EXHIBIT 1.2
MORGAN JOSEPH & CO. INC.
600 FIFTH AVENUE
19TH FLOOR
NEW YORK, NEW YORK 10020
SELECTED DEALERS AGREEMENT
Dear Sirs:
1. Registration under the Securities Act of 1933, as amended ("ACT"), of
the 20,000,000 Units* of Stone Arcade Acquisition Corp. ("COMPANY"), as more
fully described in the Preliminary Prospectus, dated ________________, and in
the final prospectus ("PROSPECTUS") which will be forwarded to you, will become
effective in the near future. We, as the Underwriters, are offering certain of
the Units for purchase by a selected group of dealers ("SELECTED DEALERS") on
the terms and conditions stated herein.
Authorized Public Offering Price: $6.00 per Unit.
Dealers' Selling Concession: Not to exceed $0.__ per Unit payable upon
termination of this Agreement, except as
provided below. We reserve the right not
to pay such concession on any of the Units
purchased by any of the Selected Dealers
from us and repurchased by us at or below
the price stated above prior to such
termination.
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* Plus the over-allotment option available to the Underwriters to purchase up to
an additional 3,000,000 Units.
Delivery and Payment: Delivery of the Units shall be made on or
about ___________, 2005 or such later date
as we may advise on not less than one
day's notice to you, at the office of
Morgan Joseph & Co. Inc., 600 Fifth
Avenue, 19th Floor, New York, New York
10020 or at such other place as we shall
specify on not less than one day's notice
to you. Payment for the Units 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 Morgan Joseph & Co. 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 Units purchased by you hereunder are to be offered by you to
the public at the public offering price, except as herein otherwise provided.
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 Units allotted and confirmed to you, (b)
not to use any of the Units 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 Units 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 Units 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.
You agree to advise us in writing of the aggregate number of persons to whom
you sell Units.
6. Additional copies of the Prospectus and any supplements or amendments
thereto shall be supplied in reasonable quantity upon request.
7. The Units 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
Units 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 Units in any jurisdiction. We have caused to be filed a Further State
Notice relating to such of the Units 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 Units were made by such
member, the number of Units 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 Units 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. Morgan Joseph & Co. 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 Units (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 Units for sale under the laws of
any jurisdiction, (v) the delivery of the Units, (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.
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 Morgan Joseph & Co.
Inc. at 600 Fifth Avenue, 19th Floor, New York, New York 10020, Attention:
David Driscoll. 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,
MORGAN JOSEPH & CO. INC.
By: _______________________________
Title:
We accept membership in the Selected Dealers on the terms specified above.
Dated: _____________, 2005
[SELECTED DEALER]
By: _______________________________
Title: