1
Exhibit 1.1
4,200,000 Shares
SOFTWORKS INC.
COMMON STOCK
UNDERWRITING AGREEMENT
================================================================================
July __, 1998
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES, INC.
As Representatives of the several Underwriters
c/o SoundView Financial Group, Inc.
00 Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Ladies and Gentlemen:
1. DESCRIPTION OF SHARES.
Softworks Inc., a Delaware corporation (the "Company"), and the selling
stockholders named in Schedule B attached hereto (the "Selling Stockholders")
propose to sell, upon the terms and subject to the conditions of this Agreement,
to the several underwriters named in Schedule A attached hereto (collectively,
the "Underwriters," or each an "Underwriter"), an aggregate of 4,200,000 shares
(the "Firm Shares") of the Company's common stock, par value $.001 per share
("Common Stock"). Computer Concepts Corp. ("Computer Concepts") also
proposes to sell to the Underwriters, upon the terms and subject to the
conditions of this Agreement, as set forth in Section 5, up to an aggregate of
an additional 625,000 shares of Common Stock (the "Option Shares," and,
collectively with the Firm Shares, the "Shares").
2. REGISTRATION STATEMENT AND PROSPECTUS.
A registration statement (File No. 333-53939) on Form S-1 relating to the
Shares, including a Preliminary Prospectus and such amendments to such
registration statement as may have been required to the date of this Agreement,
has been prepared by the Company under the provisions of the Securities Act of
1933, as amended (the "Securities Act"), and the rules and regulations
(collectively referred to as the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, and has been filed with the
Commission.
The term "Preliminary Prospectus" as used herein means a preliminary
prospectus as contemplated by Rule 430 or Rule 430A ("Rule 430A") of the Rules
and Regulations included at
2
any time as part of the registration statement. Copies of such registration
statement and amendments and of each related Preliminary Prospectus have been
delivered to the representatives of the several Underwriters hereunder
(collectively, the "Representatives"). The term "Registration Statement" means
the registration statement as amended at the time it becomes or became effective
(the "Effective Date"), including financial statements and all exhibits and any
information deemed to be included by Rule 430A or Rule 434 of the Rules and
Regulations. If the Company files a registration statement to register a portion
of the Shares and relies on Rule 462(b) of the Rules and Regulations for such
registration statement to become effective upon filing with the Commission (the
"Rule 462 Registration Statement"), then any reference to the "Registration
Statement" shall be deemed to include the Rule 462 Registration Statement, as
amended from time to time. The term "Prospectus" means the prospectus as first
filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations
or, if no such filing is required, the form of final prospectus included in the
Registration Statement at the Effective Date.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to, and agrees with, the several
Underwriters that:
(a) Securities Act Compliance. The Registration Statement conforms in all
material respects with the requirements of the Securities Act and has been filed
with the Commission under the Securities Act. The Commission has not issued or,
to the Company's knowledge, threatened to issue any order preventing or
suspending the use of any Preliminary Prospectus, and, at its date of issue,
each Preliminary Prospectus conformed in all material respects with the
requirements of the Securities Act and did not include any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and, when the Registration Statement
becomes effective and at all times subsequent thereto up to and including the
Closing Dates (as hereinafter defined), the Registration Statement and the
Prospectus and any amendments or supplements thereto contained and will contain
all material statements and information required to be included therein by the
Securities Act and conformed and will conform in all material respects to the
requirements of the Securities Act, and neither the Registration Statement nor
the Prospectus, nor any amendment or supplement thereto, included or will
include any untrue statement of a material fact or omitted or will omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that the foregoing representations,
warranties and agreements shall not apply to information contained in or omitted
from any Preliminary Prospectus or the Registration Statement or the Prospectus
or any such amendment or supplement thereto in reliance upon, and in conformity
with, written information furnished to the Company by any Underwriter
specifically for use in the preparation thereof. There is no contract,
agreement, lease, franchise or document required to be described in the
Registration Statement or Prospectus or to be filed as an exhibit to the
2
3
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
Registration Statement which is not described therein or filed therewith as
required, and all descriptions of any such contracts, agreements, leases,
franchises or documents contained in the Registration Statement are accurate and
complete descriptions of such documents in all material respects.
(b) Organization, Good Standing and Qualification. The Company and each of
its subsidiaries has been duly organized and is validly existing and in good
standing as a corporation under the laws of its jurisdiction of incorporation,
with power and authority (corporate and other) to own or lease its properties
and to conduct its business as described in the Prospectus. The Company and each
of its subsidiaries is in possession of and operating in compliance with all
franchises, grants, authorizations, licenses, permits, easements, consents,
certificates and orders required for the conduct of its business, all of which
are valid and in full force and effect, and is duly qualified to do business and
in good standing as a foreign corporation in all other jurisdictions where its
ownership or leasing of properties or the conduct of its business requires such
qualification. The Company and each of its subsidiaries has obtained all
necessary consents, approvals, authorizations, orders, registrations,
qualifications, licenses and permits of and from all public regulatory or
governmental agencies and bodies to own, lease and operate its properties and
conduct its business as now being conducted and as described in the Registration
Statement and the Prospectus, except where the failure to obtain any of the
foregoing would not have a material adverse effect on the condition (financial
or otherwise), properties, business, management, prospects, net worth or results
of operations of the Company and its subsidiaries taken as a whole ("Material
Adverse Effect"), and no such consent, approval, authorization, order,
registration, qualification, license or permit contains a materially burdensome
restriction not adequately disclosed in the Registration Statement and the
Prospectus.
(c) Subsidiaries. Except as set forth in Exhibit 21 to the Registration
Statement, the Company does not have any subsidiaries and does not own or
control, directly or indirectly, any interest in any other corporation,
association or other business entity.
(d) No Changes. Subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus, and except as set forth
or contemplated in the Prospectus, neither the Company nor any of its
subsidiaries has incurred any liabilities or obligations nor entered into any
transactions not in the ordinary course of business, and there has not been any
Material Adverse Effect, or any material adverse change in the capital stock,
short-term or long-term debt of the Company and its subsidiaries taken as a
whole.
(e) Valid Issuance of the Shares. The Shares to be issued and sold by the
Company to the Underwriters hereunder have been duly and validly authorized and,
when issued and delivered against payment therefor as provided herein, will be
duly and validly issued, fully paid and nonassessable and free of any preemptive
or similar rights and will conform in all material respects to the description
thereof in the Prospectus.
3
4
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
(f) Authorization. The Company has the full corporate power and authority
to enter into this Agreement and to perform its obligations hereunder (including
to issue, sell and deliver the Shares), and this Agreement has been duly and
validly authorized, executed and delivered by the Company and is a valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except (i) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditor's rights
generally, (ii) as the enforceability of any indemnification provision may be
limited under federal or state securities laws or (iii) as the remedy of
specific forms of equitable relief may be subject to equitable defenses and the
discretion of the court before which any proceeding may be brought
(collectively, the "Enforceability Exceptions").
(g) Compliance with other Instruments. The execution, delivery and
performance of this Agreement and the consummation of the transactions herein
contemplated will not result in a breach of any of the terms or provisions of,
constitute a default under or result in the creation of any lien under any
indenture, mortgage, deed of trust, loan agreement or other material agreement
or instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries or any of their respective
properties is or may be bound, the Certificate of Incorporation, By-laws or
other organizational documents of the Company or of any of its subsidiaries, or
any law, order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any of their
respective properties.
(h) Legal Compliance. The Company and each of its subsidiaries, in all
material respects, is in compliance with and conducts its business in conformity
with all applicable federal, state, local and foreign laws, rules and
regulations of any court or governmental agency or body, and, to the knowledge
of the Company, except as set forth in the Registration Statement and the
Prospectus, no prospective change in any of such federal or state laws, rules or
regulations has been adopted which, when made effective, would have a Material
Adverse Effect.
(i) Governmental Consents. No consent, approval, authorization or order of
any court or governmental agency or body is required for the consummation by the
Company of the transactions contemplated by this Agreement, except such as may
be required by the National Association of Securities Dealers, Inc. (the "NASD")
or under federal or state securities laws in connection with the purchase and
distribution of the Shares by the Underwriters.
(j) Financial Statements. The financial statements, together with the
related notes and schedules, set forth in the Prospectus and elsewhere in the
Registration Statement fairly present, on the basis stated in the Registration
Statement, the financial condition and the results of operations of the Company
and its subsidiaries at the respective dates or for the respective periods
therein specified. Such statements and related notes and schedules have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis,
4
5
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
except as may be set forth in the Prospectus. The selected financial and
statistical data set forth in the Prospectus under the caption "Selected
Financial Data" fairly present, on the basis stated in the Registration
Statement, the information set forth therein. The Company has provided the
Representatives with all financial statements from its inception to the date
hereof that are available to the officers of the Company.
(k) Independent Auditors. Xxxxxx Xxxxxxxx LLP, who have expressed their
opinions on the audited financial statements and related schedules included in
the Registration Statement and the Prospectus, are independent public
accountants as required by the Securities Act and the Rules and Regulations.
(l) Capitalization. The Company's authorized and outstanding capital stock
is on the date hereof, and will be on the Closing Dates, as set forth under the
heading "Capitalization" in the Prospectus (except that such disclosure need not
reflect the issuance of the Option Shares) and conforms in all material respects
to the description thereof set forth under the heading "Description of Capital
Stock" in the Prospectus. The outstanding shares of Common Stock (including the
outstanding Shares) (i) conform in all material respects to the description
thereof in the Prospectus, (ii) have been duly authorized and validly issued and
are fully paid and nonassessable, (iii) have been issued in compliance with all
federal and state securities laws, and (iv) were not issued in violation of or
subject to any preemptive rights or similar rights to subscribe for or purchase
securities. Except as disclosed in the Prospectus and the financial statements
of the Company and related notes thereto included in the Prospectus, the Company
does not have outstanding any options or warrants to purchase, or any preemptive
rights or other rights to subscribe for or to purchase any securities or
obligations convertible into, or any contracts or commitments to issue or sell,
shares of its capital stock or any such options, rights, convertible securities
or obligations, except for options granted subsequent to the date of information
provided in the Prospectus pursuant to the Company's 1998 Long Term Incentive
Plan (the "Stock Option Plan"), as disclosed in the Prospectus. The description
of the Stock Option Plan and the options or other rights granted or exercised
thereunder, as set forth in the Prospectus, accurately and fairly presents the
information required to be disclosed with respect to such Stock Option Plan,
options and rights.
(m) Litigation. Except as set forth in the Prospectus, there is no legal
or governmental action, suit, proceeding or investigation pending to which the
Company or any of its subsidiaries or affiliates is a party or to which any
property of the Company or any subsidiary or affiliate is subject, which, if
determined adversely to the Company or any such subsidiary or affiliate, might
individually or in the aggregate (i) prevent or adversely affect the
transactions contemplated by this Agreement, (ii) suspend the effectiveness of
the Registration Statement, (iii) prevent or suspend the use of the Preliminary
Prospectus in any jurisdiction, or (iv) have a Material Adverse Effect, and, to
the best of the Company's knowledge, no such action, suit, proceeding or
investigation is threatened or contemplated against the Company or any
subsidiary or affiliate by governmental authorities or others. Neither the
Company nor any
5
6
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
of its subsidiaries is a party to and is not subject to the provisions of any
material injunction, judgment, decree or order of any court, regulatory body or
other governmental agency or body.
(n) Tax Returns and Payments. The Company has filed all necessary federal,
state, local and foreign income, payroll, franchise and other tax returns,
except where the failure to file would not have a Material Adverse Effect, and
has paid all taxes shown as due thereon or with respect to any of its
properties, and there is no tax deficiency that has been, or, to the knowledge
of the Company, is likely to be asserted against the Company, any of its
subsidiaries or any of their respective properties or assets that would have a
Material Adverse Effect. All distributions to the stockholders of the Company
prior to the date hereof have been made in compliance with applicable law and
have not exceeded the amounts to which such stockholders were legally entitled.
(o) Registration Rights. No person or entity has the right to require
registration of shares of Common Stock or other securities of the Company as a
result of the filing or effectiveness of the Registration Statement and, in any
event, except as set forth in the Prospectus, no person or entity has the right
to require registration of shares of Common Stock or other securities of the
Company.
(p) Price Stabilization and Manipulation. Neither the Company nor any of
its officers, directors, subsidiaries or affiliates has taken or will take,
directly or indirectly, any action designed or intended to stabilize or
manipulate the price of any security of the Company, or which caused or resulted
in, or which might in the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the Company.
(q) Patents and Trademarks. The Company owns or otherwise possesses or has
the right to use all patents, trademarks, trademark registrations, service
marks, service xxxx registrations, trade names, copyrights, licenses,
inventions, trade secrets and rights either (i) described in the Prospectus as
being owned by it or (ii) necessary for the conduct of its business as so
described, as now conducted or as proposed to be conducted. The Company is not
aware of any claim to the contrary or any challenge by any other person to the
rights of the Company with respect to the foregoing. The Company's business as
now conducted does not infringe or conflict with in any material respect any
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
U.S. patents or other intellectual property or franchise rights or, to the
Company's knowledge, foreign patents of any person. No claim has been made
against the Company alleging the infringement by the Company of any patent,
trademark, service xxxx, trade name, copyright, trade secret, license in or
other intellectual property right or franchise right of any person, except as
described in the Prospectus or with respect to claims which, singly or in the
aggregate, will not have a Material Adverse Effect.
(r) Material Contracts. The Company or a subsidiary of the Company, as the
case may be, has performed all material obligations required to be performed by
it under all contracts
6
7
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
required by Item 601(b)(10) of Regulation S-K under the Securities Act to be
filed as exhibits to the Registration Statement, and neither the Company nor, to
the knowledge of the Company, any other party to such contract is in default
under or in breach of any such obligations, except with respect to any defaults
or breaches which, singly or in the aggregate, will not result in a Material
Adverse Effect. Neither he Company nor any of its subsidiaries has received any
notice of such default or breach.
(s) Voting Trust Agreement. The Voting Trust Agreement, dated as of ____
__, 1998 (the "Voting Trust Agreement"), by and among the Company, Computer
Concepts Corp. ("Computer Concepts") and each of Xxxxx Xxxxxxxxx, Xxxxxx
XxxXxxxxx, Xx. and Xxxxxx Xxxxxx (collectively, the "Trustees"), has been duly
and validly authorized, executed and delivered by the Company and each of the
Trustees and is a valid and binding agreement of the Company and each of the
Trustees, enforceable against the Company and each of the Trustees in accordance
with its terms, subject to the Enforceability Exceptions.
(t) Labor Agreements and Actions. Neither the Company nor any of its
subsidiaries is involved in any labor dispute and, to the Company's knowledge,
no such dispute is threatened. The Company is not aware that (i) any executive,
key employee or significant group of employees of the Company or of any of its
subsidiaries plans to terminate employment with the Company or any of its
subsidiaries, or (ii) any such executive or key employee is subject to any
noncompete, nondisclosure, confidentiality, employment, consulting or similar
agreement that would be violated by the present or proposed business activities
of the Company or of any of its subsidiaries. Neither the Company nor any of its
subsidiaries has or expects to have any liability for any prohibited transaction
or funding deficiency or any complete or partial withdrawal liability with
respect to any pension, profit sharing or other plan which is subject to the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), to which
the Company or any of its subsidiaries makes or ever has made a contribution and
in which any employee of the Company or of any of its subsidiaries is or has
ever been a participant, except where such liability would not have a Material
Adverse Effect. With respect to such plans, the Company and each of its
subsidiaries are in compliance in all material respects with all applicable
provisions of ERISA, except with respect to any non-compliance with such
provisions which, singly or in the aggregate, will not have a Material Adverse
Effect.
(u) Lock-Up Agreements. Except as disclosed in the Prospectus, the Company
has obtained the written agreement, in substantially the form attached hereto as
Schedule C, from each of its officers and directors and each holder of any
shares of Common Stock or securities convertible into or exchangeable or
exercisable for or rights to purchase or acquire shares of Common Stock, except
such written agreement will not apply to any Common Stock issuable upon exercise
of employee stock options issued in accordance with the terms of the Stock
Option Plan as in effect on the date hereof, it being understood that such
Common Stock will bear a legend prohibiting the transfer of such Common Stock
for a period of 180 days after the effective date of the Registration Statement.
7
8
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
(v) Title to Property and Assets. The Company or a subsidiary of the
Company has and, as of the Closing Dates, will have good and marketable title in
fee simple to all real property and good and marketable title to all personal
property owned or proposed to be owned by it which is material to the business
of the Company and its subsidiaries taken as a whole, in each case free and
clear of all liens, encumbrances and defects except such as are described the
Prospectus or such as would not have a Material Adverse Effect. Any real
property and buildings held under lease by the Company or any subsidiary of the
Company or proposed to be held after giving effect to the transactions described
in the Prospectus are, or will be as of the Closing Dates, held by it under
valid, subsisting and enforceable leases with such exceptions as would not have
a Material Adverse Effect, in each case except as described in or contemplated
by the Prospectus.
(w) Insurance. The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are customary in the business in which it is engaged or
proposes to engage in after giving effect to the transactions described in the
Prospectus, and the Company has no reason to believe that it will not be able to
renew any such existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect, except as
described in or contemplated by the Prospectus.
(x) Brokers. Except as may be set forth in the Prospectus, there is no
broker, finder or other party that is entitled to receive from the Company any
brokerage or finder's fee or similar fee or commission as a result of any of the
transactions contemplated by this Agreement.
(y) Internal Accounting Controls. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorization, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(z) Distribution of Offering Materials. The Company has not distributed
and will not distribute prior to the later of (i) the First Closing Date or the
Option Closing Date, as the case may be, and (ii) the completion of the
distribution of the Shares, any offering material in connection with the
offering and sale of the Shares other than any Preliminary Prospectus, the
Prospectus, the Registration Statement and other materials, if any, permitted by
the Securities Act and the use of which has been approved in advance in writing
by the Representatives.
8
9
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
(aa) Payment or Recipient of Funds. Except as set forth in the Prospectus,
neither the Company nor, to the Company's knowledge, any employee or agent of
the Company has made any payment of funds of the Company or received or retained
any funds in violation of any law, Rule or regulation, which payment, receipt or
retention of funds is of a character required to be disclosed in the Prospectus.
(bb) Investment Company. The Company is not an "investment company" or an
entity "controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(cc) Environmental Laws. The Company and each of its subsidiaries is in
compliance with the terms and conditions of all applicable federal, state, local
and foreign laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants ("Environmental Laws"), except where the failure to be in
compliance would not have a Material Adverse Effect. Neither the Company nor any
of its subsidiaries has received notice from any governmental authority of any
claim under any Environmental Laws which asserts a claim that could result in a
Material Adverse Effect. No property that is owned, leased or occupied by the
Company or by any of its subsidiaries has been designated as a Superfund site
pursuant to the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (420 U.S.C. (S) 9601 et seq.), or otherwise designated
as a contaminated site under applicable state or local laws.
(dd) Permits. The Company and each of its subsidiaries have such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease and operate its property and
to conduct its business. The Company and each of its subsidiaries have fulfilled
and performed all of its material obligations with respect to such permits and
no event has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such permit, except events the
existence of which would not have a Material Adverse Effect, and, except as
described in the Prospectus, such permits contain no restrictions that are
materially burdensome to the Company and its subsidiaries taken as a whole.
(ee) Employment Matters. To the Company's knowledge, neither the Company
nor any of its subsidiaries has violated any federal or state law relating to
discrimination in the hiring, promotion or pay of employees nor any applicable
federal or state wages and hours laws, nor any provisions of ERISA or the rules
and regulations promulgated thereunder, which in each case might have a Material
Adverse Effect.
(ff) 1934 Act Registration. The Company has filed a registration statement
pursuant to Section 12 (g) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"),
9
10
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
which registration statement has been or will be declared effective
simultaneously with the effectiveness of the Registration Statement.
(gg) Nasdaq Listing. The Common Stock has been approved for quotation on
the Nasdaq National Market, subject to official notice of issuance.
(hh) Certificates. Each certificate signed by any officer of the Company
and delivered to the Underwriters or counsel for the Underwriters pursuant to
this Agreement or in connection with the offering contemplated hereby shall be
deemed to be a representation and warranty of the Company to the Underwriters as
to the matters covered thereby.
4. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS.
1. Each Selling Stockholder, severally and not jointly, represents and warrants
to, and agrees with, the several Underwriters that:
(a) Valid and Marketable Title. Such Selling Stockholder now has, and on
the Closing Dates will have, valid and marketable title to the Shares to be sold
by such Selling Stockholder, free and clear of any lien, claim, security
interest or other encumbrance, including, without limitation, any restriction on
transfer, and has full right, power and authority to enter into this Agreement,
the Power of Attorney and the Custody Agreement (each as hereinafter defined),
and each of the several Underwriters will acquire valid and marketable title to
all of the Shares being sold to the Underwriters by such Selling Stockholder,
free and clear of any liens, encumbrances, equities claims, restrictions on
transfer or other defects whatsoever.
