Royal Xxxxxx Securities Corp.
0000 Xxxxxx Xxxx, Xxxxx 000X
Xxxx Xxxxxxx, Xxxxxxx 00000
SELECTED DEALERS AGREEMENT
, l997
Gentlemen:
Royal Xxxxxx Securities, Corp., as Underwriter, is offering for
sale 1,000,000 Shares of Common Stock ("Stock") and 2,000,000 Class A
Warrants ("A Warrants") of Silver Star Foods, Inc., a New York
corporation, (the "Company"). Such offer will be made pursuant to the
terms and conditions of the Underwriting Agreement between the Company
and the Underwriter. The shares to be offered for sale are more
particularly described in the enclosed Prospectus. We invite your
participation, as a Selected Dealer, on the terms and conditions stated
herein.
1. Offering Price. The Shares and A Warrants, which will be
offered to the public at a price of $5.25 per Share and $.25 per A
Warrant, shall not be directly or indirectly offered or sold to the
public by Selected Dealers at any other price during the period this
Agreement is in effect. The Company proposes to issue and sell
1,000,000 Shares and 2,000,000 A Warrants.
2. Selected Dealers. Members of the National Association of
Securities Dealers, Inc. (the "NASD") who shall agree to offer Shares
and A Warrants hereunder (hereinafter referred to as "Selected Dealers"
or "Participating Dealers") will be allowed a selling concession of
percent of the full ten percent (10%) commission and payable as
hereinafter provided. No concession shall be earned or paid unless
1,000,000 Shares and 2,000,000 A Warrants are sold within ninety days
from the effective date of the Registration Statement under the
Securities Act of 1933 filed by the Company with the Securities and
Exchange Commission ("Termination Date"), which date may be extended for
an additional sixty (60) days by mutual agreement of the Company and the
Underwriter.
3. Subscriptions The underwriter reserves the right to reject all
subscriptions, in whole or in part, to make allotments and to close the
subscription books at any time without notice. The Shares and A Warrants
allotted to you will be confirmed, subject to the terms and conditions
of this Agreement. Payments for Shares and A Warrants sold by you is to
be made by check or money order only and shall be made payable to
. In
respect of all Shares and A Warrants sold by you pursuant hereto, you
will promptly transmit (within three business days) to the Escrow Agent
all checks and money orders received in payment for the full amount of
the Public Offering Price for the number of Shares and A Warrants
purchased, without deduction for any commission or concession in
compliance with the Securities Exchange Act of 1934. Your transmittal
letter accompanying checks or money orders to the Escrow Agent shall set
forth the names and addresses, together with Social Security or
appropriate tax I.D. numbers, of the purchases with the number of Shares
and A Warrants purchased and a copy of said transmittal letter shall be
concurrently sent to us.
NO COMMISSIONS SHALL BE PAYABLE, AND ALL SUBSCRIPTIONS AND SUBJECT
TO REJECTION BY THE UNDERWRITER, UNLESS AND UNTIL THE SELECTED DEALER
HAS COMPLIED WITH THE ABOVE UNDERLINED PROVISION.
Each sale shall be contingent upon the sale of 1,000,000 Shares and
2,000,000 A Warrants being sold on or before the Termination Date (which
date may be extended for sixty (60) days), and upon the acceptance of
such sale by the undersigned. In the event any order submitted to you
is not accepted, the Escrow Agent will return all funds paid by the
purchases. Payment of the selling concessions in respect of each such
sale will be made to the Selected Dealer, by the Underwriter when and
only in the event that 1,000,000 Shares and 2,000,000 A Warrants are
sold by the Termination Date, (which date may be extended by sixty (60)
days), and the proceeds released by the Escrow Agent. The offering is
made subject to the issuance and delivery of the Shares and A Warrants
and the acceptance hereof by the Underwriter, to the approval of legal
matters by counsel, and to the terms and conditions herein set forth.
If an order is rejected or if a payment is received which proves
insufficient or worthless, any compensation paid to the Selected Dealer
shall be returned wither by the Selected Dealer's remittances in cash or
by a charge against the account of the Selected Dealer, as the
Underwriter may elect.
