SELLING DEALER AGREEMENT
WITH ANTHEM SECURITIES, INC.
TO: _______________________________________________________
RE: LEASE EQUITY APPRECIATION FUND I, L.P.
Ladies and Gentlemen:
Lease Equity Appreciation Fund I, L.P. (the "Partnership") is offering
units of limited partnership interest (the "Units"). The Units and the offering
are described in the enclosed Prospectus dated ____________________, 2002 (the
"Prospectus"). Prospectuses relating to the Units have been furnished to you
with this Agreement.
Our firm, Anthem Securities, Inc. (the "Dealer-Manager"), has entered
into a Dealer-Manager Agreement with the Partnership for sales of the Units, a
copy of which has been furnished to you and is incorporated in this Agreement by
this reference. Pursuant to the Dealer-Manager Agreement, the Dealer-Manager has
been authorized to select certain members (the "Selling Dealers") in good
standing of the National Association of Securities Dealers, Inc. (the "NASD") to
participate in the offering of the Units on a "best efforts" basis.
You are invited to become one of the Selling Dealers, on a
non-exclusive basis. By your acceptance below you will have agreed to act in
that capacity and to use your best efforts, in accordance with the following
terms and conditions, to solicit subscriptions for the Units in all
jurisdictions in which you are registered as a broker-dealer in good standing
except for those set forth on Schedule A hereto.
1. Representations, Warranties and Covenants of Selling Dealer. You
represent, warrant and covenant to the Dealer-Manager that:
(a) You are a corporation or other entity duly organized, validly
existing and in good standing under the laws of the state of
your formation and are duly qualified to do business and in
good standing under the laws of any jurisdiction in which your
ownership of property or conduct of business requires you to
be so qualified. You have all requisite power and authority to
enter into this Agreement and to carry out your obligations
under this Agreement.
(b) This Agreement when executed by you will be duly authorized,
executed and delivered by you and will be a valid and binding
agreement on your part and enforceable in accordance with its
terms except as may be limited by the effect of bankruptcy,
insolvency, moratorium, preferential or fraudulent conveyance
or other similar laws or equitable principles relating to or
affecting the rights of creditors generally, by general
principles of equity, and by public policy relating to claims
for indemnification for securities laws violations.
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(c) The consummation of the transactions contemplated by this
Agreement and the Prospectus will not result in any breach of
any of the terms or conditions of, or constitute a default
under, your organizational documents, bylaws, any indenture,
agreement or other instrument to which you are a party or by
which you are bound, or violate any order applicable to you of
any court, regulatory body or administrative agency having
jurisdiction over you.
(d) You are duly registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended (the "1934 Act"),
and you are a member in good standing of the NASD. You are
duly registered as a broker-dealer in the jurisdictions where
you are required to be registered in order to carry out your
obligations as contemplated by this Agreement and the
Prospectus. You agree to maintain all the foregoing
registrations in good standing throughout the term of the
offer and sale of the Units and you agree to comply with all
statutes and other requirements applicable to you as a
broker-dealer under those registrations.
(e) You will comply with all the provisions of the Securities Act
of 1933, as amended (the "1933 Act"), insofar as the 1933 Act
applies to your activities under this Agreement. Further, you
will not engage in any activity which would cause the offer
and/or sale of the Units not to comply with the 1933 Act, the
1934 Act, applicable rules and regulations of the Securities
and Exchange Commission (the "Commission"), applicable state
securities laws and regulations, this Agreement or the NASD
Conduct Rules.
(f) You have received copies of the Prospectus and you have relied
only on the statements contained in the Prospectus and not on
any other statements whatsoever, either written or oral, with
respect to the Partnership, the Units or the offering.
(g) You agree that you shall not place any advertisement or other
solicitation with respect to the Units (including, without
limitation, any material for use in any newspaper, magazine,
radio or television commercial, telephone recording, motion
picture, or other public media) without the prior written
approval of the Partnership, and without the prior filing with
and review of the form and content thereof by the Commission,
the NASD and the securities authorities of the states where
such advertisement or solicitation is to be circulated. Any
such advertisements or solicitations shall be at your expense.
(h) If a supplement or amendment to the Prospectus (each, a
"Supplement") is prepared and delivered to you by the
Partnership or the Dealer-Manager, you agree to distribute
such Supplement to every person who has previously received a
copy of the Prospectus from you and you further agree to
include such Supplement or Amendment in all future deliveries
of any Prospectus.
(i) In connection with any offer or sale of the Units, you agree
(i) to comply in all respects with restrictions and procedures
set forth in the Prospectus and the Partnership's Amended and
Restated Agreement of Limited Partnership, a copy of which is
an appendix to the Prospectus (the "Partnership Agreement"),
(ii) not to make any statement inconsistent with the
statements in the Prospectus or the Partnership Agreement,
(iii) not to provide any written information, statements or
sales literature other than the Prospectus and such other
material as shall be provided to you by the Partnership or
specifically authorized in writing by the Partnership, and
(iv) not to make any untrue statement of a material fact or
omit to state a material fact necessary in order to make
statements made, in light of the circumstances under which
they were made, not misleading in connection with the
Partnership, the Units or the offering.
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(j) Prior to the sale of any of the Units you shall have
reasonable grounds to believe that a purchase of the Units is
a suitable and appropriate investment for each subscriber. In
making this determination, you shall ascertain that the
subscriber:
(i) meets the minimum income and net worth standards set
forth in the Prospectus;
(ii) can reasonably benefit from an investment in the
Units based on the subscriber's overall investment
objectives and portfolio structure;
(iii) is able to bear the economic risk of an investment in
the Units based on the subscriber's overall financial
situation; and
(iv) has apparent understanding of the fundamental risks
of an investment in the Units; the risk that the
subscriber may lose his or her entire investment; the
lack of liquidity of the Units; the restrictions on
transferability of the Units; the background and
qualifications of the General Partner and the persons
responsible for managing the Partnership; and tax
consequences of an investment in the Units.
You and the Selling Dealers shall maintain records on the
information used to determine that the investment in the Units
is suitable and appropriate for each subscriber, and shall
maintain these records for at least six years after the
Offering Termination Date, as such term is defined in the
Dealer-Manager Agreement.
(k) You agree to use your best efforts in the solicitation and
sale of the Units, including ensuring that the prospective
purchasers properly execute the subscription agreement, a form
of which is an exhibit to the Prospectus (the "Subscription
Agreement"), together with any additional forms provided in
any Supplement or otherwise provided to you by the Partnership
or the Dealer-Manager to be completed by prospective
purchasers.
You acknowledge and agree that the Partnership shall have the
right to reject any subscription at any time for any reason
without liability to it. Investor funds and executed
Subscription Agreements shall be transmitted as set forth in
Section 11 of this Agreement.
(l) Your representations and warranties made in this Agreement are
and will be true and correct at each applicable closing on
Unit sales and you will have fulfilled all your obligations
under this Agreement at the applicable closing date.
2. Commissions.
(a) Subject to the receipt of the minimum subscription proceeds as
described in the Dealer-Manager Agreement (the "Minimum
Subscription Amount"), the restrictions with respect to sales
to Pennsylvania residents described in the Dealer-Manager
Agreement, and the exceptions for sales to LEAF Asset
Management Inc., (the general partner of the Partnership (the
"General Partner") its officers, directors and Affiliates (as
such term is defined in the Partnership Agreement), Selling
Dealers and their registered representatives and principals,
the Dealer-Manager is entitled to receive the following from
the Partnership: (i) a commission (the "Sales Commission") of
7% of the purchase price of each subscription obtained by the
Dealer-Manager or the Selling Dealers and accepted and closed
on by the Partnership, and (ii) an amount equal to the Selling
Dealers' bona fide accountable due diligence expenses per Unit
to a maximum of 1% of the purchase price of each subscription
obtained by the Dealer-Manager or the Selling Dealers and
accepted and closed on by the Partnership (the "Due Diligence
Reimbursement").
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Subject to the terms and conditions set forth in this
Agreement, including the Dealer-Manager's receipt from you of
the documentation required of you in Section 1 of this
Agreement and to the exceptions and conditions set forth in
the first paragraph of this Section 2(a), the Dealer-Manager
agrees to (i) pay you the Sales Commission, and (ii) the Due
Diligence Reimbursement, in each case with respect to those
subscriptions sold by you and accepted and closed on by the
Partnership, within seven business days after the
Dealer-Manager has received the Sales Commissions and Due
Diligence Reimbursement on the subscriptions.
(b) Notwithstanding anything in this Agreement to the contrary,
you agree to waive payment of your Sales Commissions and Due
Diligence Reimbursement until the Dealer-Manager receives the
related amounts owed to it pursuant to the Dealer-Manager
Agreement, and further agree that the Dealer-Manager's
liability for such amounts is limited solely to the proceeds
of the related amounts owed to and received by it under the
Dealer-Manager Agreement.
