EX-1.1
2
fs12017a1ex1-1_gwghold.htm
FORM OF
DEALER MANAGER AGREEMENT WITH XXXXXXX EQUITY
EXHIBIT 1.1
XXXXXXX EQUITY, LLC
FORM OF DEALER MANAGER AGREEMENT
________________, 2017
Xxxxxxx Equity, LLC
000 Xxxxx Xxxx, Xxxxx 000
San Mateo, California 94402
Ladies and Gentlemen:
GWG Holdings, Inc. (the “Company”)
is a Delaware corporation. The Company proposes to offer up to $1,000,000,000 in aggregate principal amount (the “Offering”)
of the Company’s L Bonds (“L Bonds”). The L Bonds will be issued in “Units” at a public
offering price of $1,000 per Unit.
Upon the terms and subject to the conditions
contained in this Dealer Manager Agreement (this “Agreement”), the Company hereby appoints Xxxxxxx Equity, LLC,
a California limited liability company (the “Dealer Manager”), to act as the exclusive dealer manager for the
Offering, and the Dealer Manager desires to accept such engagement.
| 1. | Representations and Warranties of the Company. The Company hereby represents, warrants and agrees, as of the date of
this Agreement and on each Effective Date (as defined below) as follows: |
| (a) | Registration Statement and Prospectus. In connection with the Offering, the Company has prepared and filed with the
Securities and Exchange Commission (the “Commission”) a registration statement (File No. 333-220288) on Form S-1 for
the registration of the public offer and sale of the Units under the Securities Act of 1933, as amended (the “Securities
Act”), and the rules and regulations of the Commission promulgated thereunder (the “Securities Act Rules and Regulations”);
and one or more amendments to such registration statement have been or may be so prepared and filed. The registration statement
on Form S-1 and the prospectus contained therein, as finally amended at the date the registration statement is declared effective
by the Commission (the “Effective Date”) are respectively hereinafter referred to as the “Registration Statement”
and the “Prospectus,” except that: |
| (i) | if the Company files a post-effective amendment to such registration statement, then the term “Registration Statement”
shall, from and after the declaration of the effectiveness of such post-effective amendment by the Commission, refer to such registration
statement as amended by such post-effective amendment, and the term “Prospectus” shall refer to the amended prospectus
then on file with the Commission; and |
| (ii) | if the prospectus filed by the Company pursuant to either Rule 424(b) or 424(c) of the Securities Act Rules and Regulations
shall differ from the prospectus on file at the time the Registration Statement or the most recent post-effective amendment thereto,
if any, shall have become effective, then the term “Prospectus” shall refer to such prospectus filed pursuant to either
Rule 424(b) or 424(c), as the case may be, from and after the date on which it shall have been filed. The term “preliminary
Prospectus” as used herein shall mean a preliminary prospectus related to the Units as contemplated by Rule 430 or Rule 430A
of the Securities Act Rules and Regulations included at any time as part of the Registration Statement. As used herein, the terms
“Registration Statement”, “preliminary Prospectus” and “Prospectus” shall include the documents,
if any, incorporated by reference therein. |
As used herein, the term “Effective Date”
also shall refer to the effective date of each post-effective amendment to the Registration Statement, unless the context otherwise
requires.
| (b) | Compliance with the Securities Act. During the term of this Agreement: |
| (i) | the Registration Statement, the Prospectus and any amendments or supplements thereto have complied, and will comply, in all
material respects with the Securities Act, the Securities Act Rules and Regulations, the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) and the rules and regulations promulgated thereunder (the “Exchange Act Rules and Regulations”); |
| (ii) | the Registration Statement does not, and any amendment thereto will not, in each case as of the applicable Effective Date,
include any untrue statement of material fact or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were made, not misleading; and the Prospectus does
not, and any amendment or supplement thereto will not, as of the applicable filing date, include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they are made, not misleading; provided, however, that the foregoing provisions of this Section 1(b)
will not extend to any statements contained in or omitted from the Registration Statement or the Prospectus that are based upon
written information furnished to the Company by the Dealer Manager expressly for use in the Offering; and |
| (iii) | the documents incorporated or deemed to be incorporated by reference in the Prospectus, at the time they are hereafter filed
with the Commission, will comply in all material respects with the requirements of the Exchange Act and the Exchange Act Rules
and Regulations, and, when read together with the other information in the Prospectus, at each applicable Effective Date, did not
and will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under which they were made, not misleading. |
| (c) | Securities Matters. There has not been: |
| (i) | any request by the Commission for any further amendment to the Registration Statement or the Prospectus or for any additional
information; |
| (ii) | any issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the institution
or, to the Company’s knowledge, threat of any proceeding for that purpose; or |
| (iii) | any notification with respect to the suspension of the qualification of the Units for sale in any jurisdiction or any initiation
or, to the Company’s knowledge, threat of any proceeding for such purpose. |
The Company is in compliance in all material respects
with all federal and state securities laws, rules and regulations applicable to it and its activities, including, without limitation,
with respect to the Offering and the sale of the Units.
| (d) | Corporate Status and Good Standing. The Company is a corporation duly organized and validly existing under the laws
of the State of Delaware and is in good standing with the Delaware Secretary of State, with all requisite power and authority to
enter into this Agreement and to carry out its obligations hereunder. |
| (e) | Authorization of Agreement. This Agreement is duly and validly authorized, executed and delivered by or on behalf of
the Company and, assuming the due authorization, execution and delivery of the same by the Dealer Manager, constitutes a valid
and binding agreement of the Company enforceable in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws of the United States, any state or any political subdivision
thereof which affect creditors’ rights generally or by equitable principles relating to the availability of remedies or except
to the extent that the enforceability of the indemnity and contribution provisions contained in this Agreement may be limited under
applicable securities laws. |
| (f) | Absence of Conflict or Default. The execution and delivery of this Agreement and the performance of this Agreement,
the consummation of the transactions contemplated herein and the fulfillment of the terms hereof, do not and will not conflict
with, or result in a breach of any of the terms and provisions of, or constitute a default under: |
| (i) | the Company’s or any of its subsidiaries’ charter, bylaws, or other organizational documents, as the case may be; |
| (ii) | any indenture, mortgage, deed of trust, voting trust agreement, note, lease or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any of its subsidiaries or any of their properties is bound except,
for purposes of this clause (ii) only, for such conflicts, breaches or defaults that do not result in and could not reasonably
be expected to result in, individually or in the aggregate, a Company MAE (as defined below in this Section 1(f)); or |
| (iii) | any statute, rule or regulation or order of any court or other governmental agency or body having jurisdiction over the Company,
any of its subsidiaries or any of their properties, except for such conflicts, breaches or defaults that do not result in and would
not reasonably be expected to result in, individually or in the aggregate, a Company MAE (as defined in this Section 1(f)). |
No consent, approval, authorization or order of any
court or other governmental agency or body has been or is required for the performance of this Agreement or for the consummation
by the Company of any of the transactions contemplated hereby (except as have been obtained under the Securities Act, the Exchange
Act, or as may be required under the Financial Industry Regulatory Authority (“FINRA”) or state securities or applicable
blue sky laws in connection with the offer and sale of the Units or under the laws of states in which the Company may own real
properties in connection with its qualification to transact business in such states or as may be required by subsequent events
which may occur). Neither the Company nor any of its subsidiaries is in violation of its charter, bylaws or other organizational
documents, as the case may be, that would reasonably be expected to result in a Company MAE.