4. Offering to Public. Shares sold to the public by Dealers shall
be sold by the Selected Dealers as agents for the Company. Neither you
nor any other person is, or has been, authorized to give any information
or to make any representations in connection with the sale of the Shares
and A Warrants other than as contained in the Prospectus. The Selected
Dealer will not sell the Shares and A Warrants 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
the person under such circumstances that it would be received by him 48
hours prior to his receipt of a confirmation of the sale. The Dealer
understands that during the 90 day period after the first date upon
which the Shares and A Warrants of the Company are bona fide offered to
the public, all Dealers effecting transactions in the Shares and A
Warrants shall be required to deliver the Company's current Prospectus
to any purchasers thereof prior to or concurrent with the receipt of the
confirmation of sale. Additional copies of the then current Prospectus
will be supplied by the Underwriter in reasonable quantities upon
request. No Selected Dealer is authorized to act as agent for the
undersigned in any respect. No Selected Dealer is authorized to act as
agent for the Company except in offering the Shares and A Warrants to
the public pursuant to this Agreement.
5. Compliance with Securities Laws. Upon becoming a Selected
Dealer, and in offering and selling the Shares and A Warrants, you agree
to comply with all applicable requirements of the Securities Act of
1933, as amended (the "1933 Act"), the 1934 Act, any applicable state
securities or "Blue Sky" laws, and the Rules of Fair Practice of the
NASD, including, but not limited to, Article III, Section 1 thereof, and
the interpretations of said section promulgated by the Board of
Governors of such Association, including and "Interpretation with
respect to 'free-riding and withholding' dated November 1, 1970, and as
thereafter amended, and including information concerning the Board of
Governor's Interpretation thereof dated March 2, l979, to NASD members.
Upon application, you will be informed as to the states in which we have
been advised by counsel to the Company that the Shares and A Warrants
have been qualified for sale under the respective securities or Blue Sky
Laws of such states, but we assume no obligation or responsibility as to
the right of any Selected Dealer to sell the Shares and A Warrants in
any state or as to any sale therein.
By acceptance of this Agreement, you represent that you are a
member in good standing of the NASD.
By acceptance of this Agreement, each Selected Dealer has assumed
full responsibility for thorough and prior training of its
representatives concerning the selling methods to be used in connection
with the offer and sale of the Shares and A Warrants, giving special
emphasis to the NASD's principles of full and fair disclosure to
prospective investors, suitability standards and the prohibitions
against "Free-Riding and Withholding."
Each Selected Dealer agrees to indemnify and hold harmless the
Underwriter, the Company and the other Selected Dealers against and from
any liability, loss, damage, or expense arising out of any failure by
the Selected Dealer to comply with the 1933 Act, the 1934 Act,
applicable securities laws of any state, the rules and regulations of
the Securities and Exchange Commission and the Rules of Fair Practice of
the NASD, due to any act of omission by the Selected Dealer.
4. Prospectus and Offering. We have been advised by the Company
that the offering under the Registration Statement on Form SB-2 (File
No. )with respect to the subject Shares and A Warrants
commenced on , l998. By signing this Agreement, each
Selected Dealer acknowledges receipt of a copy of the Prospectus
included in said Registration Statement. Additional copies of the
Prospectus will be supplied to you in reasonable quantities upon
request.
7. Liability. Nothing will constitute the Selected Dealers, an
association or other separate entity or partners with us or with each
other, but you will be responsible for your share of any liability or
expense based upon any claim to the contrary. As the Underwriter, we
shall have full authority to take such action as we may deem advisable
in all matters pertaining to the offering or in respect of the value,
validity, or form of the Shares and A Warrants, or the delivery of the
certificates for the Shares and A Warrants, or the qualifications of the
Shares and A Warrants for sale under the laws of any jurisdiction, or
for or in respect of any matter connected with this Agreement, except
for lack of good faith obligations expressly assumed by using this
Agreement and any liability due to our act or omission arising under the
1933 Act.
