EXHIBIT 1.2
COMMONWEALTH BIOTECHNOLOGIES, INC.
$3,000,000 Convertible Subordinated Notes
SELECTED DEALER AGREEMENT
_____________, 1997
Dear Sirs:
1. We have agreed to sell, as placement agent for the issuer on a
best efforts all-or-none basis, 834,000 shares of Common Stock (the "Shares") of
Commonwealth Biotechnologies, Inc. (the "Company"). The Shares and the terms
under which they are to be offered for sale are more particularly described in
the Company's Prospectus for the Shares dated _________, 1997 (the
"Prospectus").
2. The Shares are to be offered by us, as placement agent for the
Company, in accordance with the terms of the offering (the "Offering") set forth
in the Prospectus. We have advised you of the price per Shares of the Common
Stock (the "Public Offering Price"). In consideration for assisting in the sale
of the Shares, you will be paid a selling commission of five percent (4%) of the
Public Offering Price for each Shares sold by you.
3. We are offering at the Public Offering Price, subject to the
terms and conditions hereof, a portion of the Shares for sale to the customers
of certain dealers (hereinafter called "Selected Dealers"), that are actually
engaged in the investment banking or securities business and that are either (i)
members in good standing of the National Association of Securities Dealers, Inc.
(the "NASD") that are registered with the NASD and maintain net capital pursuant
to Rule 15c3-1 promulgated under the Securities Exchange Act of 1934 (the "1934
Act") of not less than $250,000 or (ii) dealers with their principal place of
business located outside the United States, its territories and its possessions
and not registered as brokers or dealers under the 1934 Act, who have agreed not
to make any sales within the United States, its territories or its possessions
or to persons who are nationals thereof or residents therein. The Selected
Dealers have agreed to comply with the provisions of section 24 of Article III
of the Rules of Fair Practice of the NASD, and, if any such dealer is a foreign
dealer and not a member of the NASD, such Selected Dealer also has agreed to
comply with the NASD's interpretation with respect to free-riding and
withholding, to comply, as though it were a member of the NASD, with the
provision of section 8 and 36 of Article III of such Rules of Fair Practice, and
to comply with section 25 of Article III thereof as that section applies to
nonmember foreign dealers.
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4. If you desire to purchase any of the Shares as agent for your
customers, your application should reach us promptly by telephone, telegraph or
telecopy at our office at Xxxxxxxx & Xxxxxxxxx, Incorporated, 0000 X. Xxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000. We reserve the right to reject subscriptions
in whole or in part, to make allotments and to close the subscription books at
any time without notice. The Shares allocated to you will be confirmed, subject
to the terms and conditions of this Agreement.
5. Any Shares purchased through you shall be purchased for your
customers under the terms of this Agreement only upon orders already received
from subscribers for the Shares in accordance with the terms of the Offering set
forth in the Prospectus, subject to the securities or blue sky laws of the
various states or other jurisdictions. You acknowledge that because all of the
proceeds from the sale of the Shares must be received before the Offering may be
closed, Shares may not be sold to your customers whose accounts are on a
delivery versus payment ("DVP") basis.
6. You agree to advise us from time to time, upon request, of the
amount of Shares requested by you hereunder and remaining unsold at the time of
such request, and, if in our opinion such Shares shall be needed to make
delivery of the Shares sold, you will, forthwith upon our request, reduce the
number of Shares allocated to you to an amount equal to the number of Shares
actually subscribed for by your customers.
7. No expense shall be charged to you. A single transfer tax, if
payable, upon the sale of the Shares to you on behalf of your customers will be
paid when such Shares are delivered. However, you shall pay any transfer tax on
sales of Shares by you and you shall pay your proportionate share of any
transfer tax (other than the single transfer tax described above) in the event
that any such tax shall from time to time be assessed against you and other
Selected Dealers as a group or otherwise.
8. Neither you nor any other person is or has been authorized to
give any information or to make any representation in connection with the sale
of the Shares other than as contained in the final Prospectus.
9. On becoming a Selected Dealer, and in offering and selling the
Shares, you agree to comply with all the applicable requirements of the
Securities Act of 1933, as amended (the "1933 Act"), and the 1934 Act. You
confirm that you are familiar with (i) Rule 15c2-8 under the 1934 Act relating
to the distribution of preliminary and final prospectuses for securities of an
issuer (whether or not the issuer is subject to the reporting requirements of
Xxxxxxx 00 xx 00(x) xx xxx 0000 Xxx), (xx) Rule 15c2-4 under the 1934 Act, (iii)
Rule 15c6-1 under the 1934 Act, and (iv) the NASD's interpretation with respect
to free-riding and withholding, and confirm that you have complied with and will
comply with said rules and interpretations. You confirm also that you are
familiar with Release No. 4968 of the Securities and Exchange Commission under
the 1933 Act and that you have complied and will
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comply with the requirements therein relating to the distribution of copies of
the Preliminary Prospectus relating to the Shares. You confirm that you are
registered with the NASD and maintain net capital pursuant to Rule 15c3-1
promulgated under the 1934 Act of not less than $250,000.
10. We hereby confirm that we will make available to you such
number of copies of the Prospectus (as amended or supplemented) as you may
reasonably request for the purposes contemplated by the 1933 Act or the 1934
Act, or the rules and regulations thereunder.
11. Upon request, you will be informed as to the states and other
jurisdictions in which, and limitations, if any, pursuant to which, we have been
advised that the Shares are qualified for sale under the respective securities
or blue sky laws of such states and other jurisdictions, but we do not assume
any obligation or responsibility as to the right of any Selected Dealer to sell
the Shares in any state or other jurisdiction or as to the eligibility of the
Shares for sale therein or to any particular prospective purchaser herein. You
agree that you will not sell the Shares in any state or jurisdiction or to any
purchaser in which or to whom the Shares are not eligible to be sold.
