EXHIBIT 1.2
Form of Participating Broker Agreement
PARTICIPATING BROKER AGREEMENT
CNL RETIREMENT PROPERTIES, INC.
THIS PARTICIPATING BROKER AGREEMENT (the "Agreement") is made and
entered into as of the day indicated on Exhibit A attached hereto and by this
reference incorporated herein, between CNL SECURITIES CORP., a Florida
corporation (the "Managing Dealer"), and the Participating Broker (the "Broker")
identified in Exhibit A hereto.
WHEREAS, CNL RETIREMENT PROPERTIES, INC. is a Maryland corporation (the
"Company"); and
WHEREAS, the Company proposes to offer and sell up to 45,000,000 shares
of Common Stock of the Company (the "Shares") to the general public, pursuant to
a public offering (the "Offering") of the Shares pursuant to a prospectus (the
"Prospectus") filed with the Securities and Exchange Commission ("SEC"); and
WHEREAS, the Managing Dealer, which has heretofore entered into a
Managing Dealer Agreement with the Company pursuant to which it has been
designated the managing dealer to sell and manage the sale by others of the
Shares pursuant to the terms of such agreement and the Offering, is a
corporation incorporated in and presently in good standing in the State of
Florida, and is presently registered with the Florida Securities Commission and
with the National Association of Securities Dealers, Inc. ("NASD") as a
securities broker-dealer qualified to offer and sell to members of the public
securities of the type represented by the Shares; and
WHEREAS, the Broker is an entity, as designated in Exhibit A hereto,
organized and presently in good standing in the state or states designated in
Exhibit A hereto, presently registered as a broker-dealer with the NASD, and
presently licensed by the appropriate regulatory agency of each state in which
it will offer and sell the Shares as a securities broker-dealer qualified to
offer and sell to members of the public securities of the type represented by
the Shares or exempt from all such registration requirements; and
WHEREAS, the Company has filed with the SEC a registration statement on
Form S-11, including a preliminary or final prospectus, for the registration of
the Shares under the Securities Act of 1933, as amended (such registration
statement, as it may be amended, and the prospectus and exhibits on file with
the SEC at the time the registration statement becomes effective, including any
post-effective amendments or supplements to such registration statement or
prospectus after the effective date of registration, being herein respectively
referred to as the "Registration Statement" and the "Prospectus"); and
WHEREAS, the offer and sale of the Shares shall be made pursuant to the
terms and conditions of the Registration Statement and the Prospectus and,
further, pursuant to the terms and conditions of all applicable securities laws
of all states in which the Shares are offered and sold; and
WHEREAS, the Managing Dealer desires to retain the Broker to use its
best efforts to sell the Shares, and the Broker is willing and desires to serve
as a broker for the Managing Dealer for the sale of the Shares upon the
following terms and conditions;
NOW, THEREFORE, in consideration of the premises and terms and
conditions thereof, it is agreed between the Managing Dealer and the Broker as
follows.
1. Employment.
(a) Subject to the terms and conditions herein set forth, the
Managing Dealer hereby employs the Broker to use its best efforts to sell for
the account of the Company a portion of the Shares described in the Registration
Statement, as specified on Exhibit A hereto. The Broker hereby accepts such
employment and covenants, warrants and agrees to sell the Shares according to
all of the terms and conditions of the Registration Statement, all applicable
state and federal laws, including the Securities Act of 1933, as amended, and
any and all regulations and rules pertaining thereto, heretofore or hereafter
issued by the SEC and the NASD. Neither the Broker nor any other person shall
have any authority to give any information or make any representations in
connection with any offer or sale of the Shares other than as contained in the
Prospectus, as amended and supplemented, and as is otherwise expressly
authorized in writing by the Managing Dealer.
(b) The Broker shall use its best efforts, promptly following
receipt of written notice from the Managing Dealer of the effective date of the
Registration Statement, to sell the Shares in such quantities and for the
account of Company as shall be agreed between the Broker and the Managing Dealer
and specified on Exhibit A hereto, and to such persons and according to all such
terms as are contained in the Registration Statement and the Prospectus. The
Broker shall comply with all requirements set forth in the Registration
Statement and the Prospectus. The Broker shall use and distribute, in connection
with the offer and sale of the Shares, only the Prospectus and such sales
literature and advertising as shall conform in all respects to any restrictions
of local law and the applicable requirements of the Securities Act of 1933, as
amended, and which has been approved in writing by the Company or the Managing
Dealer. The Managing Dealer reserves the right to establish such additional
procedures as it may deem necessary to ensure compliance with the requirements
of the Registration Statement, and the Broker shall comply with all such
additional procedures to the extent that it has received written notice thereof.
