FORM OF SELECTED DEALERS AGREEMENT

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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 30,000,000 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.

Reallowance: You may reallow not in excess of $0.__ per

Unit as a selling concession to dealers

who are members in good standing of the

National Association of Securities Dealers,

Inc. ("NASD") or to foreign dealers who are

not eligible for membership in the NASD and

who have agreed (i) not to sell the Units

within the United States of America, its

territories or possessions or to persons who

are citizens thereof or residents therein,

and (ii) to abide by the applicable Conduct

Rules of the NASD.

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* Plus the over-allotment option available to the Underwriters to purchase up to

an additional 4,500,000 Units.

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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 and

except that a reallowance from such public offering price not in excess of the

amount set forth on the first page of this Agreement may be allowed as

consideration for services rendered in distribution to dealers that (a) are

actually engaged in the investment banking or securities business; (b) execute

the written agreement prescribed by Rule 2740 of the NASD Conduct Rules; and (c)

are either members in good standing of the NASD or foreign banks, dealers or

institutions not eligible for membership in the NASD that represent to you that

they will promptly reoffer such Units at the public offering price and will

abide by the conditions with resp