As used in this Agreement, “Company MAE”
means any event, circumstance, occurrence, fact, condition, change or effect, individually or in the aggregate, that is, or could
reasonably be expected to be, materially adverse to (A) the condition, financial or otherwise, earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise, or (B) the ability of the Company to perform its obligations
under this Agreement or the validity or enforceability of this Agreement or the Units. As used in this Agreement, “business
prospects” excludes any development resulting from any event, circumstance, development, change or effect (1) in general
economic or business conditions, (2) in financial or securities markets generally, or (3) generally affecting the business or industry
in which the Company operates.
| (g) | Actions or Proceedings. As of the initial Effective Date, there are no actions, suits or proceedings against, or investigations
of, the Company or its subsidiaries pending or, to the knowledge of the Company, threatened, before any court, arbitrator, administrative
agency or other tribunal: |
| (i) | asserting the invalidity of this Agreement; |
| (ii) | seeking to prevent the issuance of the Units or the consummation of any of the transactions contemplated by this Agreement; |
| (iii) | that would reasonably be expected to materially and adversely affect the performance by the Company of its obligations under
or the validity or enforceability of, this Agreement or the Units; |
| (iv) | that would reasonably be expected to result in a Company MAE, or |
| (v) | seeking to affect adversely the federal income tax attributes of the Units except as described in the Prospectus. |
The Company promptly will give notice to the Dealer
Manager of the occurrence of any action, suit, proceeding or investigation of the type referred to above arising or occurring on
or after the initial Effective Date.
| (h) | Sales Literature. Any supplemental sales literature or advertisement (including, without limitation any “broker-dealer
use only” or institutional material), regardless of how labeled or described, used in addition to the Prospectus in connection
with the Offering which previously has been, or hereafter is, furnished or approved by the Company (collectively, “Approved
Sales Literature”), shall, to the extent required, be filed with and approved by the appropriate securities agencies and
bodies, provided that the Dealer Manager will make all FINRA filings, to the extent required. Any and all Approved Sales Literature,
when used in connection with the Prospectus, did not or will not at the time provided for use include any untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading. |
| (i) | Authorization of Units. The Units have been duly authorized and, when issued and sold as contemplated by the Prospectus
and upon payment therefor as provided in this Agreement and the Prospectus, will be validly issued, fully paid and nonassessable
and will conform in all material aspects to the description thereof contained in the Prospectus. |
| (j) | Taxes. Any taxes, fees and other governmental charges in connection with the execution and delivery of this Agreement
or the execution, delivery and sale of the Units have been or will be paid when due. |
| (k) | Investment Company. The Company is not, and neither the offer or sale of the Units nor any of the activities of the
Company will cause the Company to be, an “investment company” or under the control of an “investment company”
as such terms are defined in the Investment Company Act of 1940, as amended. |
| (l) | Tax Returns. The Company has filed or will file all material federal, state and foreign income tax returns required
to be filed by or on behalf of the Company on or before the due dates therefor (taking into account all extensions of time to file)
and has paid or provided for the payment of all such material taxes, except those being contested in good faith, indicated by such
tax returns and all assessments received by the Company to the extent that such taxes or assessments have become due. |
| (m) | Independent Registered Public Accounting Firm. The accounting firm that has certified certain financial statements appearing
in the Prospectus is an independent registered public accounting firm within the meaning of the Securities Act and the Securities
Act Rules and Regulations. Such accounting firm has not been engaged by the Company to perform any “prohibited activities”
(as defined in Section 10A of the Exchange Act). |
The Company and its subsidiaries each maintains a system
of internal accounting and other controls sufficient to provide reasonable assurances regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles as
applied in the United States (“GAAP”), including, without limitation: (i) policies and procedures that: (A) pertain
to the maintenance of records that in reasonable detail accurately and fairly reflect in all material respects the transactions
and dispositions of the assets of the Company or its subsidiaries; (B) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company
or its subsidiaries are being made only in accordance with general or specific authorizations of the Company’s management
and directors; and (C) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use,
or disposition of the Company’s or its subsidiaries’ assets that could have a material adverse effect on the Company’s
financial statements; and (ii) policies and procedures that provide reasonable assurances that: (A) transactions are executed only
in accordance with general or specific authorizations of the Company’s management or directors; (B) transactions are recorded
as necessary to permit preparation of the Company’s financial statements in conformity with GAAP and to maintain accountability
for assets: (C) access to assets is permitted only in accordance with general or specific authorization of the Company’s
management or directors; and (D) the recorded accountability for assets is compared with existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
Except as described in the Registration Statement,
since the end of the Company’s most recent audited fiscal year, there has been (1) no material weakness in the Company’s
internal control over financial reporting (whether or not remediated), and (2) no change in the Company’s internal control
over financial reporting that has materially adversely affected, or is reasonably likely to materially adversely affect, the Company’s
internal control over financial reporting.
| (n) | Preparation of the Financial Statements. The financial statements filed with the Commission as a part of the Registration
Statement and included in the Prospectus present fairly the consolidated financial position of the Company and its subsidiaries
as of and at the dates indicated and the results of their operations and cash flows for the periods specified. Such financial statements
have been prepared in conformity with GAAP applied on a consistent basis throughout the periods involved, except as may be expressly
stated in the related notes thereto. No other financial statements or supporting schedules are required to be included in the Registration
Statement or any applicable Prospectus. |
| (o) | Material Adverse Change. Subsequent to the respective dates as of which information is contained in the Registration
Statement and the Prospectus, except as may otherwise be stated therein or contemplated thereby, there has not occurred a Company
MAE, whether or not arising in the ordinary course of business. |
| (p) | Government Permits. The Company and its subsidiaries possess such certificates, authorities or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct the business now operated by them, other
than those the failure to possess or own would not have, individually or in the aggregate, a Company MAE. Neither the Company nor
any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate,
authority or permit which, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in a Company MAE. |
| 2. | Representations and Warranties of the Dealer Manager. The Dealer Manager represents and warrants to the Company as of
the date of this Agreement and on each Effective Date that: |
| (a) | Organization Status. The Dealer Manager is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of California, with all requisite power and authority to enter into this Agreement and to
carry out its obligations hereunder. |
| (b) | Authorization of Agreement. This Agreement has been duly authorized, executed and delivered by the Dealer Manager, and
assuming due authorization, execution and delivery of this Agreement by the Company, will constitute a valid and legally binding
agreement of the Dealer Manager enforceable against the Dealer Manager in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally
or by equitable principles relating to enforceability and except that rights to indemnity and contribution hereunder may be limited
by applicable law and public policy. |
| (c) | Absence of Conflict or Default. The execution and delivery of this Agreement, the consummation of the transactions herein
contemplated and compliance with the terms of this Agreement by the Dealer Manager will not conflict with or constitute a default
under: |
| (i) | its organizational or charter documents; |
| (ii) | any indenture, mortgage, deed of trust or lease to which the Dealer Manager is a party or by which it may be bound, or to which
any of the property or assets of the Dealer Manager is subject; or |
| (iii) | any statute, rule, regulation, writ, injunction or decree of any government, governmental instrumentality or court, domestic
or foreign, having jurisdiction over the Dealer Manager or its assets, properties or operations, except in the case of clause (ii)
or (iii) for such conflicts or defaults that would not individually or in the aggregate have a material adverse effect on the condition
(financial or otherwise), business, properties or results of operations of the Dealer Manager. |
| (d) | Broker-Dealer Registration; FINRA Membership. The Dealer Manager is, and during the term of this Agreement will be,
duly registered as a broker-dealer pursuant to the provisions of the Exchange Act, a member in good standing of FINRA, and a broker
or dealer duly registered as such in those states where the Dealer Manager is required to be registered in order to carry out the
Offering as contemplated by this Agreement. Moreover, the Dealer Manager’s employees and representatives have all required
licenses and registrations to act under this Agreement. There is no provision in the Dealer Manager’s FINRA membership agreement
that would restrict the ability of the Dealer Manager to carry out the Offering as contemplated by this Agreement. |
The information under the caption “Plan of Distribution”
in the Prospectus insofar as it relates to the Dealer Manager, and all other information furnished to the Company by the Dealer
Manager in writing specifically for use in the Registration Statement, any preliminary Prospectus or the Prospectus, does not contain
any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they were made, not misleading
| 3. | Offering and Sale of the Units. Upon the terms and subject to the conditions set forth in this Agreement, the Company
hereby appoints the Dealer Manager as its agent and exclusive distributor to solicit and retain the Soliciting Dealers (as defined
in Section 3(a)) to solicit subscriptions for the Units at the subscription price to be paid in cash. Upon the terms and subject
to the conditions set forth in this Agreement, the Dealer Manager hereby accepts such agency and exclusive distributorship and
agrees to use its best efforts to sell or cause to be sold the Units in such quantities and to such persons in accordance with
such terms as are set forth in this Agreement, the Prospectus and the Registration Statement. |
The Dealer Manager shall do so during the period commencing
on the initial Effective Date and ending on the earliest to occur of the following: (1) the acceptance by the Company of subscriptions
for the amount offered in the Offering; (2) the termination of the Offering by the Company, which the Company shall have the right
to terminate in its sole and absolute discretion at any time; (3) the termination of the effectiveness of the Registration Statement,
which is three years from the initial Effective Date; (4) the liquidation or dissolution of the Company; and (5) the termination
of this Agreement by either party as contemplated in Section 9(a) (such period being the “Offering Period”).
