SELECTED DEALERS AGREEMENT
A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BUT HAS NOT YET BECOME EFFECTIVE. NO OFFER TO BUY THE SECURITIES CAN BE ACCEPTED AND NO PART OF THE PURCHASE PRICE CAN BE RECEIVED UNTIL THE REGISTRATION STATEMENT HAS BECOME EFFECTIVE, AND ANY SUCH OFFER MAY BE WITHDRAWN OR REVOKED, WITHOUT OBLIGATION OR COMMITMENT OF ANY KIND, AT ANY TIME PRIOR TO NOTICE OF ITS ACCEPTANCE GIVEN AFTER THE EFFECTIVE DATE.
[Name of Company the securities of which are covered by the Agreement]
SELECTED DEALERS AGREEMENT
_______________, 20__
Dear Sirs:
1. [Name of the managing underwriter acting as the Representative of the Underwriter pursuant to the Agreement Among Underwriters named as the Underwriter in the enclosed Preliminary Prospectus (the "Underwriter"), proposes to offer on a firm commitment basis, subject to the terms and conditions and execution of the Underwriting Agreement, [number of shares covered by the offering] shares of the [par (or "no") value of stock] par value common stock (the "Shares") of [name of the Company the securities of which are covered by the Agreement] (the "Company"). The Shares are more particularly described in the enclosed Preliminary Prospectus, additional copies of which as well as the Prospectus (after effective date) will be supplied in reasonable quantities upon request.
2. The Underwriter is soliciting offers to buy upon the terms and conditions hereof for a part of the Shares from Selected Dealers, who are to act as principal, including you, who are (i) registered with the Securities and Exchange Commission (the "Commission") as broker-dealers under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and members in good standing with the National Association of Securities Dealers, Inc. (the "NASD"), or (ii) dealers or institutions with their principal place of business located outside of the United States, its territories or possessions and not registered under the 1934 Act who agree to make no sales within the United States, its territories or possessions or to persons who are nationals thereof or residents therein and, in making sales, to comply with the NASD's interpretation with respect to free-riding and withholding. Shares are to be offered at a price as determined bythe Underwriter between $[bottom of the range of the expected offering price] to $[top of the range of the expected offering price] a share. Selected Dealers will be allowed a concession of not less than [bottom of the range to be allowed as a dealer's concession] percent of the offering price. You will be notified of the precise amount of such concession prior to the effective date of the Registration Statement. The offer is solicited subject to the issuance and delivery of the Shares and their acceptance by the Underwriter, to the approval of legal matters by counsel and to the terms and conditions as herein set forth.
3. Your offer to purchase may be revoked in whole or in part without obligation or commitment of any kind by you any time prior to acceptance and no offer may be accepted by us and no sale can be made until after the registration statement covering the Shares has become effective with the Securities and Exchange Commission. Subject to the foregoing, upon execution by you of the Offer to Purchase below and the return of same to us, you shall be deemed to have offered to purchase the number of Shares set forth in your offer on the basis set forth in paragraph 2 above. Any oral notice by us of acceptance of your offer shall be immediately followed by written or telegraphic confirmation preceded or accompanied by a copy of the prospectus. If a contractual commitment arises hereunder, all the terms of this Selected Dealers Agreement shall be applicable. We may also make available to you an allotment to purchase Shares, but such allotment shall be subject to modification or termination upon notice from us any time prior to an exchange of confirmations reflecting completed transactions. All references hereafter in this Agreement to the purchase and sale of Shares assume and are applicable only if contractual commitments to purchase are completed in accordance with the foregoing.
4. You agree that in reoffering said Shares, if your offer is accepted after the effective date, you will make a bona fide public distribution of same. You will advise us upon request of Shares purchased by you remaining unsold, and we shall have the right to repurchase such Shares upon demand at the public offering price less one-half (1/2) of the concession. Any of the Shares purchased by you pursuant to this Agreement are to be reoffered by you to the public at the public offering price, subject to the terms hereof. Shares shall not be offered or sold by you below the public offering price before the termination of this Agreement.
5. Payment for Shares which you purchase hereunder shall be made by you on or before five (5) business days after the date of each confirmation by certified or bank cashier's check payable to the Underwriter. Certificates for the securities shall be delivered as soon as practicable after delivery instructions are received by the Underwriter.
6. A registration statement covering the offering has been filed with the Securities and Exchange Commission in respect to the Shares. You will be promptly advised when the registration statement becomes effective. Each Selected Dealer in selling Shares pursuant hereto agrees (which agreement shall also be for the benefit of the Company) that it will comply with the applicable requirements of the Securities Act of 1933 and of the Securities Exchange Act of 1934 and any applicable rules and regulations issued under said Acts. No person is authorized by the Company or by the Underwriter to give any information or to make any representations other than those contained in the Prospectus in connection with the sale of the Shares. Nothing contained herein shall render the Selected Dealers a member of the Underwriting Group or partners with the Underwriter or with one another.
7. You will be informed by us as to the states in which we have been advised by counsel the Shares have been qualified for sales or are exempt under the respective securities or blue sky laws of such states, but we have not assumed and will not assume any obligation or responsibility as to the right of any Selected Dealer to sell Shares in any state.
8. The Underwriter shall have full authority to take such action as we may deem advisable in respect of all matters pertaining to the offering or arising thereunder. The Underwriter shall not be under any liability to you, except such as may be incurred under the Securities Act of 1933 and the rules and regulations thereunder, except for lack of good faith and except for obligations assumed by us in this Agreement, and no obligation on our part shall be implied or inferred herefrom.
9. Selected Dealers will be governed by the conditions herein set forth until this Agreement is terminated. This Agreement will terminate when the offering is completed. Nothing herein contained shall be deemed a commitment on our part to sell you any Shares; such contractual commitment can only be made in accordance with the provisions of paragraph 3 hereof.
10. You represent that you are a member in good standing of the National Association of Securities Dealers and registered as a broker-dealer with the Securities and Exchange Commission, or that you are a foreign broker-dealer not eligible for membership under Section I of the By-Laws of the Association who agree to make no sales within the United States, its territories or possessions or to persons who are nationals thereof or residents therein and, in making sales, to comply with the NASD's Rule 2790 (“New Issue Rule”) Your attention is called to the following: (a) Rule 2790 (b) Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-10 [FN1] of the general rules and regulations promulgated under said Act; (c) Regulation M; (d) Securities Act Release number 3907; (d) Securities Act Release #4150; and (e) Rule 15c2-8(b) [FN2] requiring the delivery of a Preliminary Prospectus to all persons reasonably expected to be purchasers of shares from you at least forty-eight hours prior to the time you expect to mail confirmations. You, if a member of the Association, by signing this Agreement, acknowledge that you are familiar with the cited law, rules and releases, and agree that you will not directly and/or indirectly violate any provisions of applicable law in connection with your participation in the distribution of the Shares.
11. In addition to compliance with the provisions of paragraph 10 hereof, you will not, until advised by us in writing or by wire that the entire offering has been distributed and closed, bid for or purchase Shares in the open market or otherwise make a market in the Shares or otherwise attempt to induce others to purchase shares in the open market. Nothing contained in this paragraph 11 shall, however, preclude you from acting as agent in the execution of unsolicited orders of customers in transactions effectuated for them through a market maker.
12. You understand that the Underwriter may in connection with the offering engage in stabilizing transactions. If the Underwriter contracts for or purchases in the open market in connection with such stabilization any Shares sold to you hereunder and not effectively placed by you, the Underwriter may charge you the Selected Dealer's concession originally allowed you on the Shares so purchased, and you agree to pay such amount to us on demand.
13. By submitting an Offer to Purchase you confirm that your net capital is such that you may, in accordance with Rule 15c3-1 [FN3] adopted under the Exchange Act of 1934, agree to purchase the number of Shares you may become obligated to purchase under the provisions of this Agreement.
14. All communications from you should be directed to us at the office of the Underwriter, [address of the managing underwriter]. All communications from us to you shall be directed to the address to which this letter is mailed.
Very truly yours,
[Name of the managing underwriter acting as the Representative of
the Underwriter pursuant to the
Agreement Among Underwriters (see § 25:22)]
By ______________________________________________________________
Title ___________________________________________________________
OFFER TO PURCHASE
The undersigned does hereby offer to purchase (subject to the right to revoke as set forth in paragraph 3) [Number of shares allocated to the selected dealer by the managing underwriter. Since, if executed and returned, it becomes an offer to buy, the footnote cautions the selected dealer to change the number to the number it is prepared to offer to buy if less than the allocation.] [FNa1] Shares in accordance with the terms and conditions set forth above.
[Name of the selected dealer]
By ____________________________________________________________________________
Authorized Officer
[FN1]. 17 C.F.R. § 240.10b-10.
[FN2]. 17 C.F.R. § 240.15c2-8(b).
[FN3]. 17 C.F.R. § 240.15c3-1.
[FNa1]. If a number appears here which does not correspond with what you wish to offer to purchase, you may change the number by crossing out the number, inserting a different number, and initialing the change.