1
EXHIBIT 1.1
DRAFT, 9/22/97
4,000,000 Shares
TRANSCRYPT INTERNATIONAL, INC.
Common Stock
Par Value $.01 Per Share
UNDERWRITING AGREEMENT
____________ __, 0000
Xxxxxx Xxxx LLC
Xxxxxxxxxx Securities
Xxxx Xxxxxxxx Incorporated
As Representatives of the several Underwriters
c/o Xxxxxx Xxxx LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Transcrypt International, Inc., a Delaware corporation (the
"COMPANY"), and the stockholders of the Company named in Schedule B hereto (the
"SELLING STOCKHOLDERS") propose, subject to the terms and conditions stated
herein, to issue and sell, or to sell, as the case may be, to the several
Underwriters named in Schedule A hereto (the "UNDERWRITERS"), for which you are
acting as representatives (the "REPRESENTATIVES"), an aggregate of 4,000,000
shares (the "FIRM SHARES") of Common Stock, par value $.01 per share, of the
Company (the "COMMON STOCK"), including 2,000,000 shares to be sold by the
Company and 2,000,000 shares to be sold by the Selling Stockholders. The
Company and the Selling Stockholders also propose, subject to the terms and
conditions stated herein, to issue and sell, or to sell, as the case may be, to
the Underwriters, at their election, up to an aggregate of 600,000 shares of
Common Stock (the "OPTION SHARES"), including 184,481 shares to be sold by the
Company and 415,519 shares to be sold by the Selling Stockholders. The Firm
Shares and the Option Shares are herein collectively called the "SHARES."
The Company has filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement on Form S-1 (File No.
333-35469) and a related preliminary prospectus for the registration of the
Shares under the Securities Act of 1933, as amended (the "ACT"). The
registration statement, as amended at the time it was declared effective,
including the information (if any) deemed to be part thereof pursuant to Rule
430A under the Act is herein referred to as the "REGISTRATION STATEMENT." The
form of prospectus
2
DRAFT, 9/22/97
first filed by the Company with the Commission pursuant to Rules 424(b) and
430A under the Act is referred to herein as the "PROSPECTUS." Each preliminary
prospectus included in the Registration Statement prior to the time it becomes
effective or filed with the Commission pursuant to Rule 424(a) under the Act is
referred to herein as a "PRELIMINARY PROSPECTUS." Copies of the Registration
Statement, including all exhibits and schedules thereto, any amendments thereto
and all Preliminary Prospectuses have been delivered to you.
The Company and the Selling Stockholders hereby confirm their
respective agreements with respect to the purchase of the Shares by the
Underwriters as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company represents and warrants to, and
agrees with, each of the Underwriters that:
(i) The Registration Statement has been
declared effective under the Act, and no
post-effective amendment to the Registration
Statement has been filed with the Commission as of
the date of this Agreement. No stop order suspending
the effectiveness of the Registration Statement under
the Act has been issued and no proceeding for that
purpose has been instituted or threatened by the
Commission.
(ii) No order preventing or suspending
the use of any Preliminary Prospectus has been issued
by the Commission, and each Preliminary Prospectus,
at the time of filing thereof, conformed in all
material respects to the requirements of the Act and
the rules and regulations of the Commission
promulgated thereunder, and did not contain an untrue
statement of a material fact or omit to state a
material fact required to be stated therein or
necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading; provided, however, the Company makes no
representation or warranty as to information
contained in or omitted in reliance upon, and in
conformity with, written information furnished to the
Company by or on behalf of any Underwriter through
the Representatives expressly for use in the
preparation thereof.
(iii) The Registration Statement conforms,
and the Prospectus and any amendments or supplements
thereto will conform, in all material respects to the
requirements of the Act and the rules and regulations
thereunder. Neither the Registration Statement nor
any amendment thereto, and neither the Prospectus nor
any supplement thereto, contains or will contain, as
the case may be, any untrue statement of a material
-2-
3
DRAFT, 9/22/97
fact or omits or will omit to state any material fact
required to be stated therein or necessary to make
the statements therein, in light of the circumstances
under which they were made, not misleading; provided,
however, that the Company makes no representation or
warranty as to information contained in or omitted
from 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 by or on behalf of any Underwriter
through the Representatives, expressly for use in the
preparation thereof
(iv) The Company has been duly organized,
is validly existing as a corporation in good standing
under the laws' of the State of Delaware, has the
corporate power and authority to own or lease its
properties and conduct its business as described in
the Prospectus, and is duly qualified to transact
business in all jurisdictions in which the conduct of
its business or its ownership or leasing of property
requires such qualification and the failure so to
qualify would have a material adverse effect on the
business or condition (financial or otherwise),
results of operations, stockholders' equity or
prospects of the Company and its subsidiaries, taken
as a whole ("Material Adverse Effect").
(v) Each subsidiary of the Company has
been duly incorporated, is validly existing as a
corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate
power and authority to own or lease its properties
and conduct its business as described in the
Prospectus, and is duly qualified to transact
business in all jurisdictions in which the conduct of
its business or its ownership or leasing of property
requires such qualification and the failure so to
quality would have a Material Adverse Effect. All
outstanding shares of capital stock of each of the
subsidiaries of the Company have been duly authorized
and validly issued, are fully paid and
non-assessable, and are owned, directly or
indirectly, by the Company free and clear of all
liens, encumbrances and security interests. No
options, warrants or other rights to purchase,
agreements or other obligations to issue, or other
rights to convert any obligations into, shares of
capital stock or ownership interests in any of the
subsidiaries of the Company are outstanding.
(vi) The outstanding shares of capital
stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable.
All offers and sales by the Company of outstanding
shares of capital stock and other securities of the
Company, prior to the date hereof, were made in
compliance with the Act and all applicable state
-3-
4
DRAFT, 9/22/97
securities or blue sky laws. The Shares to be issued
and sold by the Company to the Underwriters pursuant
to this Agreement have been duly authorized and, when
issued and paid for as contemplated herein, will be
validly issued, fully paid and nonassessable, free
and clear of all liens, defects or encumbrances.
Except as otherwise stated or described in the
Prospectus, there are no preemptive rights or other
rights to subscribe for or to purchase, or any
restriction upon the voting or transfer of, any
shares of capital stock of the Company pursuant to
the Company's Certificate of Incorporation, Bylaws or
any agreement or other instrument to which the
Company is a party or by which the Company is bound
or of which the Company has knowledge. Neither the
filing of the Registration Statement nor the offering
or the sale of the Shares as contemplated by this
Agreement gives rise to any rights for, or relating
to, the registration of any shares of capital stock
or other securities of the Company, except such
rights which have been validly waived or satisfied.
Except as described in the Prospectus, there are no
outstanding options, warrants or other securities or
any agreements, contracts or other rights to purchase
or acquire from the Company any shares of its capital
stock. The Company has the authorized and
outstanding capital stock as set forth under the
heading "Capitalization" in the Prospectus. The
outstanding capital stock of the Company, including
the Shares, conforms, and the Shares to be issued by
the Company to the Underwriters will conform, to the
description thereof contained in the Prospectus.
(vii) The financial statements, together
with the related notes and schedules as set forth in
the Registration Statement and Prospectus, present
fairly the consolidated financial position, results
of operations and changes in financial position of
the Company and its subsidiaries on the basis stated
in the Registration Statement at the indicated dates
and for the indicated periods. Such financial
statements have been prepared in accordance with
generally accepted accounting principles consistently
applied throughout the periods involved, and all
adjustments necessary for a fair presentation of
results for such periods have been made, except as
otherwise stated therein. The pro forma summary and
selected financial data of the Company included in
the Registration Statement present fairly the
information shown therein on the basis stated in the
Registration Statement and have been compiled on a
basis consistent with the financial statements
presented therein.
(viii) There is no action or proceeding
pending or, to the knowledge of the Company,
threatened or contemplated against the Company or any
of its subsidiaries before any court or
administrative or
-4-
5
DRAFT, 9/22/97
regulatory agency which, if determined adversely to
the Company or any of its subsidiaries, would,
individually or in the aggregate, have a Material
Adverse Effect.
(ix) The Company and its subsidiaries
have good and marketable title to all properties and
assets reflected as owned in the financial statements
hereinabove described (or as described as owned in
the Prospectus), in each case free and clear of all
liens, encumbrances and defects, except such as are
described in the Prospectus or do not materially
affect the value of such properties and assets and do
not materially interfere with the use made and
proposed to be made of such properties and assets by
the Company and its subsidiaries; and any real
property and buildings held under lease by the
Company and its subsidiaries are held by them 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 and its
subsidiaries.
(x) Since the respective dates as of
which information is given in the Registration
Statement, as it may be amended or supplemented, (A)
there has not been any material adverse change, or
any development reasonably likely to result in a
material adverse change, in or affecting the
condition, financial or otherwise, of the Company and
its subsidiaries, taken as a whole, or the business
affairs, management, financial position,
stockholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole,
whether or not occurring in the ordinary course of
business, (B) there has not been any transaction not
in the ordinary course of business entered into by
the Company or any of its subsidiaries which is
material to the Company and its subsidiaries, taken
as a whole, other than transactions described in the
Registration Statement, (C) the Company and its
subsidiaries have not incurred any material
liabilities or obligations, which are not in the
ordinary course of business or which are reasonably
likely to result in a material reduction m the future
earnings of the Company and its subsidiaries taken as
a whole, (D) the Company and its subsidiaries have
not sustained any material loss or interference with
their respective businesses or properties from fire,
flood, windstorm, accident or other calamity, whether
or not covered by insurance, (E) there has not been
any change in the capital stock of the Company (other
than upon the exercise of options and warrants
described in the Registration Statement), or any
material increase in the short-term or long-term debt
(including capitalized lease obligations) of the
Company and its subsidiaries taken as a whole, (F)
there has not
-5-
6
DRAFT, 9/22/97
been any declaration or payment of any dividends or
any distributions of any kind with respect to the
capital stock of the Company other than any dividends
or distributions described or contemplated in the
Registration Statement, and (G) there has not been
any issuance of warrants, options, convertible
securities or other rights to purchase or acquire
capital stock of the Company and its subsidiaries,
except as described in the Registration Statement.
(xi) Neither the Company nor any of its
subsidiaries is in violation of, or in default under,
its Certificate of Incorporation or Bylaws, or any
statute, or any rule, regulation, order, judgment,
decree or authorization of any court or governmental
or administrative agency or body having jurisdiction
over the Company or any of its subsidiaries or any of
their properties, or any indenture, mortgage, deed of
trust, loan agreement, lease, franchise, license or
other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which it or
any of them are bound or to which any property or
assets of the Company or any of its subsidiaries is
subject, which violation or default (whether with the
giving of notice or passage of time or otherwise)
would have a Material Adverse Effect.
(xii) The issuance and sale of the Shares
by the Company and the compliance by the Company with
all of the provisions of this Agreement and the
consummation of the transactions contemplated herein
(A) will not violate any provision of the Certificate
of Incorporation or Bylaws of the Company or any of
its subsidiaries, (B) will not violate any statute or
any order, judgment, decree, rule, regulation or
authorization of any court or governmental or
administrative agency or body having jurisdiction
over the Company or any of its subsidiaries or any of
their properties, and (C) will not conflict with,
result in a breach or violation of, or constitute,
either by itself or upon notice or passage of time or
both, a default under any indenture, mortgage, deed
of trust, loan agreement, lease, franchise, license
or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to
which any property or assets of the Company or any of
its subsidiaries is subject. No approval, consent,
order, authorization, designation, declaration or
filing by or with any court or governmental agency or
body is required for the execution and delivery by
the Company of this Agreement and the consummation of
the transactions herein contemplated, except as may
be required under the Act or any state securities or
blue sky laws.
-6-
7
DRAFT, 9/22/97
(xiii) The Company and each of its
subsidiaries holds and is operating in compliance
with all material licenses, approvals, certificates
and permits from governmental and regulatory
authorities, foreign and domestic, which are
necessary to the conduct of its business as described
in the Prospectus.
(xiv) The Company has the power and
authority to enter into this Agreement and to
consummate the transactions contemplated by this
Agreement, including, without limitation the power
and authority to authorize, issue and sell the Shares
it will sell hereunder as contemplated hereby. This
Agreement has been duly and validly authorized,
executed and delivered by the Company.
(xv) Coopers & Xxxxxxx L.L.P., which has
certified certain of the financial statements filed
with the Commission as part of the Registration
Statement, are independent public accountants as
required by the Act and the rules and regulations
thereunder.
(xvi) Price Waterhouse LLP, which has
certified certain of the financial statements filed
with the Commission as part of the Registration
Statement, are independent public accountants as
required by the Act and the rules and regulations
thereunder.
(xvii) The Company has not taken and will
not take, directly or indirectly, any action designed
to, or which has constituted, or which might
reasonably be expected to cause or result in,
stabilization or manipulation of the price of the
Common Stock to facilitate the sale of the Shares.
(xviii) The Shares have been approved for
designation upon notice of issuance on the Nasdaq
National Market under the symbol "TRII."
(xix) The Company has obtained and
delivered to the Representatives written agreements,
in form and substance satisfactory to the
Representatives, of each of its directors, executive
officers and shareholders that no offer, sale,
assignment, transfer, encumbrance, contract to sell,
grant of an option to purchase or other disposition
of any Common Stock or other capital stock of the
Company will be made for a period of 180 days after
the date of the Prospectus, directly or indirectly,
by such holder otherwise than hereunder or with the
prior written consent of Xxxxxx Xxxx LLC.
-7-
8
DRAFT, 9/22/97
(xx) The Company has not distributed and
will not distribute any prospectus or other offering
material in connection with the offering and sale of
the Shares other than any Preliminary Prospectus or
the Prospectus or other materials permitted by the
Act to be distributed by the Company.
(xxi) The Company is in material
compliance with all provisions of Florida Statutes
Section 517.075 (Chapter 92-198, laws of Florida).
The Company does not do any business, directly or
indirectly, with the government of Cuba or with any
person or entity located in Cuba.
(xxii) The Company and its subsidiaries
have filed all federal, state, local and foreign tax
returns or reports required to be filed, and have
paid in full all taxes indicated by said returns or
reports and all assessments received by it or any of
them to the extent that such taxes have become due
and payable, except where the Company and its
subsidiaries are contesting in good faith such taxes
and assessments or the amounts involved are not
material to the Company.
(xxiii) The Company and each of its
subsidiaries owns or licenses all material patents,
patent applications, trademarks, service marks,
tradenames, trademark registrations, service xxxx
registrations, copyrights, licenses, inventions,
trade secrets and other similar rights necessary for
the conduct of its business as described in the
Prospectus. The Company has no knowledge of any
infringement by it or its subsidiaries of any
patents, patent applications, trademarks, service
marks, tradenames, trademark registrations, service
xxxx registrations, copyrights, licenses, inventions,
trade secrets or other similar rights of others, and
neither the Company nor any of its subsidiaries has
received any notice or claim of conflict with the
asserted rights of others with respect any of the
foregoing.
(xxiv) The Company is not, and upon
completion of the sale of Shares contemplated hereby
will not be, required to register as an "investment
company" under the Investment Company Act of 1940, as
amended.
(xxv) The Company maintains a system of
internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are
executed in accordance with management's general or
specific authorization; (B) transactions are recorded
as necessary to permit preparation of financial
statements in conformity with generally accepted
accounting principles and to maintain accountability
for assets; (C) access
-8-
9
DRAFT, 9/22/97
to records is permitted only in accordance with
management's general or specific authorization; and
(D) the recorded accountability for assets is
compared with existing assets at reasonable intervals
and appropriate action is taken with respect to any
differences.
(xxvi) Other than as contemplated by this
Agreement and as disclosed in the Registration
Statement, the Company has not incurred any liability
for any finder's or broker's fee or agent's
commission in connection with the execution and
delivery of this Agreement or the consummation of the
transactions contemplated hereby.
(xxvii) Neither the Company nor any of its
subsidiaries is involved in any union labor dispute
nor, to the knowledge of the Company or any of its
subsidiaries, is any such dispute threatened.
Neither the Company nor any of its subsidiaries is a
party to a collective bargaining agreement, and the
Company and its subsidiaries believe that relations
with their employees are good.
(xxviii) The Company and each of its
subsidiaries are insured by insurers of recognized
financial responsibility against such losses and
risks and in such amounts as management of the
Company believes to be prudent and customary in the
businesses in which the Company and its subsidiaries
are engaged. Neither the Company nor any such
subsidiary has been refused any insurance coverage
sought or applied for and neither the Company nor any
such subsidiary has any reason to believe that it
will not be able to renew its existing insurance
coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that
would not materially and adversely affect the
condition, financial or otherwise, or the earnings,
business or operations of the Company and its
subsidiaries, taken as a whole.
(xxix) The Company and its subsidiaries are
(i) in compliance with any and all applicable
foreign, federal, state and local laws and
regulations relating to the protection of human
health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have
received all permits, licenses or other approvals
required of them under applicable Environmental Laws
to conduct their respective businesses and (iii) are
in compliance with all terms and conditions of any
such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals
or failure to comply with the
-9-
10
DRAFT, 9/22/97
terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have
a Material Adverse Effect.
(b) Any certificate signed by any officer of the
Company and delivered to the Representatives or counsel to the Underwriters
shall be deemed to be a representation and warranty of the Company to each
Underwriter as to the matters covered thereby.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SELLING STOCKHOLDERS.
(a) Each Selling Stockholder severally represents
and warrants to, and covenants and agrees with, each of the Underwriters and
the Company that:
(i) Such Selling Stockholder has duly
executed and delivered a Power of Attorney (the
"POWER OF ATTORNEY"), appointing _________________
and _______________ and each of them, as
attorney-in-fact (the "ATTORNEYS-IN-FACT") with full
power and authority to execute and deliver this
Agreement on behalf of such Selling Stockholder, to
authorize the delivery of the Shares to be sold by
the Selling Stockholder hereunder, and otherwise to
act on behalf of such Selling Stockholder in
connection with the transactions contemplated by this
Agreement.
(ii) Such Selling Stockholder has duly
executed and delivered a Custody Agreement (the
"CUSTODY AGREEMENT") with [NORWEST BANK MINNESOTA,
N.A.], as Custodian, pursuant to which certificates
in negotiable form for the Shares to be sold by such
Selling Stockholder hereunder have been placed in
custody for delivery under this Agreement.
(iii) Such Selling Stockholder has full
right, power and authority to enter into this
Agreement, the Power of Attorney and the Custody
Agreement, and to sell, assign, transfer and deliver
the Shares to be sold by such Selling Stockholder
hereunder; and all consents, approvals,
authorizations and orders necessary for the execution
and delivery by such Selling Stockholder of this
Agreement, the Power of Attorney and the Custody
Agreement, and for the sale and delivery of the
Shares to be sold by such Selling Stockholder
hereunder, have been obtained, except such as may be
required by any state securities or blue sky laws.
(iv) Such Selling Stockholder has, and at
the Closing Date and the Option Closing Date as the
case may be (as such dates are hereinafter defined),
will have good and valid title to the Firm Shares and
the Option Shares, respectively, to be sold by such
Selling Stockholder hereunder,
-10-
11
DRAFT, 9/22/97
free of any liens, encumbrances, security interests,
equities or claims whatsoever; and upon delivery of
and payment for such Firm Shares and Option Shares
pursuant to this Agreement, good and valid title
thereto, free of any liens, encumbrances, security
interests, equities or claims whatsoever, will be
transferred to the several Underwriters.
(v) The consummation by such Selling
Stockholder of the transactions herein contemplated
and the fulfillment by such Selling Stockholder of
the terms hereof will not conflict with or result in
a breach or violation of any of the terms and
provisions of, or constitute a default under, any
will, mortgage, deed of trust, loan agreement or
other agreement, instrument or obligation to which
such Selling Stockholder is a party or to which any
of the property or assets of such Selling Stockholder
is subject, except for such agreements, instruments
or obligations for which consents have been obtained,
nor will such actions result in any violations of the
provisions of the charter or by-laws if such Selling
Stockholder is a corporation, the partnership
agreement, certificate or articles if the Selling
Stockholder is a partnership, or any statute, rule,
regulation or order applicable to such Selling
Stockholder of any court or of any regulatory body or
administrative agency or other governmental body
having jurisdiction over such Selling Stockholder.
(vi) Such Selling Stockholder has not
taken and will not take, directly or indirectly, any
action designed to, or which has constituted, or
which might reasonably be expected to cause or result
in, stabilization or manipulation of the price of the
Common Stock.
(vii) To the extent that any statements or
omissions made in the Registration Statement, any
Preliminary Prospectus thereof, the Prospectus or any
amendment or supplement thereto are made in reliance
upon and in conformity with written information with
respect to such Selling Stockholder furnished to the
Company by such Selling Stockholder expressly for use
therein, such Preliminary Prospectus and the
Registration Statement did not, and the Prospectus
and any further amendments or supplements to the
Registration Statement and the Prospectus will not,
when they become effective or are filed with the
Commission, as the case may be, contain any untrue
statement of a material fact or omit to state any
material fact required to be stated therein or
necessary to make the statements therein not
misleading.
(viii) Such Selling Stockholder will not
offer to sell, sell, transfer, assign or otherwise
dispose of any Common Stock or other
-11-
12
DRAFT, 9/22/97
capital stock of the Company, directly or indirectly,
for a period of 180 days after the date of the
Prospectus, otherwise than hereunder or with the
written consent of Xxxxxx Xxxx LLC.
(b) Each of Xxxx X. Xxxxxx and Xxxxxxx X. Xxxxxx
(the "INSIDER SELLING STOCKHOLDERS") severally represents and warrants, and
covenants and agrees with, each of the Underwriters that neither the
Registration Statement nor any amendment thereto, and neither the Prospectus
nor any supplement thereto, contains or will contain, as the case may be, any
untrue statement of a material fact or omits or will omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
provided, however, that the Insider Selling Stockholders make no representation
or warranty as to information contained in or omitted from 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 by
or on behalf of any Underwriter through the Representatives, expressly for use
in the preparation thereof
(c) In order to document the Underwriters'
compliance with the reporting and withholding provisions of the Internal
Revenue Code of 1986, as amended, with respect to the transactions herein
contemplated, each of the Selling Stockholders agrees to deliver to you prior
to or at the Closing Date a properly completed and executed United States
Treasury Department Form W-9 (or other applicable form or statement specified
by Treasury Department regulations in lieu thereof).
(d) Each of the Selling Stockholders specifically
agrees that the Shares represented by the certificates held in custody for such
Selling Stockholder under the Custody Agreement are subject to the interests of
the Underwriters hereunder, and that the arrangements made by such Selling
Stockholder for such custody and the appointment by such Selling Stockholder of
the Attorneys-in-Fact by the Power of Attorney, are to that extent irrevocable.
Each of the Selling Stockholders specifically agrees that the obligations of
the Selling Stockholders hereunder shall not be terminated by operation of law,
whether by the death or incapacity of any individual Selling Stockholder or, in
the case of an estate or trust, by the death or incapacity of any executor or
trustee or the termination of such estate or trust, or in the case of a
corporation or partnership, by the dissolution of such corporation or
partnership, or by the occurrence of any other event. If any individual Selling
Stockholder or any such executor or trustee should die or become incapacitated,
or if any such estate or trust should be terminated, or if any such corporation
or partnership should be dissolved, or if any other such event should occur
before the delivery of the Shares hereunder, certificates representing the
Shares shall be delivered by or on behalf of the Selling Stockholders in
accordance with the terms and conditions of this Agreement and of the Custody
Agreement, and actions taken by the Attorneys-in-Fact pursuant to the Powers of
Attorney shall be as valid as if such death, incapacity, termination,
dissolution or other event had not occurred, regardless of whether or not the
Custodian, the
-12-
13
DRAFT, 9/22/97
Attorneys-in-Fact, or any of them, shall have received notice of such death,
incapacity, termination, dissolution or other event.
(e) Any certificate signed by or on behalf of any
Selling Stockholder and delivered to the Representatives or to counsel to the
Underwriters shall be deemed to be a representation and warranty of such
Selling Stockholder to each Underwriter as to the matters covered thereby.
3. PURCHASE, SALE AND DELIVERY OF SHARES.
On the basis of the representations, warranties and covenants
contained herein, and subject to the terms and conditions herein set forth, the
Company and each Selling Stockholder agrees, severally and not jointly, to sell
to each Underwriter and each Underwriter agrees, severally and not jointly, to
purchase from the Company and each Selling Stockholder, at a price of $_______
per share, the number of Firm Shares (to be adjusted by you to eliminate
fractional shares) determined by multiplying the aggregate number of Firm
Shares to be sold by the Company and each of the Selling Stockholders,
respectively, as set forth opposite their respective names in Schedule B
hereto, by a fraction, the numerator of which is the aggregate number of Firm
Shares to be purchased by such Underwriter as set forth opposite the name of
such Underwriter in Schedule A hereto and the denominator of which is the
aggregate number of Firm Shares to be purchased by all the Underwriters from
the Company and the Selling Stockholders hereunder.
In addition, on the basis of the representations, warranties
and covenants herein contained and subject to the terms and conditions herein
set forth, the Company and each Selling Stockholder, as and to the extent
indicated in Schedule B hereto, hereby grant, severally and not jointly, to the
several Underwriters an option to purchase at their election up to an aggregate
of 600,000 Option Shares at the same price per share as set forth for the Firm
Shares in the paragraph above, for the sole purpose of covering overallotments
in the sale of the Firm Shares. The option granted hereby may be exercised in
whole or in part, but only once, and at any time upon written notice given
within 30 days after the date of this Agreement, by you, as Representatives of
the several Underwriters, to the Company, the Attorneys-in-Fact and the
Custodian setting forth the number of Option Shares as to which the several
Underwriters are exercising the option and the time and date at which
certificates are to be delivered. Any such election to purchase Option Shares
shall be made as set forth in Schedule B hereto. If any Option Shares are
purchased, each Underwriter agrees, severally and not jointly, to purchase that
portion of the number of Option Shares as to which such election shall have
been exercised (subject to adjustment to eliminate fractional shares)
determined by multiplying such number of Option Shares by a fraction the
numerator of which is the maximum number of Option Shares which such
Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule A hereto and the denominator of which is the maximum
number of Option Shares which all of the Underwriters are entitled to purchase
hereunder. The time and
-13-
14
DRAFT, 9/22/97
date at which certificates for Option Shares are to be delivered shall be
determined by the Representatives but shall not be earlier than two or later
than ten full business days after the exercise of such option, and shall not in
any event be prior to the Closing Date. If the date of exercise of the option
is three or more full days before the Closing Date, the notice of exercise
shall set the Closing Date as the Option Closing Date.
Certificates in definitive form for the Shares to be purchased
by each Underwriter hereunder, and in such denominations and registered in such
names as Xxxxxx Xxxx LLC may request upon at least forty-eight hours' prior
notice to the Company, shall be delivered by or on behalf of the Company and
the Selling Stockholders to you for the account of such Underwriter at such
time and place as shall hereafter be designated by the Representatives, against
payment by such Underwriter or on its behalf of the purchase price therefor by
wire transfer of immediately available funds to such accounts as the Company
and the Custodian shall have designated to the Representatives in writing at
least two business days preceding the Closing Date. The time and date of such
delivery and payment shall be, with respect to the Firm Shares, 9:00 a.m. New
York time, at the offices of Xxxxxx Xxxx LLC, _______________________, New
York, New York _________, on _____________ __,1997, or such other time and date
as you and the Company may agree upon in writing, such time and date being
herein referred to as the "CLOSING DATE," and, with respect to the Option
Shares, at the time and on the date specified by you in the written notice
given by you of the Underwriters' election to purchase the Option Shares, or
such other time and date as you and the Company may agree upon in writing, such
time and date being referred to herein as the "OPTION CLOSING DATE." Such
certificates will be made available for checking and packaging at least
twenty-four hours prior to the Closing Date or the Option Closing Date, as the
case may be, at a location as may be designated by you.
4. OFFERING BY UNDERWRITERS.
It is understood that the several Underwriters propose to make
a public offering of the Firm Shares as soon as the Representatives deem it
advisable to do so. The Firm Shares are to be initially offered to the public
at the initial public offering price set forth in the Prospectus. The
Representatives may from time to time thereafter change the public offering
price and other selling terms. To the extent, if at all, that any Option Shares
are purchased pursuant to Section 3 hereof, the Underwriters will offer such
Option Shares to the public on the foregoing terms.
5. COVENANTS OF THE COMPANY.
The Company covenants and agrees with the several Underwriters
that:
(a) The Company will prepare and timely file with
the Commission under Rule 424(b) under the Act a Prospectus containing
information previously omitted at the time of effectiveness of the Registration
Statement in reliance on Rule 430A under the Act, and
-14-
15
DRAFT, 9/22/97
will not file any amendment to the Registration Statement or supplement to the
Prospectus of which the Representatives shall not previously have been advised
and furnished with a copy and as to which the Representatives shall have
objected in writing promptly after reasonable notice thereof or which is not in
compliance with the Act or the rules and regulations thereunder.
(b) The Company will advise the Representatives
promptly of any request of the Commission for amendment of the Registration
Statement or for any supplement to the Prospectus or for any additional
information, or of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the use of the Prospectus,
of the suspension of the qualification of the Shares for offering or sale in
any jurisdiction, or of the institution or threatening of any proceedings for
that purpose, and the Company will use its best efforts to prevent the issuance
of any such stop order preventing or suspending the use of the Prospectus or
suspending such qualification and to obtain as soon as possible the lifting
thereof, if issued.
(c) The Company will cooperate with you and your
counsel in order to qualify or register the Shares for sale under the
securities laws of such jurisdictions as the Representatives may reasonably
have designated in writing and to continue such qualifications in effect for so
long as the Representatives may reasonably request for distribution of the
Shares (or obtain exemptions from the application of such laws), provided that
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 where it is
not now so qualified or required to file such a consent. The Company will, from
time to time, prepare and file such statements, reports and other documents as
are or may be required.
(d) The Company will furnish the Underwriters
with as many copies of any Preliminary Prospectus as the Representatives may
reasonably request and, during the period when delivery of a prospectus is
required under the Act, the Company will furnish the Underwriters with as many
copies of the Prospectus in final form, or as thereafter amended or
supplemented, as the Representatives may, from time to time, reasonably
request. The Company will deliver to the Representatives, at or before the
Closing Date, two signed copies of the Registration Statement and all
amendments thereto including all exhibits filed therewith, and will deliver to
the Representatives such number of copies of the Registration Statement,
without exhibits, and of all amendments thereto, as the Representatives may
reasonably request.
(e) If, during the period in which a prospectus
is required by law to be delivered by an Underwriter or dealer, any event shall
occur 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 light of the
circumstances existing at the time the Prospectus is delivered to a purchaser,
not misleading, or if for any other reason it shall be necessary at any time to
amend or supplement the Prospectus to comply with any law, the Company promptly
will notify the Representatives
-15-
16
DRAFT, 9/22/97
of such event and prepare and file with the Commission an appropriate amendment
to the Registration Statement or supplement to the Prospectus so that the
Prospectus as so amended or supplemented will not include an untrue statement
of a material fact or omit to state any material fact necessary in order to
make the statements therein in light of the circumstances existing when it is
so delivered, not misleading, or so that the Prospectus will comply with law.
In case any Underwriter is required by law to deliver a prospectus in
connection with sales of any Shares at any time nine months or more after the
effective date of the Registration Statement, upon the request of the
Representatives but at the expense of such Underwriter, the Company will
prepare and deliver to such Underwriter as many copies as the Representatives
may request of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Act.
(f) The Company will make generally available to
its security holders, as soon as it is practicable to do so, but in any event
not later than 18 months after the effective date of the Registration
Statement, an earnings statement (which need not be audited) in reasonable
detail, covering a period of at least 12 consecutive months beginning after the
effective date of the Registration Statement, which earnings statement shall
satisfy the requirements of Section 11(a) of the Act and Rule 158 thereunder
and will advise you in writing when such statement has been so made available.
(g) The Company will, for such period up to five
years from the Closing Date, deliver to the Representatives copies of its
annual report and copies of all other documents, reports and information
furnished by the Company to its security holders or Sled with any securities
exchange pursuant to the requirements of such exchange or with the Commission
pursuant to the Act or the Exchange Act. The Company will deliver to the
Representatives similar reports with respect to significant subsidiaries, as
that term is defined in the rules ad regulations under the Act, which are not
consolidated in the Company's financial statements.
(h) No offering, sale or other disposition of any
Common Stock or other capital stock of the Company, or warrants, options,
convertible securities or other rights to acquire such Common Stock or other
capital stock (other than pursuant to employee stock option plans and,
outstanding options as disclosed in the Prospectus and other than securities
issued in connection with any merger, consolidation, acquisition of stock or
assets, joint venture or other business combination or arrangement which are
not effectively registered under the Act for at least 180 days after the date
of this Agreement) will be made for a period of 180 days after the date of this
Agreement, directly or indirectly, by the Company otherwise than hereunder or
with the prior written consent of the Representatives.
(i) The Company will apply the net proceeds from
the sale of the Shares to be sold by it hereunder substantially in accordance
with the purposes set forth under "Use of Proceeds" in the Prospectus.
-16-
17
DRAFT, 9/22/97
(j) The Company will use its best efforts to
maintain the designation of the Common Stock on the Nasdaq National Market.
