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EXHIBIT 1.2
CAPTEC FRANCHISE CAPITAL PARTNERS X.X. XX
AMENDED AND RESTATED PARTICIPATING DEALER AGREEMENT
CAPTEC
Financial Group, Inc.
___________________________ _____________________, 199__
___________________________
___________________________
[Name and Address of Broker Dealer]
Attention:_________________
Dear _______________________:
Captec Franchise Capital Partners X.X. XX (the "Partnership") is a
Delaware limited partnership formed to acquire income-producing commercial real
properties ("Properties") and equipment ("Equipment") which will be leased on a
"triple net" basis to operators of national chain and nationally franchised
fast-food, family style and dinner house restaurants as well as other
franchised or chain businesses such as specialty retail businesses. The
Partnership also intends to acquire Properties that may be leased on a "double
net" (the Partnership being responsible for the maintenance of the roof,
exterior walls, and/or parking lot for such Properties) or "triple net" basis
to prominent national and regional retail concerns.
The Partnership is offering for sale units of limited partnership interest
(hereinafter, the "Units") as hereinafter described. The offering is being
made on a "best efforts, part or none" basis through certain selected dealers
(referred to herein as "Participating Dealers") who are members of the National
Association of Securities Dealers, Inc. (the "NASD"). The Partnership and
Captec Securities Corporation, a Michigan corporation (the "Dealer-Manager")
are entering into this Amended and Restated Participating Dealer Agreement (the
"Agreement") with you. References to "you" or "your" shall include you and
each of your officers, directors, partners, agents, employees, or affiliates.
The Partnership and you previously entered into a Participating Dealer
Agreement (the "Original Agreement"). The Partnership, Dealer-Manager, and you
wish to restate the Original Agreement as set forth below
1. APPOINTMENT OF BROKER-DEALER.
(a) On the basis of, and subject to the representations, warranties,
covenants, terms and conditions herein set forth, you are hereby appointed a
broker-dealer as an agent for the Partnership, during the Offering Period
herein specified, solely for the purpose of obtaining subscriptions for the
purchase of up to $30,000,000 of Units. The Units are subject to prior sale
and to cancellation or modification of the offering without notice; the
Partnership reserves the right to accept or reject subscriptions in whole or in
part in the sole discretion of the Managing General Partner, and you shall be
entitled to no commissions or other compensation for subscriptions rejected by
the Partnership.
(b) The "Offering Period" shall mean that period during which any
offers to purchase Units are solicited and shall commence on the effective date
of the Registration Statement (as defined in Section 2) and continue until the
first to occur of the close of business on the Termination Date (as defined in
Section 5) or the acceptance by the Partnership of offers to purchase 30,000
Units ($30,000,000). Subject to the performance by the Partnership of all of
its obligations hereunder and to the completeness and accuracy of all of its
representations and warranties contained herein, you hereby accept such
appointment and agree on the terms and
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conditions herein set forth to use your best efforts during the Offering Period
to obtain subscriptions for Units. Subject to the performance by you of all of
your obligations hereunder and to the completeness and accuracy of all of your
representations and warranties contained herein, your appointment hereunder
shall not be terminable by the Partnership and shall continue until the
Offering Period has ended.
Subscriptions will be received by Michigan National Bank (the "Escrow
Agent"). The General Partners reserve the right to close the subscription
books at any time without notice and to reject any subscription in whole or in
part, provided that subscriptions procured by it shall not be rejected
unreasonably. The Partnership shall notify you promptly of the rejection of
any subscription procured by it and of the reasons for such rejection.
2. REPRESENTATIONS AND WARRANTIES OF THE DEALER-MANAGER AND THE GENERAL
PARTNERS.
The General Partners and the Dealer-Manager jointly and severally
represent and warrant to you as follows:
(a) STATEMENT AND PROSPECTUS. A Registration Statement (Registration
number 333-9371 on Form S-11) with respect to the Units, including a
Preliminary Prospectus (as hereinafter defined), has been prepared by the
Partnership and the General Partners in conformity with the requirements of the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
(the "Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder and has been filed with the Commission under the Act.
Copies of the final Registration Statement will be or have been delivered to
you. As used in this Agreement, the term "Preliminary Prospectus" means each
preliminary prospectus filed with such Registration Statement and amendments,
the term "Registration Statement" means such registration statement in the form
in which it becomes effective and the term "Prospectus" means the prospectus in
the form first filed with the Commission pursuant to its Rule 424 (b) after the
Registration Statement becomes effective.
(b) COMPLIANCE WITH THE ACT. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus or Prospectus.
