ATEL CAPITAL EQUIPMENT FUND IX, LLC
SELECTED DEALERS AGREEMENT
San Francisco, California
..................., 200_
Gentlemen:
The undersigned, ATEL Securities Corporation (the "Dealer Manager"),
has entered into an agreement (the "Selling Agreement") with ATEL CAPITAL
EQUIPMENT FUND IX, LLC, a California limited liability company (the "Fund") and
its manager pursuant to which the undersigned has agreed to use its best efforts
to form and manage, as Dealer Manager, a group of securities dealers (the
"Soliciting Dealers") for the purpose of soliciting offers for the purchase of
units of limited liability company interest ("Units") in the Fund. The terms of
the offering are set forth in the Fund's Registration Statement No. __________,
on Form S-1 which was filed with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Act of 1933, as amended (the "1933
Act"). Such registration statement in the form in which it became effective is
referred to herein as the "Registration Statement" and the prospectus included
therein, in the form in which it became effective and in the form as first filed
with the Commission pursuant to its Rule 424, is referred to herein as the
"Prospectus." The terms used but not otherwise defined in this Agreement have
the same meanings as in the Prospectus.
You are invited to become one of the Soliciting Dealers and by your
confirmation hereof you agree to act in such capacity and to use your best
efforts, in accordance with the following terms and conditions, to find
purchasers for the Units. You hereby confirm that you are a member in good
standing of the National Association of Securities Dealers, Inc. ("NASD").
l. You hereby agree to solicit, as an independent contractor and not as
our agent or as an agent of the Fund or its Manager, persons acceptable to the
Manager to enter into the Subscription Agreement in the form attached to the
Prospectus. Until such time as subscription proceeds for a total of not less
than 120,000 Units are received, accepted and deposited with the escrow agent,
all subscription checks shall be payable to "U. S. Bank - ACEF IX Escrow." All
Subscription Agreements solicited by you shall be transmitted promptly to the
Dealer Manager in accordance with the instructions set forth in the Subscription
Agreements, and all funds received by you with respect to any Subscription
Agreement shall be promptly transmitted to the Dealer Manager. As used herein
the term "promptly transmitted" shall have the meaning set forth in Rule 15c2-4
under the Securities Exchange Act of 1934 (the "1934 Act"), as interpreted in
NASD Notice to Members 84-64. You hereby agree to comply in full with such NASD
Notice to Members 84-64, as it may be amended from time to time. We in turn will
transmit subscriptions and funds received during the escrow period to the escrow
agent not later than noon of the second business day following receipt of same
by us. After subscriptions for a minimum of 120,000 Units have been received,
accepted and deposited with the escrow agent, and subscription proceeds are
thereafter released to the Fund pursuant to the terms of the escrow agreement,
all further subscription checks shall be payable directly to the Fund. No
Subscription Agreement shall be effective unless and until accepted by the
Manager, and in no event will a subscription be effective until five days after
the investor has received a Prospectus.
You agree that you will:
(a) (i) diligently make inquiries as required by law of all
prospective investors in order to ascertain whether a purchase
of Units is suitable for the investors and (ii) inform each
prospective investor of all pertinent facts relating to the
liquidity and marketability of the Units during the term of
the investment;
(b) 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 you, that:
(i) the participant is or will be in a
financial position appropriate to enable him to
realize to a significant extent the benefits
described in the Prospectus;
(ii) the participant has a fair market net
worth sufficient to sustain the risks inherent in the
program, including loss of investment and lack of
liquidity; and
(iii) the program is otherwise suitable for
the participant;
(c) maintain copies of all Subscription Agreements and
information relating to suitability determinations in your
records for the longer of (i) six years from the date of
investment, (ii) the period prescribed by Rule 17a-4 under the
1934 Act, or (iii) the period required by applicable state
blue sky laws;
(d) execute no transaction in a discretionary account without
prior written approval of the transaction by the investor; and
(e) comply in all respects with the Conduct Rules of the NASD
in the conduct of the offering of Units.
Furthermore, you expressly agree to be bound by the escrow agreement
executed by the Fund for the deposit of subscription proceeds pending receipt
and acceptance of subscriptions for a minimum of 120,000 Units.
