1
EXHIBIT 1.1
4,000,000 SHARES
OTG SOFTWARE, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
_________, 2000
CREDIT SUISSE FIRST BOSTON CORPORATION
DEUTSCHE BANK SECURITIES INC.
▇▇ ▇▇▇▇▇ SECURITIES CORPORATION
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & 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 4,000,000 shares of its common stock, $.01 par value
per share ("SECURITIES") outstanding shares of the Securities (such 4,000,000
shares of Securities being hereinafter referred to as the "FIRM SECURITIES").
▇▇▇▇▇▇▇ ▇. ▇▇▇ (the "SELLING STOCKHOLDER") proposes to sell to the
Underwriters, at the option of the Underwriters, an aggregate of not more than
600,000 additional shares ("OPTIONAL SECURITIES") of its Securities as set
forth below. The Firm Securities and the Optional Securities are herein
collectively called the "OFFERED SECURITIES". As part of the offering
contemplated by this Agreement, Credit Suisse First Boston Corporation (the
"DESIGNATED UNDERWRITER") has agreed to reserve out of the Firm Securities
purchased by it under this Agreement, up to 400,000 shares, for sale to the
Company's directors, officers, employees and other parties associated with the
Company (collectively, "PARTICIPANTS"), as set forth in the Prospectus (as
defined herein) under the heading "Underwriting" (the "DIRECTED SHARE
PROGRAM"). The Firm Securities to be sold by the Designated Underwriter
pursuant to the Directed Share Program (the "DIRECTED SHARES") will be sold by
the Designated Underwriter pursuant to this Agreement at the public offering
price. Any Directed Shares not orally confirmed for purchase by a Participant
by the end of the business day on which this Agreement is executed will be
offered to the public by the Underwriters as set forth in the Prospectus. The
Company and the Selling Stockholder hereby agree with the several Underwriters
named in Schedule A hereto ("UNDERWRITERS") as follows:
2. Representations and Warranties of the Company and the Selling
Stockholder. (a) The Company represents and warrants to, and agrees with, the
several Underwriters that:
(i) A registration statement (No. 333-93581) relating to the Offered
Securities, including a form of prospectus, has been filed with the Securities
and Exchange Commission ("COMMISSION") and either (i) has been declared
effective under the Securities Act of 1933 ("ACT") and is not proposed to be
amended or (ii) is proposed to be amended by amendment or post-effective
amendment. If such registration statement ("INITIAL REGISTRATION STATEMENT")
has been declared effective, either (i) an additional registration statement
("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
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or (ii) 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 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 (i) 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 (ii) 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 Statement
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: (i) 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, (ii) 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 (iii) 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
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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; all outstanding shares of
capital stock of the Company are, and, when the Offered Securities have been
delivered and paid for in accordance with this Agreement on each Closing Date
(as defined below), such Offered Securities will have been, validly issued,
fully paid and nonassessable and will 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 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 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.
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(viii) The Offered Securities have been approved for listing on Nasdaq
Stock Market's National Market, subject to notice of issuance.
(ix) No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required for the consummation
of the transactions contemplated by this Agreement in connection with the
issuance and sale of the Offered Securities by the Company, 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
issuance and sale of the Offered Securities, 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 or 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.
(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 threatened
or, to the Company's knowledge, threatened or 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
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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; and the
schedules included in each Registration Statement present fairly in all
material respects the information required to be stated therein.
(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.
(xx) Furthermore, the Company represents and warrants to the
Underwriters that (i) the Registration Statement, the Prospectus and any
preliminary prospectus comply, and any further amendments or supplements
thereto will comply, in all material respects with any applicable laws or
regulations of foreign jurisdictions in which the Prospectus or any preliminary
prospectus, as amended or supplemented, if applicable, are distributed in
connection with the Directed Share Program, and that (ii) no authorization,
approval, consent, license, order, registration or qualification of or with any
government, governmental instrumentality or court, other than such as have been
obtained, is necessary under the securities law and regulations of foreign
jurisdictions in which the Directed Shares are offered outside the United
States.
(xxi) The Company has not offered, or caused the Underwriters to
offer, any offered Securities to any person pursuant to the Directed Share
Program with the specific intent to unlawfully influence (i) a customer or
supplier of the Company to alter the customer's or supplier's level or type of
business with the Company or (ii) a trade journalist or publication to write or
publish favorable information about the Company or its products.
