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SURREY, INC. ("SURREY" OR THE "COMPANY") EXHIBIT 1.2
SELECTED DEALERS AGREEMENT
A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION AND SUCH REGISTRATION STATEMENT WAS DECLARED
EFFECTIVE ON , 1993. THIS COMMUNICATION SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL
THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
Dear Sirs:
1. STUART, COLEMAN & CO., INC. (hereinafter "Stuart, Coleman"), named as
the Representative in the enclosed Prospectus (the "Representative"), proposes
to offer on a "firm commitment" basis, subject to the terms and conditions and
execution of the Underwriting Agreement, a maximum of 718,750 units (the
"Units") including the over-allotment option. Each Unit consists of two (2)
common shares, no par value ("Common Share") and one (1) common share purchase
warrant (the "Warrant") to purchase one (1) Common Share at an exercise price
of $4.80, at an offering price per Unit of $8.10. The Warrants expire on
, 2002, and are separable sixty (60) days after the
Effective Date or sooner at the option of the Representative. The Warrant is
exercisable at any time during the five (5) year term of the Warrant (the
"Warrant Exercise Period"). The Warrants are callable by the Company on thirty
(30) days prior written notice at a price of $.01 per Warrant commencing one
(1) year after the Closing Date and terminating at the end of the Warrant
Exercise Period, at any time the Common Stock trades at a price over $5.00 for
twenty (20) consecutive trading days. In addition the Company has agreed to
sell to the Representative, for a price of $.0005 per warrant, warrants to
purchase up to 71,875 Units at a price per Unit equal to one hundred and twenty
(120%) percent of the per Unit offering price ("Representative's Warrants").
2. The Representative is soliciting Selected Dealers who are (1)
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 (2) members in good standing with the National Association of
Securities Dealers, Inc. (the "NASD") to offer for sale on a "firm commitment"
basis, pursuant to the terms and conditions hereof and, as agent on behalf of
the Company, Units at a price of $8.10 per Unit. Such Selected Dealers will,
in turn, receive a commission (5% of offering price) or $.405 per Unit.
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3. Your offer to sell the Units on a "firm commitment" basis may be
revoked in whole or in part without obligation or commitment of any kind by you
any time prior to acceptance by us. Subject to the foregoing, upon execution
by you of the offer to sell on a "firm commitment" basis as set forth below and
the return of same to us, you shall be deemed to have offered to sell, on a
"firm commitment" basis, the number of Units set forth in your offer at $
per Unit. 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.
4. If your offer to sell the Units is accepted, you agree that in selling
the Units you will make a bona fide public distribution of same. You agree
that, prior to the termination of this Agreement, you will not offer to sell
the Units for less than the public offering price. You will advise the
Representative upon request of the number of Units you are offering which
remain unsold and the Representative shall have the right to offer such Units
for sale upon five (5) days written notice to you.
5. All orders will be strictly subject to confirmation and the
Representative reserves the right in its uncontrolled discretion to reject any
order in whole or in part, to accept or reject orders in the order of their
receipt or otherwise, and to allot. Neither you nor any other person is
authorized by the Company or the Representative to give any information or make
any representations other than those contained in the Prospectus in connection
with the sale of any of the Units. No dealer is authorized to act as agent for
the Representative when offering the Units to the public or otherwise.
6. Payment for Units purchased by you is to be made on or before five
business days after the date of each confirmation by a certified or official
bank check, by wire transfer to the order of Stuart, Coleman, & Co., Inc., 11
West 42nd Street, New York, New York 10036 or by funds cleared through the
Depository Trust Company ("DTC") at the public offering price less the above
commission against delivery of the Units.
7. A registration statement covering the offering was filed with the
Commission with respect to the Units and such registration statement was
declared effective on , 1993. Each Selected Dealer in selling
Units pursuant hereto agrees (which agreement shall also be for the benefit of
the Company) that it will comply with the applicable requirements of the
Securities Act of 1933, as amended (the "1933 Act"), 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 Representative to give any information or
to make any representations other than those contained in the Prospectus in
connection with the sale of the Units. Nothing contained herein shall render
the Selected Dealers members of an underwriting group or partners with the
Representative or with one another.
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8. You will be informed by the Representative as to the states in which it
has been advised by Company counsel that the Units have been qualified for sale
or are exempt under the respective securities or "Blue Sky" laws of such
states, but the Representative has not assumed and will not assume any
obligation or responsibility as to the right of any Selected Dealer to sell
Units in any state. Selected Dealer hereby indemnifies and holds
Representative harmless from and against any fines, judgments, lawsuits,
complaints or otherwise, including reasonable attorneys' fees, incurred by
Representative as a result of the selling of any Units contrary to the terms of
the Blue Sky Memorandum provided to Selected Dealer prior to the sale of any
Units.
9. The Representative shall have full authority to take such action as it
may deem advisable in respect of all matters pertaining to the offering or
arising thereunder. The Representative shall not be under any liability to you,
except such as may be incurred under the 1933 Act and the rules and regulations
thereunder, except for lack of good faith and except for obligations assumed by
the Representative in this Agreement, and no obligation on the Representative's
part shall be implied or inferred herefrom.
10. 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 offer you Units to sell on a "firm commitment" basis; such
contractual commitment can only be made in accordance with the provisions of
paragraph 3 hereof.
11. You represent that you are a member in good standing with the NASD and
registered as a broker-dealer with the Commission. Your attention is called to
the following: (a) Article III, Sections 1, 8, 24, 25 and 36 of the Rules of
Fair Practice of the NASD and the interpretation of said Sections promulgated
by the Board of Governors of the NASD, 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) 1933 Act Release #3907; (d) 1933 Act Release #4150; and (e)
1933 Act Release #4968 requiring the distribution of a Prospectus to all
persons reasonably expected to be purchasers of Units from you at least 48
hours prior to the time you expect to mail confirmations. You, as 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 provision of applicable law in connection with
your participation in the sale and subsequent distribution of Units.
12. You, by your confirmation below, represent that neither you nor any of
your directors, officers, partners or "persons associated with you" (as defined
in the Bylaws of the NASD) nor, to your knowledge, any "related persons' (as
defined by the NASD in its Corporate Financing Rules) have participated or
intend to participate in any transaction or dealings as to which documents or
information are required to be filed with the NASD pursuant to such
Interpretation or its Statement of Policy Concerning Venture Capital and
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Other Investment, as amended, and as to which such documents or information
have not been so filed in a timely manner.
13. The Company has indemnified the Representative and the several
underwriters, pursuant to the terms of Section 7 of the Underwriting Agreement
dated as of , 1993, and Selected Dealers are hereby
included by the Representative in such indemnification.
14. 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 Units of the
Company in the open market or otherwise make a market in such Units or
otherwise attempt to induce others to purchase Units in the open market.
Nothing contained in this paragraph 11 shall, however, preclude you from acting
in the execution of unsolicited orders of customers in transactions effectuated
for them through a market maker.
15. All communications from you should be directed to Helene K. Netter,
Esq., Syndicate Department, Stuart, Coleman & Co., Inc., 11 West 42nd Street,
New York, New York 10036. All communications from us to you shall be directed
to the address to which this letter is mailed.
Very truly yours,
STUART, COLEMAN & CO., INC.
By:
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OFFER TO SELL
The undersigned does hereby offer to sell, on a "firm commitment" basis
(subject to the right to revoke as set forth in paragraph 3) *Units
in accordance with the terms and conditions set forth above.
By:
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Authorized Officer
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* If a number appears here which does not correspond with what you wish to
offer to sell, you may change the number by crossing out the number, inserting
a different number and initialing the change.
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