EXHIBIT 1.1
3,300,000 Shares
OTG SOFTWARE, INC.
Common Stock
UNDERWRITING AGREEMENT
_________, 2000
CREDIT SUISSE FIRST BOSTON CORPORATION
DEUTSCHE BANK SECURITIES INC.
XXXXXXX XXXXX XXXXXX INC.
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.,
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. OTG Software, Inc., a Delaware corporation ("Company")
proposes to issue and sell 1,650,000 shares of its common stock, $0.01 par value
per share ("Securities") and the stockholders listed in Schedule A hereto
("Selling Stockholders") propose severally to sell an aggregate of 1,650,000
outstanding shares of the Securities (such 3,300,000 shares of Securities being
hereinafter referred to as the "Firm Securities"). Certain of the Selling
Stockholders also propose to sell to the Underwriters, at the option of the
Underwriters, an aggregate of not more than 495,000 additional outstanding
shares of the Company's Securities, as set forth below (such 495,000 additional
shares being hereinafter referred to as the "Optional Securities"). The Firm
Securities and the Optional Securities are herein collectively called the
"Offered Securities". The Company and the Selling Stockholders hereby agree with
the several Underwriters named in Schedule B hereto ("Underwriters") as follows:
2. Representations and Warranties of the Company and the Selling
Stockholders. (a) The Company represents and warrants to, and agrees with, the
several Underwriters that:
(i) A registration statement (No. 333-48516) relating to the Offered
Securities, including a form of prospectus, has been filed with the
Securities and Exchange Commission ("Commission") and either (A) has been
declared effective under the Securities Act of 1933 ("Act") and is not
proposed to be amended or (B) is proposed to be amended by amendment or
post-effective amendment. If such registration statement (the "initial
registration statement") has been declared effective, either (A) an
additional registration statement (the "additional registration
statement") relating to the Offered Securities may have been filed with
the Commission pursuant to Rule 462(b) ("Rule 462(b)") under the Act and,
if so filed, has become effective upon filing pursuant to such Rule and
the Offered Securities all have been duly registered under the Act
pursuant to the initial registration statement and, if applicable, the
additional registration statement or (B) such an additional registration
statement is proposed to be filed with the Commission pursuant to Rule
462(b) and will become effective upon filing pursuant to such Rule and
upon such filing the Offered Securities will all have been duly registered
under the Act pursuant to the initial registration statement and such
additional registration statement. If the Company does not propose to
amend the initial registration statement or if an
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additional registration statement has been filed and the Company does not
propose to amend it, and if any post-effective amendment to either such
registration statement has been filed with the Commission prior to the
execution and delivery of this Agreement, the most recent amendment (if
any) to each such registration statement has been declared effective by
the Commission or has become effective upon filing pursuant to Rule 462(c)
("Rule 462(c)") under the Act or, in the case of the additional
registration statement, Rule 462(b). For purposes of this Agreement,
"Effective Time" with respect to the initial registration statement or, if
filed prior to the execution and delivery of this Agreement, the
additional registration statement means (A) if the Company has advised the
Representatives that it does not propose to amend such registration
statement, the date and time as of which such registration statement, or
the most recent post-effective amendment thereto (if any) filed prior to
the execution and delivery of this Agreement, was declared effective by
the Commission or has become effective upon filing pursuant to Rule
462(c), or (B) if the Company has advised the Representatives that it
proposes to file an amendment or post-effective amendment to such
registration statement, the date and time as of which such registration
statement, as amended by such amendment or post-effective amendment, as
the case may be, is declared effective by the Commission. If an additional
registration statement has not been filed prior to the execution and
delivery of this Agreement but the Company has advised the Representatives
that it proposes to file one, "Effective Time" with respect to such
additional registration statement means the date and time as of which such
registration statement is filed and becomes effective pursuant to Rule
462(b). "Effective Date" with respect to the initial registration
statement or the additional registration statement (if any) means the date
of the Effective Time thereof. The initial registration statement, as
amended at its Effective Time, including all information contained in the
additional registration statement (if any) and deemed to be a part of the
initial registration statement as of the Effective Time of the additional
registration statement pursuant to the General Instructions of the Form on
which it is filed and including all information (if any) deemed to be a
part of the initial registration statement as of its Effective Time
pursuant to Rule 430A(b) ("Rule 430A(b)") under the Act, is hereinafter
referred to as the "Initial Registration Statement". The additional
registration statement, as amended at its Effective Time, including the
contents of the initial registration statement incorporated by reference
therein and including all information (if any) deemed to be a part of the
additional registration statement as of its Effective Time pursuant to
Rule 430A(b), is hereinafter referred to as the "Additional Registration
Statement". The Initial Registration Statement and the Additional
Registration are hereinafter referred to collectively as the "Registration
Statements" and individually as a "Registration Statement". The form of
prospectus relating to the Offered Securities, as first filed with the
Commission pursuant to and in accordance with Rule 424(b) ("Rule 424(b)")
under the Act or (if no such filing is required) as included in a
Registration Statement, is hereinafter referred to as the "Prospectus". No
document has been or will be prepared or distributed in reliance on Rule
434 under the Act.
(ii) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (A) on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
("Rules and Regulations") and did not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, (B) on
the Effective Date of the Additional Registration Statement (if any), each
Registration Statement conformed or will conform, in all material respects
to the requirements of the Act and the Rules and Regulations and did not
include, or will not include, any untrue statement of a material fact and
did not omit, or will not omit, to state any material fact required to be
stated therein or necessary to make the statements therein not misleading,
and (C) on the date of this Agreement, the Initial Registration Statement
and, if the Effective Time of the Additional Registration Statement is
prior to the execution and delivery of this Agreement, the Additional
Registration Statement each conforms, and at the time of filing of the
Prospectus pursuant to Rule 424(b) or (if no such filing is required) at
the Effective Date of the Additional Registration
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Statement in which the Prospectus is included, each Registration Statement
and the Prospectus will conform, in all material respects to the
requirements of the Act and the Rules and Regulations, and neither of such
documents includes, or will include, any untrue statement of a material
fact or omits, or will omit, to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.
If the Effective Time of the Initial Registration Statement is subsequent
to the execution and delivery of this Agreement: on the Effective Date of
the Initial Registration Statement, the Initial Registration Statement and
the Prospectus will conform in all material respects to the requirements
of the Act and the Rules and Regulations, neither of such documents will
include any untrue statement of a material fact or will omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and no Additional Registration
Statement has been or will be filed. The two preceding sentences do not
apply to statements in or omissions from a Registration Statement or the
Prospectus based upon written information furnished to the Company by any
Underwriter through the Representatives specifically for use therein, it
being understood and agreed that the only such information is that
described as such in Section 7(c) hereof.
(iii) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus; and the Company is
duly qualified to do business as a foreign corporation in good standing in
all other jurisdictions 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 would not have a material adverse effect on the
condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries, taken as a whole (a
"Material Adverse Effect")).
(iv) Each subsidiary of the Company has been duly incorporated and
is an existing corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as described in the
Prospectus; and each subsidiary of the Company is duly qualified to do
business as a foreign corporation in good standing in all other
jurisdictions 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 would not have a Material Adverse Effect; all of the
issued and outstanding capital stock of each subsidiary of the Company has
been duly authorized and validly issued and is fully paid and
nonassessable; and the capital stock of each subsidiary owned by the
Company, directly or through subsidiaries, is owned free from liens,
encumbrances and defects.
(v) The Offered Securities and all other outstanding shares of
capital stock of the Company have been duly authorized and are (or, in the
case of the Offered Securities offered by the Company, when paid for in
accordance with the terms of this Agreement on each Closing Date (as
defined below), or, in the case of options or the warrant owned by the
Selling Stockholders that are exercisable for the Offered Securities, when
such Offered Securities are paid for in accordance with the terms of their
respective option or warrant agreements, will be) validly issued, fully
paid and nonassessable and conform to the description thereof contained in
the Prospectus; and the stockholders of the Company have no preemptive
rights with respect to the Offered Securities.
(vi) Except as disclosed in the Prospectus, 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.
(vii) Except as described in the Prospectus, and except for rights
with respect to this offering which have been validly exercised or waived,
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
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registration statement under the 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 a
Registration Statement or in any securities being registered pursuant to
any other registration statement filed by the Company under the Act.
(viii) The Securities are listed on The Nasdaq Stock Market's
National Market.
(ix) No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required to be
obtained or made by the Company for the consummation of the transactions
contemplated by this Agreement in connection with the sale of the Offered
Securities, except such as have been obtained and made under the Act and
such as may be required under state securities laws.
(x) The execution, delivery and performance of this Agreement, and
the consummation of the transactions herein contemplated will not result
in a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation or order of
any governmental agency or body or any court, domestic or foreign, having
jurisdiction over the Company or any subsidiary of the Company or any of
their properties, or any material agreement or instrument to which the
Company or any such subsidiary is a party or by which the Company or any
such subsidiary is bound or to which any of the properties of the Company
or any such subsidiary is subject, or the charter or by-laws of the
Company or any such subsidiary, and the Company has full power and
authority to authorize, issue and sell the Offered Securities as
contemplated by this Agreement.
(xi) This Agreement has been duly authorized, executed and delivered
by the Company.
(xii) Except as disclosed in the Prospectus, the Company and its
subsidiaries have good and marketable title to all real properties and all
other properties and assets owned by them, in each case free from liens,
encumbrances and defects that would materially affect the value thereof or
materially interfere with the use made or to be made thereof by them; and
except as disclosed in the Prospectus, the Company and its subsidiaries
hold any leased real or personal property under valid and enforceable
leases with no exceptions that would materially interfere with the use
made or to be made thereof by them.
(xiii) The Company and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by them
and have not received any notice of proceedings relating to the revocation
or modification of any such certificate, authority or permit that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect.
(xiv) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that
might have a Material Adverse Effect.
(xv) The Company and its subsidiaries own, possess, have licenses to
or rights to use or can acquire licenses or rights to use on reasonable
terms, adequate trademarks, trade names and other rights to inventions,
know-how, patents, copyrights, confidential information and other
intellectual property (collectively, "intellectual property rights")
necessary to conduct the business now operated by them, or presently
employed by them, and have not received any notice of infringement of or
conflict with asserted rights of others with respect to any intellectual
property rights that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material
Adverse Effect.
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(xvi) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Company, any of its
subsidiaries or any of their respective properties that, if determined
adversely to the Company or any of its subsidiaries, would individually or
in the aggregate have a Material Adverse Effect, or would materially and
adversely affect the ability of the Company to perform its obligations
under this Agreement, or which are otherwise material in the context of
the sale of the Offered Securities; and no such actions, suits or
proceedings are pending or, to the Company's knowledge, contemplated.
(xvii) The financial statements included in each Registration
Statement and the Prospectus present fairly in all material respects the
financial position of the Company and its consolidated subsidiaries as of
the dates shown and their results of operations and cash flows for the
periods shown, and, except as otherwise disclosed in the Prospectus, such
financial statements have been prepared in conformity with the generally
accepted accounting principles in the United States applied on a
consistent basis; the schedules included in each Registration Statement
present fairly in all material respects the information required to be
stated therein; and the assumptions used in preparing the pro forma
financial statements included in each Registration Statement and the
Prospectus provide a reasonable basis for presenting the significant
effects directly attributable to the transactions or events described
therein, the related pro forma adjustments give appropriate effect to
those assumptions, and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical financial
statement amounts.
(xviii) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus there has
been no material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or
other), business, properties or results of operations of the Company and
its subsidiaries taken as a whole, and, except as disclosed in or
contemplated by the Prospectus, there has been no dividend or distribution
of any kind declared, paid or made by the Company on any class of its
capital stock.
(xix) The Company is not and, after giving effect to the offering
and sale of the Offered Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940.
(b) Each Selling Stockholder severally represents and warrants to, and
agrees with, the several Underwriters that:
(i) Such Selling Stockholder has and on each Closing Date
hereinafter mentioned will have valid and unencumbered title to the
Offered Securities to be delivered by such Selling Stockholder on such
Closing Date and full right, power and authority to enter into this
Agreement and to sell, assign, transfer and deliver the Offered Securities
to be delivered by such Selling Stockholder on such Closing Date
hereunder; and upon the delivery of and payment for the Offered Securities
on each Closing Date hereunder the several Underwriters will acquire valid
and unencumbered title to the Offered Securities to be delivered by such
Selling Stockholder on such Closing Date.
(ii) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (A) on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement conformed in all material respects to the
requirements of the Act and the Rules and Regulations and did not include
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, (B) on the Effective Date of the Additional Registration
Statement (if any), each Registration Statement conformed, or will
conform, in all material respects to the requirements of the Act and the
Rules and Regulations did not include, or will not include, any untrue
statement of a material fact and did not omit, or will not omit, to state
any material fact required to be stated therein or necessary to
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make the statements therein not misleading, and (C) on the date of this
Agreement, the Initial Registration Statement and, if the Effective Time
of the Additional Registration Statement is prior to the execution and
delivery of this Agreement, the Additional Registration Statement each
conforms, and at the time of filing of the Prospectus pursuant to Rule
424(b) or (if no such filing is required) at the Effective Date of the
Additional Registration Statement in which the Prospectus is included,
each Registration Statement and the Prospectus will conform, in all
material respects to the requirements of the Act and the Rules and
Regulations, and neither of such documents includes, or will include, any
untrue statement of a material fact or omits, or will omit, to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading. If the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement: on the Effective Date of the Initial Registration Statement,
the Initial Registration Statement and the Prospectus will conform in all
material respects to the requirements of the Act and the Rules and
Regulations, neither of such documents will include any untrue statement
of a material fact or will omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.
In the case of any Selling Stockholder who is also an Officer (as defined
below) or director of the Company, the two preceding sentences do not
apply to statements in or omissions from a Registration Statement or the
Prospectus based upon written information furnished to the Company by any
Underwriter through the Representatives specifically for use therein, it
being understood and agreed that the only such information is that
described as such in Section 7(c). In the case of any Selling Stockholder
that is not an Officer or director of the Company, the first two sentences
of this Section 2(b)(ii) apply only as to any statements in or omissions
from a Registration Statement or the Prospectus are based on written
information furnished to the Company by such Selling Stockholder
specifically for use therein. For purposes hereof, the term "Officer"
shall mean Xxxxxxx X. Xxx, F. Xxxxxxx Xxxxx and Xxxxxx X. Xxxxxx.
