Exhibit 1
BOSTON CAPITAL TAX CREDIT FUND V L.P.
DEALER-MANAGER AGREEMENT
______________ __, 2004
Boston Capital Securities, Inc.
Xxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, XX 00000-0000
Dear Sirs:
Boston Capital Associates V L.L.C., a Delaware limited liability company
(the "General Partner"), and BCTC V Assignor Corp., a Delaware corporation (the
"Assignor Limited Partner") have organized and will act as the general partner
and the assignor limited partner, respectively, of Boston Capital Tax Credit
Fund V L.P., a Delaware limited partnership, (the "Fund") which was formed to
invest through the acquisition of limited partnership interests in other limited
partnerships (the "Operating Partnerships"), each of which will own and operate
an apartment complex intended for occupancy by individuals and families of low
and moderate income.
Initially, an aggregate of 8,500,000 beneficial assignee certificates
("BACs") representing assignments of limited partnership interests in units of
$10 each (the "BACs") is being offered by the Fund in two series, namely Series
49 and 50. The Fund anticipates offering additional series. Each series will
consist of at least 250,000 BACs. The initial minimum investment in the Fund is
five hundred BACs, or $5,000, except for employees of the General Partner and/or
its Affiliates for whom the initial minimum investment is one hundred BACs, or
$1,000; additional purchases must be made in multiples of one hundred BACs, or
$1,000. The offering of BACs with respect to any series will terminate twelve
months from the effective date of the Fund's registration statement with respect
to that series (the "Registration Statement") unless terminated earlier or
extended by the General Partner (the "Termination Date"), and is subject to the
condition that subscriptions for at least 250,000 BACs be accepted by the
General Partner by the Termination Date for each series. The offering period for
the Fund will commence on the effective date of the Registration Statement. The
offering of each series will not exceed twelve months, or such lesser period as
may be determined by the General Partner, in its sole discretion (a "Series
Offering Period"). Only upon the expiration or termination of one series may the
Fund offer BACs in another series.
The purchasers thereof will have the BACs issued to them and will become
the holders thereof (the "BAC Holders"), and as such will receive the rights and
interests in the limited partnership interest of the Assignor Limited Partner,
the beneficial interests of which are assigned to them pursuant to the terms of
the Fund Agreement hereinafter referred to. The Fund Agreement provides that the
Assignor Limited Partner will assign to the BAC Holders all of the beneficial
interests of its limited partnership interests in the Fund, on the basis of one
unit of beneficial interest for one BAC.
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The General Partner, on behalf of the Fund, hereby authorizes and
appoints, subject to the terms and conditions of this Agreement, Boston Capital
Securities, Inc., a Massachusetts corporation, as dealer-manager (the
"Dealer-Manager") to organize a group of soliciting dealers (the "Soliciting
Dealers"), consisting of brokers and dealers, who shall be members in good
standing of the National Association of Securities Dealers, Inc. (the "NASD"),
to solicit purchasers of the BACs.
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE FUND AND THE GENERAL PARTNER.
The Fund and the General Partner, jointly and severally, represent and
warrant to the Dealer-Manager that:
(a) The Fund has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-11, SEC File No.
333-______ and a related preliminary prospectus for the registration
of the BACs under the Securities Act of 1933, as amended, (the "1933
Act"), and has filed such amendments thereto and such amended
preliminary prospectuses as may have been required as of the date
hereof. Such Registration Statement as amended and the amended
prospectus on file with the Commission at the time the registration
statement becomes effective are herein called the "Registration
Statement" and the "Prospectus" respectively, except that (A) if the
Fund files a post-effective amendment to such registration statement,
then the term "Registration Statement" shall, from and after the
declaration of the effectiveness of such post-effective amendment,
refer to such registration statement as amended by such
post-effective amendment, thereto, and the term "Prospectus" shall
refer to the amended prospectus then on file with the Commission, and
(B) if the prospectus filed by the Fund pursuant to either Rule
424(b) or (c) of the rules and regulations of the Commission under
the 1933 Act (the "Regulations") shall differ from the prospectus on
file at the time the Registration Statement or the most recent
post-effective amendment thereto, if any, shall have become
effective, the term "Prospectus" shall refer to such prospectus filed
pursuant to either Rule 424(b) or (c), as the case may be, from and
after the date on which it shall have been filed. The Commission has
not issued any order preventing or suspending the use of any
preliminary prospectus or the Prospectus.
