EXHIBIT 1.1
ULTICOM, INC.
Common Stock
Form of
UNDERWRITING AGREEMENT
----------------------
March __, 2000
Xxxxxx Brothers Inc.
Chase Securities Inc.
U.S. Bancorp Xxxxx Xxxxxxx Inc.
Fidelity Capital markets,
a division of National Financial
Services Corporation
As Representatives of the
several Underwriters named in Schedule 1,
c/x XXXXXX BROTHERS INC.
Three World Financial Center
Xxx Xxxx, XX 00000
Dear Sirs:
Ulticom, Inc., a New Jersey corporation (the "Company"), proposes to
sell _________ shares (the "Firm Stock") of the Company's Common Stock, no par
value (the "Common Stock"). In addition, the Company proposes to grant to the
Underwriters named in Schedule 1 hereto (the "Underwriters") an option to
purchase up to an additional _______ shares of the Common Stock on the terms and
for the purposes set forth in Section 2 (the "Option Stock"). The Firm Stock
and the Option Stock, if purchased, are hereinafter collectively called the
"Stock." This is to confirm the agreement concerning the purchase of the Stock
from the Company by the Underwriters.
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-1, and amendments thereto,
with respect to the Stock have (i) been prepared by the Company in
conformity with the requirements of the United States Securities Act
of 1933, as amended (the "Securities Act") and the rules and
regulations (the "Rule and Regulations") of the United States
Securities and Exchange Commission (the "Commission") thereunder, (ii)
been filed with the Commission under the Securities Act and (iii)
become effective under the Securities Act. Copies of such
registration statement and all amendments thereto have been delivered
by the Company to you as the representatives (the "Representatives")
of the Underwriters. As used in this Agreement, "Effective Time"
means the date and the time as of which such registration statement,
or the most recent post-effective amendment thereto, if any,
was declared effective by the Commission; "Effective Date" means the
date of the Effective Time; "Preliminary Prospectus" means each
prospectus included in such registration statement, or amendments
thereof, before it became effective under the Securities Act and any
prospectus filed with the Commission by the Company with the consent
of the Representatives pursuant to Rule 424(a) of the Rules and
Regulations; "Registration Statement" means such registration
statement, as amended at the Effective Time, including all information
contained in the final prospectus filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations in accordance with Section
5(a) hereof and deemed to be a part of the Registration Statement as
of the Effective Time pursuant to paragraph (b) of Rule 430A of the
Rules and Regulations; and "Prospectus" means such final prospectus,
as first filed with the Commission pursuant to paragraph (1) or (4) of
Rule 424(b) of the Rules and Regulations. The Commission has not
issued any order preventing or suspending the use of any Preliminary
Prospectus.
(b) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or
the Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to
the requirements of the Securities Act and the Rules and Regulations
and do not and will not, as of the applicable Effective Date (as to
the Registration Statement and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
that no representation or warranty is made as to information contained
in or omitted from the Registration Statement or the Prospectus 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 inclusion therein, it being understood
that the only information so furnished is specified in Section 9(e).
(c) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of New Jersey, 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 (except where the failure to be so qualified or in
good standing would not have, individually or in the aggregate, a
material adverse effect on the business, properties, financial
condition, stockholders' equity or results of operations of the
Company (a "Material Adverse Effect")), and has all corporate power
and authority necessary to own or hold its properties and to conduct
the business in which it is engaged. [Ulticom Europe SA ("Ulticom
Europe") is the only subsidiary of the Company and is neither a
"significant subsidiary" as that term is defined in Rule 405 of the
Rules and Regulations nor has it conducted any material business
operations.]
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(d) The Company has the authorized capitalization as 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 conform to the description thereof
contained in the Prospectus.
(e) The shares of the Stock to be issued and sold by the Company
to the Underwriters have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and non-assessable; and the
Stock will conform to the description thereof contained in the
Prospectus under the caption "Description of Securities--Common
Stock."
(f) Upon payment for and delivery of the Stock to be sold by the
Company pursuant to this Agreement, the Underwriters, or other persons
in whose names the Stock is registered will acquire good and valid
title to such Stock, in each case free and clear of all liens,
encumbrances, equities, preemptive rights and other claims.
(g) This Agreement has been duly authorized, executed and
delivered by the Company; and (assuming the due authorization,
execution and delivery thereof by the other parties thereto)
constitutes the legal, valid and binding obligation of the Company,
enforceable against it in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) or an implied
covenant of good faith and fair dealing, except that any rights or
indemnification or contribution under this Agreement may be limited by
the laws of the State of New York, the federal laws of the United
States or public policy relating thereto.
(h) The execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions contemplated
hereby and the _______-for-________ stock split described in the
Prospectus under the caption "Prospectus Summary" (such stock split is
herein call the "Recapitalization") did not and will not conflict with
or result in a breach or violation of any of the terms or provisions
of, or constitute a default under, 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 order, rule or regulation
of any court or governmental agency or body having jurisdiction over
the Company or any of its properties or assets; and except for the
registration of the Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act of 1934, as amended (the
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"Exchange Act"), and applicable state securities laws in connection
with the purchase and distribution of the Stock by the Underwriters,
no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental 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 by the Recapitalization.
(i) Except as described in the Prospectus and in the Registration
Rights Agreement, dated [February __,] 2000, by and among the Company
and Comverse Technology, Inc. ("Comverse"), there are no contracts,
agreements or understandings between the Company and any person
granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
the Company under the Securities Act. The holders of outstanding
shares of the Company's capital stock are not entitled to preemptive
or other rights to subscribe for the Stock. Except for (i) the
options to purchase from the Company __________ shares of the Common
Stock in the aggregate (after giving effect to the Recapitalization)
granted to officers, directors and employees of the Company under the
Company's 1998 Stock Incentive Compensation Plan (the "1998 Plan") and
(ii) the options to purchase from the Company, shares of the Common
Stock in the aggregate (after giving effect to the Recapitalization)
to be granted to officers, directors and employees of the Company
under the 1998 Plan upon completion of the offering, no options,
warrants or other rights to purchase from the Company, agreements or
other obligations of the Company to issue, or rights to convert any
obligations of the Company into or exchange any securities of the
Company for, shares of capital stock of or ownership interests in the
Company are outstanding.
(j) The Company has not sold or issued any shares of Common Stock
during the six-month period preceding the date of the Prospectus,
including any sales pursuant to Rule 144A under, or Regulations D or S
of, the Securities Act, other than shares issued pursuant to the 1998
Plan or pursuant to outstanding options or rights granted under the
1998 Plan.
(k) The Company has not sustained, since the date of the latest
audited financial statements included in the Prospectus, any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since such
date, other than the Recapitalization, there has not been any material
change in the capital stock or long-term debt of the Company or any
material adverse change, or any development involving a prospective
material adverse
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change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the
Company, otherwise than as set forth or contemplated in the
Prospectus.
(l) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or
included in the Prospectus present fairly in all material respects the
financial condition and results of operations of the Company, 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.
(m) Deloitte & Touche LLP, who have certified certain financial
statements of the Company, whose report appears in the Prospectus and
who have delivered the initial letter referred to in Section 8(g)
hereof, are independent public accountants as required by the
Securities Act and the Rules and Regulations.
(n) The Company does not own any real property; and the Company
has good and marketable title to all material personal property owned
by it, free and clear of all liens, encumbrances and defects, except
such as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such
property by the Company. All real property and buildings held under
lease by the Company are held by it under valid, subsisting and
enforceable leases, with such exceptions as are not material and do
not interfere with the use made and proposed to be made of such
property and buildings by the Company.
(o) The Company carries, or is covered by, insurance in such
amounts and covering such risks as is adequate for the conduct of its
business and the value of its properties and as is customary for
companies engaged in similar businesses in similar industries.
(p) Except as described in the Prospectus, the Company owns or
possesses adequate rights to use all material patents and trademarks,
including all applications therefor, copyrights and licenses necessary
for the conduct of its business as now conducted [or as proposed to be
conducted as described in the Prospectus]; and the Company 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, except where such conflict would not have a
Material Adverse Effect.
(q) 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, if determined adversely to the Company,
might have a Material Adverse Effect; and to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
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(r) 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 which have not been described in the Prospectus or filed
as exhibits to the Registration Statement.
(s) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
which is required to be described in the Prospectus which is not so
described.
(t) No labor disturbance by the employees of the Company exists
or, to the knowledge of the Company, is imminent which might be
expected to have a Material Adverse Effect.
(u) The Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); and no "reportable
event" (as defined in ERISA) has occurred with respect to any "pension
plan" (as defined in ERISA) for which the Company would have any
liability. The Company has not incurred and does not expect to incur
liability under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of
the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "Code"); and
each "pension plan" 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 would cause the loss of
such qualification.
(v) The Company has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof
and, to its knowledge, has paid all taxes due thereon, and no tax
deficiency has been determined adversely to the Company which has had
(nor does the Company have any knowledge of any tax deficiency which,
if determined adversely to the Company, might have) a Material Adverse
Effect.
(w) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed in the Prospectus, the Company has not (i) issued or granted
any securities, (ii) incurred any material liability or obligation,
direct or contingent, other than liabilities and obligations which
were incurred in the ordinary course of business, (iii) entered into
any material transaction not in the ordinary course of business or
(iv) declared or paid any dividend on its capital stock.
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(x) The Company (i) makes and keeps accurate books and records
and (ii) maintains internal accounting controls which provide
reasonable assurance that (A) transactions are executed in accordance
with management's authorization, (B) transactions are recorded as
necessary to permit preparation of its financial statements and to
maintain accountability for its assets, (C) access to its assets is
permitted only in accordance with management's authorization and (D)
the reported assets of the Company set forth in its books and records
are compared with existing assets at reasonable intervals.
(y) The Company is not (i) in violation of its charter or by-
laws, (ii) in default, and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained
in 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 properties or assets is subject, except where
such default would not have a Material Adverse Effect or (iii) in
violation of any law, ordinance, governmental rule, regulation or
court decree to which it or its property or assets may be subject,
except where such default would not have a Material Adverse Effect.
The Company has not failed to obtain any license, permit, certificate,
franchise or other governmental authorization or permit necessary to
the ownership of its property or to the conduct of its business,
except where such default would not have a Material Adverse Effect.
(z) Neither the Company nor any director, officer, agent,
employee or other person associated with or acting on behalf of the
Company, has (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating
to political activity; (ii) made any direct or indirect unlawful
payment to any foreign or domestic government official or employee
from corporate funds; (iii) violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or (iv) made
any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(aa) The Company is not an "investment company" within the
meaning of such term under the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission thereunder.
