Selling Group Member Representations. 1.1 You hereby confirm that you (i) are a member in good standing of the Financial Industry Regulatory Authority, Inc. (“FINRA”), (ii) are qualified and duly registered to act as a broker-dealer within all states in which you will sell the Bonds, (iii) are a broker-dealer duly registered with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and (iv) will maintain all such registrations and qualifications in good standing for the duration of your involvement in the Offering. You agree to immediately notify the Managing Broker-Dealer if you cease to be a member of FINRA in good standing. 1.2 You hereby agree to solicit, as an independent contractor and not as the Managing Broker-Dealer’s agent, or as an agent of the Company or its affiliates, persons acceptable to the Company to purchase the Bonds pursuant to the Subscription Agreement (the “Subscription Agreement”) in the form attached to the Offering Statement on Form 1-A, as amended (the “Offering Statement”) of which the Offering Circular is a part and in accordance with the terms of the Offering Circular, and to diligently make inquiries as required by this Agreement, the Offering Circular or applicable law with respect to prospective Investors in order to ascertain whether a purchase of the securities is suitable for the Investor. You shall solicit the purchase of Bonds in a manner that complies with Regulation A promulgated under the Securities Act of 1933, as amended (the “Securities Act”) and the rules of FINRA applicable to public offerings. In accordance with the instructions set forth in the Subscription Agreement, all the Subscription Agreements and all funds received by you with respect to any Subscription Agreement shall be transmitted to the Managing Broker-Dealer by noon of the next business day following receipt thereof. No Subscription Agreement shall be effective unless and until accepted by the Company, it being understood that the Company may accept or reject any Investor in its sole discretion and that the Company may terminate the Offering at any time for any reason. 1.3 You understand and agree that your compensation under this Agreement for the sale of Bonds is conditioned upon the Company’s acceptance of sales by you, and that the failure to accept a purchase for Bonds shall relieve the Company, the Managing Broker-Dealer or any other party of any obligation to pay you for any services rendered by you in connection with the sale of Bonds under this Agreement or otherwise. 1.4 You agree that before participating in the Offering, you will have reasonable grounds to believe based on information made available to you by the Managing Broker-Dealer and/or the Company through the Offering Circular, that all material facts are adequately and accurately disclosed in the Offering Circular and provide a basis for evaluating the Company and the Bonds. 1.5 You agree not to execute any transaction in which an Investor invests in the Bonds in a discretionary account without prior written approval of the transaction by the Investor and the Managing Broker-Dealer. 1.6 You agree to comply in all respects with the purchase procedures and plan of distribution set forth in the Offering Circular. Further, you agree that although you may receive due diligence and other information regarding the Offering from the Company in electronic form, you will not distribute to any prospective Investor or any other person any such material. All material distributions to prospective Investors shall only be in hard copy form. 1.7 All Subscriptions solicited by you will be strictly subject to confirmation by the Managing Broker-Dealer and acceptance thereof by the Company. The Managing Broker-Dealer and the Company reserve the right in their absolute discretion to reject any such Subscriptions and to accept orreject Subscriptions in the order of their receipt by the Company, as appropriate or otherwise. Neither you nor any other person is authorized to and neither you nor any of your employees, agents or representatives shall give any information or make any representation other than those contained in the Offering Circular or in any supplemental sales literature furnished by the Managing Broker-Dealer or the Company for use in making solicitations in connection with the offer and sale of the Bonds. 1.8 Upon authorization by the Managing Broker-Dealer, you may offer the Bonds at the Offering price set forth in the Offering Circular, subject to the terms and conditions thereof. 1.9 The Company or the Managing Broker-Dealer will provide you with such number of copies of the Offering Circular and such number of copies of amendments and supplements thereto as you may reasonably request. You will be responsible for correctly placing orders of such materials and will reimburse the Company or the Managing Broker-Dealer for any costs incurred in connection with unreasonable or mistaken orders. The Managing Broker-Dealer also understands that the Company may provide you with certain supplemental sales material to be used by you in connection with the solicitation of purchases of the Bonds. If you elect to use such supplemental sales material, you agree that such material shall not be used in connection with the solicitation or purchase of the Bonds unless accompanied or preceded by the Offering Circular, as then currently in effect, and as it may be amended or supplemented in the future. 