GK INVESTMENT PROPERTY HOLDINGS II, LLC PARTICIPATING DEALER AGREEMENT
Exhibit (1)(b)
GK INVESTMENT PROPERTY HOLDINGS II, LLC
Ladies
and Gentlemen:
JCC
Advisors, LLC, a Texas limited liability company, as the managing
broker-dealer (“Managing
Broker-Dealer”) for GK Investment Property Holdings
II, LLC, a Delaware limited liability company (the
“Company”),
invites you (the “Dealer”) to participate in the
distribution, on a “best efforts basis,” to the public
(the “Offering”)
of up to $50,000,000 of 7% bonds of the Company
(“Bonds”)
subject to the following terms:
I.
Managing Broker-Dealer Agreement
The
Managing Broker-Dealer and the Company have entered into that
certain Managing Broker-Dealer Agreement dated [___________], 2019
(the “Managing Broker-Dealer
Agreement”). By your acceptance of this Participating
Dealer Agreement, you will become one of the Dealers referred to in
such agreement between the Company and the Managing Broker-Dealer
and will be entitled and subject to the indemnification provisions
contained in the Managing Broker-Dealer Agreement, including
specifically the provisions of Section 4 of the Managing
Broker-Dealer Agreement. Such indemnification obligations shall
survive the termination of this Participating Dealer Agreement.
Except as otherwise specifically stated herein, all terms used in
this Participating Dealer Agreement have the meanings provided in
the Managing Broker-Dealer Agreement. The Bonds are offered solely
through broker-dealers who are members of the Financial Industry
Regulatory Authority (“FINRA”).
Dealer
hereby agrees to use its best efforts to sell the Bond for cash on
the terms and conditions stated in the Offering Circular. Nothing
in this Participating Dealer Agreement shall be deemed or construed
to make Dealer an employee, agent, representative or partner of the
Managing Broker-Dealer or of the Company, and Dealer is not
authorized to act for the Managing Broker-Dealer or the Company or
to make any representations except as set forth in the Offering
Circular and Authorized Sales Materials.
II.
Submission of Orders
Those
persons who purchase Bonds will be instructed by the Dealer to
transfer the Subscription Amount to the Escrow Account held by UMB
Bank, the Escrow Agent. Any Dealer receiving a Subscription Amount
not conforming to the foregoing instructions shall return such
Subscription Amount directly to such Subscriber not later than noon
of the next business day following its receipt. Subscription
Amounts received by the Dealer which conform to the foregoing
instructions shall be transmitted for deposit pursuant to one of
the methods in this Article II. Transmittal of received
investor funds will be made in accordance with the following
procedures:
Where,
pursuant to the Dealer’s internal supervisory procedures,
internal supervisory review is conducted at the same location at
which the Subscription Agreements and Subscription Amounts are
received from Subscribers, the Subscription Amounts will be
transmitted by noon of the next business day following receipt by
the Dealer to the Escrow Agent for deposit directly with the Escrow
Agent.
Where,
pursuant to the Dealer’s internal supervisory procedures,
final and internal supervisory review is conducted at a different
location, Subscription Amounts will be transmitted by noon of the
next business day following receipt by the Dealer to the office of
the Dealer conducting such final internal supervisory review (the
“Final Review
Office”). The Final Review Office will in turn
transmit by 5:00 pm of the next business day following receipt at a
different location by the Final Review Office such Subscription
Amounts to the Escrow Agent for deposit directly with the Escrow
Agent.
III.
Pricing
Except
as may be otherwise provided for in the “Plan of Distribution” section of
the Offering Circular, Bonds shall be offered to the public at the
offering price of $1,000 per Bond. Except as otherwise indicated in
the Offering Circular or in any letter or memorandum sent to the
Dealer by the Company or Managing Broker-Dealer, a minimum initial
purchase of five (5) Bonds is required.
IV.
Representations and Warranties of Dealer
Dealer
represents and warrants to the Company and the Managing
Broker-Dealer and agrees that:
A. Dealer will
undertake all reasonable investigation, review, and inquiry to
ensure, to the best of its reasonable knowledge and belief, that
the investment is suitable for such prospective investor upon the
basis of the information known to Dealer or disclosed by such
prospective investor as to his other security holdings and as to
his financial situation and needs. Dealer shall keep written
records supporting this representation and warranty and such
records shall be made available to the Company or the Managing
Broker-Dealer promptly upon request.
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B. Dealer shall
deliver to each prospective investor, prior to any submission by
such prospective investor, a written offer to buy any Bonds, a copy
of the Offering Circular.
C. Dealer will not
deliver to any prospective investor any written documents
pertaining to the Company or the Bonds, other than the Offering
Circular, and any Authorized Sales Materials that are supplied to
Dealer by the Company, the Managing Broker-Dealer or their
respective affiliates. Without intending to limit the generality of
the foregoing, Dealer shall not deliver to any prospective investor
any material pertaining to the Company or any of its affiliates
that has been furnished as “broker/dealer information
only.”
D. Dealer will make
reasonable inquiry to determine whether a prospective investor is
acquiring Bonds for his own account or on behalf of other persons
and not for the purpose of resale or other distribution
thereof.
E. Dealer will not
give any information or make any representation or warranty in
connection with the Offering, the Company or the Bonds other than
those contained in the Offering Circular and any Authorized Sales
Materials.
F. Dealer will abide
by, and will take reasonable precautions to ensure compliance by
prospective investors from whom Dealer has solicited an offer to
purchase, all provisions contained in the Offering Circular
regulating the terms and manner of the Offering.
G. In its solicitation
of offers for the Bonds, Dealer will comply with all applicable
requirements of the Securities Act, the Exchange Act, and the
applicable Rules and Regulations.
H. Dealer is (and will
continue to be) a member in good standing with FINRA, will abide by
the FINRA Rules, is in full compliance with all applicable
requirements under the Exchange Act, and is registered as a
broker-dealer in all of the jurisdictions in which Dealer solicits
offers to purchase the Bonds.
I. Dealer, nor any
managing member of Dealer, nor any director or executive officer of
Dealer or other officer of Dealer participating in the Offering is
subject to the disqualification provisions of Rule 262 of the Rules
and Regulations. No registered representative of Dealer, or any
other person being compensated by or through Dealer for the
solicitation of investors, is subject to the disqualification
provisions of Rule 262 of the Rules and Regulations.
J. Dealer will not
take any action in conflict with, or omit to take any action the
omission of which would cause Dealer to be in violation of the
requirements of the Securities Act or the Exchange
Act.
K. Dealer will use
reasonable efforts to ensure that all investors who are acquiring
Bonds have and will satisfy all conditions described in the
Offering Circular and the Subscription Agreement.
L. Each of the
representations and warranties made by each prospective investor to
the Company in the Subscription Agreement, is, to the
Dealer’s best knowledge, information, and belief, after due
inquiry, true and correct as of the date thereof and as of the date
of purchase of the Bonds by such prospective investor.
V.
Dealers’ Compensation
The
Managing Broker-Dealer shall pay the Dealer a selling commission of
up to 5.5% of the gross offering proceeds of the Bonds sold by it
and accepted and confirmed by the Company.
As
provided in the “Plan of Distribution” section of the
Offering Circular, and in Section 3.3 and Exhibit A of the Managing
Broker-Dealer Agreement, in addition to the selling commissions equal to 5.5% of aggregate
gross offering proceeds, Managing Broker-Dealer will receive a
Managing Broker-Dealer Fee of up to 2.5% of aggregate gross
offering proceeds, which it may re-allow, in whole or in part to
the Dealers. Additionally, the Company has agreed to pay to
Managing Broker-Dealer a non-accountable marketing and due
diligence expense reimbursement in an amount up to 1% of aggregate
gross offering proceeds, which will be re-allowed to the Dealers.
The aforementioned selling commissions, Managing Broker-Dealer Fees
and non-accountable marketing and due diligence expense
reimbursements shall only be paid to the Dealer with regard to the
Bonds sold by it and accepted and confirmed by the
Company.
