EXHIBIT 1.2
▇▇▇▇▇▇▇▇ Curhan Ford & Co.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
DG Acquisition Corp.--
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Selected Dealers Letter Agreement
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Ladies and Gentlemen:
In connection with public offerings of securities for which ▇▇▇▇▇▇▇▇ Curhan Ford
& Co. ("MCF") is acting as the managing underwriter and the manager of the
Selling Group (as defined below) or is otherwise responsible for the
distribution of securities to the public (the "Offering") by means of an
offering of securities for sale to the public and to selected dealers (the
"Selected Dealers"), you (the "Selected Dealer") may be offered the right to
purchase, as principal, a portion of the securities being distributed to the
public. In connection with the Offering, DG Acquisition Corp. (the "Company"),
has filed a registration statement (No. 333-126287) (the "Registration
Statement") under the Securities Act of 1933 (the "Act"), of, among other
securities, 8,875,000 of its Class A Units (including an additional 1,331,250
Class A Units pursuant to an over-allotment option, the "Units"), as more fully
described in the Preliminary Prospectus, dated ___________, 2005, and in the
final prospectus ("Prospectus") which will be forwarded to you and is expected
to become effective in the near future. This letter Agreement (the "Agreement")
will confirm the mutual agreement between MCF and the selected dealer as to the
general terms and conditions applicable to the Selected Dealer's participation
in any group of Selected Dealers organized by MCF (the "Selling Group") as
follows:
1. Conditions of Offering; Acceptance and Purchases. The Offering: (i) will be
subject to delivery of the Units and their acceptance by MCF; (ii) may be
subject to the approval of all legal matters by MCF's counsel and the
satisfaction of other conditions; and (iii) may be made on the basis of
reservation of Units or an allotment against subscription. MCF will advise the
Selected Dealer by electronic mail, facsimile or other form of written
communication ("Written Communication", which term, in the case of any Offering
described in Section 2(a) and Section 2(b), may include a prospectus) of the
particular method and supplementary terms and conditions of any Offering in
which the Selected Dealer is invited to participate. To the extent such
supplementary terms and conditions are inconsistent with any provision herein,
such terms and conditions shall supersede any such provision. Unless otherwise
indicated in any such Written Communication, acceptances and other
communications by the Selected Dealer with respect to an Offering should be sent
to MCF at the address set forth below. MCF reserves the right to reject any
acceptance in whole or in part. Unless notified otherwise by MCF, Units
purchased by the Selected Dealer shall be paid for on such date as MCF shall
determine, on one day's prior notice to the Selected Dealer, by wire transfer,
in an amount equal to the Authorized Public Offering Price or, if MCF shall so
advise the Selected Dealer, at the Authorized Public Offering Price less the
Selected Dealers' Selling Concession, against delivery of the Units. If Units
are purchased and paid for at the Authorized Public Offering Price, such
Selected Dealers' Selling Concession will be paid after the termination of the
provisions of Section 8 with respect to such Units. Notwithstanding the
foregoing, unless notified otherwise by MCF, payment for and delivery of Units
purchased by the Selected Dealer shall be made through the facilities of The
Depository Trust Company, if the Selected Dealer is a member, unless the
Selected Dealer has
otherwise notified MCF prior to the date specified in a Written Communication
or, if the Selected Dealer is not a member, settlement may be made through a
correspondent who is a member pursuant to instructions which MCF will send to
the Selected Dealer prior to such specified date.
2. Representations, Warranties and Agreements.
-------------------------------------------
(a) Registered Offerings. In connection with the Offering, MCF shall provide
the Selected Dealer with such number of copies of each final prospectus and
final prospectus supplement relating thereto as the Selected Dealer may
reasonably request for the purposes contemplated by the Act and the Securities
Exchange Act of 1934 (the "Exchange Act") and the applicable rules and
regulations of the Securities and Exchange Commission (the "Commission")
promulgated thereunder. The Selected Dealer represents and warrants that it is
familiar with Rule 15c2-8 promulgated under the Exchange Act relating to the
distribution of preliminary and final prospectuses and agrees that it will
comply therewith. The Selected Dealer agrees to make a record of its
distribution of each prospectus and, when furnished with copies of any revised
prospectus, the Selected Dealer will, upon MCF's request, promptly forward
copies thereof to each person to whom the Selected Dealer has theretofore
distributed a prospectus. The Selected Dealer agrees to furnish to persons who
receive a confirmation of sale a copy of the Prospectus filed pursuant to Rule
424(b) or Rule 424(c) promulgated under the Act. The Selected Dealer agrees that
in purchasing Units, it will rely upon no statement whatsoever, written or oral,
other than the statements in the final prospectus delivered to the Selected
Dealer. The Selected Dealer will not be authorized by the Company or other
seller of Units offered pursuant to a prospectus or by any underwriter engaged
in connection with the Offering (each an "Underwriter" and collectively, the
"Underwriters") to give any information or to make any representation not
contained in the prospectus in connection with the sale of such Units.
