FORM OF SELECTED DEALERS AGREEMENT
BEST EFFORTS
GAY ENTERTAINMENT TELEVISION, INC.
2,350,000 Units
BEST EFFORTS SELECTED DEALER AGREEMENT
The Agean Group, Inc. (the "Underwriter"), as agent, invites your
participation as a selected dealer ("Selected Dealer") in an offering of an
aggregate of 2,350,000 units (the "Units") for Gay Entertainment Television,
Inc., a New York corporation (the "Company") on a "best efforts, all or none
basis" with respect to the first 1,882,350 Units and a "best efforts" basis with
respect to the remaining 467,650 Units. Each Unit consists of one share of
common stock, par value $.0001 per share ("Common Stock") and one Redeemable
Warrant to purchase one-half share of Common Stock ("Warrants") pursuant to a
Registration Statement on Form SB-2 (the "Registration Statement"), including
the Preliminary Prospectus and Prospectus, as filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the "Act") at
a public offering price of $4.25 per Unit. The Underwriter is offering, subject
to the terms and conditions hereof, a portion of the Units for sale by Selected
Dealers who are actually engaged in the investment banking or securities
business and who are either (i) members in good standing of the National
Association of Securities Dealers, Inc. (the "NASD") or (ii) dealers with their
principal places of business located outside the United States, its territories
and its possessions and not registered as brokers or dealers under the
Securities Exchange Act of 1934, as amended (the "Exchange 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 and who
have agreed to comply with certain provisions of the NASD Rules of Fair Practice
as set forth further herein.
1. SELECTED DEALERS SALES. The Selected Dealer shall
purchase the Units for its customers only through the Underwriter,
1
and all such purchases shall be made only upon orders actually received by the
Selected Dealer from its customers. No Units may be purchased for the account of
the Selected Dealer or its principals. Orders received from the Selected Dealers
will be accepted only at the price, in the amounts, and on the terms which are
set forth in the Company's current Prospectus, and subject to the securities or
blue sky laws of the various states or other jurisdictions, as such
jurisdictions are set forth on the attached Exhibit "A". In all sales of the
Units to the public, the Selected Dealer shall confirm as agent and not as
principal.
2. SELLING CONCESSIONS. Selected Dealers will be allowed, on all Units
sold by them, a concession of ___% of the commission as shown in the Company's
current Prospectus. No NASD member will reallow commissions to any non-member
broker-dealer including foreign broker-dealers registered pursuant to the
Exchange Act.
3. DELIVERY OF FUNDS. The Selected Dealer shall promptly transmit (by
twelve noon of the next business day following receipt) to United National Bank
("Escrow Agent") at 0000 Xxxxx Xxxxx Xxxxx, Xxxxx Xxxxx, XX 00000 funds received
from purchasers and provide to both the Escrow Agent and the Underwriter a
confirmation or a record of each sale which shall set forth the name, address,
and social security number of each individual purchaser, the number of Units
purchased, and, if there is more than one registered owner, whether the
certificate or certificates evidencing the Units purchased are to be issued to
the purchaser in joint tenancy or otherwise. Each Selected Dealer shall report,
in writing, to the Underwriter the number of persons in each state who purchase
the Company's Units from the Selected Dealer. Each sale may be rejected by the
Underwriter, and if rejected, the Underwriter will cause the Escrow Agent to
return to the Selected Dealer all funds paid by the purchaser which have been
received by the Escrow Agent. In such event, the Selected Dealer will return to
the purchaser within five business days after actual receipt from the
Underwriter the full purchase price paid by the purchaser without interest or
deduction.
4. DEPOSIT OF SALES PROCEEDS. The proceeds from the sale of 1,882,350
Units offered hereby will be deposited in the account described in Paragraph 3
hereof. If at least $7,999,987.50 has not
2
been deposited and cleared in the account described in Paragraph 3 above within
90 days from the effective date of the Company's Registration Statement (which
date may be extended an additional 90 days upon the mutual consent of the
Company and the Underwriter), the full amount paid will be refunded to the
purchasers without interest or deductions by the Escrow Agent upon written
instructions of the Underwriter. No certificates evidencing the Company's Units
will be issued and no commissions will be paid by the Company or concessions
allowed by the Underwriter unless and until at least $7,999,987.50 in deposits
have been cleared and such funds have been released and the net proceeds thereof
delivered to the Company. If at least $7,999,987.50 have been cleared within the
time period provided above, all amounts so deposited will be delivered to the
Company, except that the Underwriter shall receive its underwriting commissions
and expenses from the proceeds of the offering concurrent with the delivery of
such proceeds to the Company.
