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EXHIBIT 1.3
SELECTED DEALERS AGREEMENT
PUBLIC OFFERING OF
800,000 SHARES OF COMMON STOCK
800,000 REDEEMABLE WARRANTS
OFFERING PRICE OF $____ PER UNIT
PACIFIC SOFTWORKS, INC.
MAY __, 1999
Xxxxxxx Xxxxxxx, Inc., on behalf of itself and other underwriters (the
"Underwriters") for which it is the representative (the "Representative"), has
severally agreed with Pacific Softworks, Inc., a California corporation (the
"Company"), to purchase 800,000 Units (the "Firm Securities") of the Company,
and the Representative has been granted the right to purchase up to an
additional 120,000 Units (the "Additional Securities") at its option for the
sole purpose of covering over-allotments in the sale of the Firm Securities (the
Firm Securities and Additional Securities being collectively referred to as the
"Securities" or a "Security"). The Underwriters are offering the Securities to
the public at an offering price of $____. Certain other capitalized terms used
herein are defined in the Underwriting Agreement and are used herein as therein
defined.
The Representative is offering the Securities to certain selected
dealers (the "Selected Dealers"), when, as and if accepted by the Representative
and subject to withdrawal, cancellation or modification of the offer without
notice and further subject to the terms of (i) the Company's current Prospectus,
(ii) the Underwriting Agreement, (iii) this Agreement, and (iv) the
Representative's instructions which may be forwarded to the Selected Dealer from
time to time. A copy of the Underwriting Agreement will be delivered to you
forthwith for inspection or copying or both, upon your request therefor. This
invitation is made by the Representative only if the Securities may be offered
lawfully to dealers in your state.
The further terms and conditions of this invitation are as follows:
1. Acceptance of Orders. Orders received by the Representative from the
Selected Dealer will be accepted only at the price, in the amounts and on the
terms which are set forth in the Company's current Prospectus, subject to
allotment in the Representative's uncontrolled discretion. The Representative
reserves the right to reject any orders, in whole or in part.
2. Selling Concession. As a Selected Dealer, you will be allowed on all
Securities purchased by you, which the Underwriters have not repurchased or
contracted to repurchase prior to termination of this Agreement at or below the
public offering price, a concession of ___% of the full 10% Underwriting
discount, i.e., $___ per Security as shown in the Company's current Prospectus.
No selling concession will be allowed to any domestic broker-dealer who is not a
member of the National Association of Securities Dealers, Inc. (the
"Association"), or to any foreign broker-dealer eligible for membership in the
Association who is not a member of the Association. Payment of such selling
concession to you will be made only as provided in Section 4 hereof. After
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the Securities are released for sale to the public, the Representative is
authorized to, and may, change the public offering price and the selling
concession.
3. Reoffer of Securities. Securities purchased by you are to be bona
fide reoffered by you in conformity with this Agreement and the terms of
offering set forth in the Prospectus. You agree that you will not bid for,
purchase, attempt to induce others to purchase, or sell, directly or indirectly,
any Securities except as contemplated by this Agreement and except as a broker
pursuant to unsolicited orders. You confirm that you have complied and agree
that you will at all times comply with the provisions of Regulation M of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") applicable to
this offering. In respect of Securities sold by you and thereafter purchased by
the Representative at or below the public offering price prior to the
termination of this Agreement as described hereinafter (or such longer period as
may be necessary to cover any short position with respect to the offering), you
agree at the Representative's option either to repurchase the Securities at a
price equal to the cost thereof to the Representative, including commissions and
transfer taxes on redelivery, or to repay the Representative such part of your
Selected Dealers' concessions on such Securities as the Representative
designates.
4. Payment for Securities. Payment for the Securities purchased by you
is to be made at the net Selected Dealers' price of $______ per Security, at the
offices of Xxxxxxx Xxxxxxx, Inc., 0000 Xxxxxxxxx Xxxxx Xxxxxxxxx, Xxxxxxxxx,
Xxxxxxxx 00000, Attention: Syndicate Department, at such time and on such date
as the Representative may designate, by certified or official bank check,
payable in clearing house funds to the order of the Representative, against
delivery of certificates for the Securities so purchased. If such payment is not
made at such time and on such date, you agree to pay the Representative interest
on such funds at the current interest rates. The Representative may in its
discretion deliver the Securities purchased by you through the facilities of the
Depository Trust Company or, if you are not a member, through your ordinary
correspondent who is a member unless you promptly give the Representative
written instructions otherwise.
