manufacturing environment. There can be no assurance that the Company will
be able to maintain acceptable production yields and avoid product shipment
delays. In the event adequate production yields are not achieved resulting in
product shipment delays, the Company's business, financial condition, and
results of operations could be materially adversely affected. The Company has
not experienced problems with production yields and has not incurred any
material product shipment delays. There can be no assurance that such events
will not occur in the future.
The Company assembles all of its opto-electronic products. Relevant assembly
processes include die attach, wirebond, substrate attachment, and fiber
coupling. The Company also conducts tests throughout its manufacturing process
using commercially available and in-house built testing systems that incorporate
proprietary procedures. The Company performs final product tests on 100% of its
products prior to shipment to customers.
The Company is subject to a variety of federal, state, and local governmental
regulations related to the storage, use, discharge, and disposal of toxic,
volatile, or otherwise hazardous chemicals used in its manufacturing process.
There can be no assurance that changes in environmental regulations will not
result in the need for additional capital equipment or other requirements.
Further, such regulations could restrict the Company's ability to expand its
operations. Any failure by the Company to obtain required permits for, control
the use of, or adequately restrict the discharge of, hazardous substances under
present or future regulations could subject the Company to substantial liability
or could cause its manufacturing operations to be suspended. Such liability or
suspension of manufacturing operations could have a material adverse effect on
the Company's operating results. The Company has not incurred any material costs
in complying with federal, state and local environmental requirements to date.
However, no assurance can be given that such costs will not be incurred in the
future.
BACKLOG
At December 31, 1995, the Company's backlog of orders was approximately
$7,940,000, as compared to a backlog of approximately $4,270,000 at December 31,
1994. The Company expects to fill this backlog within the next 12 months. All of
these orders are subject to cancellation without penalty, and there can be no
assurance that the orders comprising the backlog will be shipped or that orders
will not be canceled in whole or in part.
COMPETITION
The fiber optic components, computer networking, and telecommunications
industries are highly competitive and subject to rapid technological change. The
Company believes that the principal competitive factors in the market for fiber
optic components and instruments and data links are: (i) support for multiple
optical interfaces; (ii) power; (iii) wavelengths; (iv) electrical interface
standards; (v) mechanical packaging; (vi) price; and (vii) reliability. The
Company believes that its products are favorably priced compared to equivalent
products currently available from its competitors. In addition, management
believes that its LEDs
38
<PAGE> 42
and LED based transmitters offer substantially greater power in their wavelength
range and greater reliability than competing products. Based on its assessment
of the price/performance ratio of competitive products, the Company believes
that its products currently compare favorably with similar products, although
there can be no assurance that they will continue to do so.
The Company's current competitors include AT&T, NEC, Hewlett Packard, Ortel,
Mitsubishi, Fujitsu, and other companies that offer or have announced similar
products. Some of these competitors have substantially greater financial,
marketing, technical, human, and other resources than the Company, which may
give such competitors certain competitive advantages, including the ability to
negotiate lower prices on raw materials and components than those available to
the Company. There can be no assurance that the Company will be able to compete
successfully with existing or future competitors or that competitive pressures
faced by the Company will not materially and adversely affect the business,
operating results, and financial condition of the Company.
PROPRIETARY RIGHTS AND LICENSES
The Company holds no patents and has not filed any patent applications with
respect to its technology. The Company currently relies on unpatented
proprietary know-how, which may be duplicated, and employs various methods,
including confidentiality agreements with employees, to protect its proprietary
know-how. Such methods may not afford complete protection, however, and there
can be no assurance that others will not independently develop such know-how or
obtain access to it. If any patent applications are filed by the Company, there
can be no assurance that any patents will be issued, or, if issued, would
provide the Company with meaningful protection from competition. In addition,
there can be no assurance that the Company's products will not be found to
infringe on any patent held by others. In the event that any such products are
found to so infringe, the Company would be required to seek a license with
respect to such patented technology, or incur substantial costs to redesign the
infringing products. There can be no assurance that any such license would be
available on terms acceptable to the Company or at all, that any of the
Company's products could be redesigned on an economical basis or at all, or that
any such redesigned products would be competitive with the products of the
Company's competitors.
WARRANTIES
The Company provides a limited one-year warranty on equipment and parts and,
to date, has not experienced any significant warranty claims. Products sold
under the NBase Switch trademark are warranted for between one and three year
periods.
EMPLOYEES
As of December 31, 1995, the Company had 207 full-time employees, including
five executive officers, 106 in production, 32 in marketing and sales, 31 in
research and development, and 38 in general administration. In addition, the
Company had five part-time employees working in production. None of the
Company's employees are represented by a union or governed by a collective
bargaining agreement, and the Company believes its relationship with its
employees is satisfactory.
FACILITIES
The Company's administrative, sales and marketing, R&D, and manufacturing
facility is located in Chatsworth, California. The facility covers approximately
17,700 square feet and is leased from an unaffiliated landlord at an annual base
rent of approximately $106,000 (plus local taxes) for a lease term expiring
March 19, 1999. In addition, the Company leases additional space near its
primary facility --Chatsworth -- consisting of approximately 5,000 square feet
from an unaffiliated landlord at an annual base rent of approximately $43,000.
The lease term expires in July 1995 and is renewable for consecutive one-year
terms on an annual basis.
The Company also leases space in Gaithersburg, Maryland for its sales office
and warehouses. This facility covers approximately 3,150 square feet and is
leased from an unaffiliated landlord at an annual base rent of approximately
$36,000 per year (plus local taxes) for a lease term expiring May, 1996.
39
<PAGE> 43
The Company's administrative, sales and marketing, R&D, and manufacturing
operations in Israel are located in Tel Aviv, Yokneam and Barkan in facilities
that cover approximately 30,000 square feet and are leased for total annual base
rents of approximately $156,000. All of the leases for facilities in Israel
expire within less than one year and the Company is presently negotiating
alternative locations in which to merge the operations.
The Company also leases a facility in Lenexa, Kansas consisting of 7,000
square feet. This facility is being shut down. The Company anticipates it may be
required to pay $50,000 to terminate the lease on this facility. This facility
was used for sales, marketing and warehousing. However, the facility is being
shut down because the Company is consolidating the operations of the Kansas
facility with that of its Maryland facility.
The Company believes that its present facilities are sufficient to meet its
current needs.
LITIGATION
The Company is not party to any material litigation.
40
<PAGE> 44
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The current executive officers and directors of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Noam Lotan(1).................................. 44 President, Chief Executive Officer,
Director
Shlomo Margalit(1)............................. 54 Chairman of the Board of Directors, Chief
Technical Officer, and Secretary
Zeev Rav-Noy(1)................................ 48 Chief Operating Officer, Treasurer, and
Director
Edmund Glazer.................................. 36 Vice President of Finance and
Administration, Chief Financial Officer
Khalid (Ken) Ahmad............................. 43 Vice President of Marketing and Sales
Ofer Iny....................................... 28 Vice President of Engineering
Leonard Mautner(2)(3).......................... 77 Director
Milton Rosenberg(2)(3)......................... 72 Director
</TABLE>
- ------------------
(1) Member of the Executive Committee.
(2) Member of the Compensation Committee.
(3) Member of the Audit Committee.
Each director is elected for a period of one year at the Company's annual
meeting of stockholders and serves until the next annual meeting and until his
successor is duly elected and qualified. Officers are elected by, and serve at
the discretion of, the Board of Directors. The members of the Board of Directors
who are not employees of the Company receive cash compensation of $800 per month
and $500 for each Board of Directors meeting attended, while serving as
directors.
The principal occupations of each director and executive officer of the
Company for at least the past five years are as follows:
Noam Lotan has been the President, Chief Executive Officer, and a Director of
the Company since May 1990 and became Chief Financial Officer of the Company in
October 1993. From March 1987 to January 1990, Mr. Lotan was Managing Director
of Fibronics (UK) Ltd., the United Kingdom subsidiary of Fibronics International
Inc. ("Fibronics"), a manufacturer of fiber optic communication networks. From
January 1985 to March 1987, Mr. Lotan was a Director of European Operations for
Fibronics. Prior to such time, Mr. Lotan held a variety of sales and marketing
positions with Fibronics and Hewlett-Packard. Mr. Lotan holds a Bachelor of
Science degree in Electrical Engineering from the Technion, the Israel Institute
of Technology, and a Masters degree in Business Administration from INSEAD (the
European Institute of Business Administration, Fontainebleu, France).
Dr. Shlomo Margalit, a co-founder of the Company, has been Chairman of the
Board of Directors and Chief Technical Officer since the Company's inception in
July 1988. From May 1985 to July 1988, Dr. Margalit was a founder and Vice
President of Research and Development for LaserCom, Inc. ("LaserCom"), a
manufacturer of semiconductor lasers. From 1982 to 1985, Dr. Margalit was a
Senior Research Associate at the California Institute of Technology ("Caltech"),
and from 1976 to 1982, a Visiting Associate at Caltech. From 1972 to 1982, Dr.
Margalit was a faculty member and Associate Professor at the Technion. During
his tenure at the Technion, Dr. Margalit was awarded the "Israel Defense" prize
for his work in developing infrared detectors for heat guided missiles and the
David Ben Aharon Award for Novel Applied Research. Dr. Margalit holds a Bachelor
of Science degree, a Masters degree, and a Doctor of Science degree (Ph.D.) in
Electrical Engineering from the Technion.
41
<PAGE> 45
Dr. Zeev Rav-Noy, a co-founder of the Company, has been its Chief Operating
Officer and a Director of the Company since inception and was its President
until May 1990. From May 1985 to July 1988, Dr. Rav-Noy was a founder and Vice
President of Operations of LaserCom and, from 1982 to 1985, was a research
fellow at Caltech. From 1979 to 1982 Dr. Rav-Noy served as a consultant to a
number of companies, including Tadiran Electronic Industries, Inc., an Israeli
telecommunication, military, and consumer electronics conglomerate, and the Yeda
Research and Development Co. Ltd., a technology exploitation and application
company affiliated with the Weizman Institute in Israel. Dr. Rav-Noy holds a
Bachelor of Science degree and a Masters degree in physics from Tel Aviv
University, and a Ph.D. in Applied Physics from the Weizman Institute in Israel.
Edmund Glazer was appointed as Vice President of Finance and Administration and
Chief Financial Officer in June 1995. He has been with the company since October
1994 serving as Operations Manager. In 1993 and 1994 Mr Glazer was a consultant
providing document imaging and information systems to clients. From 1986 to 1993
Mr Glazer was Vice President of Finance at Concord Electrical Supply, a
distributor of electrical and electronic products. From 1984 to 1986 Mr Glazer
worked as a CPA at Singer, Lewak Greenbaum & Goldstein, CPA's. From 1981 to 1984
Mr Glazer worked as an auditor for Weber, Lipshie & Co. CPA's. In 1983 Mr Glazer
obtained qualification as a Certified Public Accountant from the State of
California. Mr Glazer holds a Bachelor of Science Degree in Business
Administration from the University of Southern California.
Khalid (Ken) Ahmad has been Vice President of Marketing and Sales since July
1990 and an Executive Officer since May 1992. From April 1990 to July 1990, Mr.
Ahmad was a consultant to the Company. From January 1990 to March 1990, Mr.
Ahmad was a consultant to Welwyn Microcircuits, a British hybrid manufacturer,
providing market research information on fiber optic technology. In 1988 and
1989, Mr. Ahmad was marketing manager and regional sales manager for STC
Components, a manufacturer of opto-electronic components. From 1985 to 1988, he
was marketing operations manager for PCO, Inc. a manufacturer of
opto-electronics devices and data links. From 1977 to 1985, Mr. Ahmad also held
a variety of marketing and sales management positions with Canoga Data Systems
and Deutsch. Mr. Ahmad holds a Bachelor of Science degree in Biology from
California State University at San Bernardino.
Ofer Iny has been Vice President of Engineering of the Company since May
1994. From January 1993 to May 1994, he was a consultant to the Company. From
September 1991 to January 1993, Mr. Iny was a researcher at Jet Propulsion
Laboratory, Microgravity and Microwave Group. From May 1990 to March 1992, Mr.
Iny was Senior Engineer at Whittaker Electronic Systems, a manufacturer. Mr. Iny
holds a Bachelor of Science degree in Physics from California State University,
Northridge, and a Masters degree in Physics from University of California, Los
Angeles ("UCLA").
Leonard Mautner has been an advisor to the Company since its inception and
was elected a Director in March 1992. Mr. Mautner is President of Leonard
Mautner Associates, a management consulting company, which he founded in 1973,
and in addition, from 1982 to 1988, was a visiting lecturer at the Anderson
School of Management of UCLA. Mr. Mautner is also a Director of two mutual
funds, the First Pacific Advisors Perennial Fund and the First Pacific Advisors
Paramount Fund. From 1969 to 1979, Mr. Mautner was a General Partner of Goodman
& Mautner, Ltd., a venture capital partnership, and President of Goodman &
Mautner, Inc., the partnership's investment manager. Mr. Mautner holds a
Bachelor of Science degree in Electrical Engineering from the Massachusetts
Institute of Technology.
Milton Rosenberg has been an advisor to the Company since its inception and
was elected a Director in March 1992. He is President of M. R. Associates, an
investment and consulting company, which he founded in 1978. For the past 15
years, Mr. Rosenberg has been a director of Bell Industries, a New York Stock
Exchange company engaged in the distribution of electronics components. Mr.
Rosenberg has also been a director of Iomega Corporation, a manufacturer of data
storage devices, since its inception in 1980. Mr. Rosenberg has been a
consultant to high technology companies for over 20 years, Mr. Rosenberg holds a
Bachelor of Science degree in Electrical Engineering from Drexel University and
did graduate course work in Electrical Engineering at Princeton University.
42
<PAGE> 46
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee reviews and acts on matters relating to,
among other things, compensation levels and benefit plans for key executives of
the Company. The committee consists of Messrs. Mautner and Rosenberg. Neither of
Messrs. Mautner or Rosenberg are affiliated with other companies that have
current business relationships with the Company.
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding compensation
paid by the Company for services rendered during each of the fiscal years shown
in the table to the Company's Chief Executive Officer and its executive officers
other than the Chief Executive Officer whose annual compensation exceeded
$100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------
LONG TERM
FISCAL COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS AWARDS
- --------------------------- ---- ------ ----- ------
<S> <C> <C> <C> <C>
Noam Lotan, ............................... 1995 $100,000 $ 0 0
President and Chief Executive Officer 1994 100,000 1,000 0
1993 100,000 -- 0
Zeev Rav-Noy, ............................. 1995 110,000 60,000 0
Chief Operating Officer and Treasurer 1994 110,000 60,000 0
1993 110,000 46,000 0
Shlomo Margalit, .......................... 1995 110,000 ___ 0
Chief Technical Officer and Secretary 1994 110,000 -- 0
1993 110,000 -- 0
Ken Ahmad, ................................ 1995 90,000 24,750 75,000*
Vice President of Marketing and Sales 1994 90,000 36,000 0
1993 90,000 18,000 0
</TABLE>
* Ken Ahmad holds options to purchase 75,000 shares of Common Stock. In
accordance with the Company's Incentive Stock Plan these options vest
yearly in equal portions on January 13, 1996, 1997 and 1998 respectively.
None of the other executive officers set forth in the table above hold any
options to purchase shares.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------------------
NUMBER OF
SECURITIES PERCENT OF
UNDERLYING TOTAL OPTIONS/
OPTIONS/ SARS GRANTED EXERCISE OR
SARS TO EMPLOYEES BASE PRICE EXPIRATION
NAME GRANTED(#) IN FISCAL YEAR ($/SH) DATE
- ---- ---------- -------------- ------ ----
<S> <C> <C> <C> <C>
Ken Ahmad 75,000 7.5% $7.25 1/13/2000
</TABLE>
43
<PAGE> 47
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTIONS/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES VALUE UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/
ACQUIRED ON REALIZED OPTIONS/SARS AT SARS AT DECEMBER 31, 1995
NAME EXERCISE (#) ($) DECEMBER 31, 1995 ($)
- ---- ------------ --- ------------------------------- ------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ken Ahmad -0- -0- 25,000 50,000 230,133 460,267
</TABLE>
LIMITATION ON LIABILITY AND INDEMNIFICATION MATTERS
The Company's Certificate of Incorporation includes a provision that
eliminates or limits the personal financial liability of the Company's
directors, except in situations where there has been a breach of the director's
duty of loyalty to the Company or its stockholders, acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, liability under Section 174 of the Delaware General Corporation Law
("Section 174") relative to unlawful payment of dividends, stock purchases or
redemptions, or any transaction from which the director derived an improper
personal benefit. Furthermore, Section 174 eliminates monetary liability for
gross negligence in exercising the duty of due care related to the directors'
fiduciary duties under state corporate law, however, such section does not
eliminate monetary liability of directors under the federal Securities laws. In
addition, the Company's Bylaws include provisions to indemnify its officers and
directors and other persons against expenses, judgments, fines and amounts paid
in settlement in connection with threatened, pending or completed suits or
proceedings against such persons by reason of serving or having served as
officers, directors or in other capacities, except that in relation to matters
with respect to which such persons shall be determined to be liable for
misconduct or negligence in the performance of their duties, the Company's
Bylaws provide for identification only to the extent that the Company determines
that such person acted in good faith and in a manner not opposed to the best
interests of the Company. Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors, officers or
persons controlling the Company pursuant to the foregoing provisions, the
Company has been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against the public policy as expressed in the
Act and is therefore unenforceable.
EMPLOYMENT AGREEMENTS
In March 1992, the Company entered into three-year employment agreements with
Mr. Lotan, Dr. Margalit, and Dr. Rav-Noy. Pursuant to the agreements, Mr. Lotan
serves as President, Chief Executive Officer, Chief Financial Officer, and a
Director of the Company, Dr. Margalit serves as Chairman of the Board of
Directors, Chief Technical Officer, and Secretary, and Dr. Rav-Noy serves as a
Chief Operating Officer, Treasurer, and a Director. Mr. Lotan, Dr. Margalit, and
Dr. Rav-Noy receive base annual salaries of $100,000, $110,000, and $110,000,
respectively, and each is entitled to receive a bonus determined and payable at
the discretion of the Board of Directors upon the recommendation of the
Compensation Committee of the Board. Recommendations with respect to bonus
levels are based on achievement of specified goals, such as new product
introductions, profitability levels, revenue goals, market expansion, and other
criteria as established by the Compensation Committee. Each officer also
receives employee benefits, such as vacation, sick pay, and insurance, in
accordance with the Company's policies. The Company has obtained, and is the
beneficiary of, key man life insurance policies in the amount of $1,000,000 on
the lives of each of Drs. Margalit and Rav-Noy and Mr. Lotan. All benefits under
these policies will be payable to the Company upon the death of an insured. In
November 1994, each of Mr. Lotan and Drs. Margalit and Rav-Noy agreed to extend
the term of their respective employment agreement until March 1998.
In August 1990, the Company and Mr. Ahmad executed a letter of employment
outlining the terms of Mr. Ahmad's employment as Vice President of Marketing and
Sales, at a base salary of $53,000 per annum plus commissions based upon sales
targets. In May 1992, Mr. Ahmad was elected an executive officer of the Company.
For the year ended December 31, 1993, Mr. Ahmad's base salary was $90,000 and he
earned commissions of approximately $18,000. Mr. Ahmad's employment is at will.
44
<PAGE> 48
STOCK OPTION PLAN
On March 27, 1992, the Board of Directors and stockholders of the Company
adopted the Plan, which provides for the grant to employees, officers,
directors, and consultants of options to purchase up to 450,000 shares of
Common Stock, consisting of both "incentive stock options" within the meaning of
Section 422 of the United States Internal Revenue Code of 1986, as amended (the
"Code"), and non-qualified options. Incentive stock options are issuable only to
employees of the Company, while non-qualified options may be issued to
non-employee directors, consultants, and others, as well as to employees of the
Company. In February 1995, the Board expanded the plan by 450,000 shares. In
June 1995, the stockholders approved the expansion of the plan.
Under the Plan, the Compensation Committee has the authority to determine the
persons to whom options will be granted, the number of shares to be covered by
each option, whether the options granted are intended to be incentive stock
options, the duration and rate of exercise of each option, the option price per
share, the manner of exercise, and the time, manner, and form of payment upon
exercise of an option.
The exercise price per share of Common Stock subject to incentive stock
options may not be less than the fair market value of the Common Stock on the
date the option is granted. The exercise price per share of Common Stock subject
to non-qualified options will be established by the Board of Directors. The
aggregate fair market value (determined as of the date the option is granted) of
the Common Stock that any employee may purchase in any calendar year pursuant to
the exercise of incentive stock options may not exceed $100,000. No person who
owns, directly or indirectly, at the time of the granting of an incentive stock
option to him, more than 10% of the total combined voting power of all classes
of stock of the Company shall be eligible to receive any incentive stock options
under the Plan unless the exercise price is at least 110% of grant.
Non-qualified options are not subject to this limitation.
No incentive stock option may be transferred by an optionee other than by
will or the laws of descent and distribution and, during the lifetime of an
optionee, the option will be exercisable only by the optionee. In the event of
termination of employment other than by death or disability, the optionee will
have three months after such termination or until the expiration of such option,
whichever occurs first, to exercise the option. Upon termination of employment
of an optionee by reason of death or permanent total disability, options remain
exercisable for one year thereafter or until the expiration of such option,
whichever occurs first, to the extent they were exercisable on the date of such
termination. No similar limitation applies to non-qualified options.
Stock options under the Plan must be granted within 10 years from the
effective date of the Plan. Incentive stock options granted under the Plan
cannot be exercised more than 10 years from the date of grant, except that
incentive stock options issued to 10% or greater stockholders are limited to
five year terms. All options granted under the Plan provide for the payment of
the exercise price in cash or by delivery to the Company of shares of Common
Stock already owned by the optionee having a fair market value equal to the
exercise price of the options being exercised, or by a combination of such
methods of payment. Therefore, an optionee may be able to tender shares of
Common Stock to purchase additional shares of Common Stock and may theoretically
exercise all of his stock options without making any additional cash investment.
Any unexercised options that expire or that terminate upon an employee's
ceasing to be employed With the Company become available once again for
issuance. At September 30, 1995, options for 394,700 were outstanding under the
Plan.
CERTAIN TRANSACTIONS
Between January 1, 1993 and October 31, 1994 the Company loaned Zeev Rav-Noy,
its Chief Operating Officer and Treasurer and a Director of the Company, an
aggregate of approximately $130,000. The largest amount owed by Dr. Rav-Noy to
the Company during the years ended December 31, 1993, December 31, 1994 was
approximately $56,000 and $65,000 respectively. Amounts advanced to Dr. Rav-Noy
bore no interest. Prior to December 31, 1994, Dr. Rav-Noy had repaid all amounts
owed by him to the Company.
45
<PAGE> 49
PRINCIPAL AND SELLING STOCKHOLDERS AND SELLING WARRANT HOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of March 31, 1996, of (1) each person known
by the Company to own beneficially 5% or more of the Common Stock, (II) each
current director of the Company, (III) each executive officer listed in
"Management - Executive Compensation," (iv) each Selling Stockholder and Selling
Warrant Holder, and (v) all current directors and executive officers as a group.
<TABLE>
<CAPTION>
SHARES SHARES
BENEFICIALLY OWNED NUMBER OF BENEFICIALLY OWNED
BEFORE OFFERING(1) SHARES AFTER OFFERING(1)
NAME AND ADDRESS NUMBER PERCENT BEING SOLD NUMBER PERCENT
- ---------------- ------ ------- ---------- ------ -------
<S> <C> <C> <C> <C> <C>
Shlomo Margalit ........................ 1,024,465 10.8 -- 1,024,465 10.8
c/o MRV Communications, Inc.
8917 Fullbright Avenue
Chatsworth, CA 91311
Zeev Rav-Noy ........................... 988,465 10.4 -- 988,465 10.4
c/o MRV Communications, Inc.
8917 Fullbright Avenue
Chatsworth, CA 91311
Noam Lotan ............................. 487,843 5.1 -- 487,843 5.1
c/o MRV Communications, Inc.
8917 Fullbright Avenue
Chatsworth, CA 91311
Ken Ahmad (2) .......................... 126,231 1.3 -- 126,231 1.3
c/o MRV Communications, Inc.
8917 Fullbright Avenue
Chatsworth, CA 91311
Leonard Mautner ........................ 38,137 * -- 38,137 *
1434 Sixth Street, Suite 10
Santa Monica, CA 90401
Milton Rosenberg (3) ................... 27,105 * -- 27,105 *
10975 Torreyana Road, Suite 304
San Diego, CA 92121
All Directors and Executive Officers ... 2,701,246 28.2 -- 2,701,246 28.2
as a group (eight persons)(4)
TOTAL .................................. 9,524,293 -- 9,524,293
</TABLE>
- ---------------
* Less than one percent.
(1) Pursuant to the rules of the Securities and Exchange Commission, shares of
Common Stock that an individual or group has a right to acquire within 60
days pursuant to the exercise of options or warrants are deemed to be
outstanding for the purpose of computing the percentage ownership of such
individual or group, but are not deemed to be outstanding for the purpose
of computing the percentage ownership of any other person shown in the
table.
(2) Includes 24,999 shares issuable pursuant to stock options exercisable
within 60 days from the date hereof.
(3) Includes 12,000 shares issuable pursuant to stock options exercisable
within 60 days from the date hereof.
(4) Includes 45,999 shares issuable pursuant to stock options exercisable
within 60 days from the date hereof.
<TABLE>
<CAPTION>
SHARES SHARES
BENEFICIALLY OWNED NUMBER OF BENEFICIALLY OWNED
BEFORE OFFERING(1) SHARES AFTER OFFERING(1)
SELLING STOCKHOLDERS NUMBER PERCENT BEING SOLD NUMBER PERCENT
- -------------------- ------ ------- ---------- ------ -------
<S> <C> <C> <C> <C> <C>
Everest Capital International Ltd. 254,997 3.7 254,997 --
Alavardo Partners 37,659 * 37,659 --
Arntz Builders Partners 1,200 * 1,200
Banque de Gestion E. de Rothschild, Luxembourg 4,000 * 4,000 --
Banque de Gestion E. de Rothschild, Luxembourg 5,000 * 5,000 --
Banque Privee Edmond de Rothschild/Geneva 30,000 * 30,000 --
Banque Privee Edmond de Rothschild/Geneva 5,000 * 5,000 --
CUS Trust 18,000 * 18,000 --
David Koch 329 * 329 --
</TABLE>
46
<PAGE> 50
<TABLE>
<S> <C> <C> <C> <C>
Elizabeth D. Holiday - IRA 450 * 450 --
Ince & Co. 15,000 * 15,000 --
Ince & Co. 8,000 * 8,000 --
J Steven Emerson 23,000 * 23,000 --
Jonathan Andron 1,050 * 1,050 --
Mark Riez 1,500 * 1,500 --
Northview Trading 3,000 * 3,000 --
Robert Danloy Vrancken II 1,500 * 1,500 --
Spencer Allen - IRA 150 * 150 --
Tom Zimberoff - IRA 150 * 150 --
Aharon Orlansky 479 * 479 --
Banque Privee Edmond Rothschild/Geneva 9,000 * 9,000 --
Banque de Gestion E. de Rothschild, Luxembourg 8,000 * 8,000 --
</TABLE>
<TABLE>
<CAPTION>
ADDRESSES OF SELLING STOCKHOLDERS
<S> <C>
Banque Privee Edmond de Rothschild/Geneva c/o Brown Brothers Harriman
59 Wall Street
New York, NY 10005
Banque de Gestion E. de Rothschild, Luxembourg BBH New York
59 Wall Street
New York, NY 10005
Ince & Co. Morgan Guaranty Trust New York
55 Exchange Level A
New York, NY 10260
Northview Trading Banque Financiere de la Cite
P.O. Box 5030
1211 Geneve 11
Switzerland
CUS Trust Custodial Trust Co.
101 Carnegie Ctr.
Princeton, NJ 08540
Spencer Allen - IRA Andron Capital Management
3650 Mt. Diablo Blvd., Sutie 103
Lafayette, CA 94549
Arntz Builders Partners Andron Capital Management
3650 Mt. Diablo Blvd., Sutie 103
Lafayette, CA 94549
Elizabeth D. Holiday - IRA Andron Capital Management
3650 Mt. Diablo Blvd., Sutie 103
Lafayette, CA 94549
Tom Zimberof - IRA Andron Capital Management
3650 Mt. Diablo Blvd., Sutie 103
Lafayette, CA 94549
Jonathan Andron Andron Capital Management
3650 Mt. Diablo Blvd., Sutie 103
Lafayette, CA 94549
Robert Danloy Vrancken II Robert Danloy Vrancken II
2548 Fettersmill Rd.
Huntingdon, PA 19006
Banque Privee Edmond Rothschild, Luxembourg Banque Privee Edmont Rothschild Luxembourg
c/o Brown Brothers, Harriman & Co.
59 Wall Street
New York, NY 10005
Banque Privee Edmond Rothschild/Geneva Borwn Brothers Harriman
59 Wall Street
New York, NY 10005
</TABLE>
47
<PAGE> 51
<TABLE>
<S> <C>
Ince & Co. c/o Morgan Guaranty Trust New York
La Cie Financiere E. Rothschild Banque
55 Exchange Level A
New York, NY 10260
Mark Riez Mark Riez
6 rue de Villersexel
75007 Paris
France
David Koch David Koch
55 Argyle Rd.
Scarsdale, NY 10583
J Steven Emerson J. Steven Emerson
10506 Ilona Avenue, Suite 1410
Los Angeles, CA 90064
Alavardo Partners Alvarado Partners
1 Embarcadero Ctr Suite
2330 San Francisco, CA 94111
Everest Capital Everest Capital
Corner house, 20 Parliament St.
Hamilton
HM 12
Bermuda
</TABLE>
- -------------------
(1) Pursuant to the rules of the Securities and Exchange Commission, shares of
Common Stock that an individual or group has a right to acquire within 60
days pursuant to the exercise of options or warrants are deemed to be
outstanding for the purpose of computing the percentage ownership of such
individual or group, but are not deemed to be outstanding for the purpose
of computing the percentage ownership of any other person shown in the
table.
<TABLE>
<CAPTION>
SHARES SHARES
BENEFICIALLY OWNED NUMBER OF BENEFICIALLY OWNED
BEFORE OFFERING(1) SHARES AFTER OFFERING(1)
SELLING WARRANTHOLDERS NUMBER PERCENT BEING SOLD NUMBER PERCENT
---------------------- ------ ------- ---------- ------ -------
<S> <C> <C> <C> <C> <C>
Hampshire Securities 21,807 * 21,807 --
Corporation
William E. Aaron 1,687 * 1,687 --
Michael Stein 1,687 * 1,687 --
Caesar Fraschilla 3,000 * 3,000 --
Aharon Orlansky 37,312 * 37,312 --
Jeffrey M. Berman 23,772 * 23,772 --
Leo T. Abbe 23,772 * 23,772 --
Richard K. Abbe 23,772 * 23,772 --
John H. Starr 10,189 * 10,189 --
Phillipe Scwarz 8,500 * 8,500 --
Danny Yelin 8,499 * 8,499 --
Yakov Sfadya 8,500 * 8,500 --
Benny Glazer 15,000 * 15,000 --
Nathan Shilo, Trustee 495,000 * 495,000 --
GEM Design 18,000 * 18,000 --
Jacques Cory 22,500 * 22,500 --
David Koch 3,000 * 3,000 --
Oscar Gruss & Son 3,000 * 3,000 --
Northview Trading Ltd 1,500 * 1,500 --
Heidron Engler 3,000 * 3,000 --
Robert Coane 3,000 * 3,000 --
Jeanette Coane Cust for Robert 1,500 * 1,500 --
Coane Jr.
Jeanette Coane Cust for Mary 1,500 * 1,500 --
Coane
</TABLE>
48
<PAGE> 52
<TABLE>
<S> <C> <C> <C> <C>
Jeanne Coane Cust for Kevin 1,500 * 1,500 -
Coane
Daryl Hagler 26,250 * 26,250 -
Timothy Essaye 7,500 * 7,500 -
Oscar Gruss & Sons 3,750 * 3,750 -
Dave Koch 1,500 * 1,500 -
Bill Musser 30,000 * 30,000 -
Isabelle Orlansky 6,000 * 6,000 -
Isabelle Orlansky 22,500 * 22,500 -
Northview Trading Ltd 3,750 * 3,750 -
Dara Kiely 1,500 * 1,500 -
James Powers 2,250 * 2,250 -
Steven Rosner 3,750 * 3,750 -
Terence Lambert 750 * 750 -
Lipa Mier/Alon Cohen Trustees 8,500 * 8,500 -
Everest Capital 32,500 * 32,500 -
Mark Riez 1,500 * 1,500 -
James C. Power 2,450 * 2,450 -
Jay Tucker 1,500 * 1,500 -
Barker Lee & Co. 2,550 * 2,550 -
J.M.R. Barker Foundation 2,250 * 2,250 -
Quaker Hill Associates, L.P. 600 * 600 -
Upland Associates, L.P. 1,350 * 1,350 -
Namakagon Associates, L.P. 3,750 * 3,750 -
David Koch 750 * 750 -
Jean Michel Nahon 7,500 * 7,500 -
Lucien Selle 2,250 * 2,250 -
Perlman Assoicates 30,000 * 30,000 -
J.J. Newport 15,000 * 15,000 -
James C. Powers 3,750 * 3,750 -
Jay Tucker 3,000 * 3,000 -
Daniel Perlman 1,200 * 1,200 -
Bank of the West Trustee 600 * 600 -
Tom Callahan 1,500 * 1,500 -
CUS Trust 10,000 * 10,000 -
Alvarado Partners 10,000 * 10,000 -
Perlman & Associates 7,500 * 7,500 -
Ahraon Orlanksy 9,180 * 9,180 -
GME Designs 7,500 * 7,500 -
The Excelsior Fund 50,000 * 50,000 -
Jim Powers 1,000 * 1,000 -
J. Steven Emerson 5,000 * 5,000 -
Banque de Gestion G De 5,000 * 5,000 -
Rothschild Luxembourg
Joel Packer 3,000 * 3,000 -
Banque Privee Edmond de 50,000 * 50,000 -
Rothschild S.A./Geneva
Sergio Ciambllini 15,000 * 15,000 -
Elio Bianchi 15,000 * 15,000 -
Everest Capital International Ltd. 71,000 * 71,000 -
Bill Klepper 3,750 * 3,750 -
Mark Allen 3,000 * 3,000 -
TOTAL 1,238,927 * 1,238,927 -
</TABLE>
49
<PAGE> 53
ADDRESSES OF SELLING WARRANT HOLDERS
J.M.R. Barker Foundation J.M.R. Barker Foundation
Quaker Hill Associates, L.P. Quaker Hill Associates, L.P.
Upland Associates, L.P. Upland Associates, L.P.
Namakagon Associates, L.P. Namakagon Associates, L.P.
Barker Lee & Company
530 Fifth Avenue
2nd Floor
New York, NY 10036
Joel Packer Joel Packer
531 Main Street
New York, NY 10044
Tom Callahan Tom Callahan
12 North Bridge Place
Convent Station, NJ 07961
CUS Trust Custodial Trust Co.
101 Carnegie Ctr.
Princeton, NJ 08540
Dara Kiely Dara Kiely
1 North Tweed Blvd.
Upper Grand View, NY 10960
The Excelsior Fund The Excelsior Fund
7616 North 69th Place
Paradise Valley, AZ 85253
Steven Rosner Steven Rosner
1220 Mirabeau La
Gladwyne, PA 19035
Terence Lambert Terence Lambert
155 So. Bay Avenue
Brightwaters, NY 11718
Heidron Engler Heidron Engler
301 E. 64th St. Apt. 2A
New York, NY 10021
Bill Musser Bill Musser
New Frontier
91 93rd Avenue, 6th Floor
New York, NY 10022
Robert Coane Robert Coane
Jeanette Coane Cust for Kevin Coane Jeannette Coane Cust for Kevin
Jeanette Coane Cust for Mary Coane Coane
Jeanette Coane Cust for Robert Coane, Jr. Jeannette Coane Cust for Mary
Coane
Jeannette Coane Cust for Robert
Coane Jr.
46 West Lane
Bay Shore, NY 11706
J. Steven Emerson J. Steven Emerson
10506 Ilona Ave.
Suite 1410
Los Angeles, CA 90064
Daryl Hagler Daryl Hagler
12 Dike Dr.
Wesley Hills, NY 10952
Timothy Essaye Timothy Essaye
3339 Cardinal Drive
Vero Beach, LA 32963
Oscar Gruss & Sons Oscar Gruss & Sons
74 Broad St., 5th Floor
New York, NY 10004
Isabelle Orlansky Isabelle Orlansky
201 E. 62nd St., Apt. 10A
New York, NY 10021
David Koch David Koch
55 Argyle Rd.
Scarsdale, NY 10583
50
<PAGE> 54
Jean Michel Nahon Jean Michel Nahon
7616 North 69th Place
Paradise Valley, AZ 85253
Lucien Selle Banque Financiere de la Cite
Attn: Mr. Nerfin
P.O. Box 5030
1211 Geneve 11
Switzerland
Perlman Associates Perlman Associates
539 Dusie Avenue
Closter, NJ 07624
JJ Newport JJ Newport
111 Broadway 3rd Flr.
c/o Andrew Nicollett
New York, NY 10006
James C. Power James C. Powers
345 E. 80 St. Apt. 185
New York, NY 10021
Jay Tucker Jay Tucker
325 E. 80 Apt. 185
New York, NY 10006
Daniel Perlman Daniel Perlman
2731 Broadway, Apt. 3E
New York, NY 10025
Bank of the West Trustee Bank of the West
50 West San Fernando
San Jose, CA 95113
Marki Riez Mark Riez
6 Rue de Villersexel
75007 Paris
France
James C. Powers James C. Powers
345 E. 80 St., Apt. 185
New York, NY 10021
Jay Tucker Jay Tucker
325 E. 79th Apt. 15B
New York, NY 10021
Everest Capital Everest Capital
Corner house, 20 Parliament St.
Hamilton
HM 12
Bermuda
Banque Privee Edmond Rothschild Banque Privee Edmond Rothschild
Luxembourg Luxembourg
c/o Brown Brothers, Harriman & Co.
59 Wall Street
New York, NY 10005
Banque Privee Edmond Rothschild/Geneva Brown Brothers Harriman
59 Wall Street
New York, NY 10005
Alvarado Partners Alvarado Partners
1 Embarcadero Ctr.
Suite 2330
San Francisco, CA 94111
Northview Trading Banque Financiere de la Cite
P.O. Box 5030
1211 Geneve 11
Switzerland
Elio Bianchi Elio Bianchi
Sergio Ciambellini Sergio Ciambellini
Via Oropa, 3
20132 Milano
Italy
51
<PAGE> 55
Bill Klepper Bill Klepper
c/o MRV Communications, Inc.
8943 Fullbright Ave.
Chatsworth, CA 91311
Mark Allen Mark Allen
29 Loring Drive
Norwell, MA 02061
Some of the Selling Stockholder and Selling Warrant Holders are transferees.
See "Business-Recent Acquisitions" and "Description of Securities and
Warrants-Warrants."
- -------------------
(1) Pursuant to the rules of the Securities and Exchange Commission, shares of
Common Stock that an individual or group has a right to acquire within 60
days pursuant to the exercise of options or warrants are deemed to be
outstanding for the purpose of computing the percentage ownership of such
individual or group, but are not deemed to be outstanding for the purpose
of computing the percentage ownership of any other person shown in the
table.
52
<PAGE> 56
DESCRIPTION OF SECURITIES AND WARRANTS
The authorized capital stock of the Company consists of 20,000,000 shares of
Common Stock, par value $0.0067 per share, and 1,000,000 shares of Preferred
Stock, par value $0.01 per share. As of May 10, 1996, there were 9,588,437
shares of Common Stock outstanding.
COMMON STOCK
The holders of Common Stock are entitled to one vote per share on all matters
submitted to a vote of stockholders. Holders of Common Stock also are entitled
to receive ratably such dividends as may be declared by the Board of Directors
out of funds legally available therefore, subject to preferences that may be
applicable to any outstanding Preferred Stock. In the event of liquidation,
dissolution, or winding up of the Company, holders of Common Stock are entitled
to share ratably in all assets remaining after payment of liabilities and the
liquidation preference of any outstanding Preferred Stock. Holders of Common
Stock have no preemptive, subscription, redemption, conversion, or cumulative
voting rights. All the outstanding shares of Common Stock are, and the shares of
Common stock offered hereby will be, when issued against the consideration set
forth in this Prospectus, validly authorized and issued, fully paid, and
nonassessable.
PREFERRED STOCK
Pursuant to the Company's Articles of Incorporation, the Board of Directors
has the authority to issue 1,000,000 shares of Preferred Stock in one or more
series and to fix the powers, designations, preferences, and relative,
participating, optional, or other rights thereof, including dividend rights,
conversion rights, voting rights, redemption terms, liquidation preferences, and
the number of shares constituting any series, without any further vote or action
by the Company's stockholders. The issuance of Preferred Stock in certain
circumstances may have the effect of delaying, deferring, or preventing a change
of control of the Company without further action by the stockholders, may
discourage bids for the Common Stock at a premium over the market price of the
Common Stock, and may adversely affect the market price of, and the voting and
other rights of the holders of, the Common Stock. The Company has no shares of
Preferred Stock outstanding and has no plans to issue any such shares.
Warrants
In January 1995, the Company issued to Hampshire Securities the
Representative's Warrants to purchase up to 150,000 shares at $11.20 per share
in connection with a public offering made by the Company and certain selling
stockholders. Hampshire Securities subsequently made an assignment of a portion
of the Representative's Warrants covering 126,693 shares among eight persons who
are principals of Hampshire Securities. The Representative's Warrants provide
certain rights with respect to the registration under the Securities Act of such
warrants and the Warrant Shares. The holders of a majority of such warrants and
the Warrant Shares may require the Company to file a registration statement
under the Securities Act with respect to such warrants and shares. In addition,
if the Company registers any of the Common Stock either for its own account or
for the account of other security holders, the holders of the Representative's
Warrants and the Warrant Shares are entitled to include such securities in the
registration. This 150,000 shares underlying the Representative's Warrants are
included in this Prospectus.
