EXHIBIT 1.1
Form of Managing Dealer Agreement
MANAGING DEALER AGREEMENT
THIS AGREEMENT, dated as of _____________, 2004, is made by and between
CNL RETIREMENT PROPERTIES, INC., a Maryland corporation (the "Company"), and CNL
SECURITIES CORP., a Florida corporation (the "Managing Dealer").
WHEREAS, the Company proposes to offer and sell up to an aggregate of
400,000,000 shares of common stock in the Company (the "Shares") to the public
pursuant to a public offering;
WHEREAS, the Managing Dealer is registered with the National
Association of Securities Dealers, Inc. as a broker-dealer, and is presently or,
prior to any offers or sales of Shares, will be licensed in all fifty states,
the District of Columbia, and the Commonwealth of Puerto Rico as a broker-dealer
qualified to offer and sell to the public securities of the type represented by
the Shares; and
WHEREAS, the Company desires to retain the Managing Dealer to use its
best efforts to sell the Shares and to manage the sale by others of the Shares,
and the Managing Dealer is willing and desires to serve as the Managing Dealer
for the Company for the sale of the Shares upon the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the Company and the Managing
Dealer agree as follows:
SECTION 1
DEFINITIONS
Whenever used in this Agreement, the following terms shall have the
following specified meanings.
1.1 "Company" means CNL Retirement Properties, Inc., a Maryland
corporation.
1.2 "NASD" means the National Association of Securities Dealers,
Inc.
1.3 "Offering" means the offering of up to 400,000,000 Shares of
CNL RETIREMENT PROPERTIES, INC. to the public pursuant to the terms and
conditions of the Registration Statement.
1.4 "Offering Period" means the period commencing on the effective
date of the Registration Statement and ending on the earliest of the following:
(i) the later of one year after the initial date of the Prospectus or, at the
Company's election, two years after the initial date of the Prospectus; (ii) the
acceptance by the Company of subscriptions for 400,000,000 Shares, with up to
50,000,000 of such Shares available to investors who participate in the
Company's Reinvestment Plan (as defined below); (iii) the termination of the
Offering by the Company; (iv) the termination of the effectiveness of the
Registration Statement; or (v) the termination of the Company.
1.5 "Participating Brokers" mean those broker-dealers engaged by
the Managing Dealer to participate in the Offering pursuant to Paragraph 3.2.
1.6 "Prospectus" means the final prospectus included in the
Registration Statement, pursuant to which the Company will offer Shares to the
public, as the same may be amended or supplemented from time to time after the
effective date of the Registration Statement.
1.7 "Registration Statement" means the registration statement
pursuant to which the Company has registered the Shares with the SEC as provided
in the Securities Act of 1933, as amended, as such registration statement may be
amended or supplemented from time to time.
1.8 "SEC" means the Securities and Exchange Commission.
1.9 "Shares" mean the shares of Common Stock of the Company, par
value $0.01 per share, with a purchase price of $10.00 per share. An aggregate
of up to 400,000,000 Shares will be offered pursuant to the Registration
Statement.
1.10 "State Regulatory Authorities" mean the commissions,
departments, agencies or other authorities in the fifty states, the District of
Columbia, and the Commonwealth of Puerto Rico which regulate the offer and sale
of securities.
SECTION 2
APPOINTMENT
Subject to the terms and conditions set forth in this Agreement, the
Company hereby appoints the Managing Dealer as the managing dealer of the
Offering to use its best efforts to sell up to 400,000,000 Shares of the Company
and to manage the sale by others of such Shares for the Company's account. The
Managing Dealer hereby accepts such appointment.
SECTION 3
SALE OF SHARES
3.1 Best Efforts. The Managing Dealer shall use its best efforts
during the Offering Period to sell or cause to be sold the Shares in such
quantities and to such persons and in accordance with such terms as are set
forth in this Agreement, the Prospectus and the Registration Statement.
Notwithstanding anything herein to the contrary, the Managing Dealer shall have
no obligation under this Agreement to purchase any of the Shares for its own
account.
