a Delaware corporation Maximum Offering of 3,000,000 Units Minimum Offering of 1,500,000 Units Each Unit Consisting of One Share of Common Stock and One Redeemable Common Stock Purchase Warrant SELECTED DEALER AGREEMENT
Exhibit
1.3
U.S.
DRY CLEANING CORPORATION,
a
Delaware corporation
Maximum
Offering of 3,000,000 Units
Minimum
Offering of 1,500,000 Units
Each
Unit Consisting of
One
Share of Common Stock and
One
Redeemable Common Stock Purchase Warrant
________________________,
2007
Ladies
and Gentlemen:
1. We
and
any other Underwriters named in the Prospectus relating to the above securities
(collectively the “Underwriters”), acting through us as Representative, are
severally offering for sale the securities described above (the “Units”) of U.S.
Dry Cleaning Corporation (the “Company”), on a best efforts, minimum/maximum
basis (the “Offering”). The Units and the terms under which the Units are to be
offered for sale by the several Underwriters are more particularly described
in
the Prospectus and any amendments thereto. We, as the Managing Underwriter,
are
offering certain of the Units for sale by a selected group of dealers (the
“Selected Dealers”) on the terms and conditions stated herein.
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Proposed
Public Offering Price:
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$2.25
to $2.75 per Unit, proposed, Final Public Offering Price determined
on
effectiveness and set forth on the cover page of the final Prospectus
(the
“Public Offering Price”) as well as our Notice of Effectiveness to you
(“Notice of Effectiveness”)
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Dealers’
Selling Concession:
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If
750,000 Units or more are sold by the Selected Dealer:
· Cash
commission of 7% per Unit plus
· 5%
Warrant coverage for the Units sold by that Selected Dealer
If
fewer than 750,000, but 500,000 Units or more are sold by the Selected
Dealer:
· Cash
commission of 6% per Unit plus
· 5%
Warrant coverage for the Units sold by that Selected Dealer.
If
fewer than 500,000 Units are sold by the Selected Dealer:
· Cash
commission of 6% per Unit plus
· No
Warrant coverage for the Units sold by that Selected
Dealer.
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1
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Minimum
maximum
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The
Prospectus requires a minimum sale of 1,500,000 Units. An initial
closing
and payment of compensation to the Selected Dealers will not occur
until
this minimum number of Units is sold. If the minimum number of Units
is
not sold, the Offering will be terminated and all funds returned
to
investors and no compensation will be paid to Selected
Dealers.
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Delivery
and Payment:
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Payment
for the Units sold by you hereunder can be made at the Final Public
Offering Price, when determined upon going effective, directly to
the
escrow agent at Palm Desert National Bank, 00-000 Xx Xxxxx, Xxxx
Xxxxxx,
Xxxxxxxxxx 00000, Account #000-000-000, ABA #000000000, Attention:
Xxxxx
Xxxxxx, Senior Vice President - Compliance, Telephone Number:
760/000-0000, by certified or official bank check in New York Clearing
House funds, payable to the order of “Palm Desert National Bank”, to be
held in an account entitled, “Palm Desert National Bank for the benefit of
U.S. Dry Cleaning Corporation Public Offering Escrow Account,” against
delivery of the Units which funds will be escrowed until the minimum
number of Units are sold. If you are a member of, or clear through
a
member of, The Depository Trust Company (“DTC”), we may, in our discretion
agree to deliver your Units through the facilities of DTC. These
funds
will likewise be escrowed in a U.S. Dry Cleaning Syndicate account
at our
clearing firm until the minimum number of Units is sold.
Delivery
of the Units shall be made on a revolving basis upon receipt of notice
from you indicating the number of Units to be sold, at the office
of the
lead underwriter 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 Final Public Offering Price or, if we
shall so
advise you, at the authorized Final Public Offering Price, less the
dealers’ selling concession stated above, to the account designated by us
at least two days prior to the date the payment is due.
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Clearing
Firm Closing
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Arrangements
may be available if you are a member of, or clear through a member
of DTC,
if DTC delivery becomes available through our Clearing Firm, North
American Clearing, a memo with instructions will be delivered to
you with
the details.
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Termination:
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This
Agreement shall terminate upon the earlier to occur of either the
sale of
all Units or the expiration of the offering period as set forth in
the
Prospectus, unless extended at our discretion. We may terminate this
Agreement, whether or not extended, at any time without
notice.
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2. Each
Selected Dealer is actually engaged in the investment banking or securities
business and is either (i) a member in good standing of the National Association
of Securities Dealers, Inc. (the “NASD”) or (ii) dealer with its principal
places of business located outside the United States, its territories and its
possessions and not registered as a broker or dealers under the Securities
Exchange Act of 1934 (the “Exchange Act”), who has agreed not to make any sales
of Units within the United States, its territories or its possessions or to
persons who are nationals thereof or residents therein.
3. The
Selected Dealers have agreed to comply with all applicable rules of the NASD,
including, without limitation, Rule 2740 of the Conduct Rules of the NASD (the
“Conduct Rules”). If a Selected Dealer is not an NASD member, such dealer agrees
to comply as though such dealer was a member with Rules 2730, 2740 and 2750
of
the Conduct Rules and to comply with the requirements of the NASD’s
Interpretation with Respect to Free-Riding and Withholding (IM-2110-1 of the
Conduct Rules). If a Selected Dealer is a foreign bank, broker, dealer, or
other
institution, such dealer agrees not to offer or to sell any Units in the United
States of America except through the Representative and in making sales of
Units
such dealer agrees to comply with Rule 2420 of the Conduct Rules as it applies
to a nonmember broker or dealer in a foreign country. Each Selected Dealer
further represents, by participating in this offering, each dealer has provided
to us all documents and other information required to be filed with respect
to
such dealer, any related person or any person associated with the dealer or
any
such related person pursuant to the supplementary requirements of the NASD’s
interpretation with respect to review of corporate financing as such
requirements relate to this offering. Some of or all the Underwriters may be
included among the Selected Dealers. Each of the Underwriters has agreed that,
during the term of this Agreement, it will be governed by the terms and
conditions hereof whether or not such Underwriter is included among the Selected
Dealers.
4. On
behalf
of the Underwriters, we shall act as Representative under this Agreement and
shall have full authority to take such action as we may deem advisable in
respect of all matters pertaining to the public offering of the Units.
5. If
you
desire to Offer any of the Units, your application should reach us promptly
by
fax number 000-000 0000 to US EURO Securities, Inc., Attention: Xxxxxxx Xxx
Xxxxxx, Chairman, Penthouse Floor, 00000 Xxxxxxx Xxx Xxxxx, Xxxxxxx Xxx, XX
00000, e-mail: xxxxxxxx@xxxxxxxxxxxxxxxx.xxx.
We
reserve the right to reject subscriptions in whole or in part, to make
allotments and to close the subscription books at any time without notice.
The
Units allotted to you will be confirmed, subject to the terms and conditions
of
this Agreement.
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6. The
privilege of offering and selling the Units is extended to you only on behalf
of
such of the Underwriters, if any, as may lawfully offer and sell the Units
to
dealers in your state or other jurisdiction.
7.
Any
Units offered and sold by you under the terms of this Agreement must be offered
to the public in accordance with the terms of offering thereof set forth herein
and in the Prospectus, subject to the securities or Blue Sky laws of the various
states or other jurisdictions.
8. You
agree
to immediately deliver to us for the accounts of the several Underwriters all
amounts received by you for any Units sold by you hereunder.
9. You
agree
to advise us from time to time, upon request, of the number of Units allocated
to you hereunder and remaining unsold at the time of such request, and, if
in
our opinion any such Units shall be needed to make delivery of the Units sold
or
over-allotted for the account of one or more of the Underwriters, you will,
forthwith upon our request, grant to us for the account or accounts of such
Underwriter or Underwriters the right, exercisable promptly after receipt of
notice from you that such right has been granted, to sell, at the Public
Offering Price, such number of Units of said Units allocated to you as shall
have been specified in our request.
10. No
expenses shall be charged to Selected Dealers. However, you shall pay any
transfer tax on sales of Units by you and you shall pay your proportionate
share
of any transfer tax in the event that any such tax shall from time to time
be
assessed against you and other Selected Dealers as a group or otherwise.
11. Neither
you nor any other person is or has been authorized to give any information
or to
make any representation in connection with the sale of the Units other than
as
contained in the Prospectus.
12. This
Agreement will terminate when we shall have determined that the public offering
of the Units has been completed and the compensation earned by you has been
paid
to you. Sections 20 and 21 shall survive the termination of this Agreement.
13. For
the
purpose of stabilizing the market, we have been authorized (a) to make
purchases and sales of the common stock and any other securities of the Company
in the open market or otherwise, for long or short account, (b) in arranging
for
sales of the Units, to over-allot and (c) to cover any short position or
liquidate any long position incurred in connection with such stabilization.