In June 1994, the Company filed a registration statement with respect to the
Issuance of 1,466,250 shares of Common Stock issuable upon exercise of the IPO
Warrants issued in connection with the Company's initial public offering of
December 7, 1992 and the Thomas James warrants to purchase 42,500 units, each
unit consisting of four and a half shares of Common Stock and three IPO
Warrants, held by Thomas James. The IPO Warrants were exercisable at $3.33 per
share at any time until June 7, 1995 and were exercisable thereafter at $4.00
per share until December 7, 1997, unless previously redeemed. The Company sold
the Thomas James Warrants to Thomas James at the closing of the Company's
initial public offering. The Thomas James Warrants are exercisable at a price of
$10.40 per unit at any time until December 7, 1997. On October 27, 1994, the
Company called for redemption the IPO Warrants (excluding those underlying the
Thomas James Warrants) at the redemption price of $0.03 per IPO Warrant.
Pursuant to the terms of such redemption, the holders of the IPO Warrants had
the right, on or before November 25, 1994, to exercise the IPO Warrants for
shares of Common Stock at an exercise price
53
<PAGE> 57
of $3.33 per share. As of December 31, 1995, 1,463,883 IPO Warrants had been
exercised, respectively. Except as set forth below, all other IPO Warrants were
redeemed. As of December 31, 1995, Thomas James had exercised 63,750 of the
Thomas James Warrants and 115,320 of the IPO Warrants underlying the Thomas
James Warrants.
On January 15, 1992, the Company entered into an agreement with MRI pursuant
to which MRI provided certain financial and management services and under which
the Company issued MRI a four-year warrant to purchase up to 18,750 shares of
Common Stock at the exercise price of $3.20 per share. The Company registered
the shares of Common Stock underlying the warrant after December 7, 1994. MRI
has exercised all of the Warrants.
In connection with its initial public offering in 1992, the Company issued
warrants to purchase an aggregate of 52,500 shares of Common Stock to the
holders of certain bridge notes. Each warrant entitled the holder to purchase
one share of Common Stock at a per share exercise price of $0.53 over a
five-year period expiring in January 1997. The Company registered the shares
underlying such warrants after December 7, 1994. The bridge note holders have
exercised 48,750 of the Warrants.
Selling Warrant Holders
Of the 1,238,927 shares being sold by the Selling Warrant Holders, the
Warrants are comprised of the following:
In January 1995, the Company issued to Hampshire Securities the
Representative's Warrants to purchase up to 150,000 Shares at $11.20 per share
in connection with a public offering made by the Company and certain selling
stockholders. Hampshire Securities subsequently made an assignment of a portion
of the Representative's Warrants to the following eight persons who are
principals of Hampshire Securities: William E. Aaron, warrants to purchase 1,687
shares; Michael Stein, warrants to purchase 1,687 shares; Ceaser Franschilla,
warrants to purchase 3,000 shares; Aharon Orlansky, warrants to purchase 38,812
shares; Jeffrey M. Berman, warrants to purchase 23,772 shares; Leo T. Abbe,
warrants to purchase 23,772 shares; Richard K. Abbe, warrants to purchase 23,772
shares; and John H. Starr, warrants to purchase 10,189 shares. The Company
retained Representative's Warrants to purchase 23,307 shares. The
Representative's Warrants are exercisable for a period of 3 years. The 150,000
shares underlying the Representative's Warrants are included in this Prospectus.
In connection with the acquisition of assets from Galcom Networking, Ltd the
Company issued Warrants (the "Galcom Warrants") to purchase 112,500 shares at
prices ranging from $9.83 to $14.75 per share. The Galcom Warrants are
exercisable for a period of 5 years. The 112,500 shares underlying the Galcom
warrants are included in this Prospectus. Also in connection with the
acquisition of Galcom assets, the Company issued 37,500 Warrants to Messrs.
Henri Telner, Philipe Scwarc, Danny Yellin, Yakov Sfadya, who were then
employees of Galcom, at prices ranging from $8.5 to $9.50 per share. These
Warrants are exercisable for a period of 5 years. This Prospectus also covers
those Warrants.
In connection with the acquisition of assets from Ace 400 Communications, Ltd
the Company issued Warrants (the "Ace Warrants" ) to Lipa Meir/Alon Cohen
Trustees to purchase 150,000 shares at $9.15 per share. The Ace Warrants are
exercisable for a period of 5 years. Also in connection with the acquisition of
Ace assets, the Company issued 15,000 Warrants to Benny Glazer who was then an
employee of Ace at a price of $9.33 per share. These Warrants are exercisable
for a period of 5 years. This Prospectus also covers those Warrants.(1)
In July 1995, the Company issued to Nathan Shilo Trustee, Warrants "Israel
Warrants", in an incentive plan for employees and consultants of its subsidiary
in Israel. The plan called for the issuance of Warrants to purchase up to
495,000 shares at prices ranging from $8.50 to $9.50. The Israel Warrants will
vest in one third increments over a three year period and each increment is
exercisable for five years after it has vested. This Prospectus also covers
those Warrants.
- --------
(1) These Warrants were transferred. See "Business-Recent Acquisitions."
54
<PAGE> 58
In July 1995, the Company entered into an agreement with an individual named
Jacques Cory "Cory" pursuant to which Cory will provide certain financial and
management services. In connection with this agreement the Company issued Cory
Warrants to purchase up to 22,500 shares of Common Stock at the exercise price
of $8.50 per share. The Warrants will vest in one third increments over a three
year period and are exercisable for five years after each increment has vested.
This Prospectus also covers those Warrants.
In July 1995, the Company issued Warrants to GME Design, Inc. " GME Warrants"
to purchase up to 18,000 shares of Common Stock at the exercise price of $8.50
per share. These Warrants were issued in connection with services to be rendered
in the design of components for the Company's LAN products. The GME Warrants are
exercisable for five years. This Prospectus also covers those Warrants.
In January 1996, the Company issued Warrants to GME Design to purchase 5,000
shares at exercise price of $25.25 per share. These Warrants were for design
services. These Warrants are included in this registration statement.
In January 1996, the Company issued 143,330 Warrants to Ciambellini and
Associates to purchase Common Stock at an exercise price of $25.25 per share for
a term of five years. The Warrants were issued in exchange for the right to
acquire 50% interes in an Italian networking business. This right was exercised
in May 1996. The 50% interest in the assets and operating income of the acquired
business amounted to less than 10% of the assets and operating loss of MRV for
the December 31, 1995 fiscal year. The Warrants are included in the current
registration statement.
In January 1996, the Company issued 16,667 Warrants to purchase Common Stock
to Israeli and European business consultants at an exercise price of $25.25, for
a term of five years. The Warrants were issued for consulting services.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Common Stock is American Stock
Transfer & Trust Co., New York, New York.
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, the Company will have 10,827,364 shares of
Common Stock outstanding, assuming the exercise of the Warrants in full. The
1,666,391 shares included in this Prospectus will be freely tradeable without
further registration under the Securities Act.
Of the 10,827,364 shares of Common Stock to be outstanding following this
offering, assuming the exercise of the Warrants in full, 2,627,004 shares are
"restricted securities" within the meaning of Rule 144 of the Securities Act.
All of such shares are currently eligible for sale in the public market in
reliance upon, and in accordance with, the provisions of Rule 144. In general,
under Rule 144 as currently in effect, a person (or persons whose shares are
aggregated), including a person who may be deemed to be an "affiliate" of the
Company as that term is defined under the Securities Act, would be entitled to
sell within any three month period a number of shares beneficially owned for at
least two years that does not exceed the greater of (1) 1% of the then
outstanding shares of Common Stock, or (11) the average weekly trading volume in
the Common Stock during the four calendar weeks preceding such sale. Sales under
Rule 144 are also subject to certain requirements as to the manner of sale,
notice, and the availability of current public information about the Company.
However, a person who is not deemed to have been an affiliate of the Company
during the 90 days preceding a sale by such person and who has beneficially
owned shares of Common Stock for at least three years may sell such shares
without regard to the volume, manner of sale, or notice requirements of Rule
144.
The Company cannot predict the effect, if any, that sales of shares of Common
Stock pursuant to Rule 144 or otherwise, or the availability of such shares for
sale, will have on the market price prevailing from time to time. Nevertheless,
sales by the current stockholders of a substantial number of shares of Common
Stock in the public market could adversely affect prevailing market prices for
the Common Stock. In
55
<PAGE> 59
addition, the availability for sale of a substantial number of shares of Common
Stock acquired through the exercise of the Representative's Warrants could
adversely affect prevailing market prices for the Common Stock.
Up to 150,000 shares of Common Stock may be purchased by through the exercise
of the Representative's Warrants. Any and all shares of Common Stock purchased
upon exercise of the Representative's Warrants may be freely tradeable, provided
that the Company satisfies certain securities registration and qualification
requirements in accordance with the terms of the Representative's Warrants.
56
<PAGE> 60
PLAN OF DISTRIBUTION
Selling Stockholders and Selling Warrant Holders
The Selling Stockholders and the Selling Warrant Holders may sell all or a
portion of the Shares offered hereby from time to time in brokerage transactions
in the over-the-counter market prices at terms prevailing at the times of such
sales. The Selling Stockholders and the Selling Warrant Holders may also make
private sales directly or through brokers or make sales pursuant to Rule 144
under the Securities Act. The Selling Stockholders and the Selling Warrant
Holders may individually pay customary brokerage commissions and expenses. In
connection with any sales, the Selling Stockholders and the Selling Warrant
Holders and any brokers participating in such sales may be deemed to be
underwriters within the meaning of the Securities Act, in which event
commissions received by such brokers may be deemed underwriting commissions
under the Securities Act. The Selling Stockholders and the Selling Warrant
Holders may utilize Hampshire Securities as a broker to effectuate sales for
them.
Included in the 1,238,927 Shares being offered by the Selling Warrant Holders
are 150,000 Shares (the "Warrant Shares") being offered by Hampshire Securities
Corporation ("Hampshire Securities"). Hampshire Securities was the
representative of the underwriters in the Company's public offering in January
1995 and the Company issued Hampshire Securities warrants (the "Representative's
Warrants") to purchase the Warrant Shares at $11.20 per share, 140% of the
initial public offering price. Hampshire Securities subsequently made an
assignment of a portion of the Representative's Warrants covering 126,693
Warrant Shares among eight persons who are principals of Hampshire Securities.
Under the Exchange Act and the regulations thereunder, any person engaged in
a distribution of the Shares of the Company offered by this Prospectus (other
than any broker-dealer qualifying as a "passive market-maker" and effecting
transactions in accordance with Rule 10b-6A under the Exchange Act) may not
simultaneously engage in market making activities with respect to the Shares of
the Company during the applicable "cooling off" periods prior to the
commencement of such distribution. In addition, without limiting the foregoing,
each Selling Warrant Holders and Selling Stockholders will need to comply with
the applicable provisions of the Exchange Act and the rules and regulations
thereunder including, without limitation, Rules 10b-6 and 10B-7, which
provisions may limit the timing of purchases and sales of Shares by such Selling
Warrant Holders or Selling Stockholders.
LEGAL MATTERS
The validity of the Common Stock being offered hereby will be passed upon for
the Selling Stockholders and Selling Warrant Holders by Freshman, Marantz,
Orlanski, Cooper & Klein, Beverly Hills, California.
EXPERTS
The audited financial statements of the Company, ACE 400 Communications Ltd
and Galcom Networking, Ltd., included in this prospectus and elsewhere in the
registration statement have been audited by Arthur Andersen LLP, Ratzkovsky
Fried and Co., and Almagor & Co., respectively, independent public accountants,
as indicated in their reports with respect thereto, and are included herein in
reliance upon the authority of said firms as experts in giving said reports.
57
<PAGE> 61
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Public Accountants F-2
Consolidated Balance Sheets as of December 31, 1994 and 1995, and March 31, 1996
(unaudited):
Assets F-3
Liabilities and Stockholders' Equity F-4
Consolidated Statements of Operations for each of the
three years in the period ended December 31, 1995, and the
unaudited three month periods ended March 31, 1995 and 1996 F-5
Consolidated Statements of Stockholders' Equity for each of the three years in
the period ended December 31, 1995, and
the unaudited three month period ended March 31, 1996 F-6
Consolidated Statements of Cash Flows for each of the three F-7
years in the period ended December 31, 1995, and the and
unaudited three month periods ended March 31, 1995 and 1996 F-8
Notes to Consolidated Financial Statements F-9
through
F-21
The consolidated financial statements as of March 31, 1996, and for the
three month periods ended March 31, 1995 and 1996, are unaudited.
The information required by the applicable financial statement schedules has
been disclosed in the financial statements and notes thereto and,
accordingly, the schedules have been omitted.
</TABLE>
F-1
<PAGE> 62
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To MRV Communications, Inc.:
We have audited the accompanying consolidated balance sheets of MRV
COMMUNICATIONS, INC. (a Delaware corporation) and Subsidiaries as of December
31, 1994 and 1995, and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1995. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MRV Communications, Inc. and
Subsidiaries as of December 31, 1994 and 1995, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1995 in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Los Angeles, California
February 9, 1996
F-2
<PAGE> 63
MRV COMMUNICATIONS, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, MARCH 31,
1994 1995 1996
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 4,045,000 $ 1,951,000 $ 2,678,000
Restricted cash - 6,272,000 4,714,000
Short-term investments 2,736,000 1,000,000 1,000,000
Accounts receivable, net of allowance of
$300,000 in 1994, $825,000 in 1995 and
$807,000 in 1996 4,446,000 10,780,000 12,942,000
Loans receivable from officers 42,000 10,000 -
Inventories 2,666,000 8,382,000 9,882,000
Deferred income taxes 372,000 804,000 804,000
Other current assets 708,000 598,000 899,000
------------ ------------ ------------
Total current assets 15,015,000 29,797,000 32,919,000
------------ ------------ ------------
PROPERTY AND EQUIPMENT, at cost:
Machinery and equipment 852,000 1,655,000 1,908,000
Furniture and fixtures 12,000 66,000 76,000
Computer hardware and software - 795,000 883,000
Leasehold improvements 27,000 102,000 109,000
------------ ------------ ------------
891,000 2,618,000 2,976,000
Less--Accumulated depreciation and
amortization (295,000) (558,000) (641,000)
------------ ------------ ------------
596,000 2,060,000 2,335,000
------------ ------------ ------------
OTHER ASSETS:
U.S. Treasury note 1,000,000 - -
Deferred income taxes - 925,000 925,000
Goodwill, net of accumulated
amortization of $42,000 in 1995
and $59,000 in 1996 - 525,000 508,000
Other 56,000 - -
------------ ------------ ------------
1,056,000 1,450,000 1,433,000
------------ ------------ ------------
$ 16,667,000 $ 33,307,000 $ 36,687,000
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
F-3
<PAGE> 64
MRV COMMUNICATIONS, INC.
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, MARCH 31,
1994 1995 1996
----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
CURRENT LIABILITIES:
Current portion of capital lease obligations $ - $ 33,000 $ 31,000
Accounts payable 2,485,000 4,342,000 5,958,000
Accrued liabilities 422,000 2,188,000 1,621,000
Income taxes payable 790,000 1,215,000 1,484,000
Customer deposits 15,000 - -
----------- ----------- -----------
Total current liabilities 3,712,000 7,778,000 9,094,000
----------- ----------- -----------
LONG-TERM LIABILITIES:
Accrued severance pay - 191,000 249,000
Capital lease obligations, net of
current portion - 34,000 30,000
Deferred rent 49,000 46,000 40,000
----------- ----------- -----------
Total long-term liabilities 49,000 271,000 319,000
----------- ----------- -----------
COMMITMENTS (Note 5)
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value:
Authorized - 1,000,000 shares;
no shares issued or outstanding - - -
Common stock, $0.0067 par value:
Authorized - 20,000,000 shares
Issued and outstanding - 7,605,340
shares in 1994, 9,524,293 in 1995
and 9,587,714 in 1996 51,000 63,000 64,000
Capital in excess of par value 9,878,000 23,491,000 23,627,000
Retained earnings 2,977,000 1,704,000 3,583,000
----------- ----------- -----------
12,906,000 25,258,000 27,274,000
----------- ----------- -----------
$16,667,000 $33,307,000 $36,687,000
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
F-4
<PAGE> 65
MRV COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, MARCH 31,
1993 1994 1995 1995 1996
------------ ------------ ------------ ------------ -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
REVENUES, net: $7,426,000 $17,526,000 $39,202,000 $6,737,000 $15,529,000
COSTS AND EXPENSES:
Cost of goods sold 3,936,000 10,328,000 22,608,000 4,260,000 8,989,000
Research and development
expenses 1,103,000 2,144,000 4,044,000 702,000 1,684,000
Selling, general and
administrative expenses 1,259,000 2,615,000 6,799,000 917,000 2,136,000
Purchased technology in
progress - - 6,211,000 - -
Restructuring costs - - 1,465,000 - -
---------- ----------- ----------- ---------- -----------
6,298,000 15,087,000 41,127,000 5,879,000 12,809,000
---------- ----------- ----------- ---------- -----------
Operating
income (loss) 1,128,000 2,439,000 (1,925,000) 858,000 2,720,000
---------- ----------- ----------- ---------- -----------
OTHER INCOME (EXPENSE):
Interest income 198,000 210,000 641,000 227,000 80,000
Interest expense - - (102,000) - -
Other - (48,000) 115,000 - -
---------- ----------- ----------- ---------- -----------
198,000 162,000 654,000 227,000 80,000
---------- ----------- ----------- ---------- -----------
Income (loss)
before provision
for income taxes 1,326,000 2,601,000 (1,271,000) 1,085,000 2,800,000
PROVISION FOR INCOME TAXES 487,000 983,000 2,000 380,000 921,000
---------- ----------- ----------- ---------- -----------
NET INCOME (LOSS) $ 839,000 $ 1,618,000 $(1,273,000) $ 705,000 $ 1,879,000
========== =========== =========== ========== ===========
EARNINGS (LOSS) PER COMMON
SHARE INFORMATION:
Primary earnings (loss)
per common share $ .14 $ .26 $ (.14) $ .08 $ .18
========== =========== =========== ========== ===========
Fully diluted earnings
(loss) per common share $ .14 $ .25 $ (.14) $ .08 $ .18
========== =========== =========== ========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING:
Primary 6,025,084 6,284,001 9,188,737 8,834,375 10,706,357
========== =========== =========== ========== ===========
Fully diluted 6,025,084 6,357,741 9,188,737 8,834,375 10,706,357
========== =========== =========== ========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
F-5
<PAGE> 66
MRV COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
CAPITAL IN
SHARES COMMON EXCESS OF RETAINED
OUTSTANDING STOCK PAR VALUE EARNINGS TOTAL
--------- ------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
BALANCE,
December 31, 1992 5,885,625 $39,000 $ 4,393,000 $ 520,000 $ 4,952,000
Net income - - - 839,000 839,000
--------- ------- ----------- ----------- -----------
BALANCE,
December 31, 1993 5,885,625 39,000 4,393,000 1,359,000 5,791,000
Issuance of common
stock, due to
exercise of stock
warrants, net of
related expenses 1,719,715 12,000 5,485,000 - 5,497,000
Net income - - - 1,618,000 1,618,000
--------- ------- ----------- ----------- -----------
BALANCE,
December 31, 1994 7,605,340 51,000 9,878,000 2,977,000 12,906,000
Issuance of common
stock in connection
with the secondary
public offering 1,350,000 9,000 9,346,000 - 9,355,000
Issuance of common
stock in connection
with the acquisition
of ACE 400 Communications 427,465 2,000 3,908,000 - 3,910,000
Issuance of common
stock, due to
exercise of stock
warrants and options 141,488 1,000 359,000 - 360,000
Net loss - - - (1,273,000) (1,273,000)
--------- ------- ----------- ----------- -----------
BALANCE,
December 31, 1995 9,524,293 63,000 23,491,000 1,704,000 25,258,000
Issuance of common
stock, due to
exercise of stock
options 63,421 1,000 136,000 - 137,000
Net income - - - 1,879,000 1,879,000
--------- ------- ----------- ----------- -----------
BALANCE,
March 31, 1996 9,587,714 $64,000 $23,627,000 $ 3,583,000 $27,274,000
========= ======= =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-6
<PAGE> 67
MRV COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, MARCH 31,,
1993 1994 1995 1995 1996
------------ ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) $ 839,000 $ 1,618,000 $(1,273,000) $ 705,000 $ 1,879,000
Adjustments to reconcile
net income (loss)to net
cash provided by
(used in) operating
activities:
Depreciation and
amortization 68,000 97,000 305,000 41,000 77,000
Provision for losses
on accounts
receivable 50,000 270,000 525,000 75,000 -
Gain on sale of
property
and equipment - - (6,000) - -
Realized loss on
investment - 48,000 - - -
Purchased technology
in progress - - 5,691,000 - -
Amortization of
premium paid for
U.S. Treasury notes 12,000 8,000 8,000 - -
Changes in assets
and liabilities,
net of effects from
acquisitions:
Decrease (increase)
in:
Accounts
receivable (609,000) (3,417,000) (6,859,000) (1,008,000) (2,162,000)
Inventories (439,000) (2,077,000) (5,397,000) (1,421,000) (1,500,000)
Deferred income
taxes (44,000) (282,000) (1,357,000) (7,000) -
Other assets (51,000) (618,000) 166,000 433,000 (301,000)
Increase (decrease)
in:
Accounts payable 111,000 1,584,000 1,457,000 (164,000) 1,616,000
Accrued
liabilities 38,000 266,000 154,000 (55,000) (567,000)
Income taxes
payable 53,000 421,000 425,000 (90,000) 269,000
Customer deposits (46,000) (18,000) (15,000) - -
Accrued severance
pay - - (19,000) - 58,000
Deferred rent 36,000 13,000 (3,000) - (6,000)
--------- ----------- ----------- ----------- -----------
Net cash
provided by
(used in)
operating
activities 18,000 (2,087,000) (6,198,000) (1,491,000) (637,000)
--------- ----------- ----------- ----------- -----------
</TABLE>
F-7
<PAGE> 68
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, MARCH 31,
1993 1994 1995 1995 1996
----------- ----------- ------------ ------------ ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchases of property
and equipment (155,000) (410,000) (1,035,000) (212,000) (335,000)
Proceeds from sale of
property and equipment - - 14,000 - -
Purchases of investments (2,965,000) (1,000,000) (22,013,000) (20,966,000) -
Proceeds from sale of
investments 2,474,000 1,676,000 24,741,000 10,713,000 -
Restricted cash - - (6,272,000) - 1,558,000
Net cash used in
acquisitions - - (1,000,000) - -
----------- ----------- ------------ ------------ ----------
Net cash
provided by
(used in)
investing
activities (646,000) 266,000 (5,565,000) (10,465,000) 1,223,000
----------- ----------- ------------ ------------ ----------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Net proceeds from
issuance of common
stock - 5,497,000 9,715,000 9,555,000 137,000
Principal payments on
notes payable (92,000) (42,000) - - -
Principal payments on
capital lease
obligations - - (78,000) - (6,000)
Loans receivable from
officers (79,000) 37,000 32,000 42,000 10,000
----------- ----------- ------------ ------------ ----------
Net cash
provided by
(used in)
financing
activities (171,000) 5,492,000 9,669,000 9,597,000 141,000
----------- ----------- ------------ ------------ ----------
NET INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS (799,000) 3,671,000 (2,094,000) (2,359,000) 727,000
CASH AND CASH EQUIVALENTS,
beginning of period 1,173,000 374,000 4,045,000 4,045,000 1,951,000
----------- ----------- ------------ ------------ ----------
CASH AND CASH EQUIVALENTS,
end of period $ 374,000 $ 4,045,000 $ 1,951,000 $ 1,686,000 $2,678,000
=========== =========== ============ ============ ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-8
<PAGE> 69
MRV COMMUNICATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BACKGROUND AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Background
MRV Communications, Inc. (the Company) designs, manufactures, markets
and sells semiconductor laser diodes, light emitting diodes ("LEDs") and fiber
optic transmitting and receiving modules for the transmission of large amounts
of information at high speeds over long distances. The Company assembles and
integrates these devices into components that are sold primarily to Original
Equipment Manufacturers ("OEMs") in the fiber optic market. Products
incorporating these devices are used primarily in computer communication
networks, voice communications devices, cable TV and fiber optic test
instruments. The Company develops and markets three product lines: laser diodes
and LED-based components, integrated transmitting and receiving modules, and
stand-alone products. The Company markets and sells its products both
domestically and internationally.
In 1995, the Company acquired certain assets and the distribution
business of two companies located in Israel (see Note 2). The results of
operations of the acquired businesses since the acquisition dates have been
included in the accompanying consolidated financial statements. The following
summarized unaudited pro forma financial information assumes the acquisitions
occurred on January 1, 1994 and 1995:
<TABLE>
<CAPTION>
Year Ended
December 31,
---------------------------------
1994 1995
----------- -----------
<S> <C> <C>
Revenues, net $36,781,000 $47,005,000
Net income (loss) (8,627,000) 5,247,000
Earnings (loss) per
common share $ (2.06) $ 0.85
=========== ===========
</TABLE>
Pro forma net income (loss) and earnings (loss) per share amounts do
not include the purchased technology in progress and restructuring costs
included in the accompanying 1995 Statement of Operations.
The pro forma net loss in 1994 primarily related to a non-recurring
write-off of inventories and accounts receivable in the amount of $7.2 million
relating to an acquisition of a company by ACE 400 Communications, Ltd., a
company acquired by the Company in 1995 (see Note 2).
Principles of Consolidation
The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries, N-Base Communications, Inc. and
N-Base Communications Ltd. All significant intercompany transactions and
accounts have been eliminated.
F-9
<PAGE> 70
Foreign Currency Translation
N-Base Communication Ltd.'s (N-Base) financial statements have been
prepared in U.S. Dollars as the currency of the primary economic environment in
which the operations of N-Base are conducted is the U.S. dollar. Thus, the
functional currency of N-Base is the U.S. dollar.
Transactions and balances originally denominated in U.S. dollars are
presented at their original amounts. Transactions and balances in other
currencies are translated into U.S. dollars in accordance with Statement of
Financial Accounting Standards NO. 52, and are included in determining net
income or loss.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Revenue Recognition
The Company recognizes revenue upon shipment of products. Customer
deposits represent advance payments from customers which are deferred until the
related revenue has been earned.
The Company's three largest customers together accounted for
approximately 22 percent, 13 percent and 14 percent of the Company's revenues in
1993, 1994 and 1995, respectively. At December 31, 1994, there was one customer
with a significant receivable balance, which was equal to 10 percent of total
receivables. There were no significant receivable balances at December 31, 1993
and 1995.
Sales to foreign countries approximated 18 percent, 19 percent and 45
percent of the Company's revenues in 1993, 1994 and 1995, respectively. There
have been no significant sales to any one geographical area through 1995.
Purchased Technology in Progress and Restructuring Costs
In connection with the Company's acquisitions (see Note 2), the Company
acquired incomplete research and development (R&D) projects that will be
included in the current R&D activities of the Company. For projects that will
have no alternative future use to the Company and where technological
feasibility had not yet been established, the Company allocated $6,211,000 of
the purchase price to technology in progress and recorded the expense during the
year ended December 31, 1995.
Also in connection with the Company's acquisitions, during the year
ended December 31, 1995, the Company recorded $1,465,000 as restructuring costs,
which primarily related to the closing of several Company facilities, a
reduction of its workforce, and the settlement of distribution agreements. The
reduction of the workforce related to 63 employees, of which six were upper
management personnel.
F-10
<PAGE> 71
The following summarizes the major restructuring costs:
<TABLE>
<S> <C>
Accrued termination benefits $ 221,000
Accrued legal and other 201,000
----------
Total accrued costs 422,000
----------
Closing of facilities 179,000
Settlement of distribution agreements 205,000
Termination benefits 427,000
Other costs 232,000
----------
Total cash paid 1,043,000
----------
$1,465,000
==========
</TABLE>
Restricted Cash Balances
Cash balances include restricted deposits with a bank amounting to
$6,272,000 at December 31, 1995, which are given as a security against letters
of credit issued by the bank on behalf of the Company (see Note 5).
Investments
As of December 31, 1994 and 1995, short-term investments consisted of
the following, at cost:
<TABLE>
<CAPTION>
1994 1995
---------- ----------
<S> <C> <C>
Time Deposit $ 28,000 $ -
U.S. Treasury notes 2,708,000 1,000,000
---------- ----------
$2,736,000 $1,000,000
========== ==========
</TABLE>
During 1994, the Company adopted Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities." The adoption of this standard did not have a material impact on the
Company's results of operations in 1994.
As defined by the new standard, the Company has classified all
investments as "held-to-maturity" investments and all investments are recorded
at their amortized cost basis, which approximated their fair value at December
31, 1995. All investments mature in 1996.
Inventories
Inventories are stated at the lower of cost (first-in, first-out) or
market and consist of material, labor and overhead.
Inventories consisted of the following as of December 31, 1994 and
1995:
<TABLE>
<CAPTION>
1994 1995
---------- ----------
<S> <C> <C>
Raw materials $ 910,000 $4,750,000
Work-in-process 307,000 2,035,000
Finished goods 1,449,000 1,597,000
---------- ----------
$2,666,000 $8,382,000
========== ==========
</TABLE>
F-11
<PAGE> 72
Property and Equipment
Property and equipment are stated at cost. Maintenance and repairs are
charged to expense as incurred, while significant replacements and betterments
are capitalized.
Depreciation and amortization are provided using the straight-line
method based upon the estimated useful lives of the related assets. Useful lives
range from five to fifteen years.
Goodwill
The Goodwill resulted from the Company's acquisitions during 1995. It
is amortized on a straight-line basis over 8 years.
Warranty
The Company warrants its products against defects in materials and
workmanship for one to three year periods. The estimated cost of warranty
obligations is recognized at the time of revenue recognition.
Statements of Cash Flows
For the purposes of the statements of cash flows, the Company considers
all highly liquid investments with an original maturity of 90 days or less to be
cash equivalents.
Cash paid for income taxes was $450,000 in 1993, $834,000 in 1994 and
$932,000 in 1995. There was no cash paid for interest in 1993 and 1994. Cash
paid for interest was $102,000 in 1995.
During the year ended December 31, 1995, the Company purchased property
and equipment with a cost of $100,000 through a capital lease agreement. This
non-cash transaction, which has been recorded in the December 31, 1995 Balance
Sheet, is excluded from the December 31, 1995 Statement of Cash Flows.
The 1995 Statement of Cash Flows includes an amount of $5,691,000 that
represents the fair value of consideration given and net liabilities assumed for
the Company's acquisitions that was allocated to purchased technology in
progress. This amount differs from the amount shown on the 1995 Statement of
Operations by $520,000, which represents legal, consulting and other costs which
were allocated to purchased technology in progress on the Statement of
Operations (see Note 2).
Earnings Per Common Share
Earnings per common share are based on the weighted average number of
shares of common stock and common stock equivalents (dilutive stock warrants and
stock options) outstanding during the related periods (adjusted retroactively
for the exchange of shares described in Note 6). The weighted average number of
common stock equivalent shares includes shares issuable upon the assumed
exercise of stock warrants and options, less the number of shares assumed
purchased with the proceeds available from such exercise. The effect of dilutive
common share equivalents is not included in the loss per common share
calculation for 1995. Fully diluted earnings per share differs from primary
earnings per share in 1994.
Reclassifications
Certain reclassifications have been made to prior years' amounts to
conform to the current year presentation.
F-12
<PAGE> 73
2. ACQUISITIONS AND RESTRUCTURING
On May 1, 1995, the Company acquired certain assets and the
distribution business of Galcom Networking, Ltd. (Galcom), a network equipment
company located in Israel. The purchase price paid by the Company was
approximately $900,000 in cash and the assumption of approximately $1,800,000 in
liabilities and debt.
On June 29, 1995, the Company acquired certain assets and the
distribution business of ACE 400 Communications, Ltd. (ACE), a network equipment
company located in Israel. The purchase price paid by the Company was $100,000
in cash, the assumption of $466,667 in liabilities and debt, the issuance of
284,977 shares of the Company's common stock (valued at $3,910,000), and
extended a right to ACE to sell to the Company up to $400,000 of ACE's
inventory.
Subsequent to the acquisition dates, the Company consolidated
operations in Israel and formed a new subsidiary in Israel named N-Base
Communications Ltd. Each of the businesses acquired also owned a subsidiary in
the United States. These operations were also consolidated and the Company
formed a new subsidiary in the United States named N-Base Communications, Inc.
Both acquisitions were accounted for using the purchase method of
accounting, and accordingly, the purchase price was allocated to assets acquired
and liabilities assumed based on their estimated fair values, as follows:
<TABLE>
<S> <C>
Inventory $ 319,000
Property and equipment 600,000
Current liabilities and debt (2,267,000)
-----------
Net liabilities assumed (1,348,000)
Cash paid for legal, consulting and
other costs (395,000)
Accrued legal, consulting and others
costs (125,000)
Common stock issued to sellers (3,910,000)
Cash paid to sellers (1,000,000)
-----------
Paid or accrued (6,778,000)
Allocated to purchased
technology in progress 6,211,000
-----------
Goodwill $ 567,000
===========
</TABLE>
In connection with the acquisition of certain assets from Galcom, the
Company issued warrants to Galcom to purchase 75,000 shares of common stock at
prices ranging from $14.75 to $22.13 per share. The Company also issued warrants
to purchase 25,000 common shares to former employees of Galcom at prices ranging
from $12.75 to $14.25 per share, warrants to purchase 330,000 common shares at
prices ranging from $12.75 to $14.25 per share to existing employees and
consultants, warrants to purchase 15,000 common shares at $12.75 per share to an
outside consultant, and warrants to purchase 10,000 common shares at $12.75 per
share to a company for design services performed. All of these warrants are
exercisable over a five year period.
In connection with the acquisition of certain assets from ACE, the
Company issued warrants to the trustee of ACE to purchase 100,000 common shares
at $13.72 per share, and issued warrants to purchase 10,000 shares at $14.00 per
share to an ACE employee. All of these warrants are exercisable over a five year
period.
F-13
<PAGE> 74
3. INCOME TAXES
In February 1992, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 109 (SFAS 109), which was
adopted by the Company in fiscal 1992.
Under SFAS 109, deferred income tax assets or liabilities are computed
based on temporary differences between the financial statement and income tax
bases of assets and liabilities using the enacted marginal income tax rate in
effect for the year in which the differences are expected to reverse. Deferred
income tax expenses or credits are based on the changes in the deferred income
tax assets or liabilities from period to period.
The components of the net deferred income tax asset at December 31,
1994 and 1995 are as follows:
<TABLE>
<CAPTION>
1994 1995
-------- ----------
<S> <C> <C>
Allowance for bad debts $120,000 $ 298,000
Inventory reserve 124,000 141,000
Warranty reserve 40,000 80,000
Accrued restructuring costs - 213,000
State income taxes 79,000 84,000
Other, net 9,000 (12,000)
-------- ----------
Current portion 372,000 804,000
Net operating loss carryforward - 1,350,000
Valuation reserve - (425,000)
-------- ----------
- 925,000
-------- ----------
$372,000 $1,729,000
======== ==========
</TABLE>
The provision for income taxes for the years ended December 31, 1993,
1994 and 1995 is as follows:
<TABLE>
<CAPTION>
1993 1994 1995
-------- ---------- ----------
<S> <C> <C> <C>
Current - Federal $428,000 $1,051,000 $1,112,000
- State 103,000 214,000 247,000
- Foreign - - -
-------- ---------- ----------
531,000 1,265,000 1,359,000
-------- ---------- ----------
Deferred - Federal (37,000) (252,000) (333,000)
- State (7,000) (30,000) (99,000)
- Foreign - - (925,000)
-------- ---------- ----------
(44,000) (282,000) (1,357,000)
-------- ---------- ----------
Provision for income taxes $487,000 $ 983,000 $ 2,000
======== ========== ==========
</TABLE>
In 1995, the Company incurred a consolidated loss before the provision
for income taxes of $1,271,000, but recorded pre-tax income from its United
States operations in the amount of $2,616,000. The Company's foreign operations
recorded a pre-tax loss of $3,887,000.
F-14
<PAGE> 75
Differences between the provision for income taxes and income taxes at
the statutory federal income tax rate based on U.S. pre-tax income for the years
ended December 31, 1993, 1994 and 1995 are as follows:
<TABLE>
<CAPTION>
1993 1994 1995
--------------------- --------------------- --------------------
Amount Percent Amount Percent Amount Percent
-------- --------- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Income tax
provision
(benefit) at
statutory
federal rate $451,000 34.0% $884,000 34.0% $889,000 34.0%
State and
local income
taxes, net
of federal
income tax
effect 81,000 6.1 159,000 6.1 160,000 6.1
Research and
development
credit (94,000) (7.1) (138,000) (5.3) (173,000) (6.7)
Effect of
foreign net
operating loss
carryforwards - - - - (925,000) (35.4)
Other items,
net 49,000 3.7 78,000 3.0 51,000 2.0
-------- ---- -------- ---- -------- ----
$487,000 36.7% $983,000 37.8% $ 2,000 - %
======== ==== ======== ==== ======== ====
</TABLE>
The Company's subsidiary in Israel, N-Base Communications Ltd.
(N-Base), is subject to the provisions of the Income Tax Law of 1985. During
1995, N-Base incurred a taxable loss of approximately $3.8 million. According to
Israeli tax law, this loss may be carried forward for an indefinite period of
time. The taxable loss was due to the non-recurring write-off of research and
development projects in progress in the amount of approximately $6.1 million in
1995. The Company has recorded a net long-term deferred tax asset relating to
the loss carryforward in the amount of $925,000 at December 31, 1995. A full
reserve has not been recorded against the asset due to the probability of its
recoverability. The reserve that has been recorded reflects the Company's
estimate of the amount that may not be realized due to the benefit period
described below.
In 1995, N-Base qualified for a program under which it will be eligible
for a tax exemption on its income for a period of ten years from the beginning
of the benefits period. The Company estimates that the benefit period will begin
in 1996 or 1997.
The Company does not provide U.S. federal income taxes on the
undistributed earnings of its foreign operations. The Company's policy is to
leave the income permanently invested in the country of origin. Such amounts
will only be distributed to the United States to the extent any federal income
tax can be fully offset by foreign tax credits.
4. LOANS RECEIVABLE FROM OFFICERS
During 1994 and 1995, the Company loaned certain amounts to three of
its officers. The total amounts due from the officers as of December 31, 1994
and 1995 was $42,000 and $10,000, respectively.
F-15
<PAGE> 76
5. COMMITMENTS
Lease Commitments
In March 1993, the Company entered into an agreement to lease office
and manufacturing space. The lease term is for six years, terminating in March
1999, with an average base rent of $64,000 per year. The agreement includes
lease incentives, with free rent for several months of the lease term, primarily
in 1993. As of December 31, 1995, the Company has recorded a deferred rent
liability of $46,000 to properly reflect straight-line rent expense.
The Company leases all of its facilities and certain equipment under
noncancelable capital and operating leases, expiring at various dates through
2003. Minimum future obligations under such agreements at December 31, 1995 are
as follows:
<TABLE>
<CAPTION>
Capital Operating
Leases Leases
------- ----------
<S> <C> <C>
1996 $35,000 $ 353,000
1997 25,000 314,000
1998 11,000 316,000
1999 - 194,000
2000 - 173,000
Thereafter - 270,000
------- ----------
71,000 $1,620,000
==========
Less--Amount
representing interest (4,000)
-------
67,000
Less--Current portion (33,000)
-------
$34,000
=======
</TABLE>
Rent expense under noncancelable operating lease agreements for the
years ended December 31, 1993, 1994 and 1995 was $90,000, $115,000 and $405,000,
respectively.
Employment Agreements
In March 1992, the Company entered into three-year employment
agreements with three key officers of the Company which became effective in
December 1992. The agreements specify annual salaries of $100,000 to $110,000
for each of the officers, plus annual bonuses to be determined by the Board of
Directors.
Consulting Agreement
In March 1993, the Company entered into an agreement with a company
which is affiliated with the Company's former Chief Financial Officer, to
provide financial and managerial services for a fee of $2,200 per month, plus
reimbursement for travel, transportation and other authorized and necessary
expenses. The term of the agreement is 29 months. In addition, the consulting
company received a four-year warrant to purchase up to 12,500 shares of common
stock at 120 percent of the initial public offering price ($4.80 per share) and
a cash bonus of $75,000 at the time of the closing of the initial public
offering. As of December 31, 1995, all of these common stock warrants had been
exercised and none were outstanding.
F-16
<PAGE> 77
Royalty Commitment
As part of the purchase agreements referred to in Note 2, the selling
companies' commitments to pay royalties to the State of Israel were assigned to
the Company. The commitments arose in consequence of the participation of the
Israeli Government in product development through the payment of grants.
The royalties are payable at a rate of between 1.5 percent and 3.0
percent of the sales proceeds of the products developed up to 150 percent of the
amount of the grants received. The balance of the commitment for royalties at
December 31, 1995 amounted to $6,150,000.
Letter of Credit
During 1995, the Company, in connection with its acquisitions in Israel
(see Note 2), entered into a stand-by letter of credit arrangement with a bank
in the amount of $4,935,000. The arrangement expires in 1997.
6. EQUITY TRANSACTIONS
Merger/Exchange of Shares
Effective April 7, 1992, MRV Technologies, Inc. (the predecessor
company, which was incorporated in California in July 1988) was merged into MRV
Communications, Inc., a new Delaware corporation. All of the 5,240 issued and
outstanding shares of the predecessor company were exchanged for an aggregate of
2,457,500 shares of the common stock of the Company. The financial statements
for all years presented give retroactive effect to this exchange of shares and
merger. In addition, the articles of incorporation for the new Delaware
corporation provide for the issuance of up to 1,000,000 shares of Preferred
Stock, $0.01 par value.
Secondary Public Offering
In January 1995, the Company completed a secondary public offering of
its common stock. The Company sold 900,000 shares at a price of $12.00 per
share. The gross and net proceeds of the offering were $10,800,000 and
$9,355,000, respectively.
In connection with this offering, the Company sold to the
representatives of the underwriters three-year warrants to purchase 100,000
shares of common stock at a price of $16.80 per share. The warrants may be
exercised beginning in January 1996 and expire in January 1999.
Initial Public Offering
In December 1992, the Company completed an initial public offering of
its common stock. The Company sold 488,750 units, each unit consisting of three
shares of common stock and two redeemable common stock purchase warrants, at a
price of $12.00 per unit. The gross proceeds of the initial public offering were
$5,865,000. This amount, net of deferred underwriting commissions and other
costs totaling $1,336,000, was recorded in common stock and capital in excess of
par value in the accompanying financial statements.
The two common stock purchase warrants included in the units (the IPO
warrants) became immediately detachable and separately transferable. Each
warrant entitled the registered holder to purchase, at any time over a five-year
period, one share of common stock at a price of $5.00 per share, but were
subject to redemption by the Company at $.05 per warrant on 30 days prior
written notice. On October 27, 1994, the Company called for the redemption of
all of these 977,500 outstanding warrants. As of November 25, 1994, the
redemption date, 975,922 of these outstanding warrants were exercised at $5.00
per share, and the remaining 1,578 warrants were redeemed by the Company.
F-17
<PAGE> 78
In connection with the public offering, the Company issued to the
representatives of the underwriters five-year warrants (the Underwriter
warrants) to purchase 42,500 additional units (or 212,500 shares) at a price of
$15.60 per unit. As of December 31, 1995, 204,380 shares relating to these
warrants had been issued and warrants to purchase 8,120 shares were outstanding.
These warrants expire in December 1997.
The gross proceeds from the exercise of the IPO and Underwriter
warrants was $5,754,000. This amount, net of underwriting fees and other costs
of $257,000, was recorded in common stock and capital in excess of par value in
the accompanying financial statements.
Also, in connection with the public offering, the Company issued bridge
loans with a face value of $140,000 and an interest rate equal to the prime rate
plus two percent. During fiscal 1992, the Company repaid the bridge loans from
the proceeds of the offering. In connection with the issuance of the notes, the
Company issued 35,000 stock warrants to the holders of the notes. The amount
attributed to the value of the warrants, $42,000, is recorded as capital in
excess of par value in the accompanying financial statements. The warrants allow
one share of common stock to be purchased for each $4.00 of notes. The exercise
price of the warrants is $.80 per share or 20 percent of the public offering
price. The warrants are exercisable for a five-year period, expiring in January
1997. As of December 31, 1995, 5,000 of these warrants were outstanding.
Common Stock Purchase Warrants
A summary of warrant activities is as follows:
<TABLE>
<CAPTION>
Number Exercise
of Shares Prices
---------- ---------------
<S> <C> <C>
Balance, December 31, 1992 1,237,500 $ .80 to 5.12
and 1993
Issued - -
Exercised (1,146,477) 5.00 to 5.12
Redeemed (1,578) 5.00
---------- ---------------
Balance, December 31, 1994 89,445 .80 to 5.12
Issued 700,000 12.75 to 22.13
Exercised (78,825) .80 to 5.00
Redeemed - -
---------- ---------------
Balance, December 31, 1995 710,620 $ .80 to 22.13
========== ===============
</TABLE>
At December 31, 1995, warrants to purchase 710,620 shares were
outstanding, of which 2,500 were exercisable at $.80 per share. There were no
warrants issued, exercised or redeemed during 1993.
F-18
<PAGE> 79
Stock Option Plan
In March 1992, the Board of Directors and stockholders of the Company
adopted a stock option plan (the Plan) that provides for the granting of options
to purchase up to 300,000 shares of common stock, consisting of both incentive
stock options and non-qualified options. In June 1995, the Board of Directors
and stockholders of the Company authorized options to purchase an additional
300,000 shares. Incentive stock options are issuable only to employees of the
Company and may not be granted at an exercise price less than the fair market
value of the common stock on the date the option is granted. Non-qualified stock
options may be issued to non-employee directors, consultants and others, as well
as to employees, with an exercise price established by the Board of Directors.
All incentive stock options granted as of December 31, 1995 have been granted at
prices equal to the fair market value of the common stock on the grant date, and
all options granted expire five years from the date of grant. All of the
incentive stock options granted become exercisable beginning one year from the
date of grant in equal installments over a three year period, while the
non-qualified options become fully exercisable beginning six months from the
date of the grant. There were no options granted prior to December 31, 1993.
A summary of option activities under the Plan is as follows:
<TABLE>
<CAPTION>
Number Option
of Shares Prices
-------- ----------------
<S> <C> <C>
Balance, December 31, 1993 - $ -
Granted 170,700 4.625 to 9.50
Exercised - -
Canceled (40,500) 4.625 to 5.75
-------- ----------------
Balance, December 31, 1994 130,200 4.625 to 9.50
Granted 270,500 10.880 to 14.25
Exercised (15,500) 4.625 to 9.50
Canceled - -
-------- ----------------
Balance, December 31, 1995 385,200 $ 4.625 to 14.25
======== ================
</TABLE>
Escrow Agreement
In 1992, the Company entered into an agreement with certain of its
employee/officer stockholders under which 875,000 shares of common stock held by
the individuals were placed in escrow for a seven-year term. The agreement
specifies that a certain number of the escrow shares may be released to the
stockholders periodically if the Company achieves certain income goals or if the
market price of the Company's common stock reaches certain levels. As of
December 31, 1994, the Company had achieved the necessary levels and all of the
shares in escrow were eligible to be released.
F-19
<PAGE> 80
7. UNAUDITED INFORMATION
Basis of Presentation
The unaudited financial statements have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and note disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to those rules and regulations, although
the Company believes that the disclosures made are adequate to make the
information presented not misleading. These unaudited financial statements
reflect, in the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to fairly present the results of
operations, changes in cash flows and financial position as of and for the
periods presented. These unaudited financial statements should be read in
conjunction with the audited financial statements and related notes thereto,
appearing elsewhere herein. The results for the interim periods presented are
not necessarily indicative of results to be expected for the full year.
Common Stock and Stock Split
On March 5, 1996, the stockholders of the Company authorized an
additional 10,000,000 common shares and a 3 for 2 stock split. All share amounts
have been retroactively restated to give effect to the split.
Investments
As of March 31, 1996, short-term investments consisted primarily of a
U.S. Treasury note. The investment is classified as a "held-to-maturity"
investment and is recorded at its amortized cost basis.
Inventories
Inventories are stated at the lower of cost (first-in, first-out) or
market and consist of material, labor and overhead. As of March 31, 1996,
inventories consisted of the following:
<TABLE>
<S> <C>
Raw materials $5,080,000
Work-in-process 2,572,000
Finished goods 2,230,000
----------
$9,882,000
==========
</TABLE>
Significant Customers
During the three months ended March 31, 1996, the Company's three
largest customers accounted for approximately 20 percent of the Company's
revenues.
Supplemental Cash Flow Information
Cash paid for income taxes during the three month periods ended March
31, 1995 and 1996 was $475,000 and $640,000, respectively. There was no cash
paid for interest during the three month periods ended March 31, 1995 and 1996.
Income Taxes
For the three months ended March 31, 1996, the provision for income
taxes differs from the amount computed by applying the Federal statutory income
tax rate to the income before provision for income taxes as follows:
<TABLE>
<S> <C> <C>
Expected Federal tax benefit $ 952,000 34.0%
State tax benefit, net of Federal
tax benefit 171,000 6.1
Research and development credit (45,000) (1.6)
Effect of foreign income tax
benefits (157,000) (5.6)
--------- ----
Total $ 921,000 32.9%
========= ====
</TABLE>
Common Stock Purchase Warrants
In January 1996, the Company issued warrants to purchase 143,330 shares
of common stock at the exercise price of $25.25 per share in exchange for the
right to acquire a 50 percent interest in an Italian networking company. The
right was exercised in May 1996. Also in January 1996, the Company issued
warrants to purchase 21,667 shares of common stock at the exercise price of
$25.25 per share in exchange for consulting services performed. All of these
warrants expire in January 2001.
F-20
<PAGE> 81
GALCOM NETWORKING LTD.
CONSOLIDATED FINANCIAL STATEMENTS
CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of the Auditors
Consolidated Financial statements
Balance Sheets as at December 31, 1994 and 1993 F-24
Statements of Operations for the years ended December 31, 1994,
1993 and 1992 F-26
Statements of Changes in
Shareholders' Equity for the years ended December 31, 1994,
1993 and 1992 F-27
Statements of Cash Flows for the years ended December 31, 1994,
1993 and 1992 F-28
Notes to the Consolidated
Financial Statements F-30
Unaudited Interim Period F-41
</TABLE>
F-21
<PAGE> 82
[BDO LETTERHEAD]
REPORT OF THE AUDITORS TO THE SHAREHOLDERS OF
GALCOM NETWORKING LTD.
We have examined the consolidated balance sheets of GALCOM NETWORKING LTD. ("the
Company") and its subsidiaries as at December 31, 1994 and 1993 and the related
consolidated statements of operations, shareholders' equity and cash flows for
each of the three years in the period ended December 31, 1994. Our
responsibility is to express an opinion on these financial statements on the
basis of our audits.
The financial statements of consolidated subsidiaries, whose assets constitute
approximately 4% and 9% of total consolidated assets at December 31, 1994, and
1993, respectively and whose total revenues constitutes approximately 18% and 8%
of total consolidated revenues for the years ended December 31, 1994 and 1993,
respectively, were audited by other certified public accountants whose reports
thereon have been furnished to us. Our opinion expressed herein, insofar as it
relates to the amounts included for the abovementioned subsidiaries, is based
solely upon the reports of the other accountants.
We conducted our audits in accordance with generally accepted auditing
standards, including those prescribed by the Auditors' (Mode of Performance)
Regulations (Israel), 1973. Such auditing standards are substantially identical
to generally accepted auditing standards in the Unites States. Those standards
require that we plan and perform the audit to obtain reasonable assurance
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by the Board of
Directors and management of the Company, as well as evaluating the overall
financial statements presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, based upon our examinations and the reports of the other
accountants referred to above, the aforementioned consolidated financial
statements present fairly, in all material respects, the consolidated financial
position of the Company and its subsidiaries at December 31, 1994 and 1993 and
their consolidated results of operations and cash flows for each of the three
years in the period ended December 31, 1994, in conformity with accounting
principles generally accepted in Israel. Such Israeli accounting principles
differ in certain respects from those followed in the United States (see Note 21
to the consolidated financial statements).
/s/ BDO ALMAGOR & CO.
BDO Almagor & Co.
Certified Public Accountants (Israel)
Ramat-Gan, Israel
June 7, 1995
F-22
<PAGE> 83
[SNC & CO. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Galcom, Inc.
Gaithersburg, Maryland
We have audited the accompanying balance sheets of Galcom, Inc. (a wholly-owned
subsidiary of Galcom Networking Ltd.) as of December 31, 1994 and 1993, and the
related statements of operations and deficit and cash flows for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Galcom, Inc. as of December 31,
1994 and 1993, and the results of its operations and its cash flows for the
years then ended, in conformity with generally accepted accounting principles.
/s/ STERLING, NAPPEN, CHAVKIN & CO.
Certified Public Accountants
January 26, 1995
F-23
<PAGE> 84
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1994 1993
----- -----
NOTE US$ US$
---- ----- -----
(IN THOUSANDS)
<S> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents 477 139
Accounts receivable:
Trade 2,287 1,704
Other 3 556 914
Short term investments 4,072 -
Inventories 4 876 1,698
------ ------
Total current assets 8,268 4,455
------ ------
INVESTMENTS
Investment in other company 5 519 778
------ ------
LONG-TERM INVESTMENTS 1,409 -
------ ------
FIXED ASSETS
Cost 7 2,361 1,871
Less: Accumulated depreciation 954 433
------ ------
1,407 1,438
------ ------
OTHER ASSETS, NET 75 121
------ ------
11,678 6,792
====== ======
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-24
<PAGE> 85
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1994 1993
----- -----
NOTE US$ US$
---- ----- -----
(IN THOUSANDS)
<S> <C> <C> <C>
CURRENT LIABILITIES
Short-term credits 1,646 1,019
Accounts payable:
Trade 2,014 1,532
Other 8 1,223 857
------ ------
Total current liabilities 4,883 3,408
LONG-TERM DEBT 9 926 249
PROVISION FOR SEVERANCE PAY, NET 10 172 182
------ ------
Total liabilities 5,981 3,839
------ ------
COMMITMENTS AND CONTINGENT LIABILITIES 11
MINORITY INTEREST 3,461 -
------ ------
SHAREHOLDERS' EQUITY
Share capital 12 6,288 6,138
Foreign currency translation adjustment 474 -
Accumulated deficit (4,526) (3,185)
------ ------
2,236 2,953
------ ------
------ ------
11,678 6,792
====== ======
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-25
<PAGE> 86
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1994 1993 1992
------ ------ ------
NOTE US$ US$ US$
---- ------ ------ ------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Sales 15 8,677 6,964 4,860
Cost of sales 16 7,222 4,519 3,239
----- ----- -----
GROSS PROFIT 1,455 2,445 1,621
Research and development
expenses, net 17 577 948 415
Selling, general and
administrative expenses,
net 18 4,367 3,585 1,976
------ ------ -----
OPERATING INCOME (LOSS)
BEFORE FINANCIAL EXPENSES (3,489) (2,088) (770)
Financial expenses, net (989) (288) (37)
Other income, net 6 2,855 - -
------ ----- -----
INCOME (LOSS) BEFORE TAXES
ON INCOME (1,623) (2,376) (807)
Taxes on income 14 (14) (84) -
Minority interest in net
losses of consolidated
subsidiary 373 - -
------ ------ -----
LOSS FROM CONTINUING
OPERATIONS (1,264) (2,460) (807)
Loss from discontinued
operations (77) - -
------ ------ -----
Net loss (1,341) (2,460) (807)
====== ====== =====
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-26
<PAGE> 87
GALCOM NETWORKING LTD.
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
FOREIGN RETAINED
CURRENCY EARNINGS
SHARE CAPITAL TRANSLATION (ACCUMULATED
CAPITAL SURPLUS ADJUSTMENT DEFICIT) TOTAL
------- ------- ---------- ------------ -------
US$ US$ US$ US$ US$
------- ------- ---------- ------------ -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE AS OF JANUARY 1, 1992 34 - - 135 169
Loss for the year (807) (807)
Issue of bonus shares 53 - - (53) -
Issue of ordinary shares 20 - - - 20
Issue of preferred shares 21 1,541 - - 1,562
--- ----- --- ------- -----
BALANCE AS OF DECEMBER 31, 1992 128 1,541 - (725) 944
Loss for the year - - - (2,460) (2,460)
Issue of ordinary shares 31 4,438 - - 4,469
--- ----- --- ------- -----
BALANCE AS OF DECEMBER 31, 1993 159 5,979 - (3,185) 2,953
Loss for the year - - - (1,341) (1,341)
Issue of ordinary shares - 150 - - 150
Foreign currency translation adjustment - - 474 - 474
--- ----- --- ------- -----
BALANCE AS OF DECEMBER 31, 1994 159 6,129 474 (4,526) 2,236
=== ===== === ======= =====
The accompanying notes are an integral part of the financial statements.
</TABLE>
F-27
<PAGE> 88
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1994 1993 1992
------ ------ ------
US$ US$ US$
------ ------ ------
(IN THOUSANDS)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss (1,341) (2,460) (807)
Adjustments to reconcile net loss to
cash used in operating activities
(See Appendix A) (620) (585) (384)
------ ------ ------
NET CASH USED IN OPERATING ACTIVITIES (1,961) (3,045) (1,191)
------ ------ ------
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in subsidiaries and others (93) (778) -
Purchase of fixed assets (797) (854) (553)
Purchase of other assets (45) (134)
Redemption of (investment in)
bank deposit - 111 (111)
Purchase of marketable securities
and other investments not held
for trading (1,057) - -
Purchase of short-term securities (2,378) - -
Grant of short-term loans (2,073) - -
Proceeds from sale of fixed assets 248 9 14
------ ------ ------
NET CASH USED IN INVESTING ACTIVITIES (6,150) (1,557) (784)
------ ------ ------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from share issue by
subsidiary 6,253 - -
Issue of shares 150 4,469 1,582
Increase in short-term bank
credits, net 196 99 306
Long-term loans received 1,275 315 162
Repayment of long-term loans (266) (173) (44)
------ ------ ------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 7,608 4,710 2,006
------ ------ ------
Effect of exchange rate changes
on cash 841 - -
====== ====== =====
INCREASE IN CASH AND CASH
EQUIVALENTS 338 108 31
BALANCE OF CASH AND CASH
EQUIVALENTS AT THE
BEGINNING OF THE YEAR 139 31 -
------ ------ ------
BALANCE OF CASH AND CASH
EQUIVALENTS AT THE
END OF THE YEAR 477 139 31
====== ====== ======
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-28
<PAGE> 89
STATEMENTS OF CASH FLOWS (CONTD.)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1994 1993 1992
------ ------ ------
US$ US$ US$
------ ------ ------
(IN THOUSANDS)
<S> <C> <C> <C>
APPENDIX A
ADJUSTMENTS TO RECONCILE NET LOSS TO CASH
FLOWS USED IN OPERATING ACTIVITIES
ITEMS NOT INVOLVING CASH FLOWS:
Capital loss - 2 3
Capital gain from issue to third party (2,883) - -
Loss from marketable securities 379 - -
Erosion of long-term debt 88 - (1)
Depreciation of fixed assets and
amortization of other assets 322 252 118
Increase (decrease) in provision
for severance pay, net (16) 96 36
Minority interest in net income (373) - -
Write-off of inventory 710 - -
Write-off of fixed assets 343 - -
CHANGES IN ASSETS AND LIABILITIES:
Decrease (increase) in accounts receivable (72) (992) (476)
Decrease (increase) in inventories 161 (463) (503)
Increase in accounts payable 721 520 439
------ ---- ----
(620) (585) (384)
====== ==== ====
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-29
<PAGE> 90
GALCOM NETWORKING LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - GENERAL
GALCON NETWORKING LTD. ("the Company"), which commenced operations in March
1988, is engaged in the production of components and devices used in data
communication. The Company became a public company in April 1992.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. FINANCIAL STATEMENTS IN U.S. DOLLARS
The functional currency of the Company is the U.S. dollar.
Transactions and balances denominated in dollars are presented at their
dollar amounts. Non-dollar transactions and balances are remeasured
into dollars in accordance with the principles set forth in Statement
No. 52 of the Financial Accounting Standards Board (FASB) of the United
States.
The functional currency of the Company's subsidiary in the United
Kingdom is the Pound sterling. The translation of the financial
statements of this subsidiary was made according to the principles
prescribed in Statement No. 52 of the FASB. Assets and liabilities have
been translated at period-end exchange rates and statement of operation
items have been translated at average rates prevailing during the
period. Such translation adjustments are recorded as a component of
shareholders' equity.
The financial statement of the Company's subsidiary in Israel, whose
functional currency is the new Israeli shekel have been adjusted for
changes in the Israeli Consumer Price Index ("CPI") and translated at
the representative rate of exchange of the shekel for the U.S. dollar as
at the balance sheet date. With regard to the translation of the
financial statements in accordance with accounting principles generally
accepted in the United States, see Note 20.
b. PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the results of the
Company's subsidiaries. All intercompany transactions and balances have
been eliminated.
The subsidiaries as at December 31, 1994 were as follows:
<TABLE>
<CAPTION>
PERCENTAGE COUNTY OF
SHAREHOLDING INCORPORATION
------------ -------------
<S> <C> <C>
Galcom Communication Systems 52.9% Israel
(Israel) Ltd.
Galcom Ltd. (1) 100% United Kingdom
Galcom Inc. (1) 100% U.S.A.
Faxcess Technologies Ltd. (2) 74% Israel
</TABLE>
(1) The principal activity of both of the above subsidiaries is the
marketing of the Company's products in their country of
incorporation.
(2) The principal activity of this company was research and
development. Activities were discontinued during 1994.
c. REVENUE RECOGNITION
Sales are recognized upon shipment.
d. CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise bank balances whose original term to
maturity is less than three months.
F-30
<PAGE> 91
GALCOM NETWORKING LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
e. INVENTORIES
Inventories are valued as follows:
Raw materials - Lower of cost or market value on a "moving average
basis". Work-in-process and finished products - Lower of computed cost
or market value.
f. INVESTMENTS
Investments in other companies are included at cost which does not
exceed their value as estimated by management.
g. FIXED ASSETS
Fixed assets are stated at cost.
Depreciation is calculated by the straight-line method over the
estimated useful lives of the assets. Annual rates of depreciation are
as follows:
<TABLE>
<S> <C>
Computers 20%
Machinery and equipment 10 - 15%
Office furniture and equipment 6 - 15%
Motor vehicles 15%
</TABLE>
Leasehold improvements are amortized over the term of the lease.
Fixed assets include assets which are leased under capital leases. The
balance of the liability in respect of capital leases is included in
long-term debt.
h. OTHER ASSETS
Other assets, comprising patents and production and marketing rights
(see Note 10b), are stated at cost and are amortized over 5 years.
i. RESEARCH AND DEVELOPMENT COSTS
Research and development costs, net of participation, are charged to
income as incurred.
j. BASIS OF LINKAGE AND EXCHANGE RATES
Balances in, or linked to, currencies other than the dollar are stated
on the basis of the representative exchange rates prevailing at the
balance sheet date.
The representative rate of exchange of the U.S. dollar for the new
Israeli shekel as at December 31, 1994 was US$ 1 = NIS 3.018.
Balances which are linked to the Israeli CPI are stated using the index
known at the end of the respective year.
The Israeli CPI increased by 14.5% in 1994 (1993 - 11.2%).
k. DEFERRED INCOME TAXES
Deferred income taxes are provided for temporary differences between the
assets and liabilities, as measured in the financial statements, and for
tax purposes at the tax rates expected to be in effect when these
differences reverse, in accordance with Statement No. 109 of the FASB
(Accounting for Income Taxes).
F-31
<PAGE> 92
GALCOM NETWORKING LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3 - OTHER ACCOUNTS RECEIVABLE
Comprised as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------
1994 1993
------ -----
US$ US$
------ -----
(IN THOUSANDS)
<S> <C> <C>
Government of Israel 110 -
Prepaid expenses 30 73
Advances to suppliers 38 23
Tax authorities 196 134
Shareholders (Balances linked
to the Israeli CPI) 53 169
Others 129 515
--- ---
556 914
=== ===
</TABLE>
NOTE 4 - INVENTORIES
Comprised as follows:
<TABLE>
<CAPTION>
DECEMBER 31
------------------
1994 1993
------ ------
US$ US$
------ ------
(IN THOUSANDS)
<S> <C> <C>
Raw materials 398 837
Work-in-process 187 361
Finished products 291 500
--- -----
876 1,698
=== =====
</TABLE>
* NOTE 5 - INVESTMENT IN OTHER COMPANY
As at December 31, 1994, the balance represents the cost of a 17% indirect
holding in I.N.C. Communications Pty. Ltd. ("INC"), an Australian company, held
through a 50%-held Singapore subsidiary (a dormant company). The Company does
not control or exercise any significant influence in INC and, in accordance with
Opinion No. 18 of the Accounting Principles Board, does not record this
investment using the equity method.
On the basis of available information, the management of the Company estimate
that the value of the Company's investment is not lower than its cost, though it
has not been able to obtain current financial statements of INC.
NOTE 6 - INVESTMENT IN SUBSIDIARY IN ISRAEL
During 1993, the Company established a wholly-owned subsidiary, Galcom
Communication Systems (Israel) Ltd. ("GCS") to undertake the computer
communication cable operations, previously carried out by the Company. GCS was
incorporated in Israel originally as a private company on June 29, 1993, with
the name, Galcom Communication Systems (1993) Ltd. (On October 8, 1993, the
Company changed its name to its present name.) The transfer took place on
September 30, 1993, when the Company transferred to its subsidiary, GCS, the
assets and liabilities relating to its cabling operations at book value, in
consideration of which GCS issued 100% of its share capital to the Company.
In February 1994, GCS issued shares in a public offering on the Tel Aviv Stock
Exchange and in a private placement for proceeds of US$ 6.5 million. As a
result of the issue, the Company's holding in GCS was reduced to 53% and the
Company recorded a capital gain of US$ 2,883,000.
* Footnote 5 has been added, all subsequent footnotes have been renumbered.
F-32
<PAGE> 93
GALCOM NETWORKING, LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 - FIXED ASSETS
a. COMPRISED AS FOLLOWS:
<TABLE>
<CAPTION>
December 31,
-----------------------
1994 1993
---------- ----------
US$ US$
---------- ----------
(In thousands)
<S> <C> <C>
Cost:
Land (see b. below) 432 214
Computers, machinery and equipment 889 843
Motor vehicles 414 375
Office furniture and equipment 220 190
Leasehold improvements 372 218
----- -----
2,327 1,840
Base stock 34 31
----- -----
2,361 1,871
===== =====
Payments on account of equipment
Accumulated depreciation:
Computers, machinery and equipment 693 290
Motor vehicles 122 73
Office furniture and equipment 48 29
Leasehold improvements 91 41
----- -----
954 433
===== =====
</TABLE>
b. On December 22, 1993, the Company and GCS and a related company, in concert,
undertook to purchase an interest in land in Caesarca of an area of 4.3
dunam for the construction of a plant for the manufacture of communication,
computer and high-tech products. The total commitment is for an amount in
new Israeli shekels equivalent of US$ 322,500. Of this, US$ 86,000 was paid
on signing the agreement, the balance being due to be paid in 11 quarterly
installments linked to the Israeli CPI, bearing interest at 3.5%.
The companies agreed amongst themselves to share equally in any payment due
under the agreement.
The companies undertook that after the construction of the plant is
completed, they will sign an agreement with the Caesarca Development Company
for a sub-lease agreement, according to which they will lease the
abovementioned plot for a period of 49 years, with an option for a further
49 years. When the sub-lease is signed, the deposit paid by the companies
will be considered as full payment of the proceeds of the sub-lease and the
rest of the liabilities of the companies pursuant to the sub-lease.
c. The Company sold all of its interest in the land at cost to GCS and GCS
undertook to pay the balance remaining on the loan (US$ 76,000) which the
Company received from the Caesarca Development Company in respect of the
land, under the same conditions.
d. Charges - see Note 13.
F-33
<PAGE> 94
GALCOM NETWORKING LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 - OTHER ACCOUNTS PAYABLE
COMPRISED AS FOLLOWS:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1994 1993
----- -----
US$ US$
----- -----
(IN THOUSANDS)
<S> <C> <C>
Payroll and related accruals 462 329
Advanced from customers - 92
Tax authorities 45 93
Related party 119 -
Subsidiary - -
Other accrued expenses 597 343
----- ---
1,223 857
===== ===
</TABLE>
NOTE 9 - LONG-TERM DEBT
a. COMPRISED AS FOLLOWS:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
INTEREST RATE 1994 1993
------------- ---- ----
% US$ US$
---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C>
Banks:
In dollars 6.5 8 16
Other:
In Israeli currency or linked
to the Israeli CPI Unlinked-26%; 4.3-7 1,386 249
In dollars 6-10 62 87
----- ---
1,456 352
Less: current maturities 530 103
----- ---
926 249
===== ===
</TABLE>
b. AGGREGATE MATURITIES OF LONG-TERM DEBT, AS AT DECEMBER 31, 1994, ARE AS
FOLLOWS:
<TABLE>
<S> <C>
First year (current maturities) 530
-----
Second year 524
Third year 386
Fourth year 16
-----
926
-----
1,456
=====
</TABLE>
c. The Company obtained a loan of US$ 1 million from a non-bank finance
company, against a charge on part of its shares in GCS (which was previously
charged to the bank). (These shares are "restricted securities" as defined
by the Tel-Aviv Stock Exchange).
The loan is linked to the Israeli CPI, bears interest at 8.5% per annum and
is repayable quarterly over three years.
d. Charges - see Note 13.
F-34
<PAGE> 95
GALCOM NETWORKING LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 - PROVISION FOR SEVERANCE PAY, NET
The net provision in the balance sheet represents the liability of the Company
for severance pay to its employees that is not covered by managers' insurance
policies. The custody and management of the amounts paid to the insurance
company are independent of the Company and accordingly, such amounts and the
related liabilities are not reflected in the balance sheet.
NOTE 11 - COMMITMENTS AND CONTINGENT LIABILITIES
a. ROYALTIES
Royalties are payable to the Office of the Chief Scientist of Israel
("OCS") at the rate of 3% on proceeds from the sale of products arising
from the research and development activities for which the OCS has
provided grants. Total royalties are not to exceed the grants
received, linked to the U.S. dollar.
b. MANUFACTURING AND MARKETING RIGHTS
In June 1992, the Company signed an agreement with another company,
pursuant to which the Company purchased the rights to manufacture and
market a product that was the result of joint development between the
two companies for an aggregate price of US$ 100,000. In addition, the
Company undertook to pay to the other company up to US$ 10 for each
product (as described in the agreement) sold through June 30, 1997.
c. CLAIMS PENDING
A number of claims have been made against the Company relating to
severance compensation to employees and commission to a former agent.
The amounts of the claims have not been finalized and the Company is not
in a position to estimate the final outcome of the claims. No
provisions have been made in respect of the said claims.
NOTE 12 - SHARE CAPITAL
a. COMPRISED AS FOLLOWS:
<TABLE>
<CAPTION>
ISSUED FULLY PAID
AUTHORISED ---------------------- ----------------------
NUMBER NUMBER N.I.S. NUMBER N.I.S.
---------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C>
AS AT DECEMBER 31, 1994:
Ordinary shares of
NIS 0.3 par value each 2,500,000 1,273,334 382,000 1,273,334 382,000
Preferred shares of
NIS 0.3 par value each - - - - -
AS AT DECEMBER 31, 1993:
Ordinary shares of
NIS 0.3 par value each 2,500,000 1,273,334 382,000 1,265,789 379,737
Preferred shares of
NIS 0.3 par value each - - - - -
</TABLE>
b. CHANGES IN SHARE CAPITAL
During 1993:
i. The preferred shares were consolidated with the ordinary
shares. The holders of the preferred shares exercised their
option to purchase 58,334 ordinary shares for US$ 729,175.
ii. The Company issued 240,000 ordinary shares, out of which
232,455 were fully paid. Share proceeds were US$ 3,875,025,
net of issue expenses, totalling US$ 131,982.
During 1984:
i. The balance of 7,545 ordinary shares, which was issued but not
paid in 1993, was paid. Share proceeds were US$ 150,000.
F-35
<PAGE> 96
GALCOM NETWORKING LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13 - CHARGES
The Company has registered fixed and floating charges on all of its assets
(including shares in the subsidiary), share capital and goodwill to secure its
liabilities to banks, non-bank finance company and others.
NOTE 14 - TAXES ON INCOME
a. TAX BENEFITS UNDER VARIOUS TAX LAWS:
1. Industrial Company:
The Company is an "Industrial Company" as defined by the Law for
the Encouragement of Industry (Taxes), 1969, and as such, is
entitled to certain tax benefits.
2. Approved Enterprise:
The Company's investment program for expansion has been granted
"Approved Enterprise" status in accordance with the Law for
Encouragement of Capital Investments, 1959. Pursuant to the said
law, the Company has elected to adopt the "alternative benefits
program" which entitles the Company to a complete exemption from
taxes on its undistributed income arising from the revenue that
will be derived from the expansion for a period of ten years from
the year in which the Company first earns taxable income.
During 1992, the Company received approval for an extension to the
investment amounting to US$ 648,000 under the "alternative
benefits program". Through the balance sheet date, the Company has
made investments within this program amounting to approximately
US$ 250,000.
The Company has received approval from the Investment Center to
assign the abovementioned approval to its subsidiary, Galcom
Communication Systems (Israel) Ltd. ("GCS").
b. TAXATION UNDER INFLATIONARY CONDITIONS:
All of the Company's income is subject to the provisions of the Income
Tax Law (Adjustments for Inflation), 1985, pursuant to which the results
for tax purposes are measured in real terms in accordance with changes
in the Israeli CPI.
c. INCOME TAX ASSESSMENTS:
The Company has not yet received final tax assessments since
incorporation.
F-36
<PAGE> 97
GALCOM NETWORKING LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 - INCOME TAXES (contd.)
d. DEFERRED TAXES
The main components of the Company's deferred tax assets, as at
December 31, 1994, are as follows:
<TABLE>
<CAPTION>
US$
-------
(IN THOUSANDS)
<S> <C>
Deferred tax assets:
Accrued vacation pay, severance pay and other 453
Net operating loss carryforwards in Israel 4,285
Net operating loss carryforwards
of non-Israeli subsidiaries 661
-------
5,399
Loss - valuation allowance (5,399)
-------
-
-------
Deferred tax liabilities -
-------
-
=======
</TABLE>
Under Statement No. 109 of the FASB, deferred tax assets are to be
recognized for the anticipated tax benefits associated with net
operating loss carryforwards and deductible temporary differences,
unless it is more likely than not that some or all of the deferred tax
asset will not be realized. The adjustment is made by a valuation
allowance.
Since the realization of the net operating loss carryforwards and
deductible temporary differences of the non-Israeli subsidiaries and the
Israeli companies is less likely than not, a valuation allowance has
been established for the amounts of the related tax benefits.
Tax loss carryforwards of the U.S. subsidiary, totalling US$ 1,945,000,
expire between 2007-2009.
Tax loss carryforwards of the Company and the Israeli subsidiaries are
denominated in NIS and are linked to the Israeli CPI.
e. TAXES ON INCOME:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1994 1993
------ ------
US$ US$
------ ------
(IN THOUSANDS)
<S> <C> <C>
Current taxes 14 84
====== ======
</TABLE>
F-37
<PAGE> 98
GALCOM NETWORKING LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15 - SALES
<TABLE>
<CAPTION>
Year ended December 31,
-----------------------
1994 1993 1992
---- ---- ----
US$ US$ US$
--- --- ---
(In thousands)
Classification by geographical
distribution:
<S> <C> <C> <C>
Export 8,446 4,071 2,965
Israel 231 2,893 1,895
----- ----- -----
8,677 6,964 4,860
===== ===== =====
Classification by major customer:
Percentage of sales to customer
exceeding 10% of sales: 14% 20% 36%
</TABLE>
NOTE 16 - COST OF SALES
<TABLE>
<CAPTION>
Year ended December 31,
-----------------------
1994 1993 1992
---- ---- ----
US$ US$ US$
--- --- ---
(In thousands)
<S> <C> <C> <C>
Write-off inventory and fixed assets 973
Materials and components 3,876 3,226 2,482
Salaries, wages and employee benefits 1,198 916 748
Sub-contractors 321 128 128
Depreciation and amortization 57 91 62
Other manufacturing costs 414 289 317
----- ----- -----
6,839 4,650 3,737
Decrease (increase) in work-in-process
and finished products 383 ( 131) ( 498)
----- ----- -----
7,222 4,519 3,239
===== ===== =====
</TABLE>
NOTE 17 - RESEARCH AND DEVELOPMENT EXPENSES, NET
<TABLE>
<CAPTION>
Year ended December 31,
-----------------------
1994 1993 1992
---- ---- ----
US$ US$ US$
--- --- ---
(In thousands)
<S> <C> <C> <C>
Research and development expenses 787 1,174 567
Less - participation
of the Government of Israel 210 226 152
----- ----- -----
577 948 415
===== ===== =====
</TABLE>
NOTE 18 - SELLING, GENERAL AND ADMINISTRATIVE EXPENSES, NET
<TABLE>
<CAPTION>
Year ended December 31,
-----------------------
1994 1993 1992
---- ---- ----
US$ US$ US$
--- --- ---
(In thousands)
<S> <C> <C> <C>
Selling, net 1,552 1,743 1,135
General and administrative 2,815 1,842 841
----- ----- -----
4,367 3,585 1,976
===== ===== =====
</TABLE>
F-38
<PAGE> 99
GALCOM NETWORKING LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 19 - BALANCES AND TRANSACTIONS WITH RELATED PARTIES
a. BALANCES DUE TO OR FROM RELATED PARTIES:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1994 1993
US$ US$
---- ----
(IN THOUSANDS)
<S> <C> <C>
Accounts receivable - shareholders 53 169
Accounts payable - related party 119 -
</TABLE>
b. INCOME FROM RELATED PARTIES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1994 1993 1992
US$ US$ US$
---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C>
Sales - - 5
Interest from shareholders 14 - 6
</TABLE>
c. EXPENSES TO RELATED PARTIES
<TABLE>
<S> <C> <C> <C>
Cost of sales - - 29
Purchase of fixed assets - - 11
</TABLE>
NOTE 20 - SUBSEQUENT EVENTS
On March 21, 1995, the Company signed an agreement with a third party to sell
its business and rights (including the manufacturing rights, know-how,
technology, fixed assets, inventory, etc.) and its holdings in subsidiaries in
the United States and the United Kingdom for consideration of US$ 900 thousand
in cash and the assignment of its obligations up to an amount of US$ 1.8
million. In addition, the purchaser will act so that its parent company in the
United States will issue to the Company an option (available for 5 years) to
purchase 60,000 shares of the parent company, traded on a foreign stock
exchange, at the price per shares at the date of closing of the contract ("the
closing price") and a further option (available for five years) to purchase an
additional 15,000 shares at 150% of the closing price.
F-39
<PAGE> 100
GALCOM NETWORKING LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 21 - DIFFERENCES BETWEEN ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN
ISRAEL ("ISRAELI GAAP") AND ACCOUNTING PRINCIPLES GENERALLY ACCEPTED
IN THE UNITED STATES ("U.S. GAAP")
Translation of the financial statements of the Israeli subsidiary -- Galcom
Communication Systems (Israel) Ltd. ("GCS") -- in which the Company has a 52.9%
shareholding:
In accordance with Israeli GAAP, the financial statements of GCS, adjusted for
changes in the Israeli CPI, have translated according to the representative
exchange rate of the U.S. dollar at the balance sheet date (see Note 2a).
According to U.S. GAAP, the said statements should be translated without
adjustment to the Israeli CPI, in accordance with the provisions of Statement
No. 52 of the FASB (balance sheet items -- current rate, statement of operations
items -- average rate.)
The effect of translation according to U.S. GAAP on the consolidated statement
of operations of the Company for the year ended December 31, 1994 is as follows
(GCS was established in October 1993 and the effect of translation according to
U.S. GAAP in 1993 is not material.):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1994
----------------------------
US$ US$
------ -----
(IN THOUSANDS)
ISRAELI U.S.
GAAP GAAP
------ -----
<S> <C> <C>
Sales 8,677 8,519
Cost of sales 7,222 7,067
------ -----
GROSS PROFIT 1,455 1,452
Research and development expenses, net 577 577
Selling, general and administrative expenses, net 4,367 4,328
------ -----
OPERATING LOSS BEFORE FINANCIAL EXPENSES (3,489) (3,453)
Financial expenses, net (989) (180)
Other income, net 2,855 2,855
------ -----
LOSS BEFORE TAXES ON INCOME (1,623) (778)
Taxes on income (14) -
Minority interest in net losses (income) of consolidated
subsidiary 373 (31)
Company's share in losses of subsidiaries, net - -
------ -----
LOSS FROM CONTINUING OPERATIONS (1,264) (809)
Loss from discontinued operations (77) (77)
------ -----
NET LOSS (1,341) (886)
====== =====
</TABLE>
The effect of translation according to U.S. GAAP on most of the balance sheet
items as at December 31, 1994 is not material. The items in the balance sheet
on which the effect is material are as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1994
----------------------
US$ US$
------ -----
(IN THOUSANDS)
ISRAELI U.S.
GAAP GAAP
------ -----
<S> <C> <C>
Capital surplus 474 10
===== =====
Minority interests 3,461 3,398
----- -----
</TABLE>
F-40
<PAGE> 101
UNAUDITED
GALCOM NETWORKING, LTD.
STATEMENT OF OPERATIONS
For the Four months ended April 30, 1995
<TABLE>
<CAPTION>
(In thousands US$)
<S> <C>
REVENUES, net $2,076
COSTS AND EXPENSES
Cost of goods sold 1,285
Research and development expenses 28
Selling, general and administrative expense 964
------
2,227
------
Operating loss (201)
Other expense (222)
Provision for income tax --
------
Net loss $ (423)
======
</TABLE>
F-41
<PAGE> 102
GALCOM NETWORKING LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
FOUR MONTHS ENDED APRIL 30, 1995
US$ (IN THOUSANDS)
(UNAUDITED)
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (485)
Adjustments to reconcile net loss to cash used in
operating activities
(See Appendix A) (2,914)
Net cash used in operating activities (3,403)
-------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of marketable securities 255
Investment in subsidiary, net of cash acquired
(Appendix B) (172)
Purchase of fixed assets (129)
Redemption of short-term loans 2,025
-------
Net cash provided by investing activities 1,979
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term bank credits, net 1,392
Repayment of long-term loans (125)
-------
Net cash provided by financing activities 1,267
-------
DECREASE IN CASH AND CASH EQUIVALENTS (157)
BALANCE OF CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE PERIOD 477
-------
BALANCE OF CASH AND CASH EQUIVALENTS AT THE END
OF THE PERIOD 320
=======
APPENDIX A
ADJUSTMENTS TO RECONCILE NET LOSS TO CASH FLOWS
USED IN OPERATING ACTIVITIES
ITEMS NOT INVOLVING CASH FLOWS:
Gain from marketable securities (131)
Depreciation of fixed assets and amortization
of other assets 136
Increase in provision for severance pay, net 67
Minority interest in net loss (61)
CHANGES IN ASSETS AND LIABILITIES:
Decrease in trade receivables 143
Increase in other receivables (2,410)
Increase in inventories (207)
Decrease in trade payables (251)
Decrease in other payables (200)
-------
(2,914)
=======
APPENDIX B
INVESTMENT IN SUBSIDIARY, NET OF CASH ACQUIRED
Working capital - excluding cash (375)
Fixed assets 18
Goodwill 529
-------
172
-------
</TABLE>
F-42
<PAGE> 103
GALCOM NETWORKING, LTD
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION - The accompanying unaudited condensed financial
statements have been prepared in accordance with the requirements of
Regulation S-X and, therefore, do not include all information and footnotes
which would be presented if such financial statements were prepared in
accordance with generally accepted accounting principles. These
statements should be read in conjunction with the audited financial
statements presented in the Company's Annual Report for the year ended
December 31, 1995.
In the opinion of management, these interim financial statements reflect
all normal and recurring adjustments necessary for a fair presentation of
the financial position and results of operations for the period presented.
The results of operations and cash flows for such period is not
necessarily indicative of results to be expected for the full year.
2. SUBSEQUENT EVENT - On May 2, 1995 the Company sold, to a third party, its
business and rights (including the manufacturing rights, know-how,
technology, fixed assets, inventory, etc.) and its holdings in subsidiaries
in the United States and the United Kingdom for consideration of US$900
thousand in cash and the assignment of its obligations up to an amount of
US$1.8 million. In addition, the purchaser will act so that its parent
company in the United States will issue to the Company an option (available
for 5 years) to purchase 60,000 shares of the parent company, traded on a
foreign stock exchange, at the price per share at the date of closing of
the contract ("the closing price") and a further option (available for five
years) to purchase an additional 15,000 shares at 150% of the closing price.
F-43
<PAGE> 104
ACE 400 COMMUNICATIONS LTD.
CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 1994
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
AUDITORS' REPORT F-45
CONSOLIDATED FINANCIAL STATEMENTS - IN U.S. DOLLARS:
Consolidated balance sheets F-47
Consolidated statements of operations F-49
Statement of changes in shareholders' equity F-50
Consolidated statements of cash flows F-51
Notes to consolidated financial statements F-53
Unaudited interim period F-71
</TABLE>
F-44
<PAGE> 105
RATZKOVSKY FRIED & Co.
CERTIFIED PUBLIC ACCOUNTANTS (ISR.)
43 HA'ATZMAUT ROAD HAIFA [LOGO] Ratzkovsky Fried
P.O.B. 1497 ZIP CODE 31014
TELEPHONE (04)673120
FAX (04)674778
AUDITORS' REPORT
To the Shareholders of
ACE 400 COMMUNICATIONS LTD.
We have examined the accompanying consolidated balance sheets of ACE
400 Communications Ltd. ("the Company") and its subsidiaries at December 31,
1994 and 1993, and the related statements of operations, changes in
shareholders' equity and cash flows for each of the years in the three-year
period ended December 31, 1994. Except as discussed in the following
paragraph, our examinations were made in accordance with generally accepted
auditing standards in Israel and in the United States, including those
prescribed by the Israeli Auditors' (Mode of Performance) Regulations, 1973,
and accordingly, included such tests of the accounting records and such other
auditing procedures as we considered necessary in the circumstances.
The financial statements of North Hills France (a consolidated
subsidiary), whose net loss constitutes 9.5% and 33.3% of the total
consolidated net loss for the years ended December 31, 1994 and 1993,
respectively, have been audited by other auditors whose reports thereon have
been furnished to us. These auditors disclaimed an opinion on the financial
statements for the year ended December 31, 1994, due to certain scope
limitations on their engagement, as a result of the subsidiary operating under
a liquidator as discussed in note 1c. We were unable to satisfy ourselves as
to the extent of North Hills France's liabilities and the Company's obligation
to cover these liabilities.
Due to the sale of most of its assets, as explained in note 1c, the
Company will not be able to continue its operations on a "going concern" basis.
These financial statements do not include certain additional adjustments
required in such event.
In our opinion, based on our examinations and the reports of the other
auditors, except for the effects of such adjustments, if any, that might have
been required as a result of the matters described in the preceding two
paragraphs, the accompanying financial statements present fairly, in conformity
with accounting principles generally accepted in Israel and in the United
States (as applicable to these financial statements, such accounting principles
are practically identical in all material respects), the consolidated financial
position of the Company and its subsidiaries at December 31, 1994 and 1993, and
the consolidated results of their operations and their cash flows for each of
the years in the three-year period ended December 31, 1994.
Without further qualifying our opinion, we refer to the uncertainty
detailed in note 3 in respect of a final settlement with Porta. The final
outcome of this matter cannot be determined or evaluated at this time.
/s/ RATZKOVSKY FRIED & CO.
--------------------------
Ratzkovsky Fried & Co.
Certified Public Accountants (Isr.)
Haifa, Israel
November 22, 1995
F-45
<PAGE> 106
[HLB LOGO]
[LETTERHEAD]
GROUPE FRANCE AUDIT S.A.
REPORT OF STATUTORY AUDITORS
Annual Accounts for 1994
In compliance with the assignment entrusted to us at the stockholders Annual
General Meeting of June 20th, 1994, we hereby report to you on:
- the audit of the accompanying annual account of NORTH HILLS
EUROPE S.A. 21, avenue Edouard Belin - 92500 RUEIL MALMAISON -
FRANCE,
- the specific verification and information required by law for
the year ended December 31st, 1994.
OPINION ON THE ANNUAL ACCOUNT
We have audited the financial statement on pages 2 to 5. Our audit was
conducted in accordance with standards established by the French Professional
body, except that the scope of our work was limited by the matter referred to
in the following paragraph:
The following accounts have never been approved by the company's Board.
Indeed, the directors resigned in June. Then, the business went bankrupt and
is now in the liquidator's hands. The liquidator (1) stopped our legal
assignment in August.
Therefore, the accompanying financial statements cannot be considered as the
final accounts. If so we would make three qualifications namely:
- lack of going concern
- lack of depreciation on bad debtors (German subsidiary)
- lack on information about turnover.
SPECIFIC VERIFICATION AND INFORMATION
We have no comments to make for the reasons exposed above.
Pour SOFIDEEC Associee
November 22, 1995
/s/ M.F. EL MGHAZLI
---------------------------
M.F. EL MGHAZLI
President Directeur General
Expert-Comptable
Commissaire aux Comptes, Associe
(1) Liquidator's letter copy
F-46
<PAGE> 107
ACE 400 COMMUNICATIONS LTD.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
<TABLE>
<CAPTION>
At December 31,
-----------------------------
Note 1994* 1993
-------- ------- -------
$ $
------- -------
<S> <C> <C> <C>
CURRENT ASSETS: 12
Cash and cash equivalents 337 652
Accounts receivable:
Trade receivables 15a;14 2,278 6,496
a
Other accounts receivable 14b 1,136 2,664
Inventories 14c 520 5,7O8
------- -------
Total Current Assets 4,271 15,520
PROPERTY, EQUIPMENT AND OTHER ASSETS
HELD FOR DISPOSITION:
Assets under sale agreement 2c 4,317 -
Other assets 1d;4 1,954 -
------- -------
PROPERTY AND EQUIPMENT: 5
Cost - 5,534
Less - accumulated depreciation - 983
------- -------
- 4,551
OTHER ASSETS AND DEFERRED CHARGES - 8,097
------- -------
10,542 28,168
======= =======
</TABLE>
*See note 1c.
The accompanying notes are an integral part of the financial statements.
F-47
<PAGE> 108
ACE 400 COMMUNICATIONS LTD.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
<TABLE>
<CAPTION>
At December 31,
-----------------------------
Note 1994* 1993
-------- ------- -------
$ $
------- -------
<S> <C> <C> <C>
CURRENT LIABILITIES: 12
Short-term bank credit and loans 13;14d 13,209 8,347
Current maturities of long-term loans 6 180 229
Accounts payable - trade and other:
Related parties 15a 3,218 1,785
Trade 14e 2,614 3,580
Other 14f 3,057 2,292
Liabilities for termination of the
employee - employer relationship 1c;8 222 -
--------- ---------
Total current liabilities 22,500 16,233
LONG-TERM LIABILITIES:
Long-term loans, not of current maturities 13;6 - 2,042
Convertible debenture 7 2,295 1,971
Long-term note 3 - 700
Liabilities for termination of the
employee-employer relationship 8 - 231
--------- ---------
COMMITMENTS AND CONTINGENT LIABILITIES
Total liabilities 9 24,795 21,177
SHAREHOLDERS' EQUITY: 10
Share capital 46 46
Share premium 6,157 6,581
Capital reserves 420 420
Retained earnings (accumulated deficit) (20,876) 386
--------- ---------
(14,253) 7,433
Less - loan receivable for shares issued - 442
--------- ---------
10,452 28,168
======== =========
</TABLE>
See note 1c.
The accompanying notes are an integral part of the financial statements.
F-48
<PAGE> 109
ACE 400 COMMUNICATIONS LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------------------
Note 1994* 1993 1992
-------- --------- -------- -------
$ $ $
--------- -------- -------
<S> <C> <C> <C> <C>
NET SALES 14g 13,777 15,009 8,791
COSTS AND EXPENSES:
Cost of sales 14h 9,495 8,013 4,423
Research and development expenses - net 14i 2,045 1,343 429
Selling, general and administrative expenses - net 14j 6,553 5,262 2,384
Bad debts, write-off of inventories and other
expenses 14k 7,204 2,310 86
--------- -------- ------
25,297 16,928 7,322
INCOME (LOSS) FROM OPERATIONS (11,520) (1,919) 1,469
FINANCIAL EXPENSES - net 141 (2,034) (445) (60)
--------- -------- ------
(13,554) (2,364) 1,409
LOSS ON DISPOSAL OF ASSETS 14m (7,708) - -
--------- -------- ------
NET INCOME (LOSS) FOR THE YEAR (21,262) (2,364) 1,409
========= ======== ======
</TABLE>
See note 1c.
The accompanying notes are an integral part of the financial statements.
F-49
<PAGE> 110
ACE 400 COMMUNICATIONS LTD.
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
U.S. dollars in thousands
<TABLE>
<CAPTION>
Loan
Receipts Retained receivable
on earnings for
Share Share account Capital (accumulated shares
capital premium of shares reserves deficit) issued Total
------- ------- --------- -------- ----------- --------- ---------
$ $ $ $ $ $ $
------- ------- --------- -------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 1992 36 - 214 - 1,341 - 1,591
CHANGES DURING 1992:
Share issuance to Adacom - 214 (214) - - - -
Share Issuance to others 3 1,846 - - - - 1,849
Options to employees - - - 37 - - 37
Capital reserves from sales of
goodwill and rights to company
under common control - - - 280 - - 280
Net income - - - - 1,409 - 1,409
--------- --------- --------- --------- --------- --------- ---------
BALANCE AT DECEMBER 31,1992 39 2,060 - 317 2,750 - -
CHANGES DURING 1993:
Shares issuance to the President of
Adacom and the president of the
Company 1 578 - - - (442) 137
Share issuance by way of rights 6 3,943 - - - - 3,949
Options to employees - - - 103 - - 103
Net loss - - - - (2,364) - (2,364)
--------- --------- --------- --------- --------- --------- ---------
BALANCE AT DECEMBER 31, 1993 46 6,581 - 420 386 (442) 6,991
CHANGES DURING 1994:
Exercise of options - 18 - - - - 18
Offset of loan - (442) - - - 442 -
Net loss - - - - (21,262) - (21,262)
--------- --------- --------- --------- --------- --------- ---------
BALANCE AT DECEMBER 31, 1994* 46 6,157 - 420 (20,876) - (14,253)
========= ========= ========= ========= ========= ========= =========
</TABLE>
See note 1c.
The accompanying notes are an integral part of the financial statements.
F-50
<PAGE> 111
ACE 400 COMMUNICATIONS LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
<TABLE>
<CAPTION>
Year ended December 31,
------------------------------------
1994* 1993 1992
-------- ------- -------
$ $ $
-------- ------- -------
<S> <C> <C> <C>
CASH FLOWS - OPERATING ACTIVITIES:
Net income (low) for the year (21,262) (2,364) 1,409
Adjustments to reconcile net income to net cash used
in operating activities:
Depreciation and amortization 1,213 862 165
Loss on disposal of assets 7,708 - -
Increase (decrease) in liability for
termination of employee-employer relationship (9) 8 14
Compensation expense in respect of employee
stock options - 103 37
Interest, erosion and write-off of
long-term balances 324 106 (105)
Decrease (increase) in trade receivables 4,218 (1,464) (2,668)
Decrease (increase) in other receivables 1,528 (1,145) (558)
Decrease (increase) in inventories 3,082 (2,461) 113
Increase in accounts payable 452 93 222
-------- -------- --------
Net cash used In operating activities (2,746) (6,262) (1,371)
-------- -------- --------
CASH FLOWS - INVESTING ACTIVITIES:
Purchase of North Hills Inc. - consolidated
for the first time (a) - 62 (215)
Purchase of fixed assets (358) (640) (298)
Proceeds from sale of fixed assets - 107 -
Increase In long-term balances and other assets - (55) -
-------- -------- --------
Net cash used in investing activities (358) (526) (737)
-------- -------- --------
CASH FLOWS - FINANCING ACTIVITIES:
Proceeds from issuance of shares, net 18 1,086 1,849
Proceeds from issuance of convertible
debenture, net - - 1,941
Receipt of long-term loans 54 2,035 -
Repayment of long-term loans (145) (108) (44)
Increase (decrease) in short-term
bank credit 2,862 3,207 (491)
-------- -------- --------
Net cash provided by financing activities 2,789 6,220 3,255
-------- ------- -------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (315) (568) 1,147
CASH AND CASH EQUIVALENTS AT BEGINNING OF
YEAR 652 1,220 73
-------- -------- --------
CASH AND CASH EQUIVALENTS AT END OF YEAR 337 652 1,220
-------- -------- --------
</TABLE>
* See note 1c.
The accompanying notes are an integral part of the financial statements.
F-51
<PAGE> 112
ACE 400 COMMUNICATIONS LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
<TABLE>
<CAPTION>
Year ended December 31,
------------------------------------
1994* 1993 1992
------- ------ ------
$ $ $
------- ------ ------
<S> <C> <C> <C> <C>
(a) Purchase of North Hills Inc.:
Assets and liabilities at acquisition date:
Working capital (not including
cash and cash equivalents) (6,907)
Property and equipment - net 2,460
Long-term loans (260)
Accrued severance pay (209)
Excess of cost over fair value:
Allocated to land and buildings 1,232
Goodwill that was transferred 100
to related company 8,237
------
Unallocated goodwill 4,653
Notes furnished and balance to be paid to seller (4,500)
Acquisition costs recorded in previous year (215)
------
(62)
======
(b) Non-cash transactions:
Issuance of shares to Adacom
against notes issued by Adacom in the
purchase of North Hills Inc. - 3,000 -
===== ====== =====
Interest paid in cash 1,611 609 75
===== ====== =====
Taxes paid in cash
Income taxes primarily in respect
of nondeductible expenses 277 28 -
===== ====== ======
</TABLE>
* See note 1c.
The accompanying notes are an integral part of the financial statements.
F-52
<PAGE> 113
ACE 400 COMMUNICATIONS LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31,1994
NOTE 1 - GENERAL.
a. Definitions:
ACE 400 Communications Ltd. - "the Company" - an Israeli Corporation.
<TABLE>
<S> <C>
"ACE Inc." ACE Communications Inc., a U.S. corporation, a wholly
owned subsidiary of the Company.
"North Hills Inc." North Hills Electronics Inc., a U.S. corporation, a
wholly owned subsidiary of ACE Inc., acquired on May 11, 1993.
"North Hills North Hills International Inc., a U.S. corporation,
International" a wholly owned subsidiary of North Hills Inc., whose
sole activity is holding shares in North Hills
Israel.
"North Hills Israel" North Hills Israel Ltd., a wholly owned Israeli subsidiary of North Hills
International.
"North Hills France" North Hills Europe, a wholly owned subsidiary of North Hills Israel.
"North Hills Germany" North Hills Edy Network Services GMBH, a wholly owned subsidiary of North Hills Israel.
"North Hills Group" North Hills Inc. and its subsidiaries.
"The Parent Company" Adacom Technologies Ltd-, which holds the majority of
or "Adacom" the Company's shares.
"Harris Adacom" "Harris Adacom Corporation", a U.S. corporation, which was the
ultimate parent company of the parent company, until Adacom's shares were
transferred to Harris Adacom B.V., a Dutch corporation.
"Related companies Adacom's subsidiaries and affiliated companies
of Adacom" (Adacom Group).
"Related companies Harris Adacom's subsidiaries and affiliated companies
of Harris Adacom" (Harris Adacom Group).
The Group The Company and its subsidiaries.
Related parties As defined in opinion No. 29 of the Institute of Certified Public
Accountants in Israel (hereinafter the Institute).
</TABLE>
F-53
<PAGE> 114
ACE 400 COMMUNICATIONS LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31,1994
b. Description of business
The company and North Hills Israel (which was acquired in 1993) were
engaged in the development, manufacturing, marketing and servicing of
computer communication equipment. Up to June 30, 1994, part of the
manufacturing was done at Adacom's main plant. The foreign subsidiaries
marketed the products of the Company and North Hills Israel. Part of the
marketing and sales of the products was also effected through related
companies of the parent company and of Harris Adacom.
c. Developments during 1994 and 1995
During 1994, Adacom experienced financial difficulties and a receiver was
appointed. During 1995, the Israeli court appointed a liquidator for
Adacom. Harris Adacom and its subsidiaries also experienced financial
difficulties and part or all of them are also under receivership or
liquidation. The receivers of Adacom were appointed as directors of the
Company. In 1994, the market in which the group was operating
substantially decreased by volume and sale price, the competition in the
market became stronger and the group did not succeed in developing new
products in time. These matters, along with the changes in management and
the situation of the Harris Adacom and Adacom Groups, affected the
Company, and the Group also experienced financial difficulties. As a
result of the above, Adacom's receiver decided prior to balance Sheet date
to dispose of the Company's operations. In 1995, North Hills France and
North Hills Germany ceased operations, and North Hills France is currently
under liquidation. The excess of North Hills France's liabilities over
its net assets cannot be determined at this stage, as well as the
Company's obligation to cover these liabilities; however, management has
provided $100,000, included in these statements, in respect of additional
obligations of North Hills France, is sufficient.
On June 29, 1995, the Company, Ace Inc., North Hills Israel and North
Hills Inc. signed an agreement to sell most of their assets as described
in d. below and the Group virtually discontinued its operations.
As a result of the above, and the excess of the Group's liabilities over
its assets, the Group ceased to operate on a going concern basis, except
for selling or renting the North Hills Israel building (see note 4):
therefore all of its assets to be disposed of under the sale agreement
detailed in (d) below as well as other assets held for disposition are
presented at their expected realization value, all the long-term loans to
banks have been classified as short-term loans and the expected loss
derived from the disposition of these assets is presented as a separate
line item in the statement of operations as required under the provisions
of APB 30. As to liabilities, most of which are in arrears, the Company
and the receiver of Adacom are in negotiations with the creditors (mainly
the banks) and a repayment plan has not been yet finalized.
d. On June 29, 1995 the Company, Ace Inc., North Hills Inc. and North Hills
Israel (hereafter "the Sellers") signed an agreement with N.N.H. computer
Communications Ltd. and affiliates (hereafter "the Buyers"), including MRV
Communications Inc. (hereafter "MRV"). The execution of the agreement was
based on meeting several pre-conditions; which were substantially
fulfilled. However, certain formal government authorizations are still in
the process of being obtained.
The main aspects of the agreement are as follows:
The sellers will sell to the buyers goodwill, know-how, fixed assets (not
including North Hills Israel's building), production files, research and
development files, agreements with customers (including backlog) and
suppliers and other agreements and contracts, the right to use software and
the right to use North Hills Israel's building up to January 31, 1996
(including right of first refusal to continue to rent or buy the building).
The total consideration for the above is expected to be $4,316,667, as
follows: MRV will issue shares to the Company and North Hills Israel at a
minimum guaranteed value of $3,000,000 (according to the share price as
defined in the agreement) and shares at a minimum guaranteed value of
$750,000 to Porta (see note 3). The buyers will also pay $100,000 in cash
and will pay to suppliers of the sellers $466,667.
F-54
<PAGE> 115
ACE 400 COMMUNICATIONS LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 1994
The agreement also stipulates that:
o The buyers may purchase certain items out of the sellers' inventories
at 30% of their cost during a two-year period but not less than
$400,000.
o The buyers will collect the trade receivables (at June 30, 1995) for
the sellers, for 10% commission.
o MRV will issue to the Company and North Hills Israel options to
purchase 100,000 MRV shares. The exercise price will be the same
share price as defined in the agreement.
o MRV took upon itself to pay the Company's commitment to the
Chief Scientist as explained in note 9b.
e. Financial statements in U.S. dollars
The Company and North Hills Israel are Israeli corporations which maintain
their books of account in nominal new Israeli shekels (NIS) and in U.S.
dollars.
The currency of the primary economic environment in which the operations
of the Company and its subsidiaries are conducted is the U.S. dollar
("dollar"). Thus, the functional currency of the Group is the dollar.
Transactions and balances originally denominated in dollars are presented
at their original amounts. Transactions and balances in other currencies
have been remeasured into dollars in accordance with the principles, set
forth in Statement No. 52 of the Financial Accounting Standards Board of
the United States ("FASB"). Exchange gains and losses from the
remeasurement are carried to financial income or expenses.
The exchange rates of the dollar prevailing at December 31, 1994 and 1993
were $1 = NIS 3.018 and $1 = NIS 2.986, respectively.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies that were applied in preparation of the
financial statements, in a manner consistent with the previous year (except for
adjustments recorded to present certain assets at net realizable value - see
notes 1c and 1d) are as follows:
a. Principles of consolidation:
1. The consolidated financial statements include the accounts of the
Company and the consolidated financial statements of its
subsidiaries, from the beginning of the year or from the
acquisition date - (see also note 3).
2. Material intercompany balances and transactions have been
eliminated.
b. Inventories
Inventories which may be purchased by the buyers subsequent to June
30, 1995 as mentioned in note 1c are valued at $400,000 (minimum
amount to be paid by the buyers). The write-down is included in the
loss on disposal of assets as detailed in note 14c.
Inventories at December 31, 1993 and inventories consumed subsequent
to the balance sheet date through June 30, 1995 are valued at the
lower of cost or market value. Cost is determined as follows:
Raw materials and components - on the moving average basis.
Work in process and finished goods - at actual manufacturing
cost.
Purchased products - on the "first-in first-out" basis.
F-55
<PAGE> 116
ACE 400 COMMUNICATIONS LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31,1994
c. Property and equipment:
1. Fixed assets which were sold subsequent to the balance sheet
date, as mentioned in note 1c, are valued, together with other
intangible assets, at their expected realization value. The
write-down of these assets is included in the loss on disposal
of assets (see note 14m).
2. The building (which has not yet been sold) is stated at net
realizable value. See also note 4.
3. At December 31, 1993, property and equipment were stated at cost,
net of investment grants received, see note 5.
4. Depreciation is computed by the straight-line method, over the
estimated useful lives of the assets. Annual depreciation rates
are:
<TABLE>
<CAPTION>
%
-----
<S> <C> <C>
Buildings 2-4
Equipment (including computers) 10-20
Motor vehicles 15-20
Office furniture and equipment 6-20
Leasehold improvements 10
</TABLE>
d. Other assets and deterred charges
The goodwill (from the acquisition of North Hills Inc.) and the
know-how (purchased from the parent company), which were disposed of
subsequent to the balance sheet date together with fixed assets sold,
are valued at December 31, 1994 at their net realizable value based
on the sale price according to the sale agreement described in note
1d. Prior to that date, the goodwill was amortized over twenty years
and the know-how over ten years.
e. Deferred income taxes:
The Group did not provide for deferred taxes, due to significant
accumulated tax losses and other temporary differences representing
net deferred tax asset, the realization of which is not considered
likely.
f. Revenue recognition
Revenue from sale of products is recognized upon shipment.
g. Research and development expenses
Research and development expenses, net of participation by government
ministries and others, are charged to income as incurred.
h. Employee stock options
The benefit from stock options granted to employees was charged to
income through December 31, 1993. Since further exercise of the
options is remote and amounts to be charged to income were not
material, the Company did not record compensation expense in respect
of options during 1994.
i. Allowance for warranty costs
As explained in note 9b, the Group companies provide warranties for
their products. The allowance is computed based on management's
estimation, and approximates actual costs.
F-56
<PAGE> 117
ACE 400 COMMUNICATIONS LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 1994
NOTE 3 - INVESTMENT IN NORTH HILLS INC.
The North Hills Group was acquired by Ace Inc. on May 11, 1993 from "Porta" (a
U.S. Company). The final purchase price was $6,250 thousand. Acquisition
expenses totaled $649 thousand. The excess of cost of the investment over net
assets acquired amounted to $9,666 thousand, of which $1,231 thousand was
allocated to land and buildings owned by North Hills Israel. The balance -
$8,236 thousand - was defined as goodwill.
The purchase was financed as follows:
<TABLE>
<CAPTION>
$ thousands
-----------------
<S> <C>
Cash payment by Ace Inc. in May 1993 3,500
Notes furnished by Adacom to Porta in connection
with the Company's issuance of rights to Adacom
(see note 10a(3)):
Note to be repaid on November 1994 1,200*
Note to be repaid on November 1995 1,800*
Cash payment to be made by Ace Inc.
in April 1994 800*
Note to be repaid by Ace Inc. in May 1995 700*
-------
8,000
Repayment of North Hills' bank loan (paid
to the bank by Porta) 1,750
-------
6,250
-------
</TABLE>
o Part of the shares acquired were placed in trust as security for the
repayment of the aggregate obligation of $4,500 thousand owed by Adacom
and Ace to Porta. As Adacom and Ace Inc. failed to pay the amounts due
in 1994 and 1995, the trustee to the transaction did not transfer the
shares to the Company.
Porta has several claims against the Group with regard to the following
matters:
Repayment of the notes amounting to $3,000 thousand (including interest)
by Ace, even though the notes had been issued by Adacom.
a. Repayment of the $1,750 thousand loan paid by Porta which,
according to Porta, was not a part of the deal and therefore should
be repaid to Porta.
b. Repayment of the $1,500 thousand cash and notes to be paid by Ace.
Management is of the opinion that the Group will not have to pay Porta
any amounts over and above the amounts it has specifically committed as
mentioned above.
In the sale agreement mentioned in note id, Porta will receive MRV shares
valued at $750 thousand. However, final settlement with Porta has not
yet been set.
F-57
<PAGE> 118
ACE 400 COMMUNICATIONS LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 1994
NOTE 4 - PROPERTY, EQUIPMENT AND OTHER ASSETS HELD FOR DISPOSITION:
a. Composition of assets, grouped by major classifications at December 31,
1994:
1. Assets to be disposed under the sale agreement, see note 1c:
<TABLE>
<CAPTION>
Accumulated
depreciation Net
and book
Cost amortization value
------- ------------ -------
U.S. dollars in thousands
-------------------------------------------
<S> <C> <C> <C>
Equipment 1,624 768 856
Motor vehicles 339 130 209
Office furniture and equipment 498 252 246
------- ------- -------
2,461 1,150 1,311
Goodwill from purchase of
North Hills 8,236 676 7,560
Know-how and other assets 220 172 48
------- ------- -------
8,456 848 7,608
------- ------- -------
10,917 1,998 8,919
------- ------- -------
Write-down to net realizable value:
Expected loss on disposal,
based on the sale agreement (4,602)
-------
Expected realization value 4,317
-------
</TABLE>
2. Other assets to be disposed
<TABLE>
<CAPTION>
Net
Accumulated Write- Realizable
Cost depreciation down value
------ ------------ ------ ----------
U.S. dollars in thousands
--------------------------------------------------------
<S> <C> <C> <C> <C>
Land and building
(see b. below) 3,216 355 1,000 1,861
Leasehold 25 25 - -
improvements
Vehicles 119 26 - 93
------ ------ ------ ------
3,360 406 1,000 1,954
------ ------ ------ ------
</TABLE>
b. In November 1995 North Hills received an offer to sell the building for
$1,800 thousand. A creditor bank holding a mortgage on the property
refused to allow the sale of the building at this price, expecting a
better offer. Management is also considering the possibility of renting
the building for the short-term. Nevertheless, as it appears likely that
the building will be disposed of, the Company has provided $1,000
thousand in respect of a write-down for probable impairment of the asset.
The land is leased from the Israel Lands Administration for 49 years,
until 2035 to extend for another 49 years.
c. As to charges on the assets, see note 13.
F-58
<PAGE> 119
ACE 400 COMMUNICATIONS LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 1994
NOTE 5 - PROPERTY, EQUIPMENT AND OTHER ASSETS
Composition by major classifications at December 31, 1993:
Property and equipment:
<TABLE>
<CAPTION>
Accumulated Depreciated
Cost depreciation cost
--------- ------------ -----------
U.S. dollars in thousands
--------------------------------------------------
<S> <C> <C> <C>
Land and building 3,127 262 2,865
Equipment 1,404 408 996
Motor vehicles 387 95 292
Office furniture and equipment 543 202 341
Leasehold improvements 73 16 57
--------- --------- ---------
5,534 983 4,551
========= ========= =========
</TABLE>
Other assets:
<TABLE>
<CAPTION>
Accumulated Amortized
Cost amortization balance
-------- ------------ -----------
U.S. dollars in thousands
--------------------------------------------------
<S> <C> <C> <C>
Good-will originated to the
purchase of North Hills 8,236 264 7,972
Know-how and other assets 220 95 125
--------- --------- ---------
8,456 359 8,097
========= ========= =========
</TABLE>
NOTE 6 - LONG-TERM LOANS:
a. Composition of bank loans:
<TABLE>
<CAPTION>
December 31
Interest --------------------------------
rate 1994 1993
-------- ----------- -----------
% U.S. dollars in thousands
-------- --------------------------------
<S> <C> <C> <C>
Loans linked to the U.S. dollar 8.2 180 271
Loan linked to the U.S. dollar Libor+1.8 - 2,000
--------- ---------
180 2,271
Less - current maturities 180 229
--------- ---------
- 2,042
========= =========
</TABLE>
b. The loans mature in the following years subsequent to balance sheet
dates:
<TABLE>
<CAPTION>
December 31
--------------------------
1994 1993
------ ------
U.S. dollars in thousands
--------------------------
<S> <C> <C>
First year - current maturities 180 229
Second year - 375
Third year - 222
Fourth year - 222
Fifth year and thereafter - 1,223
------ ------
- 2,042
------ ------
180 2,271
====== ======
</TABLE>
c. As to collateral securing the loans, see note 13.
F-59
<PAGE> 120
ACE 400 COMMUNICATIONS LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 1994
NOTE 7 - CONVERTIBLE DEBENTURE
A debenture convertible into common shares with a par value of NIS 4,869,959
was issued in consideration for $1,989 thousand. The debenture bears interest
of 3%, and the principal and interest are linked to the Israeli Consumer Price
Index. Interest is payable only if the debenture is not converted into shares.
The debenture holders have the right to elect one of the following
alternatives:
1. To demand redemption of the debenture, principal and interest, in 16
equal quarterly installments.
2. To convert the debenture into common shares of the Company, at a price
per share that is twice the "base price" ($286), linked to the Index.
3. To convert the shares issued and the debenture into common shares of
Adacom Technologies Ltd., to be held in trust by Harris Adacom or its
related company, at terms stipulated in the agreement between them.
In this case, the Company will repay its liabilities under the terms
of the debenture to Harris Adacom or to its related company.
The debenture holders have not yet notified the Company as to the alternative
chosen.
The Company is obligated not to pay dividends before full conversion or full
redemption of the debenture. The debenture balance at the balance sheet date
includes accrued interest of $153 thousand (December 31, 1993 - $78 thousand).
NOTE 8 - LIABILITY FOR TERMINATION OF EMPLOYEE-EMPLOYER RELATIONSHIP
The liability of the Group for pension and severance pay to their employees is
covered mainly by regular deposits with recognized pension and severance pay
funds and by the purchase of insurance policies. The amounts funded as above
are not reflected on the balance sheet since they are not under the control and
management of the Group. The balance sheet accrual for severance pay reflects
that part of the liability not covered by the above mentioned funds or
insurance policies.
F-60
<PAGE> 121
ACE 400 COMMUNICATIONS LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 1994
NOTE 9 - COMMITMENTS AND CONTINGENT LIABILITIES:
a. Commitments:
1. North Hills Israel leases a building in Yokneam, under an operating
lease agreement expiring on June 30, 1996, and offices in Kfar Saba,
under an operating lease agreement expiring on December 31, 1995.
ACE Inc. leases office space and computer equipment, under operating
lease agreements that expire on various dates through November 30,
1998.
The aggregate minimum lease payments as of December 31, 1994,
projected until the end of the lease periods are as follows:
<TABLE>
<CAPTION>
$ In thousands
-----------------
<S> <C>
1995 135
1996 96
1997 68
1998 58
</TABLE>
The above-mentioned agreements have been assigned to the buyers, see
note 1d.
2. Various agreements between the Group, Adacom Group and Harris Adacom
Group, regarding sales, purchases and allocation of expenses, were
signed during the years through December 31, 1993. Most of these
agreements may not be relevant due to the financial situation of the
Harris Adacom and Adacom groups.
3. The Company and North Hills Israel have agreements with distributors
who are not related parties, whereby they are given discounts from the
price list of up to 48%, or discounted commissions. These agreements
are also being transferred to the Buyers.
b. Contingent liabilities:
1. Under the distribution agreements, the Company and North Hills Israel
provide a warranty for their products, limited to defective materials
or workmanship, for periods ranging between one and three years.
Based on past experience, management is of the opinion that the
accrual included in the financial statements is sufficient to cover
expenses to be incurred, if any, with respect to the warranties.
2. Under research and development contracts with the Government of
Israel, the Company and North Hills are obligated to pay royalties of
2%-3% to the Government of Israel out of sale proceeds resulting from
the research and development in whose financing the Government has
participated. The total amount of the royalties is not to exceed the
amount of the grants received as participation in the research and
development projects. The total royalty-bearing grants received as
of December 31, 1994 (net of royalties paid) is approximately $5,150
thousand. This contingent obligation was transferred under the sale
agreement to the Buyers, see note 1d.
F-61
<PAGE> 122
ACE 400 COMMUNICATIONS LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31,1994
3. Under contracts with the Government of Israel, the company and North
Hills have received grants in respect of marketing expenses outside
Israel. They are contingently liable to pay 3% royalties to the
Government of Israel out of the incremental sales resulting from the
marketing program in which the Government participated, but not
exceeding the grant received. The grants received through December
31, 1994 (net of royalties paid) amounted to $2,500 thousand.
4. A lawsuit for $435 thousand has been filed against North Hills Israel
by the main contractor on its building in Yokneam. North Hills
Israel has filed a counter suit for $985 thousand. On November 15,
1995 the district court rejected the contractor's claim against North
Hills Israel and imposed payment of an immaterial amount in favor of
North Hills Israel. The contractor has the right to appeal to the
supreme court. No provision has been recorded in connection with this
claim.
5. Two lawsuits by vendors in the aggregate amount of $110 thousand have
been filed against North Hills Israel. No provision has been
recorded. Management, supported by the opinion of its legal counsel,
is of the opinion that North Hills Israel will not have to pay any
amount as a result of these lawsuits.
6. The Company and two related companies of Adacom are guarantors,
jointly and severally, to the customs authorities for any amounts
owed that have not been paid by Adacom.
7. For amounts in dispute with Porta, see Note 3.
NOTE 10 - SHARE CAPITAL:
a. Authorized, issued, and outstanding share capital is composed as
follows:
<TABLE>
<CAPTION>
Common shares, NIS 1
par value shares
------------------------------
Issued and
Authorized outstanding
---------- -----------
Number of shares
-------------------------------
<S> <C> <C>
Balance as of January 1, 1993 1,000,000 77,162
Issuances on May 30, 1993(2) - 2,625
Issuance by way of rights in
August 1993(3) - 12,478
---------- ----------
Balance as of December 31, 1993 1,000,000 92,265
Exercise of options by employees 90
Balance as of December 31, 1994 1,000,000 92,355
========== ==========
</TABLE>
1. In August 1992, the Company issued shares and a debenture. The
parties that handled negotiations related to the offering on behalf
of the Company received commissions and options to acquire additional
shares which have not been exercised to date. Such offering expenses
were offset against the proceeds of the offering.
2. Represents the issuance of 700 shares to the President of Adacom at
that time, in consideration for $137 thousand that he received as a
loan from Adacom, and the issuance of 1,925 shares to the President
of the Company at that time, in consideration for $442 thousand that
he received as a loan from the Company. These issuances resulted
from the exercise of previously granted options. See also b. below.
Pursuant to an agreement, due to the fact that the loans have not
been repaid, the shares passed to the control of Adacom. The loan to
the former president of the Company was offset against the premium
recorded at the time of issuance.
F-62
<PAGE> 123
ACE 400 COMMUNICATIONS LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31,1994
1. Represents the issuance of 12,478 shares by way of rights offering,
in consideration for $3,993 thousand. 10,370 of these shares were
issued to Adacom, in consideration for $3,317 thousand; $317 was paid
in cash, and $3,000 was paid in capital notes that were transferred
to Porta for the purchase of the shares of North Hills Inc.
b. Employee stock options
In consideration for services received, the Company decided to issue to
its officers and employees and to its related companies, officers and
employees, including certain service providers, options to purchase
common shares. During 1994, $18 thousand were received in consideration
for 90 shares issued from the exercise of 90 options. As the exercise
price is high, the probability is remote that any further exercises will
be made.
NOTE 11 - TAXES ON INCOME:
a. Benefits under - the Law for Encouragement of Capital Investments
("the Law") The Company's and North Hills Israel's production
facilities have been granted "approved enterprise" status under the
Law. Therefore, they are entitled to tax benefits, including reduced
tax rates or full exemption. North Hills Israel has also received
grants in connection with its investments. The benefits are
contingent upon compliance with conditions stipulated in the Law,
regulations enacted thereon, and the instruments of approval for the
specific investments made in the approved enterprise. Due to the
losses of the companies, utilization of the tax benefits is
considered remote.
b. As of December 31, 1994 the Company and North Hills Israel have
approximately $7,000 thousand of tax loss carryforwards. Ace Inc.
and North Hills Inc. have approximately $3,500 thousand of tax loss
carryforwards.
c. Tax assessments
The Company has received final tax assessments through 1991, North
Hills Israel received final tax assessments through 1993 inclusive;
ACE Inc., North Hills France have not been assessed for tax purposes
since their incorporation.
F-63
<PAGE> 124
ACE 400 COMMUNICATIONS LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 1994
NOTE 12 - LINKAGE TERMS OF MONETARY BALANCES:
<TABLE>
<CAPTION>
December 31, 1994
--------------------------------------------------------
In foreign
currency or
linked Linked
thereto to index Unlinked Total
----------- -------- -------- -----
U.S. dollars in thousands
---------------------------------------------------------
<S> <C> <C> <C> <C>
Cash and cash equivalents* 337 337
Trade receivables 2,171 107 2,278
Other receivables 829 21 286 1,136
--------- --------- --------- ---------
3,337 21 393 3,751
========= ========= ========= =========
Short-term bank credit
and loans 9,733 - 3,476 13,209
Related parties 3,218 - 3,218
Trade payables 1,327 - 1,287 2,614
Other payables 2,225 - 832 3,057
Long-term loans, including
current maturities 180 - - 180
Convertible debenture - 2,295 - 2,295
--------- --------- --------- ---------
16,683 2,295 5,595 **24,573
========= ========= ========= =========
</TABLE>
* Cash of subsidiaries in the U.S. and in France. May only be used for
payment of their liabilities and may not be transferred to Israel.
** Most of the liabilities are in arrears.
NOTE 13 - LIABILITIES SECURED BY PLEDGES:
To secure the commitments, guarantees discussed in Note 9b and commitments to
the Israel Investment Center, the Company and North Hills Israel have
registered fixed charges on the rights on the land and building, vehicles and
the rights thereon, share capital, goodwill, cash, securities, deposits at
banks, and insurance rights, as well as floating charges on the entire plant
and assets, unlimited in amount.
Liabilities to banks and debenture holders that are secured by charges at the
balance sheet date are as follows:
<TABLE>
<CAPTION>
December 31
------------------------
1994 1993
------- -------
U.S. dollars in thousands
-------------------------
<S> <C> <C>
Short-term bank credit and loans 13,209 8,347
====== =====
Long-term liabilities (including current
maturities) 180 2,271
====== =====
Convertible debenture 2,295 1,971
====== =====
</TABLE>
F-64
<PAGE> 125
ACE 400 COMMUNICATIONS LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 1994
NOTE 14 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION
Balance sheet:
a. Trade receivables:
<TABLE>
<CAPTION>
December 31
-------------------------
1994 1993
------- -------
U.S. dollars in thousands
-------------------------
<S> <C> <C> <C>
Foreign customers:
U.S. 235 1,302
other (primarily Europe) 1,936 4,943
Domestic customers 107 251
------- ------
2,278 6,496
======= ======
Customers are stated net of:
Allowance for bad accounts 3,893 546
======= ======
b. Accounts receivable - other
Government of Israel, in respect of:
Participation in research and development 235 557
V.A.T. and customs duties refundable 16 310
Income tax refundable 188 136
Marketing promotion fund - 702
Advances to suppliers 165 -
Miscellaneous 72 286
Related parties 460 673
------- ------
1,136 2,664
======= ======
c. Inventories:
Raw materials and components 647 1,398
Work in process 777 2,067
Finished goods 1,202 2,243
------- ------
2,626 5,708
Write-down, see notes 1d and 14m 2,106 -
------- ------
520 5,708
======= ======
d. Short-term bank credit and loans:
Banks:
Short-term credit at average
interest rates of 17% - 24% 2,017 2,879
Short-term loans (1) 11,192 5,468
------- ------
(1) - Linked to the dollar at 13,209 8,347
average interest rate of 8% 9,868* 3,350
- Loans in NIS at average
interest rate of 19.3% 1,324 2,118
------- ------
11,192 5,468
======= ======
</TABLE>
*Including a loan of $2,000 thousand which was presented as a
long-term loan in the previous year which was not renewed by the bank
in 1994.
F-65
<PAGE> 126
ACE 400 COMMUNICATIONS LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 1994
<TABLE>
<CAPTION>
December 31
-------------------------
1994 1993
------- -------
U.S. dollars in thousands
-------------------------
<S> <C> <C> <C>
e. Accounts payable - trade:
Foreign suppliers 669 l,133
Domestic suppliers:
Checks payable 514 40
Open accounts 1,431 2,407
------- ------
2,614 3,580
======= ======
f. Other payables and accrued expenses:
Porta 916 360
Accrued payroll and related expenses 267 373
Accrual for vacation and convalescence 111 152
Governmental institutions 281 223
Other 1,482 1,184
======= ======
3,057 2,292
======= ======
</TABLE>
<TABLE>
<CAPTION>
Statement of operations: Year ended December 31
--------------------------------
1994 1993 1992
------- ------- -------
U.S. dollars In thousands
--------------------------------
<S> <C> <C> <C> <C>
g. Sales - net:
Sales - geographic distribution:
Abroad - United States 2,947 4,116 4,269
Rest of the world (mainly Europe) 10,130 10,185 3,985
Domestic 700 708 537
------- ------- -------
13,777 15,009 8,791
======= ======= =======
h. Cost of sales:
Materials and components consumed
(including work in process
purchased from the parent company) 7,l64 8,834 4,081
Wages and employee benefits 678 428 26
Depreciation 48 29 7
Other manufacturing costs 194 287 50
Purchases of finished goods 263 225 163
------- ------- -------
8,347 9,803 4,327
Decrease (increase) in inventories:
Work in process 593 (1,184) (136)
Finished goods 555 (606) 232
------- ------- -------
Total - cost of sales 9,495 8,013 4,423
======= ======= =======
</TABLE>
F-66
<PAGE> 127
ACE 400 COMMUNICATIONS LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 1994
<TABLE>
<CAPTION>
Year ended December 31
-----------------------------------
1994 1993 1992
------- ------- -------
U.S. dollars in thousands
-----------------------------------
<S> <C> <C> <C> <C>
i. Research and development expenses
Expenses incurred 2,235 2,422 1,127
Less - royalty-bearing grants
received from the Government
of Israel 190 1,079 479
------ ------ -----
2,045 1,343 648
Less - capitalized development costs - - 219
------ ------ -----
2,045 1,343 429
====== ====== =====
j. Selling, general and administrative
expenses (income) - net:
Payroll and related expenses 2,708 1,883 783
Other expenses - net 3,845 4,271 2,011
Participation by the Fund for the
Promotion of Marketing Abroad - (892) (410)
------ ------ -----
6,553 5,262 2,384
====== ====== =====
k. Bad debts, write-off of inventories
and other expenses:
Write-off of certain assets, wages and
other expenses as a result of the
acquisition of North Hills - (1,331) -
Provision for bad accounts (3,846) (378) (70)
Amortization of goodwill (412) (264) -
Compensation in respect of employee
options - (103) (37)
Write-off of inventories (1,647) - -
Other expenses, net (1,299) (234) 21
------ ------ -----
(7,204) (2,310) (86)
====== ====== =====
l. Financial expenses - net:
Amortization of issue costs and interest
on convertible debenture 87 65 24
Interest on long-term liabilities 186 64 9
Interest income from related
companies - net (75) (60) (39)
Interest on short-term credit and currency
translation differences from monetary
balances, net 1,836 376 66
------- ------ -----
2,034 445 60
======= ====== =====
</TABLE>
F-67
<PAGE> 128
ACE 400 COMMUNICATIONS LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 1994
m. Loss on disposal of assets
<TABLE>
<S> <C>
Write-down of inventories to minimum value based on agreement 2,106
Loss on disposal of property, equipment and other assets, see note 4 4,602
------
Expected loss on disposal based on the agreement, see note ld 6,708
Write-down of the building, see note 4 1,000
------
Expected loss on disposal of assets 7,708
------
</TABLE>
NOTE 15 BALANCES AND TRANSACTIONS WITH RELATED PARTIES:
<TABLE>
<CAPTION>
1994 1993
------ ------
U.S. dollars in thousands
-------------------------
<S> <C> <C> <C>
a. Balances
1) Accounts receivable - trade
Adacom Group 149 1,016
Harris Adacom Group 40 959
------ ------
189 1,975
====== ======
2) Accounts receivable - other
Harris Adacom 460* 460*
Adacom Group - 213
------ ------
460 673
====== ======
3) Accounts payable and credit balances
Adacom Group 2,703 1,244
Harris Adacom Group 515* 541*
------ ------
3,218 1,785
====== ======
</TABLE>
The Group has provided for most of the balances of the Adacom Group and
Harris Adacom Group because of their financial situation, see note lb.
* In 1993, Ace Inc. paid $460 thousand to Harris Adacom in connection
with the purchase of North Hills. The Board of directors of the
company did not approve the payment, so Ace Inc. debited Harris
Adacom. As the amount is in dispute, Ace Inc. has provided for this
amount.
b. Transactions:
The company purchased raw materials and products in process from Adacom
at cost, up through the date of the appointment of Adacom's receiver
(see note lc). Subsequent to that date, raw materials were purchased
from Adacom, at 50% of their cost
Sales to the Harris Adacom and Adacom Groups, after appointment of the
receiver to Adacom, were made at the same prices as to non-related
customers, for cash only. Reimbursement of expenses made by Adacom to
third parties were at cost.
F-68
<PAGE> 129
ACE 400 COMMUNICATIONS LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31,1994
<TABLE>
<CAPTION>
Year ended December 31
---------------------------------
1994 1993 1992
------- ------- -------
U.S. dollars in thousands
---------------------------------
<S> <C> <C> <C> <C>
1) Sales:
In the U.S. - to:
Harris Adacom Group 272 345 823
====== ====== ======
Adacom Group - 155 333
====== ====== ======
In rest of world (mainly Europe) to:
Harris Adacom Group 684 1,025 1,475
====== ====== ======
Adacom Group 895 408 -
====== ====== ======
In Israel
Adacom Group 240 557 350
====== ====== ======
2) Cost of sales:
Purchases from Adacom 3,279 3,869 3,997
====== ====== ======
Expenses to (participation by)
Adacom for wages 66 - (41)
====== ====== ======
3) Research and development expenses:
Expenses to (participation by)
Adacom Group 19 - (52)
====== ====== ======
4) Marketing, selling, general and
administrative expenses
Expenses to (participation by)
Adacom Group - net 127 489 649
====== ====== ======
Expenses to Harris Adacom - 60 120
====== ====== ======
</TABLE>
F-69
<PAGE> 130
ACE 400 COMMUNICATIONS LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 1994
<TABLE>
<CAPTION>
Year ended December 31
---------------------------------
1994 1993 1992
------- ------- -------
U.S. dollars in thousands
---------------------------------
<S> <C> <C> <C> <C>
5) Financial expenses - net:
Interest income from Adacom Group (53) (57) -
====== ====== ======
Expenses to parent company - 134 -
====== ====== ======
Interest income from Harris Adacom
Group (22) (137) (39)
====== ====== ======
6) Other expenses:
Provision for doubtful accounts and
bad debts:
Harris Adacom Group 1,270 290 -
====== ====== ======
Adacom Group 1,001 103 -
====== ====== ======
Participation by Adacom - (400) -
Expenses to Harris Adacom in
respect of the purchase of North
Hills - 500 -
====== ====== ======
7) With regard to a loan to the President of the company, see note 10.
</TABLE>
F-70
<PAGE> 131
UNAUDITED
ACE 400 COMMUNICATIONS, LTD.
STATEMENT OF OPERATIONS
FOR THE PERIOD JANUARY 1, 1995 TO JUNE 29, 1995
<TABLE>
<CAPTION>
(IN THOUSANDS US$)
<S> <C>
REVENUES, NET $5,727
COSTS AND EXPENSES
Cost of goods sold 3,607
Research and development expenses 529
Selling, general and administrative expense 1,894
------
6,030
------
Operating loss (303)
Other expense (517)
Provision for income tax --
------
Net loss $ (820)
======
</TABLE>
F-71
<PAGE> 132
ACE 400 COMMUNICATIONS, LTD.
FOR THE PERIOD JANUARY 1, 1995 TO JUNE 29, 1995
UNAUDITED
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CASH FLOWS (000'$)
<S> <C>
Net loss (820)
Adjustment to reconcile net loss to net cash
used in operation 211
---
Net cash used in operating activities (609)
CASH FLOWS FROM INVESTING
Purchases of property (30)
CASH FLOWS FROM FINANCING
Net proceeds from borrowing 632
NET DECREASE IN CASH (7)
CASH, beginning of period 337
---
CASH, end of period 330
===
</TABLE>
F-72
<PAGE> 133
ACE 400 COMMUNICATIONS, LTD.
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION - The accompanying unaudited condensed financial
statements have been prepared in accordance with the requirements of
Regulation S-X and, therefore, do not include all information and footnotes
which would be presented if such financial statements were prepared in
accordance with generally accepted accounting principles. These statements
should be read in conjunction with the audited financial statements
presented in the Company's Annual Report for the year ended December 31,
1995.
In the opinion of management, these interim financial statements reflect
all normal and recurring adjustments necessary for a fair presentation of
the financial position and results of operations for the period presented.
The results of operations and cash flows for such period is not necessarily
indicative of results to be expected for the full year.
2. SUBSEQUENT EVENT - On June 29, 1995 the Ace Inc., North Hills Inc. and North
Hills Israel (hereafter "the Seller") signed agreement with N.N.H. Computer
Communications Ltd. and affiliates (hereafter "the Buyers"), including MRV
Communications, Inc. (hereafter "MRV"). The execution of the agreement was
based on meeting several pre-conditions which were substantially fulfilled.
The main aspects of the agreement are as follows:
The sellers will sell to the buyers goodwill, know-how, fixed assets (not
including North Hills Israel's building), production files, research and
development files, agreements with customers (including backlog) and
suppliers and other agreements and contracts, the right to use software and
the right to use North Hills Israel's building up to January 31, 1996
(including right of first refusal to continue to rent or buy the building).
The total consideration for the above is expected to be $4,316,667, as
follows: MRV will issue shares to the Company and North Hills Israel at a
minimum guaranteed value of $3,000,000 (according to the share price as
defined in the agreement) and shares at a minimum guaranteed value of
$750,000 to Porta Systems. The buyers will also $100,000 in cash and will
pay to suppliers of the sellers $466,667.
F-73
<PAGE> 134
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The following table sets forth the costs and expenses payable by the
Registrant in connection with the sale of the Common Stock being registered
hereby, other than underwriting commissions and discounts, all of which are
estimated except for the SEC and NASD filing fees.
<TABLE>
<CAPTION>
Item Amount
---- ------
<S> <C>
SEC registration fee* ................................... $ 1,138
Nasdaq/National Market Filing Fee .......................
-------
Blue Sky fees and expenses .............................. 2,000
Printing and engraving expenses ......................... 55,000
=======
Legal fees and expenses .................................
Accounting fees and expenses ............................
-------
Transfer Agent and Registrar fees .......................
-------
Miscellaneous expenses ..................................
-------
Total ............................................... $75,000
=======
</TABLE>
- ------------------
* Based on an assumed public offering price of $33.00 per share.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law allows for the
indemnification of officers, directors, and other corporate agents in terms
sufficiently broad to indemnify such persons under certain circumstances for
liabilities (including reimbursement for expenses incurred) arising under the
Securities Act of 1933, as amended (the "Act"). Article 8 of the Registrant's
Certificate of Incorporation (Exhibit 3a hereto) and Article IX of the
Registrant's Bylaws (Exhibit 3b hereto) provide for indemnification of the
Registrant's directors, officers, employees, and other agents to the extent and
under the circumstances permitted by the Delaware General Corporation Law. The
Registrant has also entered into agreements with its directors and executive
officers that will require the Registrant, among other things, to indemnify
them against certain liabilities that may arise by reason of their status or
service as directors to the fullest extent not prohibited by law.
II-1
<PAGE> 135
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
The Registrant has issued and sold the following unregistered
securities(1) during the past three years:
Between February 23, 1994 and September 1, 1994, the Registrant granted
an aggregate of 111,700 stock options under its 1992 Stock Option Plan at
exercise prices ranging from $4.625 to $7.00 per share and expiring between
February 23, 1999 and September 1, 1999.
On June 29, 1995, in connection with the acquisition, certain assets of
ACE 400 Communication, Ltd., the Company issued 284,977 shares of Common Stock
to certain persons affiliated with the seller. These shares were issued as part
of the consideration for the purchase of the assets and are included in this
registration statement for resale by the Selling Stockholders identified in the
Prospectus. Also, in connection with the ACE 400 acquisition, the Company
issued warrants, the ("ACE Warrants") to purchase 100,000 shares at $13.72 per
share. The ACE Warrants are exercisable for a period of 5 years. In addition,
in connection with the Acquisition, the Company issued 10,000 Warrants to an
ACE employee at a price of $14.00 per share, exercisable for 5 years. These
Warrants are included in the Selling Warrant Holders section.
In connection with the acquisition of assets from Galcom Networking,
Ltd., the Company in May 1995 issued Warrants, "Galcom Warrants" to purchase
75,000 shares of Common Stock at prices ranging from $14.75 to $22.125 per
share. The Galcom Warrants are exercisable for a period of 5 years. Also, in
connection with the Galcom Acquisition, the Company issued 25,000 Warrants to
purchase Common Stock to certain individuals who were former employees of
Galcom at prices ranging from $12.75 to $14.25 per share. These Warrants are
exercisable over a period of 5 years. These Warrants are included in the
Selling Warrant Holders section of the Prospectus.
In July of 1995, the Company issued 33,000 Warrants to certain
employees and consultants in Israel. The exercise price was $12.75 per share
and the term was for five years.
In July 1995, the Company issued Warrants, "Israel Warrants" in an
incentive award plan for employees and consultants of its subsidiary in Israel.
The plan called for the issuance of Warrants to purchase up to 330,000 shares
at prices ranging from $12.75 to $14.25. These Warrants are included in the
Selling Warrant Holders section.
In July 1995, the Company issued Warrants to Jacques Cory to purchase
15,000 shares at $12.75 per share for a period of 5 years, for consulting
services. These Warrants are included in the Selling Warrant Holders section.
In July 1995, the Company issued Warrants to purchase 12,000 shares to
GME Design, Inc., at price of $12.75 per share exercisable for 5 years. These
Warrants were for design services and are included in the Selling Warrant
Holders section.
In January 1996, the Company issued Warrants to GME Design to purchase
5,000 shares at exercise price of $25.25 per share. These Warrants were for
design services. These Warrants are included in this registration statement.
- ---------------------
(1) Does not give effect to the 3:2 stock split paid April 2, 1996.
II-2
<PAGE> 136
In January 1996, the Company issued 143,330 Warrants to Ciambellini and
Associates to purchase Common Stock at an exercise price of $25.25 per share
for a term of five years. The Warrants were issued in exchange for the right to
acquire 50% interest in an Italian networking business. The right was exercised
in May 1996. The 50% interest in the assets and operating income of the
acquired business amounted to less than 10% of the assets and operating loss
of MRV for the December 31, 1995 fiscal year. The Warrants are included in
the current registration statement.
In January 1996, the Company issued 16,667 Warrants to purchase Common
Stock to Israeli and European business consultants at an exercise price $25.25,
for a term of five years. The Warrants were issued for consulting services.
The sales of the above securities were deemed to be exempt from
registration under the Securities Act in reliance on Section 4(2) of the Act,
or Regulation D promulgated thereunder. The recipients of securities in each
such transaction represented their intention to acquire the securities for
investment only and not with a view to, or for sale in connection with, any
distribution thereof and appropriate legends were affixed to the share
certificates and warrants issued in such transactions. All recipients had
adequate access to information about the Registrant.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
1** Form of Underwriting Agreement.
2a* Agreement and Plan of Merger by and between MRV Technologies, Inc. (a
California corporation) and MRV Technologies, Inc. (a Delaware
corporation), as amended.
2b* Certificates of Merger by and between MRV Technologies, Inc. (a
California corporation) and MRV Technologies, Inc. (a Delaware
corporation).
3a* Certificate of Incorporation, as amended.
3b* Bylaws.
4b* Specimen Common Stock Certificate.
4c* Specimen Common Stock Purchase Warrant.
4d* Form of Warrant Agreement.
4f** Form of Underwriter's Warrant issued to Hampshire Securities.
4g Warrants of Selling Warrant Holders as follows:
4g(1)***** Galcom Warrants for 60,000 and 15,000 shares, dated May 1, 1995.
4g(2)***** Henry Tellner Warrant for 8,000 shares, dated July 16, 1995.
II-3
<PAGE> 137
4g(3)***** Phillipe Scwarc Warrant for 5,667 shares, dated August 3, 1995.
4g(4)***** Danny Yellin Warrant for 5,666 shares, dated August 8, 1995.
4g(5)***** Yakov Sfadya Warrant for 5,667 shares, dated August 6, 1995.
4g(6)***** Lippa Meir/Alon Cohen Trustees, Warrant for 100,000 shares, dated
June 29, 1995.
4g(7)***** Benny Glazer Warrant for 10,000 shares, dated July 24, 1995.
4g(8)***** Nathan Shilo Trustee, Warrants for 330,000 shares, dated July 13
and 19, 1995.
4g(9)***** GME Design Warrant for 12,000 shares, dated October 19, 1995.
4g(10)***** Jacques Cory Warrants for 15,000 shares, dated November 17, 1995.
4g(11)+ Oscar Gruss & Sons
4g(12)+ Northview Trading Ltd.
4g(13)+ Heidron Engler
4g(14)+ Robert Coane
4g(15)+ Jeanette Coane Cust for Robert Coane Jr.
4g(16)+ Jeannete Coane Cust for Mary Coane
4g(17)+ Jeanette Coane Cust for Kevin Coane
4g(18)+ Daryl Hagler
4g(19)+ Timothy Essaye
4g(20)+ Oscar Gruss & Sons
4g(21)+ Dave Koch
4g(22)+ Bill Musser
4g(23)+ Isabelle Orlansky
4g(24)+ Isabelle Orlansky
4g(25)+ Northview Trading Ltd.
4g(26)+ Dara Kiely
4g(27)+ James Powers
II-4
<PAGE> 138
4g(28)+ Steven Rosner
4g(29)+ Terence Lambert
4g(30)+ Mark Riez
4g(31)+ James C. Powers
4g(32)++ Jay Tucker
4g(33)++ Barker Lee & Co.
4g(34)++ J.M.R. Barker Foundation
4g(35)++ Quaker Hill Associates
4g(36)++ Upland Associates, L.P.
4g(37)++ Namakagon Associates, L.P.
4g(38)++ David Koch
4g(39)++ Jean Michel Nahon
4g(40)++ Lucien Selle
4g(41)++ Perlman Associates
4g(42)++ JJ Newport
4g(43)++ James C. Powers
4g(44)++ Jay Tucker
4g(45)++ Daniel Perlman
4g(46)++ Bank of the West Trustee
4g(47)++ Tom Callahan
4g(48)++ CUS Trust
4g(49)++ Alvarado Partners
4g(50)++ Perlman & Associates
4g(51)++ The Excelsior Fund
4g(52)++ Jim Powers
4g(53)++ J. Steven Emerson
II-5
<PAGE> 139
4g(54)++ Banque de Gestion G De Rothschild Luxembourg
4g(55)++ Joel Packer
4g(56)++ Banque Privee Edmond de Rothschild S.A./Geneva
4g(57)++ Sergio Ciambellini
4g(58)++ Elio Bianchi
4g(59)++ Everest Capital International Ltd. (To be filed by later
amendment)
4g(60)++ Everest Capital (To be filed by later amendment)
+ Issued with pre split quantity
++ Issued with post split quantity
5 Opinion of Freshman, Marantz, Orlanski, Cooper & Klein, to be filed
by Amendment.
10a* Lease for premises at 8917 Fullbright Avenue, Chatsworth, CA dated
August 5, 1991.
10a(1)* Lease for premises at 8943 Fullbright Avenue, Chatsworth, CA dated
March 3, 1993.
10b(1)* Key Employee Agreement between the Company and Noam Lotan dated March
23, 1993.
10b(1)1* Letter amending Key Employee Agreement between the Company and Noam
Lotan.
10b(1)2** Letter amending Key Employee Agreement between the Company and Noam
Lotan.
10b(2)* Key Employee Agreement between the Company and Zeev Rav-Noy dated
March 23, 1992.
10b(2)1* Letter amending Key Employee Agreement between the Company and Zeev
Rav-Noy.
10b(2)2** Letter amending Key Employee Agreement between the Company and Zeev
Rav-Noy.
10b(3)* Key Employee Agreement between the Company and Shlomo Margalit.
10b(3)1* Letter amending Key Employee Agreement between the Company and
Shlomo Margalit.
10b(3)2** Form of Letter amending Key Employee Agreement between the Company
and Shlomo Margalit.
10b(4)* Employment Letter between the Company and Khalid (Ken) Ahmad dated
August 8, 1990.
10c(1)* Overview of Bridge Financing for the Company dated March 1992.
10c(2)* Form of Warrant issued in connection with Bridge Financing and to
certain consultants.
10c(3)* Form of Promissory Note issued in connection with Bridge Financing.
II-6
<PAGE> 140
10c(5)* Schedule of Bridge Investors.
10d(1)* Agreement between the Company and Managerial Resources, Inc.
dated January 15, 1992.
10d(2)* Agreement between the Company and the Department of the Navy
dated November 21, 1991.
10d(4)* Agreement by and among the Company, Tritek International
Company, China National Electronics Import & Export Corporation
and Jiangxi Nancheng Tiangnan Radio Material Factory dated as of
November 28, 1988.
10d(5)* Promissory Note in principal amount of $50,000 issued by the
Company to An-Pin Chen dated December 18, 1989, as amended.
10d(6)* Promissory Note in principal amount of $50,000 issued by the
Company to Pacific Tritek, Inc. Defined Benefit Plan dated
December 18, 1989, as amended.
10e* Promissory Note in principal amount of $204,140 by the Company
to Julian Cole and Stein dated February 28, 1992.
10f* Form of Stock Escrow Agreement between the American Stock
Transfer & Trust Company and Certain Stockholders.
10g* 1992 Stock Option Plan.
10h* Form of Financial Consulting Agreement between the Company and
Thomas James.
10i* Form of Mergers/Acquisition Agreement between the Company and
Thomas James.
10j* Restricted Stock Agreement between the Company and Khalid (Ken)
Ahmad.
10k* Development and Manufacturing Agreement between the Company and
Laser Precision Corporation dated December 13, 1990.
10l* License Agreement between the Company and Laser Precision
Corporation dated December 13, 1990.
10m* Form of Distributor Agreement and List of Current Distributors.
10n* Form of Sales Representative Agreement and List of Current
Sales Representatives.
10o* Form of Warrant issued to Managerial Resources, Inc.
10p*** Agreement for Sale and Purchase of Assets of ACE dated June 29,
1995.
10q**** Agreement for Purchase of Galcom Assets dated March 21, 1995.
10r***** Agreement regarding Incentive Plan for 330,000 Warrants re ACE.
10s***** Letter of Agreement regarding Founders Agreement, Galcom.
II-7
<PAGE> 141
11***** Statement regarding computation of per share earnings.
21 List of subsidiaries (page II-11).
24a Consent of Arthur Andersen LLP (page II-12).
24b Consent of Freshman, Marantz, Orlanski, Cooper & Klein
(contained in Exhibit 5).
24c Consent of Almagor & Co. (page II-13).
24d Consent of Sterling, Nappen, Chavkin & Co., LLC (page II-14)
24e Consent of Ratzkovsky Fried & Co. (page II-15).
24f Consent of Groupe France Audit s.a. (page II-16).
25***** Power of Attorney.
- -----------
* Incorporated by reference from, and all such Exhibits have the same
corresponding Exhibit number filed as part of, Registrant's Registration
Statement on Form S-1 (File No. 33-48003) and the Amendments thereto as
filed with the Commission on May 27, July 14, August 14, November 9, and
December 2, 1992.
** Incorporated of reference from, and all such Exhibits have the same
corresponding Exhibit Numbers filed as part of, Registrant's
Registration Statement on Form S-1 (33-86516), effective January 11,
1995.
*** Incorporated by reference to Registrant's Report on Form 8k (0-23452)
dated June 29, 1995, with respect to the ACE Acquisition, Exhibit
No. 2.1 & 2.1a.
**** Incorporated by reference to Registrant's Report on Form 8k (0-23452),
dated May 1, 1995 with respect to the Galcom Acquisition, Exhibit
No. 2.1 and 2.1a.
***** Previously filed.
(b) FINANCIAL STATEMENT SCHEDULES
All schedules are omitted because they are inapplicable or the
requested information is shown in the financial statements of the Registrant or
related notes thereto.
ITEM 17. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 14, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as, expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-8
<PAGE> 142
The undersigned Registrant hereby undertakes to provide to the
Underwriter at the closing specified in the underwriting agreement certificates
in such denominations and registered in such names as required by the
Underwriter to permit prompt delivery to each purchaser.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act; (ii) to reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement; (iii) to include any material
information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(4) That for purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A
and contained in the form of prospectus filed by the registrant pursuant
to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the time it was
declared effective.
(5) That for the purpose of determining any liability under
the Securities Act, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
II-9
<PAGE> 143
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE
REGISTRANT HAS DULY CAUSED THIS PRE-EFFECTIVE AMENDMENT NO. 3 TO REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF CHATSWORTH, STATE OF CALIFORNIA, ON THE 29TH DAY
OF MAY, 1996.
MRV COMMUNICATIONS, INC.
By: /s/ Noam Lotan
----------------------------
Noam Lotan, President and
Chief Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
PRE-EFFECTIVE AMENDMENT NO. 3 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE
FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.
Names Title Date
/s/ Noam Lotan President, Chief Executive May 29, 1996
- ------------------------------ Officer (Principal ------------
Noam Lotan Executive Officer), and a
Director
/s/ Zeev Rav-Noy Chief Operating Officer, May 29, 1996
- ------------------------------ Treasurer, and a Director ------------
Zeev Rav-Noy
/s/ Shlomo Margalit Chairman of the Board, May 29, 1996
- ------------------------------- Chief Technical Officer, ------------
Shlomo Margalit Secretary, and a Director
/s/ Edmund Glazer Vice President of Finance May 29, 1996
- ------------------------------- and Administration, ------------
Edmund Glazer Chief Financial Officer
- ------------------------------- Director ------------
Leonard Mautner
- ------------------------------- Director ------------
Milton Rosenberg
*By /s/ Noam Lotan
-------------------------
Noam Lotan, Attorney-in-fact
II-10
<PAGE> 144
EXHIBIT 21
LIST OF SUBSIDIARIES
1) Nbase Communications, Inc.,
a Maryland corporation
2) N.N.H. Computer Communications, Inc.,
a Kansas corporation
3) NBase Communications, Ltd.,
an Israeli corporation
4) NBase UK Ltd.,
a United Kingdom corporation
II-11
<PAGE> 145
EXHIBIT 24.a
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
and to all references to our Firm included in or made part of this registration
statement.
ARTHUR ANDERSEN LLP
Los Angeles, California
May 24, 1996
II-12
<PAGE> 146
[BDO ALMAGOR & CO. CPA (ISR) LETTERHEAD]
May 3, 1996
To: MRV Communications Inc.
8943, Fulbright Avenue,
Chatsworth, CA 91311
U.S.A.
Dear Sirs,
Re: Galcom Networking Ltd. ("the Company")
--------------------------------------
As independent auditors of the Company, we hereby consent to the inclusion of
our report dated June 7, 1995 accompanying the consolidated financial
statements of the Company as at December 31, 1994 and 1993 and for the three
years in the period ended December 31, 1994, and all references to our name as
auditors of Galcom Networking Ltd. in your company's prospectus to be published
in May 1996.
Yours faithfully,
BDO Almagor & Co.
BDO Almagor & Co.
Certified Public Accountants
II-13
<PAGE> 147
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the registration statement on
Form S-1 (No.:333-00210) of MRV Communications, Inc. of our report dated
January 26, 1995 relating to the financial statements of Galcom, Inc. as of
December 31, 1994 and 1993, and the related statements of operations and
deficit and cash flows for the years then ended.
Sterling, Nappen, Chavkin & Co., LLC
STERLING, NAPPEN, CHAVKIN & CO., LLC
Livingston, New Jersey
May 14, 1996
II-14
<PAGE> 148
[RATZKOVSKY FRIED LETTERHEAD]
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-1 and each prospectus constituting part of this
Registration Statement of our report dated November 22, 1995 on the
consolidated financial statements of Ace 400 Communications Ltd. included in
the audited Pro Forma Balance Sheet and Statement of Income of MRV
Communications Inc. as of December 31, 1994 and for the fiscal year ended
December 31, 1994. We also consent to the reference to our firm under the
caption "Experts" in each prospectus included in the Registration Statement.
/s/ RATZKOVSKY FRIED & CO.
----------------------------------
Haifa, Ratzkovsky Fried & Co.
May 2, 1996 Certified Public Accountants (Isr.)
II-15
<PAGE> 149
[HLB GROUPE FRANCE AUDIT S.A. LETTERHEAD]
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-1 and each prospectus constituting part of this
Registration Statement of our report dated November 22, 1995 on the financial
statements of North Hills Europe which have been consolidated in the financial
statements of Ace 400 Communications Ltd. included in the unaudited Pro Forma
Balance Sheet and Statement of Income of MRV Communications Inc. as of December
31, 1994 and for the fiscal year ended December 31, 1994. We also consent to
the reference to our firm under the caption "Experts" in each prospectus
included in the Registration Statement.
Paris, May 1st, 1996
POUR SOFIDEEC, ASSOCIEE
/s/ M.F. EL MGHAZLI
-------------------------------------
M.F. EL MGHAZLI
President Directeur General
Expert-Comptable,
Commissaire aux Comptes, Associe
II-16
<PAGE> 150
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Numbered
Exhibit Description Page
- ------- ----------- ------------
<S> <C> <C>
1** Form of Underwriting Agreement.
2a* Agreement and Plan of Merger by and between MRV Technologies, Inc. (a
California corporation) and MRV Technologies, Inc. (a Delaware
corporation), as amended.
2b* Certificate of Merger by and between MRV Technologies, Inc. (a California
corporation) and MRV Technologies, Inc. (a Delaware corporation).
3a* Certificate of Incorporation, as amended.
3b* Bylaws.
4b* Specimen Common Stock Certificate.
4c* Specimen Common Stock Purchase Warrant.
4d* Form of Warrant Agreement.
4e* Form of Warrant issued to Thomas James Associates, Inc.
4f** Form of Underwriter's Warrant issued to Hampshire Securities.
4g Warrants of Selling Warrant Holders as follows:
4g(1)***** Galcom Warrants for 60,000 and 15,000 shares, dated May 1, 1995.
4g(2)***** Henry Tellner Warrant for 8,000 shares, dated July 16, 1995.
4g(3)***** Phillipe Scwarc Warrant for 5,667 shares, dated August 3, 1995.
4g(4)***** Danny Yellin Warrant for 5,666 shares, dated August 8, 1995.
4g(5)***** Yakov Sfadya Warrant for 5,667 shares, dated August 6, 1995.
4g(6)***** Lippa Meir/Alon Cohen Trustees, Warrant for 100,000 shares,
dated June 29, 1995.
4g(7)***** Benny Glazer Warrant for 10,000 shares, dated July 24, 1995.
4g(8)***** Nathan Shilo Trustee, Warrants for 330,000 shares, dated
July 13 and 19, 1995.
4g(9)***** GME Design Warrant for 12,000 shares, dated October 19, 1995.
</TABLE>
<PAGE> 151
<TABLE>
<CAPTION>
Sequentially
Numbered
Exhibit Description Page
- ------- ----------- ------------
<S> <C> <C>
4g(10)***** Jacques Cory Warrants for 15,000 shares, dated November 17, 1995.
4g(11)+ Oscar Gruss & Sons
4g(12)+ Northview Trading Ltd.
4g(13)+ Heidron Engler
4g(14)+ Robert Coane
4g(15)+ Jeanette Coane Cust for Robert Coane Jr.
4g(16)+ Jeanette Coane Cust for Mary Coane
4g(17)+ Jeanette Coane Cust for Kevin Coane
4g(18)+ Daryl Hagler
4g(19)+ Timothy Essaye
4g(20)+ Oscar Gruss & Sons
4g(21)+ Dave Koch
4g(22)+ Bill Musser
4g(23)+ Isabelle Orlansky
4g(24)+ Isabelle Orlansky
4g(25)+ Northview Trading Ltd.
4g(26)+ Dara Kiely
4g(27)+ James Powers
4g(28)+ Steven Rosner
4g(29)+ Terence Lambert
4g(30)++ Mark Riez
4g(31)++ James C. Powers
4g(32)++ Jay Tucker
4g(33)++ Barker Lee & Co.
</TABLE>
<PAGE> 152
<TABLE>
<CAPTION>
Sequentially
Numbered
Exhibit Description Page
- ------- ----------- ------------
<S> <C> <C>
4g(34)++ J.M.R. Barker Foundation
4g(35)++ Quaker Hill Associates
4g(36)++ Upland Associates, L.P.
4g(37)++ Namakagon Associates, L.P.
4g(38)++ David Koch
4g(39)++ Jean Michel Nahon
4g(40)++ Lucien Selle
4g(41)++ Perlman Associates
4g(42)++ JJ Newport
4g(43)++ James C. Powers
4g(44)++ Jay Tucker
4g(45)++ Daniel Perlman
4g(46)++ Bank of the West Trustee
4g(47)++ Tom Callahan
4g(48)++ CUS Trust
4g(49)++ Alvarado Partners
4g(50)++ Perlman & Associates
4g(51)++ The Excelsior Fund
4g(52)++ Jim Powers
4g(53)++ J. Steven Emerson
4g(54)++ Banque de Gestion G De Rothschild Luxembourg
4g(55)++ Joel Packer
4g(56)++ Banque Privee Edmond de Rothschild S.A./Geneva
4g(57)++ Sergio Ciambellini
</TABLE>
<PAGE> 153
<TABLE>
<CAPTION>
Sequentially
Numbered
Exhibit Description Page
- ------- ----------- -----------
<S> <C> <C>
4g(58)++ Elio Bianchi
4g(59)++ Everest Capital International Ltd. (To be filed by later amendment)
4g(60)++ Everest Capital (To be filed by later amendment)
+ Issued with pre split quantity
++ Issued with post split quantity
5 Opinion of Freshman, Marantz, Orlanski, Cooper & Klein, to be filed by
Amendment.
10a* Lease for premises at 8917 Fullbright Avenue, Chatsworth, CA dated August
5, 1991.
10a(1)* Lease for premises at 8943 Fullbright Avenue, Chatsworth, CA dated March
3, 1993.
10b(1)* Key Employee Agreement between the Company and Noam Lotan dated
March 23, 1993.
10b(1)1* Letter amending Key Employee Agreement between the Company and
Noam Lotan.
10b(1)2** Letter amending Key Employee Agreement between the Company and
Noam Lotan.
10b(2)* Key Employee Agreement between the Company and Zeev Rav-Noy dated
March 23, 1992.
10b(2)1* Letter amending Key Employee Agreement between the Company and Zeev
Rav-Noy.
10b(2)2** Letter amending Key Employee Agreement between the Company and Zeev
Rav-Noy.
10b(3)* Key Employee Agreement between the Company and Shlomo Margalit.
10b(3)1* Letter amending Key Employee Agreement between the Company and
Shlomo Margalit.
10b(3)2** Form of Letter amending Key Employee Agreement between the Company
and Shlomo Margalit.
</TABLE>
<PAGE> 154
<TABLE>
<CAPTION>
Sequentially
Numbered
Exhibit Description Page
- ------- ----------- -----------
<S> <C> <C>
10b(4)* Employment Letter between the Company and Khalid (Ken) Ahmad dated August 8, 1990
10c(1)* Overview of Bridge Financing for the Company dated March 1992.
10c(2)* Form of Warrant issued in connection with Bridge Financing and to certain consultants.
10c(3)* Form of Promissory Note issued in connection with Bridge Financing.
10c(5)* Schedule of Bridge Investors.
10d(1)* Agreement between the Company and Managerial Resources, Inc. dated January 15, 1992.
10d(2)* Agreement between the Company and the Department of the Navy dated November 21, 1991.
10d(4)* Agreement by and among the Company, Tritek International Company, China National Electronics
Import & Export Corporation and Jiangxi Nancheng Tiangnan Radio Material Factory dated as of
November 28, 1988.
10d(5)* Promissory Note in principal amount of $50,000 issued by the Company to An-Pin Chen dated
December 18,1989, as amended.
10d(6)* Promissory Note in principal amount of $50,000 issued by the Company to Pacific Tritek, Inc.
Defined Benefit Plan dated December 18, 1989, as amended.
10e* Promissory Note in principal amount of $204,140 by the Company to Julian Cole and Stein dated
February 28, 1992.
10f* Form of Stock Escrow Agreement between the American Stock Transfer & Trust Company and
Certain Stockholders.
10g* 1992 Stock Option Plan.
10h* Form of Financial Consulting Agreement between the Company and Thomas James.
10i* Form of Mergers/Acquisition Agreement between the Company and Thomas James.
10j* Restricted Stock Agreement between the Company and Khalid (Ken) Ahmad.
10k* Development and Manufacturing Agreement between the Company and
</TABLE>
<PAGE> 155
Sequentially
Numbered
Exhibit Description Page
- ------- ----------- ------------
Laser Precision Corporation dated December 13, 1990.
101* License Agreement between the Company and Laser
Precision Corporation dated December 13, 1990.
10m* Form of Distributor Agreement and List of Current
Distributors.
10n* Form of Sales Representative Agreement and List of
Current Sales Representatives.
10o* Form of Warrant issued to Managerial Resources, Inc.
10p*** Agreement for Sale and Purchase of Assets of ACE
dated June 29, 1995.
10q**** Agreement for Purchase of Galcom Assets dated March
21, 1995.
10r***** Agreement regarding Incentive Plan for 330,000
Warrants re ACE.
10s***** Letter of Agreement regarding Founders Agreement,
Galcom.
11***** Statement regarding computation of per share earnings.
21***** List of subsidiaries.
24a Consent of Arthur Andersen LLP (page II-12).
24b Consent of Freshman, Marantz, Orlanski, Cooper & Klein
(contained in Exhibit 5).
24c Consent of Almagor & Co. (page II-13).
24d Consent of Sterling, Nappen, Chavkin & Co., LLC
(page II-14).
24e Consent of Ratzkovsky Fried & Co. (page II-15).
24f Consent of Groupe France Audit s.a. (page II-16).
25***** Power of Attorney.
- -------------
* Incorporated by reference from, and all such Exhibits have
the same corresponding Exhibit number filed as part of, Registrant's
Registration Statement on Form S-1 (File No. 33-48003) and the amendments
thereto as filed with the Commission on May 27, July 14, August 14,
November 9, and December 2, 1992.
** Incorporated of reference from, and all such Exhibits have the same
corresponding Exhibit Numbers filed as part of, Registrant's Registration
Statement on Form S-1 (33-86516), effective
<PAGE> 156
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBIT DESCRIPTION PAGE
- ------- ----------- ------------
<S> <C> <C>
January 11, 1995.
*** Incorporated by reference to Registrant's Report on Form 8k (0-23452)
dated June 29, 1995, with respect to the ACE Acquisition, Exhibit No.
2.1 and 2.1a.
**** Incorporated by reference to Registrant's Report on Form 8k (0-23452),
dated May 1, 1995, with respect to the Galcom Acquisition, Exhibit No.
2.1 and 2.1a.
***** Previously filed.
</TABLE>
<PAGE> 1
EXHIBIT 4(g)11
<PAGE> 2
GALCOM WARRANT
This Warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated
April 19, 1995 by and between MRV Communications, Inc. ("MRV") and Galcom
Networking, Ltd. ("Galcom"). The exercisability of the Warrant is expressly
contingent upon the continued and faithful performance by Galcom of its
obligations under the Agreement.
MRV hereby grants:
1. Galcom the right to purchase from MRV at a price of $14 3/4
during the period of "exercisability", as hereinafter defined
up to 2,000 shares of MRV Commons Stock. The period of
exercisability shall commence six (6) months from the date
hereof and shall terminate five (5) years from the date hereof
at close of business on the last date which is the fifth
anniversary date from the date hereof.
2. The rights granted hereunder to Galcom may be assigned or
transferred to any assignee or transferee approved by MRV
provided that such assignee or transferee agrees to be bound
by the provisions of this Warrant Agreement and understands
that the exercisability of this Warrant is contingent upon the
full and faithful performance by Galcom of its obligations
under the Agreement. Provided such conditions are met, MRV
shall not unreasonably withhold its consent to any such
assignment or transfer.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, Galcom shall have the right to exercise this
Warrant into the kind and amount of shares of stock and other securities and
property (including cash) receivable by a holder of the number of shares of
Common Stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this Warrant may be exercised during the
exercisability period, at any time in whole or in part be the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the abovementioned Purchase Form
together with applicable stock transfer taxes, if any and delivery to MRV of a
duly executed agreement signed by the person(s) designated in the Purchase
Form. The Common Stock and the certificates for the Common Stock so purchased
shall be delivered to Galcom within a reasonable time, not exceeding ten (10)
days after the rights represented by this Warrant shall have been so exercised.
<PAGE> 3
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common Stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the Warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this Warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this Warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately prior to such date, he would have owned upon such exercise
and been entitled to receive upon such dividend, distribution, subdivision,
combination, reclassification, reorganization, merger, consolidation or
recapitalization. Provided however no adjustment in the exercise price shall
be required unless such adjustment would require and increase or decrease of at
least five cents in such price.
Galcom acknowledges that the Warrant and the shares underlying the Warrant of
MRV Common Stock have not been registered with the Securities and Exchange
Commission and that it is taking the shares for investment purposes in the
event it exercises this Warrant and not with a view towards distribution. Upon
exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State of Delaware.
<PAGE> 4
In witness whereof MRV Communications, Inc. has caused this Warrant to be
signed by its duly authorized officers under its Corporate Seal and this
Warrant to be dated May 1, 1995.