6. Costs and Expenses.
The Company will pay (directly or by reimbursement) all costs,
expenses and fees incident to the performance of the obligations of the Company
under this Agreement, including, without limiting the generality of the
foregoing, the following: accounting fees of the Company; the fees and
disbursements of counsel for the Company; the cost of preparing, printing and
filing of the Registration Statement, Preliminary Prospectuses and the
Prospectus and any amendments and supplements thereto and the printing, mailing
and delivery to the Underwriters and dealers of copies thereof and of this
Agreement, the Agreement Among Underwriters, any Selected Dealers Agreement,
the Underwriters' Selling Memorandum, the Invitation Letter, the Power of
Attorney, the Blue Sky Memorandum and any supplements or amendments thereto
(excluding, except as provided below, fees and expenses of counsel to the
Underwriters); the filing fees of the Commission; the filing fee incident to
securing any required review by the NASD of the terms of the sale of the
Shares; listing fees, if any, transfer taxes and the expenses, including the
reasonable fees and disbursements of counsel for the Underwriters incurred in
connection with the qualification of the Shares under state securities or Blue
Sky laws; the fees and expenses incurred in connection with the designation of
the Shares on the Nasdaq National Market; the costs of preparing stock
certificates; the costs and fees of any registrar or transfer agent and all
other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section 6.
In addition, the Company will pay all travel and lodging expenses incurred by
management of the Company in connection with any informational "road show"
meetings held in connection with the offering and will also pay for the
preparation of all materials used in connection with such meetings. The Selling
Stockholders will pay the fees and expenses of any separate counsel retained by
them in connection with the transactions contemplated hereby and any other
costs incurred by them in performing their obligations hereunder. The Company
and the Selling Stockholders shall not be required to pay for any of the
Underwriters' expenses (other than those related to qualification of the Shares
under state securities or Blue Sky laws and filing fees incident to securing
any required review by the NASD of the terms of the sale of the shares which
shall be paid by the Company as provided above) except that, if this Agreement
shall not be consummated because the conditions in Section 7 hereof are not
satisfied, or because this Agreement is terminated by the Representatives
pursuant to Section 11(b) hereof, or by reason of any failure, refusal or
inability on the part of the Company or the Selling Stockholders to perform any
undertaking or satisfy any condition of this Agreement or to comply with any of
the terms hereof on their respective parts to be performed, unless such failure
to satisfy said condition or to comply with said terms shall be due to the
default or omission of any Underwriter, then the Company shall promptly upon
request by the Representatives reimburse the several Underwriters for all
out-of-pocket accountable expenses, including reasonable fees and disbursements
of counsel, incurred in connection with investigating, marketing and proposing
to market the Shares or in contemplation
-17-
18
DRAFT, 9/22/97
of performing their obligations hereunder; but the Company shall not in any
event be liable to any of the several Underwriters for damages on account of
loss of anticipated profits from the sale by them of the Shares. If the Company
is required to pay the expenses of the Underwriters under the preceding
sentence as a result of any failure, refusal or inability on the part of any
Selling Stockholder to perform any undertaking or satisfy any condition of this
Agreement or to comply with any of the terms hereof on its part to be
performed, the Company shall be entitled to collect the amount so paid from
such Selling Stockholder.
7. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
The several obligations of the Underwriters to purchase the
Firm Shares on the Closing Date and the Option Shares, if any, on the Option
Closing Date, are subject to the condition that all representations and
warranties of the Company and the Selling Stockholders contained herein are
true and correct, at and as of the Closing Date or the Option Closing Date, as
the case may be, the condition that the Company and the Selling Stockholders
shall have performed a!l of their respective covenants and obligations
hereunder and to the following additional conditions:
(a) The Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in accordance
with Section 5(a) hereof; no stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, or any part thereof shall
have been issued and no proceedings for that purpose shall have been initiated
or threatened by the Commission; and all requests for additional information on
the part of the Commission shall have been complied with to the reasonable
satisfaction of the Representatives.
(b) The Representatives shall have received on
the Closing Date or the Option Closing Date, as the case may be, the opinion of
Manatt, Xxxxxx & Xxxxxxxx, LLP, counsel for the Company, dated the Closing Date
or the Option Closing Date, as the case may be, addressed to the Underwriters,
to the effect that:
(i) The Company has been duly
incorporated and is validly existing as a corporation
in good standing under the laws of the State of
Delaware, with corporate power and authority to own
or lease its properties and conduct its business as
described in the Prospectus.
(ii) Each subsidiary of the Company has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction of its incorporation, with corporate
power and authority to own or lease its properties
and conduct its business as described in the
Prospectus. The outstanding shares of capital stock
of each such subsidiary have been duly authorized and
validly issued, are fully paid and
-18-
19
DRAFT, 9/22/97
nonassessable and are owned of record and, to the
knowledge of such counsel, beneficially, by the
Company, free and clear of all liens, encumbrances
and security interests known to such counsel, other
than security interests specifically disclosed in the
Prospectus. To the knowledge of such counsel, no
options, warrants or other rights to purchase,
agreements or other obligations to issue or other
rights to convert any obligations into any shares of
capital stock or ownership interests in each such
subsidiary are outstanding.
(iii) The Company has authorized and
outstanding capital stock as described in the
Prospectus. The outstanding shares of the Company's
capital stock have been duly authorized and validly
issued and are fully paid and nonassessable. The form
of certificate for the Shares is in due and proper
form and complies with all applicable statutory
requirements. The Shares to be issued and sold by the
Company pursuant to this Agreement have been duly
authorized and, when issued and paid for as
contemplated herein, will be validly issued, fully
paid and nonassessable. Holders of the capital stock
of the Company are not entitled to preemptive rights
to subscribe to any additional shares of the
Company's capital stock under the Company's
Certificate of Incorporation or Bylaws. To the
knowledge of such counsel, there are no other similar
subscription rights of shareholders of the Company,
or of holders of warrants, options, convertible
securities or other rights to acquire shares of
capital stock of the Company, with respect to any of
the Shares or the issue and sale thereof To the
knowledge of such counsel, no rights to register
outstanding shares of the Company's capital stock, or
shares issuable upon the exercise of outstanding
warrants, options, convertible securities or other
rights to acquire shares of such capital stock, exist
which have not been validly exercised or waived with
respect to the Registration Statement. The capital
stock of the Company, including the Shares, conforms
in all material respects to the description thereof
contained in the Prospectus.
(iv) The Registration Statement has
become effective under the Act and, to the knowledge
of such counsel, no stop order proceedings with
respect thereto have been instituted or are pending
or threatened by the Commission.
(v) The Registration Statement, the
Prospectus and each amendment or supplement thereto
comply as to form in all material respects with the
requirements of the Act and the rules and regulations
-19-
20
DRAFT, 9/22/97
thereunder (except that such counsel need express no
opinion as to the financial statements and other
financial information included therein).
(vi) The statements (A) in the Prospectus
under the captions "Risk Factors - Shares Eligible
for Future Sale," "Business - Government Regulation
and Export Controls," "Description of Capital Stock,"
and "Shares Eligible for Future Sale" and (B) in the
Registration Statement in Items 14 and 15, insofar as
such statements constitute a summary of matters of
law, are accurate summaries and fairly present the
information called for with respect to such matters.
(vii) Such counsel does not know of any
contracts, agreements, documents or instruments
required to be filed as exhibits to the Registration
Statement, or described in the Registration Statement
or the Prospectus which are not so filed, or
described as required; and insofar as any statements
in the Registration Statement or the Prospectus
constitute summaries of any contract, agreement,
document or instrument to which the Company is a
party, such statements are accurate summaries and
fairly present the information called for with
respect to such matters.
(viii) Such counsel knows of no legal or
governmental proceeding, pending or threatened,
before any court or administrative body or regulatory
agency, to which the Company or any of its
subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries
is subject that are required to be described in the
Registration Statement or Prospectus and are not so
described, or statutes or regulations that are
required to be described in the Registration
Statement or the Prospectus that are not so
described.
(ix) The execution and delivery of this
Agreement and the consummation of the transactions
herein contemplated do not and will not conflict with
or result in a violation of or default under the
Certificate of Incorporation or Bylaws of the Company
or any of its subsidiaries, or under any statute,
permit, judgment, decree, order, rule or regulation
known to such counsel of any court or governmental
agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their properties
(except that such counsel need express no opinion
regarding any Blue Sky or other state securities
laws), or under any lease, contract, indenture,
mortgage, loan agreement or other agreement or other
instrument or obligation known to such counsel to
which the Company or any of its subsidiaries is a
party or by which the Company or any of its
subsidiaries is bound or to which any property or
assets of the Company
-20-
21
DRAFT, 9/22/97
or any of its subsidiaries is subject, except such
agreements, instruments or obligations with respect
to which valid consents or waivers have been obtained
by the Company or any of its subsidiaries; provided,
however, that with respect to any financial covenants
contained in any of such agreements, instruments or
obligations, such counsel need only opine that it has
no knowledge of any such conflict, violation or
default.