(bb) There are no contracts, agreements or understandings between
the Company and any person that would give rise to a valid claim
against the Company or any Underwriter for a brokerage commission,
finder's fee or other like payment in connection with this offering.
(cc) Except as described in the Prospectus, all of the current
versions of the Company's products will record, store, process,
calculate and present calendar dates falling after January 1, 2000,
and will calculate any information dependent on or relating to such
dates in the same manner, and with the same functionality, data
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integrity and performance, as the products recorded, stored,
processed, calculated and presented calendar dates on or before
December 31, 1999, or calculated any information dependent on or
relating to such dates (herein collectively called "Year 2000
Compliant"). The Company has not experienced any material Year 2000
Compliance problems with the current versions of its products.
2. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell _______ shares of the
Firm Stock to the several Underwriters and each of the Underwriters, severally
and not jointly, agrees to purchase the number of shares of the Firm Stock set
opposite that Underwriter's name in Schedule 1 hereto. The respective purchase
obligations of the Underwriters with respect to the Firm Stock shall be rounded
among the Underwriters to avoid fractional shares, as the Representatives may
determine.
In addition, the Company grants to the Underwriters an option to
purchase up to _______ shares of Option Stock. Such option is granted for the
purpose of covering over-allotments in the sale of Firm Stock and is exercisable
as provided in Section 4 hereof. Shares of Option Stock shall be purchased
severally for the account of the Underwriters in proportion to the number of
shares of Firm Stock set opposite the name of such Underwriters in Schedule 1
hereto. The respective purchase obligations of each Underwriter with respect to
the Option Stock shall be adjusted by the Representatives so that no Underwriter
shall be obligated to purchase Option Stock other than in 100 share amounts.
The price of both the Firm Stock and any Option Stock shall be $_____ per share.
The Company shall not be obligated to deliver any of the Stock to be
delivered on any Delivery Date (as hereinafter defined), as the case may be,
except upon payment for all the Stock to be purchased on such Delivery Date as
provided herein.
3. Offering of Stock by the Underwriters.
Upon authorization by the Representatives of the release of the Firm
Stock, the several Underwriters propose to offer the Firm Stock for sale upon
the terms and conditions set forth in the Prospectus.
It is understood that approximately _______ shares of the Firm Stock
("Directed Shares") will initially be reserved by the Underwriters for offer and
sale to employees and persons having business relationships with the Company
and/or Comverse ("Directed Share Participants") upon the terms and conditions
set forth in the Prospectus (the "Directed Share Program") and in accordance
with the rules and regulations of the National Association of Securities
Dealers, Inc. ("NASD"), and that any allocation of such Directed Shares among
such persons will be made in accordance with timely directions received by
Xxxxxx Brothers Inc. from the Company. Under no circumstances will Xxxxxx
Brothers Inc. or any Underwriter be liable to the Company, Comverse or to any
Directed Share Participant for any action taken or omitted to be taken in good
faith in connection with such Directed Share Program. To the extent that any
Directed Shares are not affirmatively reconfirmed for purchase by any Directed
Share
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Participant on or immediately after the date of this Agreement, such Directed
Shares may be offered to the public as part of the public offering contemplated
hereby.
The Company agrees to pay all fees and disbursements incurred by the
Underwriters in connection with the Directed Share Program, including counsel
fees and any stamp duties or other taxes incurred by the Underwriters in
connection with the Directed Share Program.
In connection with the offer and sale of the Directed Shares, the
Company shall, promptly upon a request in writing, indemnify and hold harmless
Xxxxxx Brothers Inc. and the other Underwriters from and against any loss,
claim, damage, expense, liability or action which (i) arises out of, or is based
upon, any untrue statement or alleged untrue statement of a material fact
contained in any material prepared by or with the approval of the Company for
distribution to Directed Share Participants in connection with the Directed
Share Program or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (ii) arises out of the failure of the Directed Share Participant
to pay for and accept delivery of Directed Shares that the Directed Share
Participant agreed to purchase or (iii) is otherwise related to the Directed
Share Program, other than losses, finally judicially determined to have resulted
directly from the bad faith or gross negligence of Xxxxxx Brothers Inc.
4. Delivery of and Payment for the Stock. Delivery of and payment
for the Firm Stock shall be made at the office of Xxxxxxxxxx & Xxxxx LLP, 00
Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 A.M., New York City time,
on the fourth full business day following the date of this Agreement or at such
other date or place as shall be determined by agreement between the
Representatives and the Company. This date and time are sometimes referred to
as the "First Delivery Date." On the First Delivery Date, the Company shall
deliver or cause to be delivered certificates representing the Firm Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire transfer in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Firm Stock shall
be registered in such names and in such denominations as the Representatives
shall request in writing not less than two full business days prior to the First
Delivery Date. For the purpose of expediting the checking and packaging of the
certificates for the Firm Stock, the Company shall make the certificates
representing the Firm Stock available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the First Delivery Date.
The option granted in Section 2 will expire 30 days after the date of
this Agreement and may be exercised in whole or in part from time to time by
written notice being given to the Company by the Representatives. Such notice
shall set forth the aggregate number of shares of Option Stock as to which the
option is being exercised, the names in which the shares of Option Stock are to
be registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
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shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are sometimes referred to as a "Second Delivery Date" and the First Delivery
Date and any Second Delivery Date are sometimes each referred to as a "Delivery
Date".
