SELECTED DEALER AGREEMENT
SAGE,
XXXXX & CO., INC.
0000
Xxxxxxxxx Xxxx
Xxxxxxxxx,
Xxx Xxxx 00000
Date:
________, 2005
Dear
Sirs:
Sage,
Xxxxx & Co., Inc., the underwriter (the "Underwriter") named in the
Prospectus (as hereinafter defined) has agreed, subject to the terms and
conditions of that certain underwriting agreement (the "Underwriting Agreement")
dated ___________, 2005, between the Underwriter and Intervest Mortgage
Corporation (the "Issuer"), to act as exclusive agent for the Issuer and to use
its best efforts to sell an aggregate of $14,000,000 principal amount of Series
__/__/05 Subordinated Debentures (the "Debentures") of the Issuer, in three
maturities as follows: $3,000,000 with a maturity date of April 1, 2009;
$4,500,000 with a maturity date of April 1, 2011; and $6,500,000 with a maturity
date of April 1, 2013. The Debentures are more particularly described in the
enclosed prospectus (the "Prospectus"), additional copies of which will be
supplied in reasonable quantities upon request.
The
Underwriter is offering a part of the Debentures for sale by selected dealers
(the "Selected Dealers"), including yourself, who are registered with the
Securities and Exchange Commission (the "SEC") as broker-dealers under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and who are
members in good standing of the National Association of Securities Dealers, Inc.
(the "NASD"), on a "best efforts" basis.
The
offering is subject to the delivery of the Debentures, and the acceptance of the
offering by the Underwriter, the approval of all legal matters by counsel, and
the terms and conditions herein set forth.
Subject
to the foregoing, the Underwriter confirms its agreement with you (sometimes
herein called the "Dealer"') as follows:
1. Non-Exclusive
Right to Offer and Sell.
Underwriter hereby grants to you the non-exclusive right to offer and sell the
Debentures in such face amounts and upon such terms as the Underwriter shall
from time to time determine and as set forth in the then effective Prospectus
relating to such Debentures. The amount and maturity of Debentures which the
Underwriter has initially determined to permit you to offer and sell is set
forth at the end of this letter, although the Underwriter reserves the right to
change such allotment. You agree (a) upon our request, to advise us of the
number of Debentures allotted to you which remain unsold; and (b) at our
request, to stop offering any such Debentures remaining unsold.
2. Compliance
with Laws. A
registration statement on Form S-11 (the "Registration Statement") with respect
to the Debentures has been filed with the SEC and has become effective. You
agree to comply with the applicable requirements of the Securities Act of 1933,
as amended (the "1933 Act"), the 1934 Act and any applicable rules and
regulations issued under said Acts. No person is authorized by the Issuer or by
the Underwriter to give any information or to make any representation other than
those contained in the Prospectus in connection with the sale of the
Debentures.
3. Dealer
Representations. Dealer
represents that it is a member in good standing of the NASD and agrees to abide
by all of the NASD rules and regulations, and any interpretations thereof,
including, without limitation, the NASD interpretation with respect to
Free-Riding and Withholding (Rule IM-2110-1) and Rules 2420, 2500 and 2700
(including, but not limited to Rules 2730, 2740 and 2750) of the NASD Conduct
Rules. Dealer also agrees to comply with the requirements of all applicable
Federal and State Laws and all rules and regulations thereunder, and
interpretations thereof, promulgated by any regulatory agency having
jurisdiction.
In the
event that a domestic or foreign Dealer should sell or offer for sale the
Debentures in any jurisdiction outside the United States, Dealer also agrees to
comply with the laws, rules and regulations of any governmental or regulatory
body applicable within such foreign jurisdiction.
4. State
Registrations. You will
be informed by the Underwriter as to the states in which we have been advised by
counsel that the Debentures have been qualified or registered for sale or are
exempt under the respective securities or "blue sky" laws of such states, but we
have not assumed and will not assume any obligation or responsibility as to the
accuracy of such information or as to the eligibility or right of any Selected
Dealer to offer or sell the Debentures in any state.
5. Underwriter
Authority and Liability. The
Underwriter shall have full authority to take such action as it may deem
advisable in respect of all matters pertaining to the offering or arising
thereunder. The Underwriter shall not be under any liability to you with respect
to any matter, except such as may be incurred under the 1933 Act and the rules
and regulations thereunder, except for lack of good faith and except for
obligations assumed by us in this Agreement, and no obligation on our part shall
be implied or inferred herefrom.
6. Payment
and Procedures. All
subscriptions for investments shall be confirmed on forms of a type acceptable
under the rules and regulations of the NASD and in accordance with Rule 15c2-8
of the 1934 Act. If at least $12,000,000 in collected funds (as defined in the
Escrow Agreement) have been received and such subscriptions accepted by the
Issuer by ______________, 2005, the Issuer may close the Offering as to those
subscribers (the "First Closing Date"). Until the First Closing Date, you shall
promptly, upon receipt of any and all checks, drafts, and money orders received
from prospective purchasers of the Debentures, transmit, in accordance with Rule
15c2-4(b) of the 1934 Act, such items to Canandaigua National Bank and Trust
Company, Canandaigua, New York, as Escrow Agent, for deposit into an account
entitled "Canandaigua National Bank & Trust Company, as Escrow Agent for
Intervest Mortgage Corporation", but in any event such transmittal to the Escrow
Agent shall be made by noon of the next business day after your receipt of such
funds. Funds may also be transmitted to the escrow agent by wire transfer. Any
Debentures remaining unsold after the First Closing Date may continue to be
offered and sold for up to 120 days after the First Closing Date. After the
First Closing Date, you shall promptly transmit any and all checks, drafts, and
money orders received from prospective purchasers of the Debentures to the
Underwriter by noon of the next business day after you receive such funds. At
the same time you deliver funds received to the Escrow Agent, or directly to the
Underwriter, you shall also deliver to Underwriter, a written account of each
purchaser which sets forth, among other things, the name, address and tax
identification number of the purchaser, the number of Debentures purchased, the
maturity thereof, and the amount paid therefor which shall be accompanied by a
copy of the check and any transmittal letter to the Escrow Agent.
You agree
to be bound by the terms of the Escrow Agreement executed by Underwriter and the
Issuer and acknowledge that you have received a copy of such Escrow
Agreement.
Until the
First Closing Date, checks shall be made payable to "CNB - Escrow Intervest".
After the First Closing Date, checks shall be made payable to "Intervest
Mortgage Corporation ", the Issuer. Until the First Closing Date, any checks
received by the Escrow Agent which are made payable to any party other than the
Escrow Agent, shall be returned by the Escrow Agent to the purchaser who
submitted the check and shall not be accepted.
All
Debentures shall be registered and issued as designated by Dealer after the
Closing Dates specified in the Prospectus.
The
Issuer reserves the right to reject any subscription, and in such case, the
Issuer will instruct the Escrow Agent or Underwriter, as may be the case, to
return, in full, any payment made in connection therewith.
If at
least $12,000,000 in collected funds (as defined in the Escrow Agreement) have
not been received and such subscriptions accepted by the Issuer by __________,
2005, subscription documents and funds shall be promptly returned to
subscribers. Interest earned on funds in the Escrow Account shall be applied to
pay escrow expenses, with the balance of interest, if any, to be paid to
subscribers in proportion to the amount of funds paid by each such subscriber
without regard to the date when such subscription funds were paid. It shall be a
condition of making any such refund to a subscriber, however, that there be
delivered to the Escrow Agent a Form W-9 executed by such
subscriber.
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7. Delivery
of Prospectus. You
shall solicit subscriptions for the Debentures only in accordance with the then
current Prospectus, shall deliver a current Prospectus to each prospective
investor, shall utilize as solicitation material only the Prospectus and such
supplemental sales literature as shall be identified as such and furnished or
authorized in writing by the Issuer, and shall make no representations other
than those contained in such Prospectus and supplemental literature. You shall
also be responsible for the servicing of investors, including responding to
inquiries by, and maintaining periodic contacts with, the investor.
8. Restrictions
on Sales and Purchases of Debentures. During
the term of this Agreement, you will not, directly or indirectly, buy, sell, or
induce others to buy or sell, the Debentures except (a) pursuant to this
Agreement, (b) as expressly authorized by the Underwriter in writing, or (c) in
the ordinary course of business as broker or agent for a customer pursuant to an
unsolicited order. You represent that you have not participated in any
transaction prohibited by the preceding sentence and that you have at all times
complied with the provisions of Rule 10b-6 of the 1934 Act applicable to this
offering. You will take such steps as you deem necessary to assure that
purchasers of the Debentures meet the suitability standards set forth in the
Prospectus or otherwise imposed by the Issuer and will maintain for a period of
at least four (4) years a record of the information obtained to indicate that
such standards have been met.
9. Commissions. You will
be entitled to receive commissions in the amount of $300 on each Debenture
maturing April 1, 2009, commissions in the amount of $500 on each Debenture
maturing April 1, 2011, and commissions in the amount of $700 on each Debenture
maturing April 1, 2013 sold by you under this Agreement, provided, however, that
the offering will be terminated and no commissions will be payable unless an
aggregate of at least $12,000,000 of the Debentures, without regard to maturity,
are sold by _____________, 2005.
10. Dealer
Responsibility for Training and Representatives. You
undertake full responsibility for adequate training of your salesmen in all
features of the Debentures offered, with special emphasis on the
responsibilities of such salesmen for full disclosure to prospective investors
and the necessity of delivering a Prospectus to each investor. You will accept
subscriptions only from persons whose investment objectives, to the best of your
knowledge and belief, are consistent with those of the Debentures
offered.
11. Sales
in Discretionary Accounts. You
agree that, without the written approval of the customer and the Underwriter
prior to the execution of any order, you will not sell to any account over which
you exercise discretionary authority any of the Debentures which you have been
allotted and which are subject to the terms of this Agreement.
12. Advertisements. It is
expected that public advertisement of this issue will be made on or about the
effective date of the Registration Statement. After the date of appearance of
such advertisement, but not before, you are free to advertise over your own name
and at your own expense and risk, subject, however, to our prior review and
approval of any advertisement.
13. Termination
of Agreement. This
Agreement may be terminated by either party at any time by written or
telegraphic notice to the other, but the Agreement shall not be valid for more
than six (6) months from the date of execution or beyond completion of the
offering, whichever is earlier, except when extended by the Underwriter to
complete the offering of the Debentures. Such termination shall not affect your
obligation to comply with this Agreement nor your right to commissions, as set
forth in Paragraph 9 of this Agreement on subscriptions confirmed by the Issuer
by the time of such termination.
14. Relationship
of Parties. Nothing
in this Agreement shall be construed to constitute Dealer a partner, employee or
agent of the Underwriter or Issuer, and neither Underwriter, Issuer or Dealer
shall be liable for any obligation, act or omission of the other to third
parties. However, in the event such a claim is made, you agree to bear your
share of any liability arising out of such claim.
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15. Dealer
Expenses. All
expenses incurred by Dealer in connection with its activities under this
Agreement shall be borne by Dealer, except that Underwriter will furnish,
without charge, a reasonable quantity of Prospectuses and supplemental
literature as issued.
16. Miscellaneous. This
Agreement supersedes all previous agreements, whether oral or written, between
Underwriter and Dealer relating to the Debentures and may not be modified except
in writing. All previous agreements, if any, whether oral or written, between
Underwriter and dealer are hereby canceled. Neither party hereto assumes any
liability or obligation toward the other under this or any previous agreement,
except as may be specifically set forth in this Agreement, nor is any such
liability or obligation to be inferred or implied hereunder.
All
communications from you shall be addressed to the Underwriter at the address set
forth above. All communications from the Underwriter to you shall be directed to
the address to which this letter is mailed.
This
Agreement shall be construed in accordance with the laws of the State of New
York.
Please
confirm that the foregoing sets forth the Agreement between you and the
Underwriter by signing and returning to us the enclosed copy of this
letter.
Very
truly yours,
SAGE,
XXXXX & CO., INC.
By: _____________________________
________________________________
(Title)
WE HEREBY
CONFIRM AS OF THE DATE HEREOF
THAT THE
ABOVE LETTER SETS FORTH THE
AGREEMENT
BETWEEN THE UNDERWRITER AND
THE
UNDERSIGNED
AMOUNT
AND MATURITY OF
DEBENTURES
TO BE OFFERED
FOR SALE
BY DEALER:
____________________________________
(Dealer)
$_______________________________
April 1,
2009
By: _________________________________
____________________________________
(Title) $_______________________________
April 1,
2011
$_______________________________
April 1,
2013
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