XXXXXX SECURITIES, INC.
0000 XXXXXXX XXXXXXXX
XXXXXXX, XXX XXXX 00000
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FORM OF SELECTED DEALERS AGREEMENT
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Dear Sirs:
1. Registration under the Securities Act of 1933, as amended
("Act"), of the [ ] shares of Common Stock and [ ] Redeemable Common Stock
Purchase Warrants (collectively, the "Securities")* of Fusion Telecommunications
International, Inc. ("Company"), as more fully described in the Preliminary
Prospectus, dated ________ __, 2004, and in the final prospectus ("Prospectus")
that will be forwarded to you, will become effective in the near future. We, as
the Underwriters, are offering certain of the Securities for purchase by a
selected group of dealers ("Selected Dealers") on the terms and conditions
stated herein.
Authorized Public Offering Price: $[ ] per Share
$[ ] per Warrant
Dealers' Selling Concession: Not to exceed $ per Share and $ per
Warrant payable upon termination of this
Agreement, except as provided below. We
reserve the right not to pay such concession
on any of the Securities purchased by any of
the Selected Dealers from us and repurchased
by us at or below the price stated above
prior to such termination.
Reallowance: You may reallow not in excess of $ per
Share and $ per Warrant as a selling
concession to dealers who are members in
good standing of the National Association of
Securities Dealers, Inc. ("NASD") or to
foreign dealers who are not eligible for
membership in the NASD and who have agreed
(i) not to sell the Securities within the
United States of America, its territories or
possessions or to persons who are citizens
thereof or residents therein, and (ii) to
abide by the applicable Conduct Rules of the
NASD.
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* Plus the over-allotment option available to the Underwriters to purchase up to
an additional [ ] Shares and [ ] Warrants.
Delivery and Payment: Delivery of the Securities shall be made on
or about __________________, 2004 or such
later date as we may advise on not less than
one day's notice to you, at the office of
Xxxxxx Securities, Inc., 0000 Xxxxxxx
Xxxxxxxx, Xxxxxxx, Xxx Xxxx 00000 or at such
other place as we shall specify on not less
than one day's notice to you. Payment for
the Securities is to be made, against
delivery, at the authorized public offering
price stated above, or, if we shall so
advise you, at the authorized public
offering price less the dealers' selling
concession stated above, by a certified or
official bank check in New York Clearing
House Funds payable to the order of Xxxxxx
Securities, Inc.
Termination: This Agreement shall terminate at the close
of business on the 45th day following the
effective date of the Registration Statement
(of which the enclosed Prospectus forms a
part), unless extended at our discretion for
a period or periods not to exceed in the
aggregate 30 additional days. We may
terminate this Agreement, whether or not
extended, at any time without notice.
2. Any of the Securities purchased by you hereunder are to be
offered by you to the public at the public offering prices, except as herein
otherwise provided and except that a reallowance from such public offering
prices not in excess of the amounts set forth on the first page of this
Agreement may be allowed as consideration for services rendered in distribution
to dealers that (a) are actually engaged in the investment banking or securities
business; (b) execute the written agreement prescribed by Rule 2740 of the NASD
Conduct Rules; and (c) are either members in good standing of the NASD or
foreign banks, dealers or institutions not eligible for membership in the NASD
that represent to you that they will promptly reoffer such Securities at the
public offering price and will abide by the conditions with respect to foreign
banks, dealers and institutions set forth in paragraph 9 below.
3. You, by becoming a member of the Selected Dealers, agree
(a) upon effectiveness of the Registration Statement and your receipt of the
Prospectus, to take up and pay for the number of Securities allotted and
confirmed to you, (b) not to use any of the Securities to reduce or cover any
short position you may have and (c) to make available a copy of the Prospectus
to all persons who on your behalf will solicit orders for the Securities prior
to the making of such solicitations by such persons. 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.
4. As contemplated by Rule 15c2-8 under the Securities
Exchange Act of 1934, as amended, we agree to mail a copy of the Prospectus to
any person making a written request therefor during the period referred to in
the rules and regulations adopted under such Act, the mailing to be made to the
address given in the request. You confirm that you have delivered all
preliminary prospectuses and revised preliminary prospectuses, if any, required
to be delivered under the provisions of Rule 15c2-8 and agree to deliver all
copies of the Prospectus required to be delivered thereunder. We have heretofore
delivered to you such preliminary prospectuses as have been required by you,
receipt of which is hereby acknowledged, and will deliver such further
prospectuses as may be requested by you.
5. You agree that until termination of this Agreement you will
not make purchases or sales of the Securities 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 any
unsolicited order.
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6. Additional copies of the Prospectus and any supplements or
amendments thereto shall be supplied in reasonable quantity upon request.