(iii) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between such Selling Stockholder and any
person that would give rise to a valid claim against such Selling
Stockholder or any Underwriter for a brokerage commission, finder's fee or
other like payment in connection with this offering.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company and each Selling Stockholder
agree, severally and not jointly, to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the Company and
each Selling Stockholder, at a purchase price of $ per share, that number of
Firm Securities (rounded up or down, as determined by Credit Suisse First Boston
Corporation ("CSFBC") in its discretion, in order to avoid fractions) obtained
by multiplying 1,650,000 Firm Securities in the case of the Company and the
number of Firm Securities set forth opposite the name of such Selling
Stockholder in Schedule A hereto, in the case of a Selling Stockholder, in each
case by a fraction the numerator of which is the number of Firm Securities set
forth opposite the name of such Underwriter in Schedule B hereto and the
denominator of which is the total number of Firm Securities.
Certificates in negotiable form or options or a warrant with the
applicable executed exercise notice for the Offered Securities to be sold by the
Selling Stockholders hereunder have been placed in custody, for delivery under
this Agreement, under Custody Agreements made with the Company, as custodian
("Custodian"). Each Selling Stockholder agrees that the shares represented by
the certificates held in custody for the Selling Stockholders under such Custody
Agreements are subject to the interests of the Underwriters hereunder, that the
arrangements made by the Selling Stockholders for such custody are to that
extent irrevocable, and that the obligations of the Selling Stockholders
hereunder shall not be terminated by operation of law, whether by the death of
any individual Selling Stockholder or the occurrence of any other event, or in
the case of a trust, by the death of any trustee or trustees or the termination
of such trust. If any individual Selling Stockholder or any such trustee or
trustees should die, or if any other such event should occur, or if any of such
trusts should terminate, before the delivery of the Offered Securities
hereunder, certificates for such
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Offered Securities shall be delivered by the Custodian in accordance with the
terms and conditions of this Agreement as if such death or other event or
termination had not occurred, regardless of whether or not the Custodian shall
have received notice of such death or other event or termination.
The Company and the Custodian will deliver the Firm Securities to the
Representatives for the accounts of the Underwriters, against payment of the
purchase price in Federal (same day) funds by official bank check or checks or
wire transfer to an account at a bank acceptable to CSFBC drawn to the order of
the Company in the case of 1,650,000 shares of Firm Securities to be sold by it
and to the order of the Custodian in the case of the shares of Firm Securities
to be sold by the Selling Stockholders, at the office of Xxxx and Xxxx LLP,
00000 Xxxxxxx Xxxxx, Xxxxx 0000, Xxxxxx, XX 00000, at 10:00 A.M., New York time,
on , or at such other time not later than seven full business days thereafter as
CSFBC and the Company determine, such time being herein referred to as the
"First Closing Date." The certificates for the Firm Securities so to be
delivered will be in definitive form, in such denominations and registered in
such names as CSFBC requests and will be made available for checking and
packaging at such location as CFSB shall reasonably request at least 24 hours
prior to the First Closing Date.
In addition, upon written notice from CSFBC given to the Company and the
Selling Stockholders from time to time not more than 30 days subsequent to the
date of the Prospectus, the Underwriters may purchase all or less than all of
the Optional Securities at the purchase price per Security to be paid for the
Firm Securities. The Selling Stockholders agree, severally and not jointly, to
sell to the Underwriters the respective numbers of Optional Securities obtained
by multiplying the number of Optional Securities specified in such notice by a
fraction the numerator of which is the number of shares set forth opposite the
names of such Selling Stockholders in Schedule A hereto under the caption
"Number of Optional Securities to be Sold" and the denominator of which is the
total number of Optional Securities (subject to adjustment by CSFBC to eliminate
fractions). Such Optional Securities shall be purchased from each Selling
Stockholder for the account of each Underwriter in the same proportion as the
number of Firm Securities set forth opposite such Underwriter's name bears to
the total number of Firm Securities (subject to adjustment by CSFBC to eliminate
fractions) and may be purchased by the Underwriters only for the purpose of
covering over-allotments made in connection with the sale of the Firm
Securities. No Optional Securities shall be sold or delivered unless the Firm
Securities previously have been, or simultaneously are, sold and delivered. The
right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and to the extent not previously exercised may be
surrendered and terminated at any time upon notice by CSFBC to the Company and
the Selling Stockholders.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by CSFBC
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Custodian will deliver
the Optional Securities being purchased on each Optional Closing Date to the
Representatives for the accounts of the several Underwriters, against payment of
the purchase price therefor in Federal (same day) funds by official bank check
or checks or wire transfer to an account at a bank acceptable to CSFBC drawn to
the order of the Custodian in the case of the shares of Optional Securities to
be sold by the Selling Stockholders, at the above office of Xxxx and Xxxx LLP.
The certificates for the Optional Securities being purchased on each Optional
Closing Date will be in definitive form, in such denominations and registered in
such names as CSFBC requests upon reasonable notice prior to such Optional
Closing Date and will be made available for checking and packaging at such
location as CSFB shall reasonably request at a reasonable time in advance of
such Optional Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company and the Selling Stockholders. The
Company agrees with the
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several Underwriters and the Selling Stockholders that:
(a) If the Effective Time of the Initial Registration Statement is prior
to the execution and delivery of this Agreement, the Company will file the
Prospectus with the Commission pursuant to and in accordance with subparagraph
(1) (or, if applicable and if consented to by CSFBC, subparagraph (4)) of Rule
424(b) not later than the earlier of (A) the second business day following the
execution and delivery of this Agreement or (B) the fifteenth business day after
the Effective Date of the Initial Registration Statement.
The Company will advise CSFBC promptly of any such filing pursuant to Rule
424(b). If the Effective Time of the Initial Registration Statement is prior to
the execution and delivery of this Agreement and an additional registration
statement is necessary to register a portion of the Offered Securities under the
Act but the Effective Time thereof has not occurred as of such execution and
delivery, the Company will file the additional registration statement or, if
filed, will file a post-effective amendment thereto with the Commission pursuant
to and in accordance with Rule 462(b) on or prior to 10:00 P.M., New York time,
on the date of this Agreement or, if earlier, on or prior to the time the
Prospectus is printed and distributed to any Underwriter, or will make such
filing at such later date as shall have been consented to by CSFBC.
(b) The Company will advise CSFBC promptly of any proposal to amend or
supplement the initial or any additional registration statement as filed or the
related prospectus or the Initial Registration Statement, the Additional
Registration Statement (if any) or the Prospectus and will not effect such
amendment or supplementation without CSFBC's consent; and the Company will also
advise CSFBC promptly of the effectiveness of each Registration Statement (if
its Effective Time is subsequent to the execution and delivery of this
Agreement) and of any amendment or supplementation of a Registration Statement
or the Prospectus and of the institution by the Commission of any stop order
proceedings in respect of a Registration Statement and will use its best efforts
to prevent the issuance of any such stop order and to obtain as soon as possible
its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered Securities
is required to be delivered under the Act in connection with sales by any
Underwriter or dealer, any event occurs 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 to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend the Prospectus to comply
with the Act, the Company will promptly notify CSFBC of such event and will
promptly prepare and file with the Commission, at its own expense, an amendment
or supplement which will correct such statement or omission or an amendment
which will effect such compliance. Neither CSFBC's consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall constitute a
waiver of any of the conditions set forth in Section 6.