(c) The Broker shall be permitted to accept subscriptions for
the Shares by telephone from residents of those states identified on Schedule A
attached hereto and made a part hereof provided that: (1) the registered
representative and branch manager of the Broker execute the subscription
agreement on behalf of any investor who subscribes for Shares by telephone; and
(2) the Broker does not charge any additional fees, including but not limited to
fees relating to opening an account with the Broker, to any investor who
telephonically or orally subscribes for Shares. It is understood and agreed
between the Managing Dealer and the Broker that the Managing Dealer may, in its
discretion, change, modify, add to or delete from the list of states identified
on Schedule A. Any such modification shall be effective ten days from the date
written notice to the Broker has been mailed by the Managing Dealer. The Broker
shall not execute a subscription agreement on behalf of any investor who
subscribes for Shares by telephone unless such investor has specifically
authorized the registered representative and the branch manager of the Broker to
execute the subscription agreement on behalf of such investor and has made or
agreed to make full payment for all Shares covered by such subscription
agreement. Notwithstanding anything contained herein to the contrary, the Broker
shall have no authority to make representations on behalf of an investor or to
initial representations contained in the subscription agreement on behalf of an
investor. In connection with telephonic or other oral subscriptions for Shares,
the Broker represents and warrants as follows: (i) that a Prospectus was
delivered to the investor before the investor made a decision to invest; (ii)
that the investor meets the suitability requirements set forth in the
Prospectus; and (iii) that, in compliance with the NASD's Conduct Rules, the
Broker has reasonable grounds to believe that the investment in the Company is
suitable for the investor, based upon information supplied by the investor to
such Broker. Further, the Broker shall explain to any investor from a state
identified in the Prospectus as having such additional requirements, that: (i)
the investor has the right to rescind such subscription for a period of at least
ten days following the date written confirmation of the subscription has been
received by the investor from the Managing Dealer; and (ii) unless the investor
rescinds such subscription within the applicable period of time, the investor
shall be bound by the subscription agreement.
(d) Notwithstanding anything to the contrary contained in
Section 2 of this Agreement, in the event that the Managing Dealer pays any
commission to the Broker for sale of one or more Shares, including, but not
limited to, those Shares sold pursuant to a telephonic or other oral
subscription therefor, where representatives of the Broker execute the
subscription agreement relating to such Shares, and the subscription is
rescinded as to one or more of the Shares covered by such subscription, the
Managing Dealer shall decrease the next payment of commissions or other
compensation otherwise payable to the Broker by the Managing Dealer under this
Agreement by an amount equal to the commission rate established in Section 2 and
Exhibit A of this Agreement, multiplied by the number of Shares as to which the
subscription is rescinded. In the event that no payment of commissions or other
compensation is due to the Broker after such withdrawal occurs, the Broker shall
pay the amount specified in the preceding sentence to the Managing Dealer within
ten (10) days following mailing of notice to the Broker by the Managing Dealer
stating the amount owed as a result of rescinded subscriptions.
(e) All monies received for purchase of any of the Shares
shall be forwarded by the Broker to the Managing Dealer for delivery to
SouthTrust Bank (the "Escrow Agent"), where such monies will be deposited in an
escrow account established by the Company solely for such subscriptions. The
Broker may accept checks made payable to either the Company or the Escrow Agent.
Subscriptions will be executed as described in the Registration Statement or as
directed by the Managing Dealer. The monies shall be deposited or transmitted by
the Broker to the Managing Dealer no later than the close of business of the
first business day after receipt of the subscription documents by the Broker;
provided, however, that if the Broker maintains a branch office, the branch
office shall transmit the subscription documents and check to the Broker by the
close of business on the first business day following their receipt by the
branch office and the Broker shall review the subscription documents and check
to ensure their proper execution and form and, if they are acceptable, transmit
the check to the Managing Dealer by the close of business on the first business
day after their receipt by the Broker. Pursuant to the terms of the Managing
Dealer Agreement, the Managing Dealer will transmit the check or monies to the
Escrow Agent by no later than the close of business on the first business day
after the check is received from the Broker.
