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 WAS
BECOME EFFECTIVE AND ANY SUCH OFFER MAY BE WITHDRAWN OR REVOKED, WITHOUT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.
PHYSICAL SPA & FITNESS INC.
SELECTED DEALERS AGREEMENT
___________________, 1998
Dear Sirs:
1. Global Financial Group, Inc., named as the Agent in the
enclosed preliminary prospectus (the "Agent"), propose to offer on a
"best efforts" basis, subject to the terms and conditions and execution
of the Agency Agreement, 375,000 shares (and 67,000 shares of Selling
Shareholders) of the $0.001 par value common stock (the "Shares') of the
Physical Spa & Fitness Inc. (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 Agent is soliciting other agents to obtain offers to buy,
upon the terms and condition hereof, for a part of the Shares from
Selected Dealers, who are to act as agent, including you, who are (a)
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 (b)
dealers or institutions with their principal place of business located
outside of the United States, its territories and 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 of $__________ share.
Selected Dealers will be allowed a concession of not less than
___________ (__%) 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 Agent, to the approval of legal
matters by counsel and to the terms and conditions as herein set forth.
3. Your offer to sell a designated number of the Shares, if made
prior to the effective date of the Registration Statement 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 Commission. Subject to the
foregoing, upon execution by you of the Offer to Sell below and the
return of same to us, you shall be deemed to have offered to sell the
number of Shares set forth in your offer on the basis set forth in
paragraph 2 above. Any oral offer to sell made by you shall be deemed
subject to this Agreement and shall be confirmed by you by the
subsequent execution and return of this Agreement. Any oral notice by us
of acceptance of your offer shall be 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 sell 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 sell
are completed in accordance with the foregoing.
4. You agree that, in selling 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 to be
sold by you remaining unsold, and we shall have the right to sell such
Shares upon demand at the public offering price. Any of the Shares sold
by you pursuant to this Agreement are to be offered 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 sell 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 Agent.
Certificates for the securities shall be delivered as soon as
practicable after delivery instructions are received by the Agent.
6. A Registration Statement covering the offering has been filed
with the 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 (the "1933 Act")
and the 1934 Act and any applicable rules and any applicable rules and
regulations issued under said Acts. No person is authorized by the
Company or by the Agent to give any information or to make any
representations other than those contained in the prospectus in
connection with the sale
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of the Shares. Nothing contained herein shall render the Selected
Dealers a member of the Underwriting Group or partners with the Agent 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 sale 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 Agent 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 Representative shall not be under any
liability to you, except such as may be incurred under the 1933 Act and
the rules and regulations thereunder, except for lack of good faith and
except for obligation 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 commit to you any number of Shares
for you to sell; 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
NASD 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 NASD 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. Your attention is called to the following:
a) Article III, SectIon 1 of the Rules of Fair Practice
of the NASD and the interpretations of said Section promulgated
by the Board of Governors of the NASD including the
interpretation with respect to "Free-Riding and Withholding";
b) Section 10(b) of the 1934 Act and Rules 10b-6 and
10b-10 of the general rules and regulations promulgated under
said Act
c) Securities Act Release #3907;
d) Securities Act Release #4150; and
e) Securities Act Release #4968 requiring the
distribution of a preliminary prospectus to all persons
reasonably expected to be purchasers of Shares from you at last
forty-eight (48) hours prior to the time you expect to mail
confirmations.
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You, if a member of the NASD, 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 Agent may, in connection with the
offering, engage in stabilizing transactions. If the Agent contact for
or purchase in the open market in section with such stabilization any
Shares sold to you hereunder and not effectively placed by you, the
Agent 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 Sell, you confirm that your net
capital is such that you may, in accordance with Rules 15c3-1 adopted
under the 1934 Act, 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 Global Financial Group, Inc. 000 Xxxxxxxxxx Xxxxxx Xxxxx,
Xxxxx 0000, Xxxxxxxxxxx, Xxxxxxxxx 00000. All communications from us to
you shall be directed to address to which this letter is mailed.
Very truly yours,
GLOBAL FINANCIAL GROUP, INC.
By__________________________
Xxxxx X. Xxxxxx, President
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OFFER TO SELL
The undersigned does hereby offer to sell (subject to the right
to revoke as set forth in paragraph 3) ____________* Shares in
accordance with the terms and conditions set forth above.
*If a number appears here which does not correspond with what you wish to
offer to purchase, you may change the number to a lesser or mutually agreed
upon number by crossing out the number, inserting such different number,
and initialling the change.
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