While
the Company agrees to reimburse its Manager, GK Development, Inc.
dba GK
Real Estate, for the cumulative organizational and offering
expenses incurred by its Manager and its affiliates in connection
with the Offering and its organization in an amount equal to up to
2.5% of the gross offering proceeds from the Offering, the Manager
intends to use, in whole or in part, such organizational and
offering fee to reimburse the Managing Broker-Dealer for its
underwriting expenses in connection with the Offering. Such
underwriting expenses of the Managing Broker-Dealer may include,
without limitation, fees paid by registered representatives
associated with the Managing Broker-Dealer to attend retail
seminars sponsored by the Dealers, costs associated with sponsoring
conferences, including reimbursements for registered
representatives associated with the Dealers to attend educational
conferences sponsored by the Company or the Managing Broker-Dealer,
reimbursements for customary lodging, meals and reasonable
entertainment expenses and promotional items, technology costs and
legal fees of the Managing Broker-Dealer. The marketing fees may be
paid to any particular Dealer based upon prior or projected volume
of sales and the amount of marketing assistance and the level of
marketing support provided by a Dealer in the past and anticipated
to be provided in this Offering. Any such underwriting expenses
must comply with FINRA Rules, including FINRA Rules concerning
non-cash compensation. In no event will the maximum amount of
underwriting compensation from any source (including fees described
in this paragraph, or the selling commissions, the Managing
Broker-Dealer Fee and non-accountable marketing and due diligence
expense reimbursements discussed above) payable to underwriters,
broker-dealers or affiliates exceed 10% of the gross offering
proceeds of this Offering. The terms and conditions for payments of
any marketing fees are set forth further in Schedule I to this
Participating Dealer Agreement. As set forth in Section 3.3 and
Exhibit A of the Managing Broker-Dealer Agreement, the Company may
also reimburse the Dealer for bona fide out-of-pocket itemized and
detailed due diligence expenses.
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For
purposes of this Participating Dealer Agreement, Bonds shall be
deemed to be “sold” if and only if a transaction has
closed with a subscriber for Bonds pursuant to all applicable
offering and subscription documents, the Company has accepted the
Subscription Agreement of such subscriber and such Bonds have been
fully paid for. The Dealer affirms that the Managing
Broker-Dealer’s liability for commissions and other amounts
payable to the Dealer is limited solely to the proceeds of
commissions and other payments received from the Company. The
Dealer shall have the responsibility to disclose to investors the
terms of any such selling commissions, fees, reimbursements,
payments or any preferential treatments, if any, provided to the
Managing Broker-Dealer or Dealer in connection therewith, if
applicable and to the extent required.
The
Dealer shall have no right to receive, and the Managing
Broker-Dealer shall have no obligation to make, payments of any
selling commissions, fees, or reimbursements until such time as the
Managing Broker-Dealer is in receipt from the Company of such
selling commissions, fees or reimbursements from which such fees or
reimbursements are to be paid.
The
parties hereby agree that the foregoing selling commissions, fees,
reimbursements and other payments are not in excess of the usual
and customary distributors’ or sellers’ commissions,
fees, reimbursements and payments received in the sale of
securities similar to the Bonds, that the Dealer’s interest
in the Offering is limited to such selling commissions, fees,
reimbursements and payments from the Managing Broker-Dealer and the
Dealer’s indemnity referred to in Section 4 of the Managing
Broker-Dealer Agreement, and that the Company is not liable or
responsible for such payments to the Dealer.
VI.
Applicability of Indemnification
Each of
the Dealer and Managing Broker-Dealer hereby acknowledges and
agrees that it will be subject to the obligations set forth in, and
entitled to the benefits of all the provisions of, the Managing
Broker-Dealer Agreement, including but not limited to, the
representations and warranties and the indemnification obligations
contained in the Managing Broker-Dealer Agreement, including
specifically the indemnification provisions of Section 4 of the Managing
Broker-Dealer Agreement. Such indemnification obligations shall
survive the termination of this Participating Dealer Agreement and
the Managing Broker-Dealer Agreement.
VII.
Payment
Payments of sales
commissions will be made by the Managing Broker-Dealer (or by the
Company as provided in the Managing Broker-Dealer Agreement) to
Dealer within 30 days of the receipt by the Managing Broker-Dealer
of the gross commission payments from the Company.
VIII.
Right to Reject Orders or Cancel Sales
All
orders, whether initial or additional, are subject to acceptance by
and shall only become effective upon confirmation by the Company,
which reserves the right to reject any order. Orders not
accompanied by a Subscription Agreement signature page and the
required Subscription Amount may be rejected. Issuance of the Bonds
will be made only after actual receipt of payment. If any check is
not paid upon presentment, or if the Company is not in actual
receipt of clearinghouse funds or cash, certified or
cashier’s check or the equivalent in payment for the Bonds
within 15 days of sale, the Company reserves the right to cancel
the sale without notice. In the event an order is rejected,
canceled or rescinded for any reason, Dealer agrees to return to
the Managing Broker-Dealer any commission theretofore paid with
respect to such order within 30 days thereafter and, failing
to do so, the Managing Broker-Dealer shall have the right to offset
amounts owed against future commissions due and otherwise payable
to Dealer.
IX.
Circular and Authorized Sales Materials
Dealer
is not authorized or permitted to give, and will not give, any
information or make any representation (written or oral) concerning
the Bonds, except as set forth in the Offering Circular and any
Authorized Sales Materials. The Managing Broker-Dealer will supply
Dealer with reasonable quantities of the Offering Circular, any
supplements thereto and any amended Offering Circular, as well as
any Authorized Sales Materials, for delivery to investors, and
Dealer will deliver a copy of the Offering Circular and all
supplements thereto and any amended Offering Circular to each
investor to whom an offer is made prior to or simultaneously with
the first solicitation of an offer to sell the Bonds to an
investor. Dealer agrees that it will not send or give any
Authorized Sales Materials to an investor unless it has previously
sent or given an Offering Circular to that investor or has
simultaneously sent or given an Offering Circular with such
Authorized Sales Materials. Dealer agrees that it will not show or
give to any investor or prospective investor or reproduce any
material or writing which is supplied to it by the Managing
Broker-Dealer and marked “broker-dealer use only” or
otherwise bearing a legend denoting that it is not to be used in
connection with the sale of Bonds to members of the public. Dealer
agrees that it will not use in connection with the offer or sale of
Bonds any material or writing supplied to it by the Company or the
Managing Broker-Dealer bearing a legend which states that such
material may not be used in connection with the offer or sale of
the Bonds or any other securities. Dealer further agrees that it
will not use in connection with the offer or sale of Bonds any
materials or writings which have not been previously authorized or
approved by the Managing Broker-Dealer.
Dealer
agrees to furnish a copy of any revised Preliminary Offering
Circular to each person to whom it has furnished a copy of any
previous Preliminary Offering Circular and further agrees that it
will itself mail or otherwise deliver all Preliminary Offering
Circulars and the Offering Circular required for compliance with
the provisions of Regulation A under the Securities Act. Regardless
of the termination of this Participating Dealer Agreement, Dealer
will deliver an Offering Circular in transactions in the Bonds for
a period of 90 days from the qualification date of the Offering
Statement. On becoming a Dealer, and in offering and selling Bonds,
Dealer agrees to comply with all the applicable requirements under
the Securities Act and Regulation A promulgated
thereunder.
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X.
License and Association Membership
Dealer’s
acceptance of this Participating Dealer Agreement constitutes a
representation to the Company and the Managing Broker-Dealer that
Dealer is a properly registered broker-dealer under the Exchange
Act, is duly licensed as a broker-dealer and authorized to sell
Bonds under Federal laws and regulations, and that it is a member
in good standing of FINRA. Dealer agrees to notify the Managing
Broker-Dealer immediately in writing and this Participating Dealer
Agreement shall automatically terminate if Dealer ceases to be a
member in good standing of FINRA, is subject to a FINRA suspension,
or its registration as a broker-dealer under the Exchange Act is
terminated or suspended. Dealer hereby agrees to abide by all
applicable FINRA Rules, including, but not limited to, FINRA
Rule 2111.
Managing
Broker-Dealer represents and warrants that it is currently, and at
all times while performing its functions under this Participating
Dealer Agreement will be, a properly registered broker-dealer under
the Exchange Act, and that it is a member in good standing of
FINRA. The Managing Broker-Dealer agrees to notify Dealer
immediately in writing if it ceases to be a member in good standing
with FINRA, is subject to a FINRA suspension, or its registration
as a broker-dealer under the Exchange Act is terminated or
suspended. The Managing Broker-Dealer hereby agrees to abide by all
applicable FINRA Rules, specifically including, but not limited to,
FINRA Rule 2111.
XI.