The number of Units, if any, to be reserved for sale
by each Soliciting Dealer may be determined by mutual agreement, from time to time, by the Dealer Manager and the Company. In the
absence of such determination, the Company shall, subject to the provisions of Section 3(b), accept subscriptions based upon a
first-come, first-accepted basis or other similar method (subject, however, to the right of the Company to reject subscriptions
as described in the Prospectus and paragraph (c) below). Under no circumstances will the Dealer Manager be obligated to underwrite
or purchase any Units for its own account and, in soliciting purchases of Units, the Dealer Manager shall act solely as the Company’s
agent and not as an underwriter or principal.
| (a) | Soliciting Dealers. The Units offered and sold through the Dealer Manager under this Agreement shall be offered and
sold only by the Dealer Manager and other securities dealers the Dealer Manager may retain (collectively the “Soliciting
Dealers”); provided, however, that: |
| (i) | the Dealer Manager reasonably believes that all Soliciting Dealers are registered with the Commission, members of FINRA and
are duly licensed or registered by the regulatory authorities in the jurisdictions in which they will offer and sell Units; and |
| (ii) | all such engagements are evidenced by written agreements, the terms and conditions of which substantially conform to the form
of Soliciting Dealer Agreement attached hereto as Exhibit A (the “Soliciting Dealer Agreement”). |
| (b) | Subscription Documents. Each person desiring to purchase Units through the Dealer Manager, or any other Soliciting Dealer,
will be required to complete and execute the subscription documents or comply with other procedures described in the Prospectus. |
| (c) | Completed Sale. The Company will sell Units directly (“Direct Settlement”) or through a closing service
provided by the Depository Trust Company (“DTC”), DTC closing (“DTC Settlement”). A sale of a Unit shall
be deemed by the Company to be completed if and only if (i) the Company has received payment of the full purchase price of each
purchased Unit, from an investor who satisfies the minimum purchase requirements set forth in the Registration Statement as determined
by the Soliciting Dealer, or the Dealer Manager, as applicable, in accordance with the provisions of this Agreement, (ii) the Company
has accepted such subscription, and, if using Direct Settlement, a properly completed and executed Subscription Agreement, and
(iii) such investor has been issued the L Bond. In addition, no sale of Units shall be completed until after the date on which
the subscriber receives a copy of the Prospectus. The Dealer Manager 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 or no reason, and
no commission or Dealer Manager Fee (as defined below) will be paid to the Dealer Manager with respect to that portion of any subscription
which is rejected. As used in this Agreement, “business day” means any day other than a Saturday, Sunday or a day on
which banking institutions in the State of New York are authorized or obligated by law or executive order to close. |
| (d) | Dealer-Manager Compensation. |
| (i) | Subject to the special circumstances described in or otherwise provided in the “Plan of Distribution” section of
the Prospectus or this Section 3(d), the table below sets forth the amount of sales commissions and additional compensation that
the Company will pay in connection with the Offering: |
| | L Bond Term | | Sales Commission | | | Additional Compensation | | | Total | |
| | 2 years | | | 3.25 | % | | | 4.75 | % | | | 8.00 | % |
| | 3 years | | | 4.25 | % | | | 3.75 | % | | | 8.00 | % |
| | 5 years | | | 4.90 | % | | | 3.10 | % | | | 8.00 | % |
| | 7 years | | | 5.00 | % | | | 3.00 | % | | | 8.00 | % |
The sales commission and additional compensation equal
the percentages of the selling price of each Unit sold in the Offering as set forth above. As described above, additional compensation
includes: (i) a Dealer Manager Fee payable to the Dealer Manager in an amount equal to 0.50% of the principal amount of all L Bonds
sold; (ii) an accountable expense allowance to the Soliciting Dealers, which may include due-diligence expenses set forth in a
detailed and itemized invoice; (iii) wholesaling fees, which may consist of commissions and non-transaction-based compensation
of the wholesalers, (iv) non-cash compensation; and (v) up to a 1.00% reallowance to Soliciting Dealers.
| (ii) | Subject to the special circumstances described in or otherwise provided in the “Plan of Distribution” section of
the Prospectus or this Section 3(d), as compensation for acting as the dealer manager, the Company will pay the Dealer Manager
a dealer manager fee in the amount of up to and including 0.50% of the selling price of each Unit sold in the Offering (the “Dealer
Manager Fee”). |
Further, the Dealer Manager is entitled to receive:
| ● | an accountable allowance expense, which includes, subject to Section
3(e), due diligence expenses and wholesaling expenses other than salaries and commissions to the wholesalers; |
| ● | a wholesaling fee which may consist of commissions and non-transaction
based compensation; and |
| ● | up to a 1.00% reallowance of the selling price to be paid to Soliciting
Dealers for each Unit sold. |
The Dealer Manager may retain or re-allow up to 1.00%
of any additional compensation it receives, subject to federal and state securities laws, to the Soliciting Dealer who sold the
Units, as described more fully in the Soliciting Dealer Agreement.
| (iii) | All selling commissions and Dealer Manager Fees payable to the Dealer Manager will be paid at least within twenty (20) business
days after each subscription for Units is accepted the Company, in an amount equal to the sales commissions plus the Dealer
Manager Fee payable with respect to such Units. |
| (iv) | In no event shall the total aggregate underwriting compensation payable to the Dealer Manager and any Soliciting Dealers participating
in the Offering, including, but not limited to, selling commissions and the Dealer Manager Fee exceed eight percent (8.0%) of gross
offering proceeds from the Offering in the aggregate. |
| (v) | Notwithstanding anything to the contrary contained herein, if the Company pays any selling commission to a Soliciting Dealer
of one or more Units and the subscription is rescinded as to one or more of the Units covered by such subscription, then the Company
shall decrease the next payment of selling commissions or other compensation otherwise payable to the Soliciting Dealer by the
Company under this Agreement by an amount equal to the commission rate established in this Section 3(d), multiplied by the number
of Units as to which the subscription is rescinded. If no payment of selling commissions or other compensation is due to the Soliciting
Dealer after such withdrawal occurs, then the Soliciting Dealer shall pay the amount specified in the preceding sentence to the
Company within a reasonable period of time not to exceed thirty (30) days following receipt of notice by the Soliciting Dealer
from the Company stating the amount owed as a result of rescinded subscriptions. |
| (e) | Reasonable Bona Fide Due Diligence Expenses. The Company shall only reimburse the Dealer Manager or any Soliciting Dealer
for such approved bona fide due diligence expenses to the extent such expenses have actually been incurred and are supported by
detailed and itemized invoice(s) provided to the Company. |
| (f) | Company Expenses. Subject to the limitations described above, the Company agrees to pay all costs and expenses incident
to the Offering, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, including
expenses, fees and taxes in connection with: |
| (i) | the registration fee, the preparation and filing of the Registration Statement (including without limitation financial statements,
exhibits, schedules and consents), the Prospectus, and any amendments or supplements thereto, and the printing and furnishing of
copies of each thereof to the Dealer Manager and to Soliciting Dealers (including costs of mailing and shipment); |
| (ii) | the preparation, issuance and delivery of certificates, if any, for the Units, including any transfer taxes or duties payable
upon the sale of the Units; |
| (iii) | all fees and expenses of the Company’s legal counsel, independent public or certified public accountants and other advisors; |
| (iv) | the determination of the Units’ eligibility for sale or an exemption under state law and the printing and furnishing
of copies of blue sky surveys if any; |
| (v) | the filing fees in connection with filing for review by FINRA, if required, of all necessary documents and information relating
to the Offering and the Units; |
| (vi) | the fees and expenses of any transfer agent or registrar for the Units and miscellaneous expenses referred to in the Registration
Statement; |
| (vii) | all costs and expenses incident to the travel and accommodation of the Company officers and directors, in making road show
presentations and presentations to Soliciting Dealers and other broker-dealers and financial advisors with respect to the offering
of the Units ; and |
| (viii) | the performance of the Company’s other obligations hereunder. |
| 4. | Conditions to the Dealer Manager’s Obligations. The Dealer Manager’s obligation to use its best efforts
to offer and sell Units pursuant to this Agreement shall be subject to the following conditions: |
| (a) | The representations and warranties on the part of the Company contained in this Agreement hereof shall be true and correct
in all material respects and the Company shall have complied with its covenants, agreements and obligations contained in this Agreement
in all material respects; |
| (b) | The Registration Statement shall have become effective and no stop order suspending the effectiveness of the Registration Statement
shall have been issued by the Commission and, to the best knowledge of the Company, no proceedings for that purpose shall have
been instituted, threatened or contemplated by the Commission; and any request by the Commission for additional information (to
be included in the Registration Statement or Prospectus or otherwise) shall have been complied with to the reasonable satisfaction
of the Dealer Manager; and |
| (c) | The Registration Statement and the Prospectus, and any amendment or any supplement thereto, shall not contain any untrue statement
of material fact, or omit to state a material fact that is required to be stated therein or is necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading. |
| 5. | Covenants of the Company. The Company covenants and agrees with the Dealer Manager as follows: |
| (a) | Registration Statement. The Company will use its best efforts to cause the Registration Statement and any subsequent
amendments thereto to become effective as promptly as possible and will furnish a copy of any proposed amendment or supplement
of the Registration Statement or the Prospectus to the Dealer Manager. The Company will comply in all material respects with all
federal and state securities laws, rules and regulations which are required to be complied with in order to permit the continuance
of offers and sales of the Units in accordance with the provisions hereof and of the Prospectus. |
| (b) | Commission Orders. If the Commission shall issue any stop order or any other order preventing or suspending the use
of the Prospectus, or shall institute any proceedings for that purpose, then the Company will promptly notify the Dealer Manager
and use its best efforts to prevent the issuance of any such order and, if any such order is issued, to use its best efforts to
obtain the removal thereof as promptly as possible. |
| (c) | Blue Sky Qualifications. If required by applicable law or regulation, the Company will use its best efforts to qualify
the Units for offering and sale under the securities or blue sky laws of such jurisdictions as the Dealer Manager and the Company
shall mutually agree upon and to make such applications, file such documents and furnish such information as may be reasonably
required for that purpose. The Company will, at the Dealer Manager’s request, furnish the Dealer Manager with a copy of such
papers filed by the Company in connection with any such qualification. The Company will promptly advise the Dealer Manager of the
issuance by such securities administrators of any stop order preventing or suspending the use of the Prospectus or of the institution
of any proceedings for that purpose, and will use its best efforts to prevent the issuance of any such order and if any such order
is issued, to use its best efforts to obtain the removal thereof as promptly as possible. |
| (d) | Amendments and Supplements. If, at any time when a Prospectus relating to the Units is required to be delivered under
the Securities Act, any event shall have occurred to the knowledge of the Company, or the Company receives notice from the Dealer
Manager that it believes such an event has occurred, as a result of which the Prospectus or any Approved Sales Literature as then
amended or supplemented would include any untrue statement of a material fact, or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were made, not misleading, or if it is necessary at any
time to amend the Registration Statement or supplement the Prospectus relating to the Units to comply with the Securities Act,
then the Company will promptly notify the Dealer Manager thereof (unless the information shall have been received from the Dealer
Manager) and will prepare and file with the Commission an amendment or supplement which will correct such statement or effect such
compliance to the extent required, and shall make available to the Dealer Manager thereof sufficient copies for its own use and/or
distribution to the Soliciting Dealers. |
| (e) | Requests from Commission. The Company will promptly advise the Dealer Manager of any request made by the Commission
or a state securities administrator for amending the Registration Statement, supplementing the Prospectus or for additional information. |
| (f) | Copies of Registration Statement. Upon request, the Company will furnish the Dealer Manager with one signed copy of
the Registration Statement, including its exhibits, and such additional copies of the Registration Statement, without exhibits,
and the Prospectus and all amendments and supplements thereto, which are finally approved by the Commission, as the Dealer Manager
may reasonably request for sale of the Units. |
| (g) | Qualification to Transact Business. The Company will take all steps necessary to ensure that at all times the Company
will validly exist as a Delaware corporation and will be qualified to do business in all jurisdictions in which the conduct of
its business requires such qualification and where such qualification is required under local law. |
| (h) | Authority to Perform Agreements. The Company undertakes to obtain all consents, approvals, authorizations or orders
of any court or governmental agency or body which are required for the Company’s performance of this Agreement and under
the Company’s Certificate of Incorporation, as amended (as the same may be amended, supplemented or otherwise modified from
time to time, the “Company’s Charter”), and the Company’s Bylaws, each in the form included as exhibits
to the Registration Statement for the consummation of the transactions contemplated hereby and thereby, respectively, or the conducting
by the Company of the business described in the Prospectus. |
| (i) | Sales Literature. The Company will furnish to the Dealer Manager as promptly as shall be practicable upon request any
Approved Sales Literature (provided that the use of said material has been first approved for use to the extent required by all
appropriate regulatory agencies). Any supplemental sales literature or advertisement, regardless of how labeled or described, used
in addition to the Prospectus in connection with the Offering which is furnished or approved by the Company (including, without
limitation, Approved Sales Literature) shall, to the extent required, be filed with and, to the extent required, approved by the
appropriate securities agencies and bodies, provided that the Dealer Manager will make all FINRA filings, to the extent required.
The Company will not (and will instruct its affiliates not to): show or give to any investor or prospective investor or reproduce
any material or writing that is marked “broker-dealer use only,” institutional, or otherwise bears a legend denoting
that it is not to be used in connection with the sale of Units to members of the public; or show or give to any investor or prospective
investor in a particular jurisdiction any material or writing if such material bears a legend denoting that it is not to be used
in connection with the sale of Units to members of the public in such jurisdiction. |
| (j) | Use of Proceeds. The Company will apply the proceeds from the sale of the Units as set forth in the Prospectus. |
| (k) | Customer Information. The Dealer Manager and the Company shall, when applicable: |
| (i) | abide by and comply with (A) the privacy standards and requirements of the Xxxxx-Xxxxx-Xxxxxx Act of 1999 (the “GLB Act”)
and applicable regulations promulgated thereunder, (B) the privacy standards and requirements of any other applicable federal or
state law, including but not limited to, the Fair Credit Reporting Act (“FCRA”), and (C) its own internal privacy policies
and procedures, each as may be amended from time to time; |
| (ii) | refrain from the use or disclosure of nonpublic personal information (as defined under the GLB Act) of all customers who have
opted out of such disclosures except as necessary to service the customers or as otherwise necessary or required by applicable
law; |
| (iii) | except as expressly permitted under the FCRA, the Dealer Manager and the Company shall not disclose any information that would
be considered a “consumer report” under the FCRA; and |
| (iv) | determine which customers have opted out of the disclosure of nonpublic personal information by periodically reviewing and,
if necessary, retrieving an aggregated list of such customers from the Soliciting Dealers (the “List”) to identify
customers that have exercised their opt-out rights. If either party uses or discloses nonpublic personal information of any customer
for purposes other than servicing the customer, or as otherwise required by applicable law, that party will consult the List to
determine whether the affected customer has exercised his or her opt-out rights. Each party understands that it is prohibited from
using or disclosing any nonpublic personal information of any customer that is identified on the List as having opted out of such
disclosures. |
| (l) | Dealer Manager’s Review of Proposed Amendments and Supplements. Prior to amending or supplementing the Registration
Statement, any preliminary prospectus or the Prospectus (including any amendment or supplement through incorporation of any report
filed under the Exchange Act), the Company shall furnish to the Dealer Manager for review, a reasonable amount of time prior to
the proposed time of filing or use thereof, a copy of each such proposed amendment or supplement, and the Company shall not file
or use any such proposed amendment or supplement without the Dealer Manager’s consent, which consent shall not be unreasonably
withheld or delayed. |
| (m) | Certain Payments. Without the prior consent of the Dealer Manager, none of the Company, the Manager or any of their
respective affiliates will make any payment (cash or non-cash) to any associated Person or registered representative of the Dealer
Manager. |
| 6. | Covenants of the Dealer Manager. The Dealer Manager covenants and agrees with the Company as follows: |
| (a) | Compliance with Laws. With respect to the Dealer Manager’s participation and the participation by each Soliciting
Dealer in the offer and sale of the Units (including, without limitation, any resales and transfers of Units), the Dealer Manager
agrees, and each Soliciting Dealer in its Soliciting Dealer Agreement will agree, to comply in all material respects with all applicable
requirements of the Securities Act, the Securities Act Rules and Regulations, the Exchange Act, the Exchange Act Rules and Regulations
and all other federal regulations applicable to the Offering, the sale of Units and with all applicable state securities or blue
sky laws, and FINRA rules and regulations applicable to the Offering, from time to time in effect, specifically including, but
not in any way limited to, NASD Conduct Rule 2340 (Customer Account Statements) and FINRA Rules 2040 (Payments to Unregistered
Persons), 2111 (Suitability), 5110 (Corporate Financing Rule – Underwriting Terms and Arrangements), 5130 (Restrictions on
the Purchase and Sale of Initial Equity Public Offerings), and 5141 (Sale of Securities in a Fixed Price Offering) therein. The
Dealer Manager will not offer the Units for sale in any jurisdiction unless and until it has been advised that the Units are either
registered in accordance with, or exempt from, the securities and other laws applicable thereto. |
In addition, the Dealer Manager shall, in accordance
with applicable law or as prescribed by any state securities administrator, provide, or require in the Soliciting Dealer Agreement
that the Soliciting Dealer shall provide, to any prospective investor copies of any prescribed document which is part of the Registration
Statement and any supplements thereto during the course of the Offering and prior to the sale. The Company may provide the Dealer
Manager with certain Approved Sales Literature to be used by the Dealer Manager and the Soliciting Dealers in connection with the
solicitation of purchasers of the Units. The Dealer Manager agrees not to deliver the Approved Sales Literature to any person prior
to the initial Effective Date. If the Dealer Manager elects to use such Approved Sales Literature after the initial Effective Date,
then the Dealer Manager agrees that such material shall not be used by it in connection with the solicitation of purchasers of
the Units and that it will direct Soliciting Dealers not to make such use unless accompanied or preceded by the Prospectus, as
then currently in effect, and as it may be amended or supplemented in the future.
The Dealer Manager agrees that it will not use any
Approved Sales Literature other than those provided to the Dealer Manager by the Company for use in the Offering. The use of any
other sales material is expressly prohibited.
| (b) | No Additional Information. In offering the Units for sale, the Dealer Manager shall not, and each Soliciting Dealer
shall agree not to, give or provide any information or make any representation other than those contained in the Prospectus or
the Approved Sales Literature. |
| (c) | Sales of Units. The Dealer Manager shall, and each Soliciting Dealer shall agree to, solicit purchases of the Units
only in the jurisdictions in which the Dealer Manager and such Soliciting Dealer are legally qualified to so act and in which the
Dealer Manager and each Soliciting Dealer have been advised by the Company or counsel to the Company that such solicitations can
be made. |
| (d) | Subscription Agreement. The Dealer Manager will comply in all material respects with the subscription procedures and
“Plan of Distribution” set forth in the Prospectus. Subscriptions using Direct Settlement will be submitted by the
Dealer Manager and each Soliciting Dealer to the Company only on the subscription agreement, substantially in the form included
as an exhibit to the Registration Statement. The Dealer Manager understands and acknowledges, and each Soliciting Dealer shall
acknowledge if using Direct Settlement, that the Subscription Agreement must be executed and initialed by the subscriber as provided
for by the Subscription Agreement. |
| (e) | Suitability. The Dealer Manager will offer Units, and in its agreement with each Soliciting Dealer will require that
the Soliciting Dealer offer Units, only to persons that it has reasonable grounds to believe meet the financial qualifications
set forth in the Prospectus or in any suitability letter or memorandum sent to it by the Company and will only make offers to persons
in the states in which it is advised in writing by the Company that the Units are qualified for sale or that such qualification
is not required. In offering Units, the Dealer Manager will comply, and in its agreements with the Soliciting Dealers, the Dealer
Manager will require that the Soliciting Dealers comply, with the provisions of all applicable rules and regulations relating to
suitability of investors, including applicable FINRA Rules. |
The Dealer Manager agrees that in recommending the
purchase of the Units in the Offering to an investor, the Dealer Manager and each person associated with the Dealer Manager that
make such recommendation shall have, and each Soliciting Dealer in its Soliciting Dealer Agreement shall agree with respect to
investors to which it makes a recommendation shall agree that it shall have, reasonable grounds to believe, on the basis of information
obtained from the investor concerning the investor’s investment objectives, other investments, financial situation and needs,
and any other information known by the Dealer Manager, the person associated with the Dealer Manager or the Soliciting Dealer that:
| (i) | the investor is or will be in a financial position appropriate to enable the investor to realize to a significant extent the
benefits described in the Prospectus, including the tax benefits where they are a significant aspect of the Company; |
| (ii) | the investor has a fair market net worth sufficient to sustain the risks inherent in the program, including loss of investment
and lack of liquidity; and |
| (iii) | an investment in the Units offered in the Offering is otherwise suitable for the investor. |
The Dealer Manager agrees as to investors to whom it
makes a recommendation with respect to the purchase of the Units in the Offering (and each Soliciting Dealer in its Soliciting
Dealer Agreement shall agree, with respect to Investors to whom it makes such recommendations) to maintain in the files of the
Dealer Manager (or the Soliciting Dealer, as applicable) documents disclosing the basis upon which the determination of suitability
was reached as to each investor.