12. You agree that you will not, at any time prior to the completion
by us of distribution of the Shares acquired by you pursuant to this Agreement,
bid for, purchase, sell or attempt to induce others to purchase or sell,
directly or indirectly, any capital stock of the Company (the "Capital Stock")
other than (i) as provided for in this Agreement, or (ii) purchases or sales of
any Capital Stock as broker on unsolicited orders for the account of others.
13. No Selected Dealer is authorized to act as our agent or agent of
the Company or otherwise to act on our behalf or on behalf of the Company in
offering or selling the Shares or otherwise to furnish any information or make
any representation except as contained in the Prospectus.
14. Nothing will constitute the Selected Dealers an association or
other separate entity or partners with us, or with each other, but you will be
responsible for your share of any liability or expense based on any claim to the
contrary. We shall not be under any liability for or in respect of value,
validity or form of the Shares, of the delivery of the Shares, or the
performance by anyone of any agreement on its part, or the qualification of the
Shares for sale under the laws of any jurisdiction, or for or in respect to any
other matter relating to this Agreement, except for the lack of good faith and
for obligations expressly assumed by us in this Agreement and no obligation on
our part shall be implied herefrom. The foregoing provisions shall not be deemed
a waiver of any liability imposed under the 1933 Act.
15. We will notify you of the exact date (the "Closing Date") on
which the sale of the Shares (the "Closing") will occur. Please provide
____________________________ (the
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"Escrow Agent") with the manner in which the Shares should be issued at least
three (3) business days prior to the Closing Date. Payment for Shares purchased
through you hereunder shall be made at the Public Offering Price (without any
deduction for the selling commission due to you) by wire transfer of IMMEDIATELY
AVAILABLE FED FUNDS no later than 11:00 a.m. on the business day prior to the
Closing Date to an escrow account (the "Escrow Account"), in accordance with the
following instructions:
------------------------------------------------------------------------------.
The Escrow Agent will deliver the certificates representing the Shares. Within
two (2) business days of the Closing, the Escrow Agent will send you a check for
your selling commission.
16. You understand that the Offering is being made on a best efforts
all-or-none basis, and that the Offering will not close unless at least 833,334
Shares are sold. Upon receipt of any and all checks, drafts and money orders
received from prospective purchasers of the Shares, you shall deliver the same
to the Escrow Agent for deposit in the Escrow Account by noon of the next
business day following the receipt, together with a written account of each
purchaser that sets forth, among other things, (i) the purchaser's name and
address, (ii) the number of Shares purchased by the purchaser, (iii) the amount
paid therefor by the purchaser, (iv) whether the consideration received from the
purchaser was in the form of a check, draft or money order, and (v) the
purchaser's social security or tax identification number. This information will
not be made available to us by the Escrow Agent except to the extent necessary
in connection with any claim relating to the sale of the Shares. Any checks that
are received that are made payable to any party other than the Escrow Agent
shall be returned to the purchaser that submitted the check and not accepted.
You agree that you are bound by the terms of the Escrow Agreement executed by us
and the Company.
17. Notices to us should be addressed to Xx. X. XxXxxxxx Downs, III,
Senior Vice President, Xxxxxxxx & Xxxxxxxxx, Incorporated, 0000 X. Xxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxx 00000. Notices to you shall be deemed to have been duly
given if telegraphed or mailed to you at the address to which this letter is
addressed.
18. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Virginia without giving effect to the
choice of law or conflicts of law principles thereof.
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19. If you desire to reserve any Shares for purchase by your
customers, please confirm your application by signing and returning to us your
confirmation on the duplicate copy of this letter enclosed herewith, even though
you may have previously advised us thereof, by telephone, telegraph or telecopy.
Very truly yours,
XXXXXXXX & XXXXXXXXX, INCORPORATED
By:
-----------------------------------
X. XxXxxxxx Downs, III
Senior Vice President
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_____________, 1997
Xxxxxxxx & Xxxxxxxxx, Incorporated
0000 X. Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xx. X. XxXxxxxx Downs, III
We hereby request an allocation of ________ Shares of Commonwealth
Biotechnologies, Inc. for purchase by our customers in accordance with the terms
and conditions stated in the foregoing letter. We hereby acknowledge receipt of
the Prospectus referred to in the first paragraph thereof relating to the
Shares. We further state that we have relied upon said Prospectus and upon no
other statement whatsoever, whether written or oral. We confirm that we are a
dealer actually engaged in the investment banking or securities business and
that we are either (i) a member in good standing of the National Association of
Securities Dealers, Inc. (the "NASD") that is registered with the NASD and
maintain net capital pursuant to Rule 15c3-1 promulgated under the Securities
Exchange Act of 1934 (the "1934 Act") of not less than $250,000 or (ii) a dealer
with its principal place of business located outside the United States, its
territories and its possessions and not registered as a broker or dealer under
the Securities Exchange Act of 1934, as amended, who hereby agrees not to make
any sales within the United States, its territories or its possessions or to
persons who are nationals thereof or residents therein. We hereby agree to
comply with the provisions of Section 24 of Article III of the Rules of Fair
Practice of the NASD, and if we are a foreign dealer and not a member of the
NASD, we also agree to comply with the NASD's interpretation with respect to
free-riding and withholding, to comply, as though we were a member of the NASD,
and with the provisions of Section 8 and 36 of Article III of such Rules of Fair
Practice, and to comply with Section 25 of Article III thereof as that Section
applies to non-member foreign dealers. We also hereby confirm that we have
complied with and will comply with Rules 15c2-4, 15c2-8 and 15c6-1 promulgated
under the 1934 Act.
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(Name of Firm)
By:
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(Title)
Address:
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