1,200,000 Shares of
Common Stock, $.0025 par value
PACIFICHEALTH LABORATORIES, INC.
SELECTED DEALER AGREEMENT
_______, 1997
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Ladies/Gentlemen:
We have agreed as the underwriter (the "Underwriter") named in the
enclosed prospectus (the "Prospectus"), subject to the terms and conditions of
an Underwriting Agreement dated ___ , 1997 (the "Underwriting Agreement"), to
purchase from PACIFICHEALTH LABORATORIES, INC. (the "Company") 1,200,000 shares
(the "Firm Shares") of Common Stock, par value $.0025 (the "Common Stock"). We
may also purchase as many as 180,000 additional shares of Common Stock (the
"Option Shares") from the Company pursuant to Section 2(b) of the Underwriting
Agreement. The Firm Shares to be sold by the Company and the Option Shares are
sometimes collectively referred to herein as the "Shares" and are more
particularly described in the Prospectus, additional copies of which will be
supplied in reasonable quantities upon request.
We are offering a portion of the Shares for sale to selected dealers
(the "Selected Dealers"), among whom we are pleased to include you, at the
public offering price of $6.00 per share, less a concession in the amount set
forth in the Prospectus under "Underwriting" ($.60 per share). This offering is
made subject to delivery of the Shares and their acceptance by the Underwriter,
to the approval of all legal matters by our counsel, and to the terms and
conditions herein set forth, and may be made on the basis of the reservation of
the Shares or an allotment against subscription.
We will advise you by telefax or telegram of the method and terms of
the offering. Acceptances should be sent to First Montauk Securities Corp., 000
Xxxxxx Xxxxxxx Xxxx, Xxx Xxxx, Xxx Xxxxxx 00000, Attention: Syndicate
Department. Subscription books may be closed by us at any time without notice,
and we reserve the right to reject any subscription in whole or in part, but
notification of allotments against and rejections of subscriptions will be made
as promptly as practicable.
Any of the Shares purchased by you hereunder are to be promptly offered
by you to the public at the public offering price, except as herein otherwise
provided and except that a reallowance from any such public offering price not
in excess of the amount set forth in the Prospectus under "Underwriting" ($.50
per share) may be allowed to dealers who are members in good standing of the
National Association of Securities Dealers, Inc. (the "NASD"), or foreign
dealers or institutions not eligible for membership in said association who
agree to abide by the conditions with respect to foreign dealers and
institutions set forth in your confirmation below. We may buy Shares from, or
sell Shares to, any Selected Dealer, and any Selected Dealer may buy Shares
from, or sell Shares to, any other Selected Dealer at the public offering price
less all or any part of the concession set forth in the Prospectus. After the
Shares are released for sale to the public, we are authorized to vary the
offering price of the Shares and other selling terms.
If, prior to the termination of this Agreement, we purchase or contract
to purchase any Shares which were purchased by you from us or any Selected
Dealer at a concession from the public offering price (or any Shares which we
believe have been substituted therefor): you agree that we may: (i) require you
to pay us on demand an amount equal to the concession on such Shares; (ii) sell
for your account the Shares so purchased and debit or credit your account with
the loss or profit resulting from such sale; or (iii) require you to purchase
such Shares at a price equal to the total cost of such purchase including
commissions and transfer taxes on redelivery.
Shares accepted or allotted hereunder shall be paid for in full at the
public offering price, or, if we shall so advise you, at such price less the
concession to dealers, at the office of First Montauk Securities Corp., 000
Xxxxxx Xxxxxxx Xxxx, Xxx Xxxx, Xxx Xxxxxx 00000, prior to 8:30 a.m., New York
City time, on such day after the public offering date as we may advise, by
certified or official bank check payable in New York Clearing House funds to the
order of First Montauk Securities Corp., against delivery of certificates. If
Shares are purchased and paid for by you hereunder at the public offering price,
the concession will be paid to you after the termination of this Agreement.
2
We have been advised by the Company that a registration statement (File
No. 333-36379) for the Shares, filed under the Securities Act of 1933, as
amended (the "Act"), has become effective. You agree that in selling the Shares
purchased pursuant hereto (which agreement shall also be for the benefit of the
Company) you will comply with the applicable requirements of the Act and of the
Securities Exchange Act of 1934, as amended, and the terms and conditions set
forth in the Prospectus. No person is authorized by the Company or any of the
Underwriters to give or rely on any information or to make any representations
not contained in the Prospectus in connection with the sale of Shares. You are
not authorized to act as agent for the Company or the Underwriter in offering
the Shares to the public or otherwise. Nothing contained herein shall constitute
that the Selected Dealers are partners with the Underwriter or with one another.
The Underwriter shall not be under any liability (except for our own
want of good faith) for or in respect of the validity or value of, or title to,
any Shares; the form or completeness of, or the statements contained in, or the
validity of, the registration statement, any preliminary prospectus, the
Prospectus, or any amendment or supplement thereto or any other letters or
instruments executed by or on behalf of the Company or others; the form or
validity of the agreement for the purchase of the Shares or this Agreement; the
delivery of the Shares; the performance by the Company or others of any
agreement on its or their part; or any matter in connection with any of the
foregoing; provided, however, that nothing in this paragraph shall be deemed to
relieve the Underwriter from any liability imposed by the Act.
