DEALER-MANAGER AGREEMENT
This Dealer-Manager Agreement (the "Agreement") is entered
into this ____ day of October, 1997, by and among CAI SECURITIES CORPORATION, a
California corporation (the "Dealer-Manager"), CAPITAL PREFERRED YIELD FUND - V,
L.P., a Delaware limited partnership (the "Partnership"), and its general
partner, CAI EQUIPMENT LEASING VI CORP., a Colorado corporation (the "General
Partner") with respect to the following:
RECITALS
a. The Partnership proposes to offer Partnership units
("Units") for sale on the basis hereinafter set forth (the "Offering").
b. The Dealer-Manager desires to sell Units on a best efforts
basis as set forth herein.
NOW THEREFORE, in consideration of the foregoing recitals, the
parties hereto agree as follows:
1. Definitions. All terms not otherwise defined herein shall have the
meaning set forth in Article One of the Partnership's Amended and Restated
Agreement of Limited Partnership, as set forth in Exhibit A to the Prospectus
(as defined in Section 4 below) (the "Partnership Agreement").
2. Dealer-Manager. The Partnership hereby appoints the Dealer-Manager
to select and coordinate the activities of the Selling Dealers (as defined in
Section 4) to be its exclusive agents to sell for the Partnership's account up
to 500,000 Units at the offering price of $100 per Unit ("Purchase Price") and
the Dealer-Manager agrees to use its best efforts to encourage the Selling
Dealers to sell such Units to prospective investors as contemplated by this
Agreement and the Selling Dealer Agreement (as defined in Section 4).
3. Sale of Units. Sales of the Units may commence at any time on or
after the effective date of the Registration Statement, as defined in Section 4,
and shall terminate on the date twenty-four (24) months from the date of the
Prospectus, as defined in Section 4, unless the Offering is terminated earlier
by the General Partner. If subscriptions for at least 12,000 Units (the "Minimum
Offering") have not been received as of the date twelve (12) months from the
date of the Prospectus, the General Partner will terminate the Offering, no
Units will be sold, and all subscription payments, plus accrued interest
thereon, will be refunded. The General Partner and its Affiliates may purchase
up to five percent (5%) of the total Units purchased in the Offering; however,
none of such purchases may be included in determining whether the Minimum
Offering has been achieved. The proceeds from the sale of the Units prior to the
Closing Date will be paid to the Partnership's escrow account, and on the
Closing Date the Partnership will pay the commissions and the reimbursements set
forth in Section 5 with respect to the Units sold at or prior to the Closing
Date. Thereafter, commissions will be paid upon admission of subscribers to the
Partnership.
4. Prospectus. The Partnership intends to offer its Units for sale in
an offering which is intended to be registered under the Securities Act of 1933
(the "Securities Act") with the Securities and Exchange Commission (the
"Commission"), in compliance with the rules and regulations of the Commission
(the "Rules and Regulations") pursuant to a Registration Statement on Form S-1
(File No. -----------) and amendments thereto. Such Registration Statement, as
amended, at the time it becomes effective, and the final Prospectus in
connection therewith filed pursuant to Rule 424(b), are herein respectively
called the "Registration Statement" and the "Prospectus". The terms and
conditions of the Offering are set forth in the Prospectus. The Units offered
and sold under this Agreement shall be offered and sold only by broker-dealers
selected by the Dealer-Manager ("Selling Dealers"), all of which shall enter
into a Selling Dealer Agreement in the form annexed hereto as Exhibit A (the
"Selling Dealer Agreement").