(b) The Selling Stockholder represents and warrants to, and agrees with,
the several Underwriters that:
(i) The Selling Stockholder has and on each Optional Closing Date
hereinafter mentioned will have valid and unencumbered title to the Offered
Securities to be delivered by the Selling Stockholder on such Optional 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
the Selling Stockholder on such Optional Closing Date hereunder; and upon the
delivery of and payment for the Offered Securities on each Optional Closing
Date hereunder the several Underwriters will acquire valid and unencumbered
title to the Offered Securities to be delivered by the Selling Stockholder on
such Optional 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 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
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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. 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).
(iii) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Selling Stockholder and any person
that would give rise to a valid claim against the 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 agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Company, at a purchase price of $ per share, the number of
Firm Securities set forth opposite the name of such Underwriter in Schedule A
hereto.
The Company 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 4,000,000 shares of Firm Securities, at the office of ▇▇▇▇ and ▇▇▇▇
LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, at 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". For purposes of Rule 15c6-1 under the
Securities Exchange Act of 1934, the First Closing Date (if later than the
otherwise applicable settlement date) shall be the settlement date for payment
of funds and delivery of securities for all the Offered Securities sold
pursuant to the offering. 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 CSFB 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 Stockholder 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 share to be paid for the Firm
Securities. The Selling Stockholder agrees to sell to the Underwriters the
number of shares of Optional Securities specified in such notice and the
Underwriters agree, severally and not jointly, to purchase such Optional
Securities. Such Optional Securities shall be purchased for the account of each
Underwriter in the same proportion as the number of shares of Firm Securities
set forth opposite such Underwriter's name bears to the total number of shares
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
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previously exercised may be surrendered and terminated at any time upon notice
by CSFBC to the Company and the Selling Stockholder.
Certificates in negotiable form of Optional Securities to be sold by the
Selling Stockholder hereunder have been placed in custody, for delivery under
this Agreement, under custody agreement ("CUSTODY AGREEMENT") made with the
Company, as custodian ("CUSTODIAN"). The Selling Stockholder agrees that the
shares represented by the certificates held in custody for the Selling
Stockholder under such Custody Agreement are subject to the interests of the
Underwriters hereunder, that the arrangements made by the Selling Stockholder
hereunder for such custody are to that extent irrevocable, and that the
obligations of the Selling Stockholder hereunder shall not be terminated by
operation of law, whether by the death of the 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 the Selling
Stockholder or any such trustee or trustees should die, or if any other such
event should occur, or if any such trusts should terminate, before the delivery
of the Optional Securities hereunder, certificates of such Optional 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.
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 Selling Stockholder, at the above office of ▇▇▇▇ and
▇▇▇▇ 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 Stockholder. The
Company agrees with the several Underwriters and the Selling Stockholder 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
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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 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 documents shall be so furnished as soon as
available. The Company and the Selling Stockholder 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.
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(h) The Company and the Selling Stockholder agree with the several
Underwriters that the Company and the Selling Stockholder will pay all expenses
incident to the performance of the obligations of the Company and the Selling
Stockholder, as the case may be, under this Agreement, for any filing fees and
other expenses (including fees and disbursements of counsel) incurred 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 Stockholder 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.
(i) The Selling Stockholder agrees to deliver to CSFBC, attention:
Transactions Advisory Group on or prior to the date of this Agreement 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).
(j) For a period of 180 days after the date of the initial public offering
of the Offered Securities, 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 or in exchange for the surrender or conversion of
promissory notes outstanding on the date hereof, (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, (iii) issue
Securities to participants in any employee stock purchase plan in effect on the
date hereof, and (iv) file registration statements on Form S-8 with the
Commission registering the shares of Common Stock issuable under its stock
option and employee stock purchase plans in effect on the date hereof.
(k) During the 180-day period following the date of this offering (the
"LOCK-UP PERIOD"), the Company will (i) enforce the terms of each agreement
entered into by the Company and CSFBC and holders of Securities, including the
Selling Stockholder, that restrict the holders thereof from offering, selling,
contracting to sell, pledging or otherwise disposing of, directly or
indirectly, any such Securities (collectively, "LOCK-UP AGREEMENTS"), and (ii)
to the extent it has not already done so, issue stop-transfer instructions to
the transfer agent for the Securities with respect to any transaction or
contemplated transaction that would constitute a breach of or default under the
applicable Lock-up Agreement. In addition, except with the prior written
consent of CSFBC, the Company agrees during the Lock-up Period (i) not to amend
or terminate, or waive any right under, any Lock-up Agreement, or take any
other action that would directly or indirectly have the same effect as an
amendment or termination, or waiver of any right under any Lock-up Agreement,
that would permit any holder of Securities, or any securities convertible into,
or exercisable or exchangeable for Securities, to make any short sale of, grant
any option for the purpose of, or otherwise transfer or dispose of, any such
Securities or other securities, prior to the expiration of the Lock-up Period
and (ii) not to consent to any sale, short sale, grant of an option for the
purchase of, or other disposition or transfer of shares of Securities or
securities convertible into or exercisable or exchangeable for Securities,
subject to a Lock-up Agreement.