(b) The Fund at its Closing Date (or at each of its Closing Dates if it
shall have more than one closing) will be duly organized and legally
existing as a limited partnership pursuant to the laws of the State
of Delaware with full power and authority to own the interests and
conduct business as described in the Prospectus; the General Partner
is duly organized and legally existing as a limited partnership
pursuant to the laws of Delaware; the General Partner has full power
and authority to conduct business as described in the Prospectus; the
Fund and the General Partner have the power and authority to enter
into and perform this Agreement; the execution and delivery of this
Agreement by the Fund and the General Partner have been duly and
validly authorized by all necessary action; the execution and
delivery of this Agreement, the fulfillment of
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its terms and consummation of the transactions contemplated hereunder
do not and will not conflict with or constitute a breach or default
under any other agreement, indenture or instrument by which the Fund
or the General Partner are bound, or any law, regulation or order
applicable to the Fund, the General Partner or their respective
properties; this Agreement constitutes the valid and binding
agreement of the Fund and the General Partner, enforceable against
each of them in accordance with its terms.
(c) At the time the Registration Statement initially becomes effective
and at the time that any post-effective amendment thereto becomes
effective, the Registration Statement and the Prospectus, and at each
Closing Date the Prospectus, will comply with the provisions of the
1933 Act and the Regulations; at the time the Registration Statement
initially becomes effective and at the time that any post-effective
amendment thereto becomes effective the Registration Statement will
not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading; and at the time the
Registration Statement or an amendment thereto becomes effective, and
the Prospectus at each Closing Date, will not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein in light of the circumstances in which they were made, not
misleading; provided, however, that the representations and
warranties in this paragraph shall not apply to statements in or
omissions from the Registration Statement or the Prospectus made in
reliance upon and in conformity with information furnished to the
Fund or the General Partner in writing by the Dealer-Manager
expressly for use in the Registration Statement or the Prospectus.
Every contract or other document required by the 1933 Act or the
Regulations to be filed as an exhibit to the Registration Statement
has been so filed.
(d) Any supplemental sales literature or advertisement, regardless of how
labeled or described, used in addition to the Prospectus in
connection with the offering and sale of the BACs which is furnished
or approved by the General Partner ("Authorized Sales Literature")
shall, to the extent required, be filed with and approved by the
appropriate securities agencies and bodies.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE DEALER-MANAGER.
The Dealer-Manager hereby represents, warrants and agrees with the Fund
and the General Partner that:
(a) Solicitation and other activities by the Dealer-Manager hereunder
shall be undertaken only in accordance with this Agreement, the 1933
Act, the Securities Exchange Act of 1934, as amended (the "1934
Act"), and the applicable rules and regulations of the Commission and
any other applicable securities or Blue Sky Laws and regulations. The
Dealer-Manager agrees that through the Termination Date it will not
use or authorize the use of any solicitation material other than the
Prospectus and Authorized Sales Literature.