All subscriptions solicited by you will be strictly subject to
confirmation by us and acceptance thereof by the Fund and we, the Fund and its
Manager, reserve the right in our and its uncontrolled discretion to reject any
such subscription and to accept or reject subscriptions in the order of their
receipt by the Fund or otherwise. A sale of a Unit shall be deemed to be
completed only after (i) the Fund receives a properly completed subscription
agreement from the Soliciting Dealer, together with payment of the full purchase
price of each purchased Unit from a buyer who satisfies each of the terms and
conditions of the Registration Statement and Prospectus; (ii) a period of five
days has passed following the receipt by the investor of a Prospectus; and (iii)
such subscription agreement has been accepted in writing by the Manager. Neither
you nor any other person is authorized to give any information or make any
representation other than those contained in the Prospectus or in any
supplemental sales literature furnished by the Dealer Manager or the Fund for
use in making solicitations in connection with the offer and sale of the Units.
Upon release by us, you may offer the Units at the public offering
price, subject to the terms and conditions hereof.
2. We understand that the Fund will provide you with such number of
copies of the enclosed Prospectus and such number of copies of amendments and
supplements thereto as you may reasonably request. In this connection, the Fund
and its Manager have represented and warranted to us that the Registration
Statement and the Prospectus, and all amendments or supplements thereto, will
contain all statements which are required to be stated therein in accordance
with the 1933 Act and the Rules and Regulations thereunder, and neither the
Registration Statement nor the Prospectus, nor any amendment or supplement
thereto, will contain any untrue statement of a material fact or omit any
material fact required to be stated therein or necessary to make the statements
therein not misleading. It is understood by the Fund and its Manager that
Section (b)(3) of Rule 2810 of the Conduct Rules of the NASD requires that you
determine that all material facts relating to the subject offering are
adequately and accurately disclosed to prospective subscribers and provide a
basis for evaluating the offering, and the Fund and its Manager therefore have
specifically represented and warranted to us that:
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(i) all items of compensation payable to them and their affiliates
are and will be set forth in the Prospectus under the caption
"Management Compensation";
(ii) all types of Equipment to be acquired by the Fund are and will be
described in the Prospectus under the caption "Investment Objectives
and Policies - Types of Equipment" or in a supplement to be included
inside the back cover of the Prospectus;
(iii) all material tax aspects are and will be set forth in the
Prospectus under the captions "Income Tax Consequences" and "Risk
Factors";
(iv) the financial position and business experience of the Manager and
of those affiliates of the Manager who are of relevance to the subject
offering are and will be accurately and adequately reflected in the
Prospectus under the captions "Management" and "Prior Performance
Summary";
(v) all material conflicts of interest and risk factors are and will be
set forth in the Prospectus under the captions "Conflicts of Interest"
and "Risk Factors"; and
(vi) all pertinent facts relating to the liquidity and marketability of
the Units are and will be set forth in the Prospectus under the
captions "Risk Factors - Limited Transferability of Units" and "Summary
of the Limited Liability Company Operating Agreement - Transferability
of Units."
We also understand that the Fund may provide you with certain
supplemental sales material to be used by you in connection with the
solicitation of Units in the Fund. We will comply with the filing requirements
of Section 2210(c)(2) of the NASD Conduct rules with respect to any
advertisements or sales literature to be used as supplemental sales material in
connection with the solicitation of Units. You agree not to use any
advertisement or sales literature, as those terms are defined in Section 2210(a)
of the NASD Conduct Rules, as supplemental sales literature in the solicitation
of Units except to the extent such materials are provided by us or we have given
our prior written approval for use of such materials. In the event you elect to
use supplemental sales material, you agree that such material shall not be used
in connection with the solicitations of Units unless accompanied or preceded by
the Prospectus as then currently in effect and as it may be amended or
supplemented in the future, unless you are notified by us that such material has
been prepared and cleared for use in compliance with the SEC's Rule 134. Upon
your request, we will furnish to you information necessary to confirm the
continued fairness, accuracy, and completeness of the Prospectus in all material
respects during the offering period.
We shall have full authority to take such action as we may deem
advisable in respect of all matters pertaining to the offering. We shall be
under no liability to you except for lack of good faith and for obligations
expressly assumed by us in this Agreement. Nothing contained in this paragraph
is intended to operate as, and the provisions of this paragraph shall not
constitute, a waiver by you of compliance with any provision of the 1933 Act, or
of the rules and regulations thereunder.
You confirm that you are familiar with Securities Act Release No. 4968
and Rule l5c2-8 under the 1934 Act, relating to the distribution of preliminary
and final prospectuses, and confirm that you have complied and will comply
therewith. We will make available to you, to the extent they are made available
to us by the Fund, such number of copies of the Prospectus as you may reasonably
request for the purposes contemplated by the 1933 Act and the applicable rules
and regulations thereunder.