Delivery of and payment for the Option Stock shall be made at the
place specified in the first sentence of the first paragraph of this Section 4
(or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New York City time, on such
Second Delivery Date. On such Second Delivery Date, the Company shall deliver
or cause to be delivered the certificates representing the Option Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire transfer in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Option Stock shall
be registered in such names and in such denominations as the Representatives
shall request in the aforesaid written notice. For the purpose of expediting
the checking and packaging of the certificates for the Option Stock, the Company
shall make the certificates representing the Option Stock available for
inspection by the Representatives in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to such Second Delivery
Date.
5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than the Commission's close of
business on the second business day following the execution and
delivery of this Agreement or, if applicable, such earlier time as may
be required by Rule 430A(a)(3) under the Securities Act; to make no
further amendment or any supplement to the Registration Statement or
to the Prospectus except as permitted herein; to advise the
Representatives, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed
or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish the Representatives
with copies thereof; to advise the Representatives, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Stock for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its
withdrawal.
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(b) To furnish promptly to each of the Representatives and to
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.
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request:
(i) conformed copies of the Registration Statement as originally filed
with the 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 and, if the delivery of a
prospectus is required at any time after the Effective Time in
connection with the offering or sale of the Stock 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 to amend
or supplement the Prospectus in order to comply with the Securities
Act, to notify the Representatives and, upon their request, to file
such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended
or supplemented Prospectus which will correct such statement or
omission or effect such compliance.
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the
Representatives, be required by the Securities Act or requested by the
Commission.
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any
Prospectus pursuant to Rule 424 of the Rules and Regulations, to
furnish a copy thereof to the Representatives and counsel for the
Underwriters and obtain the consent of the Representatives to the
filing.
(f) As soon as practicable after the Effective Date (but in no
event later than 45 days after the first anniversary of the end of the
fiscal quarter following the effective date of the Registration
Statement, or 90 days if such period is a fiscal year), to make
generally available to the Company's security holders and to deliver
to the Representatives an earnings statement of the Company (which
need not be audited) complying with Section 11(a) of the Securities
Act and the Rules and Regulations (including, at the option of the
Company, Rule 158).
(g) For a period of three years following the Effective Date, to
furnish to the Representatives copies of all materials furnished by
the Company to its
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shareholders and all public reports and all reports and financial
statements furnished by the Company to the Nasdaq National Market or
to any national securities exchange upon which the Common Stock may be
listed pursuant to requirements of or agreements with such exchange,
or 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 Stock 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 Stock; 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 date of the Prospectus, not
to, directly or indirectly, (1) offer for sale, sell, pledge or
otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition by any
person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock (other
than the Stock and shares issued pursuant to the 1998 Plan, the
Company's 2000 Employer Stock Purchase Plan or pursuant to currently
outstanding options, warrants or rights), or sell or grant options,
rights or warrants with respect to any shares of Common Stock or
securities convertible into or exchangeable for Common Stock (other
than the grant of options pursuant to the 1998 Plan), or (2) enter
into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of
ownership of such shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, in each case
without the prior written consent of Xxxxxx Brothers Inc.; and to
cause each officer, director, shareholder of the Company (other than
Comverse) and each Directed Share Participant to furnish to the
Representatives, prior to the First Delivery Date, a letter or
letters, in form and substance satisfactory to counsel for the
Underwriters, pursuant to which each such person shall agree not to,
directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed
to, or could be expected to, result in the disposition by any person
at any time in the future of) any shares of Common Stock or securities
convertible into or exchangeable for Common Stock or (2) enter into
any swap or other derivatives transaction that transfers to another,
in whole or in part, any of the economic benefits or risks of
ownership of such shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, in each case
for a period of 180 days (or 90 days with respect to those persons who
receives Stock under the Directed Share Program, except for those
12
otherwise subject to the 180-day lock-up) from the date of the
Prospectus, without the prior written consent of Xxxxxx Brothers Inc.
(j) Prior to the Effective Date, to apply for the inclusion of
the Stock on the Nasdaq National Market System and to use its best
efforts to effect that quotation, subject only to official notice of
issuance prior to the First Delivery Date.
(k) To apply the net proceeds from the sale of the Stock as set
forth in the Prospectus under the caption "Use of Proceeds."
(l) To take such steps as shall be necessary to ensure that the
Company shall not become an "investment company" within the meaning of
such term under the Investment Company Act of 1940 and the rules and
regulations of the Commission thereunder.
(m) In connection with the Directed Share Program, to ensure in
accordance with the Conduct Rules of the NASD that the Directed Shares
are not sold, transferred, assigned, pledged or hypothecated for a
period of 90 days following the Effective Date and to direct the
transfer agent that transfer restrictions be placed on the stock
certificates of the Participants in the Directed Share Program
identified by Xxxxxx Brothers Inc. as needing to be so restricted.
(n) To comply with all applicable securities and other applicable
laws, rules and regulations in each foreign jurisdiction in which the
Directed Shares are offered in connection with the Directed Share
Program.
6. Agreements of Comverse. Comverse agrees, for a period of 180 days
from the date of the Prospectus, not to, directly or indirectly, (1) offer for
sale, sell, pledge or otherwise dispose of (or enter into any transaction or
device which is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock or (2) enter into
any swap or other derivatives transaction that transfers to another, in whole or
in part, any of the economic benefits or risks of ownership of such shares of
Common Stock, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case without the prior written consent of Xxxxxx Brothers
Inc.
7. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock 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 case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, all as provided in
this Agreement; (d) the filing fees incident to securing any required review by
the NASD of the terms
13
of sale of the Stock; (e) any applicable listing or other fees; (f) the fees and
expenses of qualifying the Stock under the securities laws of the several
jurisdictions as provided in Section 5(h) (including filing fees and the fees
and expenses of counsel for the Underwriters relating to such registration and
qualification); and (g) all other costs and expenses incident to the performance
of the obligations of the Company under this Agreement; provided that, except as
provided in this Section 7 and in Section 12, the Underwriters shall pay their
own costs and expenses, including the costs and expenses of their counsel, their
own costs and expenses associated with the road shows and the expenses of
advertising any offering of the Stock made by the Underwriters.
8. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
contained herein, to the performance by the Company and Comverse of their
respective obligations hereunder, and to each of the following additional terms
and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 5(a); no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose 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.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration
Statement or the Prospectus or any amendment or supplement thereto
contains an untrue statement of a fact which, in the reasonable
opinion of Xxxxxxxxxx & Xxxxx LLP, counsel for the Underwriters, is
material or omits to state a fact which, in the reasonable opinion of
such counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Stock, 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 furnished to such
counsel all documents and information that they may reasonably request
to enable them to pass upon such matters.
(d) Weil, Gotshal & Xxxxxx LLP shall have furnished to the
Representatives its written opinion, as counsel to the Company,
addressed to the Underwriters and dated such Delivery Date, in form
and substance reasonably satisfactory to the Representatives, to the
effect that:
14
(i) the Company is duly qualified to transact business
and is in good standing as a foreign corporation in each
jurisdiction identified in such opinion; [and Ulticom Europe is
the only subsidiary of the Company and is neither a "significant
subsidiary" as that term is defined in Rule 405 of the Rules and
Regulations nor has it conducted any material business
operations];
(ii) the Registration Statement has become effective
under the Securities Act, and such counsel is not aware of any
stop order suspending the effectiveness of the Registration
Statement. To such counsel's knowledge, no proceedings therefor
have been initiated or overtly threatened by the Commission and
any required filing of the Prospectus and any supplement thereto
pursuant to Rule 424(b) under the Securities Act has been made in
the manner and within the time period required by such rule;
(iii) the Registration Statement at the time it became
effective and the Prospectus and any further amendments or
supplements thereto made by the Company prior to such Delivery
Date (except for the financial statements and notes thereto and
other financial and accounting data included in the Registration
Statement or Prospectus, 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;
(iv) the statements contained in the Prospectus under
the captions "United States Federal Tax Considerations For Non-
United States Holders" and "Shares Eligible for Future Sale", in
each case insofar as such statements constitute summaries of
federal statutes, rules and regulations referred to therein,
fairly present the information called for with respect to such
federal statutes, rules and regulations and fairly summarize the
matters referred to therein in all material respects; and
(v) the execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions
contemplated hereby and the Recapitalization did not and will not
conflict with or result in a breach or violation of any of the
terms or provisions of, or any federal or New York statute or any
order, rule or regulation known to such counsel of any federal or
New York court or governmental agency or body having jurisdiction
over the Company or any of its properties or assets; and except
for the registration of the Stock under the Securities Act and
such consents, approvals, authorizations, 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 Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is required
for the
15
execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated
hereby and by the Recapitalization.
In rendering such opinion, such counsel may state that its opinion is
limited to matters governed by the Federal laws of the United States
of America and the laws of the State of New York, and in respect of
matters of fact, upon certificates of officers of the Company,
provided that such certificates are appended to the opinion being
delivered hereunder. Such counsel shall also have furnished to the
Representatives a written statement, addressed to the Underwriters and
dated such Delivery Date, in form and substance satisfactory to the
Representatives, to the effect that (x) such counsel has acted as
counsel to the Company in connection with the preparation of the
Registration Statement, and (y) based on the foregoing, no facts have
come to the attention of such counsel which lead it to believe that
the Registration Statement, as of the Effective Date, contained any
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Prospectus 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 light of the circumstances under which they
were made, not misleading. The foregoing opinion and statement may be
qualified by a statement to the effect that such counsel does not
assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement or the
Prospectus except for the statements made in the Prospectus under the
captions "United States Federal Tax Considerations For Non-United
States Holders" and "Shares Eligible for Future Sale", insofar as such
statements relate to the Stock and concern legal matters.