Anti-Money Laundering Compliance Programs
Dealer’s
acceptance of this Participating Dealer Agreement constitutes a
representation to the Company and the Managing Broker-Dealer that
Dealer has established and implemented an anti-money laundering
compliance program (“AML
Program”) in accordance with applicable law, including
applicable FINRA Rules, SEC Rules and Section 352 of the Money
Laundering Abatement Act, reasonably expected to detect and cause
the reporting of suspicious transactions in connection with the
sale of the Bonds. Dealer hereby agrees to furnish, upon request, a
copy of its AML Program to the Managing Broker-Dealer for review
and to promptly notify the Managing Broker-Dealer of any material
changes to its AML Program.
XII.
Limitations of Offer and Suitability
Dealer
will offer Bonds only to persons who meet the suitability standards
set forth in the Offering Circular or in any suitability letter or
memorandum sent to it by the Company or the Managing
Broker-Dealer.
In
offering Bonds, Dealer will comply with the provisions of the
applicable FINRA Rules, as well as all other applicable rules and
regulations relating to suitability of investors. Nothing contained
in this Participating Dealer Agreement shall be construed to impose
upon the Company or the Managing Broker-Dealer the responsibility
of assuring that prospective investors meet the suitability
standards set forth in the Offering Circular, or to relieve Dealer
from the responsibility of assuring that prospective investors meet
the suitability standards in accordance with the terms and
provisions of the Offering Circular.
Dealer
further represents, warrants and covenants that no Dealer, or
person associated with Dealer, shall offer or sell Bonds in any
jurisdiction except to investors who satisfy the investor
suitability standards and minimum investment requirements under the
most restrictive of the following: (1) applicable provisions
of the Offering Circular;or (2) applicable FINRA Rules
including FINRA Rule 2111. Dealer agrees to ensure that, in
recommending the purchase, sale or exchange of Bonds to an
investor, each Dealer, or person associated with Dealer, shall have
reasonable grounds (as required by FINRA Rule 2111) to
believe, on the basis of information obtained from the investor
(and thereafter maintained in the manner and for the period
provided in such FINRA Rules) concerning his financial status, tax
status, investment objectives and any other information known to
Dealer, or person associated with Dealer, that: (A) the
investor is or will be in a financial position appropriate to
enable him to realize to a significant extent the benefits
described in the Offering Circular, including the tax benefits to
the extent they are a significant aspect of the Company;
(B) the investor has a fair market net worth sufficient to
sustain the risks inherent in an investment in Bonds in the amount
proposed, including loss, and lack of liquidity of such investment;
(C) that the investor has an apparent understanding of the
fundamental risks of an investment in Bonds, the lack of liquidity
of the Bonds, the background and qualifications of the sponsor, the
advisor to the Company and their affiliates, and the tax
consequences of an investment in the Bonds; and (D) an
investment in Bonds is otherwise suitable for such investor. Dealer
further represents, warrants and covenants that Dealer, or a person
associated with Dealer, will make every reasonable effort to
determine the suitability and appropriateness of an investment in
Bonds of each proposed investor by reviewing documents and records
disclosing the basis upon which the determination as to suitability
was reached as to each purchaser of Bonds pursuant to a
subscription solicited by Dealer, whether such documents and
records relate to accounts which have been closed, accounts which
are currently maintained, or accounts hereafter established. Dealer
agrees to retain such documents and records in Dealer’s
records for a period of six years from the date of the applicable
sale of Bonds and to make such documents and records available to
(i) the Managing Broker-Dealer and the Company upon request,
and (ii) to representatives of the SEC, and FINRA upon your
firm’s receipt of an appropriate document subpoena or other
appropriate request for documents from any such agency. Dealer
shall not purchase any Bonds for a discretionary account without
obtaining the prior written approval of Dealer’s customer and
his or her signature on a Subscription Agreement.
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XIII.
Due Diligence and Adequate Disclosure
Prior
to offering the Bonds for sale, Dealer shall have conducted an
inquiry such that Dealer has reasonable grounds to believe, based
on information made available to Dealer by the Company or the
Managing Broker-Dealer through the Offering Circular or other
materials, that all material facts are adequately and accurately
disclosed and provide a basis for evaluating a purchase of Bonds.
In determining the adequacy of disclosed facts pursuant to the
foregoing, each Dealer may obtain, upon request, information on
material facts relating at a minimum to the following:
(1) items of compensation; (2) physical properties;
(3) tax aspects; (4) financial stability and experience
of the Company and its advisor; (5) conflicts and risk
factors; and (6) appraisals and other pertinent
reports.