(f) During the full term of this Agreement the Managing Dealer
shall have full authority to take such action as it may deem advisable in
respect to all matters pertaining to the performance of the Broker under this
Agreement.
(g) The Shares shall be offered and sold by the Broker only
where the Shares may be legally offered and sold, and only to such persons in
such states who shall be legally qualified to purchase the Shares. The Managing
Dealer shall give the Broker written notice at the time of effectiveness of
those states in which the offering and sale of Shares may be made, and shall
amend such notice thereafter as additional states are added; no Shares shall be
offered or sold in any other states.
(h) The Broker shall have no obligation under this Agreement
to purchase any of the Shares for its own account.
(i) The Broker will use every reasonable effort to assure that
Shares are sold only to investors who:
(1) meet the investor suitability standards,
including the minimum income and net worth standard established by the
Company, and minimum purchase requirements set forth in the
Registration Statement;
(2) can reasonably benefit from the Company based on
the prospective investor's overall investment objectives and portfolio
structure;
(3) are able to bear the economic risk of the
investment based on each prospective investor's overall financial
situation; and
(4) have apparent understanding of: (a) the
fundamental risks of the investment; (b) the risk that the prospective
investor may lose the entire investment; (c) the lack of liquidity of
the Shares; (d) the restrictions on transferability of the Shares; (e)
the background and qualifications of the officers and directors of CNL
Retirement Corp., the advisor to the Company (the "Advisor"); and (f)
the tax consequences of an investment in the Shares.
The Broker will make the determinations required to
be made by it pursuant to subparagraph (i) based on information it has
obtained from a prospective investor, including, at a minimum, but not
limited to, the prospective investor's age, investment objectives,
investment experience, income, net worth, financial situation, other
investments of the prospective investor, as well as any other pertinent
factors deemed by the Broker to be relevant.
(j) In addition to complying with the provisions of
subparagraph (i) above, and not in limitation of any other obligations of the
Broker to determine suitability imposed by state or federal law, the Broker
agrees that it will comply fully with all of the applicable provisions of the
NASD's Conduct Rules, and the following provisions:
(1) The Broker shall have reasonable grounds to
believe, based upon information provided by the investor concerning his
investment objectives, other investments, financial situation and
needs, and upon any other information known by the Broker, that (A)
each investor to whom the Broker sells Shares is or will be in a
financial position appropriate to enable him to realize to a
significant extent the benefits (including tax benefits) of an
investment in the Shares, (B) each investor to whom the Broker sells
Shares has a fair market net worth sufficient to sustain the risks
inherent in an investment in the Shares (including potential loss and
lack of liquidity), and (C) the Shares otherwise are or will be a
suitable investment for each investor to whom it sells Shares, and the
Broker shall maintain files disclosing the basis upon which the
determination of suitability was made;
(2) The Broker shall not execute any transaction
involving the purchase of Shares in a discretionary account without
prior written approval of the transaction by the investor;
(3) The Broker shall have reasonable grounds to
believe, based upon the information made available to it, that all
material facts are adequately and accurately disclosed in the
Registration Statement and provide a basis for evaluating the Shares;
(4) In making the determination set forth in
subparagraph (3) above, the Broker shall evaluate items of
compensation, physical properties, tax aspects, financial stability and
experience of the sponsor, conflicts of interest and risk factors,
appraisals, as well as any other information deemed pertinent by it;
(5) If the Broker relies upon the results of any
inquiry conducted by another member of the NASD with respect to the
obligations set forth in subparagraphs (3) or (4) above, the Broker
shall have reasonable grounds to believe that such inquiry was
conducted with due care, that the member or members conducting or
directing the inquiry consented to the disclosure of the results of the
inquiry and that the person who participated in or conducted the
inquiry is not a sponsor or an affiliate of the sponsor of the Company;
and
(6) Prior to executing a purchase transaction in the
Shares, the Broker shall have informed the prospective investor of all
pertinent facts relating to the liquidity and marketability of the
Shares.
(k) The Broker agrees that it will comply with Rules 2730,
2740 and 2750 of the NASD's Conduct Rules.
(l) The Broker agrees to retain in its files, for a period of
at least six (6) years, information which will establish that each purchaser of
Shares falls within the permitted class of investors.
(m) The Broker shall not, directly or indirectly, pay or award
any finder's fees, commissions or other compensation to any persons engaged by a
potential investor for investment advice as an inducement to such advisor to
advise the potential investor to purchase Shares in the Company.
(n) The Broker either (i) shall not purchase Shares for its
own account or (ii) shall hold for investment any Shares purchased for its own
account.
(o) The Broker hereby confirms that it is familiar with
Securities Act Release No. 4968 and Rule 15c2-8 under the Securities Exchange
Act of 1934, relating to the distribution of preliminary and final prospectuses,
and confirms that it has and will comply therewith.
(p) The Broker shall deliver a copy of the Articles of
Incorporation of the Company with each Prospectus that is delivered to potential
investors in Mississippi.
(q) The Broker shall not in any way participate in, or effect
the sale or transfer of Shares in connection with, a tender offer with respect
to shares of the Company's common stock, whether or not such offer is subject to
Section 14(d)(1) of the Securities Exchange Act of 1934, as amended, other than
with the written consent of the Company and/or the Managing Dealer.
2. Compensation of Broker.
The Managing Dealer shall pay the Broker, as compensation for all
services to be rendered by the Broker hereunder, a commission equal to 7.0% on
sales of Shares by such Broker, as set forth in Exhibit A hereto, subject to
reduction as specified in this Section 2 and the Prospectus. The Managing
Dealer, in its sole discretion, may reallow to the Broker, from its marketing
support and due diligence expense reimbursement fee, up to an additional 0.5% on
sales of Shares by such Broker, based on such factors as the number of Shares
sold by the Broker, the assistance of the Broker in marketing the Offering, and
bona fide due diligence expenses incurred by the Broker. Such commission rates
shall remain in effect during the full term of this Agreement unless otherwise
changed by a written agreement between the parties hereto. A sale of Shares
shall be deemed to be completed only after the Company receives a properly
completed subscription agreement for Shares from the Broker evidencing the fact
that the investor had received a final Prospectus for a period of not less than
five (5) full business days, together with payment of the full purchase price of
each purchased Share from a buyer who satisfies each of the terms and conditions
of the Registration Statement and Prospectus, and only after such subscription
agreement has been accepted in writing by the Company. Such compensation shall
be payable to the Broker by the Managing Dealer after such acceptance of the
subscription agreement; provided, however, that compensation or commissions
shall not be paid by the Managing Dealer: (i) other than from funds received as
compensation or commissions from the Company for the sale of its Shares; (ii)
until any and all compensation or commissions payable by the Company to the
Managing Dealer have been received by the Managing Dealer; and (iii) if the
commission payable to any broker-dealer or salesman exceeds the amount allowed
by any regulatory agency. The Broker shall not reallow any commissions to
non-NASD members. The Company (and the Managing Dealer) may pay reduced
commissions or may eliminate commissions on certain sales of Shares, including
the reduction or elimination of commissions in accordance with the following
paragraph of this Section 2. Any such reduction or elimination of commissions
will not, however, change the net proceeds to the Company.
A registered principal or representative of the Managing Dealer or a
Broker, employees, officers, Directors, and directors of the Company or the
Advisor, or any of their Affiliates (and the families of any of the foregoing
persons), and any Plan (as defined in the Prospectus) established exclusively
for the benefit of such persons may purchase Shares net of 7% commissions, at a
per Share purchase price of $9.30. In addition, clients of an investment adviser
registered under the Investment Advisers Act of 1940, as amended, who have been
advised by such adviser on an ongoing basis regarding investments other than in
the Company, and who are not being charged by such adviser or its Affiliates,
through the payment of commissions or otherwise, for the advice rendered by such
adviser in connection with the purchase of the Shares, may purchase the Shares
net of commissions. In addition, brokers that have a contractual arrangement
with their clients for the payment of fees which is inconsistent with accepting
selling commissions may elect not to accept any selling commissions offered by
the Company for Shares that they sell. In that event, such Shares shall be sold
to the investor net of all selling commissions, at a per share purchase price of
$9.30.