(b) Authority. Such Selling Stockholder now has, and on the Closing Dates
will have, upon delivery of and payment for each of the Shares hereunder, full
right, power and authority, and shall have obtained any approval required by
law, to sell, transfer, assign and deliver the Shares being sold by such Selling
Stockholder hereunder.
(c) Market Stand-Off. Such Selling Stockholder has executed and delivered
to the Representatives a lock-up agreement in substantially the form attached
hereto as Schedule C (the "Lock-Up Agreement"), providing that, with certain
limited exceptions specified therein, and as provided in more detail therein,
for a period of one hundred eighty (180) days after the effective date of the
Registration Statement, and in the case of Computer Concepts, twelve (12) months
after the effective date of the Registration Statement, without the consent of
SoundView Financial Group, Inc. ("SoundView"), such Selling Stockholder will not
offer to sell, sell, contract to sell or otherwise dispose of any shares of
Common Stock, or securities convertible into or exchangeable for shares of
Common Stock, including, without limitation, shares of Common Stock which may be
deemed to be beneficially owned by such Selling Stockholders in accordance with
the Rules and Regulations, except for the Shares being sold hereunder and any
10
11
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
shares of Common Stock issuable upon exercise of employee stock options issued
in accordance with the terms of the Stock Option Plan as in effect on the date
hereof.
(d) Power of Attorney. Such Selling Stockholder has duly executed and
delivered a power of attorney, in substantially the form heretofore delivered to
the Representatives (the "Power of Attorney"), appointing __________ and
__________, and each of them, as attorney-in-fact (the "Attorneys-in-Fact") with
authority to execute and deliver this Agreement on behalf of such Selling
Stockholder, to authorize the delivery of the Shares to be sold by such Selling
Stockholder hereunder and otherwise to act on behalf of such Selling Stockholder
in connection with the transactions contemplated by this Agreement.
(e) Custody Agreement. Such Selling Stockholder has duly executed and
delivered a custody agreement, in substantially the form heretofore delivered to
the Representatives (the "Custody Agreement"), with _______________ as custodian
(the "Custodian"), pursuant to which certificates in negotiable form for the
Shares to be sold by such Selling Stockholder hereunder have been placed in
custody for delivery under this Agreement.
(f) Binding Obligations. Such Selling Stockholder has, by execution and
delivery of each of this Agreement, the Power of Attorney, the Custody Agreement
and the Lock-Up Agreement, created valid and binding obligations of such Selling
Stockholder, enforceable against such Selling Stockholder in accordance with
their respective terms, subject to the Enforceability Exceptions.
(g) Compliance with other Instruments. The performance of this Agreement,
the Custody Agreement and the Power of Attorney, and the consummation of the
transactions contemplated hereby and thereby, will not result in a breach or
violation in any material respect by such Selling Stockholder of any of the
terms or provisions of, or constitute a default by such Selling Stockholder
under, (i) any indenture, mortgage, deed of trust, trust (constructive or
other), loan agreement, lease, franchise, license or other material agreement or
instrument to which such Selling Stockholder is a party or by which such Selling
Stockholder or any of its properties is bound, (ii) any judgment of any court or
governmental agency or body applicable to such Selling Stockholder or any of its
properties, or any statute, decree, order, Rule or regulation of any court or
governmental agency or body applicable to such Selling Stockholder or any of its
properties, or (iii) any provisions of the charter, bylaws or other
organizational documents of such Selling Stockholder.
(h) No Revocation. Each Selling Stockholder agrees that (i) the Shares
represented by the certificates held in custody under the Custody Agreement are
for the benefit of and coupled with and subject to the interests of the
Underwriters and the Company hereunder, (ii) the arrangement for such custody
and the appointment of the Attorneys-in-Fact are irrevocable, (iii) the
obligations of such Selling Stockholder hereunder shall not be terminated by
operation of law, whether by the liquidation or dissolution of such Selling
Stockholder or any other event,
11
12
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
and (iv) if such Selling Stockholder should die or become incapacitated or is
liquidated or dissolved or any other event occurs, before the delivery of the
Shares hereunder, certificates for the Shares to be sold by such Selling
Stockholder shall be delivered on behalf of such Selling Stockholder in
accordance with the terms and conditions of this Agreement and the Custody
Agreement, and action taken by the Attorneys-in-Fact or any of them under the
Power of Attorney shall be as valid as if such liquidation or dissolution or
other event had not occurred, whether or not the Custodian, the
Attorneys-in-Fact or any of them shall have notice of such liquidation or
dissolution or other event.
(i) No Stabilization or Manipulation. Such Selling Stockholder has not
taken, and will not take, directly or indirectly, any action designed to, or
which might reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares pursuant to the distribution contemplated by this
Agreement, and, other than as permitted by the Securities Act, the Selling
Stockholder has not distributed and will not distribute any prospectus or other
offering material in connection with the offering and sale of the Shares.
(j) Governmental Consents. The execution, delivery and performance of this
Agreement by such Selling Stockholder, compliance by such Selling Stockholder
with all the provisions hereof and the consummation of the transactions
contemplated hereby will not require any consent, approval, authorization or
other order of any court, regulatory body, administrative agency or other
governmental body (except as such may be required under federal or state
securities laws or by the NASD).
(k) Beneficial Ownership. The information set forth under the heading
"Principal and Selling Stockholders" in the Prospectus which specifically
relates to such Selling Stockholder does not, and will not on the Closing Dates,
contain 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,
in light of circumstances under which they were made, not misleading, and such
Selling Stockholder has agreed to immediately notify the Company if, at any time
during the period when a Prospectus is required by law to be delivered in
connection with sales of Common Stock by an Underwriter or a dealer, there is
any change in such information.
(l) Organization and Good Standing. Such Selling Stockholder, if other
than a natural person, has been duly organized and is validly existing and in
good standing under the laws of the jurisdiction of its organization as the type
of entity it purports to be.
(m) No Preemptive or Other Rights. Such Selling Stockholder does not have,
or has waived prior to the date hereof, any preemptive right, co-sale right or
right of first refusal or other similar right to purchase any of the Shares that
are to be sold by the Company or any of the other Selling Stockholders to the
Underwriters pursuant to this Agreement. Such Selling Stockholder does not have,
or has waived prior to the date hereof, any registration right or other
12
13
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
similar right to participate in the offering made by the Prospectus, other than
such rights of participation as have been satisfied by the participation of such
Selling Stockholder in the transactions to which this Agreement relates in
accordance with the terms of this Agreement. Such Selling Stockholder does not
own any warrants, options or similar rights to acquire, and does not have any
right or arrangement to acquire, any capital stock, rights, warrants, options or
other securities from the Company, other than those described in the
Registration Statement and the Prospectus.
2. Computer Concepts hereby makes to the several Underwriters the
representations and warranties of the Company set forth in Section 3 hereof. In
addition, Computer Concepts represents and warrants to, and agrees with the
several Underwriters that, the Voting Trust Agreement has been duly authorized,
executed and delivered by Computer Concepts and is a valid and binding agreement
of Computer Concepts, enforceable against Computer Concepts in accordance with
its terms, subject to the Enforceability Exceptions.
5. PURCHASE AND SALE OF THE SHARES.
The Company and the Selling Stockholders agree, severally and not jointly,
to sell to the Underwriters the Firm Shares, with the number of shares to be
sold by the Company and each Selling Stockholder being the number of Shares set
opposite his, her or its name in Schedule B attached hereto, and on the basis of
the representations, warranties, covenants and agreements herein contained, but
upon the terms and subject to the conditions herein set forth, the Underwriters
agree, severally and not jointly, to purchase the Firm Shares from the Company
and the Selling Stockholders, with the number of shares of Firm Shares to be
purchased by each Underwriter being set opposite its name in Schedule A attached
hereto, subject to adjustment in accordance with Section 14 hereof. The number
of Shares to be purchased by each Underwriter from each Selling Stockholder
hereunder shall bear the same proportion to the total number of Shares to be
purchased by such Underwriter hereunder as the number of Shares being sold by
each Selling Stockholder bears to the total number of Shares being sold by all
of the Selling Stockholders, subject to adjustment by the Representatives to
eliminate fractions.
(a) Purchase Price. The purchase price per Share to be paid by the
Underwriters to the Company and the Selling Stockholders will be $____ per share
(the "Purchase Price").
(b) Closing. The Company and the Selling Stockholders will deliver the
Firm Shares to the Representatives for the respective accounts of the several
Underwriters in the form of definitive certificates, issued in such names and in
such denominations as the Representatives may direct by notice in writing to the
Company and the Selling Stockholders given at or prior to 10:00 a.m., New York
time, on the second full business day preceding the First Closing Date (as
defined below) or, if no such direction is received, in the names of the
respective Underwriters or in such other names as SoundView may designate
(solely for the purpose of administrative convenience) and in such denominations
as SoundView may determine, against payment of the
13
14
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
aggregate Purchase Price therefor in Federal or other immediately available
funds, by certified or official bank check or checks payable to the order of the
Company and the Custodian or by wire transfer to accounts designated by the
Company and the Custodian, all at the offices of Xxxxxxxx & Xxxxxxxx LLP, 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Such delivery and closing
shall occur at 10:00 a.m., New York time, on the [third/fourth] business day
after the date of this Agreement (the "First Closing Date"). The First Closing
Date and the location of delivery of, and the form of payment for, the Firm
Shares may be varied by agreement between the Company and SoundView. The First
Closing Date may be postponed pursuant to the provisions of Section 14.
(c) Certificates for the Shares. The Company and the Selling Stockholders
shall make the certificates for the Firm Shares available to the Representatives
for examination on behalf of the Underwriters not later than 12:00 p.m., New
York time, on the business day preceding the First Closing Date at such location
within New York, New York as may be designated by the Representatives. If the
Representatives so elect, delivery of the Firm Shares may be made by credit
through full fast transfer to the accounts at The Depository Trust Company
designated by the Representatives.
(d) Payment on behalf of Underwriters. It is understood that the
Representatives, individually and not as Representatives of the several
Underwriters, may (but shall not be obligated to) make payment to the Company or
the Selling Stockholders on behalf of any Underwriter or Underwriters for the
Shares to be purchased by such Underwriter or Underwriters. Any such payment by
the Representatives shall not relieve such Underwriter or Underwriters from any
of its or their other obligations hereunder.
(e) Initial Public Offering. The several Underwriters agree to make an
initial public offering of the Firm Shares at the initial public offering price
of $____ per share as soon after the effectiveness of the Registration Statement
as, in their judgment, is advisable. The Representatives shall promptly advise
the Company and the Selling Stockholders of the making of the initial public
offering. After the initial public offering, the several Underwriters may, in
their discretion, vary the public offering price.