When the Registration Statement becomes effective and at all times subsequent
thereto up to and including the Termination Date (as hereinafter defined): (i)
the Registration Statement and the Prospectus and any amendments or supplements
thereto will contain all statements and information which are required to be
included therein by the Act and the Rules and Regulations and will comply in
all material respects with the Act and the Rules and Regulations; and (ii)
neither the Registration Statement nor the Prospectus nor any amendment or
supplement thereto will at any such time 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 were made, not misleading.
(c) NO SUBSEQUENT MATERIAL EVENTS. Subsequent to the respective dates
as of which information is given in the Registration Statement and Prospectus
and up to and including the Termination Date and except for the acquisition of
Properties and/or Equipment as contemplated in the Prospectus, the Partnership
has not: (i) incurred and will not have incurred any direct or contingent
liabilities or obligations except in the ordinary course of business which are
material to the Partnership or entered in to any other transaction which is
material to the Partnership, whether or not in the ordinary course of business;
or (ii) undergone or undertaken any material adverse change, or a development
which can be seen to involve a prospective material adverse change, in the
general affairs, business, capitalization, properties, financial position or
results of operation, as the case may be, of the Partnership.
(d) FINANCIAL STATEMENTS. The financial statements and schedules of
the Partnership and the General Partners included in the Registration Statement
and the Prospectus
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and in any amendment or supplement thereto fairly present, or in the case of
future amendments or supplements will fairly present, the financial condition
of such persons and the results of their operations and changes in their
financial position, if any, as of the dates and for the periods therein
specified, and said financial statements have been and will be prepared in
accordance with generally accepted accounting principles which have been
consistently maintained and applied throughout the periods involved, except as
specifically noted in the financial statements included in the Registration
Statement and Prospectus or any amendment or supplement thereto, as the case
may be.
(e) PARTNERSHIP STATUS. The Partnership is duly formed and validly
existing under the Revised Uniform Limited Partnership Act as enacted and in
effect in the State of Delaware (the "Uniform Act"), with full power and
authority to conduct its business as described in the Prospectus, and to enter
into and perform this Agreement.
(f) AUTHORIZATION. The filing of the Registration Statement and of
applications under the securities laws of various jurisdictions (the "Blue Sky
Applications") and the execution, delivery and performance of this Agreement
are authorized by the Partnership Agreement and have been duly authorized by
the Partnership and the General Partners. The person or persons who have or
will sign this Agreement on behalf of the Managing General Partner and the
Partnership are or will be duly authorized so to sign. This Agreement is a
valid and legally binding obligation of the Partnership, except as rights to
indemnity under Section 8 hereof may be limited by federal or state securities
laws. The performance of this Agreement and the Partnership Agreement and the
consummation of the transactions contemplated herein and therein, respectively,
and the fulfillment of the terms hereof and thereof, respectively, will not
result in a breach of any of the terms and provisions of, or constitute a
default (or any event which with notice, lapse of time or both would constitute
a default) under, any statute, indenture, mortgage, deed of trust, voting trust
agreement, note agreement, lease or other agreement or instrument to which
either the Partnership or any of the General Partners are or will be a party or
by which any of them or any of their properties are or will be bound, or under
any rule or regulation or order of any court or other governmental agency or
body which is applicable or will be applicable to the Partnership or the
General Partners or any of their properties or result in the creation or
imposition of any lien, charge or encumbrance upon any of the property or
assets of the General Partners or property or assets of, or to be acquired by,
the Partnership. No consent, approval, authorization or order of any court or
governmental agency or body has been or is required for the performance of this
Agreement or the Partnership Agreement by the Partnership, or for the
consummation of the transactions contemplated hereby and thereby, respectively
(except as may be required under the Act, or under state securities laws in
connection with the distribution of the Units or from the NASD) regarding this
Agreement.
(g) PENDING ACTIONS. Except as set forth in the Prospectus, there is
no action, suit or proceeding pending before any court or governmental agency,
authority or body, or to the knowledge of the General Partners, threatened,
which might result in any material adverse change in the condition (financial
or other), business or prospectus of the General Partners or the Partnership.
There is no contract or document of a character required to be described in the
Registration Statement or Prospectus or to be filed as an exhibit to the
Registration Statement which is not described or filed as required.
(h) STATUS OF THE CORPORATE GENERAL PARTNER. Captec Franchise Capital
Corporation IV is a corporation duly organized as a corporation under the laws
of the State of Michigan, and it is validly existing and in good standing as a
corporation under such laws to conduct business as described in the Prospectus,
and has full right, power and authority to enter into this Agreement.
(i) UNITS; PARTNERSHIP AGREEMENT. The General Partners will
appropriately amend the Partnership Agreement to add the names of subscribers
of Units whose funds have been disbursed to the Partnership as Limited Partners
in the Partnership (if necessary under the
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Uniform Act), and the Units with respect to which such action has been taken
will, when sold and paid for as described in the Prospectus and the Partnership
Agreement, represent valid limited partnership interests in the Partnership,
fully paid and nonassessable, and will conform to the description thereof
contained in the Registration Statement and the Prospectus.
(j) The Partnership is not an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended, or the General Rules
and Regulations thereunder.
(k) There is no litigation or governmental proceeding pending or known
by the Partnership or the General Partners to be threatened against, or
involving the business of, the Partnership which, if adversely determined,
would materially and adversely affect the Partnership.
(l) This Agreement has been duly and validly authorized, executed and
delivered by the Partnership and is a legal, valid and binding obligation of
the Partnership, enforceable in accordance with its terms, except to the extent
that the enforceability hereof may be limited by (l) bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time in effect and
affecting the rights of creditors generally, (ii) limitations upon the power of
a court to grant specific performance or any other remedy with respect to the
enforcement of this Agreement, and (iii) except to the extent that the
indemnification provisions of this Agreement are or may be held to be violative
of public policy (under either state or federal law) in the context of the
offer, offer for sale, or sale of securities.
(m) The Units, upon the issuance thereof, will be duly and validly
authorized and issued.
3. YOUR REPRESENTATIONS AND WARRANTIES.
You represent and warrant to the Dealer-Manager and Partnership as follows:
(a) You have the necessary power and authority to execute this
Agreement and to perform the obligations imposed upon you and consummate the
transactions contemplated hereby.
(b) You are an entity duly organized and validly existing under the
laws of the state of organization; you are duly authorized to execute this
Agreement and to perform hereunder, and the execution by you of this Agreement
and the performance of the obligations and consummation of the transactions
contemplated hereby will not result in any material breach or violation of, or
constitute a default under, any agreement or instrument to which you are a
party or by which your properties are bound, or any judgment, decree, order or
any statute, rule or regulation applicable to you.
(c) You are a member in good standing of the NASD and you agree to
comply with all applicable rules of the NASD, including the NASD's Rules of
Fair Practice and all applicable provisions of the Securities Exchange Act of
1934, as amended, (the "1934 Act") including, without limitation, Rule 15c2-4
under the 1934 Act, and the securities laws of the jurisdictions in which
offers to purchase Units will be solicited by you in connection with the sale
of Units; you are also registered as a broker-dealer and in good standing under
the 1934 Act, and under the securities law of said jurisdictions in which you
may offer or sell Units.
(d) You agree to comply with the provisions contained in NASD Notice to
Members 84-64 relating to the forwarding of subscription documents and
subscription proceeds to the Escrow Agent and the return of such subscription
documents or subscription proceeds to a subscriber within the periods
specified. Specifically, you agree that:
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(i) all investors will be instructed to make their checks
payable as follows:
Michigan National Bank Escrow Agent for
Captec Franchise X.X. XX;
(ii) upon receipt of a check not conforming to the instructions
set forth in the Prospectus, you shall return such check directly to
such subscriber not later than the end of the next business day
following its receipt by you;
(iii) if you provide internal supervisory review of
subscriptions at the same location at which subscription documents and
checks are received from subscribers, checks, together with a copy of
the signature page of each Subscription Agreement, will be transmitted
to the Escrow Agent or to the broker-dealer registered under the 1934
Act, whose responsibility it is to handle, review investor suitability,
process and document the subscription and investor funds, prior to the
end of the next business day following your receipt of such materials;
(iv) if final internal supervisory review is conducted at a
different location than that at which checks and subscription documents
are received, checks will be transmitted to the office at which such
final internal supervisory review is performed by the end of the next
business day following receipt. In addition, such final review office
will, in turn, by the end of the next business day following receipt,
transmit such checks, together with a copy of the signature page of
each Subscription Agreement, for deposit to the Escrow Agent or to the
processing broker-dealer; and
(v) if a processing broker-dealer is involved, checks, together
with a copy of the signature page of each Subscription Agreement, will
be transmitted by such processing broker-dealer for deposit to the
Escrow Agent as soon as practicable, but in any event by the end of the
second business day following receipt by the processing broker-dealer.
In addition, if checks are rejected, subscriptions will be promptly
returned to such subscribers.
(e) You expressly agree that any and all compensation payable pursuant
hereto shall be earned and paid to you only if and after subscription proceeds
have been remitted to the Partnership by the Escrow Agent as otherwise
described herein.
4. COMPENSATION.
(a) Subject to the provisions of paragraph 3(e), the Partnership agrees
that the Dealer-Manager will pay you a commission equal to 8% of the principal
amount of all Units sold directly by you on each Closing Date (hereafter
defined). However, the commission rate on sales of 501 or more Units will be
reduced in accordance with the schedule set forth in the section of the
Prospectus titled "Who Should Invest-Plan of Distribution-Compensation".
(b) Subject to the provisions of paragraph 3(c), you also will be
reimbursed for your bona fide due diligence expense, including, but not limited
to, due diligence meetings, third party reports, and travel, provided however
that in no event will aggregate reimbursements to all Participating Dealers
exceed .5% of the proceeds of this Offering.
(c) The performance of your obligations hereunder and the consummation
of the transactions contemplated herein shall not entitle you to any further
compensation or remuneration, or any share in any of the profits or losses of
the Partnership or any equity interest in or right to influence, manage or
control the business, or conduct the affairs of the Partnership except as
expressly set forth in this Section 4.
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(d) Notwithstanding anything to the contrary contained herein, in the
event the payment of some or all of the compensation payable hereunder is or
will be violative of applicable state or federal broker-dealer compensation
requirements (including but not limited to applicable laws, regulations and
interpretive opinions), then you agree that such fee shall be waived to the
extent payment thereof is unlawful.
5. OFFERING.
Offers to purchase Units shall not be solicited other than at the price
and upon the terms and conditions set forth in the Prospectus. All funds
received by you in payment of subscriptions to purchase Units will be processed
in accordance with the procedures set forth in subparagraph 3(d) hereof.
All persons who subscribe for Units, and whose subscriptions for the
purchase of Units are accepted by the Managing General Partner, will be issued
Units for which they have subscribed as soon as practicable after the Managing
General Partner has accepted, and collected funds have been deposited with the
Escrow Agent representing, subscriptions for not less than 2,000 Units
($2,000,000; 2,000 Units is hereinafter referred to as the "Minimum Number of
Units"); provided, however, that if subscriptions to purchase the Minimum
Number of Units have not been received and accepted by the close of business
one year after the effective date of the Prospectus, the offering of Units, the
Offering Period and this Agreement shall terminate, and any and all funds
deposited with the Escrow Agent shall be refunded to subscribers as described
in subparagraph 1(b) hereof (the "Termination Date").
If, by the Termination Date, collected funds representing the Minimum
Number of Units have been deposited with the Escrow Agent, such funds shall be
paid to the Partnership by the Escrow Agent and the Partnership shall thereupon
pay to you amounts payable pursuant to paragraph 4(a) hereof.
6. YOUR COVENANTS.
You covenant and agree with the Partnership, General Partners, and
Dealer-Manager that you will:
(a) Comply with all requirements imposed upon you by the Act, the 1934
Act, the published rules and regulations of the Securities and Exchange
Commission (the "Commission") thereunder, and the Rules of Fair Practice of the
NASD including the requirements of: (i) Sections 8, 24, 25, 26 and 36 of
Article III of the Rules of Fair Practice; and (ii) Appendix F of Article III,
Section 34 of such Rules of Fair Practice ("Appendix F") and in particular the
requirements of Sections 3 and 4 of Appendix F.
In connection with the foregoing, you specifically covenant that:
(i) you will have reasonable grounds to believe, on the basis
of information obtained from the participant concerning his investment
objectives, other investments, financial situation and needs, and any
other information known by it or any of its associated persons, that:
(A) the subscriber is or will be in a financial position appropriate to
enable him to realize to a significant extent the tax benefits in cases
in which they are a significant aspect of the Partnership; (B) the
subscriber has a fair market net worth sufficient to sustain the risks
inherent in the Partnership, including loss of investment and limited
liquidity; and (C) the Partnership is otherwise a suitable investment
for the subscriber;
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(ii) you will not execute any transaction in the Partnership in
a discretionary account without the prior written approval of the
transaction by the customer;
(iii) you shall maintain in your files documents disclosing the
basis upon which the determination of suitability was reached as to
each subscriber;
(iv) you shall have reasonable grounds to believe, based on
information made available to you by the General Partners through the
Prospectus or other materials, that all material facts are adequately
and accurately disclosed and provide a basis for evaluating the
Partnership;
(v) in determining the adequacy of the disclosed facts pursuant
to subparagraph (iv) above, you shall obtain information on material
facts relating at a minimum to the following, if relevant: (A) items of
compensation; (B) physical properties; (C) tax aspects; (D) financial
stability and experience of the General Partners; (E) the Partnership's
conflicts and risk factors; and (F) appraisals and other pertinent
reports;
(vi) you shall not permit the purchase of Units unless you
appropriately inform prospective subscribers of all pertinent facts
relating to the liquidity and marketability of the Partnership during
the term of the investment;
(vii) you agree not to commence the public solicitation of
subscriptions for the Units until authorized to do so by the General
Partners;
(viii) you will have obtained information on material facts
relating at a minimum to the items set forth in Section 4(b) of
Appendix F of the NASD Rules of Fair Practice; and
(ix) to the extent you are relying on the results of an inquiry
conducted by another NASD member firm, you will satisfy the conditions
set forth in Section 4(c) of Appendix F to the NASD Rules of Fair
Practice.