Certain stockholders may agree with their participating Broker and the
Managing Dealer to have commissions relating to their Shares paid over a
seven-year period pursuant to a deferred commission arrangement (the "Deferred
Commission Option"). Stockholders electing the Deferred Commission Option will
be required to pay a total of $9.40 per Share purchased upon subscription,
rather than $10.00 per Share, with respect to which $0.15 per Share will be
payable as commissions due upon subscription, $0.10 of which may be reallowed to
the Broker by the Managing Dealer. For each of the six years following such
subscription (or for such six-year period commencing at a later date agreed upon
by the Managing Dealer and the Broker) on a date to be determined by the
Managing Dealer, $0.10 per Share will be paid by the Company as deferred
commissions with respect to Shares sold pursuant to the Deferred Commission
Option, which amounts will be deducted from and paid out of distributions
otherwise payable to such stockholders holding such Shares and may be reallowed
to the Broker by the Managing Dealer. The net proceeds to the Company will not
be affected by the election of the Deferred Commission Option. Under this
arrangement, a stockholder electing the Deferred Commission Option will pay a 1%
Broker commission per year thereafter for six years which will be deducted from
and paid by the Company out of distributions otherwise payable to such
stockholder. At such time, if any, that the Company's Shares are listed on a
national securities exchange or over-the-counter market, the Company shall have
the right to require the acceleration of all outstanding obligations under the
Deferred Commission Option.
The Managing Dealer shall pay the Broker commissions on Shares
purchased pursuant to the Company's Reinvestment Plan on the same basis as
commissions paid for Shares otherwise purchased in the Offering.
In addition to the commissions described above in this Section 2, the
Managing Dealer may reallow to the Broker all or a portion of its annual fee
actually received from the Company of .20% of the Company's Invested Capital (as
defined below) on December 31 of each year, commencing in the year following the
year in which the Offering terminates. It is understood that payment of such fee
by the Company to the Managing Dealer is subject to any limitations imposed on
the Company by the NASD, state securities regulators or otherwise. The Managing
Dealer may reallow this fee only to a Broker whose clients hold Shares on
December 31 of the applicable year. In general, Invested Capital is the amount
of cash contributed by the stockholders to the Company, reduced by certain prior
capital distributions to the stockholders from the sale of Company properties.
For purposes of this provision, Invested Capital shall only refer to Shares sold
under this Offering. This fee will terminate as of the beginning of any year in
which the Company is liquidated or the Shares become listed on a national
securities exchange or over-the-counter market.
3. Association with Other Dealers.
It is expressly understood between the Managing Dealer and the Broker
that the Managing Dealer may cooperate with other broker-dealers who are
registered as broker-dealers with the NASD and duly licensed by the appropriate
regulatory agency of each state in which they will offer and sell the Shares or
with broker-dealers exempt from all such registration requirements. Such other
participating broker-dealers may be employed by the Managing Dealer as brokers
on terms and conditions identical or similar to this Agreement and shall receive
such rates of commission as are agreed to between the Managing Dealer and the
respective other participating broker-dealers and as are in accordance with the
terms of the Registration Statement. The Broker understands that, to that
extent, such other participating broker-dealers shall compete with the Broker in
the sale of the Shares.
4. Conditions of the Broker's Obligations.
The Broker's obligations hereunder are subject, during the full term of
this Agreement and the Offering, to (a) the performance by the Managing Dealer
of its obligations hereunder; and (b) the conditions that: (i) the Registration
Statement shall become and remain effective; and (ii) no stop order shall have
been issued suspending the effectiveness of the Offering.
5. Conditions to the Managing Dealer's Obligations.
The obligations of the Managing Dealer hereunder are subject, during
the full term of this Agreement and the Offering, to the conditions that: (a) at
the effective date of the Registration Statement and thereafter during the term
of this Agreement while any Shares remain unsold, the Registration Statement
shall remain in full force and effect authorizing the offer and sale of the
Shares; (b) no stop order suspending the effectiveness of the Offering or other
order restraining the offer or sale of the Shares shall have been issued nor
proceedings therefor initiated or threatened by any state regulatory agency or
the SEC; and (c) the Broker shall have satisfactorily performed all of its
obligations hereunder.
6. Covenants of the Managing Dealer.
The Managing Dealer covenants, warrants and represents, during the full
term of this Agreement, that:
(a) It shall use its best efforts to prevent the sale of the
Shares through persons other than registered NASD broker-dealers.
(b) It shall use its best efforts to cause the Company to
maintain the effectiveness of the Registration Statement and to file such
applications or amendments to the Registration Statement as may be reasonably
necessary for that purpose.