1.10 The Managing Broker-Dealer shall have full authority to take such action as it may deem advisable with respect to all matters pertaining to the Offering. The Managing Broker-Dealer shall be under no liability to you except for lack of good faith and for obligations expressly assumed by it in this Agreement. Nothing contained in this section is intended to operate as, and the provisions of this section shall not constitute a waiver by you of, compliance with any provision of the Securities Act, the Exchange Act, other applicable federal law, applicable state law or of the rules and regulations thereunder. 1.11 You agree that you will not sell the Bonds to any Investor who has not confirmed to you, in writing, that such Investor meets the suitability requirements set forth in the section captioned “PLAN OF DISTRIBUTION – Determination of Suitability” in the Offering Circular. Nothing contained in this Section 1.11 shall be construed to relieve you of your suitability obligations under FINRA Rule 2111. 1.12 You will instruct all Investors to make their checks payable to Red Oak Capital Fund V, LLC or by wire or electronic funds transfer (via ACH) in accordance to the wiring instructions attached. If you receive a check that does not conform with the foregoing instructions, you shall return such check directly to such subscriber not later than noon of the business day following its receipt. 1.13 You will limit the offering of the Bonds to persons whom you have reasonable grounds to believe, and in fact believe, meet the financial suitability and other Investor requirements set forth in the Offering Circular. 1.14 After the Offering Statement has been filed with the SEC but prior to date the SEC qualifies the Bonds for sale under Regulation A (the “Qualification Date”), you are required to provide each prospective Investor with a copy of the most recent preliminary offering circular contained within the Offering Statement (the “Preliminary Offering Circular”). After the Qualification Date, you are required to provide each prospective Investor with a copy of the final Offering Circular. If a prospective Investor received the Preliminary Offering Circular, then you will be required to deliver to the Investor the final Offering Circular at least 48 hours before such Investor will be permitted to acquire Bonds. If an Investor purchases Bonds within 90 calendar days of the Qualification Date, you will deliver to the Investor, no later than two business days following the completion of such sale, a copy of the final Offering Circular and all exhibits and appendices thereto either by (i) electronic delivery of the final Offering Circular or the uniform resource locator (the “URL”) to where the final Offering Circular may be accessed on the SEC’s Electronic Data Gathering, Analysis and Retrieval System (“EXXXX”), or (ii) mailing the final Offering Circular and all exhibits and appendices thereto to the Investor at the address indicated in the Subscription Agreement. 1.15 During the course of the Offering, you will advise each prospective Investor at the time of the initial offering to him or her that the Company and/or its agents and consultants will, during the course of the Offering and prior to any sale, accord said Investor and his or her purchaser representative, if any, the opportunity to ask questions of and to receive answers from the Company and/or its agents and consultants concerning the terms and conditions of the Offering and to obtain any additional information, which information is possessed by the Company or may be obtained by it without unreasonable effort or expense and which is necessary to verify the accuracy of the information contained in the Offering Circular. 1.16 You will immediately bring to the attention of the Company and the Managing Broker-Dealer any circumstance or fact which causes you to believe the Offering Circular, or any other literature distributed pursuant to the Offering, or any information supplied to prospective Investors in their purchase materials, may be inaccurate or misleading. 1.17 You agree that in recommending to an Investor the purchase or sale of the Bonds, you shall have reasonable grounds to believe, on the basis of information obtained from the prospective Investor concerning his or her investment objectives, other investments, financial situation and needs, and any other information known by you, that: 1.17.1 The prospective Investor meets the suitability requirements set forth in the Offering Circular and the acquisition of Bonds is otherwise a suitable investment for such Investor as may be required by all applicable laws, rules and regulations; 1.17.2 The prospective Investor is or will be in a financial position appropriate to enable him or her to realize to a significant extent the benefits described in the Offering Circular; 1.17.3 The prospective Investor has a fair market net worth sufficient to sustain the risks inherent in an investment in the Bonds, including, but not limited to, the total loss of the investment, lack of liquidity and other risks described in the Offering Circular; and 1.17.4 An investment in the Bonds is otherwise suitable for the prospective Investor. 1.18 You agree to retain in your records and make available to the Managing Broker-Dealer and to the Company, for a period of at least 6 years following the Offering Termination Date, information establishing that (i) each person who purchases the Bonds pursuant to a Subscription Agreement solicited by you is within the permitted class of Investors under the requirements of the jurisdiction in which such Investor is a resident, (ii) each person met the suitability requirements set forth in the Offering Circular and the Subscription Agreement and (iii) each person is suitable for such investment and the basis on which such suitability determination was made. 1.19 You agree that upon request by the Managing Broker-Dealer, you will furnish a complete list of all persons who have been offered the Bonds (including the corresponding number of the Offering Circular delivered to such persons) and such persons’ place of residence. 