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Exhibit 1.1
TELECOMMUNICATION SYSTEMS, INC.
____ SHARES(1)
COMMON STOCK
UNDERWRITING AGREEMENT
____________, 2000
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CHASE SECURITIES INC.
DEUTSCHE BANK SECURITIES INC.
XXXXXXX XXXXX XXXXXX INC.
As Representatives of the several
Underwriters named in Schedule I.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
TeleCommunication Systems, Inc., a Maryland corporation (the "Company"),
proposes to issue and sell ___________ shares (the "Firm Shares") of its
authorized but unissued Common Stock, $__________ par value (the "Common
Stock"). The Company proposes to grant to the several Underwriters named in
Schedule I hereto (the "Underwriters") an option to purchase up to an additional
________ shares of Common Stock (the "Option Shares" and with the Firm Shares,
herein collectively called the "Shares"). This is to confirm the agreement
concerning the purchase of the Shares from the Company by the Underwriters.
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The Company
represents and warrants to and agrees with the several Underwriters that:
(a) A registration statement on Form S-1 (No. 33- ), including a form
of prospectus, relating to the Shares has been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended
(the "Securities Act"), and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
and has been filed by the Company with the Commission. The Company may have
filed one or more amendments thereto, including the related preliminary
prospectus, each of which has previously been furnished to you. The Company
will next file with the Commission either (i) prior to effectiveness of
such registration statement, a further amendment to such registration
statement (including the form of final prospectus) or (ii) after
effectiveness of such registration statement, a final prospectus in
accordance with Rules 430A and 424(b)(1) or (4). In the case of clause
(ii), the Company has included in such registration statement, as amended
at the Effective Time (as defined below), all information (other than
information permitted to be omitted from the registration statement when it
becomes effective pursuant to Rule 430A ("Rule 430A Information") required
by the Securities
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(1) Plus an option to purchase from the Company up to additional shares to
cover over-allotments.
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Act and the rules thereunder to be included in the final prospectus with
respect to the Shares and the offering thereof. As filed, such amendment
and form of final prospectus, or such final prospectus, shall contain all
Rule 430A Information, together with all other such required information,
with respect to the Shares and the offering thereof and, except to the
extent the Representatives shall agree in writing to a modification, shall
be in all substantive respects in the form furnished to you prior to the
execution of this Agreement or, to the extent not completed at such time,
shall contain only such specific additional information and other changes
(beyond that contained in the latest preliminary prospectus) as the Company
has advised you, prior to the execution of this Agreement, will be included
or made therein. For purposes of this Agreement, "Effective Time" means the
date and time as of which such registration statement, or the most recent
post effective amendment thereto, if any, was or is declared effective by
the Commission. "Preliminary Prospectus" means each prospectus included in
such registration statement, or amendments thereof, before it becomes
effective under the Securities Act, any prospectus filed with the
Commission by the Company pursuant to Rule 424(a) and the prospectus
included in the Registration Statement at the Effective Time that omits
Rule 430A Information. Such registration statement, as amended at the
Effective Time, including all Rule 430A Information, if any, is hereinafter
referred to as the "Registration Statement", and the form of prospectus
relating to the Shares, as first filed with the Commission pursuant to and
in accordance with Rule 424(o) or, if no such filing is required, as
included in the Registration Statement is hereinafter referred to as the
"Prospectus". The Company has caused to be delivered to you copies of each
Preliminary Prospectus and has consented to the use of such copies for the
purposes permitted by the Securities Act.
(b) At the Effective Time, the Registration Statement did or will, and
when the Prospectus is first filed (if required) in accordance with Rule
424(b) and on the Closing Date and the Option Closing Date (as hereinafter
respectively defined), the Prospectus (and any supplements thereto) will,
comply in all material respects with the applicable requirements of the
Securities Act and the respective rules thereunder; at the Effective Time,
the Registration Statement did not or will not include any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; at the Effective Time, the Prospectus, if not filed pursuant to
Rule 424(b), did not or will not, and on the date of any filing pursuant to
Rule 424(b) and on the Closing Date, and the Option Closing Date the
Prospectus (together with any supplement thereto) will not include any
untrue statement of a material fact or omit to state a material fact
necessary, in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The preceding
sentence does not apply to information contained in or omitted from the
Registration Statement or the Prospectus (or any supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company through the Representatives by or on behalf of any Underwriter
specifically for use therein (the "Underwriter's Information"). The parties
acknowledge and agree that the Underwriters' Information consists solely of
the following information in the Prospectus furnished on behalf of each
Underwriter: [the table included as part of the first paragraph under the
caption "Underwriting"; the concession and reallowance figures in the fifth
paragraph under the caption "Underwriting"; and the last two paragraphs
under the caption "Underwriting"].
(c) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of its jurisdiction of
incorporation, is
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duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification (other
than those jurisdictions in which the failure to so qualify would not have
a material adverse effect on the condition (financial or otherwise),
results of operations, business, properties or prospects of the Company),
and has all power and authority necessary to own or hold properties and to
conduct its business as now being conducted or as proposed to be conducted
as described in the Registration Statement and the Prospectus.