(e) Xxxxx Cummis Radin Tischman Xxxxxxx & Xxxxx, P.A. shall have
furnished to the Representatives its written opinion, as New Jersey
counsel to the Company, addressed to the Underwriters and dated such
Delivery 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 the State of New Jersey, and has all corporate power and
authority under New Jersey law necessary to own or hold its
properties and to conduct the business in which it is engaged;
(ii) the Company has the authorized capitalization as
set forth in the Prospectus, and all of the shares of Stock being
delivered on such Delivery Date) have been duly and validly
authorized and issued, are fully paid and non-assessable and
conform to the description thereof contained in
16
the Prospectus under the caption "Description of Securities -
Common Stock";
(iii) there are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the voting
or transfer of, any shares of the Stock pursuant to the Company's
charter or by-laws or any agreement or other instrument known to
such counsel;
(iv) this Agreement has been duly authorized, executed
and delivered by the Company; and (assuming the due
authorization, execution and delivery thereof by the other
parties thereto) constitutes the legal, valid and binding
obligation of the Company, enforceable against it in accordance
with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) or an implied covenant of good
faith and fair dealing, except that any rights or indemnification
or contribution under this Agreement may be limited by the laws
of the State of New York, the federal laws of the United States
or the or public policy relating thereto;
(v) the execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions
contemplated hereby and the Recapitalization did not and will not
conflict with or result in a violation of the provisions of the
charter or by-laws of the Company or any New Jersey statute or
any order, rule or regulation know to such counsel of any New
Jersey court or governmental agency or body having jurisdiction
over the Company or any of its properties or assets; and no
consent, approval, authorization or order of, or filing or
registration with, any such court or governmental 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 by the recapitalization;
(vi) all real property and buildings held under lease by
the Company are held by it under valid, subsisting and
enforceable leases, with such exceptions as are not material and
do not interfere with the use made and proposed to be made of
such property and buildings by the Company;
(vii) the statements contained in the Prospectus under
the captions "Risk Factors - certain provisions of our
certificate of incorporation and New Jersey law may have the
effect of discouraging, delaying or preventing a change in
control" and "Description of Securities", insofar as such
statements relate to the law of the State of New Jersey,
constitute a fair summary thereof in all material respects.
17
(f) Xxxxxxx X. Xxxxx shall have furnished to the Representatives
a written opinion[, as special counsel to the Company], addressed to
the Underwriters and dated such Delivery Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that:
(i) the execution delivery and performance of the
Agreement by the Company and the consummation of the transactions
contemplated hereby and the Recapitalization did not and will not
conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel 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;
(ii) to the best of such counsel's knowledge, 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, if determined adversely to the Company, might
have a Material Adverse Effect; and, to the best of such
counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(iii) to the best of such counsel's knowledge, 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 which have not been so described or filed as exhibits
to the Registration Statement; and
(iv) except as described in the Prospectus and in the
Registration Rights Agreement, dated February __, 2000, by and
among the Company and Comverse, 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 file a registration statement under the
Securities Act with respect to any securities of the Company
owned or to be owned by such person or to require the Company to
include such securities in the securities registered pursuant to
the Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Company
under the Securities Act. Except for (i) the options to purchase
from the Company, shares of the Common Stock in the aggregate
(after giving effect to the Recapitalization) granted to
officers, directors and employees under the 1998 Plan and (ii)
the options to purchase from the Company, shares of the Common
Stock in the aggregate (after giving effect to the
Recapitalization) to be granted to officers, directors and
employees under the 1998 Plan upon completion of
18
the offering, no options, warrants or other rights to purchase
from the Company, agreements or other obligations of the Company
to issue, or rights to convert any obligations of the Company
into or exchange any securities of the Company for, shares of
capital stock of or ownership interests in the Company are
outstanding.
(g) the Representatives shall have received from Xxxxxxxxxx &
Xxxxx LLP, counsel for the Underwriters, such opinion or opinions,
dated such Delivery Date, with respect to the issuance and sale of the
Stock, the Registration Statement, the Prospectus and other related
matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.
(h) At the time of execution of this Agreement, the
Representatives shall have received from Deloitte & Touche LLP a
letter, in form and substance satisfactory to the Representatives,
addressed to the Underwriters and dated the date hereof (i) confirming
that they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, (ii) stating, as of the date hereof
(or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is
given in the Prospectus, as of a date not more than five days prior to
the date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily
covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings.
(i) With respect to the letter of Deloitte & Touche LLP referred
to in the preceding paragraph and delivered to the Representatives
concurrently with the execution of this Agreement (the "initial
letter"), the Company shall have furnished to the Representatives a
letter (the "bring-down letter") of such accountants, addressed to the
Underwriters and dated such Delivery Date (i) confirming that they are
independent public accountants within the meaning of the Securities
Act and are in compliance with the applicable requirements relating to
the qualification of accountants under Rule 2-01 of Regulation S-X of
the Commission, (ii) stating, as of the date of the bring-down letter
(or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is
given in the Prospectus, as of a date not more than five days prior to
the date of the bring-down letter), the conclusions and findings of
such firm with respect to the financial information and other matters
covered by the initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letter.
19
(j) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its chief executive officer
and its chief financial officer stating that:
(i) the representations, warranties and agreements of
the Company in Section 1 are true and correct as of such Delivery
Date; the Company has complied with all its agreements contained
herein; and the conditions set forth in Sections 8(a) and 8(k)
have been fulfilled; and
(ii) they have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of the
Effective Date, the Registration Statement and Prospectus 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 (B)
since the Effective Date, no event has occurred which should have
been set forth in a supplement or amendment to the Registration
Statement or the Prospectus which has not been so set forth.
(k) (i) The Company shall not have sustained, since the date of
the latest audited financial statements included in the Prospectus,
any loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus or (ii)
since such date, there shall not have been any change in the capital
stock (other than the Recapitalization) or long-term debt of the
Company or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the
Company, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause
(i) or (ii), 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 Stock being delivered on
such Delivery Date on the terms and in the manner contemplated in the
Prospectus.