(c) If the Partnership does not receive the Minimum Subscription
Amount, nothing will be payable to you and all funds advanced
by subscribers will be returned to them with interest earned,
if any.
3. State Securities Registration. The Partnership may elect not to qualify
or register Units in any state in which it deems such qualification or
registration is not warranted for any reason in its sole discretion.
The Dealer-Manager shall advise you as to the jurisdictions in which
the Units have been qualified for sale or in which they are exempt from
qualification. Notwithstanding the foregoing, the Dealer-Manager, the
Partnership and the General Partner have not assumed and will not
assume any obligation or responsibility with respect to your right to
act as a broker or dealer with respect to the Units in any
jurisdiction.
4. Expenses of Sale. Except as otherwise specifically set forth in this
Agreement, the expenses in connection with the offer and sale of the
Units shall be payable as set forth below.
(a) The Dealer-Manager shall pay all expenses incident to the
performance of its obligations under this Agreement, including
the fees and expenses of its attorneys and accountants, even
if the offering is not successfully completed.
(b) You shall pay all expenses incident to the performance of your
obligations under this Agreement, including the fees and
expenses of your own counsel and accountants, even if this
offering is not successfully completed.
5. Conditions of Your Duties. Your obligations under this Agreement, as of
the date of this Agreement and at each applicable closing date, shall
be subject to the performance by the Dealer-Manager of its obligations
under this Agreement and to the performance by the Partnership of its
obligations under the Dealer-Manager Agreement.
6. Conditions of Dealer-Manager's Duties. The Dealer-Manager's obligations
under this Agreement, including the duty to pay compensation as set
forth in Section 2, shall be subject to the accuracy, as of the date of
this Agreement and at each applicable closing date (as if made at such
closing date) of your representations and warranties made in this
Agreement, and to the performance by you of your obligations under this
Agreement, and to receipt by the Dealer-Manager, at or before the
applicable closing date, of a fully executed Subscription Agreement for
each purchaser.
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7. Indemnification.
(a) You agree to indemnify, defend and hold harmless the
Dealer-Manager and any person who controls the Dealer-Manager
within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act from and against any and all losses, claims,
damages, liabilities and expenses (including but not limited
to reasonable attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any
claim or litigation) ("Losses") which the indemnified party or
parties may incur under federal or state law, or --------
otherwise, arising out of or based upon any breach by you of
any of your representations, warranties, covenants, duties or
obligations contained herein.
(b) If any action, suit or proceeding shall be brought against any
indemnified party in respect of which indemnity may be sought
pursuant to Section 7(a), such indemnified party shall
promptly notify you in writing, and you may elect to assume
the defense thereof, including the employment of counsel
(which counsel shall be reasonably acceptable to such
indemnified party) and payment of all reasonable fees and
expenses. The failure or delay by an indemnified party to
notify you shall not relieve you from liability which you may
have to an indemnified party unless such failure or delay
materially prejudices your ability to defend such action, suit
or proceeding on behalf of such indemnified party. Such
indemnified party shall have the right to employ separate
counsel in any such action, suit or proceeding and to
participate in (but not control) the defense thereof, but the
fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) you have agreed in writing
to pay such fees and expenses, (ii) you have failed to assume
the defense or employ counsel reasonably satisfactory to such
indemnified party or (iii) the named parties to any such
action, suit or proceeding (including any impleaded parties)
include both such indemnified party and you, and such
indemnified party shall have been advised by its counsel that
representation of such indemnified party and you by the same
counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by
the same counsel has been proposed) due to actual or potential
differing interests between it and you (in which case you
shall not have the right to assume the defense of such action,
suit or proceeding on behalf of such indemnified party) or
that there may be legal defenses available to such indemnified
party that are different from or in addition to those
available to you. It is understood, however, that you shall,
in connection with any one such action, suit or proceeding or
separate but substantially similar or related actions, suits
or proceedings in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the
reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for
all such indemnified parties not having actual or potential
differing interests with you or among themselves, which firm
shall be designated in writing by the indemnified party or
parties, and that all such fees and expenses shall be
reimbursed as they are incurred. You shall not be liable for
any settlement of any such action, suit or proceeding effected
without your written consent (which consent shall not be
unreasonably withheld), but if settled with such written
consent, or if there be a final judgment for the plaintiff in
any such action, suit or proceeding, you agree to indemnify
and hold harmless any Underwriter Indemnified Party, to the
extent provided in the preceding paragraph, from and against
any Loss by reason of such settlement or judgment.
(c) The Dealer-Manager agrees to indemnify, defend and hold
harmless you and any person who controls you, within the
meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act to the same extent as the foregoing indemnity from
you with respect to a breach by the Dealer-Manager of its
representations, warranties, covenants, duties or obligations
contained herein. If any action, suit or proceeding shall be
brought against an indemnified party in respect of which
indemnity may be sought pursuant to this paragraph (c), such
indemnified party shall have the rights and duties given to
the Dealer-Manager by paragraph (b) above.
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(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under subsections (a) or
(c) of this Section 7 in respect of any Losses, then each
applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such Losses
in such proportion as is appropriate to reflect the relative
fault of you on the one hand and of the Dealer-Manager on the
other in connection with the matters which resulted in such
Losses, as well as any other relevant equitable
considerations.
(e) No indemnifying party shall, without the prior written consent
of the indemnified party (which consent shall not be
unreasonably withheld), effect any settlement of any pending
or threatened action, suit or proceeding in respect of which
any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or
proceeding.
(f) Any Losses for which an indemnified party is entitled to
indemnification or contribution under this Section 7 shall be
paid by the indemnifying party to the indemnified party as
such Losses are incurred.
8. Representations and Agreements to Survive Delivery. All
representations, warranties and agreements of the Dealer-Manager and
you in this Agreement, and the indemnification agreements contained in
Section 7 of this Agreement, shall survive the delivery and execution
of this Agreement, and shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of you or
any person who controls you within the meaning of the Section 15 of the
1933 Act or Section 20 of the 1934 Act, or by the Dealer-Manager or any
person who controls the Dealer-Manager, or any other indemnified party,
and shall survive sale or any closing on the sale of the Units under
this Agreement.
9. Termination. You shall have the right to terminate this Agreement,
other than the indemnification provisions of Section 7, by giving
written notice any time at or before a closing date:
(a) if the Dealer-Manager shall have failed, refused, or been
unable at or before such closing date, to perform any of its
obligations under this Agreement; or
(b) an event has materially and adversely affected the value of
the Units.
The Dealer-Manager may terminate this Agreement, other than the
indemnification provisions of Section 7, for any reason and at any time
by promptly giving written notice to you.
10. Format of Checks/Escrow Agent. Pending receipt of the Minimum
Subscription Amount (subject to the additional restrictions with
respect to Pennsylvania resident as set forth in the Dealer-Manager
Agreement), the Dealer-Manager and you agree that all subscribers shall
be instructed to make their checks, drafts, or money orders payable
solely to "Lease Equity Appreciation Fund I, L.P., Escrow Account," and
you agree to comply with Rule 15c2-4 adopted under the 1934 Act.
If you receive a check, draft, or money order not conforming to the
foregoing instructions, you agree to return the check, draft, or money
order directly to the subscriber not later than the end of the next
business day following its receipt from the subscriber. If the
Dealer-Manager receives a check, draft, or money order not conforming
to the foregoing instructions, then the Dealer-Manager shall return the
check, draft, or money order to you not later than the end of the next
business day following its receipt by the Dealer-Manager and you shall
then return the check, draft, or money order directly to the subscriber
not later than the end of the next business day following its receipt
from the Dealer-Manager. Checks, drafts, or money orders received by
you which conform to the foregoing instructions shall be transmitted by
you as provided by under Section 11.
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You agree that you are bound by the terms of the escrow agreement, a
copy of which is attached to the Dealer-Manager Agreement as Exhibit
"A" (the "Escrow Agreement").
11. Transmittal Procedures. You shall transmit received investor funds in
accordance with the following procedures.
(a) Pending receipt of the Minimum Subscription Amount (subject to
the additional restrictions with respect to Pennsylvania
residents as set forth in The Dealer-Manager Agreement), you
shall promptly, on receipt of any and all checks, drafts, and
money orders received from prospective purchasers of Units,
transmit the same together with the original executed
Subscription Agreement to the Dealer-Manager by the end of the
next business day following receipt of the check, draft, or
money order by you. By the end of the next business day
following receipt of the check, draft, or money order and
original executed Subscription Agreement by the
Dealer-Manager, the Dealer-Manager shall transmit the check,
draft, or money order and a copy of the executed Subscription
Agreement to the escrow agent (the "Escrow Agent") under the
Escrow Agreement, and the original executed Subscription
Agreement and a copy of the check, draft, or money order to
the Partnership.
(b) On receipt by you of notice from the Partnership or the
Dealer-Manager that the Minimum Subscription Amount (subject
to the additional restrictions with respect to Pennsylvania
residents as set forth in The Dealer-Manager Agreement) has
been received, you agree that all subscribers thereafter may
be instructed, in the Partnership's sole discretion, to make
their checks, drafts, or money orders payable solely to "Lease
Equity Appreciation Fund I, L.P."
Thereafter, you shall promptly, on receipt of any and all
checks, drafts, and money orders received from prospective
purchasers of Units, transmit the same together with the
original executed Subscription Agreement to the Dealer-Manager
by the end of the next business day following receipt of the
check, draft, or money order by you. By the end of the next
business day following receipt of the check, draft, or money
order and original executed Subscription Agreement by the
Dealer-Manager, the Dealer-Manager shall transmit the check,
draft, or money order and the original executed Subscription
Agreement to the Partnership.
12. Parties. This Agreement shall inure to the benefit of and be binding
upon you, the Dealer-Manager, and any respective successors and
assigns. This Agreement shall also inure to the benefit of the
indemnified parties, their successors and assigns. This Agreement is
intended to be and is for the sole and exclusive benefit of the parties
hereto, and their respective successors and assigns, and the
indemnified parties and their successors and assigns, and for the
benefit of no other person. No other person shall have any legal or
equitable right, remedy or claim under or in respect of this Agreement.
No purchaser of any of the Units from you shall be construed a
successor or assign merely by reason of such purchase.
13. Relationship. You are not authorized to hold yourself out as agent of
the Dealer-Manager, the General Partner, the Partnership or of any
other Selling Dealer. This Agreement shall not constitute you a partner
of the General Partner, the Dealer-Manager, the Partnership or of any
other Selling Dealer, nor render the General Partner, the
Dealer-Manager, the Partnership or any general partner thereof, or any
other Selling Dealer liable for any of your obligations.
14. Effective Date. This Agreement is made effective between the parties as
of the date accepted by you as indicated by your signature to this
Agreement.
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15. Entire Agreement, Waiver. This Agreement constitutes the entire
agreement between the parties to this Agreement and shall not be
amended or modified in any way except by subsequent agreement executed
in writing, and no party shall be liable or bound to the other by any
agreement, except as specifically set forth in this Agreement. Any
party to this Agreement may waive, but only in writing, any term,
condition, or requirement under this Agreement which is intended for
its own benefit, and written waiver of any term or condition of this
Agreement shall not operate as a waiver of any other breach of the term
or condition, nor shall any failure to enforce any provision of this
Agreement operate as a waiver of the provision or any other provision
of this Agreement.
16. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
17. Notices. All notices or requests or consents provided for or permitted
to be given pursuant to this Agreement must be in writing and must be
given by depositing same in the United States mail, addressed to the
party to be notified, postpaid, and registered or certified with return
receipt requested or by delivering such notice in person or by
telecopier to such party. Notice given by personal delivery or mail
shall be effective upon actual receipt. Notice given by telecopier
shall be effective upon actual receipt if received during the
recipient's normal business hours, or at the beginning of the
recipient's next business day after receipt if not received during the
recipient's normal business hours. Any communications from you shall be
addressed to the Dealer-Manager at X.X. Xxx 000, Xxxxxxxxxx,
Xxxxxxxxxxxx 00000-0000; Telecopy: (000) 000-0000. Any notice from the
Dealer-Manager to you shall be deemed to have been duly given if
mailed, telecopied or telegraphed to you at your address shown below.
18. Acceptance. Please confirm your agreement to become a Selling Dealer
under the terms and conditions set forth above by signing and returning
the enclosed duplicate copy of this Agreement to us at the address set
forth above.
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Sincerely,
_____________________________________, 2002 ANTHEM SECURITIES, INC.
By: _______________________________________________
Name:
Its:
ACCEPTANCE:
We accept your invitation to become a Selling Dealer under the terms and conditions set forth in the
above Agreement and confirm that all of the representations and warranties therein concerning a Selling Dealer
are true and correct with respect to us. We hereby acknowledge receipt of copies of the Prospectus and a copy
of the Dealer-Manager Agreement referred to above.
______________________________________, 2002 _________________________________________________,
a(n)________________________________corporation,
ATTEST:
____________________________________________ By: ______________________________________________
(SEAL) Secretary
_________________________________, President
__________________________________________________
(Address)
__________________________________________________
__________________________________________________
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