EXHIBIT 1.2
FEDERAL MORTGAGE MANAGEMENT II, INC.
$5,000,000 Aggregate Principal Amount of Promissory Notes
SELECTED DEALER AGREEMENT
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Name of Firm
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Street Address
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City, State, Zip Code
Executive Wealth Management Services, Inc., 0000 Xxxxxxxx Xxxxx Xxxx,
Xxxxxxxx, Xxxxxxx 00000, announces its participation as underwriter on a best
efforts basis as agents for Federal Mortgage Management II, Inc. (the
"Company"), subject to the terms and conditions of our Underwriting Agreement
with the company, an aggregate of up to $5,000,000 aggregate principal amount of
promissory notes (the "Notes") of the Company as described below. The offering
is more fully described in the Prospectus. We invite your participation on the
terms and conditions stated herein:
1. OFFERING TO SELECTED DEALERS. We are offering to certain dealers
("Selected Dealers") who are members of the National Association of Securities
Dealer's, Inc. ("NASD"), including yourselves, the privilege of selling, when,
as and if delivered and accepted by us, subject to prior sale and to the
approval of counsel and to the terms and conditions hereof, Notes at the public
offering price of $1,000, on which you will be due a selected dealers commission
stated as follows:
SERIES COMMISSION MATURITY RATE
------ ---------- -------- ----
1996A-I 3.0% _______, 1999 8.0%
1996A-II 4.5% _______, 2001 9.0%
1996A-III 7.0% _______, 2002 10.0%
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In addition to the commission stated above Selected Dealers will be
entitled to a 2% non-accountable expense allowance.
Subscription books may be closed by us at any time in our discretion
without notice and the right is reserved to reject any subscription in whole or
in part, but notification of allotments against and rejections of subscriptions
will be made as promptly as practicable.
2. SALES BY SELECTED DEALERS. You agree that in selling the Notes
hereunder, you will comply with the applicable requirements of the Securities
Act of 1933, the Securities Exchange Act of 1934 and the interpretation of the
Board of Governors of the NASD entitled "Free Riding and Withholding". Notes
shall not be offered or sold below the public offering price before the
termination of the offering by dealers who are members in good standing of the
NASD or foreign dealers not registered under the Securities Exchange Act of 1934
who shall agree not to sell or deliver any Notes in the United States, its
territories or possessions or to persons who they have reason to believe are
citizens thereof or residents therein.
3. ESCROW PAYMENT AND DELIVERY. During the period of the Public Offering,
in accordance with Rule 15c2-4 under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), all proceeds received from the sale of the Notes will
be transmitted by the Representative by noon of the next business day after
receipt thereof to a special escrow account entitled "SOUTHTRUST ASSET
MANAGEMENT COMPANY OF FLORIDA, N.A., ESCROW AGENT - FEDERAL MORTGAGE MANAGEMENT
II, INC." with SOUTHTRUST ASSET MANAGEMENT COMPANY OF FLORIDA, N.A., 0000 Xxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxx 00000. All proceeds in the form of
subscriber's checks will be at the public offering price and made payable to the
escrow account.
Payment for Notes sold directly by you shall be made by check payable to
the order of "SOUTHTRUST ASSET MANAGEMENT COMPANY OF FLORIDA, N.A.". The above
payments for sales made by you shall be made at the public offering price and
the Selected Dealers' Commission payable to you hereunder shall be paid to you
promptly after the breakage of escrow for the offering.
4. POSITION OF SELECTED DEALERS AND UNDERWRITERS. You represent that you
are a member in good standing of the NASD, or, if a foreign dealer, that you
will not sell or deliver any Notes in the United States, its territories or
possessions or to persons who you have reason to believe are citizens thereof or
residents therein. You also confirm that you have complied with the prospectus
delivery requirements of Securities Act Release No 4968 and had and will comply
with such requirements of rule 15c-8 under the Securities Exchange Act of 1934.
You, by your acceptance to sell these Notes represent that neither you nor
any of your directors, officers, partners or "persons associated with" you (as
defined in the By-Laws of the
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NASD) nor, to your knowledge, any "related person", as defined by the NASD in
its Interpretation with Respect to Review of Corporate Financing have
participated or intend to participate in any transaction or dealing as to which
documents or information are required to be filed with the NASD pursuant to such
Interpretation or its Statement of Policy Concerning Venture Capital and Other
Investments.
You are not authorized to give any information or make any representations
other than as contained in the Prospectus. Neither we nor any Underwriter shall
be under any liability to you, except for obligations expressly assumed by us in
this Agreement, and no obligations on our part shall be implied or inferred here
from, but you shall be liable for your proportionate share of any tax, liability
or expense based on any claim to the contrary.
In making sales you hereby agree to comply with the provisions of Sections
8, 24, 25 and 36 of Article III of the Rules of Fair Practice of the NASD and if
you are a foreign dealer and not a member of the NASD, you also hereby agree to
comply with the NASD's interpretation with respect to free-riding and
withholding, to comply, as though you were a member of the NASD, with the
provisions of Sections 8 and 36 of Article III of such Rules of Fair Practice,
and to comply with Section 25 or Article III thereof as that section applies to
a non-member foreign dealer.