MRV COMMUNICATIONS, INC.
By /s/ Noam Lotan
---------------------------------
Noam Lotan, President
Corporate Seal
ATTEST:
/s/ Shlomo Margalit
- -------------------------
Shlomo Margalit
Assignment
This warrant for the purchase of 2,000 shares at $14.75 of MRV Communications,
Inc. Common Stock is hereby assigned to:
OSCAR GRUSS & SONS
- -------------------------------------------------------------------------------
ASSIGNED FROM WARRANTS
ASSIGNED BY JOSEPH ADIR
1/7/96 1/7/96
- --------------------------------------- ------------------------------
Title Date
Galcom Networking Ltd.
<PAGE> 5
Purchase Form
(to be signed only upon exercise of Warrant)
The undersigned, the holder of the forgoing Warrant, hereby irrevocably elects
to exercise the purchase rights represented by such Warrant for, and to
purchase thereunder,___________________shares of MRV Communications, Inc., and
herewith makes payment of $______________therefore, and requests that the
Warrants and certificates for shares of Common Stock be issued in the name(s)
of, and delivered to________________________, whose address(es) is(are):
______________________________dated __________________________________
- ------------------------
signature
- ------------------------
address
<PAGE> 6
EXHIBIT 4(g)12
<PAGE> 7
GALCOM WARRANT
This Warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated
April 19, 1995 by and between MRV Communications, Inc. ("MRV") and Galcom
Networking, Ltd. ("Galcom"). The exercisability of the Warrant is expressly
contingent upon the continued and faithful performance by Galcom of its
obligations under the Agreement.
MRV hereby grants:
1. Galcom the right to purchase from MRV at a price of $14 3/4
during the period of "exercisability", as hereinafter defined
up to 1,000 shares of MRV Commons Stock. The period of
exercisability shall commence six (6) months from the date
hereof and shall terminate five (5) years from the date hereof
at close of business on the last date which is the fifth
anniversary date from the date hereof.
2. The rights granted hereunder to Galcom may be assigned or
transferred to any assignee or transferee approved by MRV
provided that such assignee or transferee agrees to be bound
by the provisions of this Warrant Agreement and understands
that the exercisability of this Warrant is contingent upon the
full and faithful performance by Galcom of its obligations
under the Agreement. Provided such conditions are met, MRV
shall not unreasonably withhold its consent to any such
assignment or transfer.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, Galcom shall have the right to exercise this
Warrant into the kind and amount of shares of stock and other securities and
property (including cash) receivable by a holder of the number of shares of
Common Stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this Warrant may be exercised during the
exercisability period, at any time in whole or in part be the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the abovementioned Purchase Form
together with applicable stock transfer taxes, if any and delivery to MRV of a
duly executed agreement signed by the person(s) designated in the Purchase
Form. The Common Stock and the certificates for the Common Stock so purchased
shall be delivered to Galcom within a reasonable time, not exceeding ten (10)
days after the rights represented by this Warrant shall have been so exercised.
<PAGE> 8
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common Stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the Warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this Warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this Warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately prior to such date, he would have owned upon such exercise
and been entitled to receive upon such dividend, distribution, subdivision,
combination, reclassification, reorganization, merger, consolidation or
recapitalization. Provided however no adjustment in the exercise price shall
be required unless such adjustment would require and increase or decrease of at
least five cents in such price.
Galcom acknowledges that the Warrant and the shares underlying the Warrant of
MRV Common Stock have not been registered with the Securities and Exchange
Commission and that it is taking the shares for investment purposes in the
event it exercises this Warrant and not with a view towards distribution. Upon
exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State of Delaware.
<PAGE> 9
In witness whereof MRV Communications, Inc. has caused this Warrant to be
signed by its duly authorized officers under its Corporate Seal and this
Warrant to be dated May 1, 1995.
MRV COMMUNICATIONS, INC.
By Noam Lotan
---------------------------------
Noam Lotan, President
Corporate Seal
ATTEST:
Shlomo Margalit
- -------------------------
Shlomo Margalit
Assignment
This warrant for the purchase of 1,000 shares at $14.75 of MRV Communications,
Inc. Common Stock is hereby assigned to:
NORTHVIEW TRADING
- ------------------------------------------------------------------------------
ASSIGNED FROM WARRANTS
ASSIGNED BY JOSEPH ADIR
1/7/96 1/7/96
- -------------------------------------- ------------------------------
Title Date
Galcom Networking Ltd.
<PAGE> 10
Purchase Form
(to be signed only upon exercise of Warrant)
The undersigned, the holder of the forgoing Warrant, hereby irrevocably elects
to exercise the purchase rights represented by such Warrant for, and to
purchase thereunder,____________ shares of MRV Communications, Inc., and
herewith makes payment of $______________ therefore, and requests that the
Warrants and certificates for shares of Common Stock be issued in the name(s)
of, and delivered to _________________________ , whose address(es) is(are):
________________________________ dated__________________________
- ------------------------
signature
- ------------------------
address
<PAGE> 11
EXHIBIT 4(g)13
<PAGE> 12
GALCOM WARRANT
This Warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated
April 19, 1995 by and between MRV Communications, Inc. ("MRV") and Galcom
Networking, Ltd. ("Galcom"). The exercisability of the Warrant is expressly
contingent upon the continued and faithful performance by Galcom of its
obligations under the Agreement.
MRV hereby grants:
1. Galcom the right to purchase from MRV at a price of $14 3/4
during the period of "exercisability", as hereinafter defined
up to 2,000 shares of MRV Commons Stock. The period of
exercisability shall commence six (6) months from the date
hereof and shall terminate five (5) years from the date hereof
at close of business on the last date which is the fifth
anniversary date from the date hereof.
2. The rights granted hereunder to Galcom may be assigned or
transferred to any assignee or transferee approved by MRV
provided that such assignee or transferee agrees to be bound
by the provisions of this Warrant Agreement and understands
that the exercisability of this Warrant is contingent upon the
full and faithful performance by Galcom of its obligations
under the Agreement. Provided such conditions are met, MRV
shall not unreasonably withhold its consent to any such
assignment or transfer.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, Galcom shall have the right to exercise this
Warrant into the kind and amount of shares of stock and other securities and
property (including cash) receivable by a holder of the number of shares of
Common Stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this Warrant may be exercised during the
exercisability period, at any time in whole or in part be the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the abovementioned Purchase Form
together with applicable stock transfer taxes, if any and delivery to MRV of a
duly executed agreement signed by the person(s) designated in the Purchase
Form. The Common Stock and the certificates for the Common Stock so purchased
shall be delivered to Galcom within a reasonable time, not exceeding ten (10)
days after the rights represented by this Warrant shall have been so exercised.
<PAGE> 13
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common Stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the Warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this Warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this Warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately prior to such date, he would have owned upon such exercise
and been entitled to receive upon such dividend, distribution, subdivision,
combination, reclassification, reorganization, merger, consolidation or
recapitalization. Provided however no adjustment in the exercise price shall
be required unless such adjustment would require and increase or decrease of at
least five cents in such price.
Galcom acknowledges that the Warrant and the shares underlying the Warrant of
MRV Common Stock have not been registered with the Securities and Exchange
Commission and that it is taking the shares for investment purposes in the
event it exercises this Warrant and not with a view towards distribution. Upon
exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State of Delaware.
<PAGE> 14
In witness whereof MRV Communications, Inc. has caused this Warrant to
be signed by its duly authorized officers under its Corporate Seal and this
Warrant to be dated May 1, 1995.
MRV COMMUNICATIONS, INC.
By /s/ Noam Lotan
---------------------------------
Noam Lotan, President
Corporate Seal
ATTEST:
/s/ Shlomo Margalit
- -------------------------
Shlomo Margalit
Assignment
This warrant for the purchase of 2,000 shares at $14.75 of MRV Communications,
Inc. Common Stock is hereby assigned to:
HEIDRON ENGLER
- ------------------------------------------------------------------------------
ASSIGNED FROM WARRANTS
ASSIGNED BY JOSEPH ADIR
1/7/96 1/7/96
- -------------------------------------- ------------------------------
Title Date
Galcom Networking Ltd.
<PAGE> 15
Purchase Form
(to be signed only upon exercise of Warrant)
The undersigned, the holder of the forgoing Warrant, hereby irrevocably elects
to exercise the purchase rights represented by such Warrant for, and to
purchase thereunder,____________ shares of MRV Communications, Inc., and
herewith makes payment of $_________ therefore, and requests that the Warrants
and certificates for shares of Common Stock be issued in the name(s) of, and
delivered to_______________________, whose address(es)
is(are):____________________ dated ____________________
- ------------------------
signature
- ------------------------
address
<PAGE> 16
EXHIBIT 4(g)14
<PAGE> 17
GALCOM WARRANT
This Warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated
April 19, 1995 by and between MRV Communications, Inc. ("MRV") and Galcom
Networking, Ltd. ("Galcom"). The exercisability of the Warrant is expressly
contingent upon the continued and faithful performance by Galcom of its
obligations under the Agreement.
MRV hereby grants:
1. Galcom the right to purchase from MRV at a price of $14 3/4
during the period of "exercisability", as hereinafter defined
up to 2,000 shares of MRV Commons Stock. The period of
exercisability shall commence six (6) months from the date
hereof and shall terminate five (5) years from the date hereof
at close of business on the last date which is the fifth
anniversary date from the date hereof
2. The rights granted hereunder to Galcom may be assigned or
transferred to any assignee or transferee approved by MRV
provided that such assignee or transferee agrees to be bound
by the provisions of this Warrant Agreement and understands
that the exercisability of this Warrant is contingent upon the
full and faithful performance by Galcom of its obligations
under the Agreement. Provided such conditions are met, MRV
shall not unreasonably withhold its consent to any such
assignment or transfer.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, Galcom shall have the right to exercise this
Warrant into the kind and amount of shares of stock and other securities and
property (including cash) receivable by a holder of the number of shares of
Common Stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this Warrant may be exercised during the
exercisability period, at any time in whole or in part be the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the abovementioned Purchase Form
together with applicable stock transfer taxes, if any and delivery to MRV of a
duly executed agreement signed by the person(s) designated in the Purchase
Form. The Common Stock and the certificates for the Common Stock so purchased
shall be delivered to Galcom within a reasonable time, not exceeding ten (10)
days after the rights represented by this Warrant shall have been so exercised.
<PAGE> 18
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common Stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the Warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this Warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this Warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately prior to such date, he would have owned upon such exercise
and been entitled to receive upon such dividend, distribution, subdivision,
combination, reclassification, reorganization, merger, consolidation or
recapitalization. Provided however no adjustment in the exercise price shall
be required unless such adjustment would require and increase or decrease of at
least five cents in such price.
Galcom acknowledges that the Warrant and the shares underlying the Warrant of
MRV Common Stock have not been registered with the Securities and Exchange
Commission and that it is taking the shares for investment purposes in the
event it exercises this Warrant and not with a view towards distribution. Upon
exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State of Delaware.
<PAGE> 19
In witness whereof MRV Communications, Inc. has caused this Warrant to be
signed by its duly authorized officers under Corporate Seal and this Warrant to
be dated May 1, 1995.
MRV COMMUNICATIONS, INC.
By /s/ Noam Lotan
---------------------------------
Noam Lotan, President
Corporate Seal
ATTEST:
/s/ Shlomo Margalit
- -------------------------
Shlomo Margalit
Assignment
This warrant for the purchase of 2,000 shares at $14.75 of MRV Communications,
Inc. Common Stock is hereby assigned to:
ROBERT COANE
- ------------------------------------------------------------------------------
ASSIGNED FROM WARRANTS
ASSIGNED BY JOSEPH ADIR
1/7/96 1/7/96
- -------------------------------------- -----------------------------
Title Date
Galcom Networking Ltd.
<PAGE> 20
Purchase Form
(to be signed only upon exercise of Warrant)
The undersigned, the holder of the forgoing Warrant, hereby irrevocably elects
to exercise the purchase rights represented by such Warrant for, and to
purchase thereunder,____________ shares of MRV Communications, Inc., and
herewith makes payment of $_________ therefore, and requests that the Warrants
and certificates for shares of Common Stock be issued in the name(s) of, and
delivered to ________________________, whose address(es)
is(are):____________________ dated_____________________
- ------------------------
signature
- ------------------------
address
<PAGE> 21
EXHIBIT 4(g)15
<PAGE> 22
GALCOM WARRANT
This Warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated
April 19, 1995 by and between MRV Communications, Inc. ("MRV") and Galcom
Networking, Ltd. ("Galcom"). The exercisability of the Warrant is expressly
contingent upon the continued and faithful performance by Galcom of its
obligations under the Agreement.
MRV hereby grants:
1. Galcom the right to purchase from MRV at a price of $14 3/4
during the period of "exercisability", as hereinafter defined
up to 1,000 shares of MRV Commons Stock. The period of
exercisability shall commence six (6) months from the date
hereof and shall terminate five (5) years from the date hereof
at close of business on the last date which is the fifth
anniversary date from the date hereof.
2. The rights granted hereunder to Galcom may be assigned or
transferred to any assignee or transferee approved by MRV
provided that such assignee or transferee agrees to be bound
by the provisions of this Warrant Agreement and understands
that the exercisability of this Warrant is contingent upon the
full and faithful performance by Galcom of its obligations
under the Agreement. Provided such conditions are met, MRV
shall not unreasonably withhold its consent to any such
assignment or transfer.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, Galcom shall have the right to exercise this
Warrant into the kind and amount of shares of stock and other securities and
property (including cash) receivable by a holder of the number of shares of
Common Stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this Warrant may be exercised during the
exercisability period, at any time in whole or in part be the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the abovementioned Purchase Form
together with applicable stock transfer taxes, if any and delivery to MRV of a
duly executed agreement signed by the person(s) designated in the Purchase
Form. The Common Stock and the certificates for the Common Stock so purchased
shall be delivered to Galcom within a reasonable time, not exceeding ten (10)
days after the rights represented by this Warrant shall have been so exercised.
<PAGE> 23
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common Stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the Warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this Warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this Warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately prior to such date, he would have owned upon such exercise
and been entitled to receive upon such dividend, distribution, subdivision,
combination, reclassification, reorganization, merger, consolidation or
recapitalization. Provided however no adjustment in the exercise price shall
be required unless such adjustment would require and increase or decrease of at
least five cents in such price.
Galcom acknowledges that the Warrant and the shares underlying the Warrant of
MRV Common Stock have not been registered with the Securities and Exchange
Commission and that it is taking the shares for investment purposes in the
event it exercises this Warrant and not with a view towards distribution. Upon
exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State of Delaware.
<PAGE> 24
In witness whereof MRV Communications, Inc. has caused this Warrant to be
signed by its duly authorized officers under its Corporate Seal and this
Warrant to be dated May 1, 1995.
MRV COMMUNICATIONS, INC.
By /s/ NOAM LOTAN
---------------------------------
Noam Lotan, President
Corporate Seal
ATTEST:
/s/ SHLOMO MARGALIT
- -------------------------
Shlomo Margalit
Assignment
This warrant for the purchase of 1,000 shares at $14.75 of MRV Communications,
Inc. Common Stock is hereby assigned to:
JEANETTE COANE CUST FOR ROBERT COANE JR
- ------------------------------------------------------------------------------
ASSIGNED FROM WARRANTS
ASSIGNED BY JOSEPH ADIR
1/7/96 1/7/96
- -------------------------------------- -----------------------------
Title Date
Galcom Networking Ltd.
<PAGE> 25
Purchase Form
(to be signed only upon exercise of Warrant)
The undersigned, the holder of the forgoing Warrant, hereby irrevocably elects
to exercise the purchase rights represented by such Warrant for, and to
purchase thereunder,____________ shares of MRV Communications, Inc., and
herewith makes payment of $_________ therefore, and requests that the Warrants
and certificates for shares of Common Stock be issued in the name(s) of, and
delivered to _________________________, whose address(es) is(are):
____________________dated____________________
- ------------------------
signature
- ------------------------
address
<PAGE> 26
EXHIBIT 4(g)16
<PAGE> 27
GALCOM WARRANT
This Warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated
April 19, 1995 by and between MRV Communications, Inc. ("MRV") and Galcom
Networking, Ltd. ("Galcom"). The exercisability of the Warrant is expressly
contingent upon the continued and faithful performance by Galcom of its
obligations under the Agreement.
MRV hereby grants:
1. Galcom the right to purchase from MRV at a price of $14 3/4
during the period of "exercisability", as hereinafter defined
up to 1,000 shares of MRV Commons Stock. The period of
exercisability shall commence six (6) months from the date
hereof and shall terminate five (5) years from the date hereof
at close of business on the last date which is the fifth
anniversary date from the date hereof.
2. The rights granted hereunder to Galcom may be assigned or
transferred to any assignee or transferee approved by MRV
provided that such assignee or transferee agrees to be bound
by the provisions of this Warrant Agreement and understands
that the exercisability of this Warrant is contingent upon the
full and faithful performance by Galcom of its obligations
under the Agreement. Provided such conditions are met, MRV
shall not unreasonably withhold its consent to any such
assignment or transfer.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, Galcom shall have the right to exercise this
Warrant into the kind and amount of shares of stock and other securities and
property (including cash) receivable by a holder of the number of shares of
Common Stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this Warrant may be exercised during the
exercisability period, at any time in whole or in part be the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the abovementioned Purchase Form
together with applicable stock transfer taxes, if any and delivery to MRV of a
duly executed agreement signed by the person(s) designated in the Purchase
Form. The Common Stock and the certificates for the Common Stock so purchased
shall be delivered to Galcom within a reasonable time, not exceeding ten (10)
days after the rights represented by this Warrant shall have been so exercised.
<PAGE> 28
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common Stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the Warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this Warrant shall be made and the
exercise price in effect at the time of the record date for such dividend OR
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this Warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately prior to such date, he would have owned upon such exercise
and been entitled to receive upon such dividend, distribution, subdivision,
combination, reclassification, reorganization, merger, consolidation or
recapitalization. Provided however no adjustment in the exercise price shall
be required unless such adjustment would require and increase or decrease of at
least five cents in such price.
Galcom acknowledges that the Warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
Upon exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State of Delaware.
<PAGE> 29
In witness whereof MRV Communications, Inc. has caused this Warrant to be
signed by its duly authorized officers under its Corporate Seal and this
Warrant to be dated May 1, 1995.
MRV COMMUNICATIONS, INC.
By /s/ NOAM LOTAN
---------------------------------
Noam Lotan, President
Corporate Seal
ATTEST:
/s/ SHLOMO MARGALIT
- -------------------------
Shlomo Margalit
Assignment
This warrant for the purchase of 1,000 shares at $14.75 of MRV Communications,
Inc. Common Stock is hereby assigned to:
JEANETTE COANE CUST FOR MARY COANE
- ------------------------------------------------------------------------------
ASSIGNED FROM WARRANTS
ASSIGNED BY JOSEPH ADIR
1/7/96 1/7/96
- -------------------------------------- ------------------------------
Title Date
Galcom Networking Ltd.
<PAGE> 30
Purchase Form
(to be signed only upon exercise of Warrant)
The undersigned, the holder of the forgoing Warrant, hereby irrevocably elects
to exercise the purchase rights represented by such Warrant for, and to
purchase thereunder, _________shares of MRV Communications, Inc., and herewith
makes payment of $_________ therefore, and requests that the Warrants and
certificates for shares of Common Stock be issued in the name(s) of, and
delivered to _________________________, whose address(es)
is(are):____________________ dated_____________________
- ------------------------
signature
- ------------------------
address
<PAGE> 31
EXHIBIT 4(g)17
<PAGE> 32
GALCOM WARRANT
This Warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated
April 19, 1995 by and between MRV Communications, Inc. ("MRV") and Galcom
Networking, Ltd. ("Galcom"). The exercisability of the Warrant is expressly
contingent upon the continued and faithful performance by Galcom of its
obligations under the Agreement.
MRV hereby grants:
1. Galcom the right to purchase from MRV at a price of $14 3/4
during the period of "exercisability", as hereinafter defined
up to 1,000 shares of MRV Commons Stock. The period of
exercisability shall commence six (6) months from the date
hereof and shall terminate five (5) years from the date hereof
at close of business on the last date which is the fifth
anniversary date from the date hereof.
2. The rights granted hereunder to Galcom may be assigned or
transferred to any assignee or transferee approved by MRV
provided that such assignee or transferee agrees to be bound
by the provisions of this Warrant Agreement and understands
that the exercisability of this Warrant is contingent upon the
full and faithful performance by Galcom of its obligations
under the Agreement. Provided such conditions are met, MRV
shall not unreasonably withhold its consent to any such
assignment or transfer.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, Galcom shall have the right to exercise this
Warrant into the kind and amount of shares of stock and other securities and
property (including cash) receivable by a holder of the number of shares of
Common Stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this Warrant may be exercised during the
exercisability period, at any time in whole or in part be the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the abovementioned Purchase Form
together with applicable stock transfer taxes, if any and delivery to MRV of a
duly executed agreement signed by the person(s) designated in the Purchase
Form. The Common Stock and the certificates for the Common Stock so purchased
shall be delivered to Galcom within a reasonable time, not exceeding ten (10)
days after the rights represented by this Warrant shall have been so exercised.
<PAGE> 33
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common Stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the Warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this Warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this Warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately prior to such date, he would have owned upon such exercise
and been entitled to receive upon such dividend, distribution, subdivision,
combination, reclassification, reorganization, merger, consolidation or
recapitalization. Provided however no adjustment in the exercise price shall
be required unless such adjustment would require and increase or decrease of at
least five cents in such price.
Galcom acknowledges that the Warrant and the shares underlying the Warrant of
MRV Common Stock have not been registered with the Securities and Exchange
Commission and that it is taking the shares for investment purposes in the
event it exercises this Warrant and not with a view towards distribution.
Upon exercise of this Warrant a legend to this effect will be placed upon
the certificates.
This Agreement shall be governed by and in accordance with the laws of the
State of Delaware.
<PAGE> 34
In witness whereof MRV Communications, Inc. has caused this Warrant to be
signed by its duly authorized officers under its Corporate Seal and this
Warrant to be dated May 1, 1995.
MRV COMMUNICATIONS, INC.
By /s/ NOAM LOTAN
---------------------------------
Noam Lotan, President
Corporate Seal
ATTEST:
/s/ SHLOMO MARGALIT
- -------------------------
Shlomo Margalit
Assignment
This warrant for the purchase of 1,000 shares at $14.75 of MRV Communications,
Inc. Common Stock is hereby assigned to:
JEANETTE COANE CUST FOR KEVIN COANE
- ------------------------------------------------------------------------------
ASSIGNED FROM WARRANTS
ASSIGNED BY JOSEPH ADIR
1/7/96 1/7/96
- -------------------------------------- -----------------------------
Title Date
Galcom Networking Ltd.
<PAGE> 35
Purchase Form
(to be signed only upon exercise of Warrant)
The undersigned, the holder of the forgoing Warrant, hereby irrevocably elects
to exercise the purchase rights represented by such Warrant for, and to
purchase thereunder, ____________ shares of MRV Communications, Inc., and
herewith makes payment of $____________ therefore, and requests that the
Warrants and certificates for shares of Common Stock be issued in the name(s)
of, and delivered to _______________________, whose address(es)
is(are):____________________ dated____________________
- ------------------------
signature
- ------------------------
address
<PAGE> 36
EXHIBIT 4(g)18
<PAGE> 37
GALCOM WARRANT
This Warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated
April 19, 1995 by and between MRV Communications, Inc. ("MRV") and Galcom
Networking, Ltd. ("Galcom"). The exercisability of the Warrant is expressly
contingent upon the continued and faithful performance by Galcom of its
obligations under the Agreement.
MRV hereby grants:
1. Galcom the right to purchase from MRV at a price of $14 3/4
during the period of "exercisability", as hereinafter defined
up to 17,500 shares of MRV Commons Stock. The period of
exercisability shall commence six (6) months from the date
hereof and shall terminate five (5) years from the date hereof
at close of business on the last date which is the fifth
anniversary date from the date hereof.
2. The rights granted hereunder to Galcom may be assigned or
transferred to any assignee or transferee approved by MRV
provided that such assignee or transferee agrees to be bound
by the provisions of this Warrant Agreement and understands
that the exercisability of this Warrant is contingent upon the
full and faithful performance by Galcom of its obligations
under the Agreement. Provided such conditions are met, MRV
shall not unreasonably withhold its consent to any such
assignment or transfer.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, Galcom shall have the right to exercise this
Warrant into the kind and amount of shares of stock and other securities and
property (including cash) receivable by a holder of the number of shares of
Common Stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets,
of MRV as an entirety.
The rights represented by this Warrant may be exercised during the
exercisability period, at any time in whole or in part be the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the abovementioned Purchase Form
together with applicable stock transfer taxes, if any and delivery to MRV of a
duly executed agreement signed by the person(s) designated in the Purchase
Form. The Common Stock and the certificates for the Common Stock so purchased
shall be delivered to Galcom within a reasonable time, not exceeding ten (10)
days after the rights represented by this Warrant shall have been so exercised.
<PAGE> 38
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common Stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the Warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this Warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this Warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately prior to such date, he would have owned upon such exercise
and been entitled to receive upon such dividend, distribution, subdivision,
combination, reclassification, reorganization, merger, consolidation or
recapitalization. Provided however no adjustment in the exercise price shall
be required unless such adjustment would require and increase or decrease of at
least five cents in such price.
Galcom acknowledges that the Warrant and the shares underlying the Warrant of
MRV Common Stock have not been registered with the Securities and Exchange
Commission and that it is taking the shares for investment purposes in the
event it exercises this Warrant and not with a view towards distribution. Upon
exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State of Delaware.
<PAGE> 39
In witness whereof MRV Communications, Inc. has caused this Warrant to be
signed by its duty authorized officers under its Corporate Seal and this
Warrant to be dated May 1, 1995.
MRV COMMUNICATIONS, INC.
By /s/ NOAM LOTAN
---------------------------------
Noam Lotan, President
Corporate Seal
ATTEST:
/s/ SHLOMO MARGALIT
- -------------------------
Shlomo Margalit
Assignment
This warrant for the purchase of 17,500 shares at $14.75 of MRV Communications,
Inc. Common Stock is hereby assigned to:
DARYL HAGLER
- ------------------------------------------------------------------------------
ASSIGNED FROM WARRANTS
ASSIGNED BY JOSEPH ADIR
12/5/95 12/30/95
- -------------------------------------- -----------------------------
Title Date
Galcom Networking Ltd.
<PAGE> 40
Purchase Form
(to be signed only upon exercise of Warrant)
The undersigned, the holder of the forgoing Warrant, hereby irrevocably elects
to exercise the purchase rights represented by such Warrant for, and to
purchase thereunder, ____________shares of MRV Communications, Inc., and
herewith makes payment of $____________therefore, and requests that the
Warrants and certificates for shares of Common Stock be issued in the name(s)
of, and delivered to ________________________, whose address(es)
is(are):____________________ dated____________________
- ------------------------
signature
- ------------------------
address
<PAGE> 41
EXHIBIT 4(g)19
<PAGE> 42
GALCOM WARRANT
This Warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated
April 19, 1995 by and between MRV Communications, Inc. ("MRV") and Galcom
Networking, Ltd. ("Galcom"). The exercisability of the Warrant is expressly
contingent upon the continued and faithful performance by Galcom of its
obligations under the Agreement.
MRV hereby grants:
1. Galcom the right to purchase from MRV at a price of $14 3/4
during the period of "exercisability", as hereinafter defined
up to 5,000 shares of MRV Commons Stock. The period of
exercisability shall commence six (6) months from the date
hereof and shall terminate five (5) years from the date hereof
at close of business on the last date which is the fifth
anniversary date from the date hereof.
2. The rights granted hereunder to Galcom may be assigned or
transferred to any assignee or transferee approved by MRV
provided that such assignee or transferee agrees to be bound
by the provisions of this Warrant Agreement and understands
that the exercisability of this Warrant is contingent upon the
full and faithful performance by Galcom of its obligations
under the Agreement. Provided such conditions are met, MRV
shall not unreasonably withhold its consent to any such
assignment or transfer.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, Galcom shall have the right to exercise this
Warrant into the kind and amount of shares of stock and other securities and
property (including cash) receivable by a holder of the number of shares of
Common Stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this Warrant may be exercised during the
exercisability period, at any time in whole or in part be the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the abovementioned Purchase Form
together with applicable stock transfer taxes, if any and delivery to MRV of a
duly executed agreement signed by the person(s) designated in the Purchase
Form. The Common Stock and the certificates for the Common Stock so purchased
shall be delivered to Galcom within a reasonable time, not exceeding ten (10)
days after the rights represented by this Warrant shall have been so exercised.
<PAGE> 43
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common Stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the Warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this Warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this Warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock Which, if this Warrant had been exercised by such
holder immediately prior to such date, he would have owned upon such exercise
and been entitled to receive upon such dividend, distribution, subdivision,
combination, reclassification, reorganization, merger, consolidation or
recapitalization. Provided however no adjustment in the exercise price shall
be required unless such adjustment would require and increase or decrease of at
least five cents in such price.
Galcom acknowledges that the Warrant and the shares underlying the Warrant of
MRV Common Stock have not been registered with the Securities and Exchange
Commission and that it is taking the shares for investment purposes in the
event it exercises this Warrant and not with a view towards distribution. Upon
exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State of Delaware.
<PAGE> 44
In witness whereof MRV Communications, Inc. has caused this Warrant to be
signed by its duly authorized officers under its Corporate Seal and this
Warrant to be dated May 1, 1995.
MRV COMMUNICATIONS, INC.
By /s/ NOAM LOTAN
---------------------------------
Noam Lotan, President
Corporate Seal
ATTEST:
/s/ SHLOMO MARGALIT
- -------------------------
Shlomo Margalit
Assignment
This warrant for the purchase of 5,000 shares at $14.75 of MRV Communications,
Inc. Common Stock is hereby assigned to:
TIMOTHY ESSAYE
- ------------------------------------------------------------------------------
ASSIGNED FROM WARRANTS
ASSIGNED BY JOSEPH ADIR
12/5/95 12/30/95
- -------------------------------------- -----------------------------
Title Date
Galcom Networking Ltd.
<PAGE> 45
Purchase Form
(to be signed only upon exercise of Warrant)
The undersigned, the holder of the forgoing Warrant, hereby irrevocably elects
to exercise the purchase rights represented by such Warrant for, and to
purchase thereunder, ____________shares of MRV Communications, Inc., and
herewith makes payment of $____________ therefore, and requests that the
Warrants and certificates for shares of Common Stock be issued in the name(s)
of, and delivered to _________________________, whose address(es)
is(are):____________________ dated____________________
- ------------------------
signature
- ------------------------
address
<PAGE> 46
EXHIBIT 4(g)20
<PAGE> 47
GALCOM WARRANT
This Warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated
April 19, 1995 by and between MRV Communications, Inc. ("MRV") and Galcom
Networking, Ltd. ("Galcom"). The exercisability of the Warrant is expressly
contingent upon the continued and faithful performance by Galcom of its
obligations under the Agreement.
MRV hereby grants:
1. Galcom the right to purchase from MRV at a price of $14 3/4
during the period of "exercisability", as hereinafter defined
up to 2,500 shares of MRV Commons Stock. The period of
exercisability shall commence six (6) months from the date
hereof and shall terminate five (5) years from the date hereof
at close of business on the last date which is the fifth
anniversary date from the date hereof.
2. The rights granted hereunder to Galcom may be assigned or
transferred to any assignee or transferee approved by MRV
provided that such assignee or transferee agrees to be bound
by the provisions of this Warrant Agreement and understands
that the exercisability of this Warrant is contingent upon the
full and faithful performance by Galcom of its obligations
under the Agreement. Provided such conditions are met, MRV
shall not unreasonably withhold its consent to any such
assignment or transfer.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, Galcom shall have the right to exercise this
Warrant into the kind and amount of shares of stock and other securities and
property (including cash) receivable by a holder of the number of shares of
Common Stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this Warrant may be exercised during the
exercisability period, at any time in whole or in part be the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the abovementioned Purchase Form
together with applicable stock transfer taxes, if any and delivery to MRV of a
duly executed agreement signed by the person(s) designated in the Purchase
Form. The Common Stock and the certificates for the Common Stock so purchased
shall be delivered to Galcom within a reasonable time, not exceeding ten (10)
days after the rights represented by this Warrant shall have been so exercised.
<PAGE> 48
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common Stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the Warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this Warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this Warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately prior to such date, he would have owned upon such exercise
and been entitled to receive upon such dividend, distribution, subdivision,
combination, reclassification, reorganization, merger, consolidation or
recapitalization. Provided however no adjustment in the exercise price shall
be required unless such adjustment would require and increase or decrease of at
least five cents in such price.
Galcom acknowledges that the Warrant and the shares underlying the Warrant of
MRV Common Stock have not been registered with the Securities and Exchange
Commission and that it is taking the shares for investment purposes in the
event it exercises this Warrant and not with a view towards distribution. Upon
exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State of Delaware.
<PAGE> 49
In witness whereof MRV Communications, Inc. has caused this Warrant to be
signed by its duly authorized officers under its Corporate Seal and this
Warrant to be dated May 1, 1995.
MRV COMMUNICATIONS, INC.
By /s/ NOAM LOTAN
---------------------------------
Noam Lotan, President
Corporate Seal
ATTEST:
/s/ SHLOMO MARGALIT
- -------------------------
Shlomo Margalit
Assignment
This warrant for the purchase of 2,500 shares at $14.75 of MRV Communications,
Inc. Common Stock is hereby assigned to:
OSCAR GRUSS & SONS
- ------------------------------------------------------------------------------
ASSIGNED FROM WARRANTS
ASSIGNED BY JOSEPH ADIR
12/5/95 12/30/95
- -------------------------------------- -----------------------------
Title Date
Galcom Networking Ltd.
<PAGE> 50
Purchase Form
(to be signed only upon exercise of Warrant)
The undersigned, the holder of the forgoing Warrant, hereby irrevocably elects
to exercise the purchase rights represented by such Warrant for, and to
purchase thereunder, ____________shares of MRV Communications, Inc., and
herewith makes payment of $____________ therefore, and requests that the
Warrants and certificates for shares of Common Stock be issued in the name(s)
of, and delivered to _________________________, whose address(es)
is(are):____________________ dated____________________
- ------------------------
signature
- ------------------------
address
<PAGE> 51
EXHIBIT 4(g)21
<PAGE> 52
GALCOM WARRANT
This Warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated
April 19, 1995 by and between MRV Communications, Inc. ("MRV") and Galcom
Networking, Ltd. ("Galcom"). The exercisability of the Warrant is expressly
contingent upon the continued and faithful performance by Galcom of its
obligations under the Agreement.
MRV hereby grants:
1. Galcom the right to purchase from MRV at a price of $14 3/4
during the period of "exercisability", as hereinafter defined
up to 1,000 shares of MRV Commons Stock. The period of
exercisability shall commence six (6) months from the date
hereof and shall terminate five (5) years from the date hereof
at close of business on the last date which is the fifth
anniversary date from the date hereof.
2. The rights granted hereunder to Galcom may be assigned or
transferred to any assignee or transferee approved by MRV
provided that such assignee or transferee agrees to be bound
by the provisions of this Warrant Agreement and understands
that the exercisability of this Warrant is contingent upon the
full and faithful performance by Galcom of its obligations
under the Agreement. Provided such conditions are met, MRV
shall not unreasonably withhold its consent to any such
assignment or transfer.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, Galcom shall have the right to exercise this
Warrant into the kind and amount of shares of stock and other securities and
property (including cash) receivable by a holder of the number of shares of
Common Stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this Warrant may be exercised during the
exercisability period, at any time in whole or in part be the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the abovementioned Purchase Form
together with applicable stock transfer taxes, if any and delivery to MRV of a
duly executed agreement signed by the person(s) designated in the Purchase
Form. The Common Stock and the certificates for the Common Stock so purchased
shall be delivered to Galcom within a reasonable time, not exceeding ten (10)
days after the rights represented by this Warrant shall have been so exercised.
<PAGE> 53
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common Stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the Warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this Warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this Warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately prior to such date, he would have owned upon such exercise
and been entitled to receive upon such dividend, distribution, subdivision,
combination, reclassification, reorganization, merger, consolidation or
recapitalization. Provided however no adjustment in the exercise price shall
be required unless such adjustment would require and increase or decrease of at
least five cents in such price.
Galcom acknowledges that the Warrant and the shares underlying the Warrant of
MRV Common Stock have not been registered with the Securities and Exchange
Commission and that it is taking the shares for investment purposes in the
event it exercises this Warrant and not with a view towards distribution. Upon
exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State of Delaware.
<PAGE> 54
In witness whereof MRV Communications, Inc. has caused this Warrant to be
signed by its duly authorized officers under its Corporate Seal and this
Warrant to be dated May 1, 1995.
MRV COMMUNICATIONS, INC.
By /s/ NOAM LOTAN
----------------------------
Noam Lotan, President
Corporate Seal
ATTEST:
/s/ SHLOMO MARGALIT
- ------------------------
Shlomo Margalit
Assignment
This warrant for the purchase of 1,000 shares at $14.75 of MRV Communications,
Inc. Common Stock is hereby assigned to:
DAVID KOCH
- ------------------------------------------------------------------------------
ASSIGNED FROM WARRANTS
ASSIGNED BY JOSEPH ADIR
12/5/95 12/30/95
- -------------------------------------- -----------------------------
Title Date
Galcom Networking Ltd.
<PAGE> 55
Purchase Form
(to be signed only upon exercise of Warrant)
The undersigned, the holder of the forgoing Warrant, hereby irrevocably elects
to exercise the purchase rights represented by such Warrant for, and to
purchase thereunder, ____________shares of MRV Communications, Inc., and
herewith makes payment of $____________ therefore, and requests that the
Warrants and certificates for shares of Common Stock be issued in the name(s)
of, and delivered to ________________________, whose address(es) is (are):
____________________dated____________________
- ------------------------
signature
- ------------------------
address
<PAGE> 56
EXHIBIT 4(g)22
<PAGE> 57
GALCOM WARRANT
This Warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated
April 19, 1995 by and between MRV Communications, Inc. ("MRV") and Galcom
Networking, Ltd. ("Galcom"). The exercisability of the Warrant is expressly
contingent upon the continued and faithful performance by Galcom of its
obligations under the Agreement.
MRV hereby grants:
1. Galcom the right to purchase from MRV at a price of $14 3/4
during the period of "exercisability", as hereinafter defined
up to 20,000 shares of MRV Commons Stock. The period of
exercisability shall commence six (6) months from the date
hereof and shall terminate five (5) years from the date hereof
at close of business on the last date which is the fifth
anniversary date from the date hereof.
2. The rights granted hereunder to Galcom may be assigned or
transferred to any assignee or transferee approved by MRV
provided that such assignee or transferee agrees to be bound
by the provisions of this Warrant Agreement and understands
that the exercisability of this Warrant is contingent upon the
full and faithful performance by Galcom of its obligations
under the Agreement. Provided such conditions are met, MRV
shall not unreasonably withhold its consent to any such
assignment or transfer.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, Galcom shall have the right to exercise this
Warrant into the kind and amount of shares of stock and other securities and
property (including cash) receivable by a holder of the number of shares of
Common Stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this Warrant may be exercised during the
exercisability period, at any time in whole or in part be the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the abovementioned Purchase Form
together with applicable stock transfer taxes, if any and delivery to MRV of a
duly executed agreement signed by the person(s) designated in the Purchase
Form. The Common Stock and the certificates for the Common Stock so purchased
shall be delivered to Galcom within a reasonable time, not exceeding ten (10)
days after the rights represented by this Warrant shall have been so exercised.
<PAGE> 58
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof. MRV
further covenants and agrees that, during the exercisability period, MRV will at
all times have authorized and reserved a sufficient number of shares of its
Common Stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the Warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this Warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this Warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately prior to such date, he would have owned upon such exercise
and been entitled to receive upon such dividend, distribution, subdivision,
combination, reclassification, reorganization, merger, consolidation or
recapitalization. Provided however no adjustment in the exercise price shall
be required unless such adjustment would require and increase or decrease of at
least five cents in such price.
Galcom acknowledges that the Warrant and the shares underlying the Warrant of
MRV Common Stock have not been registered with the Securities and Exchange
Commission and that it is taking the shares for investment purposes in the
event it exercises this Warrant and not with a view towards distribution. Upon
exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State of Delaware.
<PAGE> 59
In witness whereof MRV Communications, Inc. has caused this Warrant to be
signed by its duly authorized officers under its Corporate Seal and this
Warrant to be dated May 1, 1995.
MRV COMMUNICATIONS, INC.
By /s/ NOAM LOTAN
----------------------------
Noam Lotan, President
Corporate Seal
ATTEST:
/s/ SHLOMO MARGALIT
- ------------------------
Shlomo Margalit
Assignment
This warrant for the purchase of 20,000 shares at $14.75 of MRV Communications,
Inc. Common Stock is hereby assigned to:
BILL MUSSER
- ------------------------------------------------------------------------------
ASSIGNED FROM WARRANTS
ASSIGNED BY JOSEPH ADIR
12/5/95 12/30/95
- -------------------------------------- -----------------------------
Title Date
Galcom Networking Ltd.
<PAGE> 60
Purchase Form
(to be signed only upon exercise of Warrant)
The undersigned, the holder of the forgoing Warrant,, hereby irrevocably elects
to exercise the purchase rights represented by such Warrant for, and to
purchase thereunder, ____________shares of MRV Communications, Inc., and
herewith makes payment of $____________therefore, and requests that the
Warrants and certificates for shares of Common Stock be issued in the name(s)
of, and delivered to ________________________, whose address(es)
is(are):____________________ dated____________________
- ------------------------
signature
- ------------------------
address
<PAGE> 61
EXHIBIT 4(g)23
<PAGE> 62
GALCOM WARRANT
This Warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated
April 19, 1995 by and between MRV Communications, Inc. ("MRV") and Galcom
Networking, Ltd. ("Galcom"). The exercisability of the Warrant is expressly
contingent upon the continued and faithful performance by Galcom of its
obligations under the Agreement.
MRV hereby grants:
1. Galcom the right to purchase from MRV at a price of $14 3/4
during the period of "exercisability", as hereinafter defined
up to 4,000 shares of MRV Commons Stock. The period of
exercisability shall commence six (6) months from the date
hereof and shall terminate five (5) years from the date hereof
at close of business on the last date which is the fifth
anniversary date from the date hereof.
2. The rights granted hereunder to Galcom may be assigned or
transferred to any assignee or transferee approved by MRV
provided that such assignee or transferee agrees to be bound
by the provisions of this Warrant Agreement and understands
that the exercisability of this Warrant is contingent upon the
full and faithful performance by Galcom of its obligations
under the Agreement. Provided such conditions are met, MRV
shall not unreasonably withhold its consent to any such
assignment or transfer.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, Galcom shall have the right to exercise this
Warrant into the kind and amount of shares of stock and other securities and
property (including cash) receivable by a holder of the number of shares of
Common Stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this Warrant may be exercised during the
exercisability period, at any time in whole or in part be the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the abovementioned Purchase Form
together with applicable stock transfer taxes, if any and delivery to MRV of a
duly executed agreement signed by the person(s) designated in the Purchase
Form. The Common Stock and the certificates for the Common Stock so purchased
shall be delivered to Galcom within a reasonable time, not exceeding ten (10)
days after the rights represented by this Warrant shall have been so exercised.
<PAGE> 63
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common Stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the Warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this Warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this Warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately prior to such date, he would have owned upon such exercise
and been entitled to receive upon such dividend, distribution, subdivision,
combination, reclassification, reorganization, merger, consolidation or
recapitalization. Provided however no adjustment in the exercise price shall
be required unless such adjustment would require and increase or decrease of at
least five cents in such price.
Galcom acknowledges that the Warrant and the shares underlying the Warrant of
MRV Common Stock have not been registered with the Securities and Exchange
Commission and that it is taking the shares for investment purposes in the
event it exercises this Warrant and not with a view towards distribution. Upon
exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State of Delaware.
<PAGE> 64
In witness whereof MRV Communications, Inc. has caused this Warrant to be
signed by its duly authorized officers under its Corporate Seal and this
Warrant to be dated May 1, 1995.
MRV COMMUNICATIONS, INC.
By /s/ NOAM LOTAN
----------------------------
Noam Lotan, President
Corporate Seal
ATTEST:
/s/ SHLOMO MARGALIT
- ------------------------
Shlomo Margalit
Assignment
This warrant for the purchase of 4,000 shares at $14.75 of MRV Communications,
Inc. Common Stock is hereby assigned to:
ISABELLE ORLANSKY
- ------------------------------------------------------------------------------
ASSIGNED FROM WARRANTS
ASSIGNED BY JOSEPH ADIR
12/5/95 12/30/95
- -------------------------------------- -----------------------------
Title Date
Galcom Networking Ltd.
<PAGE> 65
Purchase Form
(to be signed only upon exercise of Warrant)
The undersigned, the holder of the forgoing Warrant, hereby irrevocably elects
to exercise the purchase rights represented by such Warrant for, and to
purchase thereunder, ____________shares of MRV Communications, Inc., and
herewith makes payment of $____________ therefore, and requests that the
Warrants and certificates for shares of Common Stock be issued in the name(s)
of, and delivered to ______________________whose address(es)
is(are):_____________________ dated____________________
- ------------------------
signature
- ------------------------
address
<PAGE> 66
EXHIBIT 4(g)24
<PAGE> 67
GALCOM WARRANT
This Warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated
April 19, 1995 by and between MRV Communications, Inc. ("MRV") and Galcom
Networking, Ltd. ("Galcom"). The exercisability of the Warrant is expressly
contingent upon the continued and faithful performance by Galcom of its
obligations under the Agreement.
MRV hereby grants:
1. Galcom the right to purchase from MRV at a price of $22.125
during the period of "exercisability", as hereinafter defined
up to 15,000 shares of MRV Commons Stock. The period of
exercisability shall commence six (6) months from the date
hereof and shall terminate five (5) years from the date hereof
at close of business on the last date which is the fifth
anniversary date from the date hereof.
2. The rights granted hereunder to Galcom may be assigned or
transferred to any assignee or transferee approved by MRV
provided that such assignee or transferee agrees to be bound
by the provisions of this Warrant Agreement and understands
that the exercisability of this Warrant is contingent upon the
full and faithful performance by Galcom of its obligations
under the Agreement. Provided such conditions are met, MRV
shall not unreasonably withhold its consent to any such
assignment or transfer.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, Galcom shall have the right to exercise this
Warrant into the kind and amount of shares of stock and other securities and
property (including cash) receivable by a holder of the number of shares of
Common Stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this Warrant may be exercised during the
exercisability period, at any time in whole or in part be the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the abovementioned Purchase Form
together with applicable stock transfer taxes, if any and delivery to MRV of a
duly executed agreement signed by the person(s) designated in the Purchase
Form. The Common Stock and the certificates for the Common Stock so purchased
shall be delivered to Galcom within a reasonable time, not exceeding ten (10)
days after the rights represented by this Warrant shall have been so exercised.
<PAGE> 68
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common Stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the Warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this Warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this Warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately prior to such date, he would have owned upon such exercise
and been entitled to receive upon such dividend, distribution, subdivision,
combination, reclassification, reorganization, merger, consolidation or
recapitalization. Provided however no adjustment in the exercise price shall
be required unless such adjustment would require and increase or decrease of at
least five cents in such price.
Galcom acknowledges that the Warrant and the shares underlying the Warrant of
MRV Common Stock have not been registered with the Securities and Exchange
Commission and that it is taking the shares for investment purposes in the
event it exercises this Warrant and not with a view towards distribution. Upon
exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State of Delaware.
<PAGE> 69
In witness whereof MRV Communications, Inc. has caused this Warrant to be
signed by its duly authorized officers under its Corporate Seal and this
Warrant to be dated May 1, 1995.
MRV COMMUNICATIONS, INC.
By /s/ NOAM LOTAN
---------------------------
Noam Lotan, President
Corporate Seal
ATTEST:
/s/ SHLOMO MARGALIT
- ------------------------
Shlomo Margalit
Assignment
This warrant for the purchase of 15,000 shares at $22.125 of MRV
Communications, Inc. Common Stock is hereby assigned to:
ISABELLE ORLANSKY
- ------------------------------------------------------------------------------
ASSIGNED FROM WARRANTS
ASSIGNED BY JOSEPH ADIR
1/23/96 1/23/96
- -------------------------------------- -----------------------------
Title Date
Galcom Networking Ltd.
<PAGE> 70
Purchase Form
(to be signed only upon exercise of Warrant)
The undersigned, the holder of the forgoing Warrant, hereby irrevocably elects
to exercise the purchase rights represented by such Warrant for, and to
purchase thereunder, _____________shares of MRV Communications, Inc., and
herewith makes payment of $____________ therefore, and requests that the
Warrants and certificates for shares of Common Stock be issued in the name(s)
of, and delivered to ________________________, whose address(es)
is(are):____________________ dated____________________
- ------------------------
signature
- ------------------------
address
<PAGE> 71
EXHIBIT 4(g)25
<PAGE> 72
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", by and
between MRV Communications, Inc. ("MRV") and Galcom Networking, Ltd.
MRV hereby grants:
1. Henry Telner the right to purchase from MRV at a price of
$14.25 during the period of "Exercisability", as hereinafter defined up to
2,500 shares of MRV Common Stock. The period of Exercisability shall
commence on July 13, 1995 and shall terminate (5) years from July 13, 1995.
2. The rights granted hereunder to Henry Telner may be assigned
or transferred to any assignee or transferee approved by MRV provided that
such assignee or transferee agrees to be bound by the provisions of this
Warrant Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, the Warrantholder shall have the right to
exercise this Warrant into the kind and amount of shares of stock and other
securities and property (including cash) receivable by a holder of the number
of shares of Common stock into which the Warrant might have been exercisable
immediately prior to such merger, consolidation or sale of substantially all of
the assets of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to the Warrantholder within a reasonable time, not exceeding ten
(10) days after the rights represented by this Warrant shall have been so
exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of
<PAGE> 73
Common stock into a greater number of shares, or (iii) combine or reclassify
its outstanding shares of Common Stock into a smaller number of shares, then
the appropriate adjustments in the number and kind of such securities subject
to this warrant shall be made and the exercise price in effect at the time of
the record date for such dividend or distribution or of the effective date of
such subdivision, combination, reclassification, reorganization, merger,
consolidation, or recapitalization shall be proportionately adjusted so that
the holder of this warrant exercised after such date shall be entitled to
receive the aggregate number and kind of shares of MRV Common Stock which, if
this Warrant had been exercised by such holder immediately prior to such date,
he would have owned upon such exercise and been entitled to receive upon such
dividend, distribution, subdivision, combination, reclassification,
reorganization, merger, consolidation or recapitalization. Provided however no
adjustment in the exercise price shall be required unless such adjustment would
require an increase or decrease of at least five cents in such price.
Warrantholder acknowledges that the warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
MRV agrees to register with the Securities Exchange Commission, at MRV's
expense, the shares underlying the warrants prior to January 13, 1996. Upon
exercise of this Warrant a legend to this effect will be placed upon the
certificates.
<PAGE> 74
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
MRV COMMUNICATIONS, INC.
By /s/ NOAM LOTAN
-----------------------------
Noam Lotan, President
Corporate Seal
Attest:
/s/ SHLOMO MARGALIT
- --------------------------------------
Shlomo Margalit, Chairman of the Board
Assignment
This Warrant for the purchase of 2,500 shares at $14.25 of MRV Communications,
Inc. Common Stock is hereby assigned to:
NORTHVIEW TRADING
- ------------------------------------------------------------------------------
ASSIGNED FROM WARRANTS
ASSIGNED BY HENRI TELNER
1/23/96 1/23/96
- ----------------------------- -----------------
Henri Telner Date
<PAGE> 75
EXHIBIT 4(g)26
<PAGE> 76
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", by and
between MRV Communications, Inc. ("MRV") and Galcom Networking, Ltd.
MRV hereby grants:
1. Henry Telner the right to purchase from MRV at a price of
$14.25 during the period of "Exercisability", as hereinafter defined up to
1,000 shares of MRV Common Stock. The period of Exercisability shall
commence on July 13, 1995 and shall terminate (5) years from July 13, 1995.
2. The rights granted hereunder to Henry Telner may be assigned
or transferred to any assignee or transferee approved by MRV provided that
such assignee or transferee agrees to be bound by the provisions of this
Warrant Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, the Warrantholder shall have the right to
exercise this Warrant into the kind and amount of shares of stock and other
securities and property (including cash) receivable by a holder of the number
of shares of Common stock into which the Warrant might have been exercisable
immediately prior to such merger, consolidation or sale of substantially all of
the assets of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to the Warrantholder within a reasonable time, not exceeding ten
(10) days after the rights represented by this Warrant shall have been so
exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder,
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder off MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of
<PAGE> 77
Common stock into a greater number of shares, or (iii) combine or reclassify
its outstanding shares of Common Stock into a smaller number of shares, then
the appropriate adjustments in the number and kind of such securities subject
to this warrant shall be made and the exercise price in effect at the time of
the record date for such dividend or distribution or of the effective date of
such subdivision, combination, reclassification, reorganization, merger,
consolidation, or recapitalization shall be proportionately adjusted so that
the holder of this warrant exercised after such date shall be entitled to
receive the aggregate number and kind of shares of MRV Common Stock which, if
this Warrant had been exercised by such holder immediately prior to such date,
he would have owned upon such exercise and been entitled to receive upon such
dividend, distribution, subdivision, combination, reclassification,
reorganization, merger, consolidation or recapitalization. Provided however no
adjustment in the exercise price shall be required unless such adjustment would
require an increase or decrease of at least five cents in such price.
Warrantholder acknowledges that the warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
MRV agrees to register with the Securities Exchange Commission, at MRV's
expense, the shares underlying the warrants prior to January 13, 1996. Upon
exercise of this Warrant a legend to this effect will be placed upon the
certificates.
<PAGE> 78
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
MRV COMMUNICATIONS, INC.
By /s/ NOAM LOTAN
-----------------------------
Noam Lotan, President
Corporate Seal
Attest:
s/ SHLOMO MARGALIT
- --------------------------------------
Shlomo Margalit, Chairman of the Board
Assignment
This Warrant for the purchase of 1,000 shares at $14.25 of MRV Communications,
Inc. Common Stock is hereby assigned to:
DARA KIELY
- ------------------------------------------------------------------------------
ASSIGNED FROM WARRANTS
ASSIGNED BY HENRI TELNER
1/23/96 1/23/96
- ----------------------------- -----------------
Henri Telner Date
<PAGE> 79
EXHIBIT 4(g)27
<PAGE> 80
WARRANT
This warrant is given in consideration of the entering Agreement, hereinafter
referred to as the "Agreement", by and between MRV Communications, Inc. ("MRV")
and Galcom Networking, Ltd.
MRV hereby grants:
1. Henry Telner the right to purchase from MRV at a price of
$14.25 during the period of "Exercisability", as hereinafter defined up to
1,500 shares of MRV Common Stock. The period of Exercisability shall
commence on July 13, 1995 and shall terminate (5) years from July 13, 1995.
2. The rights granted hereunder to Henry Telner may be assigned
or transferred to any assignee or transferee approved by MRV provided that
such assignee or transferee agrees to be bound by the provisions of this
Warrant Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, the Warrantholder shall have the right to
exercise this Warrant into the kind and amount of shares of stock and other
securities and property (including cash) receivable by a holder of the number
of shares of Common stock into which the Warrant might have been exercisable
immediately prior to such merger, consolidation or sale of substantially all of
the assets of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to the Warrantholder within a reasonable time, not exceeding ten
(10) days after the rights represented by this Warrant shall have been so
exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder off MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of of that certain Asset Purchase
<PAGE> 81
Common stock into a greater number of shares, or (iii) combine or reclassify
its outstanding shares of Common Stock into a smaller number of shares, then
the appropriate adjustments in the number and kind of such securities subject
to this warrant shall be made and the exercise price in effect at the time of
the record date for such dividend or distribution or of the effective date of
such subdivision, combination, reclassification, reorganization, merger,
consolidation, or recapitalization shall be proportionately adjusted so that
the holder of this warrant exercised after such date shall be entitled to
receive the aggregate number and kind of shares of MRV Common Stock which, if
this Warrant had been exercised by such holder immediately prior to such date,
lie would have owned upon such exercise and been entitled to receive upon such
dividend, distribution, subdivision, combination, reclassification,
reorganization, merger, consolidation or recapitalization. Provided however no
adjustment in the exercise price shall be required unless such adjustment would
require an increase or decrease of at least five cents in such price.
Warrantholder acknowledges that the warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
MRV agrees to register with the Securities Exchange Commission, at MRV's
expense, the shares underlying the warrants prior to January 13, 1996. Upon
exercise of this Warrant a legend to this effect will be placed upon the
certificates.
<PAGE> 82
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
MRV COMMUNICATIONS, INC.
By s/ NOAM LOTAN
-----------------------------
Noam Lotan, President
Corporate Seal
Attest:
/s/ SHLOMO MARGALIT
- --------------------------------------
Shlomo Margalit, Chairman of the Board
Assignment
This Warrant for the purchase of 1,500 shares at $14.25 of MRV Communications,
Inc. Common Stock is hereby assigned to:
JAMES POWERS
- ------------------------------------------------------------------------------
ASSIGNED FROM WARRANTS
ASSIGNED BY HENRI TELNER
1/23/96 1/23/96
- ----------------------------- -----------------
Henri Telner Date
<PAGE> 83
EXHIBIT 4(g)28
<PAGE> 84
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", by and
between MRV Communications, Inc. ("MRV") and Galcom Networking, Ltd.
MRV hereby grants:
1. Henry Telner the right to purchase from MRV at a price of
$14.25 during the period of "Exercisability", as hereinafter defined up to
2,500 shares of MRV Common Stock. The period of Exercisability shall
commence on July 13, 1995 and shall terminate (5) years from July 13, 1995.
2. The rights granted hereunder to Henry Telner may be assigned
or transferred to any assignee or transferee approved by MRV provided that
such assignee or transferee agrees to be bound by the provisions of this
Warrant Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, the Warrantholder shall have the right to
exercise this Warrant into the kind and amount of shares of stock and other
securities and property (including cash) receivable by a holder of the number
of shares of Common stock into which the Warrant might have been exercisable
immediately prior to such merger, consolidation or sale of substantially all of
the assets of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to the Warrantholder within a reasonable time, not exceeding ten
(10) days after the rights represented by this Warrant shall have been so
exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder off MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of
<PAGE> 85
Common stock into a greater number of shares, or (iii) combine or reclassify
its outstanding shares of Common Stock into a smaller number of shares, then
the appropriate adjustments in the number and kind of such securities subject
to this warrant shall be made and the exercise price in effect at the time of
the record date for such dividend or distribution or of the effective date of
such subdivision, combination, reclassification, reorganization, merger,
consolidation, or recapitalization shall be proportionately adjusted so that
the holder of this warrant exercised after such date shall be entitled to
receive the aggregate number and kind of shares of MRV Common Stock which, if
this Warrant had been exercised by such holder immediately prior to such date,
he would have owned upon such exercise and been entitled to receive upon such
dividend, distribution, subdivision, combination, reclassification,
reorganization, merger, consolidation or recapitalization. Provided however no
adjustment in the exercise price shall be required unless such adjustment would
require an increase or decrease of at least five cents in such price.
Warrantholder acknowledges that the warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
MRV agrees to register with the Securities Exchange Commission, at MRV's
expense, the shares underlying the warrants prior to January 13, 1996. Upon
exercise of this Warrant a legend to this effect will be placed upon the
certificates.
<PAGE> 86
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
MRV COMMUNICATIONS, INC.
By /s/ NOAM LOTAN
-----------------------------
Noam Lotan, President
Corporate Seal
Attest:
/s/ SHLOMO MARGALIT
- --------------------------------------
Shlomo Margalit, Chairman of the Board
Assignment
This Warrant for the purchase of 2,500 shares at $14.25 of MRV Communications,
Inc. Common Stock is hereby assigned to:
STEVEN ROSNER
- ------------------------------------------------------------------------------
ASSIGNED FROM WARRANTS
ASSIGNED BY HENRI TELNER
1/23/96 1/23/96
- ----------------------------- -----------------
Henri Telner Date
<PAGE> 87
EXHIBIT 4(g)29
<PAGE> 88
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", by and
between MRV Communications, Inc. ("MRV") and Galcom Networking, Ltd.
MRV hereby grants:
1. Henry Telner the right to purchase from MRV at a price of
$14.25 during the period of "Exercisability", as hereinafter defined up to
500 shares of MRV Common Stock. The period of Exercisability shall commence
on July 13, 1995 and shall terminate (5) years from July B, 1995.
2. The rights granted hereunder to Henry Telner may be assigned
or transferred to any assignee or transferee approved by MRV provided that
such assignee or transferee agrees to be bound by the provisions of this
Warrant Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, the Warrantholder shall have the right to
exercise this Warrant into the kind and amount of shares of stock and other
securities and property (including cash) receivable by a holder of the number
of shares of Common stock into which the Warrant might have been exercisable
immediately prior to such merger, consolidation or sale of substantially all of
the assets of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to the Warrantholder within a reasonable time, not exceeding ten
(10) days after the rights represented by this Warrant shall have been so
exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder off MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of
<PAGE> 89
Common stock into a greater number of shares, or (iii) combine or reclassify
its outstanding shares of Common Stock into a smaller number of shares, then
the appropriate adjustments in the number and kind of such securities subject
to this warrant shall be made and tile exercise price in effect at the time of
the record date for such dividend or distribution or of the effective date of
such subdivision, combination, reclassification, reorganization, merger,
consolidation, or recapitalization shall be proportionately adjusted so that
the holder of this warrant exercised after such date shall be entitled to
receive the aggregate number and kind of shares of MRV Common Stock which, if
this Warrant had been exercised by such holder immediately prior to such date,
lie would have owned upon such exercise and been entitled to receive upon such
dividend, distribution, subdivision, combination, reclassification,
reorganization, merger, consolidation or recapitalization. Provided however no
adjustment in the exercise price shall be required unless such adjustment would
require an increase or decrease of at least five cents In such price.
Warrantholder acknowledges that the warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
MRV agrees to register with the Securities Exchange Commission, at MRV's
expense, the shares underlying the warrants prior to January 13, 1996. Upon
exercise of this Warrant a legend to this effect will be placed upon the
certificates.
<PAGE> 90
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
MRV COMMUNICATIONS, INC.
By /s/ NOAM LOTAN
-----------------------------
Noam Lotan, President
Corporate Seal
Attest:
/s/ SHLOMO MARGALIT
- --------------------------------------
Shlomo Margalit, Chairman of the Board
Assignment
This Warrant for the purchase of 500 shares at $14.25 of MRV Communications,
Inc. Common Stock is hereby assigned to:
TERRENCE P. LAMBERT
- ------------------------------------------------------------------------------
ASSIGNED FROM WARRANTS
ASSIGNED BY HENRI TELNER
1/23/96 1/23/96
- ----------------------------- -----------------
Henri Telner Date
<PAGE> 91
EXHIBIT 4(g)30
<PAGE> 92
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated 29
June, 1995 by and between MRV Communications, Inc. ("MRV") and ACE 400
Communications, Ltd; North Hills Israel, Ltd and others
MRV hereby grants:
1. Dr Lipa Meir & Alon Cohen ("The Receivers") the right to
purchase from MRV at a price of $9.15 during the period of "Exercisability",
as hereinafter defined up to 1,500 shares of MRV Common Stock. The period of
Exercisability shall commence six (6) months from the date hereof and shall
terminate five (5) years from the date hereof.
2. The rights granted hereunder to The Receivers may be assigned
or transferred to any assignee or transferee approved by MRV provided that
such assignee or transferee agrees to be bound by the provisions of this
Warrant Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, The Receivers shall have the right to exercise
this Warrant into the kind and amount of shares of stock and other securities
and property (including cash) receivable by a holder of the number of shares of
Common stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to GME within a reasonable time, not exceeding ten (10) days after
the rights represented by this Warrant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder off MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately
<PAGE> 93
prior to such date, he would have owned upon such exercise and been entitled to
receive upon such dividend, distribution, subdivision, combination,
reclassification, reorganization, merger, consolidation or recapitalization.
Provided however no adjustment in the exercise price shall be required unless
such adjustment would require an increase or decrease of at least five cents in
such price.
The Receivers acknowledge that the warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
Upon exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
/s/ NOAM LOTAN 6/29/95
- ----------------------------- --------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ SHLOMO MARGALIT 6/29/95
- ----------------------------- --------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of 1,500 shares at $9.15 of MRV Communications.
Inc. Common Stock is hereby assigned to:
MARK RIEZ
- ------------------------------------------------------------------------------
The Receivers:
Original assignment on file with MRV, /SIG./ , CFO 4/28/96.
- -------------------------------------------------- ---------------
Name Title Date
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 94
EXHIBIT 4(g)31
<PAGE> 95
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated
29 June, 1995 by and between MRV Communications, Inc. ("MRV") and ACE 400
Communications, Ltd; North Hills Israel, Ltd and others.
MRV hereby grants:
1. Dr Lipa Meir & Alon Cohen ("The Receivers") the right to
purchase from MRV at a price of $9.15 during the period of "Exercisability",
as hereinafter defined up to 2,450 shares of MRV Common Stock. The period of
Exercisability shall commence six (6) months from the date hereof and shall
terminate five (5) years from the date hereof.
2. The rights granted hereunder to The Receivers may be assigned
or transferred to any assignee or transferee approved by MRV provided that
such assignee or transferee agrees to be bound by the provisions of this
Warrant Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, The Receivers shall have the right to exercise
this Warrant into the kind and amount of shares of stock and other securities
and property (including cash) receivable by a holder of the number of shares of
Common stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to GME within a reasonable time, not exceeding ten (10) days after
the rights represented by this Warrant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this Warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this Warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately
<PAGE> 96
prior to such date, he would have owned upon such exercise and been entitled to
receive upon such dividend, distribution, subdivision, combination,
reclassification, reorganization, merger, consolidation or recapitalization.
Provided however no adjustment in the exercise price shall be required unless
such adjustment would require an increase or decrease of at least five cents in
such price.
The Receivers acknowledge that the warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
Upon exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
/s/ NOAM LOTAN 6/29/95
- ----------------------------- --------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ DR SHLOMO MARGALIT 6/29/95
- ----------------------------- --------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of 2,450 shares at $9.15 of MRV Communications,
Inc. Common Stock is hereby assigned to:
JAMES C. POWERS
- ------------------------------------------------------------------------------
The Receivers:
Original Assignment on file with MRV, /SIG./, CFO 4/23/96.
- -------------------------------------------------- ---------------
Name Title Date
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 97
EXHIBIT 4(g)32
<PAGE> 98
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated
29 June, 1995 by and between MRV Communications, Inc. ("MRV") and ACE 400
Communications, Ltd; North Hills Israel, Ltd and others.
MRV hereby grants:
1. Dr Lipa Meir & Alon Cohen ("The Receivers") the right to
purchase from MRV at a price of $9.15 during the period of "Exercisability",
as hereinafter defined up to 1,500 shares of MRV Common Stock. The period
of Exercisability shall commence six (6) months from the date hereof and
shall terminate five (5) years from the date hereof.
2. The rights granted hereunder to The Receivers may be assigned
or transferred to any assignee or transferee approved by MRV provided that
such assignee or transferee agrees to be bound by the provisions of this
Warrant Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, The Receivers shall have the right to exercise
this Warrant into the kind and amount of shares of stock and other securities
and property (including cash) receivable by a holder of the number of shares of
Common stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to GME within a reasonable time, not exceeding ten (10) days after
the rights represented by this Warrant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this Warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this Warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately
<PAGE> 99
prior to such date, he would have owned upon such exercise and been entitled to
receive upon such dividend, distribution, subdivision, combination,
reclassification, reorganization, merger, consolidation or recapitalization.
Provided however no adjustment in the exercise price shall be required unless
such adjustment would require an increase or decrease of at least five cents in
such price.
The Receivers acknowledge that the warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
Upon exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
/s/ NOAM LOTAN 6/29/95
- ----------------------------- --------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ DR SHLOMO MARGALIT 6/29/95
- ----------------------------- --------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of 1,500 shares at $9.15 of MRV Communications,
Inc. Common Stock is hereby assigned to:
JAY TUCKER
- ------------------------------------------------------------------------------
The Receivers:
Original assignment on file with MRV, /SIG./, CFO 4/23/96
- -------------------------------------------------- ---------------
Name Title Date
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 100
EXHIBIT 4(g)33
<PAGE> 101
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated
29 June, 1995 by and between MRV Communications, Inc. ("MRV") and ACE 400
Communications, Ltd; North Hills Israel, Ltd and others.
MRV hereby grants:
1. Dr Lipa Meir & Alon Cohen ("The Receivers") the right to
purchase from MRV at a price of $9.15 during the period of "Exercisability",
as hereinafter defined up to 2,550 shares of MRV Common Stock. The period
of Exercisability shall commence six (6) months from the date hereof and
shall terminate five (5) years from the date hereof.
2. The rights granted hereunder to The Receivers may be assigned
or transferred to any assignee or transferee approved by MRV provided that
such assignee or transferee agrees to be bound by the provisions of this
Warrant Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, The Receivers shall have the right to exercise
this Warrant into the kind and amount of shares of stock and other securities
and property (including cash) receivable by a holder of the number of shares of
Common stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to GME within a reasonable time, not exceeding ten (10) days after
the rights represented by this Warrant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this Warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this Warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately
<PAGE> 102
prior to such date, he would have owned upon such exercise and been entitled to
receive upon such dividend, distribution, subdivision, combination,
reclassification, reorganization, merger, consolidation or recapitalization.
Provided however no adjustment in the exercise price shall be required unless
such adjustment would require an increase or decrease of at least five cents in
such price.
The Receivers acknowledge that the warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
Upon exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
/s/ NOAM LOTAN 6/29/95
- ----------------------------- --------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ DR SHLOMO MARGALIT 6/29/95
- ----------------------------- --------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of 2,550 shares at $9.15 of MRV Communications,
Inc. Common Stock is hereby assigned to:
BARKER LEE & CO
- ------------------------------------------------------------------------------
The Receivers:
Original Assignment on file with MRV, /SIG/ , CFO 4/28/96
- -------------------------------------------------- ---------------
Name Title Date
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 103
EXHIBIT 4(g)34
<PAGE> 104
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated
29 June, 1995 by and between MRV Communications, Inc. ("MRV") and ACE 400
Communications, Ltd; North Hills Israel, Ltd and others.
MRV hereby grants:
1. Dr Lipa Meir & Alon Cohen ("The Receivers") the right to
purchase from MRV at a price of $9.15 during the period of "Exercisability",
as hereinafter defined up to 2,250 shares of MRV Common Stock. The period of
Exercisability shall commence six (6) months from the date hereof and shall
terminate five (5) years from the date hereof.
2. The rights granted hereunder to The Receivers may be assigned
or transferred to any assignee or transferee approved by MRV provided that
such assignee or transferee agrees to be bound by the provisions of this
Warrant Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, The Receivers shall have the right to exercise
this Warrant into the kind and amount of shares of stock and other securities
and property (including cash) receivable by a holder of the number of shares of
Common stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to GME within a reasonable time, not exceeding ten (10) days after
the rights represented by this Warrant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this Warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately
<PAGE> 105
prior to such date, he would have owned upon such exercise and been entitled to
receive upon such dividend, distribution, subdivision, combination,
reclassification, reorganization, merger, consolidation or recapitalization.
Provided however no adjustment in the exercise price shall be required unless
such adjustment would require an increase or decrease of at least five cents in
such price.
The Receivers acknowledge that the warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
Upon exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
/s/ NOAM LOTAN 6/29/95
- ----------------------------- --------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ DR SHLOMO MARGALIT 6/29/95
- ----------------------------- --------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of 2,250 shares at $9.15 of MRV Communications,
Inc. Common Stock is hereby assigned to:
J.M.R. BARKER FOUNDATION
- ------------------------------------------------------------------------------
The Receivers:
Original assignment on file with MRV, /SIG/ , CFO 4/23/96
- -------------------------------------------------- ---------------
Name Title Date
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 106
EXHIBIT 4(g)46
<PAGE> 107
EXHIBIT 4(g)35
<PAGE> 108
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated
29 June, 1995 by and between MRV Communications, Inc. ("MRV") and ACE 400
Communications, Ltd; North Hills Israel, Ltd and others.
MRV hereby grants:
1. Dr Lipa Meir & Alon Cohen ("The Receivers") the right to
purchase from MRV at a price of $9.15 during the period of "Exercisability",
as hereinafter defined up to 600 shares of MRV Common Stock. The period of
Exercisability shall commence six (6) months from the date hereof and shall
terminate five (5) years from the date hereof.
2. The rights granted hereunder to The Receivers may be assigned
or transferred to any assignee or transferee approved by MRV provided that
such assignee or transferee agrees to be bound by the provisions of this
Warrant Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, The Receivers shall have the right to exercise
this Warrant into the kind and amount of shares of stock and other securities
and property (including cash) receivable by a holder of the number of shares of
Common stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to GME within a reasonable time, not exceeding ten (10) days after
the rights represented by this Warrant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this Warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately
<PAGE> 109
prior to such date, he would have owned upon such exercise and been entitled to
receive upon such dividend, distribution, subdivision, combination,
reclassification, reorganization, merger, consolidation or recapitalization.
Provided however no adjustment in the exercise price shall be required unless
such adjustment would require an increase or decrease of at least five cents in
such price.
The Receivers acknowledge that the warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
Upon exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
/s/ NOAM LOTAN 6/29/95
- ----------------------------- --------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ DR SHLOMO MARGALIT 6/29/95
- ----------------------------- --------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of 600 shares at $9.15 of MRV Communications,
Inc. Common Stock is hereby assigned to:
QUAKER HILL ASSOCIATES, L.P.
- ------------------------------------------------------------------------------
The Receivers:
Original Assignment on file with MRV, /SIG/ , CFO 4/23/96.
- -------------------------------------------------- ---------------
Name Title Date
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 110
EXHIBIT 4(g)36
<PAGE> 111
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated
29 June, 1995 by and between MRV Communications, Inc. ("MRV") and ACE 400
Communications, Ltd; North Hills Israel, Ltd and others.
MRV hereby grants:
1. Dr Lipa Meir & Alon Cohen ("The Receivers") the right to
purchase from MRV at a price of $9.15 during the period of "Exercisability",
as hereinafter defined up to 1,350 shares of MRV Common Stock. The period of
Exercisability shall commence six (6) months from the date hereof and shall
terminate five (5) years from the date hereof.
2. The rights granted hereunder to The Receivers may be assigned
or transferred to any assignee or transferee approved by MRV provided that
such assignee or transferee agrees to be bound by the provisions of this
Warrant Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, The Receivers shall have the right to exercise
this Warrant into the kind and amount of shares of stock and other securities
and property (including cash) receivable by a holder of the number of shares of
Common stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above- mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall be
delivered to GME within a reasonable time, not exceeding ten (10) days after the
rights represented by this Warrant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the wan-ant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this Warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately
<PAGE> 112
prior to such date, he would have owned upon such exercise and been entitled to
receive upon such dividend, distribution, subdivision, combination,
reclassification, reorganization, merger, consolidation or recapitalization.
Provided however no adjustment in the exercise price shall be required unless
such adjustment would require an increase or decrease of at least five cents in
such price.
The Receivers acknowledge that the warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
Upon exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this the Agreement to which it attaches.
/s/ NOAM LOTAN 6/29/95
- ----------------------------- --------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ DR SHLOMO MARGALIT 6/29/95
- ----------------------------- --------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of 1,350 shares at $9.15 of MRV Communications,
Inc. Common Stock is hereby assigned to:
UPLAND ASSOCIATES, L.P.
- ------------------------------------------------------------------------------
The Receiver:
Original Assignment on file with MRV, /SIG/ , CFO 4/23/96.
- -------------------------------------------------- ---------------
Name Title Date
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 113
EXHIBIT 4(g)37
<PAGE> 114
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated 29
June, 1995 by and between MRV Communications, Inc. ("MRV") and ACE 400
Communications, Ltd; North Hills Israel, Ltd and others
MRV hereby grants:
1. Dr Lipa Meir & Alon Cohen ("The Receivers") the right to
purchase from MRV at a price of $9.15 during the period of "Exercisability", as
hereinafter defined up to 3,750 shares of MRV Common Stock. The period of
Exercisability shall commence six (6) months from the date hereof and shall
terminate five (5) years from the date hereof.
2. The rights granted hereunder to The Receivers may be assigned
or transferred to any assignee or transferee approved by MRV provided that such
assignee or transferee agrees to be bound by the provisions of this Warrant
Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, The Receivers shall have the right to exercise
this Warrant into the kind and amount of shares of stock and other securities
and property (including cash) receivable by a holder of the number of shares of
Common stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to GME within a reasonable time, not exceeding ten (10) days after
the rights represented by this Warrant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder off MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately
<PAGE> 115
prior to such date, he would have owned upon such exercise and been entitled to
receive upon such dividend, distribution, subdivision, combination,
reclassification, reorganization, merger, consolidation or recapitalization.
Provided however no adjustment in the exercise price shall be required unless
such adjustment would require an increase or decrease of at least five cents in
such price.
The Receivers acknowledge that the warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
Upon exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
/s/ NOAM LOTAN 6/29/95
- ----------------------------- -----------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ DR. SHLOMO MARGALIT 6/29/95
- ----------------------------- -----------------------
Dr. Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of 3,750 shares at $9.15 of MRV Communications,
Inc. Common Stock is hereby assigned to:
NAMAKAGON ASSOCIATES, L.P.
- ------------------------------------------------------------------------------
The Receivers:
Original assignment on file with MRV, /SIG/ , CFO 4/23/96
- ----------------------------------------------------- ---------------
Name Title Date
- ----------------------------------------------------- ---------------
Name Title Date
<PAGE> 116
EXHIBIT 4(g)38
<PAGE> 117
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated 29
June, 1995 by and between MRV Communications, Inc. ("MRV") and ACE 400
Communications, Ltd; North Hills Israel, Ltd and others
MRV hereby grants:
1. Dr Lipa Meir & Alon Cohen ("The Receivers") the right to
purchase from MRV at a price of $9.15 during the period of "Exercisability", as
hereinafter defined up to 750 shares of MRV Common Stock. The period of
Exercisability shall commence six (6) months from the date hereof and shall
terminate five (5) years from the date hereof.
2. The rights granted hereunder to The Receivers may be assigned
or transferred to any assignee or transferee approved by MRV provided that such
assignee or transferee agrees to be bound by the provisions of this Warrant
Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, The Receivers shall have the right to exercise
this Warrant into the kind and amount of shares of stock and other securities
and property (including cash) receivable by a holder of the number of shares of
Common stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to GME within a reasonable time, not exceeding ten (10) days after
the rights represented by this Warrant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder off MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately
<PAGE> 118
prior to such date, he would have owned upon such exercise and been entitled to
receive upon such dividend, distribution, subdivision, combination,
reclassification, reorganization, merger, consolidation or recapitalization.
Provided however no adjustment in the exercise price shall be required unless
such adjustment would require an increase or decrease of at least five cents in
such price.
The Receivers acknowledge that the warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
Upon exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
/s/ NOAM LOTAN 6/29/95
- ----------------------------- -----------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ DR SHLOMO MARGALIT 6/29/95
- ----------------------------- -----------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of 750 shares at $9.15 of MRV Communications,
Inc. Common Stock is hereby assigned to:
DAVID KOCH
- ------------------------------------------------------------------------------
The Receivers:
Original assignment on file with MRV, /SIG/ , CFO MRV Communications, Inc.
- ----------------------------------------------------- ---------------
Name Title Date
4/23/96
- ----------------------------------------------------- ---------------
Name Title Date
<PAGE> 119
EXHIBIT 4(g) 39
<PAGE> 120
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated 29
June, 1995 by and between MRV Communications, Inc. ("MRV") and ACE 400
Communications, Ltd; North Hills Israel, Ltd and others
MRV hereby grants:
1. Dr Lipa Meir & Alon Cohen ("The Receivers") the right to
purchase from MRV at a price of $9.15 during the period of "Exercisability", as
hereinafter defined up to 7,500 shares of MRV Common Stock. The period of
Exercisability shall commence six (6) months from the date hereof and shall
terminate five (5) years from the date hereof.
2. The rights granted hereunder to The Receivers may be assigned
or transferred to any assignee or transferee approved by MRV provided that such
assignee or transferee agrees to be bound by the provisions of this Warrant
Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, The Receivers shall have the right to exercise
this Warrant into the kind and amount of shares of stock and other securities
and property (including cash) receivable by a holder of the number of shares of
Common stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to GME within a reasonable time, not exceeding ten (10) days after
the rights represented by this Warrant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof. MRV
further covenants and agrees that, during the Exercisability period, MRV will
at all times have authorized and reserved a sufficient number of shares of its
Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder off MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately
<PAGE> 121
prior to such date, he would have owned upon such exercise and been entitled to
receive upon such dividend, distribution, subdivision, combination,
reclassification, reorganization, merger, consolidation or recapitalization.
Provided however no adjustment in the exercise price shall be required unless
such adjustment would require an increase or decrease of at least five cents in
such price.
The Receivers acknowledge that the warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
Upon exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
/s/ NOAM LOTAN 6/29/95
- ----------------------------- -----------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ DR SHLOMO MARGALIT 6/29/95
- ----------------------------- -----------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of 7,500 shares at $9.15 of MRV Communications,
Inc. Common Stock is hereby assigned to:
JEAN MICHELE NAHON
- ------------------------------------------------------------------------------
The Receivers:
Original assignment on file with MRV, /SIG/ , CFO MRV Communications, Inc.
- -------------------------------------------------- ---------------
Name Title Date
4/23/96
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 122
EXHIBIT 4(g)40
<PAGE> 123
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated 29
June, 1995 by and between MRV Communications, Inc. ("MRV") and ACE 400
Communications, Ltd; North Hills Israel, Ltd and others
MRV hereby grants:
1. Dr Lipa Meir & Alon Cohen ("The Receivers") the right to
purchase from MRV at a price of $9.15 during the period of "Exercisability", as
hereinafter defined up to 2,250 shares of MRV Common Stock. The period of
Exercisability shall commence six (6) months from the date hereof and shall
terminate five (5) years from the date hereof.
2. The rights granted hereunder to The Receivers may be assigned
or transferred to any assignee or transferee approved by MRV provided that such
assignee or transferee agrees to be bound by the provisions of this Warrant
Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, The Receivers shall have the right to exercise
this Warrant into the kind and amount of shares of stock and other securities
and property (including cash) receivable by a holder of the number of shares of
Common stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to GME within a reasonable time, not exceeding ten (10) days after
the rights represented by this Warrant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder off MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately
<PAGE> 124
prior to such date, he would have owned upon such exercise and been entitled to
receive upon such dividend, distribution, subdivision, combination,
reclassification, reorganization, merger, consolidation or recapitalization.
Provided however no adjustment in the exercise price shall be required unless
such adjustment would require an increase or decrease of at least five cents in
such price.
The Receivers acknowledge that the warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
Upon exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
/s/ NOAM LOTAN 6/29/95
- ----------------------------- -----------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ DR SHLOMO MARGALIT 6/29/95
- ----------------------------- -----------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of 2,250 shares at $9.15 of MRV Communications,
Inc. Common Stock is hereby assigned to:
LUCIEN SELLE
- ------------------------------------------------------------------------------
The Receivers:
Original assignment on file with MRV, /SIG/ , CFO MRV Communications, Inc.
- -------------------------------------------------- ---------------
Name Title Date
4/23/96
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 125
EXHIBIT 4(g)41
<PAGE> 126
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated 29
June, 1995 by and between MRV Communications, Inc. ("MRV") and ACE 400
Communications, Ltd; North Hills Israel, Ltd and others
MRV hereby grants:
1. Dr Lipa Meir & Alon Cohen ("The Receivers") the right to
purchase from MRV at a price of $9.15 during the period of "Exercisability", as
hereinafter defined up to 30,000 shares of MRV Common Stock. The period of
Exercisability shall commence six (6) months from the date hereof and shall
terminate five (5) years from the date hereof.