5. Offering Representations. The Representative has been informed that a
Registration Statement in respect of the Securities is expected to become
effective under the Securities Act of 1933, as amended (the "Act"). You are not
authorized to give any information or to make any representations other than
those contained in the Prospectus or to act as agent for the Company or for the
undersigned when offering the Securities to the public or otherwise.
6. Blue Sky. Neither the Representative nor the Underwriters assume any
responsibility or obligations as to your right to sell the Securities in any
jurisdiction, notwithstanding any information furnished in that connection. The
Selected Dealer shall report in writing to the Representative the number of
Securities which have been sold by it in each state and the number of
transactions made in each such state. This state report shall be submitted to
the Representative as soon as possible after completion of billing, but in any
event not more than three days after the closing.
7. Dealer Undertakings. By accepting this Agreement, the Selected Dealer
in offering and selling the Securities in the Public Offering (i) acknowledges
its understanding of (a) the Conduct Rules (the "Rules") of the Association and
the interpretations of such Rules promulgated by the Board of Governors of the
Association (the "Interpretations") including, but not limited to the Rule and
Interpretation with respect to "Free-Riding and Withholding" defined therein,
(b) Rule 174 of the rules and regulations promulgated under the Act, (c)
Regulation M promulgated under the
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Exchange Act, (d) Release No. 3907 under the Act, (e) Release No. 4150 under the
Act, and (f) Sections 2730, 2740, 2420 and 2750 of the Rules and Interpretations
thereunder, and (ii) represents, warrants, covenants and agrees that it shall
comply with all applicable requirements of the Act and the Exchange Act in
addition to the specific provisions cited in subparagraph (i) above and that it
shall not violate, directly or indirectly, any provision of applicable law in
connection with its participation in the Public Offering of the Securities.
8. Conditions of Public Offering. All sales shall be subject to delivery
by the Company of certificates evidencing the Securities against payment
therefore.
9. Failure of Order. If an order is rejected or if a payment is received
which proves insufficient or worthless, any compensation paid to the Selected
Dealer shall be returned by (i) restoration by the Representative to the
Selected Dealer of the latter's remittance or (ii) a charge against the account
of the Selected Dealer with the Representative, as the latter may elect without
notice being given of such election.
10. Additional Representations, Covenants and Warranties of Selected
Dealer. By accepting this Agreement, the Selected Dealer represents that it is
registered as a broker-dealer under the Exchange Act; is qualified to act as a
dealer in the states or the jurisdictions in which it shall offer the
Securities; is a member in good standing of the Association; and shall maintain
such registrations, qualifications and membership in full force and effect and
in good standing throughout the term of this Agreement. If the Selected Dealer
is not a member of the Association, it represents that it is a foreign dealer
not registered under the Exchange Act and agrees to make no sales within the
United States, its territories or its possessions or to persons who are citizens
thereof or residents therein, and in making any sales to comply with the
Association's Rules and Interpretations with respect to Free-Riding and
Withholding. Further, the Selected Dealer agrees to comply with all applicable
federal laws including, but not limited to, the Act and Exchange Act and the
rules and regulations of the Commission thereunder; the laws of the states or
other jurisdictions in which Securities may be offered or sold by it; and the
Constitution, Bylaws, and rules of the Association. Further, the Selected Dealer
agrees that it will not offer or sell the Securities in any state or
jurisdiction except those in which the Securities have been qualified or
qualification is not required. The Selected Dealer acknowledges its
understanding that it shall not be entitled to any compensation hereunder for
any period during which it has been suspended or expelled from membership in the
Association.
11. Employees and other Agents of the Selected Dealer. By accepting this
Agreement, the Selected Dealer assumes full responsibility for thorough and
proper training of its employees and other agents and representatives concerning
the selling methods to be used in connection with the Public Offering of the
Securities, giving special emphasis to the principles of full and fair
disclosure to prospective investors and the prohibitions against "Free-Riding
and Withholding" as set forth in Section 2110 of the Rules and the
Interpretations thereunder.