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(b) The Dealer-Manager is a broker-dealer registered with the Commission
and with each state in which it intends to make an offer (but not
necessarily in each state in which a Soliciting Dealer may make an
offer), it is, and will remain until the Termination Date, a member
in good standing of the NASD and agrees to comply with the provisions
of Rule 2740 and 2810 of the NASD Conduct Rules (the "Conduct
Rules"), and each sales representative of the Dealer-Manager making
offers or sales of BACs is properly licensed in each such
jurisdiction where he intends to so act. The Dealer-Manager
acknowledges that it has reviewed the Prospectus and Authorized Sales
Literature and has determined that the suitability standards are
fully disclosed and are consistent with Rule 2810 of the Conduct
Rules. In recommending to a participant the purchase, sale or
exchange of BACs the Dealer-Manager shall:
(i) 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 the
Dealer-Manager or an associated person that:
(A) 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, including the tax benefits;
(B) the participant has a fair market net worth
sufficient to sustain the risks inherent in the Fund,
including loss of investment and lack of liquidity;
and
(C) the Fund is otherwise suitable for the
participant; and
(ii) will maintain in its files documents disclosing the
basis upon which the determination of suitability was
reached as to each participant.
The Dealer-Manager hereby represents that it will communicate to
each of its sales agents, representatives and other appropriate
persons associated with it, the above-referenced suitability
standards and the Dealer-Manager shall require each Soliciting
Dealer that it may engage to acknowledge compliance with Rule
2810 of the Conduct Rules. Furthermore, the Dealer-Manager shall
not execute any transaction in the Fund in a discretionary
account without prior written approval of the transaction by the
potential investor.
(c) The Dealer-Manager shall provide a copy of the Prospectus to each
prospective investor to whom the Dealer-Manager shall directly effect
a sale of the BACs at the time of sale of any BACs to each such
prospective investor. It shall not, in connection with the offer and
sale of BACs, give any information or make
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representations, nor shall it authorize others to give any
information or make representations other than such information and
representations as is contained in the Prospectus or in any
Authorized Sales Literature.
(d) Each Soliciting Dealer engaged by the Dealer-Manager will be a
broker-dealer registered with the Commission and with each state in
which it intends to make an offer, will be a member in good standing
of the NASD and will agree to comply with the provisions of Rules
2740 and 2810 of the Conduct Rules, and each sales representative
employed by a Soliciting Dealer who makes offers or sales of BACs
will be properly licensed to sell securities in the jurisdictions
where such representative makes offers or sales.
(e) The Dealer-Manager will promptly deliver to the General Partner any
subscription documents received by it and will promptly deliver all
checks executed by or delivered on behalf of prospective investors to
the Escrow Agent for deposit in the Escrow Account in accordance with
Section 8 hereof.
(f) Prior to participating in the offer and sale of the BACs, the
Dealer-Manager shall have reviewed the Prospectus and will have
reasonable grounds to believe that all material facts are adequately
and accurately disclosed and provide a basis for evaluating the Fund.
In determining the adequacy of the disclosed facts, the
Dealer-Manager shall obtain written information on material facts
relating at a minimum to the following, if relevant in view of the
nature of the offering:
(i) items of compensation;
(ii) physical properties;
(iii) tax aspects;
(iv) financial stability and experience of the General Partner;
(v) the Fund's conflicts and risk factors; and
(vi) appraisals and other pertinent reports.
Prior to executing a purchase transaction in the Fund, the
Dealer-Manager or a person associated with it shall inform the
prospective investor of all pertinent facts relating to the
liquidity and marketability of an investment in the BACs during
the term of the prospective investment in the Fund.
(g) The Dealer-Manager represents that it has not engaged, and agrees
that it will not engage, in any activity with respect to the BACs in
violation of the 1934 Act, including Rule 10b-6 thereunder.
(h) Neither the Dealer-Manager nor any other person is authorized by the
General Partner or the Fund to give any information or make any
representations in
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connection with this Agreement or the offering of the BACs other than
those contained in the Prospectus and other Authorized Sales
Literature furnished to the Dealer-Manager or authorized for use by
the General Partner or the Fund. Without limiting the generality of
the foregoing, the Dealer-Manager will not publish, circulate or
otherwise use any other advertisement or solicitation material
without the prior written approval of the General Partner.
(i) The Dealer-Manager will require that each of the Soliciting Dealers
retained by it enter into a soliciting dealer agreement similar in
form to the one attached hereto as Exhibit A (a "Soliciting Dealer
Agreement").