3.2 Association of Other Broker-Dealers. The Company hereby
acknowledges and agrees that the Managing Dealer may engage Participating
Brokers to participate in the Offering, provided that (i) all Participating
Brokers are registered with the NASD and are duly licensed by the State
Regulatory Authorities in the jurisdictions in which they will offer and sell
Shares or exempt from broker-dealer registration with the NASD and the State
Regulatory Authorities, and (ii) all such engagements are evidenced by written
agreements, the terms and conditions of which substantially conform to the form
of Participating Broker Agreement approved by the Company and attached hereto as
Exhibit A (the "Participating Broker Agreement"). The Managing Dealer is
authorized to reallow up to 6.0% of the commissions which it receives under
Paragraph 4.1 to Participating Brokers with respect to Shares sold by them.
3.3 Telephonic Subscriptions.
(a) The Managing Dealer may permit certain Participating Brokers
to accept telephonic or other oral subscriptions for Shares; provided,
however, that any such Participating Broker agrees that: (i) the
registered representative and branch manager of the Participating
Broker shall execute the subscription agreement on behalf of any
investor who telephonically or orally subscribes
-2-
for Shares; (ii) the Participating Broker shall not charge investors
who telephonically or orally subscribe for Shares any additional fees,
including but not limited to fees relating to opening an account with
the Participating Broker; and (iii) the Participating Broker shall not
accept telephonic or oral subscriptions for Shares from any investor
unless such investor has received a copy of the Company's Prospectus
prior to making a decision to invest. The Managing Dealer shall enter
into a written agreement with each Participating Broker who wishes to
accept telephonic or other oral subscriptions for Shares from investors
in certain states more particularly identified in the Prospectus,
pursuant to which the Participating Broker shall agree to explain to
such investor that: (i) the investor shall have the right to rescind
such subscription for a period of ten (10) days following the receipt
of the Confirmation (as hereinafter defined); and (ii) unless the
investor rescinds such subscription within the applicable period of
time, the investor shall be bound by the subscription agreement. The
Managing Dealer shall confirm the receipt of subscriptions for Shares
which have been subscribed for by telephone or other oral instructions
by written notice to the investor (the "Confirmation"). Such
Confirmation shall be mailed to the investor not later than seven (7)
days after the date on which the investor's funds are deposited, shall
contain a statement that the investor has a right to rescind his
subscription, and shall be accompanied by a Prospectus and a
Subscriber's Signature Page.
(b) Notwithstanding anything to the contrary contained in
Paragraph 4.3(a) of this Agreement, in the event that the Company pays
any commissions and fees to the Managing Dealer for sale by a
Participating Broker of one or more Shares pursuant to a telephonic or
other oral subscription where representatives of such Participating
Broker execute the subscription agreement relating to such Shares, and
the subscription is rescinded as to one or more of the Shares covered
by such subscription, the Company shall decrease the next payment of
commissions or other compensation otherwise payable to the Managing
Dealer by the Company under this Agreement by an amount equal to the
commission rate established in Paragraph 4.1 of this Agreement,
multiplied by the number of Shares as to which the subscription is
rescinded. In the event that no payment of commissions or other
compensation is due to the Managing Dealer after such withdrawal
occurs, the Managing Dealer shall pay the amount specified in the
preceding sentence to the Company within ten (10) days following
receipt of notice by the Managing Dealer from the Company stating the
amount owed as a result of rescinded subscriptions.
3.4 Suitability and Minimum Purchase Requirements.
(a) The Managing Dealer will use every reasonable effort, to the
extent it sells Shares to investors, to assure that any such Shares are
sold only to investors who:
(i) meet the investor suitability standards, including
the minimum income and net worth standard established by the
Company, and minimum purchase requirements set forth in the
Registration Statement;
(ii) can reasonably benefit from the Company based on the
prospective investor's overall investment objectives and
portfolio structure;
(iii) are able to bear the economic risk of the investment
based on each prospective investor's overall financial
situation; and
(iv) have apparent understanding of: (A) the fundamental
risks of the investment;
-3-
(B) the risk that the prospective investor may lose the entire
investment; (C) the lack of liquidity of the Shares; (D) the
restrictions on transferability of the Shares; (E) the
background and qualifications of the officers and directors of
CNL Retirement Corp., the advisor to the Company (the
"Advisor"); and (F) the tax consequences of an investment in
the Shares.
(b) The Managing Dealer will make the determinations required to
be made by it pursuant to Paragraph 3.4(a) above based on information
it has obtained from a prospective investor, including, at a minimum,
but not limited to, the prospective investor's age, investment
objectives, investment experience, income, net worth, financial
situation, other investments of the prospective investor, as well as
any other pertinent factors deemed by the Managing Dealer to be
relevant.
(c) The Managing Dealer shall maintain such records evidencing
compliance with the determination of the investor suitability standards
and minimum purchase requirements set forth in the Registration
Statement, to the extent required by Paragraphs 3.4(a) and 3.4(b) above
for a period of not less than six (6) years, or for such greater time
period as shall comply with all applicable federal, state and other
regulatory requirements.
(d) In addition to the foregoing, to the extent required by
Paragraphs 3.4(a) and 3.4(b), the Managing Dealer shall comply fully
with all the applicable provisions of the NASD's Conduct Rules and the
following provisions:
(i) the Managing Dealer shall have reasonable grounds to
believe, based upon information provided by the investor
concerning his investment objectives, other investments,
financial situation and needs, and upon any other information
known by the Managing Dealer, that (A) each investor to whom
the Managing Dealer sells Shares is or will be in a financial
position appropriate to enable him to realize to a significant
extent the benefits (including tax benefits) of an investment
in the Shares, (B) each investor to whom the Managing Dealer
sells Shares has a fair market net worth sufficient to sustain
the risks inherent in an investment in the Shares (including
potential loss and lack of liquidity), and (C) the Shares
otherwise are or will be a suitable investment for each
investor to whom the Managing Dealer sells Shares, and the
Managing Dealer shall maintain files disclosing the basis upon
which the determination of suitability was made;
(ii) the Managing Dealer shall not execute any transaction
involving the purchase of Shares in a discretionary account
without prior written approval of the transaction by the
investor;
(iii) the Managing Dealer shall have reasonable grounds to
believe, based upon the information made available to it, that
all material facts are adequate and accurately disclosed in
the Registration Statement and provide a basis for evaluating
the Shares;
(iv) in making the determination set forth in item (iii)
above, the Managing Dealer shall evaluate items of
compensation, properties, tax aspects, financial stability and
experience of the sponsor, conflicts of interest and risk
factors, and any other information deemed pertinent by it; and
(v) prior to executing a purchase transaction in the
Shares, the Managing Dealer shall
-4-
have informed the prospective investor of all pertinent facts
relating to the liquidity and marketability of the Shares.
(e) The Managing Dealer shall comply with the requirements for
determining the suitability of investors who elect to participate in
the Reinvestment Plan (the "Reinvestment Plan") in accordance with the
procedure set forth in Paragraph 6 of such Reinvestment Plan in the
form of Appendix A to the Prospectus.
3.5 Sales Literature. The Managing Dealer shall use and distribute
in conjunction with the offer and sale of any Shares only the Prospectus and
such sales literature and advertising as shall have been previously approved in
writing by the Company.
3.6 Jurisdictions. The Managing Dealer shall cause Shares to be
offered and sold only in those jurisdictions specified in writing by the Company
for whose account Shares are then offered for sale, and such list of
jurisdictions shall be updated by the Company as additional states are added.
The Company shall specify only such jurisdictions in which the offering and sale
of its Shares has been authorized by appropriate State Regulatory Authorities.
No Shares shall be offered or sold for the account of the Company in any other
states.
3.7 Escrow. All funds received by the Managing Dealer for the sale
of Shares shall be deposited in an escrow account established by the Company at
SouthTrust Bank (the "Escrow Agent"), by the close of the first business day
following receipt of such funds by the Managing Dealer. Such escrow account
shall be denominated "ESCROW ACCOUNT FOR THE BENEFIT OF SUBSCRIBERS FOR COMMON
STOCK OF CNL RETIREMENT PROPERTIES, INC." Checks may be made payable to either
the Escrow Agent or the Company. The Managing Dealer may authorize certain
Participating Brokers which are "$250,000 broker-dealers" to instruct their
customers to make their checks for Shares subscribed for payable directly to the
Participating Broker. In such case, the Participating Broker will collect the
proceeds of the subscribers' checks and issue a check made payable to the order
of the Escrow Agent for the aggregate amount of the subscription proceeds or
wire such funds to the Escrow Agent.
SECTION 4
COMPENSATION
4.1 Commissions.
(a) The Company shall pay to the Managing Dealer, as compensation
for all services to be rendered by the Managing Dealer pursuant to this
Agreement, commissions of up to 6.5% of the selling price of each Share
for which a sale is completed, regardless of whether such Share is sold
by the Managing Dealer or a Participating Broker; provided, however,
that the Company will pay reduced commissions and fees or may eliminate
commissions and fees on certain sales of Shares, including the
reduction or elimination of commissions and fees in accordance with,
and on the terms set forth in, the Prospectus and Paragraphs 4.1(b) and
(c).
(b) The following persons and entities may purchase Shares net of
6.5% commissions and the 1.5% marketing support fee, at a per Share
purchase price of $9.20 (assuming no other discounts apply): (i) a
registered principal or representative of the Managing Dealer or a
Participating Broker; (ii) employees, officers and directors of the
Company or the Advisor, or of the Affiliates of either of the foregoing
entities (and the immediate family members of any of the
-5-
foregoing persons, provided that "immediate family members" means such
person's spouse, parents, children, grandparents, grandchildren and any
such person who is so related by marriage such that this includes
"step-" and "-in law" relations as well as such persons so related by
adoption), and any Plan (as defined in the Prospectus) established
exclusively for the benefit of such persons or entities; (iii) a client
of an investment adviser registered under the Investment Advisers Act
of 1940, as amended, or under applicable state securities laws; and
(iv) a person investing in a bank trust account with respect to which
the decision-making authority for investments made has been delegated
to the bank trust department. As all sales must be made through a
registered broker-dealer, the investment adviser must arrange the
placement of the transaction through a broker-dealer that will waive
compensation or may contact the Managing Dealer for such assistance.
The amount of proceeds to the Company will not be affected by
eliminating commissions and marketing support fees payable in
connection with sales to investors purchasing through such registered
investment advisers, broker/dealers or bank trust departments. In
addition, Participating Brokers that have a contractual arrangement
with their clients for the payment of fees on terms that are
inconsistent with the acceptance of all or a portion of the commissions
and the marketing support fee may elect not to accept all or a portion
of their compensation in the form of commissions and the marketing
support fees offered by the Company for Shares that they sell. In that
event, such Shares shall be sold to the investor net of 6.5%
commissions and the marketing support fee, at a per share purchase
price of $9.20.
(c) In connection with the purchases of certain minimum numbers of
Shares, the amount of commissions otherwise payable may be reduced in
accordance with the volume discounts schedule set forth in the
Prospectus.
4.2 Due Diligence and Marketing Support Fee.
(a) Due Diligence. The Company shall pay the Managing Dealer for
actual expenses incurred in connection with the due diligence of our
Company and this Offering and such reimbursement will be paid following
submission of invoices supporting such expenses. All due diligence
expense reimbursements shall be paid by the Managing Dealer from this
amount.
(b) Marketing Support Fee. The Company shall pay to the Managing
Dealer a nonaccountable fee for assistance in selling and marketing the
Shares of up to one and one-half percent (1.5%) of the selling price of
each Share which is sold in the Offering. The Managing Dealer may
reallow all or any portion of this amount (1.5% of the selling price)
for each share sold by a Participating Broker with whom the Managing
Dealer enters into a separate agreement relating to the marketing
support fee.
Stockholders who elect to participate in the Reinvestment Plan will be
charged 6.5% commissions, due diligence expense reimbursements of approximately
0.05%, and the 1.5% marketing support fee on Shares purchased for their
accounts.
4.3 Completed Sale.
(a) A sale of a Share shall be deemed to be completed under
Paragraphs 4.1 and 4.2 if and only if (i) the Company has received a
properly completed and executed subscription agreement, together with
payment of the full purchase price of each purchased Share, from or, in
accordance with Paragraph 3.3(a), on behalf of an investor who
satisfies the applicable suitability standards and
-6-
minimum purchase requirements set forth in the Registration Statement
as determined by the Managing Dealer in accordance with the provisions
of this Agreement; (ii) the Company has accepted such subscription, and
(iii) such investor has been admitted as a stockholder of the Company.
(b) The Managing Dealer hereby acknowledges and agrees that the
Company, in its sole and absolute discretion, may accept or reject any
subscription, in whole or in part, for any reason whatsoever, and no
commission will be paid to the Managing Dealer with respect to that
portion of any subscription which is rejected.