(l) In connection with the Directed Share Program, the Company will ensure
that the Directed Shares will be restricted to the extent required by the
National Association of Securities Dealers, Inc. (the "NASD") or the NASD rules
from sale, transfer, assignment, pledge or hypothecation for a period of three
months following the date of the effectiveness of the Registration Statement.
The Designated Underwriter will notify the Company as to which Participants
will need to be so restricted. The Company will direct the
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transfer agent to place stop transfer restrictions upon the securities held by
such Participants for such period of time.
(m) The Company will pay all fees and disbursements of counsel incurred by
the Underwriters in connection with the Directed Shares Program and stamp
duties, similar taxes or duties or other taxes, if any, incurred by the
underwriters in connection with the Directed Share Program.
Furthermore, the Company covenants with the Underwriters that the Company
will comply in all material respects with all applicable securities and other
applicable laws, rules and regulations in each foreign jurisdiction in which
the Directed Shares are offered in connection with the Directed Share Program.
6. 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 Stockholder 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
Stockholder 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 KMPG 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) on the basis of 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) 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 such letter, 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
(B) 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 (A) and (B) above for
changes, increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
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(iii) 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.
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 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.
(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 the 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 a whole
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 ▇▇▇▇ and ▇▇▇▇ 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
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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
Maryland and California;
(ii) OTG Sales, Inc. has been duly incorporated and is an existing
corporation in good standing under the laws of the jurisdiction of its
incorporation, 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 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) The Offered Securities delivered on such Closing Date and all
other outstanding shares of the Common Stock of the Company have been duly
authorized, (or, in the case of the Offered Securities offered by the Company,
when paid for in accordance with the terms of this Agreement, 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;
(iv) Except as described in the Prospectus, and except for rights with
respect to this offering which have been duly 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;
(v) 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.
(vi) 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, the 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;
(vii) The execution, delivery and performance of this Agreement and
the issuance and sale of the Offered Securities by the Company (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
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, or (C) any 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 and which is filed as an exhibit to
the Registration Statement, or (D) the Certificate of Incorporation or By-laws
of the Company or OTG Sales, Inc., and the Company has full power and authority
to authorize, issue and sell the Offered Securities as contemplated by this
Agreement;
(viii) 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
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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 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;
(ix) This Agreement has been duly authorized, executed and delivered
by the Company;
(x) 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;
(xi) Insofar as factual matters with respect to the Optional
Securities to be sold by the Selling Stockholder are concerned, based solely
upon certificates of such Selling Stockholder and the representations and
warranties of the Selling Stockholder in the Custody Agreement 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 Optional Securities by the Underwriters;
(xii) Insofar as factual matters with respect to the Optional
Securities to be sold by the Selling Stockholder are concerned, based solely
upon certificates of the Selling Stockholder and the representations and
warranties of the Selling Stockholder in the Custody Agreement and this
Agreement, which such counsel have no reason to believe are inaccurate, the
execution, delivery and performance of the Custody Agreement 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 such
Selling Stockholder or any of his properties and specifically naming the
Selling Stockholder, or (C) any agreement or instruments to which such 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;
(xiii) Insofar as factual matters with respect to the Optional
Securities to be sold by the Selling Stockholder are concerned, based solely
upon stock certificates of the Selling Stockholder, which such counsel has no
reason to believe are inaccurate, each of this Agreement, the Custody Agreement
and the power of attorney entered into by the Selling Stockholder in connection
with the sale of shares hereunder ("POWER OF ATTORNEY") has been duly executed
and delivered by or on behalf of the Selling Stockholder and that the Custody
Agreement and the Power of Attorney constitute valid and legally binding
obligations of the 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,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
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(xiv) Insofar as factual matters with respect to the Offered
Securities to be sold by the Selling Stockholder are concerned, based solely
upon stock certificates of the Selling Stockholder, the Selling Stockholder has
full right, power and authority to sell the Optional Securities delivered by
such Selling Stockholder on any Optional Closing Date; and
(xv) Upon the Underwriters obtaining control of the Offered Securities
to be sold by the Selling Stockholder, 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 the Selling
Stockholder 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.
Furthermore, on each Optional Closing Date, the Representatives shall have
received an opinion, dated such Optional Closing Date, of ▇▇▇▇ and ▇▇▇▇ LLP,
counsel for the Selling Stockholder, representations set forth in this Section
7(d)(xi) through (xv).
(e) The Representatives shall have received from ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇ 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 Stockholder and the Company shall have furnished to
such counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
(f) 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
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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.
(g) 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 Stockholder 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 thereof to such
Underwriter.
The Company agrees to indemnify and hold harmless the Designated
Underwriter and each person, if any, who controls the Designated Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act (the "DESIGNATED ENTITIES"), from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) (i) caused by any untrue statement or
alleged untrue statement of a material fact contained in any material (A)
prepared by the Company or (B) prepared with the consent of the Company and
which material, as prepared by such party other than the Company, was approved
by the Company, for distribution to Participants in connection with the
Directed Share Program or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; (ii) caused by the
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failure of any Participant to pay for and accept delivery of Directed Shares
that the Participant agreed to purchase; or (iii) related to, arising out of,
or in connection with the Directed Share Program, other than losses, claims,
damages or liabilities (or expenses relating thereto) that are finally
judicially determined to have resulted from the bad faith or gross negligence
of the Designated Entities.
(b) The Selling Stockholder 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 the Selling
Stockholder 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 relating to any
information regarding the Selling Stockholder; 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 thereof to such
Underwriter; and provided, further, that the liability of the Selling
Stockholder under this subsection shall be limited to an amount equal to the
aggregate net proceeds received by the Selling Stockholder from the sale of the
Optional Securities sold by the 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 the
Selling Stockholder against any losses, claims, damages or liabilities to which
the Company or the 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 the 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 second sentence of the sixth paragraph, and the
seventh, eighth and fourteenth paragraphs under the caption "Underwriting."
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(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 the 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 the
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. Notwithstanding anything contained herein to the
contrary, if indemnity may be sought pursuant to the last paragraph in Section
7 (a) hereof in respect of such action or proceeding, then in addition to such
separate firm for the indemnified parties, the indemnifying party shall be
liable for the reasonable fees and expenses of not more than one separate firm
(in addition to any local counsel) for the Designated Underwriter for the
defense of any losses, claims, damages and liabilities arising out of the
Directed Share Program, and all persons, if any, who control the Designated
Underwriter within the meaning of either Section 15 of the Act of Section 20 of
the Exchange Act. No indemnifying or indemnified party shall, without the prior
written consent of the other party, effect any settlement of any pending or
threatened action in respect of which any other party is or could have been at
the time of such settlement a party and indemnity could have been sought
hereunder by such other party, unless such settlement (i) 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 such other 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 Stockholder 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 Stockholder 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 Stockholder 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 Stockholder bear to the total
underwriting discounts and commissions received by the Underwriters (it being
understood that, with respect to the Selling Stockholder, only the net proceeds
received by the Selling Stockholder in connection with his sale of Optional
Securities hereunder shall be included for purposes of determining the relative
benefit to the 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
Stockholder or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission and the Selling Stockholder shall not be required to
contribute any amount in excess of the amount by which the net proceeds to him
of the Optional Securities sold by him hereunder exceeds the amount of any
damages which he 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
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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 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 Stockholder under this
Section shall be in addition to any liability which the Company and the Selling
Stockholder 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
Stockholder 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 and the Company and the Selling
Stockholder 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 or the Company
or the Selling Stockholder, 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 Stockholder, 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, the 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 Stockholder 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
Stockholder, 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),
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(iii), (iv) or (v) of Section 6(c), the Company and the Selling Stockholder
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.
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 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇, or,
if sent to the Selling Stockholder, will be mailed, delivered or telegraphed
and confirmed to him at the same address as that for the Company; 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, their personal representatives and respective
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 of Underwriters. 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.
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.
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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
Stockholder, the Company and the several Underwriters in accordance with its
terms.
Very truly yours,
................................................
------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇
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.
▇▇ ▇▇▇▇▇ SECURITIES CORPORATION
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
Acting on behalf of themselves and as the Representatives of the
several Underwriters
By CREDIT SUISSE FIRST BOSTON CORPORATION
By...........................
---------------------------
Name:
Title:
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SCHEDULE A
TOTAL
NUMBER OF
FIRM
SECURITIES
TO BE
UNDERWRITER PURCHASED
----------- ----------
Credit Suisse First Boston Corporation...........
Deutsche Bank Securities Inc. ...................
▇▇ ▇▇▇▇▇ Securities Corporation..................
Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc. ..........
Total............................ ==========
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