12. Indemnification by the Company. The Company has agreed in Section 8
of the Underwriting Agreement to indemnify and hold harmless the Underwriters,
the Representative and each person if any, who controls the Representative or
any one of the Underwriters within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act against any and all loss, liability, claim,
damage, and expense whatsoever (which shall include, for all purposes of Section
8 of the Underwriting Agreement, but not be limited to, attorneys' fees and any
and all expense whatsoever incurred in investigating, preparing, or defending
against any litigation, commenced or
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threatened, or any claim whatsoever and any and all amounts paid in settlement
of any claim or litigation) as and when incurred arising out of, based upon, or
in connection with (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Prospectus, the Registration
Statement, or the Prospectus (as from time to time amended and supplemented), or
any amendment or supplement thereto, or (B) in any application or other document
or communication (in the Underwriting Agreement collectively called an
"application") in any jurisdiction in order to qualify the Securities under the
"blue sky" or securities laws thereof or filed with the Commission or any
securities exchange; or any omission or alleged omission to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or (ii) any breach of any representation, warranty, covenant, or
agreement of the Company contained in the Underwriting Agreement. The
Representative has agreed to give the Company an opportunity and the right to
participate in the defense or preparation of the defense of any action brought
against the Representative, any Underwriter or any controlling person thereof to
enforce any such loss, claim, demand, liability or expense. The agreement of the
Company under this indemnity is conditioned upon notice of any such action
having been promptly given by the indemnified party to the Company. Failure to
notify the Company as provided in the Underwriting Agreement shall not relieve
the Company of its liability which it may have to the Representative, the
Underwriters, or any controlling person thereof other than pursuant to Section
8(a) of the Underwriting Agreement. This agreement is subject in all respects,
especially insofar as the foregoing description of the indemnification
provisions set forth in the Underwriting Agreement is concerned, to the terms
and provisions of the Underwriting Agreement, a copy of which will be made
available for inspection or copying or both to the Selected Dealer upon written
request to the Representative therefor. The Selected Dealer acknowledges and
confirms that, by signing a counterpart of this Agreement, it shall be deemed an
agent of the Underwriters or a "Representative" for all purposes of Section 8 of
the Underwriting Agreement, as expressly set forth therein.
13. Indemnification by the Selected Dealer. The Selected Dealer shall
indemnify and hold harmless the Company, each director of the Company, each
officer of the Company who shall have signed the Registration Statement, each
other person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act, to the same extent as the
indemnity from the Company to the Underwriters in Section 8(a) of the
Underwriting Agreement, but only with respect to statements or omissions, if
any, made in any Preliminary Prospectus, the Registration Statement, or the
Prospectus (as from time to time amended and supplemented), or any amendment or
supplement thereto, or in any application, in reliance upon and in conformity
with information furnished to the Representative or the Company with respect to
the Selected Dealer by or on behalf of the Selected Dealer expressly for
inclusion in any Preliminary Prospectus, the Registration Statement, or the
Prospectus, or any amendment or supplement thereto, or in any application, as
the case may be, or are based upon alleged misrepresentations or omissions to
state material facts in connection with statements made by the Selected Dealer
or the Selected Dealer's employees or other agents to the Company or the
Representative orally or by any other means; provided, however, that the
obligation of the Selected Dealer to provide indemnity hereunder shall be
limited to the amount which represents the product of the number of Firm
Securities and Additional Securities sold and the initial public offering price
per Security set forth on the cover page of the Prospectus. If any action shall
be brought against the Company or any other person so indemnified in respect of
which indemnity may be sought against the Selected Dealer pursuant to this
provision, the Selected Dealer shall have the rights and duties given to the
Company in the Underwriting Agreement, and the Company and each other person so
indemnified shall have the rights and duties given to the indemnified parties,
by the provisions of
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Section 8(a) of the Underwriting Agreement; and the Selected Dealer shall
reimburse the Company and the Representative for any legal or other expenses
reasonably incurred by them in connection with the investigation of or the
defense of any such action or claim. The Representative shall, after receiving
the first summons or other legal process disclosing the nature of the action
being brought against it or the Company in any proceeding with respect to which
indemnity may be sought by the Company or the Representative hereunder, notify
promptly the Selected Dealer in writing of the commencement thereof; and the
Selected Dealer shall be entitled to participate in (and, to the extent the
Selected Dealer shall wish, to direct) the defense thereof at the expense of the
Selected Dealer, but such defense shall be conducted by counsel satisfactory to
the Company and the Representative. If the Selected Dealer shall fail to provide
such defense, the Company or the Representative may defend such action at the
cost and expense of the Selected Dealer. The Selected Dealer's obligation under
this Section 13 shall survive any termination of this Agreement, the
Underwriting Agreement and the delivery of and payment for the Securities under
the Underwriting Agreement, and shall remain in full force and effect regardless
of the investigation made by or on behalf of any Representative within the
meaning of Section 15 of the Act.