(f) Over-Allotment Option.
(i) Option Shares. For the purpose of covering any over-allotments
in connection with the distribution and sale of the Firm Shares as
contemplated by the Prospectus, Computer Concepts hereby grants to the
Underwriters an option (the "Option") to purchase up to 625,000 Option
Shares. The price per share to be paid for the Option Shares shall be the
Purchase Price. The Option may be exercised as to all or any part of the
Option Shares at any time, and from time to time, not more than thirty
(30) days subsequent to the effective date of this Agreement. No Option
Shares shall be sold and delivered unless the Firm Shares previously have
been, or simultaneously are, sold and
14
15
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
delivered. The right to purchase the Option Shares or any portion thereof
may be surrendered and terminated at any time upon notice by the
Underwriters to the Company and Computer Concepts.
(ii) Exercise of Option. The Option may be exercised by the
Underwriters by SoundView's giving written notice to the Company and
Computer Concepts setting forth the number of shares of the Option Shares
to be purchased by them and the date and time for delivery of and payment
for the Option Shares (the "Option Closing Date," and, collectively with
the First Closing Date, the "Closing Dates"). The Option Closing Date
shall not be earlier than the First Closing Date and shall in no event be
earlier than two (2) business days nor later than ten (10) business days
after written notice is given. Option Shares shall be purchased for the
account of each Underwriter in the same proportion as the number of Firm
Shares set forth opposite such Underwriter's name on Schedule A attached
hereto bears to the total number of Firm Shares (subject to adjustment by
the Underwriters to eliminate odd lots). Upon exercise of the Option by
the Underwriters, the Selling Stockholders agree to sell to the
Underwriters the number of Option Shares set forth in the written notice
of exercise and the Underwriters agree, severally and not jointly and upon
the terms and subject to the conditions herein set forth, to purchase the
number of such shares determined as aforesaid.
(iii) Option Closing. Computer Concepts will deliver the Option
Shares to the Underwriters (in the form of definitive certificates, issued
in such names and in such denominations as the Representatives may direct
by notice in writing to the Company and Computer Concepts given at or
prior to 10:00 a.m., New York time, on the second full business day
preceding the Option Closing Date or, if no such direction is received, in
the names of the respective Underwriters or in such other names as
SoundView may designate (solely for the purpose of administrative
convenience) and in such denominations as SoundView may determine, against
payment of the aggregate Purchase Price therefor in Federal or other
immediately available funds, by certified or official bank check or checks
payable to the order of the Custodian or by wire transfer to accounts
designated by the Custodian, all at the offices of Xxxxxxxx & Xxxxxxxx
LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Computer
Concepts shall make the certificates for the Option Shares available to
the Underwriters for examination not later than 12:00 p.m., New York time,
on the business day preceding the Option Closing Date, at such location
within New York, New York as may be designated by the Representatives. If
the Representatives so elect, delivery of the Option Shares may be made by
credit through full fast transfer to the accounts at The Depository Trust
Company designated by the Representatives. The Option Closing Date and the
location of delivery of, and the form of payment for, the Option Shares
may be varied by agreement between the Company and SoundView. The Option
Closing Date may be postponed pursuant to the provisions of Section 14.
15
16
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
6. COVENANTS AND AGREEMENTS OF THE COMPANY.
The Company covenants and agrees with the several Underwriters that:
(a) Effectiveness of Registration Statement. The Company will (i) if the
Company and the Representatives have determined not to proceed pursuant to Rule
430A, use its best efforts to cause the Registration Statement to become
effective, (ii) if the Company and the Representatives have determined to
proceed pursuant to Rule 430A, use its best efforts to comply with the
provisions of and make all requisite filings with the Commission pursuant to
Rule 430A and Rule 424, (iii) if the Company and the Representatives have
determined to deliver Prospectuses pursuant to Rule 434, to use its best efforts
to comply with all the applicable provisions thereof, and (iv) use its best
efforts to cause any abbreviated registration statement pursuant to Rule 462(b)
of the Rules and Regulations as may be required subsequent to the date the
Registration Statement is declared effective to become effective as promptly as
possible. The Company will advise the Representatives promptly as to the time at
which the Registration Statement becomes effective, will advise the
Representatives promptly of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the institution
of any proceedings for that purpose, and will use its best efforts to prevent
the issuance of any such stop order and to obtain as soon as possible the
lifting thereof, if issued. The Company will advise the Representatives promptly
of the receipt of any comments of the Commission or any request by the
Commission for any amendment of or supplement to the Registration Statement or
the Prospectus or for additional information and will not at any time file any
amendment to the Registration Statement or supplement to the Prospectus which
shall not previously have been submitted to the Representatives a reasonable
time prior to the proposed filing thereof or to which the Representatives shall
reasonably object in writing or which is not in compliance with the Securities
Act and the Rules and Regulations.
(b) Amendments and Reports. The Company will prepare and file with the
Commission, promptly upon the request of the Representatives, any amendments or
supplements to the Registration Statement or the Prospectus which in the opinion
of the Representatives may be necessary to enable the several Underwriters to
continue the distribution of the Shares and will use its best efforts to cause
the same to become effective as promptly as possible. The Company will promptly
file all reports and any definitive proxy or information statements required to
be filed with the Commission pursuant to Section 13, 14 or 15(d) of the Exchange
Act subsequent to the date of the Prospectus and for so long as the delivery of
a prospectus is required in connection with the offering or sale of the Shares.
(c) Prospectus. If, at any time after the effective date of the
Registration Statement when a prospectus relating to the Shares is required to
be delivered under the Securities Act, any event relating to or affecting the
Company occurs as a result of which the Prospectus or any other prospectus as
then in effect would include an untrue statement of a material fact, or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances
16
17
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
under which they were made, not misleading, or if it is necessary at any time to
amend the Prospectus to comply with the Securities Act, the Company will
promptly notify the Representatives thereof and will prepare an amended or
supplemented prospectus which will correct such statement or omission.
(d) Copies of Registration Statement and Prospectus. The Company will
deliver to the Representatives, at or before the Closing Dates, manually signed
copies of the Registration Statement, and each amendment thereto, including all
financial statements and exhibits thereto, and will deliver to the
Representatives such number of copies of the Registration Statement, including
such financial statements but without exhibits, and all amendments thereto, as
the Representatives may reasonably request. The Company will deliver or mail to
or upon the order of the Representatives, from time to time until the effective
date of the Registration Statement, as many copies of the Preliminary Prospectus
as the Representatives may reasonably request. The Company will deliver or mail
to or upon the order of the Representatives on the date of the initial public
offering, and thereafter from time to time during the period when delivery of a
prospectus relating to the Shares is required under the Securities Act, as many
copies of the Prospectus, in final form or as thereafter amended or supplemented
as the Representatives may reasonably request.
(e) Section 11(a) Earnings Statement. The Company will make generally
available to its Stockholders as soon as practicable, but not later than fifteen
(15) months after the effective date of the Registration Statement, an earnings
statement which will be in reasonable detail (but which need not be audited) and
which will comply with Section 11(a) of the Securities Act, covering a period of
at least twelve (12) months beginning after the "effective date" (as defined in
Rule 158 under the Securities Act) of the Registration Statement.
(f) Blue Sky Qualification. The Company will cooperate with the
Representatives to enable the Shares to be registered or qualified for offering
and sale by the Underwriters and by dealers under the securities laws of such
jurisdictions as the Representatives may reasonably request.
(g) Reports to Stockholders. So long as the Company shall be subject to
the reporting requirements of the Exchange Act, the Company will furnish to its
Stockholders annual reports containing financial statements certified by
independent public accountants and will furnish or make available to its
Stockholders quarterly summary financial information in reasonable detail, which
may be unaudited.
(h) Nasdaq National Market. The Company will use its best efforts to
maintain the listing of the Common Stock on the Nasdaq National Market for a
period of five (5) years after the effective date of the Registration Statement.
17
18
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
(i) Transfer Agent and Registrar. The Company will maintain a transfer
agent and registrar for its Common Stock.
(j) Market Stand-Off. The Company will not offer, sell, assign, transfer,
encumber, contract to sell, grant an option to purchase or otherwise dispose of
any shares of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock (including, without limitation, Common Stock which
may be deemed to be beneficially owned by the Company in accordance with the
Rules and Regulations) during the one hundred eighty (180) days following the
effective date of the Registration Statement, except for the Shares being sold
hereunder and any shares of Common Stock issuable upon exercise of employee
stock options issued in accordance with the terms of the Stock Option Plan as in
effect on the date hereof. In addition, during the 180 days following the
effective date of the Registration Statement, the Company will not release any
officer, director or securityholder of the Company from their obligations under
any similar agreement with the Company not to sell, transfer or dispose of
securities of the Company for the 180-day period following the effective date of
the Registration Statement (including the restrictive legends referred to in
Section 3(u) hereof).
(k) Use of Proceeds. The Company will apply the net proceeds from the sale
of the Shares substantially in conformity with the description set forth under
the heading "Use of Proceeds" in the Prospectus.
(l) SEC Correspondence. The Company will supply the Representatives with
copies of all correspondence to and from, and all documents issued to and by,
the Commission in connection with the registration of the Shares under the
Securities Act.
(m) Financial Statements. Prior to the Closing Dates the Company will
furnish to the Representatives, as soon as they have been prepared, copies of
any unaudited interim financial statements of the Company for any periods
subsequent to the periods covered by the financial statements appearing in the
Registration Statement and the Prospectus.
(n) Press Releases. Prior to the Closing Dates and during the period when
a prospectus relating to the Shares is required to be delivered under the
Securities Act, the Company will issue no press release or other communications
directly or indirectly and hold no press conference with respect to the Company
or its financial condition, results of operation, business, prospects, assets or
liabilities, or the offering of the Shares, without the prior consent of the
Representatives, which consent shall not be unreasonably withheld.
(o) Reports to Representatives. During the period of three (3) years from
the date hereof, the Company will furnish to the Representatives, and, upon
request of the Representatives, to each of the Underwriters (i) as soon as
practicable after the end of each fiscal year, copies of the Annual Report of
the Company containing the balance sheet of the Company as of the close of such
fiscal year and statements of income, Stockholder's equity and
18
19
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
cash flows for the year then ended and the opinion thereon of the Company's
independent public accountants, (ii) as soon as practicable after the filing
thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Report on Form 8-K or other report filed by the Company
with the Commission, Nasdaq or any securities exchange, (iii) as soon as
available, copies of any report or communication of the Company mailed generally
to holders of its Common Stock, and (iv) such other information concerning the
Company as the Representatives may reasonably request from time to time.
