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 HAS 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SUCH OFFER MAY BE WITHDRAWN OR REVOKED, WITHOUT OBLIGATION OR COMMITMENT OF ANY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.
HERTZ TECHNOLOGY GROUP, INC.
1,100,000 SHARES OF COMMON STOCK, $.001 PAR VALUE
AND
2,200,000 CLASS A REDEEMABLE COMMON STOCK
PURCHASE WARRANTS
SELECTED DEALERS AGREEMENT
_______ __, 1996
Dear Sirs:
1. Biltmore Securities, Inc. (the "Underwriter"), has agreed to offer on a
firm commitment basis, subject to the terms and conditions and execution of the
Underwriting Agreement, 1,100,000 shares of Common Stock, $.001 par value per
share ("Common Stock") of Hertz Technology Group, Inc. (the "Company") and
2,200,000 Class A Redeemable Common Stock Purchase Warrants ("Warrants"),
(hereinafter, collectively referred to as the "Securities"; including any shares
of Common Stock and Warrants offered pursuant to an over-allotment option, the
"Firm Securities"). Each Warrant is exercisable to purchase one (1) share of
Common Stock. The Firm Securities 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 Underwriter is soliciting offers to buy Securities, upon the terms
and conditions hereof, from Selected Dealers, who are to act as principals,
including you, who are (i) 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 (ii) dealers
of institutions with their principal place of business located outside 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 and 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. The Securities are
to be offered to the public at a price of $5.00 per share of Common Stock and
$.25 per Warrant. Selected Dealers will be allowed a concession of not less than
__% of the aggregate 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 Securities
and their acceptance by the Underwriter, to the approval of legal matters by
counsel and to the terms and conditions as herein set forth.
3. Your offer to purchase 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 Securities has become effective with the Commission.
Subject to the foregoing, upon execution by you of the Offer to Purchase below
and the return of same to us, you shall be deemed to have offered to purchase
the number of Securities set forth in your offer on the basis set forth in
paragraph 2 above. Any oral notice by us of acceptance of your offer shall be
immediately 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 purchase Securities, 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 the Securities assume and are applicable only if contractual commitments
to purchase are completed in accordance with the foregoing.
4. You agree that in re-offering the Securities, 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 the Securities purchased by you remaining
unsold, and we shall have the right to repurchase such Securities upon demand at
the public offering price less the concession as set forth in paragraph 2 above.
Any of the Securities purchased by you pursuant to this Agreement are to be
re-offered by you to the public at the public offering price, subject to the
terms hereof and shall not be offered or sold by you below the public offering
price before the termination of this Agreement.
5. Payment for Securities which you purchase hereunder shall be made by you
on such date as we may determine by certified or bank cashier's check payable in
New York Clearinghouse funds to Biltmore Securities, Inc. Certificates for the
Securities shall be delivered as soon as practicable at the offices of Biltmore
Securities, Inc., 6700 North Andrews Avenue, Suite 500, Fort Lauderdale, FL
33309. Unless specifically authorized by us, payment by you may not be deferred
until delivery of certificates to you.
6. A registration statement covering the offering has been filed with the
Commission in respect to the Securities. You will be promptly advised when the
registration statement becomes effective. Each Selected Dealer in selling the
Securities pursuant hereto agrees (which
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agreement shall also be for the benefit of the Company) that it will comply with
the applicable requirements of the Securities Act of 1933 and of the 1934 Act
and any applicable rules and regulations issued under said Acts. No person is
authorized by the Company or by the Underwriter to give any information or to
make any representations other than those contained in the Prospectus in
connection with the sale of the Securities. Nothing contained herein shall
render the Selected Dealers a member of the underwriting group or partners with
the Underwriter or with one another.
7. You will be informed by us as to the states in which we have been
advised by counsel the Securities 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 Securities in any state.
8. The Underwriter 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 Underwriter shall not be under any liability to you, except such
as may be incurred under the Securities Act of 1933 and the rules and
regulations thereunder, except for lack of good faith and except for obligations
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 sell you any Securities; 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 National
Association of Securities Dealers, Inc. ("Association") and registered as a
broker-dealer or are not eligible for membership under Section I of the By-Laws
of the Association 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, Sections 1, 8, 24, 25, 26 and 36 of the Rules of
Fair Practice of the Association and the interpretations of said Section
promulgated by the Board of Governors of such Association 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 Securities from you at least 48 hours prior to the time you expect to mail
confirmations. You, if a member of the Association, 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
Securities.
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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 Securities or its component
securities in the open market of or otherwise make a market in such securities
or otherwise attempt to induce others to purchase such securities in the open
market. Nothing contained in this paragraph 11 shall, however, preclude y9u 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 Underwriter may in connection with the offering
engage in stabilizing transactions. If the Underwriter contracts for or
purchases in the open market in connection with such stabilization any
Securities sold to you hereunder and not effectively placed by you, the
Underwriter may charge you the Selected Dealer's concession originally allowed
you on the Securities so purchased, and you agree to pay such amount to us on
demand.
13. By submitting an Offer to Purchase you confirm that your net capital is
such that you may, in accordance with Rule 15c3-1 adopted under the 1934 Act,
agree to purchase the number of Securities you may become obligated to purchase
under the provisions of this Agreement.
14. You agree that (i) you shall not recommend to a customer the purchase
of Firm Securities unless you shall have reasonable grounds to believe that the
recommendation is suitable for such customer on the basis of information
furnished by such customer concerning the customer's investment objectives,
financial situation and needs, and any other information known to you, (ii) in
connection with all such determinations, you shall maintain in your files the
basis for such determination, and (iii) you shall not execute any transaction in
Firm Securities in a discretionary account without the prior specific written
approval of the customer.
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15. You represent that neither you nor any of your affiliates or associates
owns any Common Stock of the Company.
16. All communications from you should be directed to us at the office of
Biltmore Securities, Inc., 6700 North Andrews Avenue, Suite 500, Fort
Lauderdale, FL 33309. All communications from us to you shall be directed to the
address to which this letter is mailed.
Very truly yours,
BILTMORE SECURITIES, INC.
By:_______________________
Name:
Title:
ACCEPTED AND AGREED TO AS OF THE ______
DAY OF ____________, 1996
[Name of Dealer]
By: ____________________________
Its
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TO: Biltmore Securities, Inc.
6700 North Andrews Avenue
Suite 500
Fort Lauderdale, FL 33309
We hereby subscribe for ______ Shares of Common Stock, $.001 par value per
share, of Hertz Technology Group, Inc. and ______ Class A Redeemable Common
Stock Purchase Warrants in accordance with the terms and conditions stated in
the foregoing letter. We hereby acknowledge receipt of the Prospectus referred
to in the first paragraph thereof relating to said Securities. We further state
that in purchasing said Securities 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 National Association of
Securities Dealers, Inc. (the "NASD") or (ii) a dealer with its principal place
of business located outside the United States, its territories and its
possessions and not registered as a broker or dealer under the Securities
Exchange Act of 1934, as amended, 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 the
provisions of Sections 8 and 36 of Article III thereof as that Section applies
to non-member foreign dealers.
Name of
Dealer:___________________________
By:__________________________
Address:___________________________
___________________________
Dated: _____________, 1996
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