(b) Offerings Pursuant to Offering Circular. In the case of any Offering of
Units, other than a Registered Offering, which is made pursuant to an offering
circular or other document comparable to a prospectus in a Registered Offering,
MCF will make available to the Selected Dealer as soon as practicable after
sufficient copies are made available to MCF by the Company such number of copies
of each preliminary offering circular and of the final offering circular
relating thereto as the Selected Dealer may reasonably request. The Selected
Dealer agrees that it will comply with applicable Federal, state and other laws,
and the applicable rules and regulations of any regulatory body promulgated
thereunder, governing the use and distribution of offering circulars by brokers
or dealers. The Selected Dealer further agrees that in purchasing Units pursuant
to an offering circular you will rely upon no statements whatsoever, written or
oral, other than the statements in the final offering circular delivered to the
Selected Dealer by MCF. The Selected Dealer will not be authorized by the
Company or other seller of Securities offered pursuant to an offering circular
or by any Underwriters to give any information or to make any representation not
contained in the offering circular in connection with the sale of such
Securities.
(c) Offer and Sale to the Public. The Offering is made subject to the
conditions referred to the prospectus or offering circular relating to the
Offering and to the terms and conditions set forth in this Agreement. With
respect to any Offering, MCF will inform the Selected Dealer in writing of the
public offering price, the selling concession, the reallowance (if any)
to dealers and the time when the Selected Dealer may commence selling Units to
the public. After such public offering has commenced, MCF may change the public
offering price, the selling concession and the reallowance to dealers. The
offering price, selling concession and reallowance (if any) to dealers at any
time in effect with respect to an Offering are hereinafter referred to,
respectively, as the "Public Offering Price", the "Concession" and the
"Reallowance". With respect to each Offering of Units, until the provisions of
this Section 2(c) shall be terminated pursuant to Section 4 hereof, the Selected
Dealer agrees to offer Units to the public only at the Public Offering Price,
except that if a Reallowance is in effect, a Reallowance from the Public
Offering Price not in excess of such Reallowance may be allowed as consideration
for services rendered in distribution to dealers who are actually engaged in the
investment banking or securities business who are either (i) members in good
standing of the NASD who agree to abide by the applicable rules of the NASD (see
Section 3(e) below) or (ii) foreign banks, dealers or institutions not eligible
for membership in the NASD who represent to you that they will promptly reoffer
such Securities at the Public Offering Price and will abide by the conditions
with respect to foreign banks, dealers and institutions set forth in Section
2(e) hereof.
(d) Over-allotment; Stabilization; Unsold Allotments. (1) MCF is authorized
to over-allot in arranging sales to the Selling Group, to purchase and sell
Units and to stabilize or maintain the market price of the Units. The Selected
Dealer agrees to advise MCF at any time and from time to time upon MCF's
request, prior to the termination of this Agreement, of the number of Units
purchased by the Selected Dealer remaining unsold, and the Selected Dealer will,
upon MCF's request at any such time, sell to MCF, for its account or the account
of one or more of the Underwriters, such amount of such unsold Units as MCF may
designate, at the Authorized Public Offering Price thereof less an amount to be
determined by MCF not in excess of the Selected Dealers' Selling Concession. In
the event that prior to the later of (i) the termination of this Agreement or
(ii) the covering by MCF of any short position created by MCF in connection with
the Offering, for its account or the account of one or more Underwriters, MCF
purchases or contracts to purchase for its account or the account of any of the
Underwriters, in the open market or otherwise, any Units theretofore delivered
to the Selected Dealer, MCF reserves the right to withhold the above-mentioned
Selected Dealers' Selling Concession on such Units if sold to the Selected
Dealer at the Authorized Public Offering Price, or if such Selected Dealers'
Selling Concession has been allowed to the Selected Dealer through its purchase
at a net price, the Selected Dealer agrees to repay such Selected Dealers'
Selling Concession upon MCF's demand, plus, in each case, any taxes on
redelivery, commissions, original issue discount, accrued interest and dividends
paid in connection with such purchase or contract to purchase.
(2) The Selected Dealer agrees that it will not make any over-allotment
sales. The Selected Dealer agrees that it will not engage in any stabilization
transaction or purchase and sell Units for long or short accounts. The Selected
Dealer agrees that until termination of this Agreement, it will not make
purchases or sales of the Units except (I) pursuant to this Agreement, (II)
pursuant to authorization received from MCF or (III) in the ordinary course of
business as broker or agent for a customer pursuant to any unsolicited order.
(e) NASD. The Selected Dealer, by becoming a member of the Selling Group,
represents that it is engaged in the investment banking or securities business
and that it is (a) a
member in good standing of the National Association of Securities Dealers, Inc.
("NASD"), and will comply with all applicable rules of the NASD, including but
not limited to 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 by the Selected Dealer shall be in compliance with Rule 2790 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. The Selected Dealer represents that neither the Selected Dealer
nor any of its directors, officers, partners or persons associated with the
Selected Dealer (as defined in the By-Laws of the NASD) nor, to the Selected
Dealer's knowledge, any "related person" (as defined by the NASD in its
Interpretation Relating to Review of Corporate Financing, which term includes
counsel, financial consultants and advisors, finders, members of the selling or
distribution groups and any other persons associated with or related to any of
the foregoing) or any other broker-dealer has had, within the last 12 months,
any dealings with the Company or any controlling shareholders thereof (other
than relating to this Agreement) as to which documents or information are
required to be filed with the NASD pursuant to its Interpretation Relating to
Review of Corporate Financing. The Selected Dealer further represents and
warrants, by its participation in the Offering, that it has provided to MCF all
documents and other information required to be filed with respect to the
Selected Dealer, any related person or any person associated with the Selected
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 the Offering.
3. Rules of Fair Practice. The Selected Dealer agrees that, in connection with
any purchase or sale of the Units wherein a Selected Dealers' Selling Concession
or discount is received or granted, (1) it will comply with the provisions of
Section 24 of Article III of the NASD's Rules of Fair Practice and (2) if it is
a non-NASD member broker or dealer in a foreign country, it will also comply
(a), as though it were an NASD member, with the provisions of Sections 8 and 36
thereof and (b) with Section 25 thereof as that Section applies to a non-NASD
member broker or dealer in a foreign country. The Selected Dealer further agrees
that, in connection with any purchase of securities from MCF not otherwise
covered by the terms of this Agreement (whether MCF is acting as manager, as a
member of an underwriting syndicate or a selling group or otherwise), if a
Selected Dealers' Selling Concession, discount or other allowance is granted to
the Selected Dealer, clauses (1) and (2) of the preceding paragraph will be
applicable.
4. Relationship among Underwriters and Selected Dealers. MCF may buy Units from
or sell Units to any Underwriter or Selected Dealer and, without consent, the
Underwriters (if any) and the Selected Dealers may purchase Units from and sell
Units to each other at the Authorized Public Offering Price less all or any part
of the Selected Dealers' Selling Concession. Unless otherwise specified in a
separate agreement between the Selected Dealer and MCF, this Agreement does not
authorize the Selected Dealer to act as agent for: (i) MCF; (ii) any
Underwriter; (iii) the Company; or (iv) other seller of any Units in an offering
of Units to the public or otherwise. Neither MCF nor any Underwriter shall be
under any obligation to the Selected Dealer except for obligations assumed
hereby or in any Written Communication from MCF in connection with the Offering.
Nothing contained herein or in any Written Communication from MCF shall
constitute the Selected Dealer as an association or partner with
MCF or any Underwriter or with one another. If the Selling Group, among
themselves or with the Underwriters, should be deemed to constitute a
partnership for Federal income tax purposes, then the Selected Dealer shall
elect to be excluded from the application of Subchapter K, Chapter 1, Subtitle A
of the Internal Revenue Code of 1986 and agree not to take any position
inconsistent with that election. The Selected Dealer hereby authorizes MCF, in
MCF's sole discretion, to execute and file on its behalf such evidence of that
election as may be required by the Internal Revenue Service. In connection with
the Offering, the Selected Dealer shall be liable for its proportionate amount
of any tax, claim, demand or liability that may be asserted against it alone or
against one or more Selected Dealers participating in such Offering, or against
MCF or the Underwriters, based upon the claim that the Selling Group, or any
members thereof, constitute an association, an unincorporated business or other
entity, including, in each case, its proportionate amount of any expense
incurred in defending against any such tax, claim, demand or liability.