(d) The Company has full right, power and authority to execute and
deliver this Agreement and the Shares and to perform its obligations
hereunder and thereunder, and all corporate action required to be taken for
the due and proper authorization, execution and delivery of this Agreement
and the Shares and the consummation of the transactions contemplated by
this Agreement have been duly and validly taken;
(e) The Company has the authorized capitalization set forth in the
Prospectus and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and are not now in violation of or subject to any preemptive
rights; the Shares to be delivered on the Closing Date and the Option
Closing Date have been duly and validly authorized and, when delivered by
the Company in accordance with this Agreement, will be duly and validly
issued, fully paid and nonassessable and will not have been issued in
violation of or subject to any preemptive rights; the Common Stock, the
Firm Shares and the Option Shares conform to the descriptions thereof
contained in the Registration Statement and the Prospectus.
(f) The execution, delivery and performance of this Agreement and the
Shares and the consummation of the transactions contemplated hereby will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default (or an event which with notice or
lapse of time, or both, would constitute a default) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company
is a party or by which the Company is bound or to which any of the property
or assets of the Company is subject, nor will such actions result in any
violation of the provisions of the charter or by-laws of the Company or any
statute or any judgment, decree, order, rule or regulation of any court or
governmental or regulatory agency or body having jurisdiction over the
Company or any of its properties or assets; and except for the registration
of the Shares under the Securities Act and such consents, approvals,
authorizations, orders, licenses, permits, filings or registrations or
qualifications as may be required under the Exchange Act and applicable
state securities laws in connection with the purchase and distribution of
the Shares by the Underwriters, no consent, approval, authorization, order,
license or permit of, or filing, registration or qualification with, any
such court or governmental or regulatory agency or body is required for the
execution, delivery and performance of this Agreement or the Shares by the
Company and the consummation of the transactions contemplated hereby.
(g) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or
included in the Prospectus present fairly the financial condition and
results of operations of the entities
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purported to be shown thereby, at the dates and for the periods indicated,
and have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved.
(h) There are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations and which
have not been so described or filed.
(i) There are no legal or governmental proceedings pending to which
the Company is a party, or of which any property or assets of the Company
is the subject which, singularly or in the aggregate, if determined
adversely to the Company, are reasonably likely to have a material adverse
effect on the condition (financial or otherwise), results of operations,
business, properties or prospects of the Company, and to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened or contemplated by others.
(j) The Company is not (i) in violation of its charter or by-laws,
(ii) in default under, and no event has occurred which, with notice or
lapse of time or both, would constitute such a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company pursuant to, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which it
is a party or by which it is bound or to which any of its property or
assets is subject or (iii) is in violation in any respect of any statute or
any judgment, decree, order, rule or regulation of any court or
governmental or regulatory agency or body having jurisdiction over the
Company or any of its properties or assets, except any violation or default
that would not have a material adverse effect on the condition (financial
or otherwise), results of operations, business, properties or prospects of
the Company.
(k) This Agreement has been duly authorized, executed and delivered by
the Company.
(l) The Company has accurately prepared and timely filed all Federal,
state and other tax returns that are required to be filed by it and has
paid or made provision for the payment of all taxes, assessments,
governmental or other similar charges including, without limitation, all
sales and use taxes and all taxes which the Company is obligated to
withhold from amounts owing to employees, creditors and third parties, with
respect to the periods covered by such tax returns (whether or not such
amounts are shown as due on any tax return). No deficiency assessment with
respect to a proposed adjustment of the Company's Federal, state, or other
taxes is pending or, to the best of the Company's knowledge, threatened.
There is no tax lien, whether imposed by any Federal, state, or other
taxing authority, outstanding against the assets, properties or business of
the Company.
(m) The Company possesses all consents, approvals, licenses,
certificates, authorizations, orders, registrations and permits issued by,
and has made all declarations and filings with, the appropriate state,
federal or foreign regulatory or governmental agencies or bodies which are
necessary or desirable for the ownership of its properties or the conduct
of its business as now conducted and as proposed to be conducted as
described in the Registration Statement and Prospectus, except where the
failure to possess or make the same would not have, singularly or in the
aggregate, a
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material adverse effect on the condition (financial or otherwise), results
of operations, business, properties or prospects of the Company, and no
such consent, approval, license, certificate, authorization, order,
registration or permit contains a materially burdensome restriction not
adequately disclosed in the Registration Statement and the Prospectus. The
Company has not received notification of any revocation or modification of
any such consent, approval, license, certificate, authorization, order,
registration or permit and has no reason to believe that any such consent,
approval, license, certificate, authorization, order, registration or
permit will not be renewed.
(n) There are no persons with registration or other similar rights
either to have any securities registered pursuant to thc Registration
Statement or to have any securities otherwise registered by the Company
under the Securities Act in connection with or as a result of the
execution, delivery and performance of this Agreement.
(o) The Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "Investment Company
Act"), and the rules and regulations of the Commission thereunder.
(p) The Company has not taken and will not take, directly or
indirectly, any action designed to cause or result in, or which constitutes
or which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to facilitate the
sale or resale of the Shares.
(q) The Shares are registered pursuant to Section 12(g) of the
Exchange Act and are listed for quotation on the Nasdaq National Market
System ("Nasdaq"), and the Company has taken no action designed to, or
likely to have the effect of, terminating the registration of the Shares
under the Exchange Act or delisting the Shares from Nasdaq, nor has the
Company received any notification that the Commission or Nasdaq is
contemplating terminating such registration or listing.
(r) Ernst & Young LLP, who have certified the financial statements and
supporting schedules included in the Registration Statement, are
independent public accountants as required by the Securities Act and the
Rules and Regulations.
(s) Argy, Xxxxxx & Xxxxxxxx, P.C., who have certified certain Selected
Financial Data included in the Registration Statement, are independent
public accountants as required by the Securities Act and The Rules and
Regulations.