5. FAILURE OF ORDER. If an order is rejected or if a payment is
received which proves insufficient, any compensation paid to the Selected Dealer
shall be returned either by the Selected Dealer in cash or by a charge against
the account of the Selected Dealer, as the Underwriter may elect.
6. CONDITIONS OF OFFERING. All sales will be subject to delivery by
the Company of certificates evidencing its Units. The Underwriter shall have
full authority to take such action as it may deem advisable with respect to all
matters pertaining to the public offering of the Units. No Selected Dealer is
authorized to act as agent of the Underwriter, or otherwise to act on its
behalf, in offering or selling the Units to the public or otherwise or to
furnish any information or make any representations except as contained in the
Company's current Prospectus.
7. SELECTED DEALER'S UNDERTAKINGS. The Selected Dealer will not sell
the Company's Units pursuant to this Agreement unless the Prospectus is
furnished to the purchaser at least 48 hours prior to the mailing of the
confirmation of sale, or is sent to such person under such circumstances that it
would be received by him 48 hours prior to his receipt of a confirmation of the
sale. The Selected Dealer agrees not to use any supplemental sales literature of
any
3
kind without prior written approval of the Underwriter unless it is furnished by
the Underwriter for such purpose. In offering and selling the Company's Units,
the Selected Dealer will rely solely on the representations contained in the
Company's current Prospectus.
It is understood that any Selected Dealer to whom any offer
may be made as provided herein shall be (i) a member of the NASD and agrees to
comply with the provisions of Section 24 of Article III of the NASD Rules of
Fair Practice ("Rules) or (ii) a foreign dealer or institution ineligible for
NASD membership. Any such foreign dealer or institution ineligible for NASD
membership agrees (i) not to resell the Units (a) to purchasers in, or to
persons who are nationals of, the United States of America, or (b) when there is
a public demand for the Units, to persons specified as those to whom NASD
members participating in a distribution may not sell, and (ii) to comply, as
though such foreign dealer or institution were a NASD member, with the
provisions of Sections 8, 24, and 25 to the extent applicable to foreign
non-member brokers or dealers and Section 36 of such NASD Rules.
On becoming a Selected Dealer, and in offering and selling the
Units, the Selected Dealer agrees to comply with all the applicable requirements
of the Act and the Exchange Act. The Selected Dealer confirms that it is
familiar with Rule 15c2-8 under the Exchange 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 Section 13 or 15(d) of
the Exchange Act) and confirms that it has complied and will comply therewith.
8. REPRESENTATIONS AND AGREEMENTS OF SELECTED DEALER. By accepting this
Agreement, the Selected Dealer represents that it is registered as a
broker-dealer under the Exchange Act; is qualified to act as a dealer in the
United States of America or other jurisdictions in which it offers the Company's
Units; if the Selected Dealer is a member of the NASD, it is a member in good
standing with the NASD; and will maintain such registrations, qualifications,
and membership throughout the term of this Agreement. The Selected Dealer agrees
to comply with all applicable federal laws, the laws of the states or other
4
jurisdictions concerned and the rules and regulations of the NASD. Further, the
Selected Dealer agrees that it will not offer or sell the Company's Units in any
state or jurisdiction except the states in which it is licensed as a
broker-dealer under the laws of such states and which the Underwriter shall have
advised the Units are properly registered. The Selected Dealer will not be
entitled to any compensation during any period in which it has been suspended or
expelled from membership in the NASD.
Upon request, the Selected Dealer will be informed as to the states and
other jurisdictions in which the Units have been qualified for sale under the
respective securities or blue sky laws of such states and other jurisdictions,
but the Underwriter does not assume any obligation or responsibility as to the
right of any Selected Dealer to sell the Units in any state or other
jurisdiction or as to the eligibility of the Units for sale therein. The
Selected Dealer agrees to provide the Underwriter with a territorial
distribution of all Units sold by it within five business days of the closing of
the offering.