(l) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the Nasdaq
National Market or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter
market, (A) shall have been suspended and such suspension makes it, in
the reasonable judgment of the Representatives, impracticable or
inadvisable to proceed with the public offering or delivery of the
Stock being delivered on such Delivery Date on the terms and in the
manner contemplated in the Prospectus, or (B) minimum prices shall
have been established on any such exchange or such market by the
Commission, by such exchange or by any other
20
regulatory body or governmental authority having jurisdiction, (ii) a
banking moratorium shall have been declared by Federal or state
authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities
involving the United States or there shall have been a declaration of
a national emergency or war by the United States or (iv) there shall
have occurred such a material adverse change in general economic,
political or financial conditions (or the effect of international
conditions on the financial markets in the United States shall be
such) as to make it, in the judgment of the Representatives,
impracticable or inadvisable to proceed with the public offering or
delivery of the Stock being delivered on such Delivery Date on the
terms and in the manner contemplated in the Prospectus.
(m) The Nasdaq National Market System shall have approved the
Stock for quotation, subject only to official notice of issuance and
evidence of satisfactory distribution.
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.
9. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter,
its officers and employees and each person, if any, who controls any Underwriter
within the meaning of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of Stock), to which that Underwriter, officer,
employee or controlling person 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 (A) in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto or (B) in
any materials or information provided to investors by, or with the approval of,
the Company in connection with the marketing of the offering of the Stock,
including any roadshow or investor presentations made to investors by the
Company (whether in person or electronically) (the "Marketing Materials"), (ii)
the omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, or in any Marketing Materials, any material fact required to be stated
therein or necessary to make the statements therein not misleading or (iii) any
act or failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Stock or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company shall not be
liable under this clause (iii) to the extent that it is determined in a final
judgment by a court of competent jurisdiction that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to act
undertaken or
21
omitted to be taken by such Underwriter through its gross negligence or willful
misconduct), and shall reimburse each Underwriter and each such officer,
employee or controlling person promptly upon demand for any legal or other
expenses reasonably incurred by that Underwriter, officer, employee or
controlling person in connection with investigating or defending or preparing to
defend against 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, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or in any such amendment or
supplement, in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Company through the Representatives
by or on behalf of any Underwriter specifically for inclusion therein which
information consists solely of the information specified in Section 9(e). The
indemnification agreement set forth in this paragraph 9(a) with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any such losses, claims, damages, liabilities or
expenses purchased the Stock which is the subject thereof (or to the benefit of
any person controlling such Underwriter) if at or prior to the written
confirmation of the sale of such Stock a copy of the Prospectus (or the
Prospectus as amended or supplemented) was not sent or delivered to such person
and the untrue statement or omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus (or in the Prospectus as
amended or supplemented) in any case where such delivery is required by the
Securities Act, unless the failure is the result of noncompliance by the Company
with paragraph 5(a) hereof. The foregoing indemnity agreement is in addition to
any liability which the Company or Comverse may otherwise have to any
Underwriter or to any officer, employee or controlling person of that
Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its officers and employees, each of its directors
(including any person who, with his or her consent, is named in the Registration
Statement as about to become a director of the Company), and each person, if
any, who controls the Company within the meaning of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof, to which the Company or any such director, officer or
controlling person 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 (A) in any Preliminary Prospectus, the Registration Statement or
the Prospectus or in any amendment or supplement thereto, or (B) in any
Marketing Materials or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or in any
amendment or supplement thereto, or in any Marketing Materials, any 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 was made in reliance upon and in conformity
with written information concerning such Underwriter furnished to the Company
through the Representatives by or on behalf of that Underwriter specifically for
inclusion therein, which information consists solely of the information
specified in Section 9(e), and shall reimburse the Company and any such
director, officer or controlling person for any legal or other
22
expenses reasonably incurred by the Company or any such director, officer or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in addition to any
liability which any Underwriter may otherwise have to the Company or any such
director, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this Section
9 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 9, 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 9 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 9.
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 9 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 officers,
employees and 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 9 if, in the reasonable judgment of the
Representatives either (i) there is an actual or potential conflict between the
position of the Company and the Underwriters, (ii) there may be defenses
available to it or them that are different from or additional to those available
to the Company (in any of which events the Company shall not have the right to
direct the defense of such action on behalf of the Representative or
Representatives with respect to such different defenses) or (iii) the Company
has failed to assume to defense of such action and employ counsel reasonably
satisfactory to the Representatives, in any of which events such fees and
expenses shall be borne by the Company. No indemnifying party shall (i) without
the prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) 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 the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party
23
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 9 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 9(a) or 9(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, 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 from
the offering of the Stock 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 hand, with respect to the statements or omissions which resulted in such
loss, 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 Stock purchased under this Agreement (before deducting
expenses) received by the Company on the one hand, and the total underwriting
discounts and commissions received by the Underwriters with respect to the
shares of the Stock purchased under this Agreement on the other hand, bear to
the total gross proceeds from the offering of the shares of the Stock 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 whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Underwriters, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 9(d) 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(d), 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(d), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the shares
of Stock underwritten by it and distributed to the public were offered to the
public exceeds 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(d) are several in proportion to their respective
underwriting obligations and not joint.
24
(e) The Underwriters severally confirm and the Company acknowledges
that (i) the statements with respect to the public offering of the Stock by the
Underwriters set forth on the cover page of, (ii) the statements with respect to
the delivery of the Prospectus set forth on page (i) of the Prospectus, and
(iii) the concession and reallowance figures and the discussion concerning over-
allotments, stabilization and the factors the Representatives will consider in
pricing, all appearing under the caption "Underwriting" in, the Prospectus are
correct and constitute the only information concerning such Underwriters
furnished in writing to the Company by or on behalf of the Underwriters
specifically for inclusion in the Registration Statement and the Prospectus.
10. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining non-
defaulting Underwriters shall be obligated to purchase the Stock which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Stock set
opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total number of shares of the Firm Stock set opposite the
names of all the remaining non-defaulting Underwriters in Schedule 1 hereto;
provided, however, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Stock on such Delivery Date if the total number
of shares of the Stock which the defaulting Underwriter or Underwriters agreed
but failed to purchase on such date exceeds 9.09% of the total number of shares
of the Stock to be purchased on such Delivery Date, and any remaining non-
defaulting Underwriter shall not be obligated to purchase more than 110% of the
number of shares of the Stock which it agreed to purchase on such Delivery Date
pursuant to the terms of Section 2. If the foregoing maximums are exceeded, the
remaining non-defaulting Underwriters, or those other underwriters satisfactory
to the Representatives who so agree, shall have the right, but shall not be
obligated, to purchase, in such proportion as may be agreed upon among them, all
the Stock to be purchased on such Delivery Date. If the remaining Underwriters
or other underwriters satisfactory to the Representatives do not elect to
purchase the shares which the defaulting Underwriter or Underwriters agreed but
failed to purchase on such Delivery Date, this Agreement (or, with respect to
the Second Delivery Date, the obligation of the Underwriters to purchase, and of
the Company to sell, the Option Stock) 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 12. As used in this Agreement, the term "Underwriter"
includes, for all purposes of this Agreement unless the context requires
otherwise, any party not listed in Schedule 1 hereto who, pursuant to this
Section 10, purchases Firm Stock which a defaulting Underwriter agreed but
failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If
other underwriters are obligated or agree to purchase the Stock of a defaulting
or withdrawing Underwriter, either the Representatives or the Company may
postpone the Delivery Date for up to seven full business days in order to effect
any changes that in the opinion of counsel for the Company or counsel for
25
the Underwriters may be necessary in the Registration Statement, the Prospectus
or in any other document or arrangement.
11. Termination. The obligations of the Underwriters hereunder may
be terminated by the Representatives by notice given to and received by the
Company prior to delivery of and payment for the Firm Stock if, prior to that
time, any of the events described in Sections 8(k) or 8(l), shall have occurred
or if the Underwriters shall decline to purchase the Stock for any reason
permitted under this Agreement.
12. Reimbursement of Underwriters' Expenses. If the Company shall
fail to tender the Stock for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company is
not fulfilled, the Company will reimburse the Underwriters for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) incurred by
the Underwriters in connection with this Agreement and the proposed purchase of
the Stock, and upon demand the Company shall pay the full amount thereof to the
Representatives. If this Agreement is terminated pursuant to Section 10 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.
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 Xxxxxx Brothers Inc., Three World
Financial Center, New York, New York 10285, Attention: Syndicate
Department (Fax: 000-000-0000), with a copy, in the case of any notice
pursuant to Section 9(c), to the Director of Litigation, Office of the
General Counsel, Xxxxxx Brothers Inc., 0 Xxxxx Xxxxxxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, XX 00000; and
(b) if to the Company or to Comverse, shall be delivered or sent
by mail, telex or facsimile transmission to the address of the Company
set forth in the Registration Statement, Attention: Xxxxx Xxxxxxx,
President and Chief Executive Officer (Fax: (000) 000-0000), with a
copy to Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX
00000, Attention: Xxxxxxx Xxxxx, Esquire (Fax: (000) 000-0000); and
to Xxxxxxx X. Xxxxx, Esq., c/o Comverse Technology, Inc., 000 Xxxxx
Xxxxxx, Xxx Xxxx, XX 00000 (Fax: (000) 000-0000);
provided, however, that any notice to an Underwriter pursuant to Section 9(c)
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 thereof. The Company shall
be entitled to act and rely upon any
26
request, consent, notice or agreement given or made on behalf of the
Underwriters by Xxxxxx Brothers Inc. on behalf of the Representatives.
14. 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; provided that Section 6 of this Agreement shall be
binding upon Comverse and its successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(A) the representations, warranties, indemnities and agreements of the Company
and Comverse contained in this Agreement shall also be deemed to be for the
benefit of the person or persons, if any, who control any Underwriter within the
meaning of Section 15 of the Securities Act and (B) the indemnity agreement of
the Underwriters contained in Section 9(b) of this Agreement shall be deemed to
be for the benefit of directors of the Company, officers of the Company who have
signed the Registration Statement and any person controlling the Company within
the meaning of Section 15 of the Securities Act. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 14, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
15. Survival. The respective indemnities, representations,
warranties and agreements of the Company, Comverse 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
Stock and shall remain in full force and effect, regardless of any investigation
made by or on behalf of any of them or any person controlling any of them.
16. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
17. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of New York.
18. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
19. 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.
27
If the foregoing correctly sets forth the agreement among the Company,
Comverse and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
ULTICOM, INC.
By
-------------------------------------
Name:
Title:
COMVERSE TECHNOLOGY, INC.
By
-------------------------------------
Name:
Title:
Accepted:
Xxxxxx Brothers Inc.
Chase Securities Inc.
U.S. Bancorp Xxxxx Xxxxxxx Inc.
Fidelity Capital markets,
a division of National Financial
Services Corporation
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By Xxxxxx Brothers Inc.
By
-----------------------------
Authorized Representative
28