1.20 You agree that before executing a purchase transaction in the Bonds, you will inform the prospective Investor and his or her investor representative, if any, of all pertinent facts relating to the liquidity and marketability of the Bonds, as appropriate, during the term of the investment. 1.21 You hereby undertake and agree to comply with all obligations applicable to you as set forth in FINRA rules, including, but not limited to, any new suitability and filing requirements. 1.22 You agree not to rely upon the efforts of the Managing Broker-Dealer in (i) performing due diligence related to the Company (including its members, managers, trustees, officers, directors, employees and Affiliates), the Bonds, or the suitability thereof for any Investors and (ii) determining whether the Company has adequately and accurately disclosed all material facts upon which to provide a basis forevaluating the Company to the extent required by federal law, state law and/or FINRA. You further agree that you are solely responsible for performing adequate due diligence, and you agree to perform adequate due diligence as required by federal law, state law and/or FINRA. 1.23 You will refrain from making any representations to any prospective Investor other than those contained in the Offering Circular, and will not allow any other written materials to be used to describe the potential investment to prospective Investors other than the Offering Circular or factual summaries and sales brochures of the Offering prepared by the Company and distributed by the Managing Broker-Dealer. 1.24 You will refrain from distributing any material to prospective Investors that is marked “Financial Advisor Use Only” or “Broker-Dealer Use Only,” or any other due diligence material related to the Offering received by you. 1.25 The Selling Group Member hereby represents and warrants as of the date of this Agreement to the Managing Broker-Dealer and to the Company that neither the Selling Group Member nor any of its executive officers, directors, general partners, managing members, or officers involved in the offering or persons who own 20% or more of the Selling Group Member or any person receiving a commission from the Selling Group Member with respect to the Offering: 1.25.1 Has been convicted, within 10 years of the Qualification Date of any felony or misdemeanor that was: (a) In connection with the purchase or sale of any security; (b) Involving or making of any false filing with the SEC; or (c) Arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of investors of securities. 1.25.2 Is subject to any order, judgment or decree of any court of competent jurisdiction, entered within 5 years before the Qualification Date that restrains or enjoins such person from engaging or continuing in any conduct or practice: (a) In connection with the purchase or sale of any security; (b) Involving the making of any false filing with the SEC; or
Appears in 1 contract
Samples: Managing Broker Dealer/Underwriter Agreement (Red Oak Capital Fund V, LLC)
Selling Group Member Representations. 1.1 You hereby confirm that you (i) are a member in good standing of the Financial Industry Regulatory Authority, Inc. (“FINRA”), (ii) are qualified and duly registered to act as a broker-dealer within all states in which you will sell the Bonds, (iii) are a broker-dealer duly registered with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and (iv) will maintain all such registrations and qualifications in good standing for the duration of your involvement in the Offering. You agree to immediately notify the Managing Broker-Dealer if you cease to be a member of FINRA in good standing.
1.2 You hereby agree to solicit, as an independent contractor and not as the Managing Broker-Dealer’s agent, or as an agent of the Company or its affiliates, persons acceptable to the Company to purchase the Bonds pursuant to the Subscription Agreement (the “Subscription Agreement”) in the form attached to the Offering Statement on Form 1-A, as amended (the “Offering Statement”) of which the Offering Circular is a part and in accordance with the terms of the Offering Circular, and to diligently make inquiries as required by this Agreement, the Offering Circular or applicable law with respect to prospective Investors in order to ascertain whether a purchase of the securities is suitable for the Investor. You shall solicit the purchase of Bonds in a manner that complies with Regulation A promulgated under the Securities Act of 1933, as amended (the “Securities Act”) and the rules of FINRA applicable to public offerings. In accordance with the instructions set forth in the Subscription Agreement, all the Subscription Agreements and all funds received by you with respect to any Subscription Agreement shall be transmitted to the Managing Broker-Dealer by noon of the next business day following receipt thereof. No Subscription Agreement shall be effective unless and until accepted by the Company, it being understood that the Company may accept or reject any Investor in its sole discretion and that the Company may terminate the Offering at any time for any reason.
1.3 You understand and agree that your compensation under this Agreement for the sale of Bonds is conditioned upon the Company’s acceptance of sales by you, and that the failure to accept a purchase for Bonds shall relieve the Company, the Managing Broker-Dealer or any other party of any obligation to pay you for any services rendered by you in connection with the sale of Bonds under this Agreement or otherwise.
1.4 You agree that before participating in the Offering, you will have reasonable grounds to believe based on information made available to you by the Managing Broker-Dealer and/or the Company through the Offering Circular, that all material facts are adequately and accurately disclosed in the Offering Circular and provide a basis for evaluating the Company and the Bonds.
1.5 You agree not to execute any transaction in which an Investor invests in the Bonds in a discretionary account without prior written approval of the transaction by the Investor and the Managing Broker-Dealer.
1.6 You agree to comply in all respects with the purchase procedures and plan of distribution set forth in the Offering Circular. Further, you agree that although you may receive due diligence and other information regarding the Offering from the Company in electronic form, you will not distribute to any prospective Investor or any other person any such material. All material distributions to prospective Investors shall only be in hard copy form.
1.7 All Subscriptions solicited by you will be strictly subject to confirmation by the Managing Broker-Dealer and acceptance thereof by the Company. The Managing Broker-Dealer and the Company reserve the right in their absolute discretion to reject any such Subscriptions and to accept orreject or reject Subscriptions in the order of their receipt by the Company, as appropriate or otherwise. Neither you nor any other person is authorized to and neither you nor any of your employees, agents or representatives shall give any information or make any representation other than those contained in the Offering Circular or in any supplemental sales literature furnished by the Managing Broker-Dealer or the Company for use in making solicitations in connection with the offer and sale of the Bonds.
1.8 Upon authorization by the Managing Broker-Dealer, you may offer the Bonds at the Offering price set forth in the Offering Circular, subject to the terms and conditions thereof.
1.9 The Company or the Managing Broker-Dealer will provide you with such number of copies of the Offering Circular and such number of copies of amendments and supplements thereto as you may reasonably request. You will be responsible for correctly placing orders of such materials and will reimburse the Company or the Managing Broker-Dealer for any costs incurred in connection with unreasonable or mistaken orders. The Managing Broker-Dealer also understands that the Company may provide you with certain supplemental sales material to be used by you in connection with the solicitation of purchases of the Bonds. If you elect to use such supplemental sales material, you agree that such material shall not be used in connection with the solicitation or purchase of the Bonds unless accompanied or preceded by the Offering Circular, as then currently in effect, and as it may be amended or supplemented in the future.
1.10 The Managing Broker-Dealer shall have full authority to take such action as it may deem advisable with respect to all matters pertaining to the Offering. The Managing Broker-Dealer shall be under no liability to you except for lack of good faith and for obligations expressly assumed by it in this Agreement. Nothing contained in this section is intended to operate as, and the provisions of this section shall not constitute a waiver by you of, compliance with any provision of the Securities Act, the Exchange Act, other applicable federal law, applicable state law or of the rules and regulations thereunder.
1.11 You agree that you will not sell the Bonds to any Investor who has not confirmed to you, in writing, that such Investor meets the suitability requirements set forth in the section captioned “PLAN OF DISTRIBUTION – Determination of Suitability” in the Offering Circular. Nothing contained in this Section 1.11 shall be construed to relieve you of your suitability obligations under FINRA Rule 2111.
1.12 You will instruct all Investors to make their checks payable to Red Oak Capital Fund V, LLC or by wire or electronic funds transfer (via ACH) in accordance to the wiring instructions attached. If you receive a check that does not conform with the foregoing instructions, you shall return such check directly to such subscriber not later than noon of the business day following its receipt.
1.13 You will limit the offering of the Bonds to persons whom you have reasonable grounds to believe, and in fact believe, meet the financial suitability and other Investor requirements set forth in the Offering Circular.
1.14 After the Offering Statement has been filed with the SEC but prior to date the SEC qualifies the Bonds for sale under Regulation A (the “Qualification Date”), you are required to provide each prospective Investor with a copy of the most recent preliminary offering circular contained within the Offering Statement (the “Preliminary Offering Circular”). After the Qualification Date, you are required to provide each prospective Investor with a copy of the final Offering Circular. If a prospective Investor received the Preliminary Offering Circular, then you will be required to deliver to the Investor the final Offering Circular at least 48 hours before such Investor will be permitted to acquire Bonds. If an Investor purchases Bonds within 90 calendar days of the Qualification Date, you will deliver to the Investor, no later than two business days following the completion of such sale, a copy of the final Offering Circular and all exhibits and appendices thereto either by (i) electronic delivery of the final Offering Circular or the uniform resource locator (the “URL”) to where the final Offering Circular may be accessed on the SEC’s Electronic Data Gathering, Analysis and Retrieval System (“EXXXX”), or (ii) mailing the final Offering Circular and all exhibits and appendices thereto to the Investor at the address indicated in the Subscription Agreement.