(t) The Company owns or possesses adequate rights to use all patents,
patent applications, trademarks, service marks, trade names, trademark
registrations, service xxxx registrations, copyrights, licenses, formulae,
customer lists and know-how and other intellectual property (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) necessary for the conduct
of its business as being conducted and as proposed to be conducted as
described in the Registration Statement and Prospectus and has no reason to
believe that the conduct of its business will conflict with, and has not
received any notice of any claim of conflict with, any such rights of
others. To the best of the Company's knowledge, all material technical
information developed by and belonging to the Company which has not been
patented has been kept confidential. The Company has not granted or
assigned to any other person or entity any right to manufacture, assemble,
or
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sell, and no other person or entity has manufactured, assembled or sold,
the current products and services of the Company or those products and
services described in the Registration Statement and Prospectus.
(u) The Company has good and marketable title in fee simple to, or has
valid rights to lease or otherwise use, all items of real or personal
property which are material to the business of the Company, in each case
free and clear of all liens, encumbrances, claims and defects that may
interfere with the condition (financial or otherwise), results of
operations, business, properties or prospects of the Company.
(v) No labor disturbance by the employees of the Company exists or, to
the best of the Company's knowledge, is imminent which might be expected to
have a material adverse effect on the condition (financial or otherwise),
results of operations, business, properties or prospects of the Company.
(w) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section
4975 of the Internal Revenue Code of 1986, as amended from time to time
(the "Code") or "accumulated funding deficiency" (as defined in Section 302
of ERISA) or any of the events set forth in Section 4043(b) of ERISA (other
than events with respect to which the 30-day notice requirement under
Section 4043 of ERISA has been waived) has occurred with respect to any
employee benefit plan which could have a material adverse effect on the
condition (financial or otherwise), results of operations, business,
properties or prospects of the Company; each employee benefit plan is in
compliance in all material respects with applicable law, including ERISA
and the Code; the Company has not incurred and does not expect to incur
liability under Title IV of ERISA with respect to the termination of, or
withdrawal from, any "pension plan"; and each "pension plan" (as defined in
ERISA) for which the Company would have any liability that is intended to
be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by failure
to act, which could cause the loss of such qualification.
(x) There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission, or other release of any kind of
toxic or other wastes or other hazardous substances by, due to, or caused
by the Company (or, to the best of the Company's knowledge, any other
entity for whose acts or omissions the Company is or may be liable) upon
any other property now or previously owned or leased by the Company, or
upon any other property, in violation of any statute or any ordinance,
rule, regulation, order, judgment, decree or permit or which would, under
any statute or any ordinance, rule (including rule of common law),
regulation, order, judgment, decree or permit, give rise to any liability,
except for any violation or liability which would not have, singularly or
in the aggregate with all such violations and liabilities, a material
adverse effect on the condition (financial or otherwise), results of
operations, business, properties or prospects of the Company; there has
been no disposal, discharge, emission or other release of any kind onto
such property or into the environment surrounding such property of any
toxic or other wastes or other hazardous substances with respect to which
the Company has knowledge, except for any such disposal, discharge,
emission, or other release of any kind which would not have, singularly or
in thc aggregate with all such discharges and other releases, a material
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adverse effect on the condition (financial or otherwise), results of
operations, business, properties or prospects of the Company.
(y) The statistical and market-related data included in the Prospectus
are based on or derived from sources which the Company believes to be
reliable and accurate.
2. PURCHASE BY THE UNDERWRITER.
(a) On the basis of the representations, warranties and agreements
contained herein, and subject to the terms and conditions set forth herein,
the Company agrees to issue and sell to each of the Underwriters, severally
and not jointly, and each of the Underwriters, severally and not jointly,
agrees to purchase from the Company, at a purchase price per share of $___,
the number of Firm Shares set forth opposite the respective names of the
Underwriters in Schedule I hereto plus any additional number of Shares
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 6 hereof.
(b) On the basis of the representations, warranties and agreements
contained herein, and subject to the terms and conditions set forth herein,
the Company grants an option to the several Underwriters to purchase,
severally and not jointly, up to __ Option Shares from the Company at the
same price per share as the Underwriters shall pay for the Firm Shares.
Said option may be exercised only to cover over-allotments in the sale of
the Firm Shares by the Underwriters and may be exercised in whole or in
part at any time (but not more than once) on or before the thirtieth day
after the date of this Agreement upon written or telegraphic notice by you
to thc Company setting forth the aggregate number of Option Shares as to
which the several Underwriters are exercising the option. Delivery of
certificates for Option Shares, and payment therefor, shall be made as
provided in Section 3 hereof. The number of Option Shares to be purchased
by each Underwriter shall be the same percentage of the total number of
Option Shares to be purchased by the several Underwriters as such
Underwriter is purchasing of the Firm Shares, as adjusted by you in such
manner as you deem advisable to avoid fractional shares.
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3. DELIVERY OF AND PAYMENT FOR THE SHARES. Delivery of and payment for the
Firm Shares and the Option Shares (if the option granted by Section 2(b) shall
have been exercised not later than 10:00 A.M., New York City time, on the date
two business days preceding the Closing Date) shall be made at the office of
Xxxxxx & Xxxxxxx or at such other place as shall be agreed upon by the
Representatives and the Company, at 10:00 A.M., New York City time, on ________,
200_,(2) or at such other date or time, not later than seven full business days
thereafter, as shall be agreed upon by the Representatives and the Company (such
date and time (which may be postponed as provided in Section 6 hereof) being
referred to herein as the "Closing Date"). If the option granted by Section 2
hereof shall be exercised after 10:00 a.m., New York City time, on the date two
business days preceding the Closing Date, delivery of certificates for the
Option Shares, and payment therefor, shall be made at the office of Xxxxxx &
Xxxxxxx, at 10:00 a.m., New York City time, on the third business day after the
exercise of such option (such date and time being herein sometimes referred to
as the "Option Closing Date").
Payment for the Shares purchased from the Company shall be made to or
upon the order of the Company of the purchase price by wire transfer in same day
funds. Such payment shall be made upon delivery of certificates for the Shares
to you for the respective account of the several Underwriters against receipt
therefor signed by you. Certificates for the Shares to be delivered to you shall
be registered in such name or names and shall be in such denominations as you
may request at least one business day before the Closing Date, in the case of
Firm Shares, and at least one business day before the Option Closing Date, in
the case of the Option Shares. The Company shall make the certificates for the
Shares available for inspection by the Representatives in New York, New York,
not later than one full business day prior to the date of purchase.
4. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with each of the
several Underwriters:
(a) That if the Effective Time is prior to the execution and delivery
of this Agreement, to file the Prospectus with the Commission pursuant to
and in accordance with subparagraph (1) (or, if applicable and if consented
to by the Representatives, subparagraph (4)) of Rule 424(b)(3) within the
time period prescribed by such rule and will provide evidence satisfactory
to the Representatives of such timely filing;
(b) To advise the Representatives promptly of any proposal to amend or
supplement the registration statement as filed or the related prospectus or
the Registration Statement or the Prospectus and not to effect such
amendment or supplementation without the consent of the Representatives; to
advise the Representatives promptly of the receipt of any comments from the
Commission and of the effectiveness of the Registration Statement (in each
case if the Effective Time is subsequent to the execution and delivery of
this Agreement) and of any request by the Commission for any amendment or
supplementation of the Registration Statement or the Prospectus, and of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any proceedings for that
purpose; to advise the Representatives promptly of any order preventing or
suspending the use of any prospectus relating to the Shares, of the
suspension of the qualification of such Shares for offering or sale in any
jurisdiction and of the initiation or threatening of any proceeding for any
such purpose; and to use best efforts to prevent the issuance of any stop
order or
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(2) If the transaction is priced after the close of market, T+4 will apply to
the transaction. If the pricing takes place before or during market hours,
the closing will be three business days after pricing.
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of any such order preventing or suspending the use of any prospectus
relating to the Shares or suspending any such qualification and, if any
such stop order or order or suspension is issued, to obtain the lifting
thereof at the earliest possible time;
(c) To furnish promptly to each of the Representatives and counsel for
the Underwriters a signed copy of the Registration Statement as originally
filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith, and to
deliver promptly without charge to the Representatives such number of the
following documents as the Representatives may from time to time reasonably
request: (i) conformed copies of the Registration Statement as originally
filed with thc Commission and each amendment thereto (in each case
excluding exhibits other than this Agreement and the computation of per
share earnings) and (ii) each Preliminary Prospectus, the Prospectus and
any amended or supplemented Prospectus;
(d) If the delivery of a prospectus is required at any time in
connection with the sale of the Shares and if at such time any events shall
have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when
such Prospectus is delivered, not misleading, or if for any other reason it
shall be necessary at such time to amend or supplement the Prospectus in
order to comply with the Securities Act to notify the Representatives
immediately thereof, and to promptly prepare and file with the Commission
an amended Prospectus or a supplement to the Prospectus (in form and
substance satisfactory to you) which will correct such statement or
omission or effect such compliance;
(e) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus (such amendment or supplement in form and substance satisfactory
to you) that may, in the judgment of the Company or the Representatives, be
required by the Securities Act or requested by the Commission or advisable
in connection with the distribution of the Shares;
(f) As soon as practicable to make generally available to the
Company's security holders and to deliver to the Representatives an earning
statement of the Company and its subsidiaries, if any (which need nor be
audited), complying with Section 1l(a) of the Securities Act and the Rules
and Regulations (including, at the option of the Company, Rule 158);
(g) For so long as any of the Shares are outstanding, to furnish to
the Representatives copies of all materials furnished by the Company to its
shareholders and all public reports and all reports and financial
statements furnished by the Company to the Commission pursuant to the
Exchange Act or any rule or regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Shares for offering
and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of the Shares;
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provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(i) For a period of 180 days from the Effective Time, to not, directly
or indirectly, sell, offer, contract to sell, transfer the economic risk of
ownership in, make any short sale, pledge or otherwise dispose of any
shares of Common Stock or any securities convertible into or exchangeable
or exercisable for or any other rights to purchase or acquire Common Stock,
without the prior written consent of Chase Securities Inc. acting alone or
of each of the Representatives of the Underwriters acting jointly;
(j) To obtain the undertaking (the "lock-up agreement") of each of its
directors, officers, and shareholders to not, directly or indirectly, sell,
offer, contract to sell, transfer the economic risk of ownership in, make
any short sale, pledge or otherwise dispose of any shares of Common Stock
or any securities convertible into or exchangeable or exercisable for or
any other rights to purchase or acquire Common Stock, for a period of 180
days from the Effective Time, without the prior written consent of Chase
Securities Inc. acting alone or of each of the Representatives of the
Underwriters acting jointly; and
(k) To file with the Commission such reports on Form SR as may be
required pursuant to Rule 463 of the Securities Act.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations of the
several Underwriters hereunder are subject to the accuracy, when made and on the
Closing Date (for purposes of this Section 5, "Closing Date" shall refer to the
Closing Date for the Firm Shares and the Option Closing Date, if different, for
the Option Shares), of the representations and warranties of the Company
contained herein, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder, and to each of the following additional
terms and conditions:
(a) If the Effective Time is not prior to the execution and delivery
of this Agreement, the Registration Statement shall have become effective,
and the Representatives shall have received notice thereof, not later than
(i) 6:00 p.m., New York City time, on the date of determination of the
public offering price, if such determination occurred at or prior to 3:00
p.m. New York City time on such date or (ii) 12:00 noon New York City time
on the business day following the day on which the offering price was
determined if such determination occurred after 3:00 p.m. New York City
time on such date. If the Effective Time is prior to the execution and
delivery of this Agreement, the Prospectus shall have been timely filed
with the Commission in accordance with Section 1(a) of this Agreement.
Prior to the Closing Date, no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued and
no proceeding for that propose shall have been initiated or threatened by
the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with to the reasonable satisfaction of
the Representatives.
(b) All corporate proceedings and other legal matters incident to the
authorization form and validity of this Agreement, the Firm Shares, the
Option Shares, the Registration Statement and the Prospectus, and all other
legal matters relating to this Agreement and the transactions contemplated
hereby shall be reasonably satisfactory in all material respects to counsel
for the Underwriters and the Company shall have
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furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(c) Xxxxx Xxxxxxx, Xxxxxxx & Xxxxx LLP shall have furnished to the
Representatives their written opinion, as counsel to the Company, addressed
to the Underwriters and dated the Closing Date, in form and substance
reasonably satisfactory to the Representatives to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, is duly qualified to do business and is
in good standing as a foreign corporation in each jurisdiction in
which its ownership or lease of property or the conduct of its
business requires such qualification (other than those jurisdictions
in which the failure to so qualify would not have a material adverse
effect on the condition (financial or otherwise), results of
operations, business, properties or prospects Company), and has all
power and authority necessary to own or hold its properties and to
conduct its business as now being conducted or as proposed to be
conducted as described in the Registration Statement and the
Prospectus;
(ii) The Company has the authorized capitalization set forth in
the Prospectus and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable and are not now in violation of or subject to
any preemptive rights; the Shares to be delivered on the Closing Date
have been duly and validly authorized and, when delivered by the
Company in accordance with this Agreement, will be duly and validly
issued, fully paid and nonassessable and will not have been issued in
violation of or subject to any preemptive rights; the Common Stock,
the Firm Shares and the Option Shares conform to the descriptions
thereof contained in the Registration Statement and the Prospectus;
(iii) The Registration Statement was declared effective under the
Securities Act as of the date and time specified in such opinion; the
Prospectus was filed with the Commission pursuant to the subparagraph
of Rule 424(b) of the Rules and Regulations specified in such opinion
on the date specified therein; and no stop order suspending the
effectiveness of the Registration Statement has been issued and, to
thc best of such counsel's knowledge, no proceeding for that purpose
is pending or threatened by the Commission;
(iv) The Registration Statement and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus made by the Company prior to the Closing Date (other than
the financial statements and related schedules contained therein, as
to which such counsel need express no opinion) comply as to form in
all material respects with the requirements of the Securities Act and
the Rules and Regulations;
(v) The statements set forth under the captions "Business--The
Lucent Technologies Relationship," "Business--Government Regulation,"
"Business--Intellectual Property Rights" and "Description of Capital
Stock," to the extent they represent statements or summaries of legal
matters or summaries
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of contracts or agreements, are true and correct; and to the best of
such counsel's knowledge, them are no contracts or other documents
which are required to be described in the Prospectus or filed as
exhibits to the Registration Statement by the Securities Act or by the
Rules and Regulations and which have not been so described or filed;
(vi) The Company has full right, power and authority to execute
and deliver this Agreement and the Shares and to perform its
obligations hereunder and thereunder, and all corporate action
required to be taken for the due and proper authorization, execution
and delivery of this Agreement and the Shares and the consummation of
the transactions contemplated by this Agreement have been duly and
validly taken;
(vii) This Agreement has been duly authorized, executed and
delivered by the Company;
(viii) The execution, delivery and performance of this Agreement
and the Shares and the consummation of the transactions contemplated
hereby will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default (or an
event which with notice or lapse of time, or both, would constitute a
default) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company
pursuant to, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company is a party or by
which the Company is bound or to which any of the property or assets
of the Company is subject, nor will such actions result in any
violation of the provisions of the charter or by-laws of the Company
or any statute or any judgment, decree, order, rule or regulation of
any court or governmental or regulatory agency or body having
jurisdiction over the Company or any of their properties or assets;
and except for the registration of the Shares under the Securities Act
and such consents, approvals, qualifications, authorizations, orders,
licenses, permits, filings or registrations as may be required under
the Exchange Act and applicable state securities laws in connection
with the purchase and distribution of the Shares by the Underwriters,
no consent, approval, qualification, authorization, order, license or
permit of, or filing or registration with, any such court or
governmental or regulatory agency or body is required for the
execution, delivery and performance of this Agreement by the Company
and the consummation of the transactions contemplated hereby and
thereby;
(ix) The Company is not (i) in violation of its charter or
by-laws, (ii) in default under, and no event has occurred which, with
notice or lapse of time or both, would constitute such a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is bound
or to which any of its property or assets is subject or (iii) in
violation in any respect of any statute or any judgment, decree,
order, rule or regulation of any court or governmental or regulatory
agency or body having jurisdiction over the Company or any of their
properties or assets, except any violation or default that would not
have a material adverse effect on the condition (financial or
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otherwise), results of operations, business, properties or prospects
of the Company;
(x) To the best of such counsel's knowledge, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to
include securities owned or to be owned by such person in the
securities registered pursuant to the Registration Statement;
(xi) To the best of such counsel's knowledge and except as set
forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company is a party or of which any
property or assets of the Company is the subject which, singularly or
in the aggregate, if determined adversely to the Company, are
reasonably likely to have a material adverse effect on the condition
(financial or otherwise), results of operations, business, properties
or prospects of the Company; and to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others; and
(xii) The Company is, and upon receipt and pending application of
the net proceeds from the sale of the Share to be sold by the Company
in the manner described in the Prospectus will be, an "investment
company" within the meaning of the Investment Company Act and the
rules and regulations of the Commission thereunder.