(x) The Company has the corporate power
and authority to enter into this Agreement and to
authorize, issue and sell the Shares as contemplated
hereby. This Agreement has been duly and validly
authorized, executed and delivered by the Company.
(xi) No approval, consent, order,
authorization, designation, declaration or filing by
or with any regulatory, administrative or other
governmental body is necessary in connection with the
execution and delivery of this Agreement and the
consummation of the transactions herein contemplated
(other than as may be required by state securities
and blue sky laws and by the NASD, as to which such
counsel need express no opinion) except such as have
been obtained or made, specifying the same.
(xii) The Company is not, and immediately
upon completion of the sale of Shares contemplated
hereby will not be, required to register as an
"investment company" under the Investment Company Act
of 1940, as amended.
(xiii) to the knowledge of such counsel
after due inquiry, the Company and its Subsidiaries
(A) are in compliance with any and all applicable
Environmental Laws, (B) have received all permits,
licenses or other approvals required of them under
applicable Environmental Laws to conduct their
respective businesses and (C) are in compliance with
all terms and conditions of any such permit, license
or approval, except where such noncompliance with
Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the
aggregate, have a Material Adverse Effect.
(xiv) to the knowledge of such counsel
after due inquiry, the Company and each of its
subsidiaries holds and is operating in compliance
with all material licenses, approvals, certificates
and permits from governmental and regulatory
authorities, foreign and domestic, which are
necessary to the conduct of its business as described
in the Prospectus.
-21-
22
DRAFT, 9/22/97
Such counsel shall also state that on the basis of such counsel's review and
participation in conferences in connection with the preparation of the
Registration Statement and the Prospectus, such counsel has no reason to
believe that, as of its effective date, the Registration Statement or any
further amendment thereto made by the Company prior to the Closing Date or the
Option Closing Date, as the case may be, (other than the financial statements
and other financial information therein, as to which such counsel need express
no opinion) contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that, as of its date, the Prospectus or
any further amendment or supplement thereto made by the Company prior to the
Closing Date or the Option Closing Date, as the case may be, (other than the
financial statements and other financial information therein, as to which such
counsel need express no opinion) contained an untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading or that, as of the Closing Date or the Option Closing Date, as the
case may be, either the Registration Statement or the Prospectus or any further
amendment or supplement thereto made by the Company prior to the Closing Date
or the Option Closing Date, as the case may be, (other than the financial
statements and other financial information therein, as to which such counsel
need express no opinion) contains an untrue statement of a material fact or
omits to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; and they
do not know of any amendment to the Registration Statement required to be
filed.
In rendering the above opinions, counsel may rely as to
factual matters upon the representations of the Company contained in this
Agreement and upon certificates of officers of the Company and of public
officials.
(c) The Representatives shall have received on
the Closing Date or the Option Closing Date, as the case may be, the opinion of
counsel for each of the Selling Stockholders, which counsel shall be reasonably
acceptable to the Representatives, dated the Closing Date or the Option Closing
Date, as the case may be, addressed to the Underwriters, to the effect that:
(i) A Power of Attorney and a Custody
Agreement have been duly executed and delivered by
such Selling Stockholder and are the valid and
binding agreements of such Selling Stockholder.
(ii) This Agreement has been duly
authorized, executed and delivered by or on behalf of
such Selling Stockholder.
(iii) The sale of the Shares to be sold by
such Selling Stockholder hereunder and the execution
and delivery of and compliance
-22-
23
DRAFT, 9/22/97
by such Selling Stockholder with all of the
provisions of this Agreement, the Power of Attorney
and the Custody Agreement, and the consummation of
the transactions herein and therein contemplated,
will not conflict with or result in a breach or
violation of any terms or provisions of, or
constitute a default under, any statute, any
indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to such counsel
to which such Selling Stockholder is a party or by
which such Selling Stockholder is bound or to which
any of the property or assets of such Selling
Stockholder is subject, nor will such action result
in any violation of the provisions of the
organizational documents of such Selling Stockholder
if such Selling Stockholder is a corporation or
partnership, or any order, rule or regulation known
to such counsel of any court or governmental agency
or body having jurisdiction over such Selling
Stockholder or the property of such Selling
Stockholder.
(iv) No consent, approval, authorization
or order of any court or governmental agency or body
is required for the consummation of the transactions
contemplated by this Agreement in connection with the
Shares to be sold by such Selling Stockholder
hereunder, except such consents, approvals,
authorizations or orders as have been validly
obtained and are in full force and effect, such as
have been obtained under the Act and such as may be
required under the state securities or blue sky laws
in connection with the purchase and distribution of
such Shares by the Underwriters.
(v) Such Selling Stockholder has full
right, power and authority to sell, assign, transfer
and deliver the Shares to be sold by such Selling
Stockholder hereunder.
(vi) Good and valid title to the Shares
being sold by such Selling Stockholder, free and
clear of any claims, liens, encumbrances, security
interests or other adverse claims, has been
transferred to each of the several Underwriters who
have purchased such Shares in good faith and without
notice of any such claim, lien, encumbrance, security
interest or other adverse claim within the meaning of
the Uniform Commercial Code.
In rendering the opinions described above, counsel for each of
the Selling Stockholders may rely, as to matters of fact with respect to such
Selling Stockholder, upon the representations of such Selling Stockholder
contained in this Agreement, the Power of Attorney and the Custody Agreement.
-23-
24
DRAFT, 9/22/97
(d) The Representatives shall have received from
Xxxxxx Xxxxxx & Zavis, counsel for the Underwriters, an opinion dated the
Closing Date or the Option Closing Date, as the case may be, with respect to
the incorporation of the Company, the validity of the Shares, the Registration
Statement, the Prospectus, and other related matters as the Representatives may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters.
(e) The Representatives shall have received on
each of the date hereof, the Closing Date and the Option Closing Date, as the
case may be, a signed letter, dated as of the date hereof, the Closing Date or
the Option Closing Date, as the case may be, in form and substance satisfactory
to the Representatives of Coopers & Xxxxxxx, L.L.P. and Price Waterhouse, LLP,
to the effect that they are independent public accountants with respect to the
Company within the meaning of the Act and the related rules and regulations and
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus.
(f) Subsequent to the execution and delivery of
this Agreement and prior to the Closing Date or the Option Closing Date, as the
case may be, there shall not have been any change or any development involving
a reasonably foreseeable change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of operations
of the Company, otherwise than as set forth or contemplated in the Prospectus,
the effect of which, in your reasonable judgment, is material and adverse to
the Company and makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares being delivered at the Closing
Date or the Option Closing Date, as the case may be, on the terms and in the
manner contemplated in the Prospectus.
(g) The Representatives shall have received on
the Closing Date or the Option Closing Date, as the case may be, a certificate
or certificates of the chief executive officer and the chief financial officer
of the Company to the effect that, as of the Closing Date or the Option Closing
Date, as the case may be, each of them severally represents as follows:
(i) The Prospectus was filed with the
Commission pursuant to Rule 424(b) within the
applicable period prescribed for such filing by the
rules and regulations under the Act and in accordance
with Section 5(a) of this Agreement; no stop order
suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for
such purpose have been initiated or are, to his
knowledge, threatened by the Commission.
(ii) The representations and warranties
of the Company set forth in Section 1 of this
Agreement are true and correct at and as of the
-24-
25
DRAFT, 9/22/97
Closing Date or the Option Closing Date, as the case
may be, and the Company has performed all of its
obligations under this Agreement to be performed at
or prior to the Closing Date or the Option Closing
Date, as the case may be.
(h) The Representatives shall have received on
the Closing Date or the Option Date, as the case may be, a certificate of the
Selling Stockholders pursuant to which the Selling Stockholders certify that
their representations and warranties set forth in this Agreement are true and
correct at and as of the Closing Date or the Option Date, as the case may be,
and that they have performed all of their obligations under this Agreement to
be performed at or prior to the Closing Date or the Option Closing Date, as the
case may be.
(i) The Company and the Selling Stockholders
shall have furnished to the Representatives such further certificates and
documents as the Representatives may reasonably have requested.
The opinions and certificates mentioned in this Agreement
shall be deemed to be in compliance with the provisions hereof only if they are
in all material respects reasonably satisfactory to the Representatives and
Xxxxxx Xxxxxx & Xxxxx, counsel for the Underwriters.
If any of the conditions hereinabove provided for in this
Section 7 shall not have been fulfilled when and as required by this Agreement
to be fulfilled, the obligations of the Underwriters hereunder may be
terminated by the Representatives by notifying the Company of such termination
in writing or by telegram at or prior to the Closing Date or the Option Closing
Date, as the case may be. In such event, the Company and the Underwriters shall
not be under any obligation to each other (except to the extent provided in
Sections 6 and 8 hereof.