4.4 Payment. Except as otherwise provided in the Prospectus, the
commissions and fees specified in Paragraphs 4.1 and 4.2 for the sale of any
Share shall be payable in cash by the Company, as specified in Paragraphs 4.1
and 4.2, no later than seven (7) days after the end of the calendar month in
which the investor subscribing for the Share is admitted as a stockholder of the
Company. Investors whose subscriptions for Shares are accepted shall be admitted
no later than the end of the calendar month in which such subscriptions are
accepted. The Company will accept or reject all subscriptions within 30 days
after receipt. Notwithstanding anything to the contrary contained herein, in the
event that the Company pays any commission to the Managing Dealer for sale by a
Participating Broker of one or more Shares and the subscription is rescinded as
to one or more of the Shares covered by such subscription, the Company shall
decrease the next payment of commissions or other compensation otherwise payable
to the Managing Dealer by the Company under this Agreement by an amount equal to
the commission rate established in Paragraph 4.1 of this Agreement, multiplied
by the number of Shares as to which the subscription is rescinded. In the event
that no payment of commissions or other compensation is due to the Managing
Dealer after such withdrawal occurs, the Managing Dealer shall pay the amount
specified in the preceding sentence to the Company within ten (10) days
following receipt of notice by the Managing Dealer from the Company stating the
amount owed as a result of rescinded subscriptions.
4.5 Sales Incentives. The Company or its Affiliates also may
provide incentive items for registered representatives of the Managing Dealer
and the Participating Brokers, but in no event shall such gifts exceed an
aggregate of $100 per annum per participating salesperson and will otherwise
comply with the NASD Conduct Rules. In the event other incentives are provided
to registered representatives of the Managing Dealer or the Participating
Brokers, they will only be paid in cash and such payments will only be made to
the Managing Dealer or the Participating Brokers rather than to their registered
representatives. Before any such sales incentive program is offered, the Company
agrees to obtain prior approval of the terms of such program from the NASD.
4.6 Wholesaling Compensation. The Company hereby agrees to
reimburse reasonable out-of-pocket expenses that wholesalers of the Managing
Dealer incur in connection with the distribution of its Shares.
SECTION 5
TERM OF AGREEMENT
5.1 Commencement and Expiration. This Agreement shall commence as
of the date first above written and, unless sooner terminated pursuant to
Paragraph 5.2 or by operation of law or otherwise, shall expire at the end of
the Offering Period.
5.2 Termination. Any party may terminate this agreement at any
time and for any reason by
-7-
giving 30 days prior written notice of intention to terminate to each other
party hereto.
5.3 Obligations Surviving Expiration or Termination.
(a) In addition to any other obligations of the Managing Dealer
that survive the expiration or termination of this Agreement, the
Managing Dealer, upon the expiration or termination of this Agreement,
shall (i) promptly deposit any and all funds in its possession which
were received from investors for the sale of Shares into the
appropriate escrow account specified in Paragraph 3.7, and (ii)
promptly deliver to the Company all records and documents in its
possession which relate to the Offering and are not designated as
dealer copies. The Managing Dealer, at its sole expense, may make and
retain copies of all such records and documents, but shall keep all
such information confidential. The Managing Dealer shall use its best
efforts to cooperate with the Company to accomplish an orderly transfer
of management of the Offering to a party designated by the Company.
(b) In addition to any other obligations of the Company that
survive the expiration or termination of this Agreement, the Company,
upon expiration or termination of this Agreement, shall pay to the
Managing Dealer all commissions and fees to which the Managing Dealer
is or becomes entitled under Section 4 at such time or times as such
commissions and fees become payable pursuant to Paragraph 4.3.
SECTION 6
COVENANTS OF THE MANAGING DEALER
The Managing Dealer covenants, warrants and represents, during the full
term of this Agreement, that:
(a) it is (i) a corporation duly organized and validly existing
under the laws of the State of Florida, (ii) a member of the NASD, and
(iii) a broker-dealer registered under the securities laws of all fifty
states, the District of Columbia, and the Commonwealth of Puerto Rico;
(b) it will use its best efforts to assure that all Shares are
offered and sold in accordance with (i) the terms of the Registration
Statement, the Prospectus and this Agreement, (ii) the requirements of
applicable federal and state securities laws and regulations, and (iii)
the applicable rules of the NASD, including, without limitation, the
NASD's Conduct Rules;
(c) it will cause the Shares to be offered or sold only in those
jurisdictions specified in writing by the Company;
(d) it will not use any offering or selling materials other than
materials furnished or previously approved in writing by the Company;
(e) it either (i) will not purchase Shares for its own account or
(ii) will hold all such Shares for investment; and
(f) it agrees to (i) comply with U.S. Department of Treasury
regulations (outlined in the Patriot Act) that require reasonable
efforts to verify the identity of new customers, maintain customer
records, and check the names of new customers against a government
terrorist list, (ii)
-8-
provide the Financial Crimes Enforcement Network with information
regarding: (1) the identity of a specified individual or organization,
(2) account number, (3) all identifying information provided by the
account holder, and (4) the date and type of transaction, upon request,
and (iii) manually monitor account activity to identify patterns of
unusual size or volume, geographic factors, and any of the other "red
flags" described in the Patriot Act as potential signals of money
laundering or terrorist financing. The Company reserves the right to
reject account applications from new customers who fail to provide
necessary account information or who intentionally provide misleading
information.
SECTION 7
COVENANTS OF THE COMPANY
The Company covenants, warrants and represents, during the full term of
this Agreement, that:
(a) it will use its best efforts to maintain the effectiveness of
the Registration Statement, and will file, or cause to be filed, such
amendments to the Registration Statement as may be reasonably necessary
for that purpose;
(b) it will use its best efforts to (i) prevent the issuance of
any order by the SEC, any State Regulatory Authority or any other
regulatory authority which suspends the effectiveness of the
Registration Statement, prevents the use of the Prospectus, or
otherwise prevents or suspends the Offering, and (ii) obtain the
lifting of any such order if issued;
(c) it will give the Managing Dealer written notice when the
Registration Statement becomes effective and shall deliver to the
Managing Dealer a signed copy of the Registration Statement, including
its exhibits, and such number of copies of the Registration Statement,
without exhibits, and the Prospectus, and any supplements and
amendments thereto which are finally approved by the SEC, as the
Managing Dealer may reasonably request for sale of the Shares, which
Prospectus shall not contain any untrue statement of a material fact
required to be stated therein or omit any material statement necessary
to make the statements therein, in light of the circumstances under
which they are made, not misleading;
(d) if at any time any event occurs and becomes known to the
Company prior to the end of the Offering Period, as a result of which
the Registration Statement or Prospectus would include an untrue
statement of a material fact or, in view of the circumstances under
which they were made, omit to state any material fact necessary to make
the statements therein not misleading, the Company will effect the
preparation of an amended or supplemented Registration Statement or
Prospectus which will correct such statement or omission;
(e) it will promptly notify the Managing Dealer of any
post-effective amendments or supplements to the Registration Statement
or Prospectus;
(f) it will, during the full term of this Agreement, abide by all
applicable provisions of its governing instruments, as the same may be
amended; and
(g) it will use its best efforts to cause, at or prior to the time
the Registration Statement becomes effective, the qualification or
registration of the Shares for offering and sale under the securities
laws of such jurisdictions as shall be determined by the Company.
-9-
SECTION 8
PAYMENT OF COSTS AND EXPENSES
8.1 Managing Dealer. The Managing Dealer shall pay all costs and
expenses incident to the performance of its obligations under this Agreement
which are not expressly assumed by the Company under Paragraph 8.2 below.
8.2 Company. The Company shall pay all costs and expenses related
to:
(a) the registration of the offer and sale of the Shares with the
SEC, including the cost of preparation, printing, filing and delivery
of the Registration Statement and all copies of the Prospectus used in
the Offering, and any amendments or supplements to such documents;
(b) the preparation and printing of the form of subscription
agreement to be used in the sale of the Shares;
(c) the qualification or registration of the Shares under state
securities or "blue sky" laws of states where the Shares are to be
offered or sold;
(d) the filing of the Registration Statement and any related
documents, including any amendments or supplements to such documents,
with the SEC, NASD and State Regulatory Authorities;
(e) any filing fees, and fees and disbursements to counsel,
accountants and escrow agents which are in any way related to any of
the above items; and
(f) the preparation, printing and filing of all advertising and
sales materials originated by it relating to the sale of Shares.
