2,300,000 SHARES*
COMTECH TELECOMMUNICATIONS CORP.
COMMON STOCK
UNDERWRITING AGREEMENT
,2000
ABN AMRO Incorporated
Xxxxxx, Xxxxxxxx & Company, Incorporated
HCFP/Xxxxxxx Securities, LLC
As Representatives of the
several Underwriters named
in Schedule I hereto
c/o ABN AMRO Incorporated
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Pursuant to the terms of this Underwriting Agreement (this "Agreement"),
Comtech Telecommunications Corp., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions set forth herein, to issue and
sell an aggregate of 2,300,000 shares of Common Stock, par value $.10 per share
(which includes the Rights, defined below) (the "Common Stock"), of the Company
to the several underwriters named in Schedule I hereto (collectively, the
"Underwriters"). The Common Stock includes detachable preferred stock purchase
rights (the "Rights") attached to each share of Common Stock pursuant to the
Rights Agreement (the "Rights Agreement"), dated as of December 15, 1998,
between the Company and American Stock Transfer and Trust Company. As used
herein, the term Common Stock includes the Rights. The Company has agreed to
sell to the several Underwriters, upon the terms and conditions set forth in
Section 2 hereof, up to an additional 345,000 shares of Common Stock. The
aggregate of 2,300,000 shares of Common Stock to be sold by the Company are
--------
* Plus an option to purchase up to Additional Shares to cover over-allotments.
herein called the "Firm Shares" and the aggregate of 345,000 additional shares
of Common Stock to be sold by the Company are herein called the "Additional
Shares." The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the "Shares." ABN AMRO Incorporated, Xxxxxx, Xxxxxxxx & Company,
Incorporated and HCFP/Xxxxxxx Securities, LLC are acting individually and as
representatives of the several Underwriters and in such capacity are hereinafter
referred to as the "Representatives."
Prior to the purchase and public offering of the Shares by the several
Underwriters, the Company and the Representatives shall enter into an agreement
substantially in the form of Exhibit A hereto (the "Pricing Agreement"). The
Pricing Agreement may take the form of an exchange of any standard form of
written telecommunication between the Company and the Representatives and shall
specify such applicable information as is indicated in Exhibit A hereto. The
offering of the Shares will be governed by this Agreement, as supplemented by
the Pricing Agreement. From and after the date of the execution and delivery of
the Pricing Agreement, this Agreement shall be deemed to incorporate the Pricing
Agreement.
The Company is advised by the Representatives that the Underwriters have
agreed to make a public offering of their respective portions of the Shares as
soon after the Registration Statement has become effective and the Pricing
Agreement has been executed as in the judgment of the Representatives is
advisable and to first offer the Shares upon the terms set forth in the
Prospectus.
The Company, the Representatives and the other Underwriters hereby agree
to the following matters with respect to the purchase and sale of the Shares:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter that:
(a) The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Act"), a registration statement on
Form S-2 (File No. 333- ), including a preliminary prospectus, relating to the
Shares and certain amendments thereto. The Company will next file with the
Commission one of the following: (A) prior to effectiveness of such registration
statement, a further amendment thereto, including the form of final prospectus,
(B) a final prospectus in accordance with Rules 430A and 424(b) under the Act or
(C) a term sheet (the "Term Sheet") as described in and in accordance with Rules
434 and 424(b) under the Act. As filed, the final prospectus, if one is used, or
the Term Sheet and the latest Preliminary Prospectus, if a final prospectus is
not used, shall include all Rule 430A Information (as defined below). There have
been or will promptly be delivered to you three signed copies of such
registration statement and each amendment together with three copies of all
documents incorporated by reference therein, three copies of each exhibit filed
therewith, and conformed copies of such registration statement and each
amendment (but without exhibits) and of the related preliminary prospectus or
prospectuses and final forms of prospectus or Term Sheet, if a Term Sheet is
used, for each of the Underwriters. The term "Registration Statement" as used in
this Agreement shall
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mean such registration statement at the time such registration statement becomes
effective and, in the event any amendment thereto becomes effective prior to the
Closing Date (as hereinafter defined), shall also mean such registration
statement as so amended; provided, however, that such term shall also include
all Rule 430A Information deemed to be included in such registration statement
at the time such registration statement becomes effective as provided by Rule
430A and, if a Term Sheet is used, shall also include all information deemed to
be included in such registration statement at the time such registration
statement becomes effective as provided by Rule 434; provided, further, that if
the Company files a registration statement under the Act to register a portion
of the Shares and relies on Rule 462(b) for such registration statement to
become effective upon filing with the Commission (the "Rule 462 Registration
Statement"), then any reference to "Registration Statement" herein shall be
deemed to be to both the registration statement referred to above (No. 333- )
and the Rule 462 Registration Statement, as each such registration statement may
be amended pursuant to the Act. The term "Preliminary Prospectus" as used in
this Agreement shall mean any preliminary prospectus relating to the Shares
filed with the Commission under the Act and the rules and regulations
thereunder, including any preliminary prospectus included in the Registration
Statement at the time it becomes effective that omits Rule 430A Information. The
term "Prospectus" as used in this Agreement shall mean: (X) the prospectus
relating to the Shares in the form in which it is first filed with the
Commission pursuant to Rule 424(b) under the Act; (Y) if a Term Sheet is not
used and no filing pursuant to Rule 424(b) under the Act is required, the form
of final prospectus included in the Registration Statement at the time the
Registration Statement becomes effective; or (Z) if a Term Sheet is used in lieu
of a prospectus, the Term Sheet in the form in which it is first filed with the
Commission pursuant to Rule 424(b) under the Act, together with the latest
Preliminary Prospectus included in the Registration Statement at the time it
becomes effective (such Term Sheet and Preliminary Prospectus are sometimes
collectively referred to herein as the "Rule 434 Prospectus"). The term "Rule
430A Information" as used in this Agreement shall mean information with respect
to the Shares and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A under the
Act. The Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder are hereinafter collectively referred
to as the "Exchange Act." Any reference herein to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Form S-2 under the Act
("Incorporated Documents"), as of the date of such Preliminary Prospectus or
Prospectus, as the case may be. The Incorporated Documents, when they were filed
with the Commission, conformed in all material respects to the requirements of
the Exchange Act and none of such documents 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.
(b) The Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus, and each Preliminary Prospectus complied in
all material respects when so filed with the requirements of the Act (except to
the extent that, in conformity with the Act, such Preliminary Prospectus is
subject to completion).
(c) The Registration Statement in the form in which it becomes effective
and also in such form as it may be when the Pricing Agreement is executed or any
post-effective
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amendment to the Registration Statement shall become effective, and the
Prospectus when and in the form last filed with the Commission as part of the
Registration Statement prior to effectiveness or, if applicable, first filed
pursuant to Rule 424(b) under the Act, and when any supplement or amendment
thereto is filed with the Commission, each will comply in all material respects
with the requirements of the Act, will not at any such time 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. This representation
and warranty does not apply to statements in or omissions from the Registration
Statement or the Prospectus (or any supplement or amendment thereto) made in
reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by or on behalf of such Underwriter through
the Representatives specifically for use in the Registration Statement.
(d) There is no contract or other document of a character required to be
described in the Registration Statement or Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as
required.
(e) The accountants who have expressed their opinions with respect to
certain of the financial statements of the Company included or incorporated by
reference in the Registration Statement and the Prospectus, are independent
public accountants as required by the Act.
(f) The consolidated financial statements, together with the notes
thereto, of the Company included or incorporated by reference in the
Registration Statement and the Prospectus comply in all material respects with
the Act and present fairly the consolidated financial position of the Company as
of the dates indicated, and the consolidated results of operations, cash flows
and changes in financial position of the Company for the periods specified. Such
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the entire period
involved except to the extent disclosed therein.