1.15 During the course of the Offering, you will advise each prospective Investor at the time of the initial offering to him or her that the Company and/or its agents and consultants will, during the course of the Offering and prior to any sale, accord said Investor and his or her purchaser representative, if any, the opportunity to ask questions of and to receive answers from the Company and/or its agents and consultants concerning the terms and conditions of the Offering and to obtain any additional information, which information is possessed by the Company or may be obtained by it without unreasonable effort or expense and which is necessary to verify the accuracy of the information contained in the Offering Circular.
1.16 You will immediately bring to the attention of the Company and the Managing Broker-Dealer any circumstance or fact which causes you to believe the Offering Circular, or any other literature distributed pursuant to the Offering, or any information supplied to prospective Investors in their purchase materials, may be inaccurate or misleading.
1.17 You agree that in recommending to an Investor the purchase or sale of the Bonds, you shall have reasonable grounds to believe, on the basis of information obtained from the prospective Investor concerning his or her investment objectives, other investments, financial situation and needs, and any other information known by you, that:
1.17.1 The prospective Investor meets the suitability requirements set forth in the Offering Circular and the acquisition of Bonds is otherwise a suitable investment for such Investor as may be required by all applicable laws, rules and regulations;
1.17.2 The prospective Investor is or will be in a financial position appropriate to enable him or her to realize to a significant extent the benefits described in the Offering Circular;
1.17.3 The prospective Investor has a fair market net worth sufficient to sustain the risks inherent in an investment in the Bonds, including, but not limited to, the total loss of the investment, lack of liquidity and other risks described in the Offering Circular; and
1.17.4 An investment in the Bonds is otherwise suitable for the prospective Investor.
1.18 You agree to retain in your records and make available to the Managing Broker-Dealer and to the Company, for a period of at least 6 years following the Offering Termination Date, information establishing that (i) each person who purchases the Bonds pursuant to a Subscription Agreement solicited by you is within the permitted class of Investors under the requirements of the jurisdiction in which such Investor is a resident, (ii) each person met the suitability requirements set forth in the Offering Circular and the Subscription Agreement and (iii) each person is suitable for such investment and the basis on which such suitability determination was made.
1.19 You agree that upon request by the Managing Broker-Dealer, you will furnish a complete list of all persons who have been offered the Bonds (including the corresponding number of the Offering Circular delivered to such persons) and such persons’ place of residence.
1.20 You agree that before executing a purchase transaction in the Bonds, you will inform the prospective Investor and his or her investor representative, if any, of all pertinent facts relating to the liquidity and marketability of the Bonds, as appropriate, during the term of the investment.
1.21 You hereby undertake and agree to comply with all obligations applicable to you as set forth in FINRA rules, including, but not limited to, any new suitability and filing requirements.
1.22 You agree not to rely upon the efforts of the Managing Broker-Dealer in (i) performing due diligence related to the Company (including its members, managers, trustees, officers, directors, employees and Affiliates), the Bonds, or the suitability thereof for any Investors and (ii) determining whether the Company has adequately and accurately disclosed all material facts upon which to provide a basis forevaluating the Company to the extent required by federal law, state law and/or FINRA. You further agree that you are solely responsible for performing adequate due diligence, and you agree to perform adequate due diligence as required by federal law, state law and/or FINRA.
1.23 You will refrain from making any representations to any prospective Investor other than those contained in the Offering Circular, and will not allow any other written materials to be used to describe the potential investment to prospective Investors other than the Offering Circular or factual summaries and sales brochures of the Offering prepared by the Company and distributed by the Managing Broker-Dealer.
1.24 You will refrain from distributing any material to prospective Investors that is marked “Financial Advisor Use Only” or “Broker-Dealer Use Only,” or any other due diligence material related to the Offering received by you.