In making the determinations as to financial qualifications
and as to suitability, the Dealer Manager and Soliciting Dealers may rely on (A) representations from investment advisers who are
not affiliated with a Soliciting Dealer, and banks acting as trustees or fiduciaries, and (B) information it has obtained from
a prospective investor, including such information as the investment objectives, other investments, financial situation and needs
of the person or any other information known by the Dealer Manager (or Soliciting Dealer, as applicable), after due inquiry. Notwithstanding
the foregoing, the Dealer Manager shall not, and each Soliciting Dealer shall agree not to, execute any transaction in the Company
in a discretionary account without prior written approval of the transaction by the customer.
| (f) | Soliciting Dealer Agreements. All engagements of the Soliciting Dealers will be evidenced by a Soliciting Dealer Agreement. |
| (g) | Electronic Delivery. If the Dealer Manager uses electronic delivery to distribute the Prospectus to any person, it will
comply with all applicable requirements of the Commission, the Blue Sky laws and/or FINRA and any other laws or regulations related
to the electronic delivery of documents. |
| (h) | AML Compliance. The Dealer Manager represents to the Company that it has established and implemented an anti-money laundering
compliance program (“AML Program”) in accordance with Section 352 of the USA PATRIOT Act of 2001 (the “PATRIOT
Act”) and FINRA Rule 3310, that complies with applicable anti-money laundering laws and regulations, including, but not limited
to, the customer identification program requirements of Section 326 of the PATRIOT Act, and the suspicious activity reporting requirements
of Section 356 of the PATRIOT Act, and the laws, regulations and Executive Orders administered by the Office of Foreign Assets
Control (“OFAC”) of the U.S. Department of Treasury (collectively, “AML/OFAC Laws”). The Dealer Manager
hereby covenants to remain in compliance with the AML/OFAC Laws and shall, upon request by the Company, provide a certification
to the Company that, as of the date of such certification, its AML Program is compliant with the AML/OFAC Laws. |
| (i) | Customer Information. The Dealer Manager will use its best efforts to provide the Company with any and all subscriber
information that the Company requests in order for the Company to satisfy its obligations under the AML/OFAC Laws and comply with
the requirements under Section 5(k) above. |
| (j) | Recordkeeping. The Dealer Manager will comply, and will require each Soliciting Dealer to comply, with the record keeping
requirements of the Exchange Act, including, but not limited to, Rules 17a-3 and 17a-4 promulgated under the Exchange Act, and
shall maintain, for at least six years or for a period of time not less than that required in order to comply with all applicable
federal, state and other regulatory requirements, whichever is later, such records with respect to each investor who purchases
Units, information used to determine that the investor meets the suitability standards imposed on the offer and sale of the Units,
the amount of Units sold, and a representation of the investor that the investor is investing for the investor’s own account
or, in lieu of such representation, information indicating that the investor for whose account the investment was made met the
suitability standards. |
| (k) | Suspension or Termination of Offering. The Dealer Manager agrees, and will require that each of the Soliciting Dealers
agree, to suspend or terminate the offering and sale of the Units upon request of the Company at any time and to resume the offering
and sale of the Units upon subsequent request of the Company. |
| (a) | Indemnified Parties Defined. For the purposes of this Agreement, an “Indemnified Party” shall mean a person
or entity entitled to indemnification under this Section 7, as well as such person’s or entity’s officers, directors,
employees, members, partners, affiliates, agents and representatives, and each person, if any, who controls such person or entity
within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act. |
| (b) | Indemnification of the Dealer Manager and Soliciting Dealers. The Company will indemnify, defend and hold harmless the
Dealer Manager and the Soliciting Dealers, and their respective Indemnified Parties, from and against any losses, claims, expenses
(including reasonable legal and other expenses incurred in investigating and defending such claims or liabilities), damages or
liabilities, joint or several, to which any such Soliciting Dealers or the Dealer Manager, or their respective Indemnified Parties,
may become subject under the Securities Act, the Securities Act Rules and Regulations, the Exchange Act, the Exchange Act Rules
and Regulations or otherwise, insofar as such losses, claims, expenses, damages or liabilities (or actions in respect thereof)
arise out of or are based upon: |
| (i) | any material inaccuracy in a representation or warranty contained herein by the Company, any material breach of a covenant
contained herein by the Company, or any material failure by the Company to perform its obligations hereunder or to comply with
state or federal securities laws applicable to the Offering; |
| (ii) | any untrue statement or alleged untrue statement of a material fact contained (A) in any Registration Statement or any post-effective
amendment thereto or in the Prospectus or any amendment or supplement to the Prospectus, (B) in any Approved Sales Literature or
(C) in any blue sky application or other document executed by the Company or on its behalf specifically for the purpose of qualifying
any or all of the Units for sale under the securities laws of any jurisdiction or based upon written information furnished by the
Company under the securities laws thereof (any such application, document or information being hereinafter called a “Blue
Sky Application”); or |
| (iii) | the omission or alleged omission to state a material fact required to be stated in the Registration Statement or any post-effective
amendment thereof or necessary to make the statements therein not misleading, or the omission or alleged omission to state a material
fact required to be stated in the Prospectus or any amendment or supplement to the prospectus or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading. |
The Company will reimburse each Soliciting Dealer or
the Dealer Manager, and their respective Indemnified Parties, for any reasonable legal or other expenses incurred by such Soliciting
Dealer or the Dealer Manager, and their respective Indemnified Parties, in connection with investigating or defending such loss,
claim, expense, damage, liability or action; provided, however, that the Company will not be liable in any such case to the extent
that any such loss, claim, expense, damage or liability arises out of, or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Company by the
Dealer Manager expressly for use in the Registration Statement or any post-effective amendment thereof or the Prospectus or any
such amendment thereof or supplement thereto. This indemnity agreement will be in addition to any liability which the Company may
otherwise have.
| (c) | Dealer Manager Indemnification of the Company. The Dealer Manager will indemnify, defend and hold harmless the Company
and each of its Indemnified Parties and each person who has signed the Registration Statement, from and against any losses, claims,
expenses (including the reasonable legal and other expenses incurred in investigating and defending any such claims or liabilities),
damages or liabilities to which any of the aforesaid parties may become subject under the Securities Act, the Securities Act Rules
and Regulations, the Exchange Act, the Exchange Act Rules and Regulations or otherwise, insofar as such losses, claims, expenses,
damages (or actions in respect thereof) arise out of or are based upon: |
| (i) | any material inaccuracy in a representation or warranty contained herein by the Dealer Manager, or any material breach of a
covenant contained herein by the Dealer Manager; |
| (ii) | any untrue statement or any alleged untrue statement of a material fact contained (A) in any Registration Statement or any
post-effective amendment thereto or in the Prospectus or any amendment or supplement to the Prospectus, (B) in any Approved Sales
Literature, or (C) any Blue Sky Application; |
| (iii) | the omission or alleged omission to state a material fact required to be stated in the Registration Statement or any post-effective
amendment thereof to make the statements therein not misleading, or the omission or alleged omission to state a material fact required
to be stated in the Prospectus or any amendment or supplement to the Prospectus to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however, that in each case described in clauses (ii) and (iii)
to the extent, but only to the extent, that such untrue statement or omission was made in reliance upon and in conformity with
written information furnished to the Company by the Dealer Manager expressly for use in the Registration Statement or any such
post-effective amendments thereof or the Prospectus or any such amendment thereof or supplement thereto; |
| (iv) | any use of sales literature, including “broker-dealer use only” materials, by the Dealer Manager that is not Approved
Sales Literature; or |
| (v) | any untrue statement made by the Dealer Manager, or omission by the Dealer Manager to state a fact necessary in order to make
the statements made, in light of the circumstances under which they were made, not misleading, in connection with the Offering;
provided, however, this clause (v) shall not apply to any statements or omissions made in conformity with the Registration Statement,
the Prospectus, any Approved Sales Literature or any other materials or information furnished by or on behalf of the Company. |
The Dealer Manager will reimburse the aforesaid parties
for any reasonable legal or other expenses incurred in connection with investigation or defense of such loss, claim, expense, damage,
liability or action. This indemnity agreement will be in addition to any liability which the Dealer Manager may otherwise have.
| (d) | Soliciting Dealer Indemnification of the Company. By virtue of entering into the Soliciting Dealer Agreement, each Soliciting
Dealer severally will agree to indemnify, defend and hold harmless the Company, the Dealer Manager, each of their respective Indemnified
Parties, and each person who signs the Registration Statement, from and against any losses, claims, expenses, damages or liabilities
to which the Company, the Dealer Manager, or any of their respective Indemnified Parties, or any person who signed the Registration
Statement, may become subject, under the Securities Act or otherwise, as more fully described in the Soliciting Dealer Agreement. |
| (e) | Action Against Parties; Notification. Promptly after receipt by any Indemnified Party under this Section 7 of notice
of the commencement of any action, such Indemnified Party will, if a claim in respect thereof is to be made against any indemnifying
party under this Section 7, promptly notify the indemnifying party of the commencement thereof; provided, however, that the failure
to give such notice shall not relieve the indemnifying party of its obligations hereunder except to the extent it shall have been
actually prejudiced by such failure. In case any such action is brought against any Indemnified Party, and it notifies an indemnifying
party of the commencement thereof, the indemnifying party will be entitled, to the extent it may wish, jointly with any other indemnifying
party similarly notified, to participate in the defense thereof, with separate counsel. |
Such participation shall not relieve such indemnifying
party of the obligation to reimburse the Indemnified Party for reasonable legal and other expenses incurred by such Indemnified
Party in defending itself, except for such expenses incurred after the indemnifying party has deposited funds sufficient to effect
the settlement, with prejudice, of, and unconditional release of all liabilities from, the claim in respect of which indemnity
is sought. Any such indemnifying party shall not be liable to any such Indemnified Party on account of any settlement of any claim
or action effected by the Indemnified Party without the consent of such indemnifying party, such consent not to be unreasonably
withheld or delayed.
| (f) | Reimbursement of Fees and Expenses. An indemnifying party under this Section 7 of this Agreement shall be obligated
to reimburse an Indemnified Party for reasonable legal and other expenses as follows: |
| (i) | In the case of the Company indemnifying the Dealer Manager, the advancement of funds to the Dealer Manager for legal expenses
and other costs incurred as a result of any legal action for which indemnification is being sought shall be permissible only if
all of the following conditions are satisfied: (A) the legal action relates to acts or omissions with respect to the performance
of duties or services on behalf of the Company; (B) the legal action is initiated by a third party who is not a stockholder of
the Company or the legal action is initiated by a stockholder of the Company acting in his or her capacity as such and a court
of competent jurisdiction specifically approves such advancement; and (C) the Dealer Manager undertakes to repay the advanced funds
to the Company, together with the applicable legal rate of interest thereon, in cases in which the Dealer Manager is found not
to be entitled to indemnification. |
| (ii) | In any case of indemnification other than that described in Section 7(f)(i) above, the indemnifying party shall pay all legal
fees and expenses reasonably incurred by the Indemnified Party in the defense of such claims or actions; provided, however, that
the indemnifying party shall not be obligated to pay legal expenses and fees to more than one law firm in connection with the defense
of similar claims arising out of the same alleged acts or omissions giving rise to such claims notwithstanding that such actions
or claims are alleged or brought by one or more parties against more than one Indemnified Party. If such claims or actions are
alleged or brought against more than one Indemnified Party, then the indemnifying party shall only be obliged to reimburse the
expenses and fees of the one law firm that has been agreed upon by a majority of the Indemnified Parties against which such action
is finally brought; and if a majority of such Indemnified Parties is unable to agree on which law firm for which expenses or fees
will be reimbursable by the indemnifying party, then payment shall be made to the first law firm of record representing an Indemnified
Party against the action or claim. Such law firm shall be paid only to the extent of services performed by such law firm and no
reimbursement shall be payable to such law firm on account of legal services performed by another law firm. |
| (a) | If Indemnification is Unavailable. If the indemnification provided for in Section 7 is for any reason unavailable to
or insufficient to hold harmless an Indemnified Party in respect of any losses, liabilities, claims, damages or expenses referred
to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such Indemnified Party, as incurred: |
| (i) | in such proportion as is appropriate to reflect the relative benefits received by the Company, the Dealer Manager and the Soliciting
Dealer, respectively, from the proceeds received in Offering pursuant to this Agreement and the relevant Soliciting Dealer Agreement;
or |
| (ii) | if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, the Dealer Manager and
the Soliciting Dealer, respectively, in connection with the statements or omissions which resulted in such losses, liabilities,
claims, damages or expenses, as well as any other relevant equitable considerations. |
| (b) | Relative Benefits. The relative benefits received by the Company, the Dealer Manager and the Soliciting Dealer, respectively,
in connection with the proceeds received in the Offering pursuant to this Agreement and the relevant Soliciting Dealer Agreement
shall be deemed to be in the same respective proportion as the total net proceeds from the Offering pursuant to this Agreement
and the relevant Soliciting Dealer Agreement (before deducting expenses), received by the Company, the total Dealer Manager Fees
received by the Dealer Manager, and the total selling commissions and additional compensation, other than the Dealer Manager Fee,
received by the Soliciting Dealers, bear to the aggregate offering price of the Units sold in the Offering as set forth on such
cover. In the event that the Dealer Manager receives actual selling commissions and additional compensation in addition to the
Dealer Manager Fee, then the relative benefits received by the Dealer Manager shall be calculated so as to include the actual selling
commissions and additional compensation as well as the Dealer Manager Fees received by the Dealer Manager. |
| (c) | Relative Fault. The relative fault of the Company, the Dealer Manager and the Soliciting Dealer, respectively, shall
be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact related to information supplied by the Company, by the Dealer Manager or by the Soliciting
Dealer, respectively, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. |
| (d) | Pro Rata is Unreasonable. The Company, the Dealer Manager and the Soliciting Dealer (by virtue of entering into the
Soliciting Dealer Agreement) agree that it would not be just and equitable if contribution pursuant to this Section 8 were determined
by pro rata allocation or by any other method of allocation which does not take account of the equitable contributions referred
to above in this Section 8. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an Indemnified
Party and referred to above in this Section 8 shall be deemed to include any legal or other expenses reasonably incurred by such
Indemnified Party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission or alleged omission. |
| (e) | Limits. Notwithstanding the provisions of this Section 8, the Dealer Manager and the Soliciting Dealer shall not be
required to contribute any amount by which the total price at which the Units sold in the Offering to the public by them exceeds
the amount of any damages which the Dealer Manager and the Soliciting Dealer have otherwise been required to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. |
| (f) | Fraudulent Misrepresentation. No party guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any party who was not guilty of such fraudulent misrepresentation. |
| (g) | Benefits of Contribution. For the purposes of this Section 8, the Dealer Manager’s officers, directors, employees,
members, partners, agents and representatives, and each person, if any, who controls the Dealer Manager within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution of the Dealer Manager, and
each officers, directors, employees, members, partners, agents and representatives of the Company, each officer of the Company
who signed the Registration Statement and each person, if any, who controls the Company, within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution of the Company. The Soliciting Dealers’
respective obligations to contribute pursuant to this Section 8 are several in proportion to the number of Units sold by each Soliciting
Dealer in the Offering and not joint. |
| 9. | Termination of this Agreement. |
| (a) | Term; Expiration. This Agreement shall become effective on the initial Effective Date and the obligations of the parties
hereunder shall not commence until the initial Effective Date. This Agreement may be terminated by either party upon 30 calendar
days’ written notice to the other party. This Agreement shall automatically expire on the conclusion of the Offering Period. |
| (b) | Delivery of Records Upon Expiration or Early Termination. Upon the expiration or early termination of this Agreement
for any reason, the Dealer Manager shall: |
| (i) | promptly forward any and all funds, if any, in its possession which were received from investors for the sale of Units for
deposit; |
| (ii) | to the extent not previously provided to the Company a list of all investors who have subscribed for or purchased Units and
all broker-dealers with whom the Dealer Manager has entered into a Soliciting Dealer Agreement; |
| (iii) | notify Soliciting Dealers of such termination; and |
| (iv) | promptly deliver to the Company copies of any sales literature designed for use specifically for the Offering that it is then
in the process of preparing. Upon expiration or earlier termination of this Agreement, the Company shall pay to the Dealer Manager
all compensation to which the Dealer Manager is or becomes entitled under Section 3(d) at such time as such compensation becomes
payable. |
| (a) | Survival. The following provisions of the Agreement shall survive the expiration or earlier termination of this Agreement:
Section 3(d) (Dealer-Manager Compensation) (solely with respect to the sale of Units prior to termination of this Agreement); Section
3(e) (Reasonable Bona Fide Due Diligence Expenses); Section 6(h) (AML Compliance); Section 7 (Indemnification); Section 8 (Contribution);
Section 9 (Termination of This Agreement) and this Section 10 (Miscellaneous). Notwithstanding anything else that may be to the
contrary herein, the expiration or earlier termination of this Agreement shall not relieve a party for liability for any breach
occurring prior to such expiration or earlier termination. In no event shall the Dealer Manager be entitled to payment of any compensation
in connection with the Offering in the event the Offering is not completed; provided, however, that the reimbursement of out-of-pocket
accountable expenses actually incurred by the Dealer Manager or person associated with the Dealer Manager shall not be presumed
to be unfair or unreasonable and shall be payable under normal circumstances. |
| (b) | Notices. All notices or other communications required or permitted hereunder, except as herein otherwise specifically
provided, shall be in writing and shall be deemed given or delivered: (i) when delivered personally or by commercial messenger;
(ii) one business day following deposit with a recognized overnight courier service, provided such deposit occurs prior to the
deadline imposed by such service for overnight delivery; (iii) when transmitted, if sent by facsimile copy, provided confirmation
of receipt is received by sender and such notice is sent by an additional method provided hereunder; in each case above provided
such communication is addressed to the intended recipient thereof as set forth below: |
If to the Company:
GWG Holdings, Inc.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx Xxxxx, Senior Counsel
with a copy to:
Maslon LLP
3300 Xxxxx Fargo Center
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxxx
If to the Dealer Manager:
Xxxxxxx Equity, LLC
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xx. Xxxxx Xxxxxx
with a copy to:
Xxxxxxx & Xxxxxxxxx, Inc.
0000 X. Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Xx.
Any party may change its address specified above by
giving each party notice of such change in accordance with this Section 10(b).
| (c) | 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. |
| (d) | 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. |
| (e) | Applicable Law. This Agreement and any disputes relative to the interpretation or enforcement hereto shall be governed
by and construed under the internal laws, as opposed to the conflicts-of-laws provisions, of the State of New York. |
| (f) | Waiver. EACH OF THE PARTIES HERETO WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) RELATED TO OR ARISING OUT OF THIS AGREEMENT. The parties hereto each hereby irrevocably
submits to the exclusive jurisdiction of the courts of the State of New York and the Federal courts of the United States of America
located in the Eastern District of New York, in respect of the interpretation and enforcement of the terms of this Agreement, and
in respect of the transactions contemplated hereby, and each hereby waives, and agrees not to assert, as a defense in any action,
suit or proceeding for the interpretation or enforcement hereof, that it is not subject thereto or that such action, suit or proceeding
may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement
may not be enforced in or by such courts, and the parties hereto each hereby irrevocably agrees that all claims with respect to
such action or proceeding shall be heard and determined in such a New York State or Federal court. |
| (g) | Attorneys’ Fees. If a dispute arises concerning the performance, meaning or interpretation of any provision of
this Agreement or any document executed in connection with this Agreement, then the prevailing party in such dispute shall be awarded
any and all costs and expenses incurred by the prevailing party in enforcing, defending or establishing its rights hereunder or
thereunder, including, without limitation, court costs and attorneys and expert witness fees. In addition to the foregoing award
of costs and fees, the prevailing also shall be entitled to recover its attorneys’ fees incurred in any post-judgment proceedings
to collect or enforce any judgment. |
| (h) | No Partnership. Nothing in this Agreement shall be construed or interpreted to constitute the Dealer Manager or the
Soliciting Dealer as being in association with or in partnership with the Company or one another, and instead, this Agreement only
shall constitute the Soliciting Dealer as a broker authorized by the Company to sell and to manage the sale by others of the Units
according to the terms set forth in the Registration Statement, the Prospectus or this Agreement. Nothing herein contained shall
render the Dealer Manager or the Company liable for the obligations of any of the Soliciting Dealers or one another. |
| (i) | Third Party Beneficiaries. Except for the persons and entities referred to in Section 7 (Indemnification) and Section
8 (Contribution), there shall be no third-party beneficiaries of this Agreement, and 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. Except for the persons and entities referred to in Section 7 and Section 8, no third party
shall by virtue of any provision of this Agreement have a right of action or an enforceable remedy against any party to this Agreement.
Each of the persons and entities referred to in Section 7 and Section 8 shall be a third-party beneficiary of this Agreement. |
| (j) | Entire Agreement. This Agreement contains the entire agreement and understanding among the parties hereto with respect
to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions,
express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof
control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. This Agreement
may not be modified or amended other than by an agreement in writing. |
| (k) | 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. |
| (l) | Access to Information. The Company may authorize the Company’s transfer agent to provide information to the Dealer
Manager and each Soliciting Dealer regarding recordholder information about the clients of such Soliciting Dealer who have invested
with the Company on an on-going basis for so long as such Soliciting Dealer has a relationship with such clients. The Dealer Manager
shall require in the Soliciting Dealer Agreement that Soliciting Dealers not disclose any password for a restricted website or
portion of website provided to such Soliciting Dealer in connection with the Offering and not disclose to any person, other than
an officer, director, employee or agent of such Soliciting Dealers, any material downloaded from such a restricted website or portion
of a restricted website. |
| (m) | Counterparts. This Agreement may be executed (including by facsimile transmission) with counterpart signature pages
or in counterpart copies, each of which shall be deemed an original but all of which together shall constitute one and the same
instrument comprising this Agreement. |
| (n) | Absence of Fiduciary Relationships. The parties acknowledge and agree that: |
| (i) | the Dealer Manager’s responsibility to the Company is solely contractual in nature; and |
| (ii) | the Dealer Manager does not owe the Company, any of its affiliates or any other person or entity any fiduciary (or other similar)
duty as a result of this Agreement or any of the transactions contemplated hereby. |
If the foregoing is in accordance with your
understanding of our agreement, kindly sign and return it to us, whereupon this instrument will become a binding agreement between
you and the Company in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have
each duly executed this Dealer Manager Agreement as of the day and year set forth above.
| | THE COMPANY: |
| | |
| | GWG Holdings, Inc. |
| | | | |
| | By: | |
| | | Name: | |
| | | Title: | |
Accepted as of the date first above written:
| | THE DEALER MANAGER: |
| | |
| | XXXXXXX EQUITY, LLC |
| | | | |
| | By: | |
| | | Name: | |
| | | Title: | |