(j) On becoming a Soliciting Dealer and in soliciting purchasers of the
BACs, the Dealer-Manager agrees to comply with the terms and
conditions imposed on the Soliciting Dealers pursuant to the
Soliciting Dealer Agreement.
(k) The Blue Sky Survey for the Fund indicates or will indicate the
jurisdictions in which it is believed that offers and sales of the
BACs may be made under the applicable state securities laws and
regulations. In effecting offers or sales in a jurisdiction, the
Dealer-Manager will comply with all special conditions and
limitations imposed by such jurisdiction, as set forth in the Blue
Sky Survey for the Fund. If the Blue Sky Survey for the Fund is not
enclosed herewith, it will be made available to the Dealer-Manager at
a later date. Under no circumstances will the Dealer-Manager engage
in any activities as a Soliciting Dealer hereunder in any
jurisdiction (a) which is not listed in the applicable Blue Sky
Survey as a jurisdiction in which offers and sales of BACs may be
made under the Blue Sky or securities laws of such jurisdiction or
(b) in which you may not lawfully so engage. The Blue Sky Survey
shall not be considered solicitation material, as that term is herein
used.
SECTION 3. COMPENSATION OF DEALER-MANAGER.
(a) As compensation for the services of the Dealer-Manager hereunder, the
Fund will pay to the Dealer-Manager a selling commission of seven per
cent (7%) of the purchase price of each BAC sold by it and a
Dealer-Manager Fee in the amount of two per cent (2%) of the purchase
price for each BAC sold to a subscriber. However, for purchases of
more than 10,000 BACs, the selling commission will be as follows:
first 10,000 BACs, 7.0%; next 10,000 BACs, 6.5%; next 10,000 BACs,
5.5%; next 10,000 BACs, 4.5%; next 10,000 BACs, 3.5%; and next 10,000
BACs and over, 2.5%. The Dealer-Manager shall be entitled to the
foregoing compensation only for the number of BACs for which the
subscriber is admitted to the Fund as a BAC holder. The
Dealer-Manager will also be entitled to receive: (i) an accountable
due diligence expense reimbursement for actual bona fide due
diligence expenses incurred by the Dealer-Manager or Soliciting
Dealers retained by the Dealer-Manager, in an aggregate amount not to
exceed one-half of one per cent (0.5%) of the purchase price for the
BACs in such Fund sold through the efforts of the Dealer-Manager or
by the Soliciting Dealers to subscribers with respect to such Fund;
and (ii) a non-accountable
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expense allowance in an amount up to one per cent (1%) of the public
ofering price of the BACs sold.
(b) The Dealer-Manager may re-allow all or any of the Selling Commission
and due diligence expense for which the Dealer-Manager was reimbursed
by the Fund as part of its accountable due diligence expense
reimbursement in respect of the BACs in the Fund sold by such
Soliciting Dealer.
(c) No subscription shall be effective unless and until the subscription
payment is accepted by the General Partner, and the General Partner
reserves the right in its sole discretion to reject any subscription
payment submitted. In the event that a sale of a BAC for which one of
the Soliciting Dealers engaged by the Dealer-Manager has solicited a
subscription shall not occur, for whatever reason, no Dealer-Manager
Fee, Selling Commission or accountable due diligence expense
reimbursement with respect to such BACs shall be paid to the
Dealer-Manager or such Soliciting Dealer.
SECTION 4. MUTUAL COVENANTS.
In the event that any party hereto shall learn of any circumstances or
facts, the existence of which causes such party to believe that such
circumstances or facts (i) render the Prospectus inaccurate or misleading as to
any material facts or (ii) should otherwise be disclosed in a supplement or
amendment to the Prospectus or other selling material, such party will promptly
bring such circumstances or facts to the attention of each party hereto. If, in
the opinion of any party hereto or of counsel for any party hereto, such
circumstances or facts should be set forth in an amendment or supplement to the
Prospectus or to any selling material, the General Partner shall cause such
amendment or supplement to be prepared promptly and shall make available to the
Dealer-Manager sufficient copies thereof for its own use and/or distribution to
the Soliciting Dealers.