You, by your confirmation below, represent that (i) you are a member in
good standing of the NASD or are a foreign bank or dealer not eligible for
membership in the NASD which agrees to make offers or sales of Shares within the
United States, its territories or its possessions, or to persons who are
citizens thereof or residents therein; (ii) neither you nor any of your
directors, officers, partners or "persons associated with" you (as defined in
the By-Laws of the NASD) nor, to your knowledge, any "related person" (as
defined by the NASD in its Interpretation of Article III, Section I of its Rules
of Fair Practice, as amended) or any other broker-dealer, have participated or
intend to participate in any transaction or dealing as to which documents or
information are required to be filed with the NASD pursuant to such
Interpretation, and as to which such documents or information have not been so
filed as required.
3
You agree not to, at any time prior to the termination of this
Agreement, bid for, purchase, sell or attempt to induce others to purchase or
sell, directly or indirectly, any Common Stock other than (a) as provided for in
this Agreement or the Underwriting Agreement relating to the Shares, or (b)
purchases or sales as broker on unsolicited orders for the account of others. In
making the sales of Shares, if you are a member of the NASD, you will comply
with all applicable rules of the NASD, including, without limitation, Rules
2730, 2740, 2750 and 2420 of the NASD Conduct Rules, or if you are a foreign
bank or dealer, you agree to comply with such Interpretation of such Rules as
though you were such a member and Section 25 of such Article as it applies to a
nonmember broker or dealer in a foreign country.
Upon application to us, we will inform you as to the advice we have
received from counsel concerning the jurisdictions in which the Shares have been
qualified for sale or are exempt under the respective securities or blue sky
laws of such jurisdictions, but we have not assumed and will not assume any
obligation or responsibility as to the right of any Selected Dealer to sell the
Shares in any jurisdiction.
As Underwriter, we 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. Neither we, acting as the Underwriter, shall be under any
obligation to you except for obligations expressly assumed by us in this
Agreement.
You agree, upon our request, at any time or times prior to the
termination of this Agreement, to report to us the number of Shares purchased by
you pursuant to the provisions hereof which then remain unsold.
Selected Dealers will be governed by the conditions herein set forth
until this Agreement is terminated. This Agreement will terminate at the close
of business on the 30th business day after the initial public offering of the
Shares, but, in our discretion, may be extended by us for a further period or
periods not exceeding 30 business days in the aggregate and in our discretion,
whether or not extended, may be terminated at any earlier time. Notwithstanding
the termination of this Agreement, you shall remain liable for your
proportionate amount of any claim, demand or liability which may be asserted
against you alone, or against you together with other dealers purchasing Shares
upon the terms hereof, or against us, based upon the claim that the Selected
Dealers, or any of them, constitute an association, an unincorporated business
or other entity.
This Agreement shall be construed in accordance with the laws of the
State of New Jersey without giving effect to conflict of laws principles.
4
In the event that you agree to purchase Shares in accordance with the
terms hereof, and with the aforementioned telegram, kindly confirm such
agreement by completing and signing the form provided for that purpose on the
enclosed duplicate hereof and returning it to us promptly.
All communications from you should be addressed to First Montauk
Securities Corp., 000 Xxxxxx Xxxxxxx Xxxx, Xxx Xxxx, Xxx Xxxxxx 00000 Attention:
Syndicate Department. Any notice from us to you shall be deemed to have been
duly given if mailed or telegraphed to you at this address to which this letter
is mailed.
Very truly yours,
FIRST MONTAUK SECURITIES CORP.
As Underwriter
By:
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Name:
Title:
5
FIRST MONTAUK SECURITIES CORP.
000 Xxxxxx Xxxxxxx Xxxx
Xxx Xxxx, Xxx Xxxxxx 00000
Attention: Syndicate Department
Ladies/Gentlemen:
We hereby confirm our agreement to purchase __________ Shares (as such
term is defined in the Selected Dealer Agreement) of Common Stock of
PacificHealth Laboratories Inc., subject to the terms and conditions of the
foregoing Agreement and your telegram to us referred to therein. We hereby
acknowledge receipt of the definitive Prospectus relating to the Shares, and we
confirm that in purchasing Shares we have relied upon no statements whatsoever,
written or oral, other than the statements in such Prospectus. We have made a
record of our distribution of preliminary prospectuses and, when furnished with
copies of any revised preliminary prospectus, we have, upon your request,
promptly forwarded copies thereof to each person to whom we had theretofore
distributed preliminary prospectuses. We confirm that we have complied and will
comply with all of the requirements of Rule 15c2-8 under the Securities Exchange
Act of 1934.
We hereby represent that we are a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD") or, if we are not
such a member, we are a foreign dealer or institution not eligible for
membership in said Association which agrees to make no sales within the United
States, its territories or its possessions or to persons who are citizens
thereof or residents therein. If we are such a member, we agree to comply with
all applicable rules of the NASD, including, without limitation, the provisions
of Section 24 of Article III of the Rules of Fair Practice of the NASD, or, if
we are such a foreign dealer or institution, we agree to comply with all
applicable rules of the NASD, including, without limitation, the NASD's
Interpretation with Respect to Free-Riding and Withholding and Sections 8, 24
and 36 of such Article as if we were such a member, and Section 25 of such
Article as it applies to a non-member broker or dealer in a foreign country.
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Corporate or Firm Name of
Selected Dealer
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(Signature of Authorized
Official or Partner)
Dated: , 1997
