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EXHIBIT 1.1
ULTICOM, INC.
Common Stock
UNDERWRITING AGREEMENT
September ___, 2000
LEHMAN BROTHERS INC.
CHASE SECURITIES INC.
BEAR, STEARNS & CO. INC.
U.S. BANCORP PIPER JAFFRAY INC.
As Representatives of the
several Underwriters named in Schedule 1,
c/o LEHMAN BROTHERS INC.
Three World Financial Center
New York, NY 10285
Dear Sirs:
Ulticom, Inc., a New Jersey corporation (the "Company"),
proposes and certain shareholders of the Company named in Schedule 2 hereto (the
"Selling Shareholders") propose to sell an aggregate of 4,250,000 shares (the
"Firm Stock") of the Company's Common Stock, no par value (the "Common Stock").
Of the 4,250,000 shares of Firm Stock, 2,843,374 are being sold by the Company
and 1,406,626 are being sold by the Selling Shareholders. In addition, the
Company proposes to grant to the Underwriters named in Schedule 1 hereto (the
"Underwriters") an option to purchase up to an additional 637,500 shares of the
Common Stock on the terms and for the purposes set forth in Section 2 (the
"Option Stock"). The Firm Stock and the Option Stock, if purchased, are
hereinafter collectively called the "Stock." This is to confirm the agreement
concerning the purchase of the Stock from the Company and the Selling
Shareholders by the Underwriters.
1. Representations, Warranties and Agreements of the Company.
The Company represents, warrants and agrees that:
(a) A registration statement on Form S-1, and
amendments thereto, with respect to the Stock have (i) been
prepared by the Company in conformity with the requirements of
the United States Securities Act of 1933, as amended (the
"Securities Act") and the rules and regulations (the "Rule and
Regulations") of the United States Securities and Exchange
Commission (the "Commission") thereunder, (ii) been filed with
the Commission under the Securities Act and (iii) become
effective under the Securities Act. Copies of such
registration statement and all amendments thereto have been
delivered by the Company to you as the representatives (the
"Representatives") of the Underwriters. As used in this
Agreement, "Effective Time" means the date and the time as of
which such registration
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statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission;
"Effective Date" means the date of the Effective Time;
"Preliminary Prospectus" means each prospectus included in
such registration statement, or amendments thereof, before it
became effective under the Securities Act and any prospectus
filed with the Commission by the Company with the consent of
the Representatives pursuant to Rule 424(a) of the Rules and
Regulations; "Registration Statement" means such registration
statement, as amended at the Effective Time, including all
information contained in the final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules and
Regulations in accordance with Section 6(a) hereof and deemed
to be a part of the Registration Statement as of the Effective
Time pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations; and "Prospectus" means such final prospectus, as
first filed with the Commission pursuant to paragraph (1) or
(4) of Rule 424(b) of the Rules and Regulations. The
Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will, when they
become effective or are filed with the Commission, as the case
may be, conform in all material respects to the requirements
of the Securities Act and the Rules and Regulations and do not
and will not, as of the applicable Effective Date (as to the
Registration Statement and any amendment thereto) and as of
the applicable filing date (as to the Prospectus and any
amendment or supplement thereto) contain an untrue statement
of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements
therein not misleading; provided, that no representation or
warranty is made as to information contained in or omitted
from the Registration Statement or the Prospectus in reliance
upon and in conformity with written information furnished to
the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein, it being
understood that the only information so furnished is specified
in Section 11(f).
(c) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of New Jersey, is duly qualified to do
business and is in good standing as a foreign corporation in
each jurisdiction in which its ownership or lease of property
or the conduct of its business requires such qualification
(except where the failure to be so qualified or in good
standing would not have, individually or in the aggregate, a
material adverse effect on the business, properties, financial
condition, stockholders' equity or results of operations of
the Company (a "Material Adverse Effect")), and has all
corporate power and authority necessary to own or hold its
properties and to conduct the business in which it is engaged.
Ulticom Europe SA ("Ulticom Europe") is the only subsidiary of
the Company and is neither a "significant subsidiary" as that
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term is defined in Rule 405 of the Rules and Regulations nor
has it conducted any material business operations.
(d) The Company has the authorized capitalization as
set forth in the Prospectus, and all of the issued shares of
capital stock of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and
conform to the description thereof contained in the
Prospectus.
(e) The shares of the Stock to be issued and sold by
the Company to the Underwriters have been duly and validly
authorized and, when issued and delivered against payment
therefor as provided herein, will be duly and validly issued,
fully paid and non-assessable; and the Stock will conform to
the description thereof contained in the Prospectus under the
caption "Description of Securities--Common Stock."
(f) Upon payment for and delivery of the Stock to be
sold by the Company pursuant to this Agreement, the
Underwriters, or other persons in whose names the Stock is
registered will acquire good and valid title to such Stock, in
each case free and clear of all liens, encumbrances, equities,
preemptive rights and other claims.
(g) This Agreement has been duly authorized, executed
and delivered by the Company; and (assuming the due
authorization, execution and delivery thereof by the other
parties thereto) constitutes the legal, valid and binding
obligation of the Company, enforceable against it in
accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) or an
implied covenant of good faith and fair dealing, except that
any rights or indemnification or contribution under this
Agreement may be limited by the laws of the State of New York,
the federal laws of the United States or public policy
relating thereto.
(h) The execution, delivery and performance of this
Agreement by the Company and the consummation of the
transactions contemplated hereby did not and will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the
Company is bound or to which any of the property or assets of
the Company is subject, nor will such actions result in any
violation of the provisions of the charter or by-laws of the
Company or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over
the Company or any of its properties or assets; and except for
the registration of the Stock under the Securities Act and
such consents, approvals, authorizations, registrations
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or qualifications as may be required under the Exchange Act of
1934, as amended (the "Exchange Act"), and applicable state
securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is
required for the execution, delivery and performance of this
Agreement by the Company and the consummation of the
transactions contemplated hereby.
(i) The Company effected a stock dividend of 2.2727
shares for each outstanding share of Common Stock which was
declared and paid on March 13, 2000, and all necessary
corporate action was taken to effect such stock dividend.
(j) Except as described in the Prospectus and in the
Registration Rights Agreement, dated January 1, 2000, by and
among the Company and Comverse Technology, Inc. ("Comverse"),
there are no contracts, agreements or understandings between
the Company and any person granting such person the right to
require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company
owned or to be owned by such person or to require the Company
to include such securities in the securities registered
pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement
filed by the Company under the Securities Act. The holders of
outstanding shares of the Company's capital stock are not
entitled to preemptive or other rights to subscribe for the
Stock. Except for the options to purchase from the Company
3,659,472 shares of the Common Stock in the aggregate granted
to officers, directors and employees of the Company under the
Company's 1998 Stock Incentive Compensation Plan (the "1998
Plan"), no options, warrants or other rights to purchase from
the Company, agreements or other obligations of the Company to
issue, or rights to convert any obligations of the Company
into or exchange any securities of the Company for, shares of
capital stock of or ownership interests in the Company are
outstanding.
(k) The Company has not sold or issued any shares of
Common Stock during the six-month period preceding the date of
the Prospectus, including any sales pursuant to Rule 144A
under, or Regulations D or S of, the Securities Act, other
than shares issued pursuant to the 1998 Plan or pursuant to
outstanding options or rights granted under the 1998 Plan.
(l) The Company has not sustained, since the date of
the latest audited financial statements included in the
Prospectus, any material loss or interference with its
business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and,
since such date, other than the stock dividend of 2.2727
shares for each outstanding share of Common Stock
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which was declared and paid on March 13, 2000, there has not
been any material change in the capital stock or long-term
debt of the Company or any material adverse change, or any
development involving a prospective material adverse change,
in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the
Company, otherwise than as set forth or contemplated in the
Prospectus.