5. Sales Commission and Dealer-Manager Fee. In consideration for the
execution of this Agreement, and for the performance of Dealer-Manager's
obligations hereunder, the Partnership agrees to pay to the Dealer-Manager a
commission of ten percent (10%) of the offering price of each Unit sold in the
Offering, from which the Dealer-Manager shall reallow a Sales Commission to the
Selling Dealers of eight percent (8%) of the offering price of Units sold
thereby (or more if the Dealer-Manager so desires and if approved by the General
Partner). Two percent (2%) of the commission paid to the Dealer-Manager as
aforesaid shall represent a fee to the Dealer-Manager for managing the offering
of the Units. In addition, the Partnership may (directly or indirectly through
the General Partner or the Dealer-Manager) reimburse the Selling Dealers for
bona fide due diligence expenses of the lesser of up to one-half of one percent
(.50%) of the price of Units sold or the maximum amount payable under the Rules
of Conduct of the National Association of Securities Dealers (the "NASD"). To
the extent that the General Partner or the Dealer-Manager has, on the
Partnership's behalf, reimbursed one or more Selling Dealer for such bona fide
due diligence expenses, the Partnership shall reimburse the General Partner or
Dealer-Manager for such amounts paid.
The Unit price shall be $100.00, except that the
Dealer-Manager shall provide a discount to the applicable purchaser of the Units
equal to one percent (1.0%) of the aggregate purchase price of Units as a
reduction in Sales Commission for all purchases of $500,000 or more (a "Volume
Discount"). The Volume Discount applies to an investor's entire purchase of
Units if the aggregate purchase price exceeds $500,000, and the discount will be
used to purchase additional Units. For purposes of computing the Volume
Discounts, subscriptions for Units may be aggregated if: (i) the legal and
beneficial ownership of Units to be purchased is identical to the legal and
beneficial ownership of all other Units to be aggregated; (ii) all such Units
are purchased through the same Selling Dealer; and (iii) the request to combine
more than one subscription for Units is made at the time of the subsequent
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subscription. Any request for aggregating subscriptions will be subject to
verification by the Dealer-Manager, whose determination will be final.
Notwithstanding the foregoing, however, the obligation of the
Partnership to pay commissions to the Dealer-Manager and to reimburse due
diligence expenses as aforesaid shall be subject to the following conditions and
limitations:
(a) The General Partner has reserved the right to
accept or reject any subscriptions for Units as set forth in
the Prospectus and no commission will be payable to the
Dealer-Manager with respect to the tender of any Subscription
Agreement which is rejected by the General Partner.
(b) None of such commissions or due diligence
reimbursements as set forth above will be payable or paid
until release on the Closing Date to the Partnership, from the
escrow account in which they are to be deposited, of the
initial $1,200,000 of subscription proceeds, representing
subscriptions for the Minimum Offering amount of 12,000 Units.
After the Closing Date, commissions will become payable on the
date the investor becomes a Class A Limited Partner of the
Partnership.
6. Agreements of the Partnership and the General Partner. The
Partnership and General Partner, jointly and severally, agree as follows:
6.1 The Partnership will furnish to the Dealer-Manager for the
Dealer-Manager's use and for transmittal to the Selling Dealers,
without charge, as many copies of the Prospectus as the Dealer-Manager
may reasonably request.
6.2 Neither the Partnership nor the General Partner will make
amendments to the Prospectus of which the Dealer-Manager shall not
previously have been advised.
6.3 The Partnership will not sell or dispose of any Units
otherwise than pursuant to the Agreement.
6.4 The Partnership will take any and all action which will be
necessary to comply with the requirements of every jurisdiction in
which it proposes to own property or conduct its business.
7. Representations and Warranties of the Partnership and the General
Partner. The Partnership and the General Partner, jointly and severally,
represent and warrant to the Dealer-Manager that:
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7.1 The Partnership has been duly formed as a limited
partnership and is validly existing as such in good standing under the
laws of Delaware with full power and authority to conduct its business
as described in the Prospectus.
7.2 The capitalization of the Partnership and the Units
conform, or will conform when the Units are issued, in all material
respects to the description thereof and to all statements made in
relation thereto in the Prospectus.
7.3 The General Partner has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the State of Colorado with full corporate and other power and authority
to conduct its business as described in the Prospectus and is duly
qualified to transact business as a foreign corporation and is in good
standing in each jurisdiction in which such qualification is required.
7.4 The Registration Statement and Prospectus will contain all
statements which are required to be stated therein in accordance with
the Securities Act and the Rules and Regulations thereunder and will
conform in all material respects with the requirements of the
Securities Act and the Rules and Regulations; and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein and necessary to make the statements
therein not misleading.
7.5 Except as set forth in the Prospectus, there is not now
pending, or, to the knowledge of the Partnership and the General
Partner, threatened, any action, suit or proceeding to which the
Partnership or the General Partner is a party before or by any court or
governmental agency or body, which might result in any material adverse
change in the condition, business or prospects of the Partnership or
might have a materially adverse effect on the ability of the General
Partner to carry out its obligations as General Partner.
7.6 The performance of this Agreement, and the consummation of
the transactions herein contemplated by the Partnership will not result
in a breach or violation of any of the terms and provisions of, or
constitute a default under, any purchase agreement, lease, mortgage
note agreement or other agreement or instrument to which the
Partnership is a party or by which it is bound or to which any of its
property is subject, or any regulation or order of any court or
governmental agency or body having jurisdiction over the Partnership or
any of its activities or properties; and no consent, approval,
authorization or order of any court or governmental agency or body is
required for the consummation by the Partnership of the transactions
herein contemplated; and the Partnership has full power and lawful
authority to issue and sell the Units to be sold by it hereunder by the
terms and conditions herein set forth.
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8. Representations and Warranties of the Dealer-Manager. The
Dealer-Manager represents and warrants to the Partnership and the General
Partner that:
8.1 The Dealer-Manager has been duly formed as a corporation
and is validly existing as such in good standing under the laws of
California with full power and authority to conduct its business as
required by this Agreement.
8.2 The Dealer-Manager is registered as a broker-dealer with
the Commission and is a member in good standing of the NASD and will
maintain such registration and qualification throughout the term of
this Agreement.
8.3 There is not now pending, or, to the knowledge of the
Dealer-Manager, threatened, any action, suit or proceeding to which the
Dealer-Manager is a party, before or by any court or governmental
agency or body, which might result in any material adverse change in
the condition, business or prospects of the Dealer-Manager or might
have a materially adverse effect on the ability of the Dealer-Manager
to carry out its obligations under this Agreement.
8.4 The performance of this Agreement, and the consummation of
the acts required to be performed by the Dealer-Manager hereunder will
not result in a breach or violation of any of the terms and provisions
of, or constitute a default under any statute, regulation or agreement
to which the Dealer-Manager is a party; and no consent, approval,
authorization or order of any court or governmental agency or body is
required for the consummation by the Dealer-Manager of the transactions
herein contemplated.
8.5 With respect to the Dealer-Manager's performance
hereunder, the Dealer-Manager will comply with all provisions of the
Securities Act, the Rules and Regulations and other federal laws and
regulations pertaining to the sales of securities pursuant to the
Offering, the securities or "blue sky" laws and regulations and other
applicable laws of the states or other jurisdictions in which Units are
offered and sold, and the Bylaws and the Rules of Conduct of the NASD,
and all NASD interpretations thereof, whether issued by the Board of
Governors of the NASD, contained in any NASD Notice to Members or
otherwise (the "NASD Rules of Conduct").
8.6 The Dealer-Manager shall not solicit any Persons as
prospective investors in the Offering, but shall coordinate the
activities of the Selling Dealers in connection with such solicitations
made by them.
8.7 The Selling Dealers to be selected by the Dealer-Manager
to sell the Units shall each be registered as a broker-dealer with the
Commission and a member in good standing of the NASD and duly licensed
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and authorized to act as a broker-dealer for the sale of securities in
those jurisdictions in which such Selling Dealer intends to make
offers and sales of Units.
8.8 The Dealer-Manager shall require that each Selling Dealer
make every reasonable effort to determine whether a purchase of the
Units is suitable for the prospective investor.
8.9 The Dealer-Manager shall require that each Selling Dealer
keep such records as are necessary to comply with the requirements of
Rule 2810 of the NASD Rules of Conduct, with respect to all Persons
whom such Selling Dealer solicits as prospective investors in the
Offering.
8.10 The Dealer-Manager shall require that each Selling Dealer
transmit any check received from any prospective investor in the Units,
together with a copy of the executed Subscription Agreement for such
investor, to the Dealer-Manager no later than noon of the next business
day following the Selling Dealer's receipt of such check. Following
receipt of any such check and executed Subscription Agreement from any
Selling Dealer, the Dealer-Manager shall review the Subscription
Agreement to verify the suitability of the investor as a purchaser of
Units. With respect to investors for whom the Dealer-Manager verifies
such suitability, based on the information provided in the Subscription
Agreement, the Dealer-Manager shall, no later than noon of the second
business day after receipt from the Selling Dealer, forward such
accepted investors' checks as follows: (i) on or prior to the Closing
Date, to the Escrow Agent or (ii) after the Closing Date, directly to
the General Partner, on behalf of the Partnership. With respect to
investors for whom the Dealer-Manager is unable, based on the
information contained in the Subscription Agreement, to verify their
suitability to purchase Units, the Dealer-Manager shall promptly return
such investors' checks to the applicable Selling Dealer, who shall
return such check to the prospective investor.
8.11 During the term of this Agreement, the Dealer-Manager
will promptly supply the Partnership with all information required from
the Dealer-Manager for the completion of all Form SRs or other
information required to be filed with the Commission and all other
information as the Partnership may request to be supplied to the
securities authorities of any state or jurisdiction in connection with
the Offering.
9. Indemnification.
9.1 The General Partner agrees to indemnify and hold harmless
the Dealer-Manager against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation
and legal fees) arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement or Prospectus, or any amendment or supplement
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thereto, any application or other document filed in any state or
jurisdiction in connection with the Offering or any sales literature,
arising out of or based upon any omission or alleged omission to state
therein a material fact required to be stated therein as necessary to
make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or expenses arise out of or are
based upon any untrue statement or omission or allegation thereof that
is based upon information furnished in writing to the Partnership by
the Dealer-Manager or any of the Selling Dealers.
9.2 The Dealer-Manager agrees to indemnify and hold harmless
the Partnership and General Partner to the same extent as the foregoing
indemnity from the General Partner to the Dealer-Manager, but only with
respect to (i) any statement in or omission from the Registration
Statement or Prospectus, or any amendment or supplement thereto, any
application or other document filed in any state or jurisdiction in
connection with the Offering or any sales literature, if such statement
or omission was made in reliance on information furnished in writing by
the Dealer-Manager to the Partnership for use in the Registration
Statement or Prospectus, or any amendment or supplement thereto, any
such application or other document filed in any state or jurisdiction
in connection with the Offering or any sales literature, (ii) any act,
statement or representation by the Dealer-Manager which shall be in any
manner inconsistent with information set forth in the Prospectus
concerning the Dealer-Manager or (iii) any breach of the
representations and warranties of the Dealer-Manager set forth herein.
10. Termination. This Agreement shall terminate (i) on the Termination
Date of the Offering, (ii) at any time prior thereto at the will of the
Dealer-Manager or the Partnership upon ten (10) days' prior written notice,
(iii) immediately upon written notice from the Partnership to the Dealer-Manager
if the Dealer-Manager has breached any provision hereof or immediately upon any
assignment or attempted assignment of this Agreement by the Dealer-Manager
without the prior written consent of the Partnership; provided, however, that
the indemnification obligations set forth in Section 9 shall survive termination
of this Agreement.
11. Miscellaneous. Notice given pursuant to any of the provisions of
this Agreement shall be given (a) to the Partnership and the General Partner at
0000 X. Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxxxx 00000, or (b) to the
Dealer-Manager at 0000 X. Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxxxx 00000
and if given by telephone or telegraph shall subsequently be confirmed in
writing. The agreements set forth herein have been and are made solely for the
benefit of and are intended to bind the Dealer-Manager, the Partnership and the
General Partner and their respective successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. The terms
"successors and assigns" as used in this Agreement shall not include a purchaser
of any of the Units.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date set forth above.
PARTNERSHIP:
Capital Preferred Yield Fund - V, L.P.
By: CAI Equipment Leasing VI Corp., as General
Partner of Capital Preferred Yield Fund - V, L.P.,
and on its own behalf
By:
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Title:
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DEALER-MANAGER:
CAI Securities Corporation
By:
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Title:
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