In addition, such opinion shall also contain a statement that such
counsel has participated in conferences with officers and representatives of the
Company, representatives of the independent public accounts for the Company and
the Underwriters at which the contents of the Prospectus and related matters
were discussed and such counsel has no reason to believe that the Registration
Statement (or any post-effective amendment thereto), at the Effective Time,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus (or any supplement thereto) as of its
date or as of the Closing Date contained or contains any untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(d) The Representatives shall have received from Xxxxxx & Xxxxxxx,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to such matters as the Representatives may reasonably
require, and the Company shall have furnished to such counsel such
documents as they request for enabling them to pass upon such matters.
(e) At the time this Agreement is executed and at the Closing Date,
the Representatives shall have received from Ernst & Young LLP, independent
public accountants for the Company, dated as of the date of this Agreement
and as of the Closing Date, customary comfort letters addressed to the
Representatives and in form and substance satisfactory to the
Representatives and counsel to the Representatives with respect to the
financial statements and certain financial information of the Company
contained in the Prospectus.
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(f) The Representatives shall have also received from Ernst & Young
LLP, a letter stating that the Company's system of internal accounting
controls taken as a whole is sufficient to meet the broad objectives of
internal accounting control insofar as those objectives pertain to the
prevention or detection of errors or irregularities in amounts that would
be material in relation to the financial statements of the Company.
(g) The Company shall have furnished to the Representatives a
certificate, dated the Closing Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating that
(A) such officers have carefully examined the Registration Statement and
the Prospectus, (B) in their opinion, as of the Effective Time, the
Registration Statement and the Prospectus (including the documents
incorporated or deemed to be incorporated by reference therein) did not
include any untrue statement of a material fact and did not omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading and since the Effective Time, no event
has occurred which should have been set forth in a supplement or amendment
to the Registration Statement or the Prospectus, whether or not arising
from transactions in the ordinary course of business, and, since the
Effective Time, except in the ordinary course of business, the Company has
not entered into any material transaction not referred to in the
Registration Statement and thc Prospectus contained therein, (C) the
Company has no material contingent obligations which are not disclosed in
the Registration Statement and the Prospectus, and (D) to the best of his
or her knowledge after reasonable investigation, as of the Closing Date,
the representations and warranties of the Company in this Agreement are
true and correct, the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the best of his knowledge, are
contemplated by the Commission, and subsequent to the date of the most
recent financial statements in the Prospectus, there has been no material
adverse change in the financial position or results of operation of the
Company, or any change, or any development including a prospective change,
in or affecting the condition (financial or otherwise), results of
operations, business, properties or prospects of the Company, except as set
forth in the Prospectus.
(h) Subsequent to the execution and delivery of this Agreement or, if
earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereof) and the Prospectus
(exclusive of any supplement thereto), there shall not have been any change
in the capital stock or long-term debt of the Company or any change, or any
development involving a prospective change, in or affecting the condition
(financial or otherwise), results of operations, business, properties or
prospects of the Company, the effect of which, in any such case described
above, is, in the judgment of the Representatives, so material and adverse
as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares on the terms and in the manner
contemplated in the Prospectus (exclusive of any supplement).
(i) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded any of the Company's
debt securities by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes of
Rule 436(g)(2) of the Rules and Regulations and (ii) no such organization
shall have publicly announced that it has under surveillance or review
(other than an announcement with positive implications of a possible
upgrading), its rating of the Company's debt securities.
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(j) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) the suspension or
limitation of trading in securities generally, or a material adverse
decline in value of securities generally, on the New York Stock Exchange,
the American Stock Exchange, the Nasdaq Stock Market or the over-
the-counter market, or the establishment of minimum prices on such
exchanges or such markets by the Commission, by such exchanges or markets
or by any other regulatory body or governmental authority having
jurisdiction; (ii) the declaration of a general moratorium on commercial
banking activities by Federal or New York State authorities; (iii) the
escalation of hostilities by the United States or the declaration of war or
a national emergency by the United States; (iv) any outbreak of hostilities
or other national or international calamity or crisis or change in economic
or political conditions; (v) the taking of any action by any federal, state
or local government or agency in respect of its monetary or fiscal affairs
which in the several Underwriters reasonable opinion has a material adverse
effect on the securities markets in the United States; (vi) the enactment,
publication, decree or other promulgation of any federal or state statute,
regulation, rule or order of, or commencement of any proceeding or
investigation by, any court, legislative body, agency or other governmental
authority which in the several Underwriters' reasonable opinion materially
adversely affects or will materially adversely affect the business or
operations of the Company, or any such other material adverse change in
general economic, political or financial conditions (or the effect of
international conditions on the financial markets in thc United States
shall be such) as to make it, in the judgment of a majority in interest of
the several Underwriters, impracticable or inadvisable to proceed with the
public offering or the delivery of the Firm Shares or the Option Shares on
the terms and in the manner contemplated in the Prospectus.
(k) You shall have received lock-up agreements from each of the
directors, officers and hereof.
(l) The recapitalization transactions of the Company that are
described in the Prospectus shall have been completed as of the Closing
Date.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
If any of the conditions specified in this Section 5 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
counsel for the Underwriters pursuant to this Section 5 shall not be in form and
substance reasonably satisfactory to you and counsel for the Underwriters, all
obligations of the Underwriters hereunder may be cancelled by you at, or at any
time prior to, the Closing Date and the obligations of the Underwriters to
purchase the Option Shares may be cancelled by you at, or at any time prior to,
the Option Closing Date. Notice of such cancellation shall be given to the
Company pursuant to Section 13 hereof.
6. DEFAULTING UNDERWRITERS.
(a) If, on the Closing Date or the Option Closing Date, if any, any
Underwriter or Underwriters default in the performance of its or their
obligations under this Agreement, the Representatives may make arrangements
for the purchase of the Firm Shares or Option Shares, as the case may be,
to which such default relates by other
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persons satisfactory to the Company and the Representatives, including any
of the Underwriters, but if no such arrangements are made by the Closing
Date or the Option Closing Date, as the case may be, then each remaining
non-defaulting Underwriter shall be severally obligated to purchase thc
Firm Shares or Option Shares which the defaulting Underwriter or
Underwriters agreed but failed to purchase in the respective proportions
which the number of Firm Shares set forth opposite the name of each
remaining non-defaulting Underwriter in Schedule I hereto bears to the
aggregate number of Firm Shares set forth opposite the names of all the
remaining non-defaulting Underwriters in Schedule I hereto; provided,
however, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Firm Shares or Option Shares, as the case
may be, if the aggregate number of Firm Shares or Option Shares, in each
case, which the defaulting Underwriter or Underwriters agreed but failed to
purchase exceeds one-eleventh of the aggregate number of the Firm Shares or
Option Shares, in each case, to be purchased, and any remaining
non-defaulting Underwriter shall not be obligated to purchase in total more
than 110% of the number of Firm Shares or Option Shares, in each case,
which it agreed to purchase pursuant to the terms of Section 2. If the
foregoing maximums are exceeded and the remaining Underwriters or other
underwriters satisfactory to the Representatives and the Company cannot
elect to purchase the Firm Shares or Option Shares which the defaulting
Underwriter or Underwriters agreed but failed to purchase, this Agreement
shall terminate without liability on the part of any non-defaulting
Underwriter or the Company, except that the Company will continue to be
liable for the payment of expenses to the extent set forth in Sections 7
and 11 and except that the provisions of Sections 8 and 9 shall not
terminate and shall remain in effect. As used in this Agreement, the term
"Underwriter" includes, for all purposes of this Agreement unless the
context otherwise requires, any party not listed in Schedule I hereto who,
pursuant to this Section 6, purchases Firm Shares or Option Shares which a
defaulting Underwriter agreed but failed to purchase.
(b) Nothing contained herein shall relieve a defaulting Underwriter of
any liability it may have for damages caused by its default. If other
underwriters are obligated or agree to purchase the Firm Shares or Option
Shares of a defaulting Underwriter, either the Representatives or the
Company may postpone the Closing Date for up to five full business days in
order to effect any changes that in the opinion of counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus
or in any other document or agreement, and the Company agrees to file
promptly any amendment or supplement to the Registration Statement or the
Prospectus that effects any such changes.
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7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If (a) the Company shall fail to
tender the Shares for delivery to the Underwriters for any reason permitted
under this Agreement or (b) the Underwriters shall decline to purchase the
Shares for any reason permitted under this Agreement, the Company shall
reimburse the Underwriters for the fees and expenses of their counsel and for
such other out-of-pocket expenses as shall have been reasonably incurred by them
in connection with this Agreement and the proposed purchase of the Shares, and
upon demand the Company shall pay the full amount thereof to the
Representatives. If this Agreement is terminated pursuant to Section 6 by reason
of the default of one or more Underwriters, the Company shall not be obligated
to reimburse any defaulting Underwriter on account of those expenses.