(d) As soon as practicable, but not later than the Availability Date (as
defined below), the Company will make generally available to its securityholders
an earnings statement covering a period of at least 12 months beginning after
the Effective Date of the Initial Registration Statement (or, if later, the
Effective Date of the Additional Registration Statement) which will satisfy the
provisions of Section 11(a) of the Act. For the purpose of the preceding
sentence, "Availability Date" means the 45th day after the end of the fourth
fiscal quarter following the fiscal quarter that includes such Effective Date,
except that, if such fourth fiscal quarter is the last quarter of the Company's
fiscal year, "Availability Date" means the 90th day after the end of such fourth
fiscal quarter.
(e) The Company will furnish to the Representatives copies of each
Registration Statement (five of which will be signed and will include all
exhibits), each related preliminary prospectus, and, so long as a prospectus
relating to the Offered Securities is required to be delivered under the Act in
connection with sales by any Underwriter or dealer, the Prospectus and all
amendments and supplements to such documents, in each case in such quantities as
CSFBC requests. The Prospectus shall be so furnished on or prior to 3:00 P.M.,
New
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York time, on the business day following the later of the execution and delivery
of this Agreement or the Effective Time of the Initial Registration Statement.
All other such documents shall be so furnished as soon as available. The Company
and the Selling Stockholders will pay the expenses of printing and distributing
to the Underwriters all such documents.
(f) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFBC designates and
will continue such qualifications in effect so long as required for the
distribution.
(g) During the period of five years hereafter, the Company will furnish to
the Representatives and, upon request, to each of the other Underwriters, as
soon as practicable after the end of each fiscal year, a copy of its annual
report to stockholders for such year; and the Company will furnish to the
Representatives (i) as soon as available, a copy of each report and any
definitive proxy statement of the Company filed with the Commission under the
Securities Exchange Act of 1934 or mailed to stockholders, and (ii) from time to
time, such other information concerning the Company as CSFBC may reasonably
request.
(h) For a period of 90 days after the public offering date set forth on
the Prospectus, the Company will not offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, or file with the Commission a
registration statement under the Act relating to, any additional shares of its
Securities or securities convertible into or exchangeable or exercisable for any
shares of its Securities, or publicly disclose the intention to make any such
offer, sale, pledge, disposition or filing, without the prior written consent of
CSFBC, except that the Company may (i) issue Securities pursuant to the
conversion or exchange of convertible or exchangeable securities, (ii) make
grants of employee stock options pursuant to the terms of a plan in effect on
the date hereof, and issue Securities pursuant to the exercise of such options
or the exercise of any other stock options or warrants outstanding on the date
hereof, and (iii) issue Securities to participants in any employee stock
purchase plan in effect on the date hereof.
(i) The Company and each Selling Stockholder agree with the several
Underwriters that the Company and such Selling Stockholder will pay all expenses
incident to the performance of the obligations of the Company and such Selling
Stockholder, as the case may be, under this Agreement, for any filing fees and
other expenses (including fees and disbursements of counsel) in connection with
qualification of the Offered Securities for sale under the laws of such
jurisdictions as CSFBC designates and the printing of memoranda relating
thereto, for the filing fee incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the review by
the National Association of Securities Dealers, Inc. of the Offered Securities,
for any travel expenses of the Company's officers and employees and any other
expenses of the Company in connection with attending or hosting meetings with
prospective purchasers of the Offered Securities, for any transfer taxes on the
sale by the Selling Stockholders of the Offered Securities to the Underwriters
and for expenses incurred in distributing preliminary prospectuses and the
Prospectus (including any amendments and supplements thereto) to the
Underwriters.
(j) Each Selling Stockholder agrees to deliver to CSFBC, attention:
Transactions Advisory Group on or prior to the First Closing Date a properly
completed and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations in
lieu thereof).
(k) Each Selling Stockholder agrees that for a period of 90 days after the
public offering date set forth on the Prospectus, and except for the shares of
Securities that the Selling Stockholder will sell in this offering pursuant to
this Agreement, such Selling Stockholder will not offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, any shares of Securities
or securities convertible into or exchangeable or exercisable for any shares of
Securities, enter into a transaction which would have the same effect, or enter
into any swap, hedge or other arrangement that transfers, in whole or in part,
any of the economic consequences of ownership of the Securities, whether any
such aforementioned transaction is to be settled by delivery of the Securities
or such other securities, in cash or otherwise, or publicly disclose the
intention to make any such
- 9 -
offer, sale, pledge or disposition, or to enter into any such transaction, swap,
hedge or other arrangement, without, in each case, the prior written consent of
CSFBC. In addition, each Selling Stockholder agrees that, without the prior
written consent of CSFBC, it will not, for a period of 90 days after the public
offering date set forth on the final prospectus used to sell the Offered
Securities, make any demand for or exercise any right with respect to, the
registration of any Securities or any security convertible into or exercisable
or exchangeable for the Securities. Any Securities received upon exercise of
options granted to the Selling Stockholder will also be subject to this
Agreement. Any Securities acquired by the Selling Stockholder in the open market
will not be subject to this Agreement.
Notwithstanding the foregoing, each Selling Stockholder may transfer
such Selling Stockholder's Securities (i) as a bona fide gift or gifts, provided
that the donee or donees thereof agree to be bound by the restrictions set forth
herein, (ii) to any trust for the direct or indirect benefit of the Selling
Stockholder or the family of the Selling Stockholder, provided that the trustee
of the trust agrees to be bound by the restrictions set forth in this Section
5(k), and provided further that any such transfer shall not involve a
disposition for value, or (iii) with the prior written consent of CSFBC on
behalf of the Underwriters. In addition, notwithstanding the foregoing, if the
Selling Stockholder is a partnership, the partnership may transfer the
Securities to its partners; provided, however, that in any such case, it shall
be a condition to the transfer that each transferee execute an agreement stating
that such transferee is receiving and holding such Securities subject to the
provisions set forth in this Section 5(k) and there shall be no further transfer
of such Securities except as set forth herein, and provided further that any
such transfer shall not involve a disposition for value.
6. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Stockholders herein, to
the accuracy of the statements of Company officers made pursuant to the
provisions hereof, to the performance by the Company and the Selling
Stockholders of their obligations hereunder and to the following additional
conditions precedent:
(a) The Representatives shall have received a letter, dated the date of
delivery thereof (which, if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, shall be on
or prior to the date of this Agreement or, if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, shall be prior to the filing of the amendment or post-effective
amendment to the registration statement to be filed shortly prior to such
Effective Time), of KPMG LLP confirming that they are independent public
accountants within the meaning of the Act and the applicable published Rules and
Regulations thereunder and stating to the effect that:
(i) in their opinion the financial statements and schedules examined
by them and included in the Registration Statements comply as to form in
all material respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations;
(ii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement of Auditing Standards No.
71, Interim Financial Information, on the unaudited financial statements
included in the Registration Statements;
(iii) on the basis of the review referred to in clause (ii) above, a
reading of the latest available interim financial statements of the
Company, inquiries of officials of the Company who have responsibility for
financial and accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) the unaudited financial statements included in the
Registration Statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act and
the
- 10 -
related published Rules and Regulations or any material
modifications should be made to such unaudited financial statements
for them to be in conformity with generally accepted accounting
principles;
(B) at the date of the latest available balance sheet read by
such accountants, or at a subsequent specified date not more than
three business days prior to the date of this Agreement, there was
any change in the capital stock or any increase in short-term
indebtedness or long-term debt of the Company and its consolidated
subsidiaries or, at the date of the latest available balance sheet
read by such accountants, there was any decrease in consolidated net
current assets or net assets, as compared with amounts shown on the
latest balance sheet included in the Prospectus; or
(C) for the period from the closing date of the latest income
statement included in the Prospectus to the closing date of the
latest available income statement read by such accountants there
were any decreases, as compared with the corresponding period of the
previous year and with the period of corresponding length ended the
date of the latest income statement included in the Prospectus, in
consolidated revenue or in the total or per share amounts of
consolidated net income;
except in all cases set forth in clauses(B) and (C) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Registration Statements (in each case to the extent that
such dollar amounts, percentages and other financial information are
derived from the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's accounting
system or are derived directly from such records by analysis or
computation) with the results obtained from inquiries, a reading of such
general accounting records and other procedures specified in such letter
and have found such dollar amounts, percentages and other financial
information to be in agreement with such results, except as otherwise
specified in such letter; and
(v) on the basis of a reading of the unaudited pro forma financial
statements included in the Registration Statements (the "pro forma
financial statements"); carrying out certain specified procedures;
inquiries of certain officials of the Company and xVault, Inc. who have
responsibility for financial and accounting matters; and proving the
arithmetic accuracy of the application of the pro forma adjustments to the
historical amounts in the pro forma financial statements, nothing came to
their attention which caused them to believe that the pro forma financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X or that
the pro forma adjustments have not been properly applied to the historical
amounts in the compilation of such statements.
For purposes of this subsection, (i) if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, "Registration Statements" shall mean the initial registration
statement as proposed to be amended by the amendment or post-effective amendment
to be filed shortly prior to its Effective Time, (ii) if the Effective Time of
the Initial Registration Statement is prior to the execution and delivery of
this Agreement but the Effective Time of the Additional Registration Statement
is subsequent to such execution and delivery, "Registration Statements" shall
mean the Initial Registration Statement and the additional registration
statement as proposed to be filed or as proposed to be amended by the
post-effective amendment to be filed shortly prior to its Effective Time, and
(iii) "Prospectus" shall mean the prospectus included in the Registration
Statements.
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(b) If the Effective Time of the Initial Registration Statement is not
prior to the execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of this
Agreement or such later date as shall have been consented to by CSFBC. If the
Effective Time of the Additional Registration Statement (if any) is not prior to
the execution and delivery of this Agreement, such Effective Time shall have
occurred not later than 10:00 P.M., New York time, on the date of this Agreement
or, if earlier, the time the Prospectus is printed and distributed to any
Underwriter, or shall have occurred at such later date as shall have been
consented to by CSFBC. If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, the
Prospectus shall have been filed with the Commission in accordance with the
Rules and Regulations and Section 5(a) of this Agreement. Prior to such Closing
Date, no stop order suspending the effectiveness of a Registration Statement
shall have been issued and no proceedings for that purpose shall have been
instituted or, to the knowledge of any Selling Stockholder, the Company or the
Representatives, shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event involving a
prospective change, in the condition (financial or other), business, properties
or results of operations of the Company and its subsidiaries taken as one
enterprise which, in the judgment of a majority in interest of the Underwriters
including the Representatives, is material and adverse and makes it impractical
or inadvisable to proceed with completion of the public offering or the sale of
and payment for the Offered Securities; (ii) any material suspension or material
limitation of trading in securities generally on the New York Stock Exchange, or
any setting of minimum prices for trading on such exchange, or any suspension of
trading of any securities of the Company on any exchange or in the
over-the-counter market; (iii) any banking moratorium declared by U.S. Federal
or New York authorities; or (iv) any outbreak or escalation of major hostilities
in which the United States is involved, any declaration of war by Congress or
any other substantial national or international calamity or emergency if, in the
judgment of a majority in interest of the Underwriters including the
Representatives, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the Offered
Securities.
(d) The Representatives shall have received an opinion, dated such Closing
Date, of Xxxx and Xxxx LLP, counsel for the Company, to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus; and the Company is duly qualified
to do business as a foreign corporation in good standing in California,
Maryland and Massachusetts;
(ii) OTG Sales, Inc. has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus; and is duly qualified to do
business as a foreign corporation in good standing in California and
Maryland; all of the issued and outstanding capital stock of OTG Sales,
Inc. has been duly authorized and validly issued and is fully paid and
nonassessable, and the capital stock of each subsidiary owned by the
Company, directly or through subsidiaries, is owned of record by the
Company;
(iii) OTG E-Mail Corp. has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus; and is not duly qualified to do
business as a foreign corporation in any jurisdiction; all of the issued
and outstanding capital stock of OTG E-Mail Inc. has been duly authorized
and validly issued and is fully paid and nonassessable, and the capital
stock of each subsidiary owned by the Company, directly or through
subsidiaries, is owned of record by the Company;
- 12 -
(iv) The Offered Securities delivered on such Closing Date and all
other outstanding shares of the Common Stock of the Company have been duly
authorized and are, (or, in the case of the Offered Securities offered by
the Company, when paid for in accordance with the terms of this Agreement,
or, in the case of options or the warrant owned by the Selling
Stockholders that are exercisable for the Offered Securities, when such
Offered Securities are paid for in accordance with the terms of their
respective option agreements, will be) validly issued, fully paid and
nonassessable and conform to the description thereof contained in the
Prospectus; and the stockholders of the Company have no preemptive rights
with respect to the Offered Securities under the Delaware General
Corporation Law statute, the Company's Certificate of Incorporation or
By-laws or, to such counsel's knowledge, any agreement to which the
Company is a party;
(v) Except as described in the Prospectus, and except for rights
with respect to this offering which have been duly exercised or waived,
there are no contracts, agreements or understandings known to such counsel
between the Company and any person granting such person the right to
require the Company to file a registration statement under the 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 Act;
(vi) The Company is not and, after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940.
(vii) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required to be
obtained or made by the Company or, to the knowledge of such counsel, any
Selling Stockholder for the consummation of the transactions contemplated
by this Agreement or the Custody Agreement in connection with the sale of
the Offered Securities, except such as have been obtained and made under
the Act and such as may be required under state securities laws;
(viii) The execution, delivery and performance of this Agreement or
the Custody Agreement by the Company and the consummation by the Company
of the transactions herein or therein contemplated (other than the
Company's performance of its indemnification, contribution or
reimbursement obligations) will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under, (A) any
statute, any rule or any regulation of any governmental agency or body,
(B) to the knowledge of such counsel, any order of any governmental agency
or body or any court having jurisdiction over the Company or any
subsidiary of the Company or any of their properties specifically naming
the Company, OTG Sales, Inc. or OTG E-Mail Corp., (C) any agreement or
instrument to which the Company, OTG Sales, Inc. or OTG E-Mail Corp. is a
party or by which the Company, OTG Sales, Inc. or OTG E-Mail Corp. is
bound or to which any of the properties of the Company, OTG Sales, Inc. or
OTG E-Mail Corp. is subject and which is filed as an exhibit to the
Registration Statement, or (D) the charter or by-laws of the Company, OTG
Sales, Inc. or OTG E-Mail Corp.; and the Company has full power and
authority to authorize, issue and sell the Offered Securities as
contemplated by this Agreement;
(ix) The Initial Registration Statement was declared effective under
the Act as of the date and time specified in such opinion, the Additional
Registration Statement (if any) was filed and became effective under the
Act as of the date and time (if determinable) specified in such opinion,
the Prospectus either was filed with the Commission pursuant to the
subparagraph of Rule 424(b) specified in such opinion on the date
specified therein or was included in the Initial Registration Statement or
the Additional Registration Statement (as the case may be), and, to the
knowledge of such counsel, no stop order suspending the effectiveness of a
Registration Statement or any part
- 13 -
thereof has been issued and no proceedings for that purpose have been
instituted or are pending or threatened under the Act, and each
Registration Statement and the Prospectus, and each amendment or
supplement thereto, as of their respective effective or issue dates (and
in each case except as to the financial statements, including the notes
and schedules thereto, or any other financial or accounting information,
or information relating to the Underwriters or the method of distribution
of the Offered Securities by the Underwriters included therein), complied
as to form in all material respects with the requirements of the Act and
the Rules and Regulations; and such counsel do not know of any legal or
governmental proceedings to which the Company is a party or to which the
property of the Company is subject that would be required to be described
in a Registration Statement or the Prospectus which are not described as
required or of any contracts or documents of a character required to be
described in a Registration Statement or the Prospectus or to be filed as
exhibits to a Registration Statement which are not described and filed as
required;
(x) This Agreement has been duly authorized, executed and delivered
by the Company;
(xi) The statements set forth under the heading "Description of
Capital Stock" in the Prospectus, insofar as such statements purport to
summarize documents referred to therein or matters of law, are accurate
summaries and fairly present in all material respects the information
called for with respect to such statements;
(xii) Insofar as factual matters with respect to the Offered
Securities to be sold by the Selling Stockholders are concerned, based
solely upon certificates of such Selling Stockholders and the
representations and warranties of such Selling Stockholders in the Custody
Agreements and this Agreement, which such counsel has no reason to believe
are inaccurate, no consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of the
transactions contemplated by this Agreement, except such as have been
obtained under the Act and such as may be required under state securities
or blue sky laws in connection with the purchase and distribution of the
Offered Securities by the Underwriters;
(xiii) Insofar as factual matters with respect to the Offered
Securities to be sold by the Selling Stockholders are concerned, based
solely upon certificates of such Selling Stockholders and the
representations and warranties of such Selling Stockholders in the Custody
Agreements and this Agreement, which such counsel have no reason to
believe are inaccurate, the execution, delivery and performance of the
Custody Agreements and this Agreement and the consummation of the
transactions therein and herein contemplated will not result in a breach
or violation of any terms and provisions of, or constitute a default
under, (A) any statute, any rule, or any regulation of any governmental
agency or body, (B) to the knowledge of such counsel, any order of any
governmental agency or body or any court having jurisdiction over any
Selling Stockholder or any of his or its properties and specifically
naming such Selling Stockholder, or (C) any agreement or instruments to
which any Selling Stockholder is a party or by which such Selling
Stockholder is bound or by which any of the properties of such Selling
Stockholder is subject and of which such counsel has knowledge;
(xiv) Insofar as factual matters with respect to the Offered
Securities to be sold by the Selling Stockholders are concerned, based
solely upon stock certificates of such Selling Stockholders, which such
counsel has no reason to believe are inaccurate, each of this Agreement,
the Custody Agreements and the power of attorney entered into by each
Selling Stockholder in connection with the sale of shares hereunder
("Power of Attorney") has been duly executed and delivered by or on behalf
of each Selling Stockholder and that the Custody Agreement and the Power
of Attorney constitute valid and legally binding obligations of each
Selling Stockholder enforceable in accordance with their terms, except for
any obligations relating to indemnification and contribution, and subject
to bankruptcy, insolvency, fraudulent transfer, reorganization,
- 14 -
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
(xv) Insofar as factual matters with respect to the Offered
Securities to be sold by the Selling Stockholders are concerned, based
solely upon stock certificates of such Selling Stockholders, each Selling
Stockholder has full right, power and authority to sell the Offered
Securities delivered by such Selling Stockholder on the Closing Date; and
(xvi) Upon the Underwriters obtaining control of the Offered
Securities to be sold by the Selling Stockholders, and assuming the
Underwriters purchased such Offered Securities for value and without
notice of any adverse claim to such Offered Securities within the meaning
of Section 8-102 of the Uniform Commercial Code, the Underwriters will
have acquired all rights of such Selling Stockholders in such Offered
Securities free of any adverse claim.
In addition, such counsel shall state that, in connection with the preparation
of the Registration Statement and the Prospectus, they have participated in
conferences with officers and representatives of the Company, counsel for the
Underwriters and the independent accountants of the Company, at which
conferences they made inquiries of such persons and others and discussed the
contents of the Registration Statement and the Prospectus; that while the
limitations inherent in the independent verification of factual matters and the
character of determinations involved in the registration process are such that
they are not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus, subject to the foregoing and based on such
participation, inquiries and discussions, no facts have come to their attention
which have caused them to believe that the Registration Statement, as of the
Effective Date (but after giving effect to changes incorporated pursuant to Rule
430A under the Act), contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading, that the Prospectus, as of
the date it was filed with the Commission pursuant to Rule 424(b)(4) under the
Act, contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading (except that they
express no such view with respect to the financial statements, including the
notes and schedules thereto, or any other financial or accounting information),
or that the Registration Statement or the Prospectus, as of the date of such
opinion, contained any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading (except that they
express no such view with respect to the financial statements, including the
notes and schedules thereto, or any other financial information).
On each Optional Closing Date, the Representatives shall have received an
opinion, dated such Optional Closing Date, of Xxxx and Xxxx LLP, counsel for the
Selling Stockholders, including the representations set forth in Sections
6(d)(vii) and 6(d)(xii) through (xvi) and the immediately preceding paragraph.
(e) The Representatives shall have received an opinion, dated such Closing
Date, of Xxxxx & Xxxxxxx LLP, counsel for ABS Capital Partners, to the effect
that:
On each Optional Closing Date, the Representatives shall have received an
opinion, dated such Optional Closing Date, of Xxxxx & Xxxxxxx LLP, counsel for
ABS Capital Partners, including the representations set forth in Section 6(e).
(f) The Representatives shall have received from Xxxxx Xxxxxxx Xxxxxxx &
Xxxxx LLP, counsel for the Underwriters, such opinion or opinions, dated such
Closing Date, with respect to the incorporation of the Company, the validity of
the Offered Securities delivered on such Closing Date, the Registration
Statements, the Prospectus and other related matters as the Representatives may
require, and the Selling Stockholders and the Company shall have furnished to
such counsel such documents as they request for the purpose of enabling
- 15 -
them to pass upon such matters.
(g) The Representatives shall have received a certificate, dated such
Closing Date, of the President or any Vice President and a principal financial
or accounting officer of the Company in which such officers, to the best of
their knowledge after reasonable investigation, shall state on behalf of the
Company that: the representations and warranties of the Company in this
Agreement are true and correct; the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder at
or prior to such Closing Date; no stop order suspending the effectiveness of any
Registration Statement has been issued and, to their knowledge, no proceedings
for that purpose have been instituted or are threatened by the Commission; the
Additional Registration Statement (if any) satisfying the requirements of
subparagraphs (1) and (3) of Rule 462(b) was filed pursuant to Rule 462(b),
including payment of the applicable filing fee in accordance with Rule 111(a) or
(b) under the Act, prior to the time the Prospectus was printed and distributed
to any Underwriter; and, subsequent to the date of the most recent financial
statements in the Prospectus, there has been no material adverse change, nor any
development or event involving a prospective material adverse change, in the
condition (financial or other), business, properties or results of operations of
the Company and its subsidiaries taken as a whole except as set forth in or
contemplated by the Prospectus or as described in such certificate.
(h) The Representatives shall have received a letter, dated such Closing
Date, of KPMG LLP which meets the requirements of subsection (a) of this
Section, except that the specified date referred to in such subsection will be a
date not more than three days prior to such Closing Date for the purposes of
this subsection.
The Selling Stockholders and the Company will furnish the Representatives with
such conformed copies of such opinions, certificates, letters and documents as
the Representatives reasonably request. CSFBC may in its sole discretion waive
on behalf of the Underwriters compliance with any conditions to the obligations
of the Underwriters hereunder, whether in respect of an Optional Closing Date or
otherwise.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter, its partners, directors and officers and each
person, if any who controls such Underwriter within the meaning of Section 15 of
the Act, against any losses, claims, damages or liabilities, joint or several,
to which such Underwriter may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement, the
Prospectus, or any amendment or supplement thereto, or any related preliminary
prospectus, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company by any Underwriter through the Representatives specifically for
use therein, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in
subsection (c) below; and provided, further, that with respect to any untrue
statement or alleged untrue statement in, or omission or alleged omission from,
any preliminary prospectus, the indemnity agreement contained in this subsection
(a) shall not inure to the benefit of any Underwriter from whom the person
asserting any such losses, claims, damages or liabilities purchased the Offered
Securities concerned, to the extent that a prospectus relating to such Offered
Securities was required to be delivered by such Underwriter under the Act in
connection with such purchase and any such loss, claim, damage or liability of
such Underwriter results from the fact that there was not sent or given to such
person, at or prior to the written confirmation of the sale of such Offered
Securities to such person, a copy of the Prospectus if the Company had
previously furnished copies
- 16 -
thereof to such Underwriter.
(b) The Selling Stockholders, jointly and severally, will indemnify and
hold harmless each Underwriter, its partners, directors and officers and each
person who controls such Underwriter within the meaning of Section 15 of the
Act, against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any Registration Statement, the Prospectus, or
any amendment or supplement thereto, or any related preliminary prospectus, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that in the case of
Selling Stockholders who are not Officers or directors of the Company, such
Selling Stockholders will only be liable to the extent that any such loss,
claim, damage or liability that arises out of and is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written
information furnished to the Company by such Selling Stockholders; and provided,
further, that the Selling Stockholders will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement in or omission or
alleged omission from any of such documents in reliance upon and in conformity
with written information furnished to the Company by an Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (c) below; and provided, further,
that with respect to any untrue statement or alleged untrue statement in, or
omission or alleged omission from, any preliminary prospectus, the indemnity
agreement contained in this subsection (b) shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased the Offered Securities concerned, to the extent that a
prospectus relating to such Offered Securities was required to be delivered by
such Underwriter under the Act in connection with such purchase and any such
loss, claim, damage or liability of such Underwriter results from the fact that
there was not sent or given to such person, at or prior to the written
confirmation of the sale of such Offered Securities to such person, a copy of
the Prospectus if the Company had previously furnished copies thereof to such
Underwriter; and provided, further, that the liability of each Selling
Stockholder under this subsection shall be limited to an amount equal to the
aggregate net proceeds received by such Selling Stockholder from the sale of the
Offered Securities sold by such Selling Stockholder hereunder.
(c) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company, its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Act, and each
Selling Stockholder against any losses, claims, damages or liabilities to which
the Company or such Selling Stockholder may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives specifically for use therein, and will reimburse any
legal or other expenses reasonably incurred by the Company and each Selling
Stockholder in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being understood
and agreed that the only such information furnished by any Underwriter consists
of (i) the following information in the Prospectus furnished on behalf of each
Underwriter: the concession and reallowance figures appearing in the fourth
paragraph under the caption "Underwriting" and (ii) the information contained in
the last sentence of the sixth
- 17 -
paragraph, and the seventh, eighth, thirteenth and fourteenth paragraphs under
the caption "Underwriting."
(d) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under
subsection (a), (b) or (c) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a), (b) or (c) above, except to the extent the
indemnifying party is prejudiced as a result of such omission. In case any such
action is brought against any indemnified party and it notifies an indemnifying
party of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been at the time of such settlement a party
and indemnity could have been sought hereunder by such indemnified party unless
such (i) settlement includes an unconditional release of such indemnified party
from all liability on any claims that are the subject matter of such action and
(ii) does not include a statement as to, or an admission of, fault, culpability
or a failure to act by or on behalf of an indemnified party.
(e) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a), (b) or
(c) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a), (b) or (c) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on the
other from the offering of the Securities 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 Stockholders on
the one hand and the Underwriters on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities as
well as any other relevant equitable considerations. The relative benefits
received by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Company and the Selling Stockholders bear to the total underwriting discounts
and commissions received by the Underwriters (it being understood that, with
respect to each Selling Stockholder, only the net proceeds received by such
Selling Stockholder in connection with the sale of Offered Securities by such
Selling Stockholder hereunder shall be included for purposes of determining the
relative benefit to such Selling Stockholder). The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, the Selling
Stockholders or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission and each Selling Stockholder shall not be required to
contribute any amount in excess of the amount by which the net proceeds to such
Selling Stockholder of the Offered Securities sold by such Selling Stockholder
hereunder exceeds the amount of any damages which such Selling Stockholder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (e) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of this
subsection (e). Notwithstanding the provisions of this subsection (e), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities
- 18 -
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (e) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(f) The obligations of the Company and the Selling Stockholders under this
Section shall be in addition to any liability which the Company and the Selling
Stockholders may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
director of the Company, to each officer of the Company who has signed a
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities hereunder on either the First
or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, CSFBC may
make arrangements satisfactory to the Company and the Selling Stockholders for
the purchase of such Offered Securities by other persons, including any of the
Underwriters, but if no such arrangements are made by such Closing Date, the
non-defaulting Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Offered Securities that such
defaulting Underwriters agreed but failed to purchase on such Closing Date. If
any Underwriter or Underwriters so default and the aggregate number of shares of
Offered Securities with respect to which such default or defaults occur exceeds
10% of the total number of shares of Offered Securities that the Underwriters
are obligated to purchase on such Closing Date and arrangements satisfactory to
CSFBC, the Company and the Selling Stockholders for the purchase of such Offered
Securities by other persons are not made within 36 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Selling Stockholders, except as
provided in Section 9 (provided that if such default occurs with respect to
Optional Securities after the First Closing Date, this Agreement will not
terminate as to the Firm Securities or any Optional Securities purchased prior
to such termination). As used in this Agreement, the term "Underwriter" includes
any person substituted for an Underwriter under this Section. Nothing herein
will relieve a defaulting Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Selling Stockholders, of the Company or its officers and of the several
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, any Selling
Stockholder, the Company or any of their respective representatives, officers or
directors or any controlling person, and will survive delivery of and payment
for the Offered Securities. If this Agreement is terminated pursuant to Section
8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company and the Selling Stockholders shall
remain responsible for the expenses to be paid or reimbursed by them pursuant to
Section 5 and the respective obligations of the Company, the Selling
Stockholders, and the Underwriters pursuant to Section 7 shall remain in effect,
and if any Offered Securities have been purchased hereunder the representations
and warranties in Section 2 and all obligations under Section 5 shall also
remain in effect. If the purchase of the Offered Securities by the Underwriters
is not consummated for any reason other than solely because of the termination
of this Agreement pursuant to Section 8 or the occurrence of any event specified
in clause (ii), (iii) or (iv) of Section 6(c), the Company and the Selling
Stockholders will, jointly and severally, reimburse the Underwriters for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the offering of the Offered Securities.
- 19 -
10. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
the Representatives, c/o Credit Suisse First Boston Corporation, Eleven Madison
Avenue, New York, N.Y. 10010-3629, Attention: Investment Banking Department -
Transactions Advisory Group, or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx
000, Xxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxx, or, if sent to the
Selling Stockholders or any of them, will be mailed, delivered or telegraphed
and confirmed to each Selling Stockholders' address set forth in Schedule A;
provided, however, that any notice to an Underwriter pursuant to Section 7 will
be mailed, delivered or telegraphed and confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective personal representatives and
successors and the officers and directors and controlling persons referred to in
Section 7, and no other person will have any right or obligation hereunder.
12. Representation. The Representatives will act for the several
Underwriters in connection with the transactions contemplated by this Agreement,
and any action under this Agreement taken by the Representatives, jointly or by
CSFBC, will be binding upon all the Underwriters. F. Xxxxxxx Xxxxx, Xxxxxx X.
Xxxxxx and Xxxxxxx X. Xxx will act for the Selling Stockholders in connection
with such transactions, and any action under or in respect of this Agreement
taken by F. Xxxxxxx Xxxxx, Xxxxxx X. Xxxxxx and/or Xxxxxxx X. Xxx will be
binding upon all the Selling Stockholders.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of laws.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
- 20 -
If the foregoing is in accordance with the Representatives' understanding
of our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement among the Selling
Stockholders, the Company and the several Underwriters in accordance with its
terms.
Very truly yours,
----------------------------------------------
Xxxxxxx X. Xxx
----------------------------------------------
Xxxxxxx X. Xxx, as custodian for Xxxxxxxxx Xxx
----------------------------------------------
Xxxxxxx X. Xxx, as trustee of the Xxxxxxx Xxx
November 1999 Grantor Retained Annuity Trust
----------------------------------------------
Xxxxxxx Xxx, as trustee of the Xxxxxx Xxxx Xxx
November 1999 Grantor Retained Annuity Trust
and the Xxxxxxx Xxxx Xxx November 1999 Grantor
Retained Annuity Trust
ABS CAPITAL PARTNERS II, L.P.
By: ABS Partners II, LLC, its general partner
By:
------------------------------------------
Xxxxxx X. Xxxx, Xx.
Managing Member
----------------------------------------------
F. Xxxxxxx Xxxxx
----------------------------------------------
Xxxxxx X. Xxxxxx
----------------------------------------------
Xxxxxxx X. Xxxxxxxx
----------------------------------------------
Xxxx Xxxxxx
----------------------------------------------
Geaton X. XxXxxxxxx, Xx.
----------------------------------------------
Xxxxxx Xxxxxxxxx
- 21 -
If the foregoing is in accordance with the Representatives' understanding
of our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement among the Selling
Stockholders, the Company and the several Underwriters in accordance with its
terms.
Very truly yours,
----------------------------------------------
Xxxx Xxxxxx
----------------------------------------------
Xxxx Xxxxxx
----------------------------------------------
Xxxxx Xxxxxx
----------------------------------------------
Xxxxxxx Xxxxxx
----------------------------------------------
Xxxxxxx Xxxxxxxx
----------------------------------------------
Xxxxxx Xxxxxx
OTG SOFTWARE, INC.
By:
------------------------------------------
Name:
Title:
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
DEUTSCHE BANK SECURITIES INC.
XXXXXXX XXXXX XXXXXX INC.
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
Acting on behalf of themselves and as the Representatives of the several
Underwriters.
By CREDIT SUISSE FIRST BOSTON CORPORATION
By
-------------------------------------
Name:
Title:
- 22 -
SCHEDULE A
Number of
Number of Optional
Firm Securities Securities to
Selling Stockholder to be Sold be Sold
------------------- --------------- -------------
Xxxxxxx X. Xxx......................................................... 450,000
OTG Software, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Xxxxxxxxx Xxx.......................................................... 16,500
00000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
The Xxxxxxx Xxx November 1999 Grantor Retained 16,500
Annuity Trust......................................................
00000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
The Xxxxxx Xxxx Xxx November 1999 Grantor Retained 16,500
Annuity Trust......................................................
00000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
The Xxxxxxx Xxxx Xxx November 1999 Grantor Retained 16,500
Annuity Trust......................................................
Xxxxxxxxx, XX 00000
ABS Capital Partners II, L.P........................................... 600,000 90,000
0 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx, Xx.
F. Xxxxxxx Xxxxx....................................................... 70,000
OTG Software, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Xxxxxx X. Xxxxxx....................................................... 70,000
OTG Software, Inc.
Xxxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxxx.................................................... 20,000
00000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
Xxxx Xxxxxx............................................................ 40,000
XX Xxx 0000
Xxxxx Xxxxx, XX 00000
- 23 -
Number of
Number of Optional
Firm Securities Securities to
Selling Stockholder to be Sold be Sold
------------------- --------------- -------------
Geaton X. XxXxxxxxx, Xx. .............................................. 40,000
0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
Xxxxxx Xxxxxxxxx....................................................... 42,000
OTG Software, Inc.
Xxxxxxxx, XX 00000
Xxxx Xxxxxx............................................................ 45,000
OTG Software, Inc.
Xxxxxxxx, XX 00000
Xxxx Xxxxxx............................................................ 42,000
OTG Software, Inc.
Xxxxxxxx, XX 00000
Xxxxx Xxxxxx........................................................... 48,000
OTG Software, Inc.
Xxxxxxxx, XX 00000
Xxxxxxx Xxxxxx......................................................... 45,000
OTG Software, Inc.
Xxxxxxxx, XX 00000
Xxxxxxx Xxxxxxxx....................................................... 42,000
OTG Software, Inc.
Xxxxxxxx, XX 00000
Xxxxxx Xxxxxx.......................................................... 30,000
0000 Xxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
----------- ---------
Total......................................................... 1,650,000 495,000
=========== =========
- 24 -
SCHEDULE B
Number of
Firm Securities
Underwriter to be Purchased
----------- ---------------
Credit Suisse First Boston Corporation..................
Deutsche Bank Securities Inc. ..........................
Xxxxxxx Xxxxx Xxxxxx Inc. ..............................
Friedman, Billings, Xxxxxx & Co., Inc. .................
------------
Total........................ 3,300,000
============