(p) Form S-8. The Company will not file any registration statements on
Form S-8 covering shares of Common Stock issuable under its stock option plans
for a period of one hundred eighty (180) days following the effectiveness of the
Registration Statement.
7. PAYMENT OF EXPENSES.
(a) Expenses of the Company. The Company will pay, either directly or by
reimbursement, all costs, fees and expenses incurred in connection with expenses
incident to the performance of the obligations of the Company and of the Selling
Stockholders under this Agreement, including, but not limited to, (i) all
expenses and taxes incident to the issuance and delivery of the Shares to the
Representatives, (ii) all expenses incident to the registration of the Shares
under the Securities Act, (iii) all costs of preparing stock certificates,
including printing and engraving costs, (iv) all fees and expenses of the
registrar and transfer agent of the Shares, (v) all necessary issue, transfer
and other stamp taxes in connection with the issuance and sale of the Shares to
the Underwriters, (vi) all fees and expenses of the Company's counsel and the
Company's independent accountants, (vii) all costs and expenses incurred in
connection with the preparation, printing, filing, shipping and distribution of
the Registration Statement, each Preliminary Prospectus and the Prospectus,
including all exhibits and financial statements, and all amendments and
supplements provided for herein, the Powers of Attorney, the Custody Agreement,
the Underwriters' Questionnaire, the Blue Sky memoranda and this Agreement,
(viii) all filing fees and attorneys' fees and expenses incurred by the Company
or the Underwriters in connection with exemptions from qualifying or registering
(or obtaining qualification or registration of) all or any part of the Shares
for offer and sale and determination of its eligibility for investment under the
Blue Sky or other securities laws of such jurisdictions as the Representatives
may designate, (ix) all filing fees paid or incurred in connection with filings
made with the NASD and (x) all fees and expenses associated with the listing of
the Shares and the Common Stock on the Nasdaq National Market.
(b) Expenses of the Selling Stockholders. Each Selling Stockholder will
pay, either directly or by reimbursement, all fees and expenses incident to the
performance of such Selling Stockholder's obligations under this Agreement which
are not otherwise specifically provided for herein, including, but not limited
to, any fees and expenses of counsel for such Selling Stockholder, such Selling
Stockholder's pro rata share of fees and expenses of the Attorneys-in-
19
20
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
Fact and the Custodian and all expenses and taxes incident to the sale and
delivery of the Shares to be sold by such Selling Stockholder to the
Underwriters hereunder.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) Indemnification by the Company. The Company agrees to indemnify and
hold harmless each Underwriter, each person, if any, who controls such
Underwriter within the meaning of the Securities Act and the respective
officers, directors, partners, employees, representatives and agents of each of
such Underwriter and controlling person (collectively, the "Underwriter
Indemnified Parties" and, each, an "Underwriter Indemnified Party") against any
losses, claims, damages, liabilities or expenses (including the reasonable cost
of investigating and defending against any claims therefor and fees of counsel
incurred in connection therewith), joint or several, which may be based upon the
Securities Act, the Exchange Act, or any other federal, state, local or foreign
statute or regulation, or at common law, on the ground or alleged ground that
any Preliminary Prospectus, the Registration Statement or the Prospectus (or any
Preliminary Prospectus, the Registration Statement or the Prospectus as from
time to time amended or supplemented) includes or allegedly includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, unless such
statement or omission was made in reliance upon, and in conformity with, written
information furnished to the Company by any Underwriter, directly or through the
Representatives, specifically for use in the preparation thereof. The Company
will be entitled to participate at its own expense in the defense or, if it so
elects, to assume the defense of any suit brought to enforce any such liability,
but, if the Company elects to assume the defense, such defense shall be
conducted by counsel chosen by it. In the event the Company elects to assume the
defense of any such suit and retain such counsel, any Underwriter Indemnified
Parties, defendant or defendants in the suit, may retain additional counsel but
shall bear the fees and expenses of such counsel unless (i) the Company shall
have specifically authorized the retaining of such counsel, or (ii) the parties
to such suit include any such Underwriter Indemnified Parties, and the Company
and such Underwriter Indemnified Parties have been advised by counsel to the
Underwriters that one or more legal defenses may be available to it or them
which may not be available to the Company, in which case the Company shall not
be entitled to assume the defense of such suit, notwithstanding its obligation
to bear the fees and expenses of such counsel. This indemnity agreement is not
exclusive and will be in addition to any liability which the Company might
otherwise have and shall not limit any rights or remedies which may otherwise be
available at law or in equity to each Underwriter Indemnified Party.
(b) Indemnification by the Selling Stockholders. Each Selling Stockholder
agrees to indemnify and hold harmless each Underwriter Indemnified Party against
any losses, claims, damages, liabilities or expenses (including, unless such
Selling Stockholder elects to assume the defense, the reasonable cost of
investigating and defending against any claims therefor and fees of counsel
incurred in connection therewith), which may be based upon the Securities Act,
the
20
21
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
Exchange Act, or any other federal, state, local or foreign statute or
regulation, or at common law, on the ground or alleged ground that any
Preliminary Prospectus, the Registration Statement or the Prospectus (or any
Preliminary Prospectus, the Registration Statement or the Prospectus, as from
time to time amended and supplemented) includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, unless such statement or omission
was made in reliance upon, and in conformity with, written information furnished
to the Company by any Underwriter, directly or through the Representatives,
specifically for use in the preparation thereof; provided, however, that the
indemnification obligation arising under this Section 8(b) shall apply only to
the extent that such loss, claim, damage, liability or expense is caused by or
related to an untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with information relating to
such Selling Stockholder furnished in writing to the Company by or on behalf of
such Selling Stockholder expressly for use in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendments or supplements thereto.
Such Selling Stockholder shall be entitled to participate at his own expense in
the defense, or, if he so elects, to assume the defense of any suit brought to
enforce any such liability, but, if such Selling Stockholder elects to assume
the defense, such defense shall be conducted by counsel chosen by him. In the
event that any Selling Stockholder elects to assume the defense of any such suit
and retain such counsel, the Underwriter Indemnified Parties, defendant or
defendants in the suit, may retain additional counsel but shall bear the fees
and expenses of such counsel unless (i) such Selling Stockholder shall have
specifically authorized the retaining of such counsel, or (ii) the parties to
such suit include such Underwriter Indemnified Parties and such Selling
Stockholder and such Underwriter Indemnified Parties have been advised by
counsel to the Underwriters that one or more legal defenses may be available to
it or them which may not be available to such Selling Stockholder, in which case
such Selling Stockholder shall not be entitled to assume the defense of such
suit notwithstanding its obligation to bear the fees and expenses of such
counsel. Subject to Section 8(e) below, this indemnity agreement is not
exclusive and will be in addition to any liability which such Selling
Stockholder might otherwise have and shall not limit any rights or remedies
which may otherwise be available at law or in equity to each Underwriter
Indemnified Party. The Company and the Selling Stockholders may agree, as among
themselves and without limiting the rights of the Underwriters under this
Agreement, as to their respective amounts of such liability for which they each
shall be responsible.
(c) Indemnification by Underwriters. Each Underwriter severally agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who have signed the Registration Statement and each person, if any, who
controls the Company within the meaning of the Securities Act (collectively, the
"Company Indemnified Parties") and each Selling Stockholder and each person, if
any, who controls a Selling Stockholder within the meaning of the Securities Act
(collectively, the "Stockholder Indemnified Parties") against any losses,
claims, damages, liabilities or expenses (including, unless the Underwriter or
21
22
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
Underwriters elect to assume the defense, the reasonable cost of investigating
and defending against any claims therefor and fees of counsel incurred in
connection therewith), joint or several, which arise out of or are based in
whole or in part upon the Securities Act, the Exchange Act or any other federal,
state, local or foreign statute or regulation, or at common law, on the ground
or alleged ground that any Preliminary Prospectus, the Registration Statement or
the Prospectus (or any Preliminary Prospectus, the Registration Statement or the
Prospectus, as from time to time amended and supplemented) includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances in which they were made, not misleading, but only insofar as
any such statement or omission was made in reliance upon, and in conformity
with, written information furnished to the Company by such Underwriter, directly
or through the Representatives, specifically for use in the preparation thereof,
and the parties acknowledge and agree that the only information furnished by the
Underwriters to the Company for inclusion in any Preliminary Prospectus, the
Registration Statement or the Prospectus, as from time to time amended or
supplemented, is the information set forth in the last paragraph of the front
cover page of the Prospectus (insofar as such information relates to the
Underwriters), the information on page 2 of the Prospectus concerning
stabilization and over-allotment by the Underwriters, and the information under
the caption "Underwriting" in the Prospectus that does not describe this
Agreement; provided, however, that in no case is such Underwriter to be liable
with respect to any claims made against any Company Indemnified Party or
Stockholder Indemnified Party against whom the action is brought unless such
Company Indemnified Party or Stockholder Indemnified Party shall have notified
such Underwriter in writing within a reasonable time after the summons or other
first legal process giving information of the nature of the claim shall have
been served upon the Company Indemnified Party or Stockholder Indemnified Party,
but failure to notify such Underwriter of such claim shall not relieve it from
any liability which it may have to any Company Indemnified Party or Stockholder
Indemnified Party otherwise than on account of its indemnity agreement contained
in this paragraph. Such Underwriter shall be entitled to participate at its own
expense in the defense, or, if it so elects, to assume the defense of any suit
brought to enforce any such liability, but, if such Underwriter elects to assume
the defense, such defense shall be conducted by counsel chosen by it. In the
event that any Underwriter elects to assume the defense of any such suit and
retain such counsel, the Company Indemnified Parties or Stockholder Indemnified
Parties and any other Underwriter or Underwriters or controlling person or
persons, defendant or defendants in the suit, shall bear the fees and expenses
of any additional counsel retained by them, respectively. The Underwriter
against whom indemnity may be sought shall not be liable to indemnify any person
for any settlement of any such claim effected without such Underwriter's
consent. This indemnity agreement is not exclusive and will be in addition to
any liability which such Underwriter might otherwise have and shall not limit
any rights or remedies which may otherwise be available at law or in equity to
any Company Indemnified Party or Stockholder Indemnified Party.