5. Blue Sky Laws. Upon the request of the Selected Dealer, MCF shall inform the
Selected Dealer as to any advice MCF has received from counsel concerning the
jurisdictions in which Units have been qualified for sale or are exempt under
the securities or blue sky laws of such jurisdictions, but we do not assume any
obligation or responsibility as to your right to sell Units in any such
jurisdiction. Upon the completion of the Offering, the Selected Dealer (and each
other member of the Selling Group) agrees to promptly furnish to MCF, upon MCF's
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 MCF may request, in order to
permit to file on a timely basis any report that MCF as the Underwriter of the
Offering or manager of the Selling Group may be required to file pursuant to the
securities or blue sky laws of any jurisdiction.
6. Compliance with Law. The Selected Dealer agrees that in selling Units
pursuant to the Offering (which agreement shall also be for the benefit of the
Company or other seller of such Units), it will comply with all applicable laws,
rules and regulations, including the applicable provisions of the Act and the
Exchange Act, the applicable rules and regulations of the Commission thereunder,
the applicable rules and regulations of the NASD, the applicable rules and
regulations of any securities exchange having jurisdiction over the Offering and
the applicable laws, rules and regulations specified in Section 3 hereof.
Furthermore, the Selected Dealer acknowledges and agrees that certain Offerings
of Units (i) may be made in the United States only and/or (ii) may be offerings
of Units of an affiliate of a United States bank but are not savings accounts,
deposits or other obligations of any such bank and would not be guaranteed by
such bank or insured by the Federal Deposit Insurance Corporation or any other
governmental agency.
7. Termination, Supplements and Amendments. This Agreement shall continue in
full force and effect until terminated by a written instrument executed by each
of the parties hereto. This Agreement may be supplemented or amended by MCF by
written notice thereof to the Selected Dealer, and any such supplement or
amendment to this Agreement shall be effective with respect to any Offering to
which this Agreement applies after the date of such supplement or amendment.
Each reference to "this Agreement" herein shall, as appropriate, be to this
Agreement as so amended and supplemented. The terms and conditions set forth in
Section 1 with regard to the Offering will terminate at the close of business on
the 30th day after the
commencement of the public offering of the Units to which the Offering relates,
but in MCF's sole discretion may be extended by us for a further period not
exceeding 30 days and in our discretion, whether or not extended, may be
terminated at any earlier time.
8. MCF Liabilities. As Managing Underwriter of the Offering and manager of the
Selling Group, MCF shall have full authority to take such action as it 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, MCF shall be under no liability to any member of the
Selling Group 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 to be entered into in connection with the Offering
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.
9. Notices. All communications from the Selected Dealer shall be addressed to
MCF at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ________________. Any notice from MCF to the Selected Dealer 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 California without giving effect to
conflict of laws.
10. Time is of the Essence. Time is of the essence in this Agreement.
11. Successors and Assigns. This Agreement shall be binding on, and inure to the
benefit of, the parties hereto and other persons specified in Section 1, and the
respective successors and assigns of each of them.
Please confirm, by signing and returning to MCF the enclosed copy of this
Agreement, the Selected Dealer's agreement to purchase, or the Selected Dealer's
acceptance of any reservation of, any Units pursuant to an Offering and shall
constitute (i) acceptance of and agreement to the terms and conditions of this
Agreement together with and subject to any supplementary terms and conditions
contained in any Written Communication from MCF in connection with such
Offering, all of which shall constitute a binding agreement between MCF and the
Selected Dealer, individually or as representative of any Underwriters, (ii)
confirmation that the Selected Dealer's representations and warranties set forth
in Section 2 hereof are true and correct, (iii) confirmation that the Selected
Dealer's agreements set forth in this Agreement have been and will be fully
performed by the Selected Dealer to the extent and at the times required thereby
and (iv) in the case of any Offering described in Section 2(b) and 2(c),
acknowledgment that the Selected Dealer will request and has received from MCF
sufficient copies of the final prospectus or offering circular, as the case may
be, with respect to such Offering in order to comply with its undertakings in
Section 2(a) or 2(b).
Very truly yours,
▇▇▇▇▇▇▇▇ CURHAN FORD & CO.
By:
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Name:
Title:
[________________________________]
By: ______________________________
Name:
Title: