EXHIBIT 1.2
SELECTED SALES AGENT AGREEMENT
SELECTED SALES AGENT AGREEMENT
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SELECTED SALES AGENT AGREEMENT between XXXXXXX XXXXXX & COMPANY FINANCIAL
SERVICES, INC., an Iowa Corporation (the "Managing Sales Agent"), and the
Selected Sales Agent (the "Agent") signing this Agreement.
RECITALS
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Telecommunications Income Fund XI, L.P., is an Iowa Limited Partnership
(the "Partnership") of which Xxxxxxx, Xxxxxx & Company Leasing, Inc. is the
General Partner. The Partnership proposes to offer and sell up to 25,000 units
representing limited partnership interests (the "Units") to the general public,
pursuant to a public offering of the Units (the "Offering") which will be
registered with the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Securities Act").
The Managing Sales Agent is a corporation presently in good standing in the
State of Iowa, is a member presently in good standing of the National
Association of Securities Dealers, Inc. ("NASD"), and is presently registered as
a broker-dealer with the SEC. The Managing Sales Agent has heretofore been
designated the Managing Sales Agent to manage the sale by others of the Units
pursuant to the terms of the Offering.
The Agent is an entity as designated in Exhibit A attached hereto, is a
member presently in good standing of the NASD, is presently registered as a
broker-dealer and is in good standing with the SEC and is presently licensed by,
and is in good standing with, the appropriate regulatory agency of each state in
which it will offer and sell the Units, as a securities broker-dealer qualified
to offer and sell to members of the public securities of the type represented by
the Units.
The General Partner, on behalf of the Partnership, has filed with the SEC a
registration statement on Form S-1, including a preliminary prospectus, for the
registration of the Units under the Securities Act. Such registration
statement, as it may be amended, and the prospectus included therein at the time
the registration statement becomes effective, including any supplements and
amendments to such documents after the effective date of registration statement,
are herein referred to as the "Registration Statement" and the "Prospectus,"
respectively.
The offer and sale of the Units shall be made pursuant to the terms and
conditions of the Registration Statement and the Prospectus, and pursuant to the
terms and conditions of all applicable securities laws of all states in which
the Units are offered and sold.
The Managing Sales Agent desires to retain the Agent to use its best
efforts to sell the Units, and the Agent is willing and desires to serve as an
agent for the Managing Sales Agent for the sale of the Units upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and terms and conditions
hereof, it is agreed as follows:
1. EMPLOYMENT. (a) Subject to the terms and conditions herein set
forth, the Managing Sales Agent hereby employs the Agent as an agent to use its
best efforts to sell for the Partnership's account a portion of the Units. The
Agent hereby accepts such employment and covenants, warrants and agrees that all
Units sold by it will be sold according to all of the terms and conditions of
the Registration
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Statement, the Conduct Rules of the NASD and all applicable
state and federal laws, including the Securities Act and any and all regulations
and rules pertaining thereto heretofore or hereafter issued by the SEC. Neither
the Agent nor any other person shall have any authority or give any information
or make any representations in connection with any offer or sale of the Units
other than as contained in the Prospectus and as is otherwise expressly
authorized in writing by the Managing Sales Agent.
(b) The Agent shall use its best efforts as agent, promptly
following receipt of written notice from the Managing Sales Agent of the
effective date of the Registration Statement, to sell a portion of the Units
at the price per Unit to be specified in, and in such quantities and to such
persons and according to such terms as are all contained in, the Registration
Statement and the Prospectus. The Agent shall comply with all requirements
set forth in the Registration Statement and the Prospectus. The Agent shall
use and distribute, in conjunction with the offer and sale of the Units, only
the Prospectus and such sales literature and advertising as shall conform in
all respects to any restrictions of local law and the applicable requirements
of the Securities Act. The Managing Sales Agent reserves the right to
establish such additional procedures as it may deem necessary to insure
compliance with the requirements of the Registration Statement, and the Agent
shall comply with all such additional procedures to the extent that it has
received written notice thereof.
(c) All checks received for purchase of any of the Units shall be
made out to "_____________ ("Escrow Agent"), Escrow #______________" until the
minimum number of Units is sold and thereafter to Telecommunications Income Fund
XI, L.P., and shall be forwarded by the Agent, no later than noon of the
business day following receipt, to the Managing Sales Agent; provided, however,
that if the Agent receives payment from investors who authorize the Agent to
debit their customer accounts, checks that represent funds obtained in this
manner will be forwarded by the Agent to the Managing Sales Agent no later than
the end of the next business day following their receipt. The Managing Sales
Agent shall deposit such checks no later than the second business day (no later
than the first business day in the case of checks that represent funds obtained
by Agent through the debiting of investors' accounts) following receipt in an
escrow account established with the Escrow Agent, _________________, _______,
______ _____, solely for such deposits and under an Escrow Agreement between the
Partnership and Escrow Agent and, following the sale of the minimum number of
Units, in the account of Telecommunications Income Fund XI, L.P. Funds held in
escrow in account with Escrow Agent, or in an escrow account with such other
substantial commercial bank designated by the Partnership as successor escrow
agent (the "Escrow Account"), will be held under and subject to the terms of an
Escrow Agreement entered into between the Partnership and the Escrow Agent.
(d) During the full term of this Agreement, the Managing Sales Agent
shall have full authority to take such action as it may deem advisable in
respect of all matters pertaining to the performance of the Agent under this
Agreement.
(e) The Units shall be offered and sold only where the Units may be
legally offered and sold and only to such persons in such states as shall be
legally qualified to purchase the Units. The Partnership and the General
Partner contemplate selling the Units in all states listed in the attached
Exhibit B, and unless the Agent shall receive written notice from the Managing
Sales Agent authorizing the offering and sale of Units in additional states not
set forth on such Exhibit B, no Units shall be offered or sold in such
additional states.
(f) Notwithstanding anything herein to the contrary, the Agent shall
have no obligation under this Agreement to purchase any of the Units for its own
account.
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2. COMPENSATION TO THE AGENT. The Managing Sales Agent shall pay the
Agent, as compensation for services to be rendered by the Agent hereunder, a
commission on each Unit sold equal to 6.0%, which commission rate shall remain
in effect during the full term of this Agreement unless otherwise changed by an
agreement in writing between the parties hereto. If the Agent sells more than
$1,000,000 of Units, the Managing Sales Agent shall pay the Agent, as
compensation for services to be rendered by the Agent hereunder, a commission on
each Unit sold equal to 6.5%. A sale of a Unit shall be deemed to be completed
when a properly completed Subscription Agreement, Signature Page and Power of
Attorney has been received from the Agent by the Managing Sales Agent, and
payment of the full purchase price of each purchased Unit has been received by
the Managing Sales Agent, from a buyer who satisfies each of the terms and
conditions of the Registration Statement and Prospectus. Such compensation due
under this paragraph shall be payable to the Agent by the Managing Sales Agent
within a reasonable time after the end of the month of receipt of the full
purchase price; PROVIDED, HOWEVER, that no commissions will be paid to the Agent
with respect to any Units sold until the Managing Sales Agent receives such
commissions from the Partnership; PROVIDED FURTHER that no commission shall be
paid to the Agent with respect to any Units sold unless and until the purchase
price for the Units is released from the Escrow Account to the Partnership in
accordance with the Prospectus and the Escrow Agreement, or, after the minimum
number of Units has been sold, until the purchase price for the Units is paid to
the Partnership.
3. COOPERATION OF OTHER BROKER-DEALERS. It is expressly agreed by the
Managing Sales Agent and the Agent that the Managing Sales Agent may cooperate
with other broker-dealers who are licensed members of the NASD, registered as
broker-dealers with the SEC and duly licensed by the appropriate regulatory
agency of each state in which they will offer and sell the Units ("NASD
Dealers"). Such other NASD Dealers may be employed by the Managing Sales Agent
as agents on terms and conditions identical or similar to this Agreement and
shall receive such rates of commission as are agreed to between the Managing
Sales Agent and the respective other NASD Dealers and as are in accordance with
the terms of the Registration Statement, and to that extent such other NASD
Dealers shall compete with the Agent in the sale of the Units.
4. CONDITIONS TO THE AGENT'S OBLIGATIONS. The Agent's obligations
hereunder are subject during the full term of this Agreement and the Offering
to: (a) the performance by the Managing Sales Agent of its obligations
hereunder; and (b) the conditions that: (i) the Registration Statement shall
become and remain effective; (ii) the NASD shall have indicated that it does not
disapprove of the underwriting arrangements with respect to the Offering; and
(iii) no stop order shall have been issued suspending the effectiveness of the
Offering.
5. CONDITIONS TO THE MANAGING SALES AGENT'S OBLIGATIONS. The obligations
of the Managing Sales Agent hereunder are subject, during the full term of this
Agreement and the Offering, to the conditions that: (a) at the effective date
of the Registration Statement, and thereafter during the term of this Agreement
while any Units remain unsold, the Registration Statement shall remain in full
force and effect authorizing the offer and sale of the Units; (b) no stop order
suspending the effectiveness of the Offering or other order restraining the
offer or sale of the Units shall have been issued or proceedings theretofore
initiated or threatened by any state regulatory agency or the SEC; and (c) the
Agent shall have satisfactorily performed all of its obligations hereunder.
6. COVENANTS OF THE MANAGING SALES AGENT. The Managing Sales Agent
covenants, warrants and represents, during the full term of this Agreement,
that:
(a) It shall use its best efforts to prevent the sale of the Units
through persons other than NASD Dealers.
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(b) It shall provide the Agent, when received, with a copy of any
letter from the NASD in which the NASD indicates that it does not disapprove of
the underwriting arrangements with respect to the Offering.
(c) It shall use its best efforts to cause the Partnership and the
General Partner to maintain the effectiveness of the Registration Statement and
to file such amendments to the Registration Statement as may be reasonably
necessary for that purpose.
(d) It shall advise the Agent whenever and as soon as it receives or
learns of any order issued by the SEC or any state regulatory agency or any
other regulatory agency which suspends the effectiveness of the Registration
Statement or prevents the use of the Prospectus or which otherwise prevents or
suspends the Offering of the Units or receives notice of any proceedings
regarding any such order.
(e) It shall use its best efforts to prevent the issuance of any
order described in subsection (d) above and to obtain the lifting of any such
order if issued.
(f) It shall give the Agent written notice by telegram or facsimile
transmission when the Registration Statement becomes effective and shall deliver
to the Agent such number of copies of the Prospectus, and any supplements and
amendments thereto, in the form in which filed with the SEC, as the Agent may
reasonably request in connection with the sale of the Units, which Prospectus
shall in all respects conform to the applicable requirements of the Securities
Act and all applicable rules and regulations promulgated thereunder, and 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.
(g) It shall make available such number of copies of the Prospectus
as the Agent reasonably requests for the purposes contemplated by the Securities
Act, the Securities Exchange Act of 1934 (the "Exchange Act") and the rules and
regulations promulgated thereunder.
(h) It shall promptly notify the Agent of any post-effective
amendments or supplements to the Registration Statement or Prospectus and shall
furnish the Agent with copies thereof.
(i) It shall keep the Agent fully informed of any material
development to which the Partnership is a party or which concerns the business
and condition of the Partnership, of which the Managing Sales Agent has
knowledge.
(j) It, in conjunction with the General Partner, shall use its best
efforts to cause, at or prior to the time the Registration Statement becomes
effective, the qualification (or exemption from qualification) of the Units for
offering and sale under the securities laws of all states listed on Exhibit B
attached hereto.
(k) It undertakes to comply with Sections 2730, 2740, 2420, and 2750
of the NASD Conduct Rules.
7. COVENANTS OF THE AGENT. The Agent covenants, warrants and represents
that:
(a) Based upon a review, to the extent relevant to the Offering, of
the items referred to in Section 2810(b)(3)(B) of the NASD Conduct Rules, as set
forth in the Prospectus and other materials
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made available to it by the General Partner, it has reasonable grounds to
believe that all material facts relating to the Offering are adequately
disclosed and provide a basis for evaluating the Offering.
(b) At the date of execution of this Agreement, it has complied with
the provisions of Section 2810(b)(3)(A) and Section 2810(b)(3)(B) of the NASD
Conduct Rules.
(c) In recommending to a prospective Subscriber the purchase, sale or
exchange of Units, the Agent shall have, and shall insure that all persons
associated with the Agent ("Associates") making such recommendations shall have,
reasonable grounds to believe, on the basis of information obtained from the
prospective Subscriber concerning his investment objectives, other investments,
financial situation and needs, and any other information known by the Agent or
such Associates, that the prospective Subscriber satisfies the criteria as to
suitability set forth in Section 2810(b)(2)(B)(i) of the NASD Conduct Rules, and
prior to executing a purchase transaction with respect to Units, the Agent
shall, and shall insure that each of its Associates proposing to execute such a
transaction shall, inform the prospective Subscriber of all pertinent facts
relating to the liquidity and marketability of the Units during the term of the
investment. This representation will survive the termination of this Agreement.
(d) It shall maintain in its files, for the longer of the period
prescribed by SEC Rule 17a-4 or the period prescribed by the state blue sky laws
applicable to it, documents disclosing the basis upon which the determination of
suitability was reached as to each Subscriber who subscribes for Units through
it.
(e) It shall not execute any transaction for a Subscriber in
connection with the Offering in a discretionary account without the prior
written approval of such transaction by such Subscriber.
(f) It shall not accept, or permit its employees to accept, sales
incentive items other than in compliance with Section 2810(b)(4)(E) and Section
2810(b)(4)(F) of the NASD Conduct Rules.
(g) It is familiar with Release No. 4968 and Rule 15c2-8 under the
Exchange Act, which relate to the distribution of preliminary and final
prospectuses, and will comply therewith.
(h) It agrees to be bound by the terms of the Escrow Agreement.
(i) It shall provide the Managing Sales Agent with signed
subscription documents or confirmations of such subscriptions for each
investment, as requested by the Managing Sales Agent in its sole discretion.
8. PAYMENT OF COSTS AND EXPENSES. The Agent shall pay all costs and
expenses incident to the performance of its obligations under this Agreement,
including:
(a) All expenses incident to the preparation, printing and filing of
all advertising originated by it related to the sale of the Units; and
(b) All other costs and expenses incurred in connection with its
sales efforts related to the sales of the Units, except expenses which the
Managing Sales Agent has expressly assumed and are incurred in connection with
its due diligence with respect to the Offering.
9. INDEMNIFICATION. (a) The Agent shall indemnify, defend and hold
harmless the Managing Sales Agent, its officers, directors, employees and agents
against all losses, claims, demands, liabilities and expenses, including
reasonable legal and other expenses incurred in defending such claims or
liabilities,
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whether or not resulting in any liability to the Managing Sales Agent, its
officers, directors, employees or agents, which they or any of them may
incur, arising out of the offer or sale by the Agent of any Units, pursuant
to this Agreement, or arising out of the breach by the Agent of any of the
terms and conditions of this Agreement, including but not limited to alleged
violations of the Securities Act and/or the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), OTHER THAN any claim, demand or liability
arising from any untrue statement or alleged untrue statement of a material
fact contained in the Prospectus or the Registration Statement, as filed and
in effect with the SEC, or any amendment or supplement thereto, or in any
application prepared by the General Partner and filed with any state
regulatory agency in order to register or qualify the Units under the
securities laws thereof (the "blue sky applications"), or in any supplemental
sales material which is prepared by the General Partner for distribution to
prospective investors, or which shall arise out of or be based upon any
omission or alleged omission to state therein a material fact required to be
stated in the Prospectus or the Registration Statement or any of the blue sky
applications or such supplemental sales material necessary to make the
statements therein not misleading. This indemnity provision shall survive
the termination of this Agreement.
(b) The Managing Sales Agent shall indemnify, defend and hold
harmless the Agent, its officers, directors, employees and agents against 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 Agent, its officers, directors, employees
or agents, which they or any of them may incur, including but not limited to
alleged violations of the Securities Act and/or the Exchange Act, BUT ONLY to
the extent that such losses, claims, demands, liabilities and expenses shall
arise or be based upon any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus or the Registration Statement, as
filed and in effect with the SEC, or any amendment or supplement thereto, or in
any of the blue sky applications, or in any supplemental sales material which is
prepared by the General Partner for distribution to prospective investors, or
which shall arise out of or be based upon any omission or alleged omission to
state therein a material fact required to be stated in the Prospectus or the
Registration Statement or the blue sky applications or such supplemental sales
material necessary to make the statements made therein not misleading. This
indemnity provision shall survive the termination of this Agreement.
10. TERM OF AGREEMENT. This Agreement shall become effective at the time
the Managing Sales Agent (a) releases for publication the first newspaper
advertisement regarding the Offering or (b) releases the Units for offering by
letter or telegram, whichever is earlier. The Agent and the Managing Sales
Agent may each prevent this Agreement from becoming effective, without liability
to the other, by written notice before the time this Agreement otherwise could
become effective. After this Agreement becomes effective, either party may
terminate it at any time for any reason by giving 30 days' written notice to the
other party; PROVIDED, HOWEVER, that this Agreement shall in any event
automatically terminate at the first occurrence of any of the following events:
(a) the Registration Statement shall cease to be effective; (b) the Offering
shall be terminated; or (c) the Agent's license or registration to act as a
broker-dealer shall be revoked or suspended by any federal or state regulatory
agency and such revocation or suspension is not cured within 10 days from the
date of such occurrence.
11. NOTICES. All notices and communications hereunder shall be in writing
and, if sent to the Managing Sales Agent, shall be mailed to:
Xxxxxxx Xxxxxx & Company Financial Services, Inc.
000 Xxxxxx Xxxxxx, XX
Xxxxx Xxxxxx, Xxxx 00000
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or, if sent to the Agent, shall be mailed to the person whose name and address
is identified in Exhibit A attached hereto.
12. SUCCESSORS. This Agreement may not be assigned or transferred by the
Agent by operation of law or otherwise.
13. CONSTRUCTION. (a) This Agreement shall be governed by, and construed
in accordance with, the applicable laws of the State of Iowa without regard to
any provision or rule of law which would require the application of the law of
any state other than Iowa.
(b) Nothing in this Agreement shall constitute the Agent as in
association or in partnership with the Managing Sales Agent, and, instead, this
Agreement shall only constitute the Agent as an independent contractor (and not
as an employee or other agent of the Managing Sales Agent) authorized by the
Managing Sales Agent to sell the Units according to the terms expressly set
forth herein, provided that the Agent shall not in any event have any authority
to act in connection with the Offering except according to the terms expressly
set forth herein.
(c) If any provision of this Agreement shall be deemed void, invalid
or ineffective for any reason, the remainder of the Agreement shall remain in
full force and effect.
(d) This Agreement embodies the entire understanding between 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 both parties
hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year set forth below.
MANAGING SALES AGENT: SELECTED SALES AGENT:
XXXXXXX XXXXXX & COMPANY FINANCIAL
SERVICES, INC.
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(Broker/Dealer Name)
By: By:
-------------------------------- --------------------------------
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(Print Name and Title) (Print Name and Title)
Date: Date:
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AGENTS: PLEASE EXECUTE TWO COPIES AND RETURN BOTH TO XXXXXXX XXXXXX & COMPANY
FINANCIAL SERVICES, INC.
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EXHIBIT A
PLEASE EXECUTE AND RETURN TWO COPIES OF THE SELECTED SALES AGENT AGREEMENT. ONE
EXECUTED COPY WILL BE RETURNED TO YOU BY XXXXXXX XXXXXX & COMPANY FINANCIAL
SERVICES, INC. FOR YOUR RECORDS.
I. PERSON TO RECEIVE COMMISSION
Name Firm Name
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Title Address
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(Street Address/P.O. Box)
Telephone
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(City) (State) (ZIP)
II. DUE DILIGENCE OFFICER
Name
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(Telephone)
Address
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(Street) (City) (State) (ZIP)
III. INFORMATION CONCERNING FIRM
Address
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(Headquarters) (City) (State) (ZIP)
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(Telephone) (Facsimile Number)
Type of Entity: [ ] Corporation [ ] Partnership
[ ] Proprietorship [ ] Other (describe)
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Federal Tax I.D. No.
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Organized in
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(State)
Licensed as Broker-Dealer in
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(List States or Provide Attachment Listing States)
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IV. ADDITIONAL INFORMATION
In order to expedite all transmissions and correspondence, Xxxxxxx Xxxxxx &
Company Financial Services, Inc. requests that each Firm include with the
executed copy of the Selected Sales Agent Agreement a list containing the
following information concerning each branch office: (A) branch address
and telephone number; (B) name of branch manager; (C) registered
representatives working out of each branch office; and (D) the names,
addresses and telephone numbers of any other appropriate members of Firm
involved in sales management.
EXHIBIT B
STATES IN WHICH UNITS ARE TO BE OFFERED AND SOLD
Arizona
Arkansas
California
Colorado
District of Columbia
Florida
Illinois
Iowa
Kansas
Michigan
Minnesota
Missouri
Nebraska
Nevada
North Dakota
South Dakota
Texas
Wisconsin