SECTION 5. TERMINATION.
This Agreement may be terminated by written or telegraphic notice to the
Dealer-Manager from the General Partner, or upon the expiration or termination
of the offering of BACs; provided, however, that such termination shall not
relieve the Fund of the obligation to pay when due all fees payable to the
Dealer-Manager hereunder or the obligations of any of the parties hereto
referred to under Section 7 hereof.
SECTION 6. LIABILITY OF PARTIES.
(a) Nothing herein contained shall constitute the Dealer-Manager, the
Soliciting Dealers, the General Partner and the Fund as an
association, partnership, unincorporated business or other separate
entity, nor shall anything herein contained render the General
Partner or the Fund liable for the obligations of any of the
Soliciting Dealers. Neither the General Partner nor the Fund shall be
under any liability to any Soliciting Dealer or any other person for
any act or omission or any matter connected with this Agreement or
the Fund, except for
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obligations expressly assumed by an association, partnership,
unincorporated business or other separate entity in this Agreement.
(b) It is understood and agreed by the parties that no partner of the
General Partner shall have any personal liability under this
Agreement by virtue of its status as a partner of the General
Partner, and that any person asserting a claim against the General
Partner hereunder shall look solely to the assets of such General
Partner (specifically excluding the personal assets of the partners
thereof).
SECTION 7. INDEMNIFICATION.
(a) The General Partner will indemnify and hold harmless the
Dealer-Manager and each Soliciting Dealer from and against any and
all losses, claims, damages or liabilities, joint or several, to
which the Dealer-Manager and any Soliciting Dealer may become
subject, under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon a breach or alleged breach by the General
Partner of any of his representations and warranties or upon an
untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, the Registration Statement
or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; and the General Partner
will reimburse the Dealer-Manager and each such Soliciting Dealer for
any legal or other expenses (including, but not limited to,
reasonable attorneys' fees) reasonably incurred by the Dealer-Manager
and such Soliciting Dealer in connection with investigating or
defending any such claim or action instituted against the
Dealer-Manager or any such Soliciting Dealer, whether or not
resulting in any liability.
The indemnity agreement in this Section 7(a) will be in addition to
any liability which the General Partner may otherwise have and shall
extend upon the same terms and conditions to each person, if any, who
controls the Dealer-Manager and any Soliciting Dealer within the
meaning of the 1933 Act or 1934 Act, or is a registered
representative of such Dealer-Manager or Soliciting Dealer.
(b) The Dealer-Manager and each Soliciting Dealer will indemnify and hold
harmless the General Partner and the Fund from and against any and
all losses, claims, damages or liabilities to which the General
Partner and the Fund may become subject insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon (i) the failure or alleged failure by the
Dealer-Manager and/or such Soliciting Dealer to perform fully and to
act in compliance with the provisions of this Agreement or the
Soliciting Dealer Agreement, or (ii) any untrue statement or alleged
untrue statement of any material fact made by the Dealer-Manager or
such Soliciting Dealer to any offeree or purchaser of any of BACs
(other than any statement contained in the Prospectus or any
Authorized Sales Literature, or any amendment or
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supplement thereto), or (iii) any omission or alleged omission by the
Dealer-Manager or such Soliciting Dealer to state to any offeree or
purchaser of any BACs a material fact necessary in order to make the
statements made to such offeree or purchaser not misleading in light
of the circumstances under which they were made (other than any such
material fact omitted from the Prospectus, or any amendment or
supplement thereto), and will reimburse any legal or other expenses
(including, but not limited to, reasonable attorneys' fees)
reasonably incurred by the General Partner or the Fund in connection
with investigating or defending any such claim or action, whether or
not resulting in any liability.