Notwithstanding the
foregoing, each Dealer may rely upon the results of an inquiry
conducted by an independent third party retained for that purpose
or another Dealer, provided that: (1) such Dealer has
reasonable grounds to believe that such inquiry was conducted with
due care by said independent third party or such other Dealer;
(2) the results of the inquiry were provided to Dealer with
the consent of the other Dealer conducting or directing the
inquiry; and (3) no Dealer that participated in the inquiry is
an affiliate of the Company.
Prior
to the sale of the Bonds, each Dealer shall inform each prospective
purchaser of Bonds of pertinent facts relating to the Bonds
including specifically the lack of liquidity and lack of
marketability of the Bonds during the term of the investment, but
shall not, in any event, make any representation on behalf of the
Company except as set forth in the Offering Circular and any
Authorized Sales Materials.
XIV.
Compliance with Record Keeping Requirements
Dealer
agrees 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. Dealer further agrees to keep
such records with respect to each customer who purchases Bonds, his
suitability and the amount of Bonds sold and to retain such records
for such period of time as may be required by the SEC, FINRA or the
Company.
XV.
Customer Complaints
Each
party hereby agrees to promptly provide to the other party copies
of any written or otherwise documented complaints from customers of
Dealer received by such party relating in any way to the Offering
(including, but not limited to, the manner in which the Bonds are
offered by the Managing Broker-Dealer or Dealer), the Bonds or the
Company.
XVI.
Effectiveness, Termination and Amendments
This
Participating Dealer Agreement shall become effective upon the
execution hereof by Dealer and receipt of such executed
Participating Dealer Agreement by the Managing Broker-Dealer;
provided, however, that in the event of the execution of this
Participating Dealer Agreement prior to the time that the Offering
Statement becomes qualified with the SEC, this Participating Dealer
Agreement shall not become effective prior to the Offering
Statement being qualified with the SEC and shall instead become
effective simultaneously with the qualification of the Offering
Statement.
Dealer
will immediately suspend or terminate its offer and sale of Bonds
upon the request of the Company or the Managing Broker-Dealer at
any time and will resume its offer and sale of Bonds hereunder upon
subsequent request of the Company or the Managing Broker-Dealer.
Any party may terminate this Participating Dealer Agreement by
written notice. Such termination shall be effective 48 hours after
the mailing of such notice. This Participating Dealer Agreement and
the exhibits hereto are the entire agreement of the parties and
supersede all prior agreements, if any, between the parties hereto.
In any event, this Participating Dealer Agreement shall terminate
at the close of business on the Offering Termination
Date.
This
Participating Dealer Agreement may be amended at any time by the
Managing Broker-Dealer by written notice to the Dealer, and any
such amendment shall be deemed accepted and agreed to by Dealer
upon placing an order for sale of Bonds after receipt of such
notice.
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XVII.
Privacy Laws
The
Managing Broker-Dealer and Dealer (each referred to individually in
this section as “Party”) agree as
follows:
M. Each Party agrees
to abide by and comply with (1) the privacy standards and
requirements of the Xxxxx-Xxxxx-Xxxxxx Act of 1999
(“GLB Act”),
(2) the privacy standards and requirements of any other
applicable Federal or state law, and (3) its own internal
privacy policies and procedures, each as may be amended from time
to time.
N. Dealer agrees to
provide privacy policy notices required under the GLB Act resulting
from purchases of Bonds made by its customers pursuant to this
Participating Dealer Agreement.
O. Each party agrees
to 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; and
P. Each Party shall be
responsible for determining which customers have opted out of the
disclosure of nonpublic personal information by periodically
reviewing and, if necessary, retrieving a list of such customers
(the “List”) to
identify customers that have exercised their opt-out rights. In the
event 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 each 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.
XVIII.
Notice
Any
notice in this Participating Dealer Agreement permitted to be
given, made or accepted by either party to the other, must be in
writing and may be given or served by (1) overnight courier or
(2) depositing the same in the United States mail, postpaid,
certified, return receipt requested. Notice deposited in the United
States mail shall be deemed given three (3) business days after
mailing. Notice given in any other manner shall be effective when
received at the address of the addressee. For purposes hereof the
addresses of the parties, until changed as hereafter provided,
shall be as follows:
|
To
Managing Broker-Dealer:
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JCC
Advisors, LLC
00000
Xxx Xxxxx Xxxxx, Xxxxx 000X
Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention:
Xxxx Xxxxxxx
|
|
To
Dealer:
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Address
Specified By Dealer on signature page.
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XIX.
Attorney’s Fees, Applicable Law and Venue;
Arbitration
In any
action to enforce the provisions of this Participating Dealer
Agreement or to secure damages for its breach, the prevailing party
shall recover its costs and reasonable attorney’s fees. This
Participating Dealer Agreement shall be construed under the laws of
the State of California and shall take effect when signed by Dealer
and countersigned by the Managing Broker-Dealer. Dealer and the
Managing Broker-Dealer hereby acknowledge and agree that venue for
any action brought hereunder shall lie exclusively in Orange
County, California.
XX.
Severability
In the
event that any court of competent jurisdiction declares any
provision of this Participating Dealer Agreement invalid, such
invalidity shall have no effect on the other provisions hereof,
which shall remain valid and binding and in full force and effect,
and to that end the provisions of this Participating Dealer
Agreement shall be considered severable.
XXI.
No Waiver
Failure
by either party to promptly insist upon strict compliance with any
of the obligations of the other party under this Participating
Dealer Agreement shall not be deemed to constitute a waiver of the
right to enforce strict compliance with respect to any obligation
hereunder.
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XXII.
Assignment
This
Participating Dealer Agreement may not be assigned by Dealer,
except with the prior written consent of the Managing
Broker-Dealer. This Participating Dealer Agreement may be assigned
by the Managing Broker-Dealer with 10 days prior written notice to
Dealer, but such assignment shall not release the Managing
Broker-Dealer from any liability under this Participating Dealer
Agreement subsequent to any such assignment. This Participating
Dealer Agreement shall be binding upon the parties hereto, their
heirs, legal representatives, successors and permitted
assigns.
XXIII.
Authorization
Each
party represents to the other that all requisite corporate
proceedings have been undertaken to authorize it to enter into and
perform under this Participating Dealer Agreement as contemplated
herein, and that the individual who has signed this Participating
Dealer Agreement below on its behalf is a duly elected officer that
has been empowered to act for and on behalf of such party with
respect to the execution of this Participating Dealer
Agreement.
XXIV.
Counterparts
This
Participating Dealer Agreement may be executed in any number of
counterparts. Each counterpart, when executed and delivered, shall
be an original contract, but all counterparts, when taken together,
shall constitute one and the same agreement.
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THE
MANAGING BROKER-DEALER
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JCC ADVISORS,
LLC
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By:
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Name:
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Title:
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7
We have
read the foregoing Participating Dealer Agreement and we hereby
accept and agree to the terms and conditions therein set forth. We
agree to advise you of any changes to the information listed on
this signature page during the term of this Participating Dealer
Agreement.
1.
Identity of
Dealer:
Name:
Type of
entity:
(to
be completed by Dealer) (corporation, partnership or
proprietorship)
Organized
in the State of:
(to
be completed by Dealer) (State)
Licensed
as broker-dealer in the following States:
(to be completed by Dealer)
Tax
I.D. #:
2.
Person to receive
notice pursuant to Section XVIII.
Name:
Company:
Address:
City,
State and Zip Code:
Telephone
No.:
(
)
Fax No.:
(
)
AGREED
TO AND ACCEPTED BY THE
DEALER:
(Dealer’s
Firm Name)
By:
Signature
Title:
Date:
8
JCC ADVISORS, LLC
SCHEDULE I TO PARTICIPATING DEALER AGREEMENT
This
Schedule I to Participating Dealer Agreement is intended to reflect
the terms of the marketing fees paid to __________________________
(“Dealer”) and shall constitute a part of the
Participating Dealer Agreement between JCC Advisors, LLC
(“Managing Broker-Dealer”) and Dealer dated the _____
day of ________________, 20____ (the “Participating Dealer
Agreement”) relating to the sale of the 7% bonds (the
“Bonds”) of GK Investment Property Holdings II, LLC.
(the “Company”). Capitalized terms used herein, which
are not specifically defined herein, shall have the same meanings
as set forth in the Participating Dealer Agreement.
The
payment of marketing fees to Dealer is intended to support actual
marketing and sales distribution efforts provided by Dealer the
distribution of the Bonds. The Managing Broker-Dealer’s
obligation to pay marketing fees to Dealer hereunder shall be
conditioned upon Dealer’s providing the marketing and sales
distribution support summarized below:
1.
Dealer has internal
marketing support personnel who will provide substantial support
and assistance to the Managing Broker-Dealer’s marketing
personnel, and Dealer shall provide marketing and sales
distribution support in connection with the distribution and sale
of Bonds of the Company equivalent to the highest level of
marketing and sales distribution support provided to other product
sponsors.
2.
Dealer will use its
internal marketing communications systems to promote the product,
which may include, without limitation, internal or external
newsletters, internal intranet sites, internal mail, sponsor pages,
approved product lists, conference calls. Managing Broker-Dealer
shall have the opportunity to provide newsletter submissions and
other materials, content for written and e-mail communications to
Dealer’s registered representatives.
3.
Managing
Broker-Dealer shall be provided (i) updated lists of Dealer’s
registered representatives, including names, addresses, and
telephone numbers; (ii) lists of newly hired registered
representatives; (iii) copies of Dealer’s sales and market
share reports; and (iv) copies of Dealer’s conference
calendars.
4.
Managing
Broker-Dealer will have reasonable access to Dealer’s
registered representatives and shall have the opportunity to invite
registered representatives associated with Dealer to educational,
training and due diligence conferences and meetings sponsored by
the Managing Broker-Dealer, subject to Dealer’s applicable
broker-dealer compliance approval procedures.
5.
Managing
Broker-Dealer will be invited to attend and participate in all
Dealer sponsored conferences and shall have the right to
participate in such conferences. The payments to Dealer
contemplated by this Agreement shall cover and include the amount
of the conference fees for the Managing Broker-Dealer’s
attendance at and participation in all conferences sponsored by
Dealer available product sponsors.
6.
Dealer will assist
its customers with account transfers, change of address requests,
dividend reinvestments and share redemptions.
7.
Dealer will provide
such other services as may be reasonably requested by its customers
or the Managing Broker-Dealer from time to time and will maintain
the technical support necessary to adequately service its customers
and promote the distribution and sale of the Bonds.
The
parties to the Participating Dealer Agreement of which this
Schedule I is a part hereby acknowledge and agree as
follows:
1.
The marketing fees
paid to Dealer shall be based upon the total volume of sales of
Bonds sold to customers of Dealer during the applicable calendar
quarter and shall be subject to Managing Broker-Dealer’s
verification of said sales volume.
2.
The payment of
marketing fees to Dealer contemplated hereby for sales made during
the preceding calendar quarter shall be payable on or before the
last day of the following month.
3.
The agreement
between Dealer and the Managing Broker-Dealer regarding the payment
of marketing fees set forth in the Offering Statement, this
Schedule I and the Managing Broker-Dealer Agreement shall comply
with all applicable FINRA Rules. In the event of any change in
FINRA Rules that limits the payment of marketing fees to Dealer,
the agreement between Dealer and the Managing Broker-Dealer
regarding the payment of marketing fees set forth in the Offering
Statement, this Schedule I and the Managing Broker-Dealer Agreement
shall be modified to be in compliance with such FINRA Rules. In the
event of any change in applicable FINRA Rules that paying the
aforementioned marketing fees becomes prohibited, such agreement to
pay marketing fees shall be considered
terminated immediately.
4.
Either party to the
Participating Dealer Agreement of which this Schedule I is a part
may terminate the Select Dealer Agreement at any time by providing
to the other party a written notice of termination at least 15 days
prior to the termination date.
In
consideration for providing the foregoing services, Managing
Broker-Dealer shall pay marketing fees to Dealer in an amount equal
to __% of the aggregate proceeds received by the Company from the
sale of Bonds to customers of Dealer in transactions in which
Dealer acted as the broker-dealer of record, in accordance with the
terms and conditions set forth in this Schedule I.
Any
amendments or exceptions to this Schedule I or its provisions set
forth above shall be in writing or otherwise supported by written
documentation.
AGREED AND ACKNOWLEDGED:
DEALER:
_________________________________________________
(Print Name of Dealer)
By:______________________________________________
Name:____________________________________________
Title:_____________________________________________
9