(c) It shall advise the Broker whenever and as soon as it
receives or learns of any order issued by the SEC, any state regulatory agency
or any other regulatory agency which suspends the effectiveness of the
Registration Statement or prevents the use of the Prospectus or which otherwise
prevents or suspends the offering or sale of the Shares, or receives notice of
any proceedings regarding any such order.
(d) It shall use its best efforts to prevent the issuance of
any order described herein at subparagraph (c) hereof and to obtain the lifting
of any such order if issued.
(e) It shall give the Broker written notice when the
Registration Statement becomes effective and shall deliver to the Broker such
number of copies of the Prospectus, and any supplements and amendments thereto,
which are finally approved by the SEC, as the Broker may reasonably request for
sale of the Shares.
(f) It shall promptly notify the Broker of any post-effective
amendments or supplements to the Registration Statement or Prospectus, and shall
furnish the Broker with copies of any revised Prospectus and/or supplements and
amendments to the Prospectus.
(g) To the extent to which the Managing Dealer has knowledge,
it shall keep the Broker fully informed of any material development to which the
Company is a party or which concerns the business and condition of the Company.
(h) In conjunction with the Company, it shall use its best
efforts to cause, at or prior to the time the Registration Statement becomes
effective, the qualification of the Shares for offering and sale under the
securities laws of such states as the Company shall elect.
7. Payment of Costs and Expenses.
The Broker shall pay all costs and expenses incident to the performance
of its obligations under this Agreement, including:
(a) All expenses incident to the preparation, printing and
filing of all advertising originated by it related to the sale of the Shares;
and
(b) All other costs and expenses incurred in connection with
its sales efforts related to the sales of the Shares which are not expressly
assumed by the Company in its Managing Dealer Agreement with the Managing
Dealer.
8. Indemnification.
(a) The Broker agrees to indemnify, defend and hold harmless
the Company, its affiliates and their or its officers, directors, trustees,
employees and agents, including the Managing Dealer, against all losses, claims,
demands, liabilities and expenses, joint or several, including reasonable legal
and other expenses incurred in defending such claims or liabilities, whether or
not resulting in any liability to the Company, its affiliates and their or its
officers, directors, trustees, employees or agents, which they or any of them
may incur arising out of the offer or sale by the Broker, or any person acting
on its behalf, of any Shares pursuant to this Agreement if such loss, claim,
demand, liability, or expense arises out of or is based upon (i) an untrue
statement or alleged untrue statement of a material fact, or any omission or
alleged omission of a material fact, other than a statement, omission, or
alleged omission by the Broker which is also, as the case may be, contained in
or omitted from the Prospectus or the Registration Statement and which statement
or omission was not based on information supplied to the Company or the Managing
Dealer by such Broker, or (ii) the breach by the Broker, or any person acting on
its behalf, of any of the terms and conditions of this Agreement. This indemnity
provision shall survive the termination of this Agreement.
(b) The Managing Dealer agrees to indemnify, defend and hold
harmless the Broker, its officers, directors, employees and agents, against all
losses, claims, demands, liabilities and expenses, including reasonable legal
and other expenses incurred in defending such claims or liabilities, which they
or any of them may incur, including, but not limited to, alleged violations of
the Securities Act of 1933, as amended, but only to the extent that such losses,
claims, demands, liabilities and expenses shall arise out of or be based upon
(i) any untrue statement of a material fact contained in the Prospectus or the
Registration Statement, as filed and in effect with the SEC, or in any amendment
or supplement thereto, or in any application prepared or approved in writing by
counsel to the Company and filed with any state regulatory agency in order to
register or qualify the Shares under the securities laws thereof (the "Blue Sky
applications"), or (ii) any omission or alleged omission to state therein a
material fact required to be stated in the Prospectus or the Registration
Statement or the Blue Sky applications, or necessary to make such statements,
and any part thereof, not misleading; provided, further, that any such untrue
statement, omission or alleged omission is not based on information included in
any such document which was supplied to the Managing Dealer, the Company, or any
officer of the Company by such Broker. This indemnity provision shall survive
the termination of this Agreement.