7. The Securities are offered by us for delivery when, as and
if sold to, and accepted by, us and subject to the terms herein and in the
Prospectus or any supplements or amendments thereto, to our right to vary the
concessions and terms of offering after their release for public sale, to
approval of counsel as to legal matters and to withdrawal, cancellation or
modification of the offer without notice.
8. Upon written application to us, you shall be informed as to
the jurisdictions under the securities or blue sky laws of which we believe the
Securities are eligible for sale, but we assume no responsibility as to such
eligibility or the right of any member of the Selected Dealers to sell any of
the Securities in any jurisdiction. We have caused to be filed a Further State
Notice relating to such of the Securities to be offered to the public in New
York in the form required by, and pursuant to, the provisions of Article 23A of
the General Business Law of the State of New York. Upon the completion of the
public offering contemplated herein, each member of the Selected Dealers agrees
to promptly furnish to us, upon our request, territorial distribution reports
setting forth each jurisdiction in which sales of the Securities were made by
such member, the number of Securities sold in such jurisdiction, and any further
information as we may request, in order to permit us to file on a timely basis
any report that we as the Underwriters of the offering or manager of the
Selected Dealers may be required to file pursuant to the securities or blue sky
laws of any jurisdiction.
9. You, by becoming a member of the Selected Dealers,
represent that you are actually engaged in the investment banking or securities
business and that you are (a) a member in good standing of the NASD and will
comply with NASD Conduct Rule 2740, or (b) a foreign dealer or institution that
is not eligible for membership in the NASD and that has agreed (i) not to sell
Securities within the United States of America, its territories or possessions
or to persons who are citizens thereof or residents therein; (ii) that any and
all sales shall be in compliance with Rule 2110-01 of the NASD's Conduct Rules;
(iii) to comply, as though it were a member of the NASD, with Rules 2730, 2740
and 2750 of the NASD's Conduct Rules, and to comply with Rule 2420 thereof as
that Rule applies to a non-member broker or dealer in a foreign country.
10. Nothing herein shall constitute any members of the
Selected Dealers partners with us or with 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 Selected Dealers constitute a partnership, association,
unincorporated business or other separate entity and a like share of any
expenses of resisting any such claim.
11. Xxxxxx Securities, Inc. shall be the Managing Underwriter
of the offering and manager of the Selected Dealers and shall have full
authority to take such action as we may deem advisable in respect of all matters
pertaining to the offering or the Selected Dealers or any members of them.
Except as expressly stated herein, or as may arise under the Act, we shall be
under no liability to any member of the Selected Dealers as such for, or in
respect of (i) the validity or value of the Securities (ii) the form of, or the
statements contained in, the Prospectus, the Registration Statement of which the
Prospectus forms a part, any supplements or amendments to the Prospectus or such
Registration Statement, any preliminary prospectus, any instruments executed by,
or obtained or any supplemental sales data or other letters from, the Company,
or others, (iii) the form or validity of the Underwriting Agreement or this
Agreement, (iv) the eligibility of any of the Securities for sale under the laws
of any jurisdiction, (v) the delivery of the Securities, (vi) the performance by
the Company, or others of any agreement on its or their part, or (vii) any
matter in connection with any of the foregoing, except our own want of good
faith.
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12. If for federal income tax purposes the Selected Dealers,
among themselves or with the Underwriters, should be deemed to constitute a
partnership, then we elect to be excluded from the application of Subchapter K,
Chapter 1, Subtitle A of the Internal Revenue Code of 1986, as amended, and we
agree not to take any position inconsistent with such selection. We authorize
you, in your discretion, to execute and file on our behalf such evidence of such
election as may be required by the Internal Revenue Service.
13. All communications from you shall be addressed to Xxxxxx
Securities, Inc. at 0000 Xxxxxxx Xxxxxxxx, Xxxxxxx, Xxx Xxxx 00000, Attention:
Xxxxx X. Xxxxxxx. Any notice from us to you shall be deemed to have been fully
authorized by the Underwriters and to have been duly given if mailed,
telegraphed or sent by confirmed facsimile transmittal to you at the address to
which this letter is mailed. This Agreement shall be construed in accordance
with the laws of the State of New York without giving effect to conflict of
laws. Time is of the essence in this Agreement.
If you desire to become a member of the Selected Dealers,
please advise us to that effect immediately by facsimile transmission and sign
and return to us the enclosed counterpart of this letter.
Very truly yours,
XXXXXX SECURITIES, INC.
By:
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Name: Xxxxx X. Xxxxxxx
Title: Co-Chief Executive Officer
We accept membership in the Selected Dealers on the terms
specified above.
Dated: ___________ __, 2004
(Selected Dealer)
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By:
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Name:
Title:
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