22
23
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
(d) Contribution. If the indemnification provided for in this Section 8 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) or (c) above in respect of any losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to herein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Selling
Stockholders on the one hand, and the Underwriters on the other hand, from the
offering of the Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company and the Selling Stockholders on the
one hand, and the Underwriters on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Selling Stockholders on the one hand, and the Underwriters on the other
hand, shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company and the
Selling Stockholders bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, the Selling Stockholders or the
Underwriters, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company,
the Selling Stockholders and the Underwriters agree that it would not be just
and equitable if contribution were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or expenses (or actions in
respect thereof) referred to above shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating, defending, settling or compromising any such claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public 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. The Underwriters' obligations to
contribute are several in proportion to their respective underwriting
obligations and not joint. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
23
24
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
(e) Limitation of Liability. Notwithstanding any provision herein to the
contrary, (i) the indemnity agreements contained in Section 8(a) and Section
8(b) with respect to any Preliminary Prospectus shall not inure to the benefit
of any Underwriter (or any person controlling such Underwriter) from whom the
person asserting any such loss, claim, damage, liability or expense purchased
the Shares which are the subject thereof if at or prior to the written
confirmation of the sale of such Shares a copy of the Prospectus (or the
Prospectus as amended or supplemented) was not sent or delivered to such person
(excluding the documents incorporated therein by reference), the untrue
statement or omission of a material fact contained in such Preliminary
Prospectus was corrected in the Prospectus (or the Prospectus as amended or
supplemented), and such failure to send or deliver a copy of the Prospectus (or
the Prospectus as amended or supplemented) was not the result of the Company's
non-compliance with the provisions of Section 6(d), (ii) the liability for
indemnification under Section 8(b) of each Selling Stockholder shall not exceed
the Purchase Price of the Shares sold by such Selling Stockholder to the
Underwriters, and (iii) such liability shall be further limited for each Selling
Stockholder such that such Selling Stockholder's liability, in proportion to the
aggregate liability of all Selling Stockholders as a group, shall not exceed the
proportion that the number of Shares sold by such Selling Stockholder bears to
the aggregate number of Shares sold by all Selling Stockholders hereunder;
provided, however, that the limitation on liability set forth in the foregoing
clause (iii) shall not apply with respect to any particular Selling Stockholder
if such liability is attributable to such Selling Stockholder, as set forth in
the first sentence of Section 8(b); and, provided, further, that nothing in the
foregoing clause (iii) shall require the Underwriters to seek indemnification
from any other Selling Stockholder(s) as a condition of their being entitled to
indemnification from any particular Selling Stockholder. Notwithstanding
anything to the contrary in this Agreement, the Underwriters and their control
persons shall not seek indemnification pursuant to this Section 8 unless they
shall have first reasonably determined that the Company is unable or not
required to fully satisfy the obligations of the Selling Stockholders pursuant
to such Sections.
9. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC.
Unless this Agreement is terminated in accordance with Section 12 hereof,
the respective indemnities, covenants, agreements, representations, warranties
and other statements of the Company, the Selling Stockholders and the several
Underwriters, as set forth in this Agreement or made by them respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter, the Selling
Stockholders, the Company or any of its officers or directors or any controlling
person, and shall survive delivery of and payment for the Shares.
24
25
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
10. CONDITIONS OF UNDERWRITERS' OBLIGATIONS.
The respective obligations of the several Underwriters hereunder shall be
subject to the material accuracy, at and (except as otherwise stated herein) as
of the date hereof and at and as of the Closing Dates, of the representations
and warranties made herein by the Company and the Selling Stockholders, to
compliance at and as of the Closing Dates by the Company and the Selling
Stockholders with their covenants and agreements herein contained and other
provisions hereof to be satisfied at or prior to the Closing Dates, and to the
following additional conditions:
(a) Effective Registration Statement. The Registration Statement shall
have become effective and no stop order suspending the effectiveness thereof
shall have been issued and no proceedings for that purpose shall have been
initiated or, to the knowledge of the Company or the Representatives, shall be
threatened by the Commission, and any request for additional information on the
part of the Commission (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the reasonable
satisfaction of the Representatives. Any filings of the Prospectus, or any
supplement thereto, required pursuant to Rule 424(b) or Rule 434 of the Rules
and Regulations, shall have been made in the manner and within the time period
required by Rule 424(b) and Rule 434 of the Rules and Regulations, as the case
may be.
(b) Changes. The Representatives shall have been reasonably satisfied that
there shall not have occurred any change prior to the Closing Dates in the
condition (financial or otherwise), properties, business, prospects, net worth
or results of operations of the Company and its subsidiaries taken as a whole,
or any material adverse change in the capital stock, short-term or long-term
debt of the Company and its subsidiaries taken as a whole, such that (i) the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, contains an untrue statement of fact which, in the reasonable opinion
of the Representatives, is material, or omits to state a fact which, in the
reasonable opinion of the Representatives, is required to be stated therein or
is necessary to make the statements therein not misleading, or (ii) it is
impracticable in the reasonable judgment of the Representatives to proceed with
the public offering or to purchase the Shares as contemplated hereby.
(c) Litigation. The Representatives shall be satisfied that no legal or
governmental action, suit, proceeding or investigation affecting the Company or
any of its subsidiaries which may have a Material Adverse Effect or may affect
the Company's or the Selling Stockholders' ability to perform their respective
obligations under this Agreement shall have been instituted or threatened, and
there shall have occurred no material adverse development in any existing such
action, suit, proceeding or investigation.
(d) Comfort Letter. Prior to the execution of this Agreement, the
Representatives shall have received from Xxxxxx Xxxxxxxx LLP, independent
certified public accountants, a letter, dated the date hereof, in form and
substance reasonably satisfactory to the Underwriters.
25
26
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
(e) Bring-Down. The Representatives shall have received from Xxxxxx
Xxxxxxxx L.L.P., independent certified public accountants, letters, dated the
Closing Dates, to the effect that such accountants reaffirm, as of the Closing
Dates, and as though made on the Closing Dates, the statements made in the
letter furnished by such accountants pursuant to Section 10(d); provided,
however, that the letter delivered on the First Closing Date shall use a
"cut-off date" not earlier than the date hereof, and the letter delivered on the
Option Closing Date shall use a "cut-off date" not more than five (5) business
days prior to such Option Closing Date.
(f) Legal Opinion of Counsel for the Company. The Representatives shall
have received from Blau, Kramer, Wactlar & Xxxxxxxxx, P.C., counsel for the
Company and Computer Concepts, an opinion, dated the Closing Dates, which
opinion shall be rendered to the Underwriters at the request of the Company and
Computer Concepts (and shall so state therein) to the effect that:
(i) the Company and each of its subsidiaries has been duly
incorporated, is validly existing as corporation in good standing under
the laws of its jurisdiction of incorporation and has the corporate power
and authority required to carry on its business and to own, lease and
operate its property as described in the Prospectus;
(ii) the Company and each of its subsidiaries is duly qualified and
is in good standing as a foreign corporation authorized to do business in
each jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the failure
to be so qualified would not have a Material Adverse Effect;
(iii) all of the outstanding shares of Common Stock (including the
Shares to be sold by the Selling Stockholders) have been duly authorized
and validly issued and are fully paid, non-assessable and not subject to
any preemptive or similar rights, except as disclosed in the Prospectus;
(iv) the Shares to be issued and sold by the Company hereunder have
been duly authorized, and when issued and delivered to the Underwriters
against payment therefor as provided by this Agreement, will have been
validly issued and will be fully paid and non-assessable, and the issuance
of such shares is not subject to any preemptive or similar rights;
(v) this Agreement has been duly and validly authorized, executed
and delivered by the Company and by Computer Concepts and is a valid and
binding agreement of the Company and Computer Concepts, enforceable
against the Company and Computer Concepts in accordance with its terms,
subject to the Enforceability Exceptions;
26
27
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
(vi) the authorized capital stock of the Company, including the
Common Stock, conforms in all material respects to the description thereof
contained in the Prospectus;
(vii) the Registration Statement has become effective under the
Securities Act and, to such counsel's knowledge, no stop order suspending
its effectiveness has been issued and no proceedings for that purpose are,
to the knowledge of such counsel, pending before or contemplated by the
Commission;
(viii) the Company is not in violation of its Certificate of
Incorporation or By-laws and, to such counsel's knowledge, the Company is
not in default in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of
indebtedness or in any other agreement, indenture or instrument material
to the conduct of the business of the Company, to which the Company is a
party or by which it or its property is bound;
(ix) the execution, delivery and performance of this Agreement by
the Company and each Selling Stockholder, compliance by the Company and
each Selling Stockholder with all the provisions hereof and the
consummation of the transactions contemplated hereby will not require any
consent, approval, authorization or other order of any court, regulatory
body, administrative agency or other governmental body (except as such may
be required under the Securities Act) and will not conflict with or
constitute a breach of any of the terms or provisions of, or a default
under, the Certificate of Incorporation, By-laws or other organizational
documents of the Company or of any of its subsidiaries, or any agreement,
indenture or other instrument known to such counsel to which the Company
or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective properties is bound, or, to such
counsel's knowledge, violate or conflict with any laws, administrative
regulations or rulings or court decrees applicable to the Company or its
property;
(x) to such counsel's knowledge, there is no legal or governmental
proceeding pending or threatened to which the Company or any of its
subsidiaries is a party or to which any of its property is subject which
is required to be described in the Registration Statement or the
Prospectus and is not so described, or of any contract or other document
which is required to be described in the Registration Statement or the
Prospectus or is required to be filed as an exhibit to the Registration
Statement which is not described or filed as required;
(xi) the Company is not an "investment company" or a company
"controlled" by an "investment company," as defined in the Investment
Company Act of 1940, as amended;
27
28
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
(xii) to such counsel's knowledge, except otherwise set forth in the
Registration Statement, no holder of any security of the Company has any
right to require registration of shares of Common Stock or any other
security of the Company;
(xiii) to such counsel's knowledge, except as otherwise set forth in
the Registration Statement or such as are not material to the business,
prospects, financial condition or results of operation of the Company and
its subsidiaries taken as a whole, the Company and each of its
subsidiaries has good and marketable title, free and clear of all liens,
claims, encumbrances and restrictions except liens for taxes not yet due
and payable, to all property and assets described in the Registration
Statement as being owned by it;
(xiv) to such counsel's knowledge, all leases to which the Company
and each of its subsidiaries is a party are valid and binding and no
default has occurred or is continuing thereunder, with the exception of
those leases the violation of which would not, in the aggregate, have a
Material Adverse Effect;
(xv) (A) the Registration Statement (including any Registration
Statement filed under Rule 462(b) under the Securities Act, if any) and
the Prospectus and any supplement or amendment thereto (except for
financial statements, schedules and reports thereon, and other financial
and statistical data included therein, as to which no opinion need be
expressed) comply as to form in all material respects with the Securities
Act, and (B) although counsel has not undertaken to investigate or verify
independently and is not passing upon, and does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Prospectus or any amendment or supplement
thereto, nothing has come to the attention of such counsel which has
caused it to believe that (except for financial statements, schedules and
reports thereon, and other financial and statistical data included therein
as aforesaid) the Registration Statement and the prospectus included
therein at the time the Registration Statement became effective contained
any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus, as amended or
supplemented, if applicable (except for financial statements, schedules
and reports thereon, and other financial and statistical data included
therein as aforesaid) contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(xvi) the Custody Agreement has been duly and validly authorized,
executed and delivered by Computer Concepts and is a valid and binding
agreement of Computer Concepts, enforceable against Computer Concepts in
accordance with its terms, subject to the Enforceability Exceptions;
28
29
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
(xvii) Computer Concepts has full legal right, power and authority,
and any approval required by law (other than any approval imposed by the
applicable state securities and Blue Sky laws) to sell, assign, transfer
and deliver the Shares to be sold by Computer Concepts in the manner
provided in this Agreement and the Custody Agreement;
(xviii) Computer Concepts has good and valid title to the
certificates for the Shares to be sold by such Selling Stockholder and,
upon delivery thereof, pursuant hereto and payment therefor, good and
valid title will pass to the Underwriters, severally, free of all
restrictions on transfer, liens, encumbrances, security interests and
claims whatsoever; (xix) the Power of Attorney signed by Computer Concepts
appointing __________ and ___________, or either of them, as Computer
Concept's attorney-in-fact to the extent set forth therein with regard to
the transactions contemplated hereby has been duly and validly authorized,
executed and delivered by or on behalf of Computer Concepts and is a valid
and binding instrument of Computer Concepts, enforceable against Computer
Concepts in accordance with its terms, subject to the Enforceability
Exceptions; and
(xx) the Voting Trust Agreement has been duly and validly
authorized, executed and delivered by each of the parties thereto and is a
valid and binding agreement of each of the parties thereto, enforceable
against such parties in accordance with its terms, subject to the
Enforceability Exceptions.