8. INDEMNIFICATION.
(a) The Company shall indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of the
Securities Act (collectively referred to for the purposes of this Section 8
and Section 9 as the Underwriter) against any loss, claim, damage or
liability, joint or several, or any action in thereof, to which that
Underwriter may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of or
is based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto or
(ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and shall reimburse each Underwriter for any legal or other
expenses incurred by that Underwriter in connection with investigating
or preparing to defend or defending against or appearing as a third party
witness in connection with any such loss, claim, damage, liability or
action as such expenses are incurred; provided however, that the Company
shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action, arises out of or is based upon an
untrue statement or alleged untrue statement in or omission or alleged
omission from any Preliminary Prospectus, the Registration Statement or the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for use
therein.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, each of its directors, each officer of the
Company who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of the Securities Act (collectively
referred to for the purposes of this Section 8 and Section 9 as the
Company), against any loss claim, damage or liability, joint or several, or
any action in respect thereof, to which the Company may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of or is based upon (i) any untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, but in each case only to the
extent that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or on
behalf of that Underwriter specifically for use therein, and shall
reimburse the Company for any legal or other expenses reasonably incurred
by the Company in connection with investigating
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or preparing to defend or defending against or appearing as third party
witness in connection with any such loss, claim, damage, liability or
action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided however,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have under this Section 8 except to the extent
it has been materially prejudiced by such failure; and, provided, further,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have to an indemnified party otherwise than
under this Section 8. If any such claim or action shall be brought against
an indemnified party, and it shall notify the indemnifying party thereof,
the indemnifying party shall be entitled to participate therein and, to the
extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying
party to the indemnified party of its election to assume the defense of
such claim or action, the indemnifying party shall not be liable to the
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided
however, that the Representatives shall have the right to employ counsel to
represent jointly the Representatives and those other Underwriters and
their respective controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Underwriters against the Company under this Section 8 if, in the reasonable
judgment of the Representatives, it is advisable for the Representatives
and those Underwriters and controlling persons to be jointly represented by
separate counsel, and in that event the fees and expenses of such separate
counsel shall be paid by the Company. Each indemnified party, as a
condition of the indemnity agreements contained in Sections 8(a) and 8(b),
shall use all reasonable efforts to cooperate with the indemnifying party
in the defense of any such action or claim. No indemnifying party shall be
liable for any settlement of any such action effected without its written
consent (which consent shall not be unreasonably withheld), but if settled
with its written consent or if there be a final judgment of the plaintiff
in any such action, the indemnifying party, agrees to indemnify and hold
harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment.
The obligations of the Company and the Underwriters in this Section
8 and in Section 9 are in addition to any other liability which the Company or
the Underwriters, as the case may be, may otherwise have.
9. CONTRIBUTION. If the indemnification provided for in Section 8 is
unavailable or insufficient to hold harmless an indemnified party under Section
8(a) or (b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other form the offering of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and the
Underwriters on the other with respect to the statements or omissions which
resulted in such loss,
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claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other with respect to such offering
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the Shares purchased under this Agreement (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters with respect to the Shares purchased
under this Agreement, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters on the
other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 9 were to be determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section 9
shall be deemed to include, for purposes of this Section 9, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 9, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public less
the amount of any damages which such Underwriter has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 9 are several in proportion to their respective underwriting
obligations and not joint.
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10. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure to
the benefit of and be binding upon the Underwriters, the Company, and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 8 and 9
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision contained
herein.
11. EXPENSES. The Company agrees with the Underwriters to pay (a) the costs
incident to the authorization, issuance, sale, preparation and delivery of the
Shares and any taxes payable in that connection; (b) the costs incident to the
preparation, printing and filing under the Securities Act of the Registration
Statement and any amendments and exhibits thereto; (c) the costs of distributing
the Registration Statement as originally filed and each amendment thereto and
any post-effective amendments thereof (including, in each ease, exhibits), any
Preliminary Prospectus, the Prospectus and any amendment or supplement to the
Prospectus, all as provided in this Agreement; (d) the costs of printing,
reproducing and distributing this Agreement and any other underwriting and
selling group documents by mail, telex or other means of communications; (e) the
costs and expenses incident to the furnishing to you and the Underwriters of the
reports and information referred to in paragraph (g) of Section 4 (Exchange Act
reports); (f) the filing fees incident to securing any required review by the
National Association of Securities Dealers, Inc. of the terms of sale of the
Shares; (g) any applicable listing or other fees; (h) the fees and expenses of
qualifying the Shares under the securities laws of the several jurisdictions as
provided in paragraph (h) of Section 4 and of preparing, printing and
distributing Blue Sky Memoranda (including related fees and expenses of counsel
to the Underwriters); and (i) all other costs and expenses incident to the
performance of the obligations of the Company under this Agreement; provided
that, except as otherwise provided in this Section 11 and in Section 7, the
Underwriters shall pay their own costs and expenses, including the costs and
expenses of their counsel, any transfer taxes on the Shares which they may sell
and the expenses of advertising any offering of the Shares made by the
Underwriters.
12. SURVIVAL. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company and the Underwriters
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Shares and shall remain in full force and effect, regardless of any termination
or cancellation of this Agreement or any investigation made by or on behalf of
any of them or any person controlling any of them.
13. NOTICES, ETC. All statements, requests, notices and agreements hereunder
shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to Chase Securities Inc., 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention:[______________];
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to thc address of the Company set forth in the
Registration Statement, Attention:[__________]:
provided however, that any notice to an Underwriter pursuant to Section 7(b)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt
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thereof. The Company shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Underwriters by the
Representatives.
14. DEFINITIONS OF CERTAIN TERMS. For purposes of this Agreement, (a)
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading and (b) "subsidiary" has the meaning set forth in Rule 405 of the
Rules and Regulations.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
17. HEADINGS. The headings herein are inserted for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
If the foregoing is in accordance with your understanding of the
agreement between the Company and the several Underwriters, kindly indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
TELECOMMUNICATION SYSTEMS, INC.
By
----------------------------
Name:
Title:
Accepted:
CHASE SECURITIES INC.
DEUTSCHE BANK SECURITIES INC.
XXXXXXX XXXXX XXXXXX INC.
By Chase Securities Inc.
By
--------------------------------
Authorized Signatory
For themselves and the other Underwriters
21
22
SCHEDULE I
Underwriters Firm Shares to be
------------ Purchased
---------
Chase Securities Inc.........................$
Deutsche Bank Securities Inc...............
Xxxxxxx Xxxxx Xxxxxx Inc...................
---------------
$
==============
Total.......................................