The indemnity agreement in this Section 7(b) will be in addition to
any liability which the Dealer-Manager and/or such Soliciting Dealer
may otherwise have and shall extend upon the same terms and
conditions to each person signing the Registration Statement on
behalf of the Fund and each person, if any, who controls the General
Partner or the Fund within the meaning of the 1933 Act or the 1934
Act.
(c) No person shall be liable under the indemnity agreements contained
under Sections 7(a) and (b) hereof unless the person requesting
indemnification shall have notified such indemnifying party within
ten (10) business days after the summons or other first legal process
giving notice of the nature of the claim shall have been served upon
the indemnified party, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under
this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying
party will not relieve him or it from any liability which he or it
may have to any indemnified party otherwise than under this Section
7. In case any such action is brought against any indemnified party
and he or it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate
therein and, to the extent that he or it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of his or its election
so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section 7 for any legal
or other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than
reasonable costs of investigation.
(d) If the right to indemnification provided for in paragraphs (a), (b)
or (c) of this Section 7 would by its terms be available to a person
hereunder (collectively, the "Indemnified Parties" and individually,
an "Indemnified Party"), but is held to be unavailable by a court of
competent jurisdiction for any reason other than because of the terms
of such indemnification provision, then, the General Partner, the
Dealer-Manager and the Soliciting Dealers (collectively, the
"Indemnifying Parties" and individually, an "Indemnifying Party")
shall contribute to the aggregate of such losses, claims, damages and
liabilities as are contemplated in those paragraphs (including, but
not limited to, any
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investigation, legal and other expenses incurred in connection with,
and any amount paid in settlement of, any claim, action, suit or
proceeding) in the ratio in which the proceeds of the offering of
BACs have been actually received by each such Indemnifying Party. For
purposes of the preceding sentence, proceeds paid to an Indemnifying
Party hereunder and subsequently paid to another Indemnifying Party
or Indemnifying Parties pursuant to this Agreement, the Fund
Agreement for the Fund or otherwise, shall be deemed received by the
last of such Indemnifying Parties to whom or to which such proceeds
were paid; provided, however, that proceeds paid to the Fund and not
subsequently paid to the Dealer-Manager or such Soliciting Dealer
shall be considered to be received by the General Partner. However,
the right of contribution described in the preceding sentences is
subject to the following limitations:
(i) In no case shall any Indemnifying Party and the persons
who control such Indemnifying Party within the meaning
of applicable state and federal securities laws be
required to contribute any amount in excess of the
aggregate offering proceeds actually received by it and
them (determined as described above); and
(ii) No person guilty of fraudulent misrepresentation within
the meaning of Section 11(f) of the 1933 Act shall be
entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
Any Indemnified Party entitled to contribution will, promptly after
receipt of such notice of commencement of any action, suit,
proceeding or claim against him or it in respect of which a claim for
contribution may be made against another Indemnifying Party or
Indemnifying Parties, notify such other Indemnifying Party or
Indemnifying Parties. Failure to so notify such other Indemnifying
Party or Indemnifying Parties shall not relieve such other
Indemnifying Party or Indemnifying Parties from any other obligation
it or they may have hereunder or otherwise. If such other
Indemnifying Party or Indemnifying Parties are so notified, such
other Indemnifying Party or Indemnifying Parties shall be entitled to
participate in the defense of such action, suit, proceeding or claim
at its or their own expense or in accordance with arrangements
satisfactory to all parties who may be required to contribute. After
notice from such other Indemnifying Party or Indemnifying Parties to
the Indemnified Party entitled to contribution of its or their
election to assume its or their own defense, the Indemnifying Party
or Indemnifying Parties so electing shall not be liable for any legal
or other expenses of litigation subsequently incurred by the
Indemnified Party entitled to contribution in connection with the
defense thereof, other than the reasonable costs of investigation. No
person shall be required to contribute with respect to any action or
claim settled without his or its consent.