Counsel rendering the foregoing opinion may rely as to questions of law
not involving the laws of the United States or the States of New York or
Delaware upon opinions of local counsel, and as to questions of fact upon
representations or certificates of officers of the Company, the Selling
Stockholders or officers of the Selling Stockholders (when such Selling
Stockholder is not a natural person), and of government officials, in which case
their opinion is to state that they are so relying and that they have no
knowledge of any material misstatement or inaccuracy in any such opinion,
representation or certificate. Copies of any opinion, representation or
certificate so relied upon shall be delivered to the Representatives and to
counsel for the Underwriters.
(g) Intentionally omitted.
29
30
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
(h) Legal Opinion of Counsel for the Underwriters. The Representatives
shall have received from Xxxxxxxx & Xxxxxxxx, LLP, counsel for the Underwriters,
their opinion or opinions, dated the Closing Dates, with respect to the validity
of the Shares, the Registration Statement and the Prospectus and such other
related matters as it may reasonably request, and the Company and the Selling
Stockholders shall have furnished to such counsel such documents as they may
request for the purpose of enabling them to pass upon such matters.
(i) Officers' Certificate. The Representatives shall have received a
certificate, dated the Closing Dates, of the Chief Executive Officer of
the Company and the Chief Financial Officer of the Company to the effect
that:
(i) No stop order suspending the effectiveness of the Registration
Statement has been issued, and, to the knowledge of the signers, no
proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act;
(ii) Neither any Preliminary Prospectus, as of its date, nor the
Registration Statement nor the Prospectus, nor any amendment or supplement
thereto, as of the time when the Registration Statement became effective
and at all times subsequent thereto up
30
31
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
to the delivery of such certificate, included any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(iii) The representations and warranties of the Company in this
Agreement are true and correct in all material respects at and as of the
Closing Dates, and the Company has substantially complied with all of the
agreements and substantially performed or satisfied all of the conditions
on its part to be performed or satisfied at or prior to the Closing Dates;
and
(iv) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, and except as disclosed in
or contemplated by the Prospectus, (A) there has not been any material
adverse change or a development involving a material adverse change in the
condition (financial or otherwise), properties, business, management,
prospects, net worth or results of operations of the Company, (B) the
business and operations conducted by the Company have not sustained a loss
by strike, fire, flood, accident or other calamity (whether or not
insured) of such a character as to interfere materially with the conduct
of the business and operations of the Company, (C) no legal or
governmental action, suit, proceeding or investigation is pending or
threatened against the Company which is material to the Company, whether
or not arising from transactions in the ordinary course of business, or
which may materially and adversely affect the transactions contemplated by
this Agreement, (D) since such dates and except as so disclosed, the
Company has not incurred any material liability or obligation, direct,
contingent or indirect, made any change in its capital stock (except
pursuant to its Stock Option Plan), made any material change in its
short-term or funded debt or repurchased or otherwise acquired any of the
Company's capital stock, (E) the Company has not declared or paid any
dividend, or made any other distribution, upon its outstanding capital
stock payable to Stockholders of record on a date prior to the Closing
Dates, and (F) the Company has not entered into any material transactions
not in the ordinary course of business.
(j) Certificate of Selling Stockholders. The Representatives shall have
received a certificate or certificates, dated the Closing Dates, of the
Attorneys-in-Fact on behalf of each of the Selling Stockholders to the effect
that as of the Closing Dates its representations and warranties in this
Agreement are true and correct as if made on and as of the Closing Dates, and
that it has performed all its obligations and satisfied all the conditions on
its part to be performed or satisfied at or prior to the Closing Dates.
(k) Opinion of Intellectual Property Counsel. The Representatives shall
have received from Xxxxxxx & Parry special intellectual property counsel for the
Company, an opinion,
31
32
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
dated the Closing Dates, with respect to certain intellectual property law
matters. Such opinion shall be in form and substance reasonably satisfactory to
the Underwriters.
(l) Additional Certificates. The Company and each of the Selling
Stockholders shall have furnished to the Representatives such additional
certificates as the Representatives may have reasonably requested as to the
accuracy, at and as of the Closing Dates, of the representations and warranties
made herein by them and as to compliance at and as of the Closing Dates by them
with their covenants and agreements herein contained and other provisions hereof
to be satisfied at or prior to the Closing Dates, and as to satisfaction of the
other conditions to the obligations of the Underwriters hereunder.
(m) Satisfaction. All opinions, certificates, letters and other documents
will be in compliance with the provisions hereunder only if they are reasonably
satisfactory in form and substance to the Representatives. The Company will
furnish to the Representatives such number of original and conformed copies of
such opinions, certificates, letters and other documents as the Representatives
shall reasonably request. If any of the conditions hereinabove provided for in
this Section 8 shall not have been satisfied when and as required by this
Agreement, this Agreement may be terminated by the Representatives by notifying
the Company of such termination in writing or by telegram at or prior to the
Closing Dates, but SoundView shall be entitled to waive any of such conditions.
11. EFFECTIVE DATE.
This Agreement shall become effective upon execution and delivery by all
the parties hereto and the written or oral release of notification of the
effectiveness of the Registration Statement by the Commission.
12. TERMINATION.
The Representatives shall have the right to terminate this Agreement by
giving notice to the Company as hereinafter specified at any time at or prior to
the First Closing Date or the Option Closing Date, as the case may be, (a) if
the Company or any Selling Stockholder shall have failed, refused or been unable
to perform any agreement on its part to be performed, or because any other
condition of the Underwriters' obligations hereunder required to be fulfilled is
not fulfilled, including, without limitation, any change in the condition
(financial or otherwise), earnings, operations, business or business prospects
of the Company from that set forth in the Registration Statement or Prospectus,
which, in the sole reasonable judgment of the Representatives, is material and
adverse, or (b) if additional material governmental restrictions, not in force
and effect on the date hereof, shall have been imposed upon trading in
securities generally or minimum or maximum prices shall have been generally
established on the New York Stock Exchange or on the American Stock Exchange or
in the over-the-counter market by the NASD, or trading in securities generally
shall have been suspended on either such exchange
32
33
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
or in the over-the-counter market by the NASD, or if a banking moratorium shall
have been declared by federal or New York authorities, or (c) if the Company
shall have sustained a loss by strike, fire, flood, earthquake, accident or
other calamity of such character as to interfere materially with the conduct of
the business and operations of the Company regardless of whether or not such
loss shall have been insured, or (d) if there shall have been a material adverse
change in the general political or economic conditions or financial markets as
in the reasonable judgment of the Representatives makes it inadvisable or
impracticable to proceed with the offering, sale and delivery of the Shares, or
(e) if there shall have been an outbreak or escalation of hostilities or of any
other insurrection or armed conflict or the declaration by the United States of
a national emergency which, in the reasonable opinion of the Representatives,
makes it impracticable or inadvisable to proceed with the public offering of the
Shares as contemplated by the Prospectus. In the event of termination pursuant
to this Section 12 the Company shall remain obligated to pay costs and expenses
pursuant to Section 7, Section 8 and Section 13 hereof. If the Company shall
elect to prevent this Agreement from becoming effective as provided in Section
11, the Company shall promptly notify the Representatives by telephone,
facsimile or telegraph, in each case confirmed by letter. If the Representatives
elect to prevent this Agreement from becoming effective as provided in Section
11 or to terminate this Agreement as provided in this Section 12, the
Representatives shall promptly notify the Company by telephone, facsimile or
telegraph, in each case confirmed by letter.
13. REIMBURSEMENT OF UNDERWRITERS.
Notwithstanding any other provisions hereof, if this Agreement shall not
become effective by reason of any election of the Company pursuant to Section 11
or shall be terminated by the Representatives under Section 10 or Section 12(a),
the Company will bear and pay the expenses specified in Section 7 hereof and, in
addition to its obligations pursuant to Section 8 hereof, the Company will
reimburse the reasonable out-of-pocket expenses of the several Underwriters
(including reasonable fees and disbursements of counsel for the Underwriters)
incurred in connection with this Agreement and the proposed purchase of the
Shares, and promptly upon demand the Company will pay such amounts to the
Representatives.