8. INDEMNIFICATION.
(a) The Company and the Insider Selling
Stockholders, jointly and not severally, agree to indemnify and hold harmless
each Underwriter, each officer, director, employee and agent thereof, and each
person, if any, who controls any Underwriter within the meaning of the Act,
against any losses, claims, damages or liabilities to which such Underwriter or
such persons may became subject under the Act or otherwise, insofar as 'such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement,
any Preliminary Prospectus or the Prospectus, including any amendments or
supplements thereto, (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 in light of the circumstances under which
they were made, 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 Common Stock or the offering contemplated hereby, and which is included
as part of or referred
-25-
26
DRAFT, 9/22/97
to in any losses, claims, damages or liabilities (or actions or proceedings in
respect thereof arising out of or based upon matters covered by clause (i) or
(ii) above, and will reimburse each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable (A) in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement, or omission or alleged omission, made
(1) in the Registration Statement, any Preliminary Prospectus or the
Prospectus, including any amendments or supplements thereto, in reliance upon
and in conformity with written information furnished to the Company by any
Underwriter through the Representatives specifically for use therein or (2) in
any Preliminary Prospectus if the untrue statement or omission was corrected in
the Prospectus (or any amendment or supplement thereto), sufficient quantities
of the Prospectus (or the amendment or supplement) were provided to such
Underwriter prior to the time that it was required to deliver the Prospectus
under the Act, the person bringing the claim against which indemnification is
sought was an original purchaser of Shares from such Underwriter in the
offering contemplated by the Registration Statement to whom such Underwriter
sent a confirmation of the sale, and such Underwriter failed to deliver the
Prospectus (or such amendment or supplement) to such person when required under
the Act; or (B) in the case of any matter covered by clause (iii) above to the
extent that it is determined in a final judgment by a court of competent
jurisdiction that such losses, claims, damages or liabilities resulted directly
from any such acts or failures to act undertaken or omitted to be taken by such
Underwriter through its gross negligence or willful misconduct.
(b) Each of the Selling Stockholders, severally
in proportion to the number of Shares to be sold by such Selling Stockholder
hereunder, agrees to indemnify and hold harmless each Underwriter, each officer
and director thereof, and each person, if any, who controls any Underwriter
within the meaning of the Act, against any losses, claims, damages, or
liabilities to which such Underwriter or such persons may become subject under
the Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions or proceedings in respect thereof arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, any Preliminary Prospectus or the Prospectus,
including any amendments or supplements thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein not
misleading in light of the circumstances under which they were made, but only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any such amendment or supplement, in reliance
upon and conformity with written information furnished to the Company by such
Selling Stockholders for use therein, and will reimburse each Underwriter and
each such controlling
-26-
27
DRAFT, 9/22/97
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that no
Selling Stockholder shall be required to pay amounts for indemnification,
including expenses, which exceed the aggregate net proceeds received by such
Selling Stockholder from the sale of Shares to the Underwriters; and further
provided that the Selling Stockholders shall not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement, or omission or
alleged omission, made in the Registration Statement, any Preliminary
Prospectus or the Prospectus, including any amendments or supplements thereto,
in reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives specifically for use
therein.
(c) Each Underwriter agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement, each Selling Stockholder and each person, if
any, who controls the Company or any Selling Stockholder within the meaning of
the Act, against any losses, claims, damages or liabilities to which the
Company or any such director, officer, Selling Stockholder or controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or arise out
of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made, and will reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, Selling Stockholder or controlling
person in connection with investigating or defending any such action or claim
as such expenses are incurred; provided, however, that each Underwriter will be
liable in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission has been
made in the Registration Statement, any Preliminary Prospectus, the Prospectus
or any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein.
(d) In case any proceeding (including any
governmental investigation) shall be instituted involving any person in respect
of which indemnity or contribution may be sought pursuant to this Section 8,
such person (the "INDEMNIFIED PARTY") shall promptly notify the person against
whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing. No
indemnification provided for in Section 8(a), (b)or (c) or contribution
provided for in Section 8(e) shall be available with respect to a proceeding to
any party who shall fail to give notice of such proceeding as provided in this
Section 8(d) if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was prejudiced by the
failure to give such notice, but the failure to give such notice shall not
relieve the indemnifying
-27-
28
DRAFT, 9/22/97
party or parties from any liability which it or they may have to the
indemnified party otherwise than on account of the provisions of Section 8(a),
(b),(c) or (d). In case any such proceeding shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying parry similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party and shall pay as
incurred the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain
its own counsel at its own expense. Notwithstanding the foregoing, the
indemnifying party shall pay promptly as incurred the reasonable fees and
expenses of the counsel retained by the indemnified party in the event (i) the
indexing party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and the indemnified party shall have reasonably concluded
that there may be a conflict between the positions of the indemnifying party
and the indemnified party in conducting the defense of any such action or that
there may be legal defenses available to it or other indemnified parties which
are different from or additional to those available to the indemnifying party.
It is understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm at any time for all such
indemnified parties. Such firm shall be designated in writing by the
Representatives and shall be reasonably satisfactory to the Company in the case
of parties indemnified pursuant to Section 8(a) or (b) and shall be designated
in writing by the Company and shall be reasonably satisfactory to the
Representatives in the case of parties indemnified pursuant to Section 8(c).
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment.
(e) If the indemnification provided for in this
Section 8 is unavailable or insufficient to hold harmless an indemnified party
under Section 8(a), (b)or (c) above in respect of any losses, claims, damages
or liabilities (or actions or proceedings in respect thereof referred to
therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages
or liabilities (or actions or proceedings in respect thereof in such proportion
as is appropriate to reflect the relative benefits received by the Company and
the Selling Stockholders on the one hand and the Underwriters on the other from
the offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and the Selling
Stockholders on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions or proceedings in respect thereof, as well as any
other relevant
-28-
29
DRAFT, 9/22/97
equitable considerations. The relative benefits received by the Company and the
Selling Stockholders on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company and the Selling
Stockholders bears to the total underwriting discounts and commissions received
by the Underwriters, 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 and the Selling Stockholders on
the one hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 8(e) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this Section 8(e). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereto) referred to above in
this Section 8(e) shall be deemed to include 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 8(e), no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to the Shares
purchased by such Underwriter; and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this Section 8(e) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company and the
Selling Stockholders under this Section 8 shall be in addition to any liability
which the Company and the Selling Stockholders may otherwise have, and the
obligations of the Underwriters under this Section 8 shall be in addition to
any liability which the Underwriters may otherwise have.
(g) The indemnity and contribution provisions
contained in this Section 8 and the representations and warranties of the
Company and the Selling Stockholders contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of
this Agreement, (ii) any investigation made by or on behalf of any Underwriter
or any person controlling the Underwriter, the Selling Stockholders or any
person controlling the Selling Stockholders, or the Company, its officers or
directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Shares.
(h) Notwithstanding anything to the contrary
contained herein, the aggregate liability of the Selling Stockholders pursuant
to the provisions of this Section 8 and with respect to breaches of the
representations, warranties and agreements contained in Section
-29-
30
DRAFT, 9/22/97
2, except for liability resulting from the willful misconduct or intentional
action of the Selling Stockholders, shall not exceed an amount equal to the
total price at which the Shares of which the Selling Stockholders are a
beneficial owner (as defined in rule 13d-3 under the Exchange Act) were sold to
the public hereunder.
9. DEFAULT BY UNDERWRITERS.
If on the Closing Date or the Option Closing Date, as the case
may be, any Underwriter shall fail to purchase and pay for the portion of the
Shares which such Underwriter has agreed to purchase and pay for on such date
(otherwise than by reason of any default on the part of the Company or a
Selling Stockholder), you, as Representatives of the Underwriters, shall use
your best efforts to procure within 36 hours thereafter one or more of the
other Underwriters, or any others, to purchase from the Company and the Selling
Stockholders such amounts as may be agreed upon, and upon the terms set forth
herein, of the Firm Shares or Option Shares, as the case may be, which the
defaulting Underwriter or Underwriters failed to purchase. If during such 36
hours you, as Representatives, shall not have procured such other Underwriters,
or any others, to purchase the Firm Shares or Option Shares, as the case may
be, agreed to be purchased by the defaulting Underwriter or Underwriters, then
(a) if the aggregate number of Shares with respect to which such default shall
occur does not exceed 10% of the Firm Shares or Option Shares, as the case may
be, covered hereby, the other Underwriters shall be obligated, severally, in
proportion to the respective numbers of Firm Shares or Option Shares, as the
case may be, which they are obligated to purchase hereunder, to purchase the
Firm Shares or Option Shares, as the case may be, which such defaulting
Underwriter or Underwriters failed to purchase, or (b) if the aggregate number
of shares of Firm Shares or Option Shares, as the case may be, with respect to
which such default shall occur exceeds 10% of the Firm Shares or Option Shares,
as the case may be, covered hereby, the Company and the Selling Stockholders or
you as the Representatives of the Underwriters will have the right, by written
notice given within the next 36-hour period to the parties to this Agreement,
to terminate this Agreement without liability on the part of the non-defaulting
Underwriters or of the Company and the Selling Stockholders except for expenses
to be borne by the Company, the Selling Stockholders and the Underwriters as
provided in Section 6 hereof and the indemnity and contribution agreements in
Section 8 hereof In the event of a default by any Underwriter or Underwriters,
as set forth in this Section 9, the Closing Date or Option Closing Date, as the
case may be, may be postponed for such period, not exceeding seven days, as
you, as Representatives, may determine in order that the required changes in
the Registration Statement or in the Prospectus or in any other documents or
arrangements may be effected. The term "UNDERWRITER" includes any person
substituted for a defaulting Underwriter. Any action taken under this Section 9
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
-30-
31
DRAFT, 9/22/97
10. NOTICES.
All communications hereunder shall be in writing and, except
as otherwise provided herein, will be mailed, delivered or telegraphed and
confirmed as follows: if to the Underwriters, to Xxxxxx Xxxx LLC, 000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Attn: Xxxx
Xxxxxxxxx, Xx., Managing Director, and Xxxxxx Xxxx LLC, 000 Xxxxxxxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Attn: Xxxx Xxxxxxxxx, Xx. Managing
Director, Xxxxxxxxxx Securities, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, Attention: [XXX XXXX], Managing Director, and Xxxx Xxxxxxxx
Incorporated, Xxxx Xxxxxxxx Plaza, 00 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxx, Attention: Xxxxxxx X. Xxxxxx, Managing Director, with a copy to
Xxxxxx X. Xxxxxxx, Esq., Xxxxxx Xxxxxx & Zavis, 000 Xxxx Xxxxxx Xxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxxx 00000-0000; if to the Company, to Transcrypt
International, Inc., 0000 XX 0xx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention:
[XXXXXXX X. XXXXXX, CHIEF EXECUTIVE OFFICER], with a copy to Xxxxxxx
Ouicksilver, Esq., Manatt, Xxxxxx & Xxxxxxxx, LLP, 00000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000; and if to the Selling Stockholders,
to ____________________________, with a copy to
___________________________________.
11. TERMINATION.
This Agreement may be terminated by you by notice to the
Company and the Selling Stockholders as follows:
(a) at any time prior to the earlier of (i) the
time the Shares are released by you for sale by notice to the Underwriters or
(ii) 12:00 noon, Minneapolis time, on the first business day following the
later of the date on which the Registration Statement becomes effective or the
date of this Agreement;
(b) at any time prior to the Closing Date if any
of the following has occurred: (i) since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
material adverse change in or affecting the condition, financial or otherwise,
of the Company taken as a whole or the business affairs, management, financial
position, shareholders' equity or results of operations of the Company taken as
a whole, whether or not arising in the ordinary course of business, (ii) any
outbreak or escalation of hostilities or declaration of war or national
emergency after the date hereof or other national or international calamity or
crisis or change in economic or political conditions if the effect of such
outbreak, escalation, declaration, emergency, calamity, crisis or change on the
financial markets of the United States would, in your reasonable judgment, make
the offering or delivery of the Shares impracticable or inadvisable, (iii)
suspension of trading in securities generally on the New York Stock Exchange or
the American Stock Exchange or limitation on prices generally (other than
limitations on hours or numbers of days of trading) for securities on either
such Exchange, or a halt or suspension of trading in securities generally which
are quoted on Nasdaq National
-31-
32
DRAFT, 9/22/97
Market System, or (iv) declaration of a banking moratorium by either federal or
New York State authorities; or
(c) as provided in Sections 7 and 9 of this
Agreement.
This Agreement also may be terminated by you, by notice to the
Company, as to any obligation of the Underwriters to purchase the Option
Shares, upon the occurrence at any time prior to the Option Closing Date of any
of the events described in subparagraph (b) above or as provided in Sections 6
and 8 of this Agreement.
12. WRITTEN INFORMATION.
For all purposes under this Agreement (including, without
limitation, Section 1, Section 2, Section 3 and Section 8 hereof), the Company
and the Selling Stockholders understand and agree with each of the Underwriters
that the following constitutes the only written information furnished to the
Company by or through the Representatives specifically for use in preparation
of the Registration Statement, any Preliminary Prospectus, the Prospectus, or
any amendment or supplement thereto: (i) the per share "Price to Public" ad per
share "Underwriting Discounts and Commissions" set forth on the cover page of
the Prospectus, (ii) the information relating to stabilization set forth in the
last paragraph on page two of the Preliminary Prospectus and the Prospectus,
and (iii) the information set forth in the first, second, fifth, seventh and
eighth (insofar as the information therein concerns the Underwriters)
paragraphs under the caption "Underwriting" in the Preliminary Prospectus and
the Prospectus.
13. SUCCESSORS.
This Agreement has been and is made solely for the benefit of
and shall be binding upon the Underwriters, the Company, the Selling
Stockholders and their respective successors, executors, administrators, heirs
and assigns, and the officers, directors and controlling persons referred to
herein, and no other person will have any right or obligation hereunder. The
term "SUCCESSORS" shall not include any purchaser of the Shares merely because
of such purchase.
14. MISCELLANEOUS.
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and covenants
in this Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b)any investigation made by or on behalf of any
Underwriter or controlling person thereof, or by or on behalf of the Company or
its directors or officers or the Selling Stockholders and (c) delivery of and
payment for the Shares under this Agreement.
-32-
33
DRAFT, 9/22/97
Each provision of this Agreement shall be interpreted in such
a manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal or unenforceable
under any applicable law or rule in any jurisdiction, such provision will be
ineffective only to the extent of such invalidity, illegality or
unenforceability in such jurisdiction or any provision hereof in any other
jurisdiction.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of [NEW YORK].
-33-
34
DRAFT, 9/22/97
If the foregoing letter is in accordance with your
understanding of our agreement, please sign and return to us the enclosed
duplicates hereof, whereupon it will become a binding agreement among the
Company, the Selling Stockholders and the several Underwrites in accordance
with its terms.
Very truly yours,
TRANSCRYPT INTERNATIONAL, INC.
By: _____________________________
Xxxxxxx X. Xxxxxx
President and Chief Executive
Officer
SELLING STOCKHOLDERS
LISTED ON SCHEDULE B
By:______________________________
Attorney-in-Fact
By:______________________________
Attorney-in-Fact
The foregoing Underwriting Agreement
is hereby confirmed and accepted as of
the date first above written.
XXXXXX XXXX LLC
XXXXXXXXXX SECURITIES
XXXX XXXXXXXX INCORPORATED
As Representatives of the several Underwriters
By: XXXXXX XXXX LLC
By: _________________________________________
Its: _________________________________________
-34-
35
DRAFT, 9/22/97
SCHEDULE A
SCHEDULE OF UNDERWRITERS
Number of Firm Maximum Number
Underwriter Shares to be Purchased of Option Shares
----------- ---------------------- ----------------
Xxxxxx Xxxx LLC . . . . . . . . . . . . . . .
Xxxxxxxxxx Securities . . . . . . . . . . .
Xxxx Xxxxxxxx Incorporated . . . . . . . . .
. . . . . . . . . . . .
. . . . . . . . . . . .
. . . . . . . . . . . .
---------- --------
4,000,000 600,000
========= =======
Total . . . . . . . . . . . . . . . . . .
-35-
36
DRAFT, 9/22/97
SCHEDULE B
Number of Maximum Number
Seller Firm Shares of Option Shares*/
------ ----------- -----------------
Transcrypt International, Inc. . . . . . . . . . . . . . 2,000,000 184,481
Selling Stockholders:
. . . . . . . . . . . . . 2,000,000 415,519
. . . . . . . . . . . . .
------- -------
Total . . . . . . . . . . . . . . . . . 4,000,000 600,000
========= =======
__________________________________
*/ If the underwriters elect to purchase some, but less than all, of
the Option Shares, the Option Shares to be purchased shall be purchased
pro rata in proportion to the number of Option Shares owned by each Selling
Shareholder as set forth above.
-36-