1.25 The Selling Group Member hereby represents and warrants as of the date of this Agreement to the Managing Broker-Dealer and to the Company that neither the Selling Group Member nor any of its executive officers, directors, general partners, managing members, or officers involved in the offering or persons who own 20% or more of the Selling Group Member or any person receiving a commission from the Selling Group Member with respect to the Offering:
1.25.1 Has been convicted, within 10 years of the Qualification Date of any felony or misdemeanor that was:
(a) In connection with the purchase or sale of any security;
(b) Involving or making of any false filing with the SEC; or
(c) Arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of investors of securities.
1.25.2 Is subject to any order, judgment or decree of any court of competent jurisdiction, entered within 5 years before the Qualification Date that restrains or enjoins such person from engaging or continuing in any conduct or practice:
(a) In connection with the purchase or sale of any security;
(b) Involving the making of any false filing with the SEC; or
Appears in 1 contract
Samples: Managing Broker Dealer/Underwriter Agreement (Red Oak Capital Fund VI, LLC)
Selling Group Member Representations. 1.1 You hereby confirm that you (i) are a member in good standing of the Financial Industry Regulatory Authority, Inc. (“FINRA”), (ii) are qualified and duly registered to act as a broker-dealer within all states in which you will sell the Bonds, (iii) are a broker-dealer duly registered with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and (iv) will maintain all such registrations and qualifications in good standing for the duration of your involvement in the Offering. You agree to immediately notify the Managing Broker-Dealer if you cease to be a member of FINRA in good standing.
1.2 You hereby agree to solicit, as an independent contractor and not as the Managing Broker-Dealer’s agent, or as an agent of the Company or its affiliates, persons acceptable to the Company to purchase the Bonds pursuant to the Subscription Agreement (the “Subscription Agreement”) in the form attached to the Offering Statement on Form 1-A, as amended (the “Offering Statement”) of which the Offering Circular is a part and in accordance with the terms of the Offering Circular, and to diligently make inquiries as required by this Agreement, the Offering Circular or applicable law with respect to prospective Investors in order to ascertain whether a purchase of the securities is suitable for the Investor. You shall solicit the purchase of Bonds in a manner that complies with Regulation A promulgated under the Securities Act of 1933, as amended (the “Securities Act”) and the rules of FINRA applicable to public offerings. In accordance with the instructions set forth in the Subscription Agreement, all the Subscription Agreements and all funds received by you with respect to any Subscription Agreement shall be transmitted to the Managing Broker-Dealer by noon of the next business day following receipt thereof. No Subscription Agreement shall be effective unless and until accepted by the Company, it being understood that the Company may accept or reject any Investor in its sole discretion and that the Company may terminate the Offering at any time for any reason.
1.3 You understand and agree that your compensation under this Agreement for the sale of Bonds is conditioned upon the Company’s acceptance of sales by you, and that the failure to accept a purchase for Bonds shall relieve the Company, the Managing Broker-Dealer or any other party of any obligation to pay you for any services rendered by you in connection with the sale of Bonds under this Agreement or otherwise.
1.4 You agree that before participating in the Offering, you will have reasonable grounds to believe based on information made available to you by the Managing Broker-Dealer and/or the Company through the Offering Circular, that all material facts are adequately and accurately disclosed in the Offering Circular and provide a basis for evaluating the Company and the Bonds.
1.5 You agree not to execute any transaction in which an Investor invests in the Bonds in a discretionary account without prior written approval of the transaction by the Investor and the Managing Broker-Dealer.
1.6 You agree to comply in all respects with the purchase procedures and plan of distribution set forth in the Offering Circular. Further, you agree that although you may receive due diligence and other information regarding the Offering from the Company in electronic form, you will not distribute to any prospective Investor or any other person any such material. All material distributions to prospective Investors shall only be in hard copy form.
1.7 All Subscriptions solicited by you will be strictly subject to confirmation by the Managing Broker-Dealer and acceptance thereof by the Company. The Managing Broker-Dealer and the Company reserve the right in their absolute discretion to reject any such Subscriptions and to accept orreject or reject Subscriptions in the order of their receipt by the Company, as appropriate or otherwise. Neither you nor any other person is authorized to and neither you nor any of your employees, agents or representatives shall give any information or make any representation other than those contained in the Offering Circular or in any supplemental sales literature furnished by the Managing Broker-Dealer or the Company for use in making solicitations in connection with the offer and sale of the Bonds.
1.8 Upon authorization by the Managing Broker-Dealer, you may offer the Bonds at the Offering price set forth in the Offering Circular, subject to the terms and conditions thereof.
1.9 The Company or the Managing Broker-Dealer will provide you with such number of copies of the Offering Circular and such number of copies of amendments and supplements thereto as you may reasonably request. You will be responsible for correctly placing orders of such materials and will reimburse the Company or the Managing Broker-Dealer for any costs incurred in connection with unreasonable or mistaken orders. The Managing Broker-Dealer also understands that the Company may provide you with certain supplemental sales material to be used by you in connection with the solicitation of purchases of the Bonds. If you elect to use such supplemental sales material, you agree that such material shall not be used in connection with the solicitation or purchase of the Bonds unless accompanied or preceded by the Offering Circular, as then currently in effect, and as it may be amended or supplemented in the future.
1.10 The Managing Broker-Dealer shall have full authority to take such action as it may deem advisable with respect to all matters pertaining to the Offering. The Managing Broker-Dealer shall be under no liability to you except for lack of good faith and for obligations expressly assumed by it in this Agreement. Nothing contained in this section is intended to operate as, and the provisions of this section shall not constitute a waiver by you of, compliance with any provision of the Securities Act, the Exchange Act, other applicable federal law, applicable state law or of the rules and regulations thereunder.
1.11 You agree that you will not sell the Bonds to any Investor who has not confirmed to you, in writing, that such Investor meets the suitability requirements set forth in the section captioned “PLAN OF DISTRIBUTION – Determination of Suitability” in the Offering Circular. Nothing contained in this Section 1.11 shall be construed to relieve you of your suitability obligations under FINRA Rule 2111.
1.12 You will instruct all Investors to make their checks payable to Red Oak Capital Fund VVII, LLC or by wire or electronic funds transfer (via ACH) in accordance to the wiring instructions attached. If you receive a check that does not conform with the foregoing instructions, you shall return such check directly to such subscriber not later than noon of the business day following its receipt.
1.13 You will limit the offering of the Bonds to persons whom you have reasonable grounds to believe, and in fact believe, meet the financial suitability and other Investor requirements set forth in the Offering Circular.
1.14 After the Offering Statement has been filed with the SEC but prior to date the SEC qualifies the Bonds for sale under Regulation A (the “Qualification Date”), you are required to provide each prospective Investor with a copy of the most recent preliminary offering circular contained within the Offering Statement (the “Preliminary Offering Circular”). After the Qualification Date, you are required to provide each prospective Investor with a copy of the final Offering Circular. If a prospective Investor received the Preliminary Offering Circular, then you will be required to deliver to the Investor the final Offering Circular at least 48 hours before such Investor will be permitted to acquire Bonds. If an Investor purchases Bonds within 90 calendar days of the Qualification Date, you will deliver to the Investor, no later than two business days following the completion of such sale, a copy of the final Offering Circular and all exhibits and appendices thereto either by (i) electronic delivery of the final Offering Circular or the uniform resource locator (the “URL”) to where the final Offering Circular may be accessed on the SEC’s Electronic Data Gathering, Analysis and Retrieval System (“EXXXXXXXXX”), or (ii) mailing the final Offering Circular and all exhibits and appendices thereto to the Investor at the address indicated in the Subscription Agreement.
1.15 During the course of the Offering, you will advise each prospective Investor at the time of the initial offering to him or her that the Company and/or its agents and consultants will, during the course of the Offering and prior to any sale, accord said Investor and his or her purchaser representative, if any, the opportunity to ask questions of and to receive answers from the Company and/or its agents and consultants concerning the terms and conditions of the Offering and to obtain any additional information, which information is possessed by the Company or may be obtained by it without unreasonable effort or expense and which is necessary to verify the accuracy of the information contained in the Offering Circular.
1.16 You will immediately bring to the attention of the Company and the Managing Broker-Dealer any circumstance or fact which causes you to believe the Offering Circular, or any other literature distributed pursuant to the Offering, or any information supplied to prospective Investors in their purchase materials, may be inaccurate or misleading.
1.17 You agree that in recommending to an Investor the purchase or sale of the Bonds, you shall have reasonable grounds to believe, on the basis of information obtained from the prospective Investor concerning his or her investment objectives, other investments, financial situation and needs, and any other information known by you, that:
1.17.1 The prospective Investor meets the suitability requirements set forth in the Offering Circular and the acquisition of Bonds is otherwise a suitable investment for such Investor as may be required by all applicable laws, rules and regulations;
1.17.2 The prospective Investor is or will be in a financial position appropriate to enable him or her to realize to a significant extent the benefits described in the Offering Circular;
1.17.3 The prospective Investor has a fair market net worth sufficient to sustain the risks inherent in an investment in the Bonds, including, but not limited to, the total loss of the investment, lack of liquidity and other risks described in the Offering Circular; and
1.17.4 An investment in the Bonds is otherwise suitable for the prospective Investor.
1.18 You agree to retain in your records and make available to the Managing Broker-Dealer and to the Company, for a period of at least 6 years following the Offering Termination Date, information establishing that (i) each person who purchases the Bonds pursuant to a Subscription Agreement solicited by you is within the permitted class of Investors under the requirements of the jurisdiction in which such Investor is a resident, (ii) each person met the suitability requirements set forth in the Offering Circular and the Subscription Agreement and (iii) each person is suitable for such investment and the basis on which such suitability determination was made.
1.19 You agree that upon request by the Managing Broker-Dealer, you will furnish a complete list of all persons who have been offered the Bonds (including the corresponding number of the Offering Circular delivered to such persons) and such persons’ place of residence.
1.20 You agree that before executing a purchase transaction in the Bonds, you will inform the prospective Investor and his or her investor representative, if any, of all pertinent facts relating to the liquidity and marketability of the Bonds, as appropriate, during the term of the investment.
1.21 You hereby undertake and agree to comply with all obligations applicable to you as set forth in FINRA rules, including, but not limited to, any new suitability and filing requirements.
1.22 You agree not to rely upon the efforts of the Managing Broker-Dealer in (i) performing due diligence related to the Company (including its members, managers, trustees, officers, directors, employees and Affiliates), the Bonds, or the suitability thereof for any Investors and (ii) determining whether the Company has adequately and accurately disclosed all material facts upon which to provide a basis forevaluating for evaluating the Company to the extent required by federal law, state law and/or FINRA. You further agree that you are solely responsible for performing adequate due diligence, and you agree to perform adequate due diligence as required by federal law, state law and/or FINRA.
1.23 You will refrain from making any representations to any prospective Investor other than those contained in the Offering Circular, and will not allow any other written materials to be used to describe the potential investment to prospective Investors other than the Offering Circular or factual summaries and sales brochures of the Offering prepared by the Company and distributed by the Managing Broker-Dealer.
1.24 You will refrain from distributing any material to prospective Investors that is marked “Financial Advisor Use Only” or “Broker-Dealer Use Only,” or any other due diligence material related to the Offering received by you.
1.25 The Selling Group Member hereby represents and warrants as of the date of this Agreement to the Managing Broker-Broker- Dealer and to the Company that neither the Selling Group Member nor any of its executive officers, directors, general partners, managing members, or officers involved in the offering or persons who own 20% or more of the Selling Group Member or any person receiving a commission from the Selling Group Member with respect to the Offering:
1.25.1 Has been convicted, within 10 years of the Qualification Date of any felony or misdemeanor that was:
(a) In connection with the purchase or sale of any security;
(b) Involving or making of any false filing with the SEC; or
(c) Arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of investors of securities.
1.25.2 Is subject to any order, judgment or decree of any court of competent jurisdiction, entered within 5 years before the Qualification Date that restrains or enjoins such person from engaging or continuing in any conduct or practice:
(a) In connection with the purchase or sale of any security;
(b) Involving the making of any false filing with the SEC; or
(d) Arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of investors of securities.
1.25.3 Is subject to a final order of a state securities commission (or an agency or officer of a state performing like functions), a state authority that supervises or examines banks, savings associations or credit unions, a state insurance commission (or an agency or officer of a state performing like functions), an appropriate federal banking agency, the U.S. Commodity Futures Trading Commission or the National Credit Union Administration that:
(a) As of the Qualification Date, bars the person from: (i) Association with an entity regulated by such commission, authority, agency or officer; (ii) Engaging in the business of securities, insurance or banking; or (iii) Engaging in savings association or credit union activities.
(b) Constitutes a final order based on a violation of any law or regulation that prohibits fraudulent, manipulative or deceptive conduct entered within ten years before the Qualification Date.
1.25.4 Is subject to an order of the SEC pursuant to sections 15(b) or 15B(c) of the Exchange Act or section 203(e) or
Appears in 1 contract
Samples: Managing Broker Dealer/Underwriter Agreement (Red Oak Capital Fund VII, LLC)