(m) The financial statements (including the related
notes and supporting schedules) filed as part of the
Registration Statement or included in the Prospectus present
fairly in all material respects the financial condition and
results of operations of the Company at the dates and for the
periods indicated, and have been prepared in conformity with
generally accepted accounting principles applied on a
consistent basis throughout the periods involved.
(n) Deloitte & Touche LLP, who have certified certain
financial statements of the Company, whose report appears in
the Prospectus and who have delivered the initial letter
referred to in Section 10(h) hereof, are independent public
accountants as required by the Securities Act and the Rules
and Regulations.
(o) The Company does not own any real property; and
the Company has good and marketable title to all material
personal property owned by it, free and clear of all liens,
encumbrances and defects, except such as do not materially
affect the value of such property and do not materially
interfere with the use made and proposed to be made of such
property by the Company. All real property and buildings held
under lease by the Company are held by it under valid,
subsisting and enforceable leases, with such exceptions as are
not material and do not interfere with the use made and
proposed to be made of such property and buildings by the
Company.
(p) The Company carries, or is covered by, insurance
in such amounts and covering such risks as is adequate for the
conduct of its business and the value of its properties and as
is customary for companies engaged in similar businesses in
similar industries.
(q) Except as described in the Prospectus, the
Company owns or possesses adequate rights to use all material
patents and trademarks, including all applications therefor,
copyrights and licenses necessary for the conduct of its
business as now conducted and as proposed to be conducted as
described in the Prospectus, except that no representation is
made with respect to any products currently under development;
and the Company has no reason to believe that the conduct of
its business will conflict with, and has not received any
notice of any claim of conflict with, any such rights of
others, except where such conflict would not have a Material
Adverse Effect.
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(r) There are no legal or governmental proceedings
pending to which the Company is a party or of which any
property or assets of the Company is the subject which, if
determined adversely to the Company, might have a Material
Adverse Effect; and to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(s) There are no contracts or other documents which
are required to be described in the Prospectus or filed as
exhibits to the Registration Statement by the Securities Act
or by the Rules and Regulations which have not been described
in the Prospectus or filed as exhibits to the Registration
Statement.
(t) No relationship, direct or indirect, exists
between or among the Company on the one hand, and the
directors, officers, shareholders, customers or suppliers of
the Company on the other hand, which is required to be
described in the Prospectus which is not so described.
(u) No labor disturbance by the employees of the
Company exists or, to the knowledge of the Company, is
imminent which might be expected to have a Material Adverse
Effect.
(v) The Company is in compliance with all presently
applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, and the regulations
thereunder ("ERISA") except where such non-compliance would
not have a Material Adverse Effect. No "reportable event" (as
defined in ERISA) has occurred with respect to any "pension
plan" (as defined in ERISA) to which the Company contributes
or which the Company maintains that could have a Material
Adverse Effect. The Company has not incurred, and does not
expect to incur, any liability under (i) Title IV of ERISA
with respect to the termination of, or withdrawal from, any
"pension plan" or (ii) Section 412 or 4971 of the Internal
Revenue Code of 1986, as amended, and the regulations
thereunder (the "Code"), which has, or could be expected to
have, a Material Adverse Effect. Each "pension plan" for which
the Company could have any liability and that is intended to
be qualified under Section 401(a) of the Code is so qualified
in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of
such qualification except where such loss of qualification
would not have a Material Adverse Effect.
(w) The Company has filed all federal, state and
local income and franchise tax returns required to be filed
through the date hereof and has paid all taxes shown to be due
thereon, and no tax deficiency has been determined adversely
to the Company which has had (nor does the Company have any
knowledge of any tax deficiency which, if determined adversely
to the Company, might have) a Material Adverse Effect.
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(x) Since the date as of which information is given
in the Prospectus through the date hereof, and except as may
otherwise be disclosed in the Prospectus, the Company has not
(i) issued or granted any securities, (ii) incurred any
material liability or obligation, direct or contingent, other
than liabilities and obligations which were incurred in the
ordinary course of business, (iii) entered into any material
transaction not in the ordinary course of business or (iv)
declared or paid any dividend on its capital stock.
(y) The Company (i) makes and keeps accurate books
and records and (ii) maintains internal accounting controls
which provide reasonable assurance that (A) transactions are
executed in accordance with management's authorization, (B)
transactions are recorded as necessary to permit preparation
of its financial statements and to maintain accountability for
its assets, (C) access to its assets is permitted only in
accordance with management's authorization and (D) the
reported assets of the Company set forth in its books and
records are compared with existing assets at reasonable
intervals.
(z) The Company is not (i) in violation of its
charter or by-laws, (ii) in default, and no event has occurred
which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any
term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or
to which any of its properties or assets is subject, except
where such default would not have a Material Adverse Effect or
(iii) in violation of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or
assets may be subject, except where such violation would not
have a Material Adverse Effect. The Company has not failed to
obtain any license, permit, certificate, franchise or other
governmental authorization or permit necessary to the
ownership of its property or to the conduct of its business,
except where such failure would not have a Material Adverse
Effect.
(aa) Neither the Company nor any director, officer,
agent, employee or other person associated with or acting on
behalf of the Company, has (i) used any corporate funds for
any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; (ii) made any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii)
violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977; or (iv) made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment.
(bb) The Company is not an "investment company"
within the meaning of such term under the Investment Company
Act of 1940, as amended, and the rules and regulations of the
Commission thereunder.
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(cc) There are no contracts, agreements or
understandings between the Company and any person that would
give rise to a valid claim against the Company or any
Underwriter for a brokerage commission, finder's fee or other
like payment in connection with this offering.
(dd) Except as described in the Prospectus, all of
the current versions of the Company's products will record,
store, process, calculate and present calendar dates falling
after January 1, 2000, and will calculate any information
dependent on or relating to such dates in the same manner, and
with the same functionality, data integrity and performance,
as the products recorded, stored, processed, calculated and
presented calendar dates on or before December 31, 1999, or
calculated any information dependent on or relating to such
dates (herein collectively called "Year 2000 Compliant"). The
Company has not experienced any material Year 2000 Compliance
problems with the current versions of its products.
2. Representations, Warranties and Agreements of the Selling
Shareholders. Each Selling Shareholder severally represents, warrants and agrees
that:
(a) The Selling Shareholder has, and immediately
prior to the Delivery Date (as defined in Section 5 hereof)
the Selling Shareholder will have good and valid title to the
shares of Stock to be sold by the Selling Shareholder
hereunder on such date, free and clear of all liens,
encumbrances, equities or claims; and upon delivery of such
shares and payment therefor pursuant hereto, good and valid
title to such shares, free and clear of all liens,
encumbrances, equities or claims, will pass to the several
Underwriters.
(b) The Selling Shareholder has placed in custody
under a custody agreement and power of attorney (the "Custody
Agreement and Power of Attorney" and, together with all other
similar agreements executed by the other Selling Shareholders,
the "Custody Agreements and Powers of Attorney") with the
Company, as custodian (the "Custodian"), for delivery under
this Agreement, certificates in negotiable form (with
signature guaranteed by a commercial bank or trust company
having an office or correspondent in the United States or a
member firm of the New York or American Stock Exchanges)
representing the shares of Stock to be sold by the Selling
Shareholder hereunder, and the Selling Shareholder has duly
and irrevocably executed and delivered a power of attorney
appointing the Custodian and one or more other persons, as
attorneys-in-fact, with full power of substitution, and with
full authority (exercisable by any one or more of them) to
execute and deliver this Agreement and to take such other
action as may be necessary or desirable to carry out the
provisions hereof on behalf of the Selling Shareholder.
