XXXX COMPUTER CORPORATION
1,000,000 SHARES OF COMMON STOCK
($.001 PAR VALUE)
SELECTED DEALER AGREEMENT
New York, New York
______________, 1997
Dear Sirs:
1. A registration statement on Form SB-2 (the "Registration
Statement") filed by Xxxx Computer Corporation (the "Company") under the
Securities Act of 1933, as amended (the "Securities Act"), covering 1,000,000
shares of the Company's Common stock, $.001 par value, plus up to 150,000
additional shares of such Common Stock which are subject to an option granted to
us by certain shareholders of the Company for the purpose of covering
over-allotments, has become effective. The Shares (which term as used in this
Agreement means such 1,000,000 shares plus any of such 150,000 shares purchased
upon exercise of such option) are being sold for the account of the Company,
and, in the case of any over-allotments, for the account of such shareholders of
the Company, and are described in the enclosed final prospectus (the
"Prospectus"). We are offering certain of the Shares for purchase by a selected
group of dealers (the "Selected Dealers") as principals on the terms and
conditions stated herein.
Authorized Public Offering
Price: $5.00 per Share.
Dealers' Selling Concession: $_____ per Share, except that in the event that
prior to the termination of this agreement (or
prior to such earlier date as we may determine)
any of the Shares delivered to you are sold in the
open market, at or below the public offering
price, we reserve the right not to pay you, or to
charge you, and you agree to repay us on
demand, the amount of the dealer's selling
concession allowed to you.
Reallowance: You may reallow not more than $____ per Share as a
selling concession on the Shares to dealers that
are members in good standing of the National
Association of Securities Dealers, Inc. (the
"NASD") or to foreign dealers not eligible to be
members of the NASD that agree to abide by the
Rules of Fair Practice of the NASD.
Delivery and Payment: On or about ________________, 1997 or such later
date as we may advise on not less than one day's
notice to you, at the offices of Network 1
Financial Securities, Inc., The Galleria, Building
Two, Penthouse, 0 Xxxxxx Xxxxxx, Xxx Xxxx, XX
00000-0000, or at such other place as we may
specify on not less than one day's notice to you.
Payment is to be made, against delivery, at the
full public offering price less the concession to
dealers stated above, by a certified or official
bank check in New York Clearing House funds
payable to the order of Network 1 Financial
Securities, Inc.
Termination: This Agreement will terminate at the close of
business on the 30th day following the effective
date of the Registration Statement unless
extended, at our discretion, for a period or
periods not to exceed in the aggregate 30
additional days; but we may terminate this
Agreement, whether or not extended, at any time
without notice.
2. Any of the Shares purchased by you hereunder are to be offered by
you to the public at the public offering price, except as herein otherwise
provided and except that a reallowance from such public offering price not in
excess of the amount set forth in the Prospectus under the caption
"Underwriting" may be allowed as consideration for services rendered in
distribution to
-2-
dealers that (a) are actually engaged in the investment banking or securities
business; (b) execute the written agreement prescribed by Section 24(c) of
Article III of the Rules of Fair Practice of the NASD; and (c) are either
members in good standing of the NASD or foreign banks, dealers or institutions
not eligible for membership in the NASD which represent to you that they will
promptly reoffer such Shares at the public offering price and will abide by the
conditions with respect to foreign banks, dealers and institutions set forth in
your confirmation below. We, in turn, are prepared to receive orders subject to
confirmation and allotment by us. We reserve the right to reject any order in
whole or in part or to allot less than the number of Shares applied for. Orders
transmitted by telephone must be promptly confirmed by letter or telegram.
3. You, by becoming a Selected Dealer, agree (a) to take up and pay
for the number of Shares allotted and confirmed to you; (b) not to use any such
Shares to reduce or cover any short position you may have; and (c) upon our
request, to advise us of the number of Shares purchased from us, as manager of
the selling group comprised of all the Selected Dealers (the "Selling Group"),
remaining unsold by you and to resell to us any or all of such unsold Shares at
the public offering price stated above, less all or such part of the concession
allowed you as we may determine. You are not authorized to give any information
or to make any representations other than those contained in the Prospectus or
any supplements or amendments thereto. You confirm that you have distributed
expeditiously copies of a preliminary prospectus complying with Rule 430 under
the Securities Act to all persons to whom you expected to mail confirmation of
sale not less than 48 hours prior to the time you expected to mail any such
confirmation, and that you have informed us by telegram of compliance with this
provision not later than 2:00 P.M., New York City time, on the day prior to the
anticipated effective date of the Registration Statement. You confirm that you
are conversant with the requirements for delivery of the Prospectus pursuant to
Rule 15c2-8 under the Securities Exchange Act of 1934 and that you will comply
with all of the applicable provisions thereof.
4. You agree that until termination of this Agreement you will not
make purchases or sales of Shares except (a) pursuant to this Agreement; (b)
pursuant to authorization received from us; or (c) in the ordinary course of
business as broker or agent for a customer pursuant to an unsolicited order.
5. Additional copies of the Prospectus and any supplements or
amendments thereto will be supplied in reasonable quantities upon request.
-3-
6. It is expected that a public advertisement of the Shares will be
made on or about _____________, 1997. After the date of appearance of such
advertisement, but not before, you are free to advertise over your own name at
your own expense and risk.
7. The Shares are offered for delivery when, as and if sold to, and
accepted by, the Underwriters and subject to the terms stated herein and in the
Prospectus or any supplements or amendments thereto, to our right to vary the
concession and terms of offering after the release of the Shares for public
sale, to approval of counsel as to legal matters and to withdrawal, cancellation
or modification of the offer without notice.
8. Upon application, you will be informed as to the states and
jurisdictions under the securities or Blue Sky laws of which we believe the
Shares are eligible for sale, but we will assume no responsibility as to such
eligibility or the right of any Selected Dealer to sell any Shares in any state
or jurisdiction.
9. Each dealer, in becoming a Selected Dealer and accepting
membership in the Selling Group, represents that it is a member in good standing
of the NASD, or, if a foreign dealer not eligible for membership in the NASD,
that it agrees to comply with all applicable provisions of the Rules of Fair
Practice of the NASD and to make no sales within the United States, its
territories or possessions or to persons who are citizens thereof or residents
therein.
10. Nothing herein will constitute the Selected Dealers partners with
us, or each other, but you agree, notwithstanding any prior settlement of
accounts or termination of this Agreement, to bear your proper proportion of any
tax or other liability based upon the claim that the Selling Group constitutes a
partnership, association, unincorporated business or other separate entity and a
like share of any expenses of resisting any such claim.
11. Each dealer, in becoming a Selected Dealer, represents that it is
not purchasing any of the Shares for the account of anyone other than a United
States or Canadian person and agrees that it will not offer or resell any Shares
directly or indirectly outside the United States or Canada or to anyone other
than a United States or Canadian person or to any other dealer who does not so
represent and agree. As used herein "United States person" means any resident
of the United States, or any corporation, pension, profit-sharing or other trust
or other entity organized under the laws of the United States or any political
subdivision thereof (other than a branch located
-4-
outside the United States of any United States person) and includes any United
States branch or office of a person who is otherwise not a United States person.
As used herein, "Canadian person" means any individual who is resident in
Canada, or any corporation, pension, profit sharing or other trust or other
entity organized under or governed by the laws of Canada or any political
subdivision thereof (other than a foreign branch or office of any Canadian
person) and includes any Canadian branch or office of a non-Canadian person.
12. As manager of the Selling Group, we will have full authority to
take such action as we may deem advisable in respect of all matters pertaining
to the offering or the Selling Group. Except as expressly stated herein, or as
may arise under the Securities Act, we will not be under any liability to any
Selected Dealer for, or in respect of, the validity or value of the Shares, the
form of, or the statements contained in, the Prospectus, the Registration
Statement, any preliminary prospectus (or any amendments or supplements to the
Prospectus or the Registration Statement) or any supplemental sales data or
other letters or instruments executed by, or obtained from, the Company, or
others, the form or validity of this Agreement or the Underwriting Agreement
between the Company and us, the eligibility of the Shares for sale under the
laws of any state or jurisdiction, the delivery of the Shares or 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, except our own lack of good faith.
If you desire to become a Selected Dealer, please advise us to that
effect immediately by telegram and sign and return to us the enclosed
counterpart of this letter.
Very truly yours,
NETWORK 1 FINANCIAL
SECURITIES, INC.
By:
---------------------------------
Name:
Title:
-5-
NETWORK 1 FINANCIAL SECURITIES, INC.
EXHIBIT A
TO
SELECTED DEALER AGREEMENT
Network 1 Financial Securities, Inc.
The Galleria
Building Two
Penthouse
0 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Dear Sirs:
We hereby confirm our agreement to purchase the Shares (as defined in
the foregoing Agreement) allotted to us subject to the terms and conditions of
the foregoing Agreement and your telegram to us confirming our allotment. We
hereby acknowledge receipt of the definitive Prospectus relating to the Shares,
and we confirm that in purchasing Shares we have not relied upon any 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 hereby represent that we
are actually engaged in the investment banking or securities business and that
we are either a member in good standing of the National Association of
Securities Dealers, Inc. (the "NASD") of if we are not such a member, that we
are a foreign dealer or institution not eligible for membership in the NASD
which agrees (i) not to make any sales within the United States, its territories
or its possessions or to persons who are citizens thereof or residents therein
and (ii) in making other sales, to comply with the NASD's interpretation with
respect to free-riding and withholding.
-6-
We agree that, in connection with any purchase or sale of the Shares
wherein a selling concession, discount or other allowance is received or
granted, (1) we will comply with the provisions of Section 24 of Article III of
the NASD's Rules of Fair Practice; (2) if we are a non-NASD member broker or
dealer in a foreign country, we will also comply (a) as though we were an NASD
member, with the provisions of Sections 8 an 36 thereof and (b) with Section 25
thereof as that Section applies to a non-NASD member broker or dealer in a
foreign country.
_____________________________
Name of Selected Dealer
By:__________________________
(Authorized Signature)
Dated: _________________, 1997
-7-