(g) 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 full
corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement and Prospectus.
The Company is duly qualified to do business as a foreign corporation and in
good standing in each jurisdiction in which the ownership or leasing of its
properties or the conduct of its business requires such qualification, except in
any such case in which the failure to so qualify or be in good standing would
not have a material adverse effect upon the business of the Company and its
subsidiaries, taken as a whole; and no proceeding of which the Company has
knowledge has been instituted in any such jurisdiction, revoking, limiting or
curtailing, or seeking to revoke, limit or curtail, such power and authority or
qualification.
(h) Each of the Company's subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with
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full corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement and Prospectus.
Each of the Company's subsidiaries is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction in which the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except in any such case in which the failure to so qualify or be
in good standing would not have a material adverse effect on the business of the
Company and its subsidiaries, taken as a whole. Each of the Company's
subsidiaries has all authorizations, approvals, orders, certificates and permits
of and from all state, federal and other regulatory officials and bodies
necessary to own its properties and to conduct its business as described in the
Registration Statement and Prospectus, except where the failure to have any such
authorization, approval, order, certificate or permit would not have a material
adverse effect on the business affairs, business prospects, properties,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole. Except for the capital stock of the subsidiaries
and except as otherwise described in the Prospectus, the Company does not own
any capital stock of, or other securities evidencing an equity interest in, any
corporation, partnership or other entity. All of the issued and outstanding
shares of capital stock of the Company's subsidiaries have been duly and validly
authorized and issued, are fully paid and non-assessable, and except as
described in the Prospectus, are owned by the Company, free and clear of any
security interest, claim, lien, encumbrance or adverse interest of any nature.
Except as described in the Prospectus, there are no outstanding subscriptions,
rights, warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock of any of the Company's
subsidiaries.
(i) The Company has an authorized and outstanding capitalization as set
forth in the Prospectus and the Shares conform to the description thereof
contained in the Prospectus. All of the issued and outstanding shares of Common
Stock have been duly authorized, validly issued and are fully paid and
non-assessable and free of preemptive or other similar rights and there are no
options, agreements, contracts or other rights in existence to acquire from the
Company any shares of Common Stock except as set forth in the Prospectus.
(j) The Shares to be sold by the Company pursuant to this Agreement and
the Pricing Agreement have been duly authorized and, when issued and paid for in
accordance with this Agreement and the Pricing Agreement, will be validly
issued, fully paid and non-assessable and entitled to the rights set forth in
the Company's Certificate of Incorporation and the Rights Agreement; the holders
of the Shares will not be subject to personal liability by reason of being such
holders; there are no holders of securities of the Company having rights,
contractual or otherwise, to registration thereof or preemptive rights to
purchase Common Stock; all corporate actions required to be taken for the
authorization, issue and sale of the Shares have been validly and sufficiently
taken; and upon delivery of and payment for such Shares hereunder, the
Underwriters will acquire valid and marketable title thereto, free and clear of
any security interest, claim, lien, encumbrance or adverse interest of any
nature.
(k) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated or
contemplated therein, there has not been (A) any material adverse change in the
condition (financial or otherwise), earnings, affairs,
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business or prospects of the Company and its subsidiaries, taken as a whole,
whether or not arising in the ordinary course of business, (B) any material
transaction entered into, or any material liability or obligation incurred, by
the Company or its subsidiaries other than in the ordinary course of business,
(C) any change in the capital stock, or material increase in the short term debt
or long-term debt of the Company or its subsidiaries, or (D) any dividend or
distribution of any kind declared, paid or made by the Company or its
subsidiaries on its capital stock.
(l) The Company and each of its subsidiaries have good and marketable
title to all properties and assets reflected as owned in the financial
statements hereinabove described or described in the Prospectus as owned by
them, free and clear of all liens, charges, encumbrances or restrictions of any
kind, except such as are referred to in such financial statements or the
Prospectus or which are not material to the business of the Company and its
subsidiaries, taken as a whole; all of the leases and subleases material to the
business of the Company and its subsidiaries, taken as a whole or under which
the Company or its subsidiaries holds properties are in full force and effect;
and neither the Company nor any of its subsidiaries has received any notice of
any material claim of any sort which has been asserted by anyone adverse to the
rights of the Company or any subsidiary as owner or as lessee or sublessee under
any of the leases or subleases mentioned above, or affecting or questioning the
rights of the Company or such subsidiary to the continued possession of the
leased or subleased premises under any such lease or sublease.
(m) Neither the Company nor any of its subsidiaries is in default in the
observance of any provision of its respective Certificate of Incorporation or
by-laws, or in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which it is a party or by which it
or any of its properties may be bound, the effect of which could be materially
adverse to the condition (financial or otherwise), earnings, affairs, business
or prospects of the Company and its subsidiaries, taken as a whole.
(n) The execution and delivery of this Agreement and the Pricing
Agreement, the issuance and delivery of the Shares, the consummation of the
transactions contemplated herein and in the Registration Statement and
compliance with the terms of this Agreement and the Pricing Agreement have been
duly authorized by all necessary corporate action and will not result in any
violation of the Certificate of Incorporation or by-laws of the Company or any
of its subsidiaries, and will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge, encumbrance or restriction of any
kind upon any property or assets of the Company or any of its subsidiaries under
any contract, indenture, mortgage, loan agreement, note, lease 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, or any of their
respective properties, is bound, or any existing applicable law, rule,
regulation, judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its subsidiaries or any of their respective properties. No
approval, authorization or consent of any court, regulatory body, administrative
agency or other
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governmental body having jurisdiction over the Company or any of its
subsidiaries is required in connection with the sale of the Shares to the
Underwriters, except such as may be required under the Act, state securities or
Blue Sky laws or from the clearance of the offering with the National
Association of Securities Dealers, Inc. (the "NASD").
(o) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, or any arbitrator or
arbitration panel, now pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its subsidiaries which could result
in any material adverse change to the condition (financial or otherwise),
earnings, affairs, business or prospects of the Company and its subsidiaries,
taken as whole; and there is no decree, judgment or order of any kind in
existence against or restraining the Company or any of its subsidiaries, or any
of their respective officers, employees or directors, from taking any actions of
any kind in connection with the business of the Company or any such subsidiary.
(p) The Company and each of its subsidiaries own or possess or have
obtained all material governmental licenses, permits, consents, orders,
approvals and other authorizations necessary to lease or own, as the case may
be, and to operate their properties and to carry on their businesses as
presently conducted, and neither the Company nor any such subsidiary has
received any notice of proceedings related to revocation or modification of any
such licenses, permits, consents, orders, approvals or authorizations which
singly or in the aggregate, if the subject of an unfavorable ruling or finding,
would be materially adverse to the condition (financial or otherwise), earnings,
affairs, business or prospects of the Company and its subsidiaries, taken as a
whole.
(q) The conduct of the business of the Company and each of its
subsidiaries is in compliance with all applicable federal, state and local laws
and regulations that regulate or are concerned in any way with the business of
the Company or such subsidiaries, where the effect of the failure to comply
would be materially adverse to the condition (financial or otherwise), earnings,
affairs, business or prospects of the Company and its subsidiaries, taken as a
whole.
(r) The Company, together with its subsidiaries, owns or possesses, or
can acquire on reasonable terms, all right, title and interest in or to, or has
duly licensed from third parties, all patents, trademarks, service marks,
copyrights, trade names, trade secrets and other proprietary rights ("Trade
Rights") necessary to conduct the business now or proposed to be conducted by
it, and neither the Company nor any of its subsidiaries has received any notice
of, and has no knowledge of, infringement of or conflict with asserted rights of
others with respect to any such Trade Rights which, singly or in the aggregate,
if the subject of any unfavorable decision, ruling or finding, would be
materially adverse to the condition (financial or otherwise), earnings, affairs,
business or prospects of the Company and its subsidiaries, taken as a whole.
(s) The Company has filed all tax returns required to be filed and has
paid all taxes which were payable pursuant to said returns or any assessments
with respect thereto, other than any tax returns which the Company is contesting
in good faith or which are not material to the Company and there is no tax
deficiency that has been, or to the knowledge of the Company
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might be, asserted against the Company or any of its properties or assets that
would or could be expected to have a material adverse affect upon the condition
(financial or otherwise) or results of operations of the Company and its
subsidiaries, taken as a whole.
(t) This Agreement has been duly executed and delivered by the Company.
(u) A registration statement relating to the Common Stock has been
declared effective by the Commission pursuant to the Exchange Act and the Common
Stock is duly registered thereunder. The Shares have been authorized for trading
on the Nasdaq National Market, subject to notice of issuance or sale, as the
case may be.
(v) The Company is not, and does not intend to conduct its business in a
manner in which it would become, an "investment company" as defined in Section
3(a) of the Investment Company Act of 1940, as amended (the "Investment Company
Act").
(w) All offers and sales of the Company's capital stock prior to the
date hereof were at all relevant times exempt from the registration requirements
of the Act and were duly registered with, or the subject of an available
exemption from, the registration requirements of the applicable state securities
or Blue Sky laws.
(x) The Company has not taken and will not take, directly or indirectly,
any action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company.
(y) Except as disclosed in the Registration Statement and the
Prospectus, no transaction has occurred between or among the Company or any of
its subsidiaries, on the one hand, and any of their officers or directors or any
affiliate or affiliates of any such officer or director, on the other hand, that
is required to be so disclosed, including, but not limited to, any outstanding
loans, advances or guaranties of indebtedness by the Company or its subsidiaries
to or for the benefit of any affiliates of the Company or its subsidiaries, or
any of the officers or directors of the Company or its subsidiaries, or any
family member of any of them.
(z) The Company has not, directly or indirectly, at any time (A) made
any contributions to any candidate for foreign political office, or if made,
failed to disclose fully any such contribution made in violation of law, or (B)
made any payment to any state, federal or foreign governmental officer or
official, or other person charged with similar public or quasi public duties,
other than payments or contributions required or allowed by applicable law. The
Company's internal accounting controls and procedures are sufficient to cause
the Company to comply in all material respects with the Foreign Corrupt
Practices Act of 1977, as amended.
(aa) The Company and each of its subsidiaries (a) are 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"), (b) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective
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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
on the Company and its subsidiaries, taken as a whole.
(bb) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business, operations
and properties of the Company and its subsidiaries, in the course of which if
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws of any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company has
reasonably concluded that such associated costs and liabilities would not,
singly or in the aggregate, have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
SECTION 2. AGREEMENT TO SELL AND PURCHASE.
(a) Subject to such adjustments to eliminate any fractional share sales
or purchases as the Representatives in their discretion may make, (i) the
Company hereby agrees to issue and sell to the Underwriters the Firm Shares, and
(ii) on the basis of the representations, warranties and agreements of the
Company herein contained and subject to the terms and conditions set forth
herein, each Underwriter agrees, severally and not jointly, to purchase from the
Company, at the purchase price per Share set forth in the Pricing Agreement (the
"Purchase Price per Share"), the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule I hereto (or such number of Firm Shares as
such Underwriter shall be obligated to purchase pursuant to the provisions of
Section 9 hereof).
(b) The Company agrees to sell to the Underwriters and, on the basis of
the representations, warranties and agreements of the Company set forth herein
and subject to the terms and conditions set forth herein, the Underwriters shall
have the right to purchase, severally and not jointly, from the Company up to
345,000 Additional Shares, at the Purchase Price per Share upon delivery to the
Company of the notice hereinafter referred to. Such Additional Shares may be
purchased solely for the purpose of covering over-allotments made in connection
with the offering of the Firm Shares. If any Additional Shares are to be
purchased, each Underwriter, severally and not jointly, agrees to purchase from
the Company the number of Additional Shares (subject to such adjustments to
eliminate fractional Shares as the Representatives may determine) which bears
the same proportion to the total number of Additional Shares to be purchased
from the Company as the number of Firm Shares set forth opposite such
Underwriter's name in Schedule I (or such number of Firm Shares increased
pursuant to the terms set forth in Section 9 hereof) bears to the total number
of Firm Shares.
SECTION 3. DELIVERY OF THE SHARES AND PAYMENT THEREFOR.
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(a) Delivery to the Underwriters of the Firm Shares shall be made
against payment therefor at 9:00 a.m., Chicago, Illinois time, on the third full
business day following the date of the Pricing Agreement (the "Closing Date") at
the offices of ABN AMRO Incorporated, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000. The place of the closing and the Closing Date may be varied by
agreement among the Representatives and the Company.
(b) Delivery to the Underwriters of any Additional Shares to be
purchased by the several Underwriters shall be made in Chicago, Illinois against
payment therefor at the offices of ABN AMRO Incorporated, 000 Xxxxx XxXxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, at such time on such date (the "Option Closing
Date"), which may be the same as the Closing Date, but shall in no event be
earlier than the Closing Date nor earlier than three nor later than ten business
days after the giving of the notice hereinafter referred to, as shall be
specified in written notice from the Representatives to the Company of the
determination to purchase a number, specified in said notice, of Additional
Shares. Said notice may be given at any time within 30 days after the date of
the execution of the Pricing Agreement. The place of the closing and the Option
Closing Date may be varied by agreement among the Representatives and the
Company.
(c) If the Representatives and the Company have elected to enter into
the Pricing Agreement after the Registration Statement is effective, the
Purchase Price per Share to be paid by the several Underwriters for the Shares
shall be an amount equal to the initial public offering price, less an amount to
be determined by agreement between the Representatives and the Company. The
initial public offering price per Share of the Shares shall be a fixed price to
be determined by agreement between the Representatives and the Company. The
initial public offering price and the Purchase Price per Share, when so
determined, shall be set forth in the Pricing Agreement. If such prices have not
been agreed upon and the Pricing Agreement has not been executed and delivered
by all parties thereto by the close of business on the fourth business day
following the date of this Agreement, this Agreement shall terminate forthwith,
without liability of any party to any other party, unless otherwise agreed to by
the Company and the Representatives and except as otherwise provided in Section
5 hereof. If the Representatives and the Company have elected to enter into the
Pricing Agreement prior to the Registration Statement becoming effective, the
initial public offering price and the Purchase Price per Share to be paid by the
several Underwriters for the Shares having each been determined and set forth in
the Pricing Agreement, the Company agrees to file an amendment to the
Registration Statement and the Prospectus before the Registration Statement
becomes effective.
(d) Certificates for the Firm Shares and for the Additional Shares shall
be registered in such names and in such denominations as the Representatives
shall request upon at least 48 hours prior notice to the Company preceding the
Closing Date or the Option Closing Date, as the case may be. Such certificates
shall be made available to the Representatives at the office of The Depository
Trust Company, New York, New York, for inspection and packaging not later than
at least 24 hours prior to the Closing Date or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and the Additional
Shares shall be delivered to the Representatives on the Closing Date or the
Option Closing Date, as the case may be, with any transfer taxes thereon duly
paid by the Company or the Selling Stockholders, as the case may be for the
respective accounts of the several Underwriters, against payment of the purchase
price
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therefor by wire or other immediately available funds. It is understood by the
Company that each of the Underwriters has authorized the Representatives, for
its account, to accept delivery of, receipt for and make payment of the purchase
price for, the Shares it has agreed to purchase.
SECTION 4. AGREEMENTS OF THE COMPANY. The Company covenants and agrees
with the several Underwriters that:
(a) The Company will endeavor to cause the Registration Statement to
become effective and will advise the Representatives promptly and, if requested
by the Representatives, will confirm such advice in writing, (i) when the
Registration Statement has become effective and when any post-effective
amendment to it becomes effective, and of the filing of any final prospectus or
supplement or amendment to the Prospectus, (ii) of any request by the Commission
for amendments or supplements to the Registration Statement or Prospectus or any
Preliminary Prospectus or for additional information, (iii) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction, or the initiation or contemplation of any
proceeding for such purposes, and (iv) within the period of time referred to in
paragraph (f) below, of the happening of any event which makes any statement
made in the Registration Statement or Prospectus (as then amended or
supplemented) untrue in any material respect or which requires the making of any
additions to or changes in the Registration Statement or Prospectus (as then
amended or. supplemented) in order to make the statements therein not misleading
or the necessity to amend or supplement the Prospectus to comply with the Act or
any other law. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the Company will
make every reasonable effort to obtain the withdrawal of such order at the
earliest possible moment. If the Company elects to rely on Rule 434 of the Act,
the Company will prepare a Term Sheet that complies with the requirements of
Rule 434 of the Act and will provide the Representatives with copies of the form
of Rule 434 Prospectus in such numbers as you may reasonably request and file or
transmit for filing with the Commission the form of Prospectus complying with
Rule 434(c)(2) of the Act in accordance with Rule 424(b) of the Act by the close
of business in Chicago on the business day immediately succeeding the date
hereof. If the Company elects not to rely on Rule 434, the Company will provide
you with copies of the form of Prospectus in such numbers as you may reasonably
request and file or transmit for filing with the Commission such Prospectus in
accordance with Rule 424(b) of the Act, by the close of business in Chicago on
the business day immediately succeeding the date hereof.
(b) If, at the time that the Registration Statement becomes effective,
any information shall have been omitted therefrom in reliance upon Rule 430A
under the Act, then promptly following the execution of the Pricing Agreement,
the Company will prepare and file with the Commission, in accordance with Rule
430A and Rule 424(b) under the Act, copies of an amended Prospectus, or, if
required by Rule 430A, a post-effective amendment to the Registration Statement
(including an amended Prospectus) containing all information so omitted.
(c) Neither the Company nor any of its subsidiaries will, prior to the
earlier of the Option Closing Date or termination or expiration of the related
option, incur any liability or
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obligation, direct or contingent, or enter into any material transaction, other
than in the ordinary course of business, except as contemplated in the
Prospectus.
(d) The Company will not file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectus of which the
Representatives shall not previously have been advised or to which the
Representatives shall promptly after being so advised reasonably object in
writing.
(e) Prior to the effective date of the Registration Statement, the
Company has delivered or will deliver to each of the Underwriters, without
charge, copies of each form of Preliminary Prospectus in such quantities as they
have reasonably requested or may hereafter reasonably request. The Company
consents to the use, in accordance with the provisions of the Act and with the
securities or Blue Sky laws of the jurisdictions in which the Shares are offered
by the several Underwriters and by dealers, prior to the effective date of the
Registration Statement, of each Preliminary Prospectus so furnished by the
Company.
(f) On the effective date of the Registration Statement and thereafter
from time to time during such period as in the opinion of counsel for the
Underwriters a prospectus relating to the Shares is required by law to be
delivered in connection with offers or sales of the Shares by an Underwriter or
a dealer, the Company will deliver to each Underwriter and dealer, without
charge, as many copies of the Registration Statement, the Prospectus and each
Preliminary Prospectus and the Incorporated Documents (and of any amendment or
supplement to such documents) as they may reasonably request. During such
period, if any event occurs which in the judgment of the Company, or in the
opinion of counsel for the Underwriters, should be set forth in the Prospectus
in order to ensure that no part of the Prospectus includes an untrue statement
of a material fact or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances at the time the
Prospectus is delivered to a purchaser, not misleading, the Company will
forthwith prepare, submit to the Representatives, file with the Commission and
deliver, without charge to the several Underwriters and dealers (whose names and
addresses will be furnished by the Representatives to the Company) to whom
shares have been sold by the Underwriters or to other dealers any amendments or
supplements to the Prospectus so that the statements in the Prospectus, as so
amended or supplemented, will comply with the standards set forth in this
sentence. The Company consents to the use of such Prospectus (and of any
amendments or supplements thereto) in accordance with the provisions of the Act
and with the securities or Blue Sky laws of the jurisdictions described in the
preliminary Blue Sky memorandum in which the Shares are lawfully offered by the
several Underwriters and by all dealers to whom Shares may be sold, both in
connection with the offering or sale of the Shares and for such period of time
thereafter as the Prospectus is required by law to be delivered in connection
therewith. In case any Underwriter is required to deliver a Prospectus (and any
amendment or supplement thereto) more than nine months after the first date upon
which the Shares are offered to the public, the Company will, upon request, but
at the expense of such Underwriter, promptly prepare and furnish such
Underwriter with reasonable quantities of a Prospectus complying with Section
10(a)(3) of the Act.
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(g) The Company will cooperate with the Representatives and counsel for
the Underwriters in connection with the registration or qualification of the
Shares for offer and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as the Representatives may
designate, will continue such registrations or qualifications in effect so long
as reasonably required for the distribution of the Shares and will file such
consents to service of process or other documents as may be necessary in order
to effect such registration or qualification; provided that in no event shall
the Company be obligated (i) to qualify to do business in any jurisdiction where
it is not now so qualified, (ii) to file any general consent to service of
process, or (iii) take any action that would subject it to income taxation in
any jurisdiction where it is not so qualified.
(h) For a period of five years after the date of the Pricing Agreement:
(i) the Company will furnish to the Representatives (A) as soon as
available, a copy of each report of the Company of general interest mailed
to any class of its security holders (B) copies of all annual reports and
current reports filed with the Commission on Forms 10-K, 10-Q and 8-K and
any amendment thereto or such other similar forms as may be designated by
the Commission and (C) from time to time, such other information concerning
the Company as the Representatives may reasonably request;
(ii) if at any time during such five year period, the Company shall
cease filing with the Commission the annual reports and current reports on
Forms 10-K, 10-Q and 8-K or other similar forms referred to in clause (i)
above, the Company will forward to its stockholders generally and the
Representatives and upon request to each of the other Underwriters (A) as
soon as practicable after the end of each fiscal year, copies of a balance
sheet and statements of income and retained earnings of the Company as of
the end of and for such fiscal year, certified by independent public
accountants, and (B) as soon as practicable after the end of each quarterly
fiscal period, except for the last quarterly fiscal period in each fiscal
year, a summary statement (which need not be certified) of income and
retained earnings of the Company for such period, which shall also be made
publicly available; and
(iii) the Company will furnish to the Representatives and to the NASD,
and by issuance of a press release, on the date of declaration, notice of
all dividends, including the amount and medium of payment, the record date
(which shall be not less than ten days subsequent to the declaration date)
and the payment date (which shall be not less than ten days subsequent to
the record date).
(i) The Company will make generally available to its security holders an
earnings statement of the Company, which need not be audited, covering a
twelve-month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, as soon as practicable
after the end of such period, which earnings statement shall satisfy the
provisions of Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including Rule 158).
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(j) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than by notice given by the Representatives'
termination of this Agreement pursuant to Section 10 hereof), or if this
Agreement shall be terminated by the several Underwriters because of any failure
or refusal on the part of the Company to comply with the terms or fulfill any of
the conditions of this Agreement, the Company agrees to reimburse the several
Underwriters for all out-of-pocket expenses (including reasonable fees and
expenses of counsel for the Underwriters) reasonably incurred by them in
connection herewith but without any further obligation of the Company for lost
profits or otherwise. If this Agreement is terminated pursuant to Section 10
hereof, the several Underwriters shall themselves bear any such out-of-pocket
expenses incurred by them.
(k) The Company agrees and will enter into an agreement not to sell,
contract to sell or otherwise dispose of any Common Stock or rights to purchase
Common Stock for a period of 180 days after the date of the Pricing Agreement
without the prior written consent of the Representatives. The Company will also
obtain similar agreements from each of its executive officers and directors.
(l) The Company will apply the net proceeds from the sale of the shares
to be sold by it under this Agreement and the Pricing Agreement for the purposes
set forth in the Prospectus under the caption "Use of Proceeds."
(m) The Company will use its best efforts, subject to notice of
issuance, to cause the Shares to be approved for quotation on the NASDAQ Stock
Market.
SECTION 5. PAYMENT OF EXPENSES. The Company will pay, or reimburse if
paid by the Representatives, whether or not the transactions contemplated hereby
are consummated or this Agreement is terminated, all costs and expenses incident
to the performance by it of its obligations under this Agreement and the Pricing
Agreement, including, without limiting the generality of the foregoing, (a)
preparation, printing, filing and distribution (including postage, air freight
charges and charges for counting and packaging) of the original registration
statement, the Registration Statement, each Preliminary Prospectus, the
Prospectus (including any all Incorporated Documents, exhibits and financial
statements and any Term Sheet delivered by the Company pursuant to Rule 434 of
the Act), each amendment and/or supplement to any of the foregoing, and this
Agreement, the Pricing Agreement, the Agreement Among Underwriters, Selected
Dealers Agreement, Powers of Attorney and Underwriters' Powers of Attorney and
Questionnaires, (b) furnishing to the several Underwriters and dealers copies of
the foregoing materials (provided, however, that any such copies furnished by
the Company more than nine months after the first date upon which the Shares are
offered to the public shall be at the expense of the several Underwriters or
dealers so requesting as provided in Section 4(f) above), (c) the registrations
or qualifications referred to in Section 4(g) above (including filing fees and
fees and disbursements of counsel in connection therewith) and expenses of
printing and delivering to the several Underwriters copies of the preliminary
and final Blue Sky memoranda, (d) the review of the terms of the public offering
of the Shares by the NASD (including the filing fees paid to the NASD in
connection therewith) and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith, (e) the performance by the Company of
its other
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obligations under this Agreement, including the fees of the Company's counsel
and accountants, (f) the issuance of the Shares and the preparation and printing
of the stock certificates representing the Shares, including any stamp taxes
payable in connection with the original issuance of the Shares, (g) furnishing
to the several Underwriters copies of all reports and information required by
Section 4(h) above, including reasonable costs of shipping and mailing, and (h)
the designation of the Common Stock as a Nasdaq National Market security.
SECTION 6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters to purchase the Firm Shares hereunder are
subject to the following conditions:
(a) That the Registration Statement shall have become effective not
later than 1:00 p.m., Chicago time, on the first full business day after the
date of this Agreement, or at such later date and time as shall be consented to
in writing by the Representatives, and, if the Representatives and the Company
have elected to rely upon Rule 430A, the price of the Shares and any
price-related or other information previously omitted from the effective
Registration Statement pursuant to such Rule 430A shall have been transmitted to
the Commission for filing pursuant to Rule 424(b) within the prescribed time
period, and, if the Representatives and the Company have elected to rely upon a
Term Sheet, such Term Sheet shall have been transmitted to the Commission for
filing pursuant to Rule 434 and Rule 424(b) within the prescribed time period,
and on or prior to the Closing Date, the Company shall have provided evidence
satisfactory to the Representatives of such timely filing, or a post-effective
amendment providing such information shall have been promptly filed and declared
effective in accordance with the requirements of Rule 430A. No stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for the purpose shall have been instituted or shall be
pending or, to the knowledge of the Company, shall be contemplated by the
Commission and there shall not have come to the attention of the Representatives
any facts that would cause them to believe that the Prospectus, at the time it
was required to be delivered to purchasers of the Shares, contained any untrue
statement of material fact or omitted to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
there were made, not misleading.
(b) That subsequent to the effective date of the Registration Statement,
(i) there shall not have occurred any change, or any development involving a
prospective change, in or affecting particularly the business or properties of
the Company or its subsidiaries not contemplated by the Prospectus, which, in
the Representatives' opinion, as Representatives of the several Underwriters,
would materially adversely affect the market for the Shares or make it
impracticable or inadvisable to proceed with the offering or the delivery of the
Shares, as contemplated herein and in the Prospectus, or to attempt to enforce
contracts for the purchase of Shares, and (ii) the business and operations of
the Company shall not have been adversely affected by strike, fire, flood,
accident or other calamity (whether or not insured).
(c) The Representatives shall have received from Proskauer Rose LLP,
counsel for the Company, a favorable opinion dated the Closing Date and
satisfactory to the Representatives and the Underwriters' counsel to the effect
that:
-15-
(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
full corporate power and authority to own, lease and operate its properties
and conduct its business as described in the Registration Statement. The
Company is duly qualified to do business as a foreign corporation and in
good standing in each jurisdiction where the ownership or leasing of its
properties or the conduct of its business requires such qualification,
except in any such case where the failure to so qualify or be in good
standing would not have a material adverse effect on the condition
(financial or otherwise) or results of operations of the Company and its
subsidiaries, taken as a whole.
(ii) Each subsidiary has been duly incorporated and is validly existing
as a corporation in good standing under the laws of its state of
incorporation with full corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Registration Statement. Each subsidiary is duly qualified to do business as
a foreign corporation and in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except in any such case where the failure to so
qualify or be in good standing would not have a material adverse effect on
the condition (financial or otherwise) or results of operations of the
Company and its subsidiaries, taken as a whole.
(iii) All of the issued and outstanding capital stock of the
subsidiaries of the Company has been duly authorized and validly issued and
is fully paid and non-assessable, and except as disclosed in the
Registration Statement, the Company owns directly or indirectly 100 percent
of the outstanding capital stock of each subsidiary and, to the best
knowledge of such counsel, such stock is owned free and clear of any
security interests, claims, liens, encumbrances or adverse interests of any
nature.
(iv) The issued and outstanding capital stock of the Company has been
duly authorized and validly issued and is fully paid and non-assessable and
free of preemptive rights.
(v) The authorized capitalization of the Company consists entirely of
32,000,000 shares of Common Stock, of which 4,492,493 were issued and
outstanding on the date of the Prospectus and 2,000,000 shares of Preferred
Stock, of which none were issued and outstanding on the date of the
Prospectus and all of which conforms to the description thereof in the
Registration Statement and the Prospectus.
(vi) The certificates for the Shares to be delivered hereunder are in
due and proper form, and when duly countersigned by the Company's transfer
agent and delivered to the Representatives against payment of the agreed
consideration therefor in accordance with the provisions of this Agreement
and the Pricing Agreement, the Shares represented thereby will be duly
authorized and validly issued, fully paid and nonassessable, entitled to the
rights set forth in the Company's Certificate of Incorporation and the
Rights Agreement and free of
-16-
preemptive rights and, to the knowledge of such counsel, will be free of any
security interest, claim, lien, encumbrance or adverse interest of any
nature, or rights of first refusal in favor of, stockholders with respect to
any of the Shares or the issuance or sale thereof, pursuant to the
Certificate of Incorporation or by-laws of the Company and, to such
counsel's knowledge, there are no contractual preemptive rights, rights of
first refusal, rights of co-sale or other similar rights which exist with
respect to any of the Shares or the issuance and sale thereof, and the
Shares to be sold hereunder have been duly and validly authorized and
qualified for inclusion on The Nasdaq National Market, subject to notice of
issuance.
(vii) This Agreement and the Pricing Agreement have been duly and
validly authorized, executed and delivered by the Company and are legal,
valid and binding obligations of the Company, enforceable in accordance with
their terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and by general principles of equity, and except
that such counsel need express no opinion as to those provisions relating to
indemnities for liabilities under the Act.