SECTION 8. TRANSFER OF FUNDS.
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The Dealer-Manager shall either directly, or through each Soliciting
Dealer, instruct subscribers to make their checks payable to the Escrow Agent as
agent for the Fund. If the Dealer-Manager receives a check not conforming to the
foregoing instructions it shall return such check directly to such subscriber
not later than the end of the next business day following its receipt. Checks
received by the Dealer-Manager which conform to the foregoing instructions shall
be transmitted for deposit by the Dealer-Manager as soon as practicable to the
Escrow Agent, but in any event by noon of the second business day following
receipt by the Dealer-Manager.
SECTION 9. NOTICES.
Any notice hereunder shall be in writing or by telegram and if to the
Dealer-Manager shall be deemed to have been duly given if mailed or telegraphed
to the Dealer-Manager at the address to which this letter is addressed, and if
to the General Partner or the Fund, if delivered or sent to them c/o Boston
Capital Corporation at Xxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxxxxx
00000.
SECTION 10. PARTIES IN INTEREST.
The Agreement herein set forth is intended solely for the benefit of the
Dealer-Manager, each Soliciting Dealer, the General Partner and the Fund (and,
to the extent provided in Section 7 hereof certain parties associated
therewith), and their respective successors and assigns, and no other person
shall acquire or have any right by virtue of this Agreement, and the term
"successors and assigns" as used herein shall not include any subscriber or
purchaser, as such, of BACs.
SECTION 11. GOVERNING LAW.
This Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of Delaware.
SECTION 12. AMENDMENT.
This Agreement may be amended by an agreement in writing signed by all
the parties hereto.
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SECTION 13. CONFIRMATION.
Please confirm your agreement to become the Dealer-Manager under the
terms and conditions herein set forth by signing and returning the confirmation
on the enclosed duplicate copy of this letter to us at the above address.
Very truly yours,
BOSTON CAPITAL ASSOCIATES V L.L.C.
By:
--------------------------
Xxxx X. Xxxxxxx
Managing Member
BOSTON CAPITAL TAX CREDIT
FUND V L.P.
By: Boston Capital Associates V L.L.C., its
general partner
By:
-------------------------
Xxxx X. Xxxxxxx
Managing Member
BOSTON CAPITAL SECURITIES, INC.
By:
--------------------------
Xxxxxxx X. XxXxxxxx
President
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Exhibit 2
BOSTON CAPITAL TAX CREDIT FUND V L.P.
SOLICITING DEALER AGREEMENT
___________ __, 2004
Dear Sir or Madam:
Boston Capital Associates V L.L.C., a Delaware limited liability company
(the "General Partner"), and BCTC V Assignor Corp., a Delaware corporation (the
"Assignor Limited Partner") have organized and the General Partner will act as
the general partner of Boston Capital Tax Credit Fund V L.P., a Delaware limited
partnership (the "Fund") which was formed to invest through the acquisition of
limited partnership interests in other limited partnerships, each of which will
own and operate an apartment complex intended for occupancy by individuals and
families of low and moderate income.
Initially, an aggregate of 8,500,000 beneficial assignee certificates in
Series 49 and Series 50 ("BACs") representing assignments of limited partnership
interests in units of $10 each (the "BACs") is being offered by the Fund in one
or more series. The Fund anticipates offering additional series. Each series
will consist of at least 250,000 BACs. The initial minimum investment in the
Fund is five hundred BACs, or $5,000; additional purchases must be made in
multiples of one hundred BACs, or $1,000. The offering of BACs with respect to
any series will terminate twelve months from the effective date of the Fund's
registration statement with respect to that series (the "Registration
Statement") unless terminated earlier or extended by the General Partner (the
"Termination Date"), and is subject to the condition that subscriptions for at
least 250,000 BACs be accepted by the General Partner by the Termination Date.