Except as permitted by us, you will not, at any time prior to the completion
of
distribution of the Units pursuant to this Agreement, bid for, purchase, sell
or
attempt to induce others to purchase or sell, directly or indirectly, any common
stock of the Company or any security of the same class and series, or any right
to purchase any such security other than (i) as provided for in this Agreement,
the Agreement Among Underwriters or the Underwriting Agreement relating to
the
Units or (ii) purchases or sales by you of any common stock as broker on
unsolicited orders for the account of others.
14. You
further agree at all times to comply with the provisions of Regulation M of
the
Exchange Act applicable to this offering.
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15. On
becoming a Selected Dealer, and in offering and selling the Units, you agree
to
comply with all the applicable requirements of the Securities Act of 1933,
as
amended (the “Act”), and the Exchange Act. You confirm that you are 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 confirm that you have complied and will comply
therewith.
16. We
hereby
confirm that we will make available to you such number of copies of the
Prospectus (as amended or supplemented) as you may reasonably request for the
purposes contemplated by the Act or the Exchange Act, or the rules and
regulations thereunder.
17. Upon
request, you will be informed as to the states and other jurisdictions under
the
respective
securities or blue sky laws of which we have been advised that the Units
qualified for sale or is exempt from such qualification, but neither we nor
any
of the Underwriters 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.
18. No
Selected Dealer is authorized to act as our agent or as agent for the
Underwriters or issuer, or otherwise to act on our behalf or on behalf of the
Underwriters or issuer, in offering or selling the Units to public or otherwise
or to furnish any information or make any representation except as contained
in
the Prospectus.
19. Nothing
will constitute the Selected Dealers an association or other separate entity
or
partners with the Underwriters, with us, or with each other, but you will be
responsible for your share of any liability or expense based on any claim to
the
contrary. We and the several Underwriters shall not be under any liability
for
or in respect of the value of the Units or the validity or form thereof, or
for
or in respect of the delivery of the Units, or for the performance by anyone
of
any agreement on its part, or for the qualification of the Units for sale under
the laws of any jurisdiction or its exemption from such qualification, 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 us or by the Underwriters
in
this Agreement; and no obligation on our part shall be implied herefrom. The
foregoing provisions shall not be deemed a waiver of any liability imposed
under
the Act.
20. Notices
to us should be addressed, and faxed, mailed or delivered to us at the office
of
US EURO Securities, Inc., Attention: Xxxxxxx Xxx Xxxxxx, Chairman, Penthouse
Floor, 00000 Xxxxxxx Xxx Xxxxx, Xxxxxxx Xxx, XX 00000, e-mail: xxxxxxxx@xxxxxxxxxxxxxxxx.xxx,
fax:
000-000-0000. Notices to you shall be deemed to have been duly given if faxed,
mailed or delivered to you at the address indicated in this letter.
21. This
Agreement shall be governed by and construed in accordance with the laws of
the
State of California, without giving effect to the choice of law or conflicts
of
laws principles thereof.
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22. US
EURO
Securities, Inc. is the Managing Underwriter of the Offering and manager of
the
Selected Dealers and has full authority to take such action as it may deem
advisable in respect of all matters pertaining to the Offering or the Selected
Dealers. Except as expressly stated herein, or as may arise under the Act,
the
Underwriter shall be under no liability to any Selected Dealer 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.
Very
truly yours,
As
Representative of the Several Underwriters
US
EURO
Securities, Inc.
_______________________________
Xxxxxxx
Xxx Xxxxxx, Chairman
[SELECTED
DEALER SIGNATURE PAGE FOLLOWS]
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Dated:
April ___, 2007
We
hereby
request you give us an initial allocation of Units of U.S. Dry Cleaning
Corporation 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 such Units. We further state that in offering
and
selling the Units, we have relied upon such 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, 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 except through the Representative. We hereby have
agreed to comply with all applicable rules of the NASD, including, without
limitation, Rule 2740 of the Conduct Rules of the NASD (the “Conduct Rules”). If
we are not an NASD member, we agree to comply as though we were a member with
Rules 2730, 2740 and 2750 of the Conduct Rules and to comply with the
requirements of the NASD’s Interpretation with Respect to Free-Riding and
Withholding (IM-2110-1 of the Conduct Rules). We also represent that we have
provided to you all documents and other information required to be filed with
respect to us, any related person or any person associated with us or any such
related person pursuant to the supplementary requirements of the NASD’s
interpretation with respect to review of corporate financing as such
requirements relate to this offering.
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(NAME
OF SELECTED DEALER)
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| _______________________ | |
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By:
_______________________
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Its:
_______________________
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Authorized
Signatory
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Address:___________________
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| _______________________ | |
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Telephone:
_________________
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Fax:
______________________
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E-mail:
____________________
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Firm
CRD Number ___________
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