(c) No indemnifying party shall be liable under the indemnity
agreements contained in subparagraphs (a) and (b) above unless the party to be
indemnified shall have notified such indemnifying party in writing promptly
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon the party to be indemnified, but
failure to notify an indemnifying party of any such claim shall not relieve it
from any liabilities which it may have to the indemnified party against whom
action is brought other than on account of its indemnity agreement contained in
subparagraphs (a) and (b) above. In the case of any such claim, if the party to
be indemnified notified the indemnifying party of the commencement thereof as
aforesaid, the indemnifying party shall be entitled to participate at its own
expense in the defense of such claim. If it so elects, in accordance with
arrangements satisfactory to any other indemnifying party or parties similarly
notified, the indemnifying party has the option to assume the entire defense of
the claim, with counsel who shall be satisfactory to such indemnified party and
all other indemnified parties who are defendants in such action; and after
notice from the indemnifying party of its election so to assume the defense
thereof and the retaining of such counsel by the indemnifying party, the
indemnifying party shall not be liable to such indemnified party under
subparagraphs (a) and (b) above for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof, other
than for the reasonable costs of investigation.
9. Term of Agreement.
This Agreement shall become effective at 8:00 A.M. (Eastern Standard
Time) on the first full business day following the day on which the Registration
Statement becomes effective, or if later, the date on which this Agreement is
executed by the Managing Dealer and the Broker. The Broker and the Managing
Dealer may each prevent this Agreement from becoming effective, without
liability to the other, by written notice before the time this Agreement would
otherwise become effective. After this Agreement becomes effective, either party
may terminate it at any time for any reason by giving thirty (30) days' written
notice to the other party; provided, however, that this Agreement shall in any
event automatically terminate at the first occurrence of any of the following
events: (a) the Registration Statement for offer and sale of the Shares shall
cease to be effective; (b) the Company shall be terminated; or (c) the Broker's
license or registration to act as a broker-dealer shall be revoked or suspended
by any federal, self-regulatory or state agency and such revocation or
suspension is not cured within ten (10) days from the date of such occurrence.
In any event, this Agreement shall be deemed suspended during any period for
which such license is revoked or suspended.
10. Notices.
All notices and communications hereunder shall be in writing and shall
be deemed to have been given and delivered when deposited in the United States
mail, postage prepaid, registered or certified mail, to the applicable address
set forth below.
If sent to the Managing Dealer:
CNL SECURITIES CORP.
CNL Center at City Commons
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Mailing Address:
Xxxx Xxxxxx Xxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, President
If sent to the Broker: to the person whose name and address are
identified in Exhibit A hereto.
11. Successors.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto, and shall not be assigned or transferred by the Broker by
operation of law or otherwise.
12. Miscellaneous.
(a) This Agreement shall be construed in accordance with the
applicable laws of the State of Florida.
(b) Nothing in this Agreement shall constitute the Broker as
in association with or in partnership with the Managing Dealer. Instead, this
Agreement shall only authorize the Broker to sell the Shares according to the
terms as expressly set forth herein; provided, further, that the Broker shall
not in any event have any authority to act as the agent or broker of the
Managing Dealer except according to the terms expressly set forth herein.
(c) This Agreement, including Exhibit A and Schedule A hereto,
embodies the entire understanding between the parties to the Agreement, and no
variation, modification or amendment to this Agreement shall be deemed valid or
effective unless it is in writing and signed by both parties hereto.
(d) If any provision of this Agreement shall be deemed void,
invalid or ineffective for any reason, the remainder of the Agreement shall
remain in full force and effect.
(e) This Agreement may be executed in counterpart copies, each
of which shall be deemed an original but all of which together shall constitute
one and the same instrument comprising this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year indicated on Exhibit A hereto.
MANAGING DEALER FOR
BROKER: CNL RETIREMENT PROPERTIES, INC.:
_______________________________________ CNL SECURITIES CORP.
(Name of Broker)
By:_____________________________________ By_______________________________
Print Name:______________________________ Print Name:______________________
Title:___________________________________ Title:___________________________
Witness:_________________________________ Witness:_________________________
EXHIBIT A
TO
PARTICIPATING BROKER AGREEMENT
OF
CNL RETIREMENT PROPERTIES, INC.
This Exhibit A is attached to and made a part of that certain
Participating Broker Agreement, dated as of the ___ day of ___________________,
_________, by and between CNL SECURITIES CORP., as Managing Dealer, and
________________________________________________, as Broker.
1. Date of Agreement: _______________________________________________________
2. Identity of Broker:
Name:_____________________________________________________________________
Firm NASD (CRD) No:_______________________________________________________
Type of Entity____________________________________________________________
(To be completed by Broker, e.g., corporation, partnership or
sole proprietorship.)