You agree that you will exercise due diligence in determining that all
material facts are adequately and accurately disclosed in the Prospectus. For
purposes of compliance with Sections (b)(3)(A) and (B) of Rule 2810 of the
Conduct Rules of the NASD regarding due diligence, it is understood and agreed
that you may rely upon the results of an inquiry conducted by another member or
members of the NASD, provided that:
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(1) you have reasonable grounds to believe that such inquiry
was conducted with due care;
(2) the results of the inquiry were provided to you with the
consent of the member or members conducting or directing the inquiry;
and
(3) no member that participated in the inquiry is a sponsor
of the Fund or an Affiliate of such sponsor.
3. We will be entitled to receive from the Fund a selling commission
equal to 9.5% of the Gross Proceeds. For your services hereunder, subject to the
condition that Subscription Agreements for a minimum of 120,000 Units have been
received and accepted by the Manager by the termination date of the offering,
you will receive from us a selling commission equal to 8% of the proceeds from
all Subscription Agreements solicited by you and accepted by the Manager. No
other payment or reimbursement of selling compensation or expenses will be made
hereunder unless and until we have executed an addendum to this Agreement
setting forth the terms of such payment or reimbursement.
In the event that a sale of Units for which you have solicited a
Subscription Agreement shall not occur, whether by reason of the failure of any
condition specified herein or in the Subscription Agreement or the Selling
Agreement, rejection of the subscription by the Fund or otherwise, no payment
with respect to such Unit shall be made to you. Further, it is understood and
agreed that we shall be under no obligation to make payment to you, and you
expressly waive payment, of any commission hereunder except to the extent that
we shall have first received from the Fund the selling commission to which we
are entitled in connection with the subject transaction. Any payment to you will
be payable only with respect to transactions lawful in the jurisdictions where
they occur.
We as Dealer Manager may, in our discretion, rebate to a purchaser of
Units the selling commissions otherwise payable in connection with any
investment in Units by the Manager, a Soliciting Dealer or any Affiliate or
employee of the foregoing. Any such rebate will only be made if and to the
extent that the Soliciting Dealer which would otherwise be entitled to a selling
commission on any such transaction agrees to such rebate. Therefore, we will by
separate letter agreement establish the amount of selling commission rebate, if
any, on transactions for which you would otherwise be entitled to the full
selling commission, but which are eligible for the rebate. It shall be your
responsibility to notify your Affiliates and employees as to the amount, if any,
which you agree to rebate.
As described in the Prospectus, we may from time to time during the
offering establish a non-cash sales incentive bonus program, subject to prior
NASD approval and compliance with all applicable NASD rules and procedures.
4. This Agreement may be terminated by us or by you at any time upon
five days' written notice.
5. In soliciting persons to acquire the Units, you agree to comply with
any applicable requirements of the 1933 Act, the 1934 Act, the published rules
and regulations thereunder and the Conduct Rules of the NASD and, in particular,
you agree that you will not give any information or make any representation
other than those contained in the Prospectus and in any supplemental sales
literature furnished to you by the Fund or us for use in making such
solicitations. You further confirm and agree that, in connection with any
assistance you may provide in the sale or transfer of Units, you will fulfill
your obligations pursuant to Sections (b)(2)(B) and (b)(3)(D) of Rule 2810 of
the Conduct Rules of the NASD.
6. We assume no obligation or responsibility in respect of the
qualification of the Units under the laws of any jurisdiction. The Blue Sky
Memorandum enclosed, or to be promptly furnished to you, indicates the states in
which it is believed by the Fund that the Units are exempt from, or have been
qualified under, the applicable state securities or "blue sky" laws and the
restrictions, if any, on the rights of dealers to solicit sales thereof. It is
understood that under no circumstances will you engage in any activities
hereunder in any state which is not listed in said Blue Sky Memorandum as a
state in which the Units are exempt from, or qualified under, the state
securities or "blue sky" laws.
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Solicitations are to be made only by Soliciting Dealers qualified to act as such
for such purpose within the states in which they make such solicitations.
7. Nothing contained herein shall constitute the Soliciting Dealers and
us, or any of them, an association, partnership, unincorporated business, or
other separate entity. We shall be under no liability to make any payment to you
except out of funds received by us from the Fund as hereinabove provided, and we
shall not be under any liability for or in respect of the value or validity of
the Subscription Agreements, the Units, or the performance by anyone of any
agreement on its part, or for, or in respect of any matters connected with this
Agreement. Notwithstanding the previous sentence, we shall be fully liable to
you for any damages or harm suffered by you as a direct result of our lack of
good faith, or for obligations expressly assumed by us in this Agreement.
8. It is expressly understood that the Dealer Manager may cooperate
with other broker dealers who are licensed members of the NASD, registered as
broker dealers with the SEC and duly licensed by the appropriate regulatory
agency of each state in which they will offer and sell the Units of the Fund.
Such other NASD members may be employed by the Dealer Manager as Soliciting
Dealers on terms and conditions identical or similar to this Agreement and shall
receive such rates of commission as are agreed to between the Dealer Manager and
the respective other Soliciting Dealers and as are in accordance with the terms
of the Registration Statement, and to that extent such other Soliciting Dealers
shall compete with you in the sale of the Units.
9. Under the Selling Agreement, the Manager has agreed to indemnify us,
the Soliciting Dealers and each person, if any, who controls us or any
Soliciting Dealer within the meaning of the 1933 Act against certain liabilities
under such Act. Each Soliciting Dealer agrees to indemnify the Manager and the
Fund as provided in Paragraph 7 of the Selling Agreement and to indemnify us and
each other Soliciting Dealer to the same extent and in the same manner as such
Soliciting Dealer agrees to indemnify the Manager and the Fund. In the execution
of the Selling Agreement, we shall be deemed to have acted as a representative
of each of the Soliciting Dealers, and the Soliciting Dealers shall be deemed to
be in privity of contract with the Manager and the Fund.
10. Neither the Dealer Manager, the Fund or its Manager, nor any
affiliates thereof, will (a) notify or actively solicit your clients with
respect to any further transactions, or (b) release the name and/or account
information or any of your clients to any other party unless required by court
order, an authorized governmental or self-regulatory entity, or by the Limited
Liability Company Operating Agreement to do so. For purposes of this paragraph
"notify or solicit" shall not be deemed to include any direct and unassisted
contact by a broker-dealer other than the sponsor, the Dealer Manager or the
Fund. The provisions of this section shall survive any termination of the
Selling Agreement or this Agreement.
11. We acknowledge that you may form opinions regarding the Dealer
Manager, the Fund, or its Manager, regarding the Units including but not limited
to evaluations of the Dealer Manager's, the Fund's or its Manager's personnel,
track record, financial statements, and terms of the offering. This evaluation
may differ from the Dealer Manager's, the Fund's or its Manager's assessment and
may be negative in nature. The Dealer Manager, the Fund and its Manager
acknowledge that said evaluation shall not prohibit you from satisfying your
"best efforts" obligation under the sales agreement. We hereby grant you the
right to communicate to others your evaluations so long as such evaluations are
made in good faith and the communication concerning the evaluations are
consistent with such evaluations and are limited in scope to the extent
reasonably deemed necessary by you to serve your customers and otherwise to
conduct your securities business. We waive any rights of action which may arise
from the circumstances described in this Paragraph 11.
12. Any controversy or claim arising out of this agreement shall be
settled by arbitration in California in accordance with the then current rules
of the NASD, if appropriate, and otherwise with the then current rules of the
American Arbitration Association. Judgment upon the arbitration award may be
entered in any court having jurisdiction. Reasonable expenses, attorney's fees,
and costs incurred therein shall be paid in accordance with the award of the
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arbitrators. The prevailing party shall be reimbursed for the reasonable costs
of the investigation, attorney's fees and court costs.
13. Any notice from us to you as Soliciting Dealer shall be deemed to
have been duly given if mailed or telegraphed to you at your address set forth
below.
Please confirm this agreement to solicit persons to acquire Units on
the foregoing terms and conditions by signing and returning the form enclosed
herewith.
Very truly yours,
ATEL SECURITIES CORPORATION
By: ______________________________
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ATEL Securities Corporation
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
RE: ATEL Capital Equipment Fund IX, LLC
Gentlemen:
The undersigned confirms its agreement to act as a Soliciting Dealer as
referred to in the foregoing Soliciting Dealers Agreement, subject to the terms
and conditions of such Agreement. The undersigned confirms that it is a member
in good standing of the National Association of Securities Dealers, Inc.
PLEASE NOTE: The undersigned further confirms that its registered
representatives (check one):
__ are authorized
__ are not authorized
---
to subscribe for Units for their own account on terms which include a rebate of
commissions otherwise payable on their investment, as described in the
Prospectus under "Plan of Distribution."
Dated: ________, 200_. ________________________________________
(Print Name of Firm)
By: ____________________________________
(Authorized Representative)
____________________________________
(Print Name of Authorized Representative)
Address___________________________
____________________________________
Phone Number (___)________________
Send Due Diligence Information To: Send Marketing Information To:
-------------------------------- ------------------------------
-------------------------------- ------------------------------
Send Commission Checks To:
____________________________________
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