14. No Authority to Act as Partner or Agent. Nothing herein shall
constitute the Selected Dealers as an association or other separate entity or
partners with or agents of the Representative or with each other, but each
Selected Dealer shall be responsible for its pro rata share of any liability or
expense based upon any claims to the contrary. The Representative shall not be
under any liability for or in respect of the value, validity or form of the
Securities, or the delivery of certificates for the Securities or the
performance by any person of any agreement on its part, or the qualification of
the Securities for sale under the laws of any jurisdiction, or for or in respect
of any matter in connection with this Agreement, except for lack of good faith
and for obligations expressly assumed by the Representative in this Agreement.
15. Expenses. No expenses incurred in connection with offers and sales
of the Securities under the Public Offering will be chargeable to the Selected
Dealers. A single transfer tax, if any, on the sale of Securities by the
Selected Dealer to its customers will be paid when such Securities are delivered
to the Selected Dealer for delivery to its customers. Notwithstanding the
foregoing, the Selected Dealer shall pay its proportionate share of any transfer
tax or any other tax (other than the single transfer tax described above) if any
such tax shall at any time be assessed against the Representative and other
Selected Dealers.
16. Notices. All notices, demands or requests required or authorized
hereunder shall be deemed given sufficiently if in writing and sent by
registered or certified mail, return receipt requested and postage prepaid, or
by tested telex, telegram, cable or facsimile to, in the case of the
Representative, the address set forth above directed to the attention of the
President of the Representative, and in the case of the Selected Dealer, to the
address provided below by the Selected Dealer, directed to the attention of the
President.
17. Termination. This Agreement may be terminated by the Representative
with or without cause upon written notice to Selected Dealer to such effect; and
such notice having been given, this Agreement shall terminate at the time
specified therein. Additionally, this Agreement shall terminate upon the earlier
of the termination of the Underwriting Agreement, or at the close of business
thirty days after the Securities are released by the Representative for sale to
the public.
18. General Provisions. This Agreement shall be construed and enforced
in accordance with and governed by the laws of the State of Colorado. This
Agreement embodies the entire
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agreement and understanding between the Representative and the Selected Dealer
and supersedes all prior agreements and understandings related to the subject
matter hereof, and this Agreement may not be modified or amended or any term or
provision hereof waived or discharged except in writing signed by the party
against whom such amendment, modification, waiver or discharge is sought to be
enforced. All the terms of this Agreement, whether so expressed or not, shall be
binding upon, and shall inure to the benefit of, the respective successors,
legal representatives and assigns of the parties hereto; provided, however, that
none of the parties hereto can assign this Agreement or any of its rights
hereunder without the prior written consent of the other party hereto, and any
such attempted assignment or transfer without the other party's prior written
consent shall be void and without force or effect. The headings of this
Agreement are for purposes of reference only and shall not limit or otherwise
affect the meaning hereof. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
If the foregoing correctly sets forth the terms and conditions of your
agreement to purchase the Securities allotted to you, please indicate your
acceptance thereof by signing and returning to Xxxxxxx Xxxxxxx, Inc. the
duplicate copy of this Agreement, whereupon this letter and your acceptance
shall become and evidence a binding contract between you and the Representative.
XXXXXXX XXXXXXX, INC.
By:_______________________________
Title:____________________________
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Gentlemen:
The undersigned confirms its agreement to purchase ____________ Units of
Pacific Softworks, Inc., upon the terms and subject to the conditions of the
foregoing Selected Dealers Agreement, and further agrees that any agreement by
it to purchase Additional Securities during the life of such Agreement will be
upon the same terms and subject to the same conditions. The undersigned
acknowledges receipt of the Prospectus relating to the public offering of the
Securities and confirms that in agreeing to purchase such Securities it has
relied on such Prospectus and not on any other statement whatsoever written or
oral.
Firm Name:_________________________________
(Print or Type name of Firm)
By:________________________________________
(Authorized Agent)
___________________________________________
(Print or Type Name and Title of
Authorized Agent)
Address:___________________________________
Telephone No.______________________________
IRS Employer Identification No.:___________
Dated:_______________________________, 1999
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