SECTION 9
INDEMNIFICATION
The Managing Dealer agrees to indemnify, defend and hold harmless the
Company from all losses, claims, demands, liabilities and expenses, including
reasonable legal and other expenses incurred in defending such claims or
liabilities, whether or not resulting in any liability to the Company, which the
Company may incur in connection with the offer or sale of any Shares, either by
the Managing Dealer pursuant to this Agreement or any Participating Broker
acting on the Managing Dealer's behalf pursuant to the Participating Broker
Agreement which arise out of or are based upon (i) an untrue statement or
alleged untrue statement of a material fact, or any omission or alleged omission
of a material fact, other than a statement or omission contained in the
Prospectus, the Registration Statement, or any state securities filing which was
not based on information supplied to the Company by the Managing Dealer or a
Participating Broker, or (ii) the breach by the Managing Dealer or any
Participating Broker acting on its behalf of any of the terms and conditions of
this Agreement or any Participating Broker Agreement, including, but not limited
to, alleged violations of the Securities Act of 1933, as amended.
The Company agrees to indemnify, defend and hold harmless the Managing
Dealer and its
-10-
employees, officers, directors and Affiliates, from all losses, claims, demands,
liabilities and expenses, including reasonable legal and other expenses incurred
in defending such claims or liabilities, whether or not resulting in any
liability to the Managing Dealer, which the Managing Dealer may incur in
connection with the offer or sale of any Shares, which arise out of or are based
upon (i) an untrue statement or alleged untrue statement of a material fact, or
any omission or alleged omission of a material fact, contained in the
Prospectus, the Registration Statement, or any state securities filing, or (ii)
the breach by the Company of any of the terms and conditions of this Agreement,
including, but not limited to, alleged violations of the Securities Act of 1933,
as amended.
SECTION 10
MISCELLANEOUS
10.1 Notices. Any notice, approval, request, authorization,
direction or other communication under this Agreement shall be given in writing
and shall be deemed to be delivered when delivered in person or deposited in the
United States mail, properly addressed and stamped with the required postage,
registered or certified mail, return receipt requested, to the intended
recipient as set forth below.
If to the Company: CNL Retirement Properties, Inc.
CNL Center at City Commons
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Xx., Chairman
of the Board
If to the Managing Dealer: CNL Securities Corp.
CNL Center at City Commons
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, President
Any party may change its address specified above by giving each other party
notice of such change in accordance with this Paragraph 10.1.
10.2 Invalid Provision. The invalidity or unenforceability of any
provision of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provision were omitted.
10.3 No Partnership. Nothing in this Agreement shall be construed
or interpreted to constitute the Managing Dealer as in association with or in
partnership with the Company, and instead, this Agreement only shall constitute
the Managing Dealer as a dealer authorized by the Company to sell and to manage
the sale by others of the Shares according to the terms set forth in the
Registration Statement, the Prospectus or this Agreement.
10.4 No Third Party Beneficiaries. No provision of this Agreement
is intended to be for the benefit of any person or entity not a party to this
Agreement, and no third party shall be deemed to be a beneficiary of any
provision of this Agreement. Further, no third party shall by virtue of any
provision of this Agreement have a right of action or an enforceable remedy
against either party to this Agreement.
10.5 Survival. Paragraph 5.3 and Section 9 and all provisions of
this Agreement which may
-11-
reasonably be interpreted or construed as surviving the expiration or
termination of this Agreement shall survive the expiration or termination of
this Agreement.
10.6 Entire Agreement. This Agreement constitutes the complete
understanding among the parties hereto, and no variation, modification or
amendment to this Agreement shall be deemed valid or effective unless and until
it is signed by all parties hereto.
10.7 Successors and Assigns. No party shall assign (voluntarily, by
operation of law or otherwise) this Agreement or any right, interest or benefit
under this Agreement without the prior written consent of the other party.
Subject to the foregoing, this Agreement shall be fully binding upon, inure to
the benefit of, and be enforceable by, the parties hereto and their respective
successors and assigns.
10.8 Nonwaiver. The failure of any party to insist upon or enforce
strict performance by any other party of any provision of this Agreement or to
exercise any right under this Agreement shall not be construed as a waiver or
relinquishment to any extent of such party's right to assert or rely upon any
such provision or right in that or any other instance; rather, such provision or
right shall be and remain in full force and effect.
10.9 Applicable Law. This Agreement shall be interpreted, construed
and enforced in all respects in accordance with the laws of the State of Florida
applicable to contracts to be made and performed entirely in said state.
-12-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
Company: CNL RETIREMENT PROPERTIES, INC.
By: __________________________________
XXXXX X. XXXXXX, XX., Chairman of the Board
Managing Dealer: CNL SECURITIES CORP.
By: __________________________________
XXXXXX X. XXXXXX, President
-13-