14. SUBSTITUTION OF UNDERWRITERS.
If any Underwriter or Underwriters shall default in its or their
obligations to purchase shares of Shares hereunder and the aggregate number of
shares which such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed ten percent (10%) of the total number of shares
underwritten, the other Underwriters shall be obligated severally, in proportion
to their respective commitments hereunder, to purchase the shares which such
defaulting Underwriter or Underwriters agreed but failed to purchase. If any
Underwriter or Underwriters shall so default and the aggregate number of shares
with respect to which such default or defaults occur is more than ten percent
(10%) of the total number of shares underwritten and arrangements satisfactory
to the Representatives and the Company for the
33
34
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
purchase of such shares by other persons are not made within forty-eight (48)
hours after such default, this Agreement shall terminate. If the remaining
Underwriters or substituted Underwriters are required hereby or agree to take up
all or part of the shares of Shares of a defaulting Underwriter or Underwriters
as provided in this Section 14, (a) the Company and the Selling Stockholders
shall have the right to postpone the Closing Dates for a period of not more than
seven (7) full business days in order that the Company and the Selling
Stockholders may effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees promptly to file any amendments to the
Registration Statement or supplements to the Prospectus which may thereby be
made necessary, and (b) the respective numbers of shares to be purchased by the
remaining Underwriters or substituted Underwriters shall be taken as the basis
of their underwriting obligation for all purposes of this Agreement. Any action
taken under this Section 14 shall not relieve any defaulting Underwriter of its
liability to the Company, the Selling Stockholders or the other Underwriters for
damages occasioned by its default hereunder. Any termination of this Agreement
pursuant to this Section 14 shall be without liability on the part of any
non-defaulting Underwriter, the Selling Stockholders or the Company, except for
expenses to be paid or reimbursed pursuant to Section 7 and except for the
provisions of Section 8.
15. NOTICES.
All communications hereunder shall be in writing and, (a) if sent to the
Underwriters, shall be mailed, delivered, transmitted by facsimile or
telegraphed and confirmed to the Representatives, x/x XxxxxXxxx, 00 Xxxxxxxxx
Xxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 (facsimile: (000) 000-0000), except that
notices given to an Underwriter pursuant to Section 8 hereof shall be sent to
such Underwriter at the address furnished by the Representatives, or (b) if sent
to the Company, shall be mailed, delivered, transmitted by facsimile or
telegraphed and confirmed to the Company, 0000 Xxxxxxxx Xxxxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxxx 00000, Attn: President (facsimile: (000) 000-0000), with a
copy to Blau, Kramer, Wactlar & Xxxxxxxxx, P.C. , 000 Xxxxxxx Xxxxxxxxxx, Xxxxx
000, Xxxxxxx, Xxx Xxxx 00000, Attn: Xxxxx X. Xxxxxxxxx (facsimile (516)
822-4824) or (c) if sent to the Selling Stockholders, shall be mailed,
delivered, transmitted by facsimile or telegraphed and confirmed to the Selling
Stockholders, c/o the Attorneys-in-Fact, c/o the Company, 0000 Xxxxxxxx Xxxxxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000, Attn: President (facsimile: (703)
341-2424), with a copy to Blau, Kramer, Wactlar & Xxxxxxxxx, P.C. , 000 Xxxxxxx
Xxxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxx Xxxx 00000, Attn: Xxxxx X. Xxxxxxxxx
(facsimile (000) 000-0000).
16. SUCCESSORS.
This Agreement shall inure to the benefit of and be binding upon the
several Underwriters, the Company and the Selling Stockholders and their
respective successors and legal representatives. Nothing expressed or mentioned
in this Agreement is intended or shall be construed to give any person other
than the persons mentioned in the preceding sentence any
34
35
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
legal or equitable right, remedy or claim under or in respect of this Agreement,
or any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person, except that the
representations, warranties, covenants, agreements and indemnities of the
Company and the Selling Stockholders contained in this Agreement shall also be
for the benefit of the person or persons, if any, who control any Underwriter or
Underwriters within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, and the indemnities of the several Underwriters shall
also be for the benefit of each director of the Company, each of its officers
who has signed the Registration Statement and the person or persons, if any, who
control the Company or any Selling Stockholders within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act.
17. APPLICABLE LAW.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without giving effect to principles of conflicts
of laws.
18. AUTHORITY OF REPRESENTATIVES.
In connection with this Agreement, the Representatives will act for and on
behalf of the several Underwriters, and any action taken under this Agreement by
the Representatives will be binding on all the Underwriters, and any action
taken under this Agreement by any of the Attorneys-in-Fact will be binding on
all of the Selling Stockholders.
19. PARTIAL UNENFORCEABILITY.
The invalidity or unenforceability of any section, paragraph or provision
of this Agreement shall not affect the validity or enforceability of any other
section, paragraph or provision hereof. If any section, paragraph or provision
of this Agreement is for any reason determined to be invalid or unenforceable,
there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.
20. ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement of the parties to this
Agreement and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter
hereof.
21. GENERAL.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include on another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This
35
36
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
Agreement may be amended or modified, and the observance of any term of this
Agreement may be waived, only by a writing signed by the Company, the Selling
Stockholders and the Representatives.
22. COUNTERPARTS.
This Agreement may be signed in two (2) or more counterparts, each of
which shall be deemed an original, and all of which together shall constitute
one and the same instrument.
23. ATTORNEY-IN-FACT.
Any person executing and delivering this Agreement as Attorney-in-Fact for
the Selling Stockholders represents by so doing that he has been duly appointed
as Attorney-in-Fact by such Selling Stockholder pursuant to a validly existing
and binding Power of Attorney which authorizes such Attorney-in-Fact to take
such action.
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter and your acceptance shall constitute a binding agreement between us.
Very truly yours,
SOFTWORKS, INC.
By:
---------------------------------
Xxxx Xxxxxx, Chief Executive Officer
and Chief Executive Officer
SELLING STOCKHOLDERS NAMED IN SCHEDULE B
By:
---------------------------------
Name:
As Attorney-in-Fact of the Selling
Stockholders listed in Schedule B hereto.
Agreed to and accepted as of
the date first set forth above:
36
37
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES
JULY___, 1998
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXXXX XXXXX & ASSOCIATES, INC.
By: SoundView Financial Group, Inc.
By:
-------------------------------------
Xxxxx X. Xxxxxxx, Managing Director
37
38
SCHEDULE A
Number of Firm Number of Option
Shares to be Shares to be
Name Purchased Purchased
-------------------------------- ----------------- ----------------
SoundView Financial Group, Inc.
Xxxxxxx Xxxxx & Associates,
Inc.
----------------- ----------------
TOTAL
================= ================
39
SCHEDULE B
Number of Firm Number of Option
Shares to be Shares to be
Name Sold Sold
-------------------------------- -------------- ----------------
Softworks 2,000,000
Selling Stockholders:
Computer Concepts Corp.
-------------- ----------------
TOTAL
============== ================
40
SCHEDULE C
LOCK-UP AGREEMENT
SoundView Financial Group, Inc.
Xxxxxxx Xxxxx & Associates, Inc.
c/o SoundView Financial Group, Inc.
00 Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Ladies and Gentlemen:
The undersigned is a director, officer and/or securityholder of Softworks,
Inc. (the "Company") and wishes to facilitate the proposed initial public
offering (the "Offering") of the Company's common stock ("Common Stock")
pursuant to a registration statement on Form S-1 (the "Registration Statement")
to be filed with the Securities and Exchange Commission (the "SEC").
The undersigned recognizes and agrees that the Offering will benefit the
undersigned as a director, officer or securityholder of the Company. In
consideration of the foregoing, and in order to induce the several underwriters
to act as such in connection with the Offering, the undersigned hereby
irrevocably agrees not to, directly or indirectly, offer, sell, contract to
sell, transfer the economic risk of ownership in, make any short sale, pledge,
establish an open "put equivalent position" within the meaning of Rule 16a-1(h)
under the Securities Exchange Act of 1934, as amended, grant any option to sell,
transfer or otherwise dispose of any shares of Common Stock, or any securities
convertible into or exchangeable or exercisable for or any rights to purchase or
acquire Common Stock, or publicly announce the undersigned's intention to do any
of the foregoing, without the prior written consent of SoundView Financial
Group, Inc., for a period commencing on the date hereof and terminating one
hundred eighty (180) days after the effective date of the Registration
Statement, and in the case of Computer Concepts, twelve (12) months after the
effective date of the Registration Statement (the "Lock-Up Period"); provided,
however, that shares of Common Stock purchased by the undersigned in the public
market after the Offering, and any shares of Common Stock issuable upon exercise
of employee stock options issued in accordance with the terms of the Company's
1998 Long Term Incentive Plan, as disclosed in the Registration Statement, shall
not be subject to this agreement.
Notwithstanding the foregoing, if the undersigned is an individual, he or
she may transfer any shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock either during his or her lifetime
or on death by will or intestacy to his or her immediate family or to a trust if
the beneficiaries of such trust are exclusively the undersigned and/or a member
or members of his or her immediate family; provided, however, that prior to any
such transfer each transferee shall execute an agreement, satisfactory to
SoundView Financial Group, Inc., pursuant to which each transferee shall agree
to receive and hold such shares of Common Stock, or securities convertible into
or exchangeable or exercisable for
41
Soundview Financial Group, Inc.
Xxxxxxx Xxxxx & Associates
May___, 1998
Page Two
Common Stock, subject to the provisions hereof, and there shall be no further
transfer except in accordance with the provisions hereof. In addition, if the
undersigned is a partnership, the partnership may transfer any shares of Common
Stock or securities convertible into or exchangeable or exercisable for Common
Stock to a partner of such partnership, to a retired partner of such
partnership, or to the estate of any such partner or retired partner, and any
such partner who is an individual may transfer such shares of Common Stock or
securities convertible into or exchangeable or exercisable for Common Stock by
gift, will or intestacy to a member or members of his or her immediate family;
provided, however, that prior to any such transfer each transferee shall execute
an agreement, satisfactory to SoundView Financial Group, Inc., pursuant to which
each transferee shall agree to receive and hold such shares of Common Stock or
securities convertible into or exchangeable or exercisable for Common Stock,
subject to the provisions hereof, and there shall be no further transfer except
in accordance with the provisions hereof. For purposes of this paragraph,
"immediate family" shall mean spouse, lineal descendant, father, mother, brother
or sister of the transferor.
In addition, the undersigned agrees that, without the prior written
consent of SoundView Financial Group, Inc., the undersigned will not, during the
Lock-Up Period, make any demand for, or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock.
The undersigned confirms that he or she understands that the underwriters
of the Offering and the Company will rely upon the representations set forth in
this agreement in proceeding with the Offering. The undersigned further confirms
that this agreement is irrevocable and shall be binding upon the undersigned's
heirs, legal representatives, successors and assigns so long as the closing of
the Offering occurs on or prior to ________ __, 1998. The undersigned agrees and
consents to the entry of stop transfer instructions with the Company's transfer
agent against the transfer of Common Stock or other securities of the Company
held by the undersigned except in compliance with this agreement.
Dated: ___________, __ 1998.
Name of Securityholder
By:
-------------------------------------
Name:
Title:
