SELECTED DEALER AGREEMENT
Xxxxxxx Xxxxxxx Securities
000 Xxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Dear Sirs:
The undersigned understands that AeroCentury Fund IV, Inc., a
California corporation (the "Company"), proposed to make a public offering and
sale of up to $10,000,000 of 10% Secured Promissory Notes ("Notes"), each Note
with a principal face amount of $1,000, on a best efforts basis through Xxxxxxx
Xxxxxxx Securities (the "Sales Agent") and certain additional broker dealers
(the "Selected Dealers") who are members of the National Association of
Securities Dealers, Inc. (the "NASD"). The Sales Agent has advised the
undersigned that in connection therewith, the Company has filed with the
Securities and Exchange Commission (the "SEC"), a registration statement on Form
SB-2 and has filed or expects to file one or more amendments thereto. As used
herein, "Registration Statement" refers to Registration Statement No.333-22239
as declared effective by the SEC on _____, and "Prospectus" refers to the final
prospectus constituting Part I of such Registration Statement, and in the event
of any supplement or amendment to such Registration Statement or Prospectus
after the Registration Statement has become effective, the terms "Registration
Statement" and "Prospectus" shall mean such Registration Statement or Prospectus
as so supplemented or amended. Certain terms used herein which begin with
initial capital letters are defined in the Prospectus and shall have the same
meanings given therein. Upon the terms and conditions set forth herein, the
undersigned agrees to use its best efforts to solicit and obtain subscriptions
to purchase Notes at a price of $1,000 per Note in accordance with the following
terms and conditions.
The undersigned hereby makes the following agreements, representations,
and warranties to the Company and the Sales Agent which agreements,
representations and warranties are made by the undersigned severally and not
jointly with the other Selected Dealers:
1. REPRESENTATION AND WARRANTIES. The undersigned represents and
warrants that (i) it is a member in good standing of the NASD, (ii) it is
registered as a broker-dealer under the Securities and Exchange Act of 1934,
(iii) it is licensed as a broker-dealer under the law of the state(s) listed
below the undersigned's signature hereunder, (iv) neither the undersigned nor
any of its executive officers and directors are currently subject to any
administrative order or judgment in any state which prohibits the use of any
exemption from registration in connection with the purchase or sale of
securities, (v) neither the undersigned nor any of its executive officers and
directors are subject to any order, judgment or decree of any court of competent
jurisdiction temporarily or preliminarily restraining or enjoining, or subject
to any order, judgment or decree of any court of competent jurisdiction entered
within the last five years permanently restraining or enjoining such person from
engaging in or continuing any conduct or practice in connection with the
purchase or sale of any security or commodity or involving the making of any
false filing with any state and (vi) neither the undersigned nor any of its
executive officers and directors has been convicted of a felony involving the
purchase or sale of a security within five years prior to the commencement of
the Offering.