In addition, you agree not to deliver any additional written, audio or
audiovisual material prepared by the Partnership for use in conjunction with
the offer or sale of the Units (the "Supplemental Literature") to any person
unless the Supplemental Literature is accompanied or preceded by the
Prospectus. You confirm that you are registered and are in good standing under
the 1934 Act and a member of the NASD.
(b) You will solicit purchases of the Units only in the states and
other jurisdictions in which the Partnership's Blue Sky memoranda indicate that
such solicitation can be made and in which you have determined that such
solicitation can be made and in which you are qualified to so act, and to
solicit purchases of the Units only from those persons to whom offers and sales
will be made by the Partnership as described in the Prospectus under "Who
Should Invest."
(c) You will not give any information or make any representation in
connection with the offering of the Units other than those contained in the
Prospectus and Supplemental Literature furnished by the General Partners. You
agree not to publish, circulate or otherwise use any other advertisement or
solicitation material. You are not authorized to act as agent of the
Partnership or the General Partners in connection with any transaction, and you
agree not to act as such agent and not to purport to do so without the prior
written approval of the General Partners. You agree that, if and when the
General Partners supply you with copies of any supplement to the Prospectus,
you will affix copies of such supplement to copies of the Prospectus already in
your possession, and that thereafter you will only distribute Prospectuses
containing such supplement and that you will accept subscriptions only from
investors who have
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received a copy of the Prospectus containing such supplement. Your further
agree to comply with all instructions from the General Partners concerning the
destruction of out-dated Prospectuses and the use of supplemented or amended
Prospectuses.
(d) Upon the reasonable request of the General Partners, you will
furnish them with such information as may be reasonably necessary for them to
be apprised of the status of the solicitation of offers to purchase Units.
(e) Maintain, for your benefit and the benefit of the Partnership, for
a period of not less than five (5) years, file memoranda and other customary
and appropriate documents and records substantiating your compliance with the
foregoing requirements.
(f) You will not use any offering or selling materials other than
materials furnished or approved by the Partnership, and than only in such
manner as shall be directed by the Partnership. To the extent that information
is provided to you marked "For Broker/Dealer Use Only," you covenant and agree
not to provide such information to prospective investors.
(g) During the Offering Period, you shall not take any action or permit
any action to occur which would result in any of the representations and
warranties contained herein being untrue in any material respect as of a time
immediately after such action is taken or permitted.
(h) Subject to your and the Partnership's right to terminate this
Agreement as set forth in Section 11 hereof, if at any time during the Offering
Period any event occurs as a result of which the Prospectus would include an
untrue statement of a material fact or, in view of the circumstances under
which they were made, omit to state any material fact necessary to make the
statements therein not misleading, you will promptly notify the Partnership
thereof (unless the information shall have been received from the Partnership)
and you will assist the Partnership, by whatever means are available to you, in
the preparation of an amended or supplemented Prospectus which will correct
such statement or omission.
7. CONDITIONS OF CLOSING.
The purchase of, and payment for, the Units on a Closing Date shall be
subject to the continuing accuracy of the representations and warranties of the
Partnership and you as of the date hereof and as of the Closing Date; to the
performance by the Partnership and you of their respective obligations
hereunder; and to the following conditions:
(a) On or prior to the Closing Date, your counsel and our counsel shall
have been furnished such documents, certificates and opinions as they may
reasonably require in order to evidence the accuracy, completeness or
satisfaction of any of the representations, warranties or conditions herein
contained.
(b) Prior to the Closing Date: (1) there shall have been no materially
adverse change in the condition of the Partnership or its business activities
from that as of the latest date as of which such conditions are described in
the Prospectus, (2) there shall have been no material transactions not in the
ordinary course of business, entered into by the Partnership from the latest
date as of which its financial conditions are described in the Prospectus,
other than transactions referred to or contemplated therein or to which you
have given your written consent, (3) the Partnership shall not be in default
under any provisions of any instruments relating to any material outstanding
indebtedness, (4) no material amount of the assets of the Partnership shall be
at the Closing Date pledged or mortgaged, except as set forth in the
Prospectus, and (5) no action, suit or proceeding, at law or in equity, shall
have been pending or to their knowledge threatened against the Partnership or
affecting its business before or by any court or federal or state commission,
board or other administrative agency wherein an unfavorable decision, ruling
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or finding would adversely affect the offering of the Units, business,
operations, prospects or financial condition or income of the Partnership,
except as set forth in the Prospectus.
(c) No order suspending the sale of the Units prior to the Closing Date
in any jurisdiction designated by you shall have been issued on such Closing
Date, and no proceedings for that purpose either shall have been instituted,
or, to your knowledge or to the knowledge of the Partnership, shall be
contemplated.
(d) At the Closing Date, you shall, upon request, be delivered a
certificate of the Partnership or the General Partners as the case may be,
dated as of such Closing Date, to the effect that the conditions set forth in
Subsections a and b above have been satisfied, and, as to the accuracy, as of
the Closing Date, of its representations and warranties set forth in Section 2
hereof.
(e) At the Closing Date, the Partnership and the General Partners shall
have received your certificate, dated as of such Closing Date, as to your
compliance with your covenants and agreements set forth in Sections 3 and 7
hereof.
If any condition to your obligations hereunder to be fulfilled prior to or
at the Closing Date is not so fulfilled, you may terminate this Agreement or,
if you so elect, waive any such conditions which have been unfulfilled or
extend the time for their fulfillment.
The Partnership shall be under no liability to make any payment to you
except out of funds received by the Partnership as hereinbefore provided, and
the Partnership shall not be under any liability for or in respect of the value
or validity of the Units, or the performance by anyone of any agreement on its
part, or for or in respect of any matter connected with this Agreement, except
for lack of good faith and for obligations expressly assumed by the Partnership
in this Agreement.
8. INDEMNIFICATION.
(a) Subject to the conditions set forth below, the Partnership, the
General Partners, and Dealer-Manager agree to indemnify and hold harmless you
and each person, if any, who controls you, within the meaning of Section 15 of
the Act (an "Indemnified Party") against any and all loss, liability, claim,
damage and expense whatsoever (including but not limited to all expenses
reasonably incurred in investigating, preparing or defending against any
litigation or arbitration, commenced or threatened, or any claim with respect
to which litigation or arbitration is reasonably foreseeable) arising out of or
based upon (a) any untrue statement or alleged untrue statement of a material
fact contained (i) in the Prospectus (as from time to time amended and
supplemented) other than that based upon written information provided by you or
on your behalf, or (ii) in any application or other document (in this Section 8
called an "Application") executed by the Partnership or based upon written
information provided by or on behalf of the Partnership filed in any
jurisdiction in order to secure registration of the Units under the securities
laws thereof; or (b) the omission or alleged omission from the Prospectus or
any Application of a material fact required to be stated therein or necessary
to make the statements therein not misleading other than an omission related to
written information provided by you or on your behalf; or (c) the failure of
the Partnership or its agents to comply with any of the applicable provisions
of the Act, the General Rules and Regulations of the Commission or the 1934
Act; or (d) any unauthorized verbal or written representations in connection
with the offer and sale of Units made by the Partnership or the agents,
employees or affiliates of such persons; or (e) any material breach of the
representations, warranties, covenants and/or agreements of the Partnership
contained in this Agreement; or (f) any actions, direct or indirect, in
connection with the offer and sale of Units by the Partnership or agents,
employees or affiliates of such persons in violation of the Act, the 1934 Act
or the Rules and Regulations promulgated thereunder or any state securities law
and regulation.
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(b) Subject to the conditions set forth below, you agree to indemnify
and hold harmless the Partnership, Dealer-Manager, and/or the General Partners
and each person, if any, who controls the Partnership and/or the General
Partners within the meaning of Section 15 of the Act against any and all loss,
liability, claim, damage and expense whatsoever (including but not limited to
all expenses reasonably incurred in investigating, preparing or defending
against any litigation or arbitration, commenced or threatened, or any claim
with respect to which litigation or arbitration is reasonably foreseeable)
arising out of or based upon (a) any untrue statement or alleged untrue
statement of a material fact contained (i) in the Prospectus (as from time to
time amended and supplemented) based upon written information provided by you
or on your behalf, or (ii) in any Application executed by you or based upon
written information provided by you or on your behalf filed in any jurisdiction
in order to secure an exemption from the registration for the Units or the
transaction in which the Units are offered under the securities laws thereof;
or (b) the omission or alleged omission from the Prospectus or any Application
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only if you were the source of omission
or alleged omission; (c) your failure or the failure of your agents to comply
with any of the applicable provisions of the Act, the General Rules and
Regulations of the Commission or the 1934 Act; or (d) any unauthorized verbal
or written representations in connection with the offer and sale of Units made
by you or your agents, employees or affiliates; or (e) any material breach of
your representations, warranties, covenants and/or agreements contained in this
Agreement; or (f) any actions, direct or indirect, in connection with the offer
and sale of Units by you or your agents, employees or affiliates of such
persons in violation of the 1934 Act or any state securities law and
regulation.
(c) If any action is brought against any person entitled to
indemnification hereunder (an "Indemnified Party") with respect to which
indemnity may be sought against any person who is required to provide
indemnification hereunder (the "Indemnifying Party") such Indemnified Party
shall promptly notify the Indemnifying Party, in writing, of such action, and
the Indemnifying Party shall assume the defense of such action, including the
employment of counsel to be chosen by the Indemnifying Party and payment of
expenses. The Indemnified Party shall have the right to employ counsel in any
such case, but all fees and expenses of such counsel shall be at the
Indemnified Party's expense unless the Indemnifying Party shall not have
employed counsel to have charge of the defense of such action, or such
Indemnified Party shall have reasonably concluded in reliance upon a written
opinion of counsel that there may be defenses available to it which are
different from or in addition to those available to the Indemnifying Party (in
which case the Indemnifying Party shall not have the right to direct the
defense of such action on behalf of the Indemnified Party), in any of which
events such fees and expenses shall be borne by the Indemnifying Party. The
Indemnifying Party shall not be liable for any settlement of, or expenses
incurred with respect to, any such claim or action effected without their
written consent. The Indemnifying Party agrees to promptly notify the
Indemnified Party of the commencement of any litigation or proceedings against
the Indemnifying Party, or any of its officers, directors, or agents in
connection with the offer and sale of Units or in connection with the
Prospectus or this Agreement.
(d) Notwithstanding anything to the contrary provided in Section 9 of
this Agreement, an Indemnifying Party shall not be obliged 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 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. In case 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
which has been selected by a majority of the Indemnified Parties against which
such action is finally brought. In the event a majority of such Indemnified
Parties are unable to agree on which law firm for which expenses or fees will
be reimbursable by the Partnership, 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 service performed by such law
firm, and no reimbursement shall be payable to such law firm on
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account of legal services performed by another law firm. Notwithstanding
anything contained herein to the contrary, an Indemnified Party may not without
the prior consent of the Partnership settle or compromise any action brought
against such Indemnified Party.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Sub-sections (a),
(b), (c) and (d) of this Section 8 is for any reason held by a court of
competent jurisdiction to be unenforceable as to the Partnership or you, the
Partnership and you shall contribute to the aggregate losses, claims, damages
and liabilities (including any investigation, legal and other expenses incurred
in connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted) to which the Partnership, and you may be
subject in such proportion so that you shall be responsible for that portion
represented by the percentage that the commissions paid on the principal amount
of the Units which you sold in this Offering.
9. REPRESENTATIONS AND AGREEMENTS TO SURVIVE SALE AND PAYMENT.
Except as the context otherwise requires, all representations, warranties,
covenants and agreements contained in this Agreement shall be deemed to be
representations, warranties, covenants and agreements at the Closing Date; and
such representations, warranties, covenants and agreements of you and the
Partnership shall remain operative and in full force and effect regardless of
any investigation made by you, or by the Partnership, and shall survive the
sale of, and payment for, the Units.
10. TERMINATION OF THIS AGREEMENT.
(a) You or the Partnership shall have the right to terminate this
Agreement at any time during the Offering Period, if any domestic or
international event or act or occurrence has materially disrupted, or in your
opinion will in the immediate future materially disrupt, securities markets; or
if the United States shall have become involved in a war or major hostilities;
or if a banking moratorium has been declared by a state or federal authority;
or if the changes in factors relating to the proposed business of the
Partnership shall, in your opinion or in the Partnership's opinion, make it
inadvisable to proceed with the delivery of the Units.
(b) If you elect to terminate this Agreement as provided in this
Section 10, you shall promptly notify the Partnership pursuant to Section 11 of
this Agreement. If the Partnership elects to terminate this Agreement as
provided in this Section 10, the Partnership shall promptly notify you pursuant
to Section 11 of this Agreement.