(viii) No authorization, approval, order or consent of any governmental
authority or agency is required for the valid issuance and sale of the
Shares, except such as may be required under the Act or state securities
laws as to which such counsel need express no opinion.
(ix) The execution, delivery and performance of this Agreement and the
Pricing Agreement by the Company, the issue and sale of the Shares, and the
consummation of the transactions contemplated hereby and thereby will not
conflict with or result in a breach of any of the provisions of, or
constitute a default under (A) the Company's Certificate of Incorporation or
by-laws or any agreement, franchise, license, indenture, mortgage, deed of
trust or other instrument or agreement known to such counsel to which the
Company or any of its subsidiaries is a party or by which Company or any of
its subsidiaries is bound or to which any of their respective properties is
subject or (B) so far as known to such counsel, any statute, order, rule or
regulation applicable to the Company or any of its subsidiaries of any court
or other governmental authority or body having jurisdiction over the Company
or any of its subsidiaries or any of its properties.
(x) All documents incorporated by reference in the Prospectus, when they
were filed with the Commission, complied as to form in all material respects
with the requirements of the Exchange Act; and such counsel has no reason to
believe that any of such documents, when they were so filed, contained an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so filed,
not misleading; such counsel need express no opinion as to the financial
statements or other financial or statistical data contained in any such
document.
(xi) The Registration Statement has become effective under the Act, and,
to the knowledge of such counsel, no stop order suspending the effectiveness
of the Registration
-17-
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act.
(xii) The Registration Statement (including the information deemed to be
part of the Registration Statement at the time of effectiveness pursuant to
Rule 430A(b), if applicable) as amended or supplemented (except for the
financial statements and notes thereto, the financial statement schedules
and other statistical or financial data included therein as to which such
counsel need express no opinion) and the Prospectus and any supplements or
amendments thereto (except for the financial statements and notes thereto,
the financial statement schedules and other statistical or financial data
included therein, as to which such counsel need express no opinion) comply
as to form in all material respects with the requirements of the Act and the
rules of the Commission thereunder and nothing has come to the attention of
such counsel that would cause such counsel to believe that the Registration
Statement (including the information deemed to be part of the Registration
Statement at the time of effectiveness pursuant to Rule 430A(b), if
applicable) as amended or supplemented (except for the financial statements
and notes thereto, the financial statement schedules and other statistical
or financial data included therein as to which such counsel need express no
opinion) at the time it became effective, at the time the Pricing Agreement
was executed and at the Closing Date, contained any untrue statement of a
material fact or omitted or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading,
or that, as of its date, the Prospectus or any amendment or supplement
thereto (except for the financial statements and notes thereto, the
financial statement schedules and other statistical or financial data
included therein as to which such counsel need express no opinion) included
or includes any untrue statement of a material fact or omitted or omits to
state any material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading. The Rule
434 Prospectus conforms to the requirements of Rule 434 of the Act.
(xiii) The statements in the Prospectus in the sections captioned
"Description of Capital Stock," "Business - Mobile Data Communications
Services Business Segment," and "Certain Transactions" in each case insofar
as such statements reflect a summary of the material legal matters or the
documents referred to therein, fairly and accurately present the information
called for by the Act and the applicable rules and regulations promulgated
thereunder.
(xiv) To the knowledge of such counsel there are no statutes or
regulations, provisions of the General Corporation Law of the State of
Delaware or any pending or threatened litigation or governmental proceedings
against the Company required to be described in the Prospectus which are not
so described, nor of any contracts or documents of a character required to
be described in or filed as a part of the Registration Statement which are
not described or filed as required.
(xv) To such counsel's knowledge, except as disclosed in the Prospectus
and as have been duly waived, no person has the right, contractual or
otherwise, to cause the Company to register pursuant to the Act any shares
of capital stock of the Company, upon the
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issuance and sale of the Shares to be sold by the Company to the
Underwriters pursuant to this Agreement.
(xvi) Neither the Company nor any of its subsidiaries is an "investment
company" or a person "controlled by" an "investment company" within the
meaning of the Investment Company Act.
(xvii) To such counsel's knowledge, all offers and sales of the
Company's and each of its subsidiaries capital stock prior to the date
hereof were at all relevant times exempt from the registration requirements
of the Act and were duly registered or the subject of an available exemption
from the registration requirements of the applicable state securities or
blue sky laws.
In rendering such opinion, such counsel may state that they are relying
upon the certificate of the officers of the Company and the transfer agent for
the Common Stock, as to the number of shares of Common Stock at any time or
times outstanding, and that insofar as their opinion under clause (xii) above
relates to the accuracy and completeness of the Prospectus and Registration
Statement, it is based upon a general review with the Company's representatives
and independent accountants of the information contained therein, without
independent verification by such counsel of the accuracy or completeness of such
information. Such counsel may also rely upon the opinions of other competent
counsel and, as to factual matters, on certificates of officers of the Company
and of state officials, in which case their opinion is to state that they are so
doing and copies of such opinions or certificates are to be attached to the
opinion unless such opinions or certificates (or, in the case of certificates,
the information therein) have been furnished to the Representatives otherwise.
(d) That the Representatives shall have received on the Closing Date a
favorable opinion dated the Closing Date from Xxxxxxxx Xxxxxx LLP, counsel for
the Underwriters, as to such matters as the Representatives may reasonably
require.
(e) That the Representatives shall have received letters addressed to
the Representatives and dated the date hereof and the Closing Date from KPMG
LLP, independent public accountants for the Company, to the effect set forth in
Schedule II. There shall not have been any change or decrease specified in the
letters referred to in this subparagraph which makes it impractical or
inadvisable in the judgment of the Representatives to proceed with the public
offering or purchase of the Shares as contemplated hereby.
(f) That (i) no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there shall
not have been any change in the capital stock of the Company nor any material
increase in the short or long-term debt of the Company from that set forth or
contemplated in the Registration Statement; (iii) there shall not have been,
since the respective dates as to which information is given in the Registration
Statement and the Prospectus, except as may otherwise be set forth or
contemplated in the Registration Statement and the Prospectus,
-19-
any material adverse change in the financial condition or results of operations
of the Company; (iv) the Company shall not have incurred any material
liabilities or obligations, direct or contingent (whether or not in the ordinary
course of business), other than those reflected in the Registration Statement;
and (v) all of the representations and warranties of the Company contained in
this Agreement shall be true and correct on and as of the date hereof and the
Closing Date as if made on and as of each such date, and the Representatives
shall have received a certificate, dated the Closing Date and signed by the
chief executive officer and the principal financial officer (or such other
officers as are acceptable to the Representatives) to the effect set forth in
this Section 6(f) and in Section 6(g) hereof.
(g) That the Company shall not have failed at or prior to the Closing
Date to have performed or complied in all material respects with any of the
agreements herein contained and required to be performed or complied with by it
at or prior to the Closing Date.
(h) Within 24 hours after the Registration Statement becomes effective,
or within such longer period as to which the Representatives shall have
consented, the Shares shall have been qualified for sale or exempted from such
qualification under the securities laws of such jurisdictions as the
Representatives shall have designated prior to the time of execution of the
Pricing Agreement and such qualification or exemption shall continue in effect
to and including the Closing Date.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of the Option Closing
Date of the conditions set forth in paragraphs (a) through (h); except that the
opinions called for in paragraphs (c) and (d) shall be revised to reflect the
sale of Additional Shares and shall be dated the Option Closing Date, if
different from the Closing Date.
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of the
Act or the Exchange Act from and against any and all losses, claims, damages or
liabilities, joint or several, whatsoever (including any investigation, legal or
other expenses incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding or any claim asserted) to which such
Underwriter, or such controlling person may become subject, arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus or the Registration Statement or the
Prospectus or in any amendment or supplement thereto or arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred, except insofar as such
losses, claims, damages or liabilities anise out of or are based upon any such
untrue statement or omission or allegation thereof which has been made therein
or omitted therefrom in reliance upon and in conformity with information
relating to such Underwriter furnished in writing to the Company by or on behalf
of any
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Underwriter through the Representatives expressly for use therein; provided,
however, that the indemnification contained in this paragraph with respect to
any Preliminary Prospectus shall not inure to the benefit of any Underwriter (or
of any person controlling such Underwriter) with respect to any action or claim
arising from the sale of the Shares by such Underwriter brought by any person
who purchased Shares from such Underwriter if (i) a copy of the Prospectus (as
amended or supplemented if any amendments or supplements thereto shall have been
furnished to the Underwriter prior to the written confirmation of the sale
involved) shall not have been given or sent to such person by or on behalf of
the Underwriter with or prior to the written confirmation of the sale involved
and (ii) the untrue statement or omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus (as amended or
supplemented if amended or supplemented as aforesaid).
(b) If any action or claim shall be brought against any Underwriter or
any person controlling such Underwriter, in respect of which indemnity may be
sought against the Company, such Underwriter shall promptly notify the Company
in writing, and the Company shall assume the defense thereof, including the
employment of counsel and payment of all fees and expenses. Any Underwriter or
any such person controlling such Underwriter shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Underwriter or such controlling person and shall be reimbursed as they are
incurred unless (i) the Company has agreed in writing to pay such fees and
expenses, (ii) the Company has failed to assume the defense and employ counsel,
or (iii) the named parties to any such action (including any impleaded party)
included such Underwriter or controlling person and the Company and such
Underwriter or controlling person shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the Company and which may also result in a
conflict of interest (in which case if such Underwriter or controlling person
notifies the Company, the Company shall not have the right to assume the defense
of such action on behalf of such Underwriter or controlling person, it being
understood, however, that the Company shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising put of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys for all such Underwriters and controlling persons, which firm shall be
designated in writing by the Representatives). The Company shall not be liable
for any settlement or any such action effected without the written consent of
the Company, but if settled with the written consent of the Company, or if there
shall be a final judgment for the plaintiff in any such action and the time for
filing all appeals has expired, the Company agrees to indemnify and hold
harmless any Underwriter and any such controlling person from and against any
loss or liability by reason of such settlement or judgment.
(c) Each Underwriter will severally indemnify and hold harmless the
Company, its directors, its officers who sign the Registration Statement and any
person controlling the Company within the meaning of the Act or the Exchange Act
to the same extent as the foregoing indemnity from the Company to each
Underwriter, but only with respect to information relating to such Underwriter
furnished in writing to the Company by or on behalf of such Underwriter through
the Representatives expressly for use in the Registration Statement, the
Prospectus or
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any Preliminary Prospectus. If any action or claim shall be brought or asserted
against the Company, any of its directors, any such officer, or any such
controlling person based on the Registration Statement, the Prospectus or any
Preliminary Prospectus and in respect of which indemnity may be sought against
any Underwriter, such Underwriter shall have the rights and duties given to the
Company pursuant to Section 7(b) hereof (except that if the Company shall have
assumed the defense thereof, such Underwriter shall not be required to do so,
but may employ separate counsel therein and participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of such
Underwriter), and the Company, its directors, any such officer, and any such
controlling person shall have the rights and duties given to the Underwriters by
Section 7(b) hereof.
(d) (i) If the indemnification provided for in this Section 7 is
unavailable as a matter of law to any indemnified party under this Section 7 in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party in lieu of indemnifying such indemnified
party thereunder, shall contribute to the amount paid or payable by damages,
liabilities or expenses (A) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Underwriters from the offering
of the Shares or (B) if the allocation provided by clause (A) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (A) above but also the relative
fault of the Company and the Underwriters in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The respective
relative benefits received by the Company and the Underwriters shall be deemed
to be in the same proportion in the case of the Company, as the total price paid
to the Company for the Shares by the Underwriters (net of underwriting discount
but before deducting expenses), and in the case of the Underwriters as the
underwriting discount received by them bears to the total of such amounts paid
to the Company and received by the Underwriters as underwriting discount, in
each case as contemplated by the Prospectus. The relative fault of the Company
and the Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities and expenses referred to in
this Section shall be deemed to include, subject to the limitations set forth in
this Section, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim.
(ii) The Company and the Underwriters agree that the determination of
contribution pursuant to this Section based on pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph would not be
just and equitable (even if the several Underwriters were treated as one entity
for such purpose). Notwithstanding the provisions of this Section, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by it and distributed
to the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by
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reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section are several in proportion to
their respective underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this Section
and the representations and warranties of the Company set forth in this
Agreement shall remain operative and in full force and effect, regardless of (i)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Company or its directors or officers, (or any
person controlling the Company), (ii) acceptance of any Shares and payment
therefor hereunder and (iii) any termination of this Agreement. A successor or
assign of an Underwriter, the Company or its directors or officers, and their
legal and personal representatives (or of any person controlling an Underwriter,
or the Company) shall be entitled to the benefits of the indemnity, contribution
and reimbursement agreements contained in this Section.
SECTION 8. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become
effective immediately as to Sections 5, 7, 10 and 11 and as to all other
provisions at 10:00 A.M., Chicago Time, on the day following the date upon which
the Pricing Agreement is executed and delivered, unless such a day is a
Saturday, Sunday or holiday (and in that event this Agreement shall become
effective at such hour on the business day next succeeding such Saturday, Sunday
or holiday); but this Agreement shall nevertheless become effective at such
earlier time after the Pricing Agreement is executed and delivered as you may
determine on and by notice to the Company or by release of any Shares for sale
to the public. For the purposes of this Section, the Shares shall be deemed to
have been so released upon the release for publication of any newspaper
advertisement relating to the Shares or upon the release by you of telegrams (i)
advising Underwriters that the Shares are released for public offering, or (ii)
offering the Shares for sale to securities dealers, whichever may occur first.
SECTION 9. DEFAULT OF UNDERWRITERS. If any one or more of the
Underwriters shall fail or refuse to purchase Firm Shares which it or they have
agreed to purchase under this Agreement and the Pricing Agreement and the
aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate number of Firm Shares, each non-defaulting Underwriter shall be
obligated, severally, in the proportion which the number of Firm Shares set
forth opposite its name in Schedule I bears to the aggregate number of Firm
Shares set forth opposite the names of all non-defaulting Underwriters or in
such other proportion as the Representatives may specify in accordance with the
Agreement Among Underwriters to purchase the Firm Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase. If any
Underwriter or Underwriters shall fail or refuse to purchase Firm Shares and the
aggregate number of Firm Shares with respect to which such default occurs is
more than one-tenth of the aggregate number of Firm Shares and arrangements
satisfactory to the Representatives and the Company for the purchase of such
Firm Shares are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case which does not result in termination of this
Agreement, either
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the Representatives or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and the Prospectus or any other
documents or arrangements may be effected. Any action taken under this paragraph
shall not relieve any defaulting Underwriter from liability in respect of any
such default of any such Underwriter under this Agreement. Any notice under this
Section 9 may be made by telecopy or telephone but shall be subsequently
confirmed by letter.
SECTION 10. TERMINATION OF AGREEMENT. This Agreement and the Pricing
Agreement shall be subject to termination by notice given by you to the Company,
if (a) after the execution and delivery of this Agreement and the Pricing
Agreement and prior to the Closing Date (and with respect to the Additional
Shares, the Option Closing Date) (i) trading generally shall have been suspended
or materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, the National Association of Securities
Dealers, Inc., the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) trading of any securities of the
Company shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New York
or in Chicago shall have been declared by either Federal, New York or Illinois
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses (a)(1) through (iv), such event, singly or
together with any other such event, makes it, in your judgment, impracticable to
market the Shares on the terms and in the manner contemplated in the Prospectus.
Notice of such cancellation shall be given to the Company by telecopy or
telephone but shall be subsequently confirmed by letter.
SECTION 11. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale to the
Underwriters of the Shares on the Closing Date is not consummated because any
condition to the Underwriters' obligations hereunder is not satisfied or because
of any refusal, inability or failure on the part of the Company to perform any
agreement herein or to comply with any provision hereof, unless such failure to
satisfy such condition or to comply with any provision hereof is due to the
default or omission of any Underwriter, the Company agrees to reimburse you and
the other Underwriters upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been reasonably
incurred by you and them in connection with the proposed purchase and the sale
of the Shares. Any such termination shall be without liability of any party to
any other party except that the provisions of this Section, Section 5 and
Section 7 shall at all times be effective and shall apply.
SECTION 12. NOTICES. Except as otherwise provided in Sections 9 and 10
hereof, notice given pursuant to any of the provisions of this Agreement shall
be in writing and shall be delivered (a) if to the Company, at the office of the
Company at 000 Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000, Attention: Xxxx Xxxxxxxx
with a copy to Proskauer Rose LLP, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxx X. Xxxxxxx, Esq., or (b) if to the Representatives, at the
offices of ABN AMRO Incorporated, 000 Xxxxx XxXxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000, Attention: Corporate Finance Department, with a copy to Xxxxxxxx
Xxxxxx LLP, Xxx Xxxxxxxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, Attention: Xxxxxx
X. Xxxx,
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Esq. or in any case to such other address as the person to be notified may have
requested in writing.
SECTION 13. SUCCESSORS. The Agreement and the Pricing Agreement are made
solely for the benefit of the several Underwriters, the Company, their directors
and officers and other controlling persons referred to in Section 7 hereof, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement or the Pricing Agreement.
The term "successors and assigns" as used in this Agreement shall not include a
purchaser from any of the several Underwriters of any of the Shares in his
status as such purchaser.
SECTION 14. REPRESENTATION OF UNDERWRITERS. The Representatives will act
for the several Underwriters in connection with the purchase, offering and sale
of the Shares, and any action taken by the Representatives will be binding upon
all the Underwriters.
SECTION 15. PARTIAL UNENFORCEABILITY. If any section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph or provision hereof.
SECTION 16. APPLICABLE LAW. This Agreement and the Pricing Agreement
shall be governed by and construed in accordance with the laws of the State of
Illinois.
SECTION 17. COUNTERPARTS. This Agreement may be signed in various
counterparts which together shall constitute one and the same instrument.
* * *
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
Comtech Telecommunications Corp.
By:
----------------------------------------------
Name: Xxxx Xxxxxxxx
Title: Chairman of the Board, Chief Executive
Officer and President
Accepted and delivered as of
the date first written above.
ABN AMRO Incorporated
XXXXXX, XXXXXXXX & COMPANY, INCORPORATED
HCFP/XXXXXXX SECURITIES, LLC
Acting as Representatives of
the Several Underwriters named
in Schedule I hereto.
By: ABN AMRO Incorporated
By:
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COMTECH TELECOMMUNICATIONS CORP.
SCHEDULE I
UNDERWRITERS
NUMBER OF
NAME FIRM SHARES
---- -----------
ABN AMRO Incorporated..................................................
Xxxxxx, Xxxxxxxx & Company, Incorporated...............................
HCFP/Xxxxxxx Securities, LLC...........................................
---------
TOTAL.......................................................... 2,300,000
=========
COMTECH TELECOMMUNICATIONS CORP.
SCHEDULE II
COMFORT LETTER OF KPMG LLP
(1) They are independent public accountants with respect to the
Company and its subsidiaries within the meaning of the Act.
(2) In their opinion the consolidated financial statements of the
Company and its subsidiaries included or incorporated by reference in the
Registration Statement and the consolidated financial statements of the Company
from which the information presented under the caption "Selected Consolidated
Financial Data" has been derived which are stated therein to have been examined
by them comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act.
(3) On the basis of specified procedures (but not an examination in
accordance with generally accepted auditing standards), including inquiries of
certain officers of the Company and its subsidiaries responsible for financial
and accounting matters as to transactions and events subsequent to July 31,
1999, a reading of minutes of meetings of the stockholders and directors of the
Company and its subsidiaries since July 31, 1999, a reading of the latest
available interim unaudited consolidated financial statements of the Company and
its subsidiaries (with an indication of the date thereof) and other procedures
as specified in such letter, nothing came to their attention which caused them
to believe that (i) the unaudited consolidated financial statements of the
Company and its subsidiaries included or incorporated by reference in the
Registration Statement do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the Exchange Act or that
such unaudited financial statements are not fairly presented in accordance with
generally accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included in the
Registration Statement, and (ii) at a specified date not more than five days
prior to the date thereof in the case of the first letter and not more than two
business days prior to the date thereof in the case of the second and third
letters, there was any change in the capital stock or long-term debt or
short-term debt (other than normal payments) of the Company and its subsidiaries
on a consolidated basis or any decrease in consolidated net current assets or
consolidated stockholders' equity as compared with amounts shown on the latest
unaudited balance sheet of the Company included in the Registration Statement or
for the period from the date of such balance sheet to a date not more than five
days prior to the day thereof in the case of the first letter and not more than
two business days prior to the date thereof in the case of the second and third
letters, there were any decreases, as compared with the corresponding period of
the prior year, in consolidated net sales, consolidated income before income
taxes or in the total or per share amounts of consolidated net income except, in
all instances, for changes or decreases which the Prospectus discloses have
occurred or may occur or which are set forth in such letter.
(4) They have carried out specified procedures, which have been
agreed to by the Representatives, with respect to certain information in the
Prospectus specified by the Representatives, and on the basis of such
procedures, they have found such information to be in agreement with the general
accounting records of the Company and its subsidiaries.
Exhibit A
2,300,000 SHARES
COMTECH TELECOMMUNICATIONS CORP.
COMMON STOCK
PRICING AGREEMENT
, 2000
ABN AMRO Incorporated
Xxxxxx, Xxxxxxxx & Company, Incorporated
HCFP/Xxxxxxx Securities, LLC
Individually and as Representatives of the
Several Underwriters Named in Schedule I
to the Underwriting Agreement
c/o ABN AMRO Incorporated
000 Xxxxx XxXxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated , 2000 (the
"Underwriting Agreement"), relating to the purchase by the several Underwriters
named in Schedule I thereto (collectively, the "Underwriters"), for whom you are
acting individually and as representatives (the "Representatives"), of the above
referenced Common Stock (the "Shares") of Comtech Telecommunications Corp. (the
"Company").
Pursuant to Section 3 of the Underwriting Agreement, the Company agrees
with each of the Underwriters as follows:
1. The initial public offering price per share of the Shares determined
as provided in said Section 3 shall be $ .
2. The purchase price per share of the Shares to be paid by the several
Underwriters shall be $ , being an amount equal to the initial public
offering price set forth above, less $ per Share.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Underwriters and the Company in accordance with its terms.
Very truly yours,
Comtech Telecommunications Corp.
By:
----------------------------------------------
Name: Xxxx Xxxxxxxx
Title: Chairman of the Board, Chief Executive
Officer and President
Confirmed and Accepted, as of the date
first above written for themselves and
as Representatives of the other Underwriters
named in the Underwriting Agreement:
ABN AMRO INCORPORATED
XXXXXX, XXXXXXXX & COMPANY, INCORPORATED
HCFP/XXXXXXX SECURITIES, LLC
Acting as Representatives of the Several
Underwriters named in Schedule I to
the Underwriting Agreement
BY: ABN AMRO INCORPORATED
BY:
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