2. DUTIES. The undersigned agrees that its duties under this
Agreement include the following:
(a) To use its best efforts to procure purchase(s) for Notes
at a price of $1,000 per Note in accordance with the terms of the Offering as
set forth in the Prospectus. The minimum investment in Notes is set forth in the
Prospectus. The undersigned shall not be entitled to solicit the services of
other broker-dealers or pass through or reallow any portion of the compensation
set forth in Section 3 in connection with performing the undersigned's service
hereunder;
(b) To at all times comply with all applicable provisions of
the Securities Act of 1933, as amended (the "Act"), the Securities Exchange Act
of 1934 and the rules and regulations of the Commission thereunder, state blue
sky securities laws and the rules of the NASD, including, without limitation,
Sections 2730, 2740, 2420 and 2750 of the NASD Conduct Rules, all prospectus
delivery requirements, and the prohibition against the direct or indirect
payment or awarding of any finder's fees, commissions, or other compensation to
any person engaged by a potential investor for investment advice as an
inducement to such advisor to advise the purchase of interests in a particular
program; provided, however, that the payment of the normal sales commissions
payable to a registered broker-dealer or other properly licensed person for
selling Notes shall not be prohibited;
(c) To sell Notes only in state(s) and jurisdiction(s) in
which the undersigned is licensed as a broker-dealer, and only in state(s) and
jurisdiction(s) and in such amounts for which Blue Sky clearance has been
obtained as indicated to the undersigned by the Sales Agent;
(d) To take such actions as may be required by law or which it
may deem reasonably necessary in order to ascertain that a purchase of the Notes
is suitable for a prospective purchaser, and maintain a record thereof for a
period of at least six years, or such other period as required by law;
(e) To confirm through diligent inquiry that each prospective
purchaser is a citizen of the United States in the manner described in the
Prospectus prior to submitting his subscription payment and related
documentation to the Escrow Agents, and maintain a record of the basis upon
which such determination was made;
(f) To supply the Sales Agent and the Company with such
written reports of the undersigned's activities relating to the offering of
Notes as the Sale Agent or the Company may from time to time reasonably request;
(g) To deliver a current copy of the Prospectus and any
amendments or supplements thereto, to each prospective purchaser prior to
accepting a subscription from such purchaser;
(h) To obtain each of the following in connection with the
sale of the Notes and to transmit the same to the Escrow Agents, within the time
periods specified below:
(i) A fully completed Subscription Agreement,
executed by the prospective purchaser, if required by applicable state law or
otherwise requested by the Company; and
(ii) Appropriate payment by the purchaser for
the number of Notes subscribed for, either in the form of a check payable to
"First Security Bank/AeroCentury Fund IV Escrow Account" or by wire
transfer of funds from the account of the purchaser into the
above-referenced escrow account (the account number will be provided upon
request of the Company).
3. COMPENSATION. The undersigned shall receive from the Escrow Agent
(through the Sales Agent) as compensation Selling Commissions of 6.0% of the
sales price of any Notes sold by it to the public in accordance herewith. In
addition, in the Sales Agent's sole discretion, up to 2.0% of the sales price
for any Notes may be reallowed by the Sales Agent to the undersigned for due
diligence and selling efforts. Notwithstanding the above, no Sales Commissions
and no expense allowance or reimbursement shall be paid with respect to any
Notes sold hereunder until the occurrence of a Closing Date following the sale
of such Notes. Subject to the previous sentence, all Selling Commissions and
other compensation is being paid to the undersigned in consideration of its
efforts to conduct the due diligence determined by the undersigned to be
reasonably necessary and that the undersigned will be solely responsible for
such diligence; the Sales Agent will have no responsibility or liability
pertaining thereto (although the Sales Agent may, in its discretion, reallow a
portion of its due diligence cost reimbursement to the undersigned in connection
therewith). Notwithstanding the foregoing, the undersigned will not be entitled
to receive compensation pursuant to this Section 3 in the event that (i) the
Sales Agent or the Company determines that any offer, sale or solicitation by
the undersigned was made in violation of the Act, or any of the regulations
thereunder, of the securities or "blue sky" laws of any jurisdiction or the
NASD, or of any covenant or representation made hereunder, (ii) if the Sales
Agent shall not have previously received from the undersigned a confirmed copy
of this Agreement, or (iii) with respect to certain subscriptions, the Company
or the Sales Agent, in their sole discretion do not accept (in whole or in part)
such subscriptions to purchase Notes obtained by the undersigned for any reason,
or any Subscription Documents for such subscriptions, if any, fully completed
and duly executed, are received by the Sales Agent after the final Closing Date.
4. SALES INCENTIVE PROGRAMS. No sales incentive bonuses shall be
paid directly or indirectly in connection with the offer and sale of the
Notes.
5. Terms and Termination. The undersigned's obligation under this
Agreement shall commence as of the date of this Agreement or the effective
date of the Registration Statement,