2. The rights granted hereunder to The Receivers may be assigned
or transferred to any assignee or transferee approved by MRV provided that such
assignee or transferee agrees to be bound by the provisions of this Warrant
Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, The Receivers shall have the right to exercise
this Warrant into the kind and amount of shares of stock and other securities
and property (including cash) receivable by a holder of the number of shares of
Common stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to GME within a reasonable time, not exceeding ten (10) days after
the rights represented by this Warrant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder off MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately
<PAGE> 127
prior to such date, he would have owned upon such exercise and been entitled to
receive upon such dividend, distribution, subdivision, combination,
reclassification, reorganization, merger, consolidation or recapitalization.
Provided however no adjustment in the exercise price shall be required unless
such adjustment would require an increase or decrease of at least five cents in
such price.
The Receivers acknowledge that the warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
Upon exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
/s/ NOAM LOTAN 6/29/95
- ----------------------------- -----------------------
Noam Lotan Date
President & CEO
[Corporate Seal]
DR SHLOMO MARGALIT 6/29/95
- ----------------------------- -----------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of 30,000 shares at $9.15 of MRV Communications,
Inc. Common Stock is hereby assigned to:
PERLMAN ASSOCIATES
- ------------------------------------------------------------------------------
The Receivers:
Original assignment on file with MRV, [SIG] , CFO MRV Communications, Inc.
- -------------------------------------------------- ---------------
Name Title Date
4/23/96
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 128
EXHIBIT 4(g)42
<PAGE> 129
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated 29
June, 1995 by and between MRV Communications, Inc. ("MRV") and ACE 400
Communications, Ltd; North Hills Israel, Ltd and others
MRV hereby grants:
1. Dr Lipa Meir & Alon Cohen ("The Receivers") the right to
purchase from MRV at a price of $9.15 during the period of "Exercisability", as
hereinafter defined up to 15,000 shares of MRV Common Stock. The period of
Exercisability shall commence six (6) months from the date hereof and shall
terminate five (5) years from the date hereof.
2. The rights granted hereunder to The Receivers may be assigned
or transferred to any assignee or transferee approved by MRV provided that such
assignee or transferee agrees to be bound by the provisions of this Warrant
Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, The Receivers shall have the right to exercise
this Warrant into the kind and amount of shares of stock and other securities
and property (including cash) receivable by a holder of the number of shares of
Common stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to GME within a reasonable time, not exceeding ten (10) days after
the rights represented by this Wan-ant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
fights as a shareholder off MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the wan-ant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately
<PAGE> 130
prior to such date, he would have owned upon such exercise and been entitled to
receive upon such dividend, distribution, subdivision, combination,
reclassification, reorganization, merger, consolidation or recapitalization.
Provided however no adjustment in the exercise price shall be required unless
such adjustment would require an increase or decrease of at least five cents in
such price.
The Receivers acknowledge that the warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
Upon exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
/s/ NOAM LOTAN 6/29/95
- ----------------------------- -----------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ DR. SHLOMO MARGALIT 6/29/95
- ----------------------------- -----------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of 15,000 shares at $9.15 of MRV Communications,
Inc. Common Stock is hereby assigned to:
J.J. NEWPORT
- ------------------------------------------------------------------------------
The Receivers:
Original assignment on file with MRV, /SIG./,
CFO MRV Communications, Inc.
- -------------------------------------------------- ---------------
Name Title Date 4/23/96
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 131
EXHIBIT 4(g)43
<PAGE> 132
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated 29
June, 1995 by and between MRV Communications, Inc. ("MRV") and ACE 400
Communications, Ltd; North Hills Israel, Ltd and others
MRV hereby grants:
1. Dr Lipa Meir & Alon Cohen ("The Receivers") the right to
purchase from MRV at a price of $9.15 during the period of "Exercisability", as
hereinafter defined up to 3,750 shares of MRV Common Stock. The period of
Exercisability shall commence six (6) months from the date hereof and shall
terminate five (5) years from the date hereof.
2. The fights granted hereunder to The Receivers may be assigned
or transferred to any assignee or transferee approved by MRV provided that such
assignee or transferee agrees to be bound by the provisions of this Warrant
Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, The Receivers shall have the right to exercise
this Warrant into the kind and amount of shares of stock and other securities
and property (including cash) receivable by a holder of the number of shares of
Common stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to GME within a reasonable time, not exceeding ten (10) days after
the rights represented by this Warrant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder off MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately
<PAGE> 133
prior to such date, he would have owned upon such exercise and been entitled to
receive upon such dividend, distribution, subdivision, combination,
reclassification, reorganization, merger, consolidation or recapitalization.
Provided however no adjustment in the exercise price shall be required unless
such adjustment would require an increase or decrease of at least five cents in
such price.
The Receivers acknowledge that the warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
Upon exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
/s/ NOAM LOTAN 6/29/95
- ----------------------------- -----------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ DR SHLOMO MARGALIT 6/29/95
- ----------------------------- -----------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of 3,750 shares at $9.15 of MRV Communications,
Inc. Common Stock is hereby assigned to:
JAMES C. POWERS
- ------------------------------------------------------------------------------
The Receivers:
Original assignment on file with MRV, /SIG/, CFO
MRV Communications, Inc.
4/23/96
- -------------------------------------------------- ---------------
Name Title Date
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 134
EXHIBIT 4(g)44
<PAGE> 135
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated 29
June, 1995 by and between MRV Communications, Inc. ("MRV") and ACE 400
Communications, Ltd; North Hills Israel, Ltd and others
MRV hereby grants:
1. Dr Lipa Meir & Alon Cohen ("The Receivers") the right to
purchase from MRV at a price of $9.15 during the period of "Exercisability", as
hereinafter defined up to 3,000 shares of MRV Common Stock. The period of
Exercisability shall commence six (6) months from the date hereof and shall
terminate five (5) years from the date hereof.
2. The rights granted hereunder to The Receivers may be assigned
or transferred to any assignee or transferee approved by MRV provided that such
assignee or transferee agrees to be bound by the provisions of this Warrant
Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, The Receivers shall have the right to exercise
this Warrant into the kind and amount of shares of stock and other securities
and property (including cash) receivable by a holder of the number of shares of
Common stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to GME within a reasonable time, not exceeding ten (10) days after
the rights represented by this Warrant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder off MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately
<PAGE> 136
prior to such date, he would have owned upon such exercise and been entitled to
receive upon such dividend, distribution, subdivision, combination,
reclassification, reorganization, merger, consolidation or recapitalization.
Provided however no adjustment in the exercise price shall be required unless
such adjustment would require an increase or decrease of at least five cents in
such price.
The Receivers acknowledge that the warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
Upon exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
/s/ NOAM LOTAN 6/29/95
- ----------------------------- -----------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ DR SHLOMO MARGALIT 6/29/95
- ----------------------------- -----------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of 3,000 shares at $9.15 of MRV Communications,
Inc. Common Stock is hereby assigned to:
JAY TUCKER
- ------------------------------------------------------------------------------
The Receivers:
Original assignment on file with MRV, /SIG/, CFO
MRV Communications, Inc.
- -------------------------------------------------- ---------------
Name Title Date
4/23/96
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 137
EXHIBIT 4(g)45
<PAGE> 138
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated 29
June, 1995 by and between MRV Communications, Inc. ("MRV") and ACE 400
Communications, Ltd; North Hills Israel, Ltd and others
MRV hereby grants:
1. Dr Lipa Meir & Alon Cohen ("The Receivers") the right to
purchase from MRV at a price of $9.15 during the period of "Exercisability", as
hereinafter defined up to 1,200 shares of MRV Common Stock. The period of
Exercisability shall commence six (6) months from the date hereof and shall
terminate five (5) years from the date hereof.
2. The rights granted hereunder to The Receivers may be assigned
or transferred to any assignee or transferee approved by MRV provided that such
assignee or transferee agrees to be bound by the provisions of this Warrant
Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, The Receivers shall have the right to exercise
this Warrant into the kind and amount of shares of stock and other securities
and property (including cash) receivable by a holder of the number of shares of
Common stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to GME within a reasonable time, not exceeding ten (10) days after
the rights represented by this Warrant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder off MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately
<PAGE> 139
prior to such date, he would have owned upon such exercise and been entitled to
receive upon such dividend, distribution, subdivision, combination,
reclassification, reorganization, merger, consolidation or recapitalization.
Provided however no adjustment in the exercise price shall be required unless
such adjustment would require an increase or decrease of at least five cents in
such price.
The Receivers acknowledge that the warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
Upon exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
NOAM LOTAN 6/29/95
- ----------------------------- -----------------------
Noam Lotan Date
President & CEO
Corporate
Seal
DR SHLOMO MARGALIT 6/29/95
- ----------------------------- -----------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of 1,200 shares at $9.15 of MRV Communications,
Inc. Common Stock is hereby assigned to:
DANIEL PERLMAN
- ------------------------------------------------------------------------------
The Receivers:
Original assignment on file with MRV, [SIG] , CFO MRV Communications, Inc.
- -------------------------------------------------- ---------------
Name Title Date
4/23/96
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 140
EXHIBIT 4(g)46
<PAGE> 141
EXHIBIT 4(g)57
<PAGE> 142
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated 29
June, 1995 by and between MRV Communications, Inc. ("MRV") and ACE 400
Communications, Ltd; North Hills Israel, Ltd and others
MRV hereby grants:
1. Dr Lipa Meir & Alon Cohen ("The Receivers") the right to
purchase from MRV at a price of $9.15 during the period of "Exercisability", as
hereinafter defined up to 600 shares of MRV Common Stock. The period of
Exercisability shall commence six (6) months from the date hereof and shall
terminate five (5) years from the date hereof.
2. The rights granted hereunder to The Receivers may be assigned
or transferred to any assignee or transferee approved by MRV provided that such
assignee or transferee agrees to be bound by the provisions of this Warrant
Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, The Receivers shall have the right to exercise
this Warrant into the kind and amount of shares of stock and other securities
and property (including cash) receivable by a holder of the number of shares of
Common stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to GME within a reasonable time, not exceeding ten (10) days after
the rights represented by this Wan-ant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder off MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately
<PAGE> 143
prior to such date, he would have owned upon such exercise and been entitled to
receive upon such dividend, distribution, subdivision, combination,
reclassification, reorganization, merger, consolidation or recapitalization.
Provided however no adjustment in the exercise price shall be required unless
such adjustment would require an increase or decrease of at least five cents in
such price.
The Receivers acknowledge that the warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
Upon exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
NOAM LOTAN 6/29/95
- ----------------------------- -----------------------
Noam Lotan Date
President & CEO
Corporate
Seal
DR SHLOMO MARGALIT 6/29/95
- ----------------------------- -----------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of 600 shares at $9.15 of MRV Communications,
Inc. Common Stock is hereby assigned to:
BANK OF THE WEST TRUSTEE ACCT: MIXON
- ------------------------------------------------------------------------------
The Receivers:
Original assignment on file with MRV, [SIG] , CFO MRV Communications, Inc.
- -------------------------------------------------- ---------------
Name Title Date
4/23/96
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 144
EXHIBIT 4(g)47
<PAGE> 145
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated 29
June, 1995 by and between MRV Communications, Inc. ("MRV") and ACE 400
Communications, Ltd; North Hills Israel, Ltd and others ("ACE")
MRV hereby grants:
1. Tom Callahan the right to purchase from MRV at a price of
$9.147 during the period of "Exercisability", as hereinafter defined up to
1,500 shares of MRV Common Stock. The period of Exercisability shall commence
six (6) months from the date hereof and shall terminate five (5) years from the
date thereof.
2. The rights granted hereunder to Tom Callahan may be assigned
or transferred to any assignee or transferee approved by MRV provided that such
assignee or transferee agrees to be bound by the provisions of this Warrant
Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, Tom Callahan shall have the right to exercise
this Warrant into the kind and amount of shares of stock and other securities
and property (including cash) receivable by a holder of the number of shares of
Common stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to Tom Callahan within a reasonable time, not exceeding ten (10)
days after the rights represented by this Warrant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder off MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this Warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately
<PAGE> 146
prior to such date, he would have owned upon such exercise and been entitled to
receive upon such dividend, distribution, subdivision, combination,
reclassification, reorganization, merger, consolidation or recapitalization.
Provided however no adjustment in the exercise price shall be required unless
such adjustment would require an increase or decrease of at least five cents in
such price.
Tom Callahan acknowledge that the warrant and the shares underlying the Warrant
of MRV Common Stock have not been registered with the Securities and Exchange
Commission and that it is taking the shares for investment purposes in the
event it exercises this Warrant and not with a view towards distribution. Upon
exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
/s/ NOAM LOTAN 6/29/95
- ----------------------------- -----------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ DR SHLOMO MARGALIT 6/29/95
- ----------------------------- -----------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of___________ shares at $9.147 of MRV
Communications, Inc. Common Stock is hereby assigned to:
- -------------------------------------------------- ---------------
Name Title Date
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 147
EXHIBIT 4(g)48
<PAGE> 148
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated
29 June, 1995 by and between MRV Communications, Inc. ("MRV") and ACE 400
Communications, Ltd; North Hills Israel, Ltd and others ("ACE")
MRV hereby grants:
1. CUS Trust the right to purchase from MRV at a price of $9.147
during the period of "Exercisability", as hereinafter defined up to 10,000
shares of MRV Common Stock. The period of Exercisability shall commence six
(6) months from the date hereof and shall terminate five (5) years from the
date thereof.
2. The rights granted hereunder to CUS Trust may be assigned or
transferred to any assignee or transferee approved by MRV provided that such
assignee or transferee agrees to be bound by the provisions of this Warrant
Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, Everest Capital International, Ltd shall have the
right to exercise this Warrant into the kind and amount of shares of stock and
other securities and property (including cash) receivable by a holder of the
number of shares of Common stock into which the Warrant might have been
exercisable immediately prior to such merger, consolidation or sale of
substantially all of the assets of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to CUS Trust within a reasonable time, not exceeding ten (10) days
after the rights represented by this Warrant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the Warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this Warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately
<PAGE> 149
prior to such date, he would have owned upon such exercise and been entitled to
receive upon such dividend, distribution, subdivision, combination,
reclassification, reorganization, merger, consolidation or recapitalization.
Provided however no adjustment in the exercise price shall be required unless
such adjustment would require an increase or decrease of at least five cents in
such price.
CUS Trust acknowledge that the warrant and the shares underlying the Warrant of
MRV Common Stock have not been registered with the Securities and Exchange
Commission and that it is taking the shares for investment purposes in the
event it exercises this Warrant and not with a view towards distribution. Upon
exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
/s/ NOAM LOTAN 6/29/95
- ----------------------------- -----------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ DR SHLOMO MARGALIT 6/29/95
- ----------------------------- -----------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of____________shares at $9.147 of MRV
Communications, Inc. Common Stock is hereby assigned to:
- -------------------------------------------------- ---------------
Name Title Date
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 150
EXHIBIT 4(g)49
<PAGE> 151
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated 29
June, 1995 by and between MRV Communications, Inc. ("MRV") and ACE 400
Communications, Ltd; North Hills Israel, Ltd and others ("ACE")
MRV hereby grants:
1. Alvarado Partners L.P. the right to purchase from MRV at a
price of $9.147 during the period of "Exercisability", as hereinafter defined
up to 10,000 shares of MRV Common Stock. The period of Exercisability shall
commence six (6) months from the date hereof and shall terminate five (5) years
from the date thereof.
2. The rights granted hereunder to Alvarado Partners L.P. may be
assigned or transferred to any assignee or transferee approved by MRV provided
that such assignee or transferee agrees to be bound by the provisions of this
Warrant Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, Alvarado Partners L.P. shall have the right to
exercise this Warrant into the kind and amount of shares of stock and other
securities and property (including cash) receivable by a holder of the number
of shares of Common stock into which the Warrant might have been exercisable
immediately prior to such merger, consolidation or sale of substantially all of
the assets of MRV as an entirety.
The rights represented by this Warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to Alvarado Partners L.P. within a reasonable time, not exceeding
ten (10) days after the rights represented by this Warrant shall have been so
exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this warrant exercised
after such date shall be entitled to receive the aggregate number and kind
<PAGE> 152
of shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately prior to such date, he would have owned upon such exercise
and been entitled to receive upon such dividend, distribution, subdivision,
combination, reclassification, reorganization, merger, consolidation or
recapitalization. Provided however no adjustment in the exercise price shall
be required unless such adjustment would require an increase or decrease of at
least five cents in such price.
Alvarado Partners L.P. acknowledge that the warrant and the shares underlying
the Warrant of MRV Common Stock have not been registered with the Securities
and Exchange Commission and that it is taking the shares for investment
purposes in the event it exercises this Warrant and not with a view towards
distribution. Upon exercise of this Warrant a legend to this effect will be
placed upon the certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
/s/ NOAM LOTAN 6/29/95
- ----------------------------- -----------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ DR SHLOMO MARGALIT 6/29/95
- ----------------------------- -----------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of___________ shares at $9.147 of MRV
Communications, Inc. Common Stock is hereby assigned to:
- -------------------------------------------------- ---------------
Name Title Date
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 153
EXHIBIT 4(g)50
<PAGE> 154
WARRANT
This warrant is given in consideration of the entering into of that certain
Asset Purchase Agreement, hereinafter referred to as the "Agreement", dated
29 June, 1995 by and between MRV Communications, Inc. ("MRV") and ACE 400
Communications, Ltd; North Hills Israel, Ltd and others ("ACE")
MRV hereby grants:
1. Perlman Associates the right to purchase from MRV at a price
of $9.147 during the period of "Exercisability", as hereinafter defined up to
7,500 shares of MRV Common Stock. The period of Exercisability shall commence
six (6) months from the date hereof and shall terminate five (5) years from the
date thereof.
2. The rights granted hereunder to Perlman Associates may be
assigned or transferred to any assignee or transferee approved by MRV provided
that such assignee or transferee agrees to be bound by the provisions of this
Warrant Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, Perlman Associates shall have the right to
exercise this Warrant into the kind and amount of shares of stock and other
securities and property (including cash) receivable by a holder of the number
of shares of Common stock into which the Warrant might have been exercisable
immediately prior to such merger, consolidation or sale of substantially all of
the assets of MRV as an entirety.
The rights represented by this Warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to Perlman Associates within a reasonable time, not exceeding ten
(10) days after the rights represented by this Warrant shall have been so
exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this warrant exercised
after such date shall be entitled to receive the aggregate number and kind
<PAGE> 155
of shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately prior to such date, he would have owned upon such exercise
and been entitled to receive upon such dividend, distribution, subdivision,
combination, reclassification, reorganization, merger, consolidation or
recapitalization. Provided however no adjustment in the exercise price shall
be required unless such adjustment would require an increase or decrease of at
least five cents in such price.
Perlman Associates acknowledge that the warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
Upon exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
/s/ NOAM LOTAN 6/29/95
- ----------------------------- -----------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ DR SHLOMO MARGALIT 6/29/95
- ----------------------------- -----------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of____________shares at $9.147 of MRV
Communications, Inc. Common Stock is hereby assigned to:
- -------------------------------------------------- ---------------
Name Title Date
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 156
EXHIBIT 4(g)51
<PAGE> 157
WARRANT
This warrant is given in consideration of certain rights and the recognition of
certain business relationships by and between MRV Communications, Inc. ("MRV")
and Sergio Ciambelini, Elio Bianchi, Barbara Pedrazzani and Rodolfo Casieri
("Ciambelini and Associates").
MRV hereby grants:
1. The Excelsior Fund (Transferred from Ciambelini & Associates)
the right to purchase from MRV at a price of $16.833 during the period of
"Exercisability", as hereinafter defined up to 50,000 shares of MRV Common
Stock. The period of Exercisability shall commence on the date of the granting
of this warrant and shall terminate five (5) years from the date thereof.
2. The rights granted hereunder to The Excelsior Fund(Transferred
from Ciambelini & Associates) may be assigned or transferred to any assignee or
transferee approved by MRV provided that such assignee or transferee agrees to
be bound by the provisions of this Warrant Agreement as indicated by their
signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, The Excelsior Fund (Transferred from Ciambelini &
Associates) shall have the right to exercise this Warrant into the kind and
amount of shares of stock and other securities and property (including cash)
receivable by a holder of the number of shares of Common stock into which the
Warrant might have been exercisable immediately prior to such merger,
consolidation or sale of substantially all of the assets of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to The Excelsior Fund (Transferred from Ciambelini & Associates)
within a reasonable time, not exceeding ten (10) days after the rights
represented by this Warrant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification,
<PAGE> 158
reorganization, merger, consolidation, or recapitalization shall be
proportionately adjusted so that the holder of this warrant exercised after
such date shall be entitled to receive the aggregate number and kind of shares
of MRV Common Stock which, if this Warrant had been exercised by such holder
immediately prior to such date, he would have owned upon such exercise and been
entitled to receive upon such dividend, distribution, subdivision, combination,
reclassification, reorganization, merger, consolidation or recapitalization.
Provided however no adjustment in the exercise price shall be required unless
such adjustment would require an increase or decrease of at least five cents in
such price.
The Excelsior Fund (Transferred from Ciambelini & Associates) acknowledge that
the warrant and the shares underlying the Warrant of MRV Common Stock have not
been registered with the Securities and Exchange Commission and that it is
taking the shares for investment purposes in the event it exercises this
Warrant and not with a view towards distribution. Upon exercise of this
Warrant a legend to this effect will be placed upon the certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
/s/ NOAM LOTAN 1/10/96
- ----------------------------- -----------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ DR SHLOMO MARGALIT 1/10/96
- ----------------------------- -----------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of_____________ shares at $16.833 of MRV
Communications, Inc. Common Stock is hereby assigned to:
- ------------------------------------------------------------------------------
The Excelsior Fund
- -------------------------------------------------- ---------------
Name Title Date
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 159
EXHIBIT 4(g)52
<PAGE> 160
WARRANT
This warrant is given in consideration of certain rights and the recognition of
certain business relationships by and between MRV Communications, Inc. ("MRV")
and Sergio Ciambelini, Elio Bianchi, Barbara Pedrazzani and Rodolfo Casieri
("Ciambelini and Associates").
MRV hereby grants:
1. Jim Powers (Transferred from Ciambelini & Associates) the
right to purchase from MRV at a price of $16.833 during the period of
"Exercisability", as hereinafter defined up to 1,000 shares of MRV Common
Stock. The period of Exercisability shall commence on the date of the granting
of this warrant and shall terminate five (5) years from the date thereof.
2. The rights granted hereunder to Jim Powers (Transferred from
Ciambelini & Associates) may be assigned or transferred to any assignee or
transferee approved by MRV provided that such assignee or transferee agrees to
be bound by the provisions of this Warrant Agreement as indicated by their
signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, Jim Powers (Transferred from Ciambelini &
Associates) shall have the right to exercise this Warrant into the kind and
amount of shares of stock and other securities and property (including cash)
receivable by a holder of the number of shares of Common stock into which the
Warrant might have been exercisable immediately prior to such merger,
consolidation or sale of substantially all of the assets of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to Jim Powers (Transferred from Ciambelini & Associates) within a
reasonable time, not exceeding ten (10) days after the rights represented by
this Warrant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification,
<PAGE> 161
reorganization, merger, consolidation, or recapitalization shall be
proportionately adjusted so that the holder of this warrant exercised after
such date shall be entitled to receive the aggregate number and kind of shares
of MRV Common Stock which, if this Warrant had been exercised by such holder
immediately prior to such date, he would have owned upon such exercise and been
entitled to receive upon such dividend, distribution, subdivision, combination,
reclassification, reorganization, merger, consolidation or recapitalization.
Provided however no adjustment in the exercise price shall be required unless
such adjustment would require an increase or decrease of at least five cents in
such price.
Jim Powers (Transferred from Ciambelini & Associates) acknowledge that the
warrant and the shares underlying the Warrant of MRV Common Stock have not been
registered with the Securities and Exchange Commission and that it is taking
the shares for investment purposes in the event it exercises this Warrant and
not with a view towards distribution. Upon exercise of this Warrant a legend
to this effect will be placed upon the certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
/s/ NOAM LOTAN 1/10/96
- ----------------------------- -----------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ DR SHLOMO MARGALIT 1/10/96
- ----------------------------- -----------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of__________shares at $16.833 of MRV
Communications, Inc. Common Stock is hereby assigned to:
- ------------------------------------------------------------------------------
Jim Powers
- -------------------------------------------------- ---------------
Name Title Date
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 162
EXHIBIT 4(g)53
<PAGE> 163
WARRANT
This warrant is given in consideration of certain rights and the recognition of
certain business relationships by and between MRV Communications, Inc. ("MRV")
and Sergio Ciambelini, Elio Bianchi, Barbara Pedrazzani and Rodolfo Casieri
("Ciambelini and Associates").
MRV hereby grants:
1. J. Steven Emerson (Transferred from Ciambelini & Associates)
the right to purchase from MRV at a price of $16.833 during the period of
"Exercisability", as hereinafter defined up to 5,000 shares of MRV Common
Stock. The period of Exercisability shall commence on the date of the granting
of this warrant and shall terminate five (5) years from the date thereof.
2. The rights granted hereunder to J. Steven Emerson (Transferred
from Ciambelini & Associates) may be assigned or transferred to any assignee or
transferee approved by MRV provided that such assignee or transferee agrees to
be bound by the provisions of this Warrant Agreement as indicated by their
signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, J. Steven Emerson (Transferred from Ciambelini &
Associates) shall have the right to exercise this Warrant into the kind and
amount of shares of stock and other securities and property (including cash)
receivable by a holder of the number of shares of Common stock into which the
Warrant might have been exercisable immediately prior to such merger,
consolidation or sale of substantially all of the assets of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to J. Steven Emerson (Transferred from Ciambelini & Associates)
within a reasonable time, not exceeding ten (10) days after the rights
represented by this Warrant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder off MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification,
<PAGE> 164
reorganization, merger, consolidation, or recapitalization shall be
proportionately adjusted so that the holder of this warrant exercised after
such date shall be entitled to receive the aggregate number and kind of shares
of MRV Common Stock which, if this Warrant had been exercised by such holder
immediately prior to such date, he would have owned upon such exercise and been
entitled to receive upon such dividend, distribution, subdivision, combination,
reclassification, reorganization, merger, consolidation or recapitalization.
Provided however no adjustment in the exercise price shall be required unless
such adjustment would require an increase or decrease of at least five cents in
such price.
J. Steven Emerson (Transferred from Ciambelini & Associates) acknowledge that
the warrant and the shares underlying the Warrant of MRV Common Stock have not
been registered with the Securities and Exchange Commission and that it is
taking the shares for investment purposes in the event it exercises this
Warrant and not with a view towards distribution. Upon exercise of this
Warrant a legend to this effect will be placed upon the certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
/s/ NOAM LOTAN 1/10/96
- ----------------------------- -----------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ DR SHLOMO MARGALIT 1/10/96
- ----------------------------- -----------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of_______________ shares at $16.833 of MRV
Communications, Inc. Common Stock is hereby assigned to:
- ------------------------------------------------------------------------------
J. Steven Emerson
- -------------------------------------------------- ---------------
Name Title Date
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 165
EXHIBIT 4(g)54
<PAGE> 166
WARRANT
This warrant is given in consideration of certain rights and the recognition of
certain business relationships by and between MRV Communications, Inc. ("MRV")
and Sergio Ciambelini, Elio Bianchi, Barbara Pedrazzani and Rodolfo Casieri
("Ciambelini and Associates").
MRV hereby grants:
1. Banquede Gastion G De Rothschild Luxembourg (Transferred from
Ciambelini & Associates) the right to purchase from MRV at a price of $16.833
during the period of "Exercisability", as hereinafter defined up to 5,000
shares of MRV Common Stock. The period of Exercisability shall commence on the
date of the granting of this warrant and shall terminate five (5) years from
the date thereof.
2. The rights granted hereunder to J. Steven Emerson (Transferred
from Ciambelini & Associates) may be assigned or transferred to any assignee or
transferee approved by MRV provided that such assignee or transferee agrees to
be bound by the provisions of this Warrant Agreement as indicated by their
signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, Banquede Gastion G De Rothschild Luxembourg
(Transferred from Ciambelini & Associates) shall have the right to exercise
this Warrant into the kind and amount of shares of stock and other securities
and property (including cash) receivable by a holder of the number of shares of
Common stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to Banquede Gastion G De Rothschild Luxembourg (Transferred from
Ciambelini & Associates) within a reasonable time, not exceeding ten (10) days
after the rights represented by this Warrant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this warrant shall be made and the
exercise price in effect at the time of the record date for such
<PAGE> 167
dividend or distribution or of the effective date of such subdivision,
combination, reclassification, reorganization, merger, consolidation, or
recapitalization shall be proportionately adjusted so that the holder of this
warrant exercised after such date shall be entitled to receive the aggregate
number and kind of shares of MRV Common Stock which, if this Warrant had been
exercised by such holder immediately prior to such date, he would have owned
upon such exercise and been entitled to receive upon such dividend,
distribution, subdivision, combination, reclassification, reorganization,
merger, consolidation or recapitalization. Provided however no adjustment in
the exercise price shall be required unless such adjustment would require an
increase or decrease of at least five cents in such price.
Banquede Gastion G De Rothschild Luxembourg (Transferred from Ciambelini &
Associates) acknowledge that the warrant and the shares underlying the Warrant
of MRV Common Stock have not been registered with the Securities and Exchange
Commission and that it is taking the shares for investment purposes in the
event it exercises this Warrant and not with a view towards distribution. Upon
exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
/s/ NOAM LOTAN 1/10/96
- ----------------------------- -----------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ SHLOMO MARGALIT 1/10/96
- ----------------------------- -----------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of______________ shares at $16.833 of MRV
Communications, Inc. Common Stock is hereby assigned to:
- ------------------------------------------------------------------------------
Banque de Gastion G De Rothschild Luxenbourg
- -------------------------------------------------- ---------------
Name Title Date
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 168
EXHIBIT 4(g)55
<PAGE> 169
WARRANT
This warrant is given in consideration of certain rights and the recognition of
certain business relationships by and between MRV Communications, Inc. ("MRV")
and Sergio Ciambelini, Elio Bianchi, Barbara Pedrazzani and Rodolfo Casieri
("Ciambelini and Associates").
MRV hereby grants:
1. Joel Packer (Transferred from Ciambelini & Associates) the
right to purchase from MRV at a price of $16.833 during the period of
"Exercisability", as hereinafter defined up to 3,000 shares of MRV Common
Stock. The period of Exercisability shall commence on the date of the granting
of this warrant and shall terminate five (5) years from the date thereof.
2. The rights granted hereunder to Joel Packer (Transferred from
Ciambelini & Associates) may be assigned or transferred to any assignee or
transferee approved by MRV provided that such assignee or transferee agrees to
be bound by the provisions of this Warrant Agreement as indicated by their
signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, Joel Packer (Transferred from Ciambelini &
Associates) shall have the right to exercise this Warrant into the kind and
amount of shares of stock and other securities and property (including cash)
receivable by a holder of the number of shares of Common stock into which the
Warrant might have been exercisable immediately prior to such merger,
consolidation or sale of substantially all of the assets of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to Joel Packer (Transferred from Ciambelini & Associates) within a
reasonable time, not exceeding ten (10) days after the rights represented by
this Warrant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification,
<PAGE> 170
reorganization, merger, consolidation, or recapitalization shall be
proportionately adjusted so that the holder of this warrant exercised after
such date shall be entitled to receive the aggregate number and kind of shares
of MRV Common Stock which, if this Warrant had been exercised by such holder
immediately prior to such date, he would have owned upon such exercise and been
entitled to receive upon such dividend, distribution, subdivision, combination,
reclassification, reorganization, merger, consolidation or recapitalization.
Provided however no adjustment in the exercise price shall be required unless
such adjustment would require an increase or decrease of at least five cents in
such price.
Joel Packer (Transferred from Ciambelini & Associates) acknowledge that the
warrant and the shares underlying the Warrant of MRV Common Stock have not been
registered with the Securities and Exchange Commission and that it is taking
the shares for investment purposes in the event it exercises this Warrant and
not with a view towards distribution. Upon exercise of this Warrant a legend
to this effect will be placed upon the certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
/s/ NOAM LOTAN 1/10/96
- ----------------------------- -----------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ DR SHLOMO MARGALIT 1/10/96
- ----------------------------- -----------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of________________ shares at $16.833 of MRV
Communications, Inc. Common Stock is hereby assigned to:
- ------------------------------------------------------------------------------
Joel Packer:
- -------------------------------------------------- ---------------
Name Title Date
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 171
EXHIBIT 4(g)56
<PAGE> 172
WARRANT
This warrant is given in consideration of certain rights and the recognition of
certain business relationships by and between MRV Communications, Inc. ("MRV")
and Sergio Ciambelini, Elio Bianchi, Barbara Pedrazzani and Rodolfo Casieri
("Ciambelini and Associates").
MRV hereby grants:
1. Banque Privee Edmond de Rothschild S.A./Geneva (Transferred
from Ciambelini & Associates) the right to purchase from MRV at a price of
$16.833 during the period of "Exercisability", as hereinafter defined up to
50,000 shares of MRV Common Stock. The period of Exercisability shall commence
on the date of the granting of this warrant and shall terminate five (5) years
from the date thereof.
2. The rights granted hereunder to Banque Privee Edmond de
Rothschild S.A./Geneva may be assigned or transferred to any assignee or
transferee approved by MRV provided that such assignee or transferee agrees to
be bound by the provisions of this Warrant Agreement as indicated by their
signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, Banque Privee Edmond de Rothschild S.A./Geneva
(Transferred from Ciambelini & Associates) shall have the right to exercise
this Warrant into the kind and amount of shares of stock and other securities
and property (including cash) receivable by a holder of the number of shares of
Common Stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to Banque Privee Edmond de Rothschild S.A./Geneva (Transferred
from Ciambelini & Associates) within a reasonable time, not exceeding ten (10)
days after the rights represented by this Warrant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this warrant shall be made and the
exercise price in effect at the time of the record date for such
<PAGE> 173
dividend or distribution or of the effective date of such subdivision,
combination, reclassification, reorganization, merger, consolidation, or
recapitalization shall be proportionately adjusted so that the holder of this
warrant exercised after such date shall be entitled to receive the aggregate
number and kind of shares of MRV Common Stock which, if this Warrant had been
exercised by such holder immediately prior to such date, he would have owned
upon such exercise and been entitled to receive upon such dividend,
distribution, subdivision, combination, reclassification, reorganization,
merger, consolidation or recapitalization. Provided however no adjustment in
the exercise price shall be required unless such adjustment would require an
increase or decrease of at least five cents in such price.
Banque Privee Edmond de Rothschild S.A./Geneva (Transferred from Ciambelini &
Associates) acknowledge that the warrant and the shares underlying the Warrant
of MRV Common Stock have not been registered with the Securities and Exchange
Commission and that it is taking the shares for investment purposes in the
event it exercises this Warrant and not with a view towards distribution. Upon
exercise of this Warrant a legend to this effect will be placed upon the
certificates,
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
/s/ NOAM LOTAN 1/10/96
- ----------------------------- -----------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ DR SHLOMO MARGALIT 1/10/96
- ----------------------------- -----------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of____________ shares at $16.833 of MRV
Communications, Inc. Common Stock is hereby assigned to:
- ------------------------------------------------------------------------------
Banque Privee Edmond de
Rothschild S.A./Geneva
- -------------------------------------------------- ---------------
Name Title Date
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 174
EXHIBIT 4(g)57
<PAGE> 175
WARRANT
This warrant is given in consideration of certain rights and the recognition of
certain business relationships by and between MRV Communications, Inc. ("MRV")
and Sergio Ciambelini, Elio Bianchi, Barbara Pedrazzani and Rodolfo Casieri
("Ciambelini and Associates").
MRV hereby grants:
1. Sergio Ciambelini the right to purchase from MRV at a price of
$25.25 during the period of "Exercisability", as hereinafter defined up to
10,000 shares of MRV Common Stock. The period of Exercisability shall commence
on the date of the granting of this warrant and shall terminate five (5) years
from the date thereof.
2. The rights granted hereunder to Sergio Ciambelini may be
assigned or transferred to any assignee or transferee approved by MRV provided
that such assignee or transferee agrees to be bound by the provisions of this
Warrant Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, Sergio Ciambelini shall have the right to
exercise this Warrant into the kind and amount of shares of stock and other
securities and property (including cash) receivable by a holder of the number
of shares of Common Stock into which the Warrant might have been exercisable
immediately prior to such merger, consolidation or sale of substantially all of
the assets of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to Sergio Ciambelini within a reasonable time, not exceeding ten
(10) days after the rights represented by this Warrant shall have been so
exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this warrant exercised
after such date shall be entitled to receive the aggregate number and kind
<PAGE> 176
of shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately prior to such date, he would have owned upon such exercise
and been entitled to receive upon such dividend, distribution, subdivision,
combination, reclassification, reorganization, merger, consolidation or
recapitalization. Provided however no adjustment in the exercise price shall
be required unless such adjustment would require an increase or decrease of at
least five cents in such price.
Sergio Ciambelini acknowledges that the warrant and the shares underlying the
Warrant of MRV Common Stock have not been registered with the Securities and
Exchange Commission and that it is taking the shares for investment purposes in
the event it exercises this Warrant and not with a view towards distribution.
Upon exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this the Agreement to which it attaches.
/s/ NOAM LOTAN 1/10/96
- ----------------------------- -----------------------
Noam Lotan Date
President & CEO
Corporate
Seal
/s/ DR SHLOMO MARGALIT 1/10/96
- ----------------------------- -----------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of________________ shares at $25.25 of MRV
Communications, Inc. Common Stock is hereby assigned to:
- ------------------------------------------------------------------------------
Ciambelini and Associates:
- -------------------------------------------------- ---------------
Name Title Date
- -------------------------------------------------- ---------------
Name Title Date
<PAGE> 177
EXHIBIT 4(g)58
<PAGE> 178
WARRANT
This warrant is given in consideration of certain rights and the recognition of
certain business relationships by and between MRV Communications, Inc. ("MRV")
and Sergio Ciambelini, Elio Bianchi, Barbara Pedrazzani and Rodolfo Casieri
("Ciambelini and Associates").
MRV hereby grants:
1. Elio Bianchi has the right to purchase from MRV at a price of
$25.25 during the period of "Exercisability", as hereinafter defined up to
10,000 shares of MRV Common Stock. The period of Exercisability shall commence
on the date of the granting of this warrant and shall terminate five (5) years
from the date thereof.
2. The rights granted hereunder to Elio Bianchi may be assigned
or transferred to any assignee or transferee approved by MRV provided that such
assignee or transferee agrees to be bound by the provisions of this Warrant
Agreement as indicated by their signature below.
In the event of any merger, consolidation or sale of substantially all of the
assets of MRV as an entirety, Elio Bianchi shall have the right to exercise
this Warrant into the kind and amount of shares of stock and other securities
and property (including cash) receivable by a holder of the number of shares of
Common Stock into which the Warrant might have been exercisable immediately
prior to such merger, consolidation or sale of substantially all of the assets
of MRV as an entirety.
The rights represented by this warrant may be exercised during the
Exercisability period, at any time in whole or in part by the surrender of this
Warrant with the Purchase Form at the end hereof properly executed, at the
principal executive office of MRV, payment to MRV of the exercise price then in
effect for the number of shares specified in the above-mentioned Purchase Form.
The Common Stock and the certificates for the Common Stock so purchased shall
be delivered to Elio Bianchi within a reasonable time, not exceeding ten (10)
days after the rights represented by this Warrant shall have been so exercised.
This warrant may be subdivided into smaller denominations as requested by the
warrant holder.
MRV covenants and agrees that all shares of Common Stock which may be issued as
part of this Warrant will, upon issuance, be validly issued, fully paid and
non-assessable, and no personal liability will attach to the holder thereof.
MRV further covenants and agrees that, during the Exercisability period, MRV
will at all times have authorized and reserved a sufficient number of shares of
its Common Stock to provide for the exercise of the Warrant.
The Warrant shall not entitle the Warrant holder to any voting rights or other
rights as a shareholder of MRV.
The exercise price in effect at any time and the number and kind of securities
purchasable upon the exercise of the warrant shall be subject to adjustment
from time to time upon the happening of certain events as described below:
In case MRV shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, then the appropriate adjustments in the number
and kind of such securities subject to this warrant shall be made and the
exercise price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, or recapitalization
shall be proportionately adjusted so that the holder of this warrant exercised
after such date shall be entitled to receive the aggregate number and kind of
shares of MRV Common Stock which, if this Warrant had been exercised by such
holder immediately
<PAGE> 179
prior to such date, he would have owned upon such exercise and been entitled to
receive upon such dividend, distribution, subdivision, combination,
reclassification, reorganization, merger, consolidation or recapitalization.
Provided however no adjustment in the exercise price shall be required unless
such adjustment would require an increase or decrease of at least five cents in
such price.
Elio Bianchi acknowledges that the warrant and the shares underlying the Warrant
of MRV Common Stock have not been registered with the Securities and Exchange
Commission and that it is taking the shares for investment purposes in the
event it exercises this Warrant and not with a view towards distribution. Upon
exercise of this Warrant a legend to this effect will be placed upon the
certificates.
This Agreement shall be governed by and in accordance with the laws of the
State Of Delaware.
The undersigned acknowledges receipt of this warrant and agrees to be bound by
the terms of this document and the Agreement to which it attaches.
1/10/96
- ----------------------------- -----------------------
Noam Lotan Date
President & CEO
Corporate
Seal
1/10/96
- ----------------------------- -----------------------
Dr Shlomo Margalit Date
Chairman of the Board
- ------------------------------------------------------------------------------
ASSIGNMENT
This warrant for the purchase of_________________ shares at $25.25 of MRV
Communications, Inc. Common Stock is hereby assigned to:
- ------------------------------------------------------------------------------
Ciambelini and Associates:
- -------------------------------------------------- ---------------
Name Title Date
- -------------------------------------------------- ---------------
Name Title Date