5. REGISTRATION STATEMENT. We have been advised by the Company that a
Registration Statement in respect of the Notes under the Securities Act of 1933,
amended, has or will soon become effective. Neither you nor any other person is
authorized by the Company or by us to give any information or make any
representations, other than those contained in the Prospectus, in connection
with the issue and sale of the Notes.
6. CLAIMS, DEMANDS, AND LIABILITIES. You agree to pay your proportionate
share of any claim, demand or liability asserted against and discharged by you
and the other Selected Dealers, or any of them who sell Notes in accordance with
the terms of this Agreement, or asserted against and discharged by us, based on
the claim that such Selected Dealers constitute an association, unincorporated
business or other separate entity, including in each case your proportionate
share of any expense incurred in defending against any such claim, demand or
liability.
7. BLUE SKY MATTERS. Upon application to us, we will inform you as to the
states in which we believe the Notes have been qualified for sale under the
respective securities or Blue Sky laws of such states. Neither we nor any
Underwriter shall have any responsibility with respect to the right of any
dealer to sell any of the Notes in any jurisdiction, notwithstanding any
information we may furnish in that connection.
8. DEFAULT. In the event of your default in any of your obligations
hereunder, or in
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the performance of the terms and conditions of your agreement, we may in our
discretion, in addition to other remedies reserved hereunder, sell at any time,
or from time o time, any Notes which you have accepted and agreed to sell
without notice, demand or legal proceedings, at such price and upon such terms
as we may deem fair and to such persons as we may desire. Notwithstanding any
such action under this Section, you shall remain liable for any losses to us
resulting from such default.
9. LIABILITY OF THE REPRESENTATIVE. We shall have full authority to take
such action as we may deem advisable in respect of all matters pertaining to the
offering. Except as to any liability arising under the Securities Act of 1933,
as amended, we shall not be under any liability to you for or in respect of the
value of validity of the Notes or the validity of the form of, or the
representations contained in the Registration Statement or the Prospectus, or in
any amendments or supplement to any of the, or in the Underwriting Agreement or
in any other instrument executed by the Company or by other, or for the delivery
of the Notes or the performance by the Company or others of any agreement on its
or their part, nor shall we be liable under the provisions of this Agreement, or
for any matter connected with this Agreement or any of the foregoing, except for
lack of good faith and for obligations expressly assumed under this Agreement.
Please confirm the foregoing and indicate the number of Notes requested to be
sold by you by telephone (000-000-0000) and by signing and returning at once to
Xx. Xxx X. Xxxxx Xxxxx, Executive Wealth Management Services, Inc., 0000
Xxxxxxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxxxx 00000, the enclosed copy of the
Acceptance and Order on the next page. Upon receipt thereof, this Agreement and
such signed Acceptance and Order will evidence the agreement between us.
10. REPRESENTATION OF SELECTED DEALER. You agree and represent to us that
no beneficial owner of the issuer's unregistered securities, has any direct or
indirect affiliation or association with you and that no officer, director or 5%
or greater shareholder of the issuer has any direct or indirect affiliation or
association with you.
Very truly yours,
By:____________________________
Xxx X. Xxxxx Xxxxx
Date:____________________________
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ACCEPTANCE AND ORDER
Executive Wealth Management Services, Inc.
0000 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Dear Sirs:
We hereby confirm our acceptance to sell __________ Promissory Notes of
Federal Mortgage Management II, Inc., in accordance with all the terms and
conditions stated in the foregoing letter setting forth the number of Promissory
Notes reserved for sale by us and the price to be paid by subscribers. We hereby
acknowledge receipt of the Prospectus relating to the above Promissory Notes,
and we further state that in selling such Promissory Notes we have relied upon
said Prospectus and on no other statements whatsoever, written or oral.
We hereby confirm that we are in a member of good standing of the National
Association of Securities Dealers, Inc., or if we are not such a member, we are
a foreign bank, dealer or institution not registered under the Securities
Exchange Act of 1934, as amended, which agrees to make no sales within the
United States, its territories or possessions or to persons who are citizens
thereof or residents therein, and in making sales to comply with the National
Association of Securities Dealers, Inc.'s interpretation with respect to
free-riding and withholding. In connection with the sale of any of the
Promissory Notes with respect to which a selling concession is received or
granted to us, we agree: (i) to comply with Section 24 or Article III of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.;
and (ii) if we are not a member of the National Association of Securities
Dealers, Inc., to comply as though we were a member with the provisions of
Sections 8 and 36 of such Article III and to comply with section 25 thereof as
that Section applies to a non-member broker or dealer in a foreign country.
We hereby confirm that no beneficial owner of the issuer's unregistered
securities, has any direct or indirect affiliation or association with us.
SELECTED DEALER:_____________________________________
BY:__________________________________________________
DATE:________________________________________________
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