9. NO ASSOCIATION. Nothing will constitute the Selected Dealers as an
association or other separate entity or partners with the Underwriter, or with
each other, but the Selected Dealer will be responsible for its share of any
liability or expense based on any claim to the contrary. The Underwriter shall
not be under any liability for or in respect of value, validity or form of the
Units, or the delivery of the certificates for the Units, or the performance by
anyone of any agreement on its part, or the qualification of the Units for sale
under the laws of any jurisdiction, or for or in respect of any other matter
relating to this Agreement, except for lack of good faith and for obligations
expressly assumed by it in this Agreement and no obligation on the Underwriter's
part shall be implied herefrom. The foregoing provisions shall not be deemed a
waiver of any liability imposed under the Act.
10. INDEMNIFICATION. The Company has agreed in Section 8(a) of the
Underwriting Agreement between the Company and the Underwriter (which section is
incorporated herein by reference) to indemnify and hold harmless the Underwriter
and each person, if
5
any, who controls the Underwriter within the meaning of Section 15
of the Act.
The Selected Dealer agrees to indemnify and hold harmless the
Company, the Underwriter, each of the Company's officers and directors who
signed the Registration Statement, and each person, if any, who controls the
Company and the Underwriter within the meaning of Section 15 of the Act against
any and all loss, liability, claim, damage, and expense (a) described in the
indemnity referred to in this Paragraph 10, but only with respect to untrue
statements or omission, or alleged untrue statements or omission, made in the
Registration Statement or the Prospectus or any amendment or supplement thereto
in reliance upon and in conformity with written information furnished to the
Company by such Selected Dealer expressly for use in the Registration Statement
(or any amendment thereto) or the Prospectus (or any amendment or supplement
thereto) or (b) based upon alleged misrepresentations or omissions to state
material facts in connection with statements made by the Selected Dealer or the
Selected Dealer's representatives orally or by other means; and the Selected
Dealer will reimburse the Company and the Underwriter for any legal or other
expenses reasonably incurred in connection with the investigation of or
defending of any such action or claim.
Each indemnified party is required to give prompt notice to
each indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to notify an indemnifying party
shall not relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. An indemnifying party may participate at
its own expense in the defense of such action. If it so elects within a
reasonable time after receipt of such notice, an indemnifying party, jointly
with any other indemnifying parties receiving such notice, may assume the
defense of such action with counsel chosen by it and approved by the indemnified
parties defendant in such action, unless such indemnified parties reasonably
object to such assumption on the grounds that there may be legal defenses
available to them which are different from or in addition to those available to
such indemnifying parties, and shall not be liable for any fees and expenses of
counsel for the indemnified parties incurred thereafter in connection with such
action. In no event
6
shall the indemnifying parties be liable for the fees and expenses of more than
one counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances.
11. SELECTED DEALER'S EMPLOYEES. By executing this Agreement, the
Selected Dealer has assumed full responsibility for proper training and
instruction of its representatives concerning the selling methods to be used in
connection with the offer and sale of the Company's Units giving special
emphasis to the principles of suitability and full disclosure to prospective
investors and the prohibitions against "free-riding" and "withholding."
12. TERMINATION. This Agreement will terminate upon the termination of
the offering except that the Underwriter may terminate the Selected Dealer at
any time, without notice.
13. NOTICES. Notices to the Underwriter should be addressed to it at
the office of The Agean Group, Inc., Attention: Xxxxxx Xxxxx. Notices to the
Selected Dealer shall be deemed to have been duly given if telegraphed or mailed
to you at the address to which this letter is addressed.
If you desire to offer any Units, 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 or telegraph.
Our signature hereon may be by facsimile.
Very truly yours,
The Agean Group, Inc.
By:__________________
Authorized Officer
Date:___________________________________
7
Allocation:_____________________________
Special Instructions:___________________
________________________________________
8
Date:______________
The Agean Group, Inc.
Xxx Xxxxx Xxxxx Xxxx., Xxxxx 000
Boca Raton, FL 33432
We hereby subscribe, as agents, for Units of GAY ENTERTAINMENT
TELEVISION, INC. in accordance with the terms and conditions stated in the
foregoing Best Efforts Selected Dealer Agreement. We hereby acknowledge receipt
of the Prospectus referred to in the first paragraph thereof relating to said
Units. We further state that in subscribing for said Units 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
NASD or (ii) a foreign broker/dealer who are not eligible for membership in the
NASD, 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, with provisions of Sections 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.
______________________________
(Selected Dealer)
By:___________________________
Its:__________________________
Address:______________________
______________________________
______________________________
9
EXHIBIT A
STATES AND JURISDICTIONS IN WHICH SECURITIES MAY BE SOLD
10