(c) The Selling Shareholder has full right, power and
authority to enter into this Agreement and the Custody
Agreement and Power of
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Attorney; the execution, delivery and performance of this
Agreement and the Custody Agreement and Power of Attorney by
the Selling Shareholder and the consummation by the Selling
Shareholder of the transactions contemplated hereby and
thereby will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute
a default under any material indenture, mortgage, deed of
trust, loan agreement or other material agreement or
instrument to which the Selling Shareholder, if applicable, is
a party or by which the Selling Shareholder is bound or to
which any of the property or assets of the Selling Shareholder
is subject, nor will such actions result in any violation of
the provisions of the charter or by-laws of the Selling
Shareholder or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction
over the Selling Shareholder or the property or assets of the
Selling Shareholder; and, except for the registration of the
Stock under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state
securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is
required for the execution, delivery and performance of this
Agreement or the Custody Agreement and Power of Attorney by
the Selling Shareholder and the consummation by the Selling
Shareholder of the transactions contemplated hereby and
thereby.
(d) To the knowledge of any such Selling Shareholder,
the Registration Statement and the Prospectus and any further
amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with
the Commission, as the case may be, do not and will not, as of
the applicable effective date (as to the Registration
Statement and any amendment thereto) and as of the applicable
filing date (as to the Prospectus and any amendment or
supplement thereto) contain an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading; provided that no representation or warranty is
made as to information contained in or omitted from the
Registration Statement or the Prospectus in reliance upon and
in conformity with written information furnished to the
Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein.
(e) The Selling Shareholder has no reason to believe
that the representations and warranties of the Company
contained in Section 1 hereof are not materially true and
correct, is familiar with the Registration Statement and the
Prospectus (as amended or supplemented) and has no knowledge
of any material fact, condition or information not disclosed
in the Registration Statement, as of the effective date, or
the Prospectus (or any amendment or supplement thereto), as of
the applicable filing date, which has adversely affected or
may adversely affect the business of the Company
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and is not prompted to sell shares of Common Stock by any
information concerning the Company which is not set forth in
the Registration Statement and the Prospectus.
(f) The Selling Shareholder has not taken and will
not take, directly or indirectly, any action which is designed
to or which has constituted or which might reasonably be
expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the shares of the Stock.
3. Purchase of the Stock by the Underwriters. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 2,843,374 shares of
the Firm Stock and each Selling Shareholder hereby agrees to sell the number of
shares of the Firm Stock set opposite the name of such Selling Shareholder in
Schedule 2 hereto, to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set opposite that Underwriter's name in Schedule 1 hereto. The respective
purchase obligations of the Underwriters with respect to the Firm Stock shall be
rounded among the Underwriters to avoid fractional shares, as the
Representatives may determine.
In addition, the Company grants to the Underwriters an option
to purchase up to 637,500 shares of Option Stock. Such option is granted for the
purpose of covering over-allotments in the sale of Firm Stock and is exercisable
as provided in Section 5 hereof. Shares of Option Stock shall be purchased
severally for the account of the Underwriters in proportion to the number of
shares of Firm Stock set opposite the name of such Underwriters in Schedule 1
hereto. The respective purchase obligations of each Underwriter with respect to
the Option Stock shall be adjusted by the Representatives so that no Underwriter
shall be obligated to purchase Option Stock other than in 100 share amounts. The
price of both the Firm Stock and any Option Stock shall be $________ per share.
The Company shall not be obligated to deliver any of the Stock
to be delivered on any Delivery Date (as hereinafter defined), as the case may
be, except upon payment for all the Stock to be purchased on such Delivery Date
as provided herein.
4. Offering of Stock by the Underwriters. Upon authorization
by the Representatives of the release of the Firm Stock, the several
Underwriters propose to offer the Firm Stock for sale upon the terms and
conditions set forth in the Prospectus.
5. Delivery of and Payment for the Stock. Delivery of and
payment for the Firm Stock shall be made at the office of Gibson, Dunn &
Crutcher LLP, 200 Park Avenue, New York, New York 10166, at 10:00 A.M., New York
City time, on the fourth full business day following the date of this Agreement
or at such other date or place as shall be determined by agreement between the
Representatives and the Company. This date and time are sometimes referred to as
the "First Delivery Date." On the First Delivery Date, the Company and the
Selling Shareholders shall deliver or cause to be
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delivered certificates representing the Firm Stock to the Representatives for
the account of each Underwriter against payment to or upon the order of the
Company and the Selling Shareholders of the purchase price by wire transfer in
immediately available funds. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligation of each Underwriter hereunder. Upon delivery, the Firm Stock
shall be registered in such names and in such denominations as the
Representatives shall request in writing not less than two full business days
prior to the First Delivery Date. For the purpose of expediting the checking and
packaging of the certificates for the Firm Stock, the Company and the Selling
Shareholders shall make the certificates representing the Firm Stock available
for inspection by the Representatives in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to the First Delivery Date.
The option granted in Section 3 will expire 30 days after the
date of this Agreement and may be exercised in whole or in part from time to
time by written notice being given to the Company by the Representatives. Such
notice shall set forth the aggregate number of shares of Option Stock as to
which the option is being exercised, the names in which the shares of Option
Stock are to be registered, the denominations in which the shares of Option
Stock are to be issued and the date and time, as determined by the
Representatives, when the shares of Option Stock are to be delivered; provided,
however, that this date and time shall not be earlier than the First Delivery
Date nor earlier than the second business day after the date on which the option
shall have been exercised nor later than the fifth business day after the date
on which the option shall have been exercised. The date and time the shares of
Option Stock are delivered are sometimes referred to as a "Second Delivery Date"
and the First Delivery Date and any Second Delivery Date are sometimes each
referred to as a "Delivery Date".
Delivery of and payment for the Option Stock shall be made at
the place specified in the first sentence of the first paragraph of this Section
5 (or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New York City time, on such
Second Delivery Date. On such Second Delivery Date, the Company shall deliver or
cause to be delivered the certificates representing the Option Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire transfer in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Option Stock shall
be registered in such names and in such denominations as the Representatives
shall request in the aforesaid written notice. For the purpose of expediting the
checking and packaging of the certificates for the Option Stock, the Company
shall make the certificates representing the Option Stock available for
inspection by the Representatives in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to such Second Delivery
Date.
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6. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by
the Representatives and to file such Prospectus pursuant to
Rule 424(b) under the Securities Act not later than the
Commission's close of business on the second business day
following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule
430A(a)(3) under the Securities Act; to make no further
amendment or any supplement to the Registration Statement or
to the Prospectus except as permitted herein; to advise the
Representatives, promptly after it receives notice thereof, of
the time when any amendment to the Registration Statement has
been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to
furnish the Representatives with copies thereof; to advise the
Representatives, promptly after it receives notice thereof, of
the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, of the suspension of the
qualification of the Stock for offering or sale in any
jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the
Registration Statement or the Prospectus or for additional
information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any
such qualification, to use promptly its best efforts to obtain
its withdrawal.
(b) To furnish promptly to each of the
Representatives and to counsel for the Underwriters a signed
copy of the Registration Statement as originally filed with
the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed
therewith.
(c) To deliver promptly to the Representatives such
number of the following documents as the Representatives shall
reasonably request: (i) conformed copies of the Registration
Statement as originally filed with the Commission and each
amendment thereto (in each case excluding exhibits other than
this Agreement and the computation of per share earnings) and,
(ii) each Preliminary Prospectus, the Prospectus and any
amended or supplemented Prospectus and, if the delivery of a
prospectus is required at any time after the Effective Time in
connection with the offering or sale of the Stock and if at
such time any events shall have occurred as a result of which
the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading,
or, if for any other reason it shall be necessary to amend or
supplement the Prospectus in order to comply with the
Securities Act, to notify the Representatives and, upon their
request, to file such document and to prepare and furnish
without charge to each Underwriter and
<PAGE>
to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an
amended or supplemented Prospectus which will correct such
statement or omission or effect such compliance.
(d) To file promptly with the Commission any
amendment to the Registration Statement or the Prospectus or
any supplement to the Prospectus that may, in the judgment of
the Company or the Representatives, be required by the
Securities Act or requested by the Commission.
(e) Prior to filing with the Commission any amendment
to the Registration Statement or supplement to the Prospectus
or any Prospectus pursuant to Rule 424 of the Rules and
Regulations, to furnish a copy thereof to the Representatives
and counsel for the Underwriters and obtain the consent of the
Representatives to the filing.
(f) As soon as practicable after the Effective Date
(but in no event later than 45 days after the first
anniversary of the end of the fiscal quarter following the
effective date of the Registration Statement, or 90 days if
such period is a fiscal year), to make generally available to
the Company's security holders and to deliver to the
Representatives an earnings statement of the Company (which
need not be audited) complying with Section 11(a) of the
Securities Act and the Rules and Regulations (including, at
the option of the Company, Rule 158).
(g) For a period of three years following the
Effective Date, to furnish to the Representatives copies of
all materials furnished by the Company to its shareholders and
all public reports and all reports and financial statements
furnished by the Company to the Nasdaq National Market or to
any national securities exchange upon which the Common Stock
may be listed pursuant to requirements of or agreements with
such exchange, or to the Commission pursuant to the Exchange
Act or any rule or regulation of the Commission thereunder.
(h) Promptly from time to time to take such action as
the Representatives may reasonably request to qualify the
Stock for offering and sale under the securities laws of such
jurisdictions as the Representatives may request and to comply
with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of the Stock; provided,
that, in connection therewith, the Company shall not be
required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction.
(i) For a period of 90 days from the date of the
Prospectus, not to, directly or indirectly, (1) offer for
sale, sell, pledge or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any
time in the future
<PAGE>
of) any shares of Common Stock or securities convertible into
or exchangeable for Common Stock (other than the Stock and
shares issued pursuant to the 1998 Plan, the Company's 2000
Employee Stock Purchase Plan or pursuant to currently
outstanding options, warrants or rights), or sell or grant
options, rights or warrants with respect to any shares of
Common Stock or securities convertible into or exchangeable
for Common Stock (other than the grant of options pursuant to
the 1998 Plan), or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or
in part, any of the economic benefits or risks of ownership of
such shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by
delivery of Common Stock or other securities, in cash or
otherwise, in each case without the prior written consent of
Lehman Brothers Inc.; and to cause each executive officer,
director and certain shareholders of the Company to furnish to
the Representatives, prior to the First Delivery Date, a
letter or letters, in form and substance satisfactory to
counsel for the Underwriters, pursuant to which each such
person shall agree not to, directly or indirectly, (1) offer
for sale, sell, pledge or otherwise dispose of (or enter into
any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any
time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock
or (2) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the
economic benefits or risks of ownership of such shares of
Common Stock, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock
or other securities, in cash or otherwise, in each case for a
period of 90 days from the date of the Prospectus, without the
prior written consent of Lehman Brothers Inc (subject to the
proviso contained in Section 7(a) hereof).
(j) Prior to the Effective Date, to apply for the
inclusion of the Stock on the Nasdaq National Market System
and to use its best efforts to effect that quotation, subject
only to official notice of issuance prior to the First
Delivery Date.
(k) To apply the net proceeds from the sale of the
Stock as set forth in the Prospectus under the caption "Use of
Proceeds."
(l) To take such steps as shall be necessary to
ensure that the Company shall not become an "investment
company" within the meaning of such term under the Investment
Company Act of 1940 and the rules and regulations of the
Commission thereunder.
(m) In connection with the Directed Share Program, to
ensure in accordance with the Conduct Rules of the NASD that
the Directed Shares are not sold, transferred, assigned,
pledged or hypothecated for a period of 90 days following the
Effective Date and to direct the transfer agent that transfer
restrictions be placed on the stock certificates of the
Participants in
<PAGE>
the Directed Share Program identified by Lehman Brothers Inc.
as needing to be so restricted.
(n) To comply with all applicable securities and
other applicable laws, rules and regulations in each foreign
jurisdiction in which the Directed Shares are offered in
connection with the Directed Share Program.
7. Further Agreements of the Selling Shareholders. Each
Selling Shareholder agrees:
(a) Without the prior written consent of Lehman
Brothers Inc. on behalf of the Representatives, not to offer,
sell or grant any option for the sale or otherwise dispose of
(or enter into any transaction which is designed to, or could
be expected to result in the disposition by any person at any
time in the future of) (i) any shares of Common Stock or (ii)
any securities convertible into or exercisable for shares of
Common Stock, owned by such Selling Shareholder or with
respect to which such Selling Shareholder has the power of
disposition, whether directly or indirectly (collectively, the
"Stock") for a period of 90 days subsequent to the date of the
Prospectus; provided, however, that if the market price of the
Company's Common Stock increases 20% or more from the per
share price at which the shares of Firm Stock are offered to
the public on the date of the Prospectus, the Selling
Shareholders may sell up to 50% of their remaining shares
after 45 days from the date of the Prospectus.
(b) That the Stock to be sold by the Selling
Shareholder hereunder, which is represented by the
certificates held in custody for the Selling Shareholder, is
subject to the interest of the Underwriters and the other
Selling Shareholders thereunder, that the arrangements made by
the Selling Shareholder for such custody are to that extent
irrevocable, and that the obligations of the Selling
Shareholder hereunder shall not be terminated by any act of
the Selling Shareholder, by operation of law, by the death or
incapacity of any individual Selling Shareholder or, in the
case of a trust, by the death or incapacity of any executor or
trustee or the termination of such trust, or the occurrence of
any other event.
(c) To deliver to the Representatives prior to the
First Delivery Date a properly completed and executed United
States Treasury Department Form W-8 (if the Selling
Shareholder is a non-United States person) or Form W-9 (if the
Selling Shareholder is a United States person).
8. Agreements of Comverse. Comverse agrees, for a period of 90
days from the date of the Prospectus, not to, directly or indirectly, (1) offer
for sale, sell, pledge or otherwise dispose of (or enter into any transaction or
device which is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock or (2) enter into
any swap or other derivatives transaction that transfers to
<PAGE>
another, in whole or in part, any of the economic benefits or risks of ownership
of such shares of Common Stock, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise, in each case without the prior written consent
of Lehman Brothers Inc; provided, however, that Comverse may sell shares of the
Company's Common Stock to a purchaser or purchasers of the share who agree to be
bound by the terms of this Section 8.
9. Expenses. The Company agrees to pay (a) the costs incident
to the authorization, issuance, sale and delivery of the Stock and any taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus,
all as provided in this Agreement; (d) the filing fees incident to securing any
required review by the NASD of the terms of sale of the Stock; (e) any
applicable listing or other fees; (f) the fees and expenses of qualifying the
Stock under the securities laws of the several jurisdictions as provided in
Section 5(h) (including filing fees and the fees and expenses of counsel for the
Underwriters relating to such registration and qualification); and (g) all other
costs and expenses incident to the performance of the obligations of the Company
under this Agreement; provided that, except as provided in this Section 9 and in
Section 14, the Underwriters shall pay their own costs and expenses, including
the costs and expenses of their counsel, their own costs and expenses associated
with the road shows and the expenses of advertising any offering of the Stock
made by the Underwriters.
10. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
contained herein, to the performance by the Company and Comverse of their
respective obligations hereunder, and to each of the following additional terms
and conditions:
(a) The Prospectus shall have been timely filed with
the Commission in accordance with Section 7(a); no stop order
suspending the effectiveness of the Registration Statement or
any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the
Prospectus or otherwise shall have been complied with.
(b) No Underwriter shall have discovered and
disclosed to the Company on or prior to such Delivery Date
that the Registration Statement or the Prospectus or any
amendment or supplement thereto contains an untrue statement
of a fact which, in the reasonable opinion of Gibson, Dunn &
Crutcher LLP, counsel for the Underwriters, is material or
omits to state a fact which, in the reasonable opinion of such
counsel, is material and is
<PAGE>
required to be stated therein or is necessary to make the
statements therein not misleading.
(c) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this
Agreement, the Stock, the Registration Statement and the
Prospectus, and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be
reasonably satisfactory in all material respects to counsel
for the Underwriters, and the Company shall have furnished to
such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(d) Weil, Gotshal & Manges LLP shall have furnished
to the Representatives its written opinion, as counsel to the
Company, addressed to the Underwriters and dated such Delivery
Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
(i) the Company is duly qualified to
transact business and is in good standing as a
foreign corporation in each jurisdiction identified
in such opinion;
(ii) the Registration Statement has become
effective under the Securities Act, and such counsel
is not aware of any stop order suspending the
effectiveness of the Registration Statement. To such
counsel's knowledge, no proceedings therefor have
been initiated or overtly threatened by the
Commission and any required filing of the Prospectus
and any supplement thereto pursuant to Rule 424(b)
under the Securities Act has been made in the manner
and within the time period required by such rule;
(iii) the Registration Statement at the
time it became effective and the Prospectus and, if
applicable, any further amendments or supplements
thereto made by the Company prior to such Delivery
Date (except for the financial statements and notes
thereto and other financial and accounting data
included in the Registration Statement or Prospectus,
as to which such counsel need express no opinion)
comply as to form in all material respects with the
requirements of the Securities Act and the Rules and
Regulations;
(iv) the statements contained in the
Prospectus under the captions "United States Federal
Tax Considerations For Non-United States Holders" and
"Shares Eligible for Future Sale", in each case
insofar as such statements constitute summaries of
federal statutes, rules and regulations referred to
therein, fairly present the information called for
with respect to such federal statutes, rules and
regulations and fairly summarize the matters referred
to therein in all material respects;
<PAGE>
(v) the execution and delivery by the
Company of this Agreement and the performance by the
Company of its obligations hereunder will not
conflict with or violate any federal or New York law
or regulation (other than federal and state
securities or blue sky laws, as to which such counsel
expresses no opinion); and
(vi) no consent, approval, waiver, license
or authorization or other action by or filing with
any federal or New York governmental authority is
required in connection with the execution and
delivery by the Company of this Agreement, the
consummation by the Company of the transactions
contemplated hereby or the performance by the Company
of its obligations hereunder, except for (i) such
filings with, approvals of and registrations with the
Nasdaq National Market, the National Association of
Securities Dealers and the Commission as have been
obtained or made under the Securities Act and the
Exchange Act and the rules and regulations
thereunder, (ii) such as may be required under
federal, state securities or blue sky laws (as to
which such counsel need express no opinion) and (iii)
those already obtained.
In rendering such opinion, such counsel may state that its
opinion is limited to matters governed by the Federal laws of
the United States of America and the laws of the State of New
York, and that such counsel is relying, in respect of matters
of fact, upon certificates of officers of the Company,
provided that such certificates are appended to the opinion
being delivered hereunder. Such counsel shall also have
furnished to the Representatives a written statement,
addressed to the Underwriters and dated such Delivery Date, in
form and substance satisfactory to the Representatives, to the
effect that (x) such counsel has acted as counsel to the
Company in connection with the preparation of the Registration
Statement, and (y) based on the foregoing, no facts have come
to the attention of such counsel which lead it to believe that
the Registration Statement, as of the Effective Date,
contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or
necessary in order to make the statements therein not
misleading, or that the Prospectus contains any untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under
which they were made, not misleading. The foregoing opinion
and statement may be qualified by a statement to the effect
that such counsel does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained
in the Registration Statement or the Prospectus except for the
statements made in the Prospectus under the captions "United
States Federal Tax Considerations For Non-United States
Holders" and "Shares Eligible for Future Sale", insofar as
such statements relate to the Stock and concern legal matters.
<PAGE>
(e) Sills Cummis Radin Tischman Epstein & Gross, P.A.
shall have furnished to the Representatives its written
opinion, as New Jersey counsel to the Company, addressed to
the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Representatives, to
the effect that:
(i) the Company has been duly
incorporated and is validly existing as a corporation
in good standing under the laws of the State of New
Jersey, and has all corporate power and authority
under New Jersey law necessary to own or hold its
properties and to conduct the business in which it is
engaged;
(ii) the Company has the authorized
capitalization as set forth in the Prospectus, and
all of the shares of Stock being delivered on such
Delivery Date have been duly and validly authorized
and issued, are fully paid and non-assessable and
conform to the description thereof contained in the
Prospectus under the caption "Description of
Securities - Common Stock";
(iii) there are no preemptive or other
rights to subscribe for or to purchase, nor any
restriction upon the voting or transfer of, any
shares of the Stock pursuant to the Company's
certificate of incorporation or by-laws or any
agreement or other instrument known to such counsel;
(iv) this Agreement has been duly
authorized, executed and delivered by the Company;
(v) the execution and delivery of this
Agreement by the Company and the performance of its
obligations hereunder will not conflict with or
result in a violation of the provisions of the
certificate of incorporation or by-laws of the
Company or any New Jersey law or regulation (other
than New Jersey blue sky laws as to which such
counsel need express no opinion); and
(vi) the statements contained in the
Prospectus under the captions "Risk Factors - Certain
provisions of our certificate of incorporation and
New Jersey law may make it more difficult for you to
get a change in control premium" and "Description of
Securities," insofar as such statements relate to the
law of the State of New Jersey, constitute a fair
summary thereof in all material respects.
In rendering such opinion, such counsel may state that its
opinion is limited to matters governed by the laws of the
State of New Jersey, and that such counsel is relying, in
respect of matters of fact, upon certificates of officers of
the Company, provided that such certificates are appended to
the opinion being delivered hereunder.
<PAGE>
(f) William F. Sorin shall have furnished to the
Representatives a written opinion, as special counsel to the
Company, addressed to the Underwriters and dated such Delivery
Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
(i) Ulticom Europe is not a "significant
subsidiary" as that term is defined in Rule 405 under
the Securities Act;
(ii) the execution and delivery of this
Agreement by the Company and the performance of its
obligations hereunder will not conflict with or
result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to such counsel
to which the Company is a party or by which the
Company is bound or to which any of the property or
assets of the Company is subject;
(iii) to the best of such counsel's
knowledge, there are no legal or governmental
proceedings pending to which the Company is a party
or of which any property or assets of the Company is
the subject which, if determined adversely to the
Company, might have a Material Adverse Effect; and,
to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(iv) to the best of such counsel's
knowledge, there are no contracts or other documents
which are required to be described in the Prospectus
or filed as exhibits to the Registration Statement by
the Securities Act or by the Rules and Regulations
which have not been so described or filed as exhibits
to the Registration Statement; and
(v) except as described in the Prospectus
and in the Registration Rights Agreement, dated as of
January 1, 2000, by and among the Company and
Comverse, to the best of such counsel's knowledge,
there are no contracts, agreements or understandings
between the Company and any person granting such
person the right to require the Company to file a
registration statement under the Securities Act with
respect to any securities of the Company owned or to
be owned by such person or to require the Company to
include such securities in the securities registered
pursuant to the Registration Statement or in any
securities being registered pursuant to any other
registration statement filed by the Company under the
Securities Act. Except for the options to purchase
from the Company, 3,659,472 shares of the Common
Stock in the aggregate granted to officers, directors
and employees under the 1998 Plan, no options,
warrants or other rights to purchase from the
Company, agreements or other
<PAGE>
obligations of the Company to issue, or rights to
convert any obligations of the Company into or
exchange any securities of the Company for, shares of
capital stock of or ownership interests in the
Company are outstanding.
In rendering such opinion, such counsel may state that it is
relying, in respect of matters of fact, upon certificates of
officers of the Company, provided that such certificates are
appended to the opinion being delivered hereunder.
(g) the Representatives shall have received from
Gibson, Dunn & Crutcher LLP, counsel for the Underwriters,
such opinion or opinions, dated such Delivery Date, with
respect to the issuance and sale of the Stock, the
Registration Statement, the Prospectus and other related
matters as the Representatives may reasonably require, and the
Company shall have furnished to such counsel such documents as
they reasonably request for the purpose of enabling them to
pass upon such matters.
(h) At the time of execution of this Agreement, the
Representatives shall have received from Deloitte & Touche LLP
a letter, in form and substance satisfactory to the
Representatives, addressed to the Underwriters and dated the
date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are
in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, (ii) stating, as of the date hereof (or,
with respect to matters involving changes or developments
since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more
than five days prior to the date hereof), the conclusions and
findings of such firm with respect to the financial
information and other matters ordinarily covered by
accountants' "comfort letters" to underwriters in connection
with registered public offerings.
(i) With respect to the letter of Deloitte & Touche
LLP referred to in the preceding paragraph and delivered to
the Representatives concurrently with the execution of this
Agreement (the "initial letter"), the Company shall have
furnished to the Representatives a letter (the "bring-down
letter") of such accountants, addressed to the Underwriters
and dated such Delivery Date (i) confirming that they are
independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X of the Commission, (ii)
stating, as of the date of the bring-down letter (or, with
respect to matters involving changes or developments since the
respective dates as of which specified financial information
is given in the Prospectus, as of a date not more than five
days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the
financial information and other matters covered
<PAGE>
by the initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in the initial
letter.
(j) The Company shall have furnished to the
Representatives a certificate, dated such Delivery Date, of
its chief executive officer and its chief financial officer
stating that:
(i) the representations, warranties and
agreements of the Company in Section 1 are true and
correct as of such Delivery Date; the Company has
complied with all its agreements contained herein;
and the conditions set forth in Sections 10(a) and
10(k) have been fulfilled; and
(ii) they have carefully examined the
Registration Statement and the Prospectus and, in
their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include
any untrue statement of a material fact and did not
omit to state a material fact required to be stated
therein or necessary to make the statements therein
not misleading, and (B) since the Effective Date, no
event has occurred which should have been set forth
in a supplement or amendment to the Registration
Statement or the Prospectus which has not been so set
forth.
(k) (i) The Company shall not have sustained, since
the date of the latest audited financial statements included
in the Prospectus, any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus or (ii) since such
date, there shall not have been any change in the capital
stock (other than the stock dividend of 2.2727 shares for each
outstanding share of Common Stock which was declared and paid
on March 13, 2000) or long-term debt of the Company or any
change, or any development involving a prospective change, in
or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the
Company, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in
clause (i) or (ii), is, in the judgment of the
Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the public
offering or the delivery of the Stock being delivered on such
Delivery Date on the terms and in the manner contemplated in
the Prospectus.
(l) Each Selling Shareholder (or the Custodian or one
or more attorneys-in-fact on behalf of the Selling
Shareholders) shall have furnished to the Representatives on
the Delivery Date a certificate, dated such Delivery Date,
signed by, or on behalf of, the Selling Shareholder (or the
Custodian or one or more attorneys-in-fact) stating that the
representations, warranties and
<PAGE>
agreements of the Selling Shareholder contained herein are
true and correct as of such Delivery Date and that the Selling
Shareholder has complied with all agreements contained herein
to be performed by the Selling Shareholder at or prior to such
Delivery Date.
(m) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following:
(i) trading in securities generally on the New York Stock
Exchange or the Nasdaq National Market or in the
over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market, (A)
shall have been suspended and such suspension makes it, in the
reasonable judgment of the Representatives, impracticable or
inadvisable to proceed with the public offering or delivery of
the Stock being delivered on such Delivery Date on the terms
and in the manner contemplated in the Prospectus, or (B)
minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or
by any other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been
declared by Federal or state authorities, (iii) the United
States shall have become engaged in hostilities, there shall
have been an escalation in hostilities involving the United
States or there shall have been a declaration of a national
emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic,
political or financial conditions (or the effect of
international conditions on the financial markets in the
United States shall be such) as to make it, in the judgment of
the Representatives, impracticable or inadvisable to proceed
with the public offering or delivery of the Stock being
delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(n) The Nasdaq National Market System shall have
approved the Stock for quotation, subject only to official
notice of issuance and evidence of satisfactory distribution.
All opinions, letters, evidence and certificates mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Underwriters.
11. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless
each Underwriter, its officers and employees and each person,
if any, who controls any Underwriter within the meaning of the
Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of Stock),
to which that Underwriter, officer, employee or controlling
person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage,
<PAGE>
liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material
fact contained (A) in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment
or supplement thereto or (B) in any materials or information
provided to investors by, or with the approval of, the Company
in connection with the marketing of the offering of the Stock,
including any roadshow or investor presentations made to
investors by the Company (whether in person or electronically)
(the "Marketing Materials"), (ii) the omission or alleged
omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment
or supplement thereto, or in any Marketing Materials, any
material fact required to be stated therein or necessary to
make the statements therein not misleading or (iii) any act or
failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to,
the Stock or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage,
liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company
shall not be liable under this clause (iii) to the extent that
it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or
action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through
its gross negligence or willful misconduct), and shall
reimburse each Underwriter and each such officer, employee or
controlling person promptly upon demand for any legal or other
expenses reasonably incurred by that Underwriter, officer,
employee or controlling person in connection with
investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses
are incurred; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or
in any such amendment or supplement, in reliance upon and in
conformity with written information concerning such
Underwriter furnished to the Company through the
Representatives by or on behalf of any Underwriter
specifically for inclusion therein which information consists
solely of the information specified in Section 11(f). The
indemnification agreement set forth in this paragraph 11(a)
with respect to any Preliminary Prospectus shall not inure to
the benefit of any Underwriter from whom the person asserting
any such losses, claims, damages, liabilities or expenses
purchased the Stock which is the subject thereof (or to the
benefit of any person controlling such Underwriter) if at or
prior to the written confirmation of the sale of such Stock a
copy of the Prospectus (or the Prospectus as amended or
supplemented) was not sent or delivered to such person and the
untrue statement or omission of a material fact contained in
such Preliminary Prospectus was corrected in the Prospectus
(or in the Prospectus as amended or supplemented) in any case
where such delivery is required by the
<PAGE>
Securities Act, unless the failure is the result of
noncompliance by the Company with paragraph 7(a) hereof. The
foregoing indemnity agreement is in addition to any liability
which the Company or Comverse may otherwise have to any
Underwriter or to any officer, employee or controlling person
of that Underwriter.
(b) The Selling Shareholder, severally in proportion
to the number of shares of Stock to be sold by each of them
hereunder, shall indemnify and hold harmless each Underwriter,
its officer and employees, and each person, if any, who
controls any Underwriter within the meaning of the Securities
Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof (including,
but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Stock), to which
that Underwriter, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar
as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any amendment or supplement thereto, or (ii)
the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or
in any amendment or supplement thereto, any material fact
required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to
the extent that the untrue statement or alleged untrue
statement or omission was made in reliance upon and in
confomity with written information concerning such Selling
Shareholder furnished to the Company by or on behalf of that
Selling Shareholder specifically for inclusion therein and
shall reimburse each Underwriter, its officers and employees
and each such controlling person for any legal or other
expenses reasonably incurred by that Underwriter, its officers
and employees or controlling person in connection with
investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses
are incurred. Notwithstanding the foregoing sentence, the
aggregate liability of any Selling Shareholder pursuant to the
provisions of this paragraph shall be limited to an amount
equal to the aggregate purchase price, less underwriting
discounts and commissions, received by such Selling
Shareholder from the sale of such Selling Shareholder's Stock
hereunder. The foregoing indemnity agreement is in addition to
any liability which the Selling Shareholders may otherwise
have to any Underwriter or any officer, employee or
controlling person of that Underwriter.
(c) Each Underwriter, severally and not jointly,
shall indemnify and hold harmless the Company, its officers
and employees, each of its directors (including any person
who, with his or her consent, is named in the Registration
Statement as about to become a director of the Company), and
each person, if any, who controls the Company within the
meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or
<PAGE>
several, or any action in respect thereof, to which the
Company or any such director, officer or controlling person
may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained (A) in
any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or (B)
in any Marketing Materials or (ii) the omission or alleged
omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment
or supplement thereto, or in any Marketing Materials, any
material fact required to be stated therein or necessary to
make the statements therein not misleading, but in each case
only to the extent that the untrue statement or alleged untrue
statement or omission was made in reliance upon and in
conformity with written information concerning such
Underwriter furnished to the Company through the
Representatives by or on behalf of that Underwriter
specifically for inclusion therein, which information consists
solely of the information specified in Section 11(e), and
shall reimburse the Company and any such director, officer or
controlling person for any legal or other expenses reasonably
incurred by the Company or any such director, officer or
controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The
foregoing indemnity agreement is in addition to any liability
which any Underwriter may otherwise have to the Company or any
such director, officer, employee or controlling person.
(d) Promptly after receipt by an indemnified party
under this Section 11 of notice of any claim or the
commencement of any action, the indemnified party shall, if a
claim in respect thereof is to be made against the
indemnifying party under this Section 11, notify the
indemnifying party in writing of the claim or the commencement
of that action; provided, however, that the failure to notify
the indemnifying party shall not relieve it from any liability
which it may have under this Section 11 except to the extent
it has been materially prejudiced by such failure and;
provided further, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section
11. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying
party shall not be liable to the indemnified party under this
Section 11 for any legal or other expenses subsequently
incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation;
provided, however, that the Representatives shall have the
right to employ counsel to represent jointly the
Representatives and those
<PAGE>
other Underwriters and their respective officers, employees
and controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be
sought by the Underwriters against the Company or any Selling
Shareholder under this Section 11 if, in the reasonable
judgment of the Representatives either (i) there is an actual
or potential conflict between the position of the Company or
any Selling Shareholder and the Underwriters, (ii) there may
be defenses available to it or them that are different from or
additional to those available to the Company or any Selling
Shareholder (in any of which events the Company or any Selling
Shareholder shall not have the right to direct the defense of
such action on behalf of the Representative or Representatives
with respect to such different defenses) or (iii) the Company
or any Selling Shareholder has failed to assume to defense of
such action and employ counsel reasonably satisfactory to the
Representatives, in any of which events such fees and expenses
shall be borne by the Company or any Selling Shareholder. No
indemnifying party shall (i) without the prior written consent
of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the
entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional
release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding, or (ii) be
liable for any settlement of any such action effected without
its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying
party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss
or liability by reason of such settlement or judgment.
(e) If the indemnification provided for in this
Section 11 shall for any reason be unavailable to or
insufficient to hold harmless an indemnified party under
Section 11(a) or 11(b) in respect of any loss, claim, damage
or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such
loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Company and the
Selling Shareholders on the one hand and the Underwriters on
the other from the offering of the Stock or (ii) if the
allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company and the
Selling Shareholders on the one hand, and the Underwriters on
the other hand, with respect to the statements or omissions
which resulted in such loss, claim, damage or liability, or
action in respect thereof, as well as any other
<PAGE>
relevant equitable considerations. The relative benefits
received by the Company and the Selling Shareholders on the
one hand and the Underwriters on the other with respect to
such offering shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Stock
purchased under this Agreement (before deducting expenses)
received by the Company and the Selling Shareholders on the
one hand, and the total underwriting discounts and commissions
received by the Underwriters with respect to the shares of the
Stock purchased under this Agreement on the other hand, bear
to the total gross proceeds from the offering of the shares of
the Stock under this Agreement, in each case as set forth in
the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to whether the untrue
or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to
information supplied by the Company, the Selling Shareholders
or the Underwriters, the intent of the parties and their
relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company,
the Selling Shareholders and the Underwriters agree that it
would not be just and equitable if contributions pursuant to
this Section 11(e) were to be determined by pro rata
allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation
which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in
this Section 11 shall be deemed to include, for purposes of
this Section 11(d), any legal or other expenses reasonably
incurred by such indemnified party in connection with
investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 11(d), no
Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the
shares of Stock underwritten by it and distributed to the
public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute
as provided in this Section 11(e) are several in proportion to
their respective underwriting obligations and not joint.
(f) The Underwriters severally confirm and the
Company and the Selling Shareholders acknowledge that (i) the
statements with respect to the public offering of the Stock by
the Underwriters set forth on the cover page of the
Prospectus, (ii) the statements with respect to the delivery
of the Prospectus set forth on page (i) of the Prospectus, and
(iii) the concession and reallowance figures and the
discussion concerning over-allotments, stabilization and the
factors the Representatives will consider in pricing, all
appearing under the caption "Underwriting" in the Prospectus,
are correct
<PAGE>
and constitute the only information concerning such
Underwriters furnished in writing to the Company by or on
behalf of the Underwriters specifically for inclusion in the
Registration Statement and the Prospectus.
12. Defaulting Underwriters. If, on either Delivery Date, any
Underwriter defaults in the performance of its obligations under this Agreement,
the remaining non-defaulting Underwriters shall be obligated to purchase the
Stock which the defaulting Underwriter agreed but failed to purchase on such
Delivery Date in the respective proportions which the number of shares of the
Firm Stock set opposite the name of each remaining non-defaulting Underwriter in
Schedule 1 hereto bears to the total number of shares of the Firm Stock set
opposite the names of all the remaining non-defaulting Underwriters in Schedule
1 hereto; provided, however, that the remaining non-defaulting Underwriters
shall not be obligated to purchase any of the Stock on such Delivery Date if the
total number of shares of the Stock which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such date exceeds 9.09% of the
total number of shares of the Stock to be purchased on such Delivery Date, and
any remaining non-defaulting Underwriter shall not be obligated to purchase more
than 110% of the number of shares of the Stock which it agreed to purchase on
such Delivery Date pursuant to the terms of Section 4. If the foregoing maximums
are exceeded, the remaining non-defaulting Underwriters, or those other
underwriters satisfactory to the Representatives who so agree, shall have the
right, but shall not be obligated, to purchase, in such proportion as may be
agreed upon among them, all the Stock to be purchased on such Delivery Date. If
the remaining Underwriters or other underwriters satisfactory to the
Representatives do not elect to purchase the shares which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such Delivery Date,
this Agreement (or, with respect to the Second Delivery Date, the obligation of
the Underwriters to purchase, and of the Company to sell, the Option Stock)
shall terminate without liability on the part of any non-defaulting Underwriter
or the Company, except that the Company will continue to be liable for the
payment of expenses to the extent set forth in Sections 8 and 13. As used in
this Agreement, the term "Underwriter" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 12, purchases Firm Stock which a
defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting
Underwriter of any liability it may have to the Company for damages caused by
its default. If other underwriters are obligated or agree to purchase the Stock
of a defaulting or withdrawing Underwriter, either the Representatives or the
Company may postpone the Delivery Date for up to seven full business days in
order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
13. Termination. The obligations of the Underwriters hereunder
may be terminated by the Representatives by notice given to and received by the
Company and the Selling Shareholders prior to delivery of and payment for the
Firm Stock if, prior to that time, any of the events described in Sections 10(k)
or 10(m), shall have occurred
<PAGE>
or if the Underwriters shall decline to purchase the Stock for any reason
permitted under this Agreement.
14. Reimbursement of Underwriters' Expenses. If the Company or
any Selling Shareholder shall fail to tender the Stock for delivery to the
Underwriters by reason of any failure, refusal or inability on the part of the
Company or any Selling Shareholder to perform any agreement on its part to be
performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company or any Selling Shareholder is
not fulfilled (unless such non-fulfillment is due to any action or inaction by
an Underwriter and other than pursuant to Section 10(m)(iv)), the Company and
the Selling Shareholders will reimburse the Underwriters for all reasonable
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
incurred by the Underwriters in connection with this Agreement and the proposed
purchase of the Stock, and upon demand the Company and the Selling Shareholders
shall pay the full amount thereof to the Representatives. If this Agreement is
terminated pursuant to Section 12 by reason of the default of one or more
Underwriters, neither the Company nor any Selling Shareholder shall be obligated
to reimburse any defaulting Underwriter on account of those expenses.
15. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or
sent by mail, telex or facsimile transmission to Lehman
Brothers Inc., Three World Financial Center, New York, New
York 10285, Attention: Syndicate Department (Fax:
212-526-6588), with a copy, in the case of any notice pursuant
to Section 11(c), to the Director of Litigation, Office of the
General Counsel, Lehman Brothers Inc., 3 World Financial
Center, 10th Floor, New York, NY 10285;
(b) if to the Company or to Comverse, shall be
delivered or sent by mail, telex or facsimile transmission to
the address of the Company set forth in the Registration
Statement, Attention: Shawn Osborne, President and Chief
Executive Officer (Fax: (856) 886-2033), with a copy to
William F. Sorin, Esq., c/o Comverse Technology, Inc., c/o
Comverse Network Systems, Inc., 909 Third Avenue, New York, NY
10022 (Fax: (212) 759-7521) and to Weil, Gotshal & Manges LLP,
767 Fifth Avenue, New York, NY 10153, Attention: Stephen
Besen, Esq. (Fax: (212) 310-8007); and
(c) if to any Selling Shareholders, shall be
delivered or sent by mail, telex or facsimile transmission to
the Custodian or one or more attorneys-in-fact at the
address(es) set forth in the Custody Agreement and Power of
Attorney with a copy to William F. Sorin, [17 East 89th
Street, New York, NY, 10128].
provided, however, that any notice to an Underwriter pursuant to Section 11(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its
<PAGE>
address set forth in its acceptance telex to the Representatives, which address
will be supplied to any other party hereto by the Representatives upon request.
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof. The Company and the Selling Shareholders shall be
entitled to act and rely upon any request, consent, notice or agreement given or
made on behalf of the Underwriters by Lehman Brothers Inc. on behalf of the
Representatives and the Company and the Underwriters shall be entitled to act
and rely upon any request, consent, notice or agreement given or made on behalf
of the Selling Shareholders by the Custodian.
16. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the Company,
the Selling Shareholders and their respective successors; provided that Section
8 of this Agreement shall be binding upon Comverse and its successors. This
Agreement and the terms and provisions hereof are for the sole benefit of only
those persons, except that (A) the representations, warranties, indemnities and
agreements of the Company and the Selling Shareholders contained in this
Agreement shall also be deemed to be for the benefit of the person or persons,
if any, who control any Underwriter within the meaning of Section 15 of the
Securities Act and (B) the indemnity agreement of the Underwriters contained in
Section 11(b) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning
of Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 16, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
17. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Selling Shareholders, Comverse and
the Underwriters contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Stock and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.
18. Definition of the Terms "Business Day" and "Subsidiary".
For purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
19. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
20. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
<PAGE>
21. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
<PAGE>
If the foregoing correctly sets forth the agreement among the
Company, the Selling Shareholders, Comverse and the Underwriters, please
indicate your acceptance in the space provided for that purpose below.
Very truly yours,
ULTICOM, INC.
By
-------------------------------------------
Name:
Title:
COMVERSE TECHNOLOGY, INC.
By
-------------------------------------------
Name:
Title:
LIEVRE HOLDINGS LIMITED
By
-------------------------------------------
Name:
Title:
CARMEL VERNIA
----------------------------------------------
KOBI ALEXANDER
----------------------------------------------
<PAGE>
SHAWN K. OSBORNE
----------------------------------------------
DAVID KREINBERG
----------------------------------------------
WILLIAM F. SORIN
----------------------------------------------
SACHI GERLITZ
----------------------------------------------
ZVI BAR-ON
----------------------------------------------
RON HIRAM
----------------------------------------------
REX A. McWILLIAMS
----------------------------------------------
<PAGE>
Accepted:
LEHMAN BROTHERS INC.
CHASE SECURITIES INC.
BEAR, STEARNS & CO. INC.
U.S. BANCORP PIPER JAFFRAY INC.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By LEHMAN BROTHERS INC.
By
----------------------------------------
Authorized Representative
SCHEDULE 1
Number
of
Underwriters Firm Shares
------------ -----------
LEHMAN BROTHERS INC. ..................................
CHASE SECURITIES INC. .................................
BEAR, STEARNS & CO. INC. ..............................
U.S. BANCORP PIPER JAFFRAY INC. .......................
-----------
Total 2,843,374
<PAGE>
SCHEDULE 2
Number
of
Selling Shareholders Firm Shares
-------------------- -----------
LIEVRE HOLDINGS LIMITED ................................. 1,227,263
CARMEL VERNIA ........................................... 40,000
KOBI ALEXANDER .......................................... 40,000
SHAWN K. OSBORNE ........................................ 25,000
DAVID KREINBERG ......................................... 21,500
WILLIAM F. SORIN ........................................ 21,500
SACHI GERLITZ ........................................... 16,363
ZVI BAR-ON .............................................. 5,000
RON HIRAM ............................................... 5,000
REX A. MCWILLIAMS ....................................... 5,000
-----------
TOTAL 1,406,626
LOCK-UP LETTER AGREEMENT
LEHMAN BROTHERS INC.
CHASE SECURITIES INC.
BEAR, STEARNS & CO. INC.
U.S. BANCORP PIPER JAFFRAY INC.
As Representatives of the
several underwriters
c/o LEHMAN BROTHERS INC.
Three World Financial Center
New York, NY 10285
Re: Ulticom, Inc.
Dear Sirs:
The undersigned understands that you and certain other firms
propose to enter into an Underwriting Agreement (the "Underwriting Agreement")
providing for the purchase by you and such other firms (the "Underwriters") of
shares of Common Stock, no par value per share (the "Common Shares"), of
Ulticom, Inc. (the "Company") (such Common Shares are hereinafter referred to as
the "Shares") and that the Underwriters propose to reoffer the Shares to the
public (the "Offering").
In consideration of the execution of the Underwriting
Agreement by the Underwriters, and for other good and valuable consideration,
the undersigned hereby
<PAGE>
irrevocably agrees that, without the prior written consent of Lehman Brothers
Inc., the undersigned will not, directly or indirectly, (1) offer for sale,
sell, pledge, or otherwise dispose of (or enter into any transaction or device
that is designed to, or could be expected to, result in the disposition by any
person at any time in the future of) any Common Shares (including, without
limitation, Common Shares that may be deemed to be beneficially owned by the
undersigned in accordance with the rules and regulations of the Securities and
Exchange Commission and Common Shares that may be issued upon exercise of any
option or warrant) or securities convertible into or exchangeable for Common
Shares owned by the undersigned on the date of execution of this Lock-Up Letter
Agreement or on the date of the completion of the Offering, or (2) enter into
any swap or other derivatives transaction that transfers to another, in whole or
in part, any of the economic benefits or risks of ownership of such Common
Shares, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Shares or other securities, in cash or
otherwise, for a period of 90 days after the date of the final Prospectus
relating to the Offering; [provided, however, that if the market price of the
Common Shares increases by 20% or more from the per share price at which the
Shares are offered to the public in the Offeing, the undersigned may sell up to
50% of his, her or its remaining shares after 45 days from the date of the
Offering.]
In furtherance of the foregoing, the Company and its transfer
agent are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Lock-Up Letter
Agreement.
It is understood that, if the Company notifies you that it
does not intend to proceed with the Offering, if the Underwriting Agreement does
not become effective, or if the Underwriting Agreement (other than the
provisions thereof which survive termination) shall terminate or be terminated
prior to payment for and delivery of the Shares, the undersigned will be
released from its obligations under this Lock-Up Letter Agreement.
The undersigned understands that the Company and the
Underwriters will proceed with the Offering in reliance on this Lock-Up Letter
Agreement.
The undersigned hereby represents and warrants that the
undersigned has full power and authority to enter into this Lock-Up Letter
Agreement and that, upon request, the undersigned will execute any additional
documents necessary in connection with the enforcement hereof. Any obligations
of the undersigned shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
Very truly yours,
By:
--------------------------------
Name:
Title:
Dated: , 2000