State Organized in:_______________________________________________________
(To be completed by Broker)
Qualified To Do Business and in Good Standing in the Following
Jurisdictions (including your state of organization) (Note: Qualification
to do business in any jurisdiction is generally a requirement imposed by
the secretary of state or other authority of jurisdictions in which you do
business, and is not related to your holding a license as a securities
broker-dealer in such jurisdictions. Questions concerning this matter
should be directed to you or your legal counsel.):
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
(To be completed by Broker)
Licensed as Broker-Dealer in The Following States: _______________________
__________________________________________________________________________
__________________________________________________________________________
(To be completed by Broker)
3. Schedule of Commissions Payable to Participating Broker (see Section 2 of
Agreement):
Number of Shares
Purchased In Sales Price As a Percentage
Individual Order To Subscriber of the Sales Price(1) Dollar Amount(1)
---------------- ------------- ------------------ -------------
1 or more $10.00 7.0% $0.70
4. Name and Address for Notice Purposes (see Paragraph 10 of Agreement):
Name: __________________________________ email:___________________________
Title: ___________________________________________________________________
Company: _________________________________________________________________
Address: _________________________________________________________________
City, State and Zip Code:_________________________________________________
Telephone Number (including area code):___________________________________
5. Please complete the following for our records:
(a) Please name those individuals who hold the following positions:
President:______________________________ email:_______________________
Due Diligence Officer:__________________ email:_______________________
Marketing Director:_____________________ email:_______________________
In-House Editor:________________________ email:_______________________
(b) Does your company hold national or regional conferences? Yes___ No____
If so, when?__________________________________________________________
__________________________
(1) Subject to reduction as set forth in Section 2 of the Participating Broker
Agreement.
(2) Qualified includes those Registered Representatives with an NASD Series 7
or Series 62 license.
Who is the coordinator?___________________________________________________
(c) How many representatives are registered with your
broker-dealer?____________________________
PLEASE ENCLOSE A CURRENT LIST OF QUALIFIED(2) REGISTERED
REPRESENTATIVES. ALL INFORMATION WILL BE HELD IN CONFIDENCE.
(d) Does your firm publish a newsletter? Yes _____ No _____
What is/are the frequency of the publication(s)?
_____ Weekly _____ Monthly _____ Quarterly
_____ Bi-weekly _____ Bi-monthly _____ Other (please specify)
PLEASE PLACE CNL ON YOUR MAILING LIST AND PROVIDE A SAMPLE OF THE
PUBLICATION IF AVAILABLE.
(e) Does your firm have regular internal mailings, or bulk package mailings
to representatives? Yes _____ No _____
PLEASE PLACE CNL ON YOUR MAILING LIST AND PROVIDE A SAMPLE OF THE
PUBLICATION IF AVAILABLE.
(f) Does your firm have a computerized electronic mail (E-Mail) system for
your representatives?
Yes _____ No _____
If so, please provide e-mail address:_________________________________
(g) Website address:______________________________________________________
Person responsible: __________________________________________________
SCHEDULE A
TO
PARTICIPATING BROKER AGREEMENT
OF
CNL RETIREMENT PROPERTIES, INC.
TELEPHONIC SUBSCRIPTION AUTHORIZATION
This Schedule A is attached to and made a part of that certain
Participating Broker Agreement, dated as of the ___ day of ____________________,
________, by and between CNL SECURITIES CORP., as Managing Dealer, and
_____________________________________________, as Broker.
The list of states in which the Broker is permitted to accept
telephonic subscriptions shall be those states identified by Item 2 of Exhibit
A, as amended from time to time, to the Broker Agreement between the parties
hereto, as states in which the Broker is licensed as a Broker-Dealer, except for
the following states in which the Broker is specifically prohibited from
accepting telephonic subscriptions: Florida, Iowa, Maine, Massachusetts,
Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Mexico, North
Carolina, Ohio, Oregon, South Dakota, Tennessee and Washington.
Initials:______________ -- CNL SECURITIES CORP.
______________ -- PARTICIPATING BROKER
DEFERRED COMMISSION OPTION AUTHORIZATION
Authorization is hereby given for registered representatives to select,
at the request of the investor, the deferred commission option, as explained in
Section 2, paragraph 3 of the Participating Broker Agreement.
Initials:______________ -- CNL SECURITIES CORP.
______________ -- PARTICIPATING BROKER