(c) If you or the Partnership shall terminate this Agreement pursuant
to this Section 10, no party shall have any liability to any other party, other
than for obligations, if any, pursuant to Section 4 hereof, as they relate to
Units sold by you through the date of termination of this Agreement.
(d) Notwithstanding any election hereunder or any termination of this
Agreement pursuant to this Section 11, and whether or not this Agreement is
otherwise carried out, the provisions of Section 9 shall not be in any way
affected by such election or termination pursuant to this Section 10.
11. NOTICES.
All notices provided for by this Agreement shall be made in writing either
(i) by actual delivery of the notice into the hands of the parties thereto
entitled, or by delivery via courier service to a person in the office of the
person entitled to notice; or (ii) by the mailing of the notice in the United
States mails to the address, as stated below (or at such other address as may
be designated by written notice), of the party entitled thereto, by certified
or registered mail, return receipt requested, postage prepaid. The notice
shall be deemed to be received on the date
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xx xxxxxxx xx xxx Xxxxxx Xxxxxx mails if mailed per subparagraph (ii) above, or
the date of delivery to the office if sent per subparagraph (i) above.
All communications hereunder, except as herein otherwise specifically
provided, shall be in writing and, if sent to you, shall be mailed or delivered
to you at your address first set forth above; if sent to the Partnership or
Dealer-Manager, shall be mailed or delivered to 24 Xxxxx Xxxxx Xxxxxx Xxxxx,
X.X. Xxx 000, Xxx Xxxxx, Xxxxxxxx 00000-0000. Should a party change its
address, following delivery of notice of the new address, subsequent notices
shall be sent to the new address.
12. CONSTRUCTION.
This Agreement shall be governed by, subject to, and construed in
accordance with, the laws of the state of Delaware.
13. SEVERABILITY.
If any portion of this Agreement is to be held invalid or unenforceable by
a court of competent jurisdiction, then, so far as is reasonable and possible
(i) the remainder of this Agreement shall be considered valid and operative and
(ii) effect shall be given to the intent manifested by the portion held invalid
or inoperative.
14. MULTIPLE COUNTERPARTS.
This Agreement may be executed in a number of identical counterparts, each
of which shall be deemed to be an original, but all of which shall constitute,
collectively, one and the same agreement; however, in making proof of this
Agreement, it shall not be necessary to produce or account for more than one
such counterpart, provided such counterpart has been executed by the party to
be charged with performance of this Agreement.
15. MODIFICATION OF AMENDMENT.
This Agreement may not be modified or amended except by written agreement
executed by all the parties hereto.
16. NUMBER AND GENDER OF WORDS.
Whenever the context so requires, the masculine shall include the feminine
and neuter, and the singular shall include the plural, and conversely.
17. OTHER INSTRUMENTS.
The parties hereto covenant and agree that they will execute such other
and further instruments and documents as are or may become necessary or
convenient to effectuate and carry out this Agreement.
18. CAPTIONS.
The captions used in this Agreement are for convenience only and shall not
be considered as part of this Agreement.
19. PARTIES.
This Agreement shall be binding upon and inure solely to the benefit of
the parties hereto, the persons referred to in Section 8 hereof and their
respective successors, legal representatives, heirs and assigns, and no other
person shall have or be construed to have any legal or equitable
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right, remedy or claim under or in respect to or by virtue of this Agreement or
any provision herein contained, including, but not limited to, persons who are
or become Limited Partners of the Partnership.
20. ENTIRE AGREEMENT.
This Agreement contains the entire understanding between the parties and
supersedes any prior understandings or written or oral agreements between them
respecting the subject matter hereof.
If the foregoing correctly gets forth the understanding between you and
the Partnership, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between us.
Very truly yours,
CAPTEC FRANCHISE CAPITAL PARTNERS
X.X. XX
By: CAPTEC FRANCHISE CAPITAL
CORPORATION IV, Managing General
Partner
By:
-----------------------------------
Xxxxxxx X. Beach
President
CAPTEC SECURTIES CORPORATION
By:
-----------------------------------
Its:
----------------------------------
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Gentlemen:
We hereby confirm our agreement to abide by and conform to the terms and
conditions of the foregoing Amended and Restated Participating Dealer Agreement
and we acknowledge the receipt of the Prospectus relating to the Units. We
confirm that we are members of the National Association of Securities Dealers,
Inc.
Dated: , 199 By:
------------ -- ------------------------------------
Authorized Representative
Address:
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Phone Number:
------------------
Fax Number:
--------------------
Tax ID Number:
-----------------
COMMISSION CHECKS:
Name:
--------------------------
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STATES LICENSED:
All Fifty States
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All Fifty States Except:
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Licensed in the Following States:
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