The series offering period ("Series Offering Period") for the Fund will commence
on the effective date of the Registration Statement. The offering of each series
will not exceed twelve months, or such lesser period as may be determined by the
General Partner, in its sole discretion (a "Series Offering Period"). Only upon
the expiration or termination of one series may the Fund offer BACs in another
series.
The purchasers thereof will have the BACs issued to them and will become
the holders thereof (the "BAC Holders"), and as such will receive the rights and
interests in the limited partnership interest of the Assignor Limited Partner,
the beneficial interests of which are assigned to them pursuant to the terms of
the Fund Agreement hereinafter referred to. The Fund Agreement provides that the
Assignor Limited Partner will assign to those persons who purchase BACs all of
the beneficial interests of its limited partnership interests in the Fund, on
the basis of one unit of beneficial interest for one BAC.
The undersigned, Boston Capital Securities, Inc. (the "Dealer Manager"),
has entered into a Dealer-Manager Agreement (the "Dealer-Manager Agreement")
with the General Partner and the Fund pursuant to which the Dealer-Manager has
agreed to use its best efforts to form and manage a group of securities dealers
(the "Soliciting Dealers") consisting of brokers and dealers who shall be
members in good standing of the National
1
Association of Securities Dealers, Inc. (the "NASD"), for the purpose of
soliciting purchasers of the Units. 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 obtain purchasers of BACs.
SECTION 1. SOLICITATION.
You hereby agree to solicit, as an independent contractor and not as the
agent of the Dealer-Manager, the Fund or the General Partner, persons acceptable
to the General Partner who will acquire BACs. In connection with the execution
of this Agreement and your solicitation of purchasers of the BACs, you hereby
acknowledge that no subscriptions for BACs will be effective unless and until
accepted by the General Partner on behalf of the Fund and hereby covenant,
represent and warrant to the Dealer-Manager, the Fund and the General Partner as
follows:
(a) Solicitation and other activities by you hereunder shall be
undertaken only in accordance with this Agreement, the Securities Act
of 1933, as amended (the "1933 Act") and the applicable rules and
regulations of the Commission.
(b) You hereby acknowledge receipt of copies of the Prospectus describing
the terms of the offering and the BACs offered thereby, including the
Investor Information Form as an attachment thereto. Additional copies
of the Prospectus will be supplied in reasonable quantities upon your
request. Neither you nor any other person is authorized by the
General Partner or the Fund to give any information or make any
representations in connection with this Agreement or the offering of
the BACs other than those contained in the Prospectus and other
authorized solicitation material furnished by the General Partner or
the Dealer-Manager ("Authorized Sales Literature"). Without limiting
the generality of the foregoing, you agree not to publish, circulate
or otherwise use any other advertisement or solicitation material
other than Authorized Sales Literature. Further, you agree that
should you distribute any Authorized Sales Literature to prospective
purchasers, such distribution shall be accompanied or preceded by the
Prospectus as then currently in effect.
(c) You represent that you have not engaged, and agree that you will not
engage, in any activity in respect of the BACs in violation of the
Securities Exchange Act of 1934, as amended (the "1934 Act"),
including Rule l0b-6 thereunder.
(d) In recommending to a potential investor the purchase of BACs, you or
someone associated with you shall have reasonable grounds to believe,
on the basis of information obtained from the potential investor
concerning his investment objectives, other investments, financial
situation and needs, and any other information known by you or such
person associated with you, that:
(i) The potential investor is or will be in a financial
position appropriate to enable him to realize to a
significant extent the benefits described in the
Prospectus, including the tax benefits of the Fund;
2
(ii) The potential investor has a net worth sufficient to
sustain the risks inherent in the Fund, including loss of
investment and lack of liquidity; and
(iii) The Fund is otherwise suitable for such potential
investor.
You further agree to provide the Dealer-Manager with all the
information you obtained to determine a potential investor's
suitability.
(e) You agree to instruct Subscribers to make their checks payable to the
Escrow Agent as agent for the Fund. Any Soliciting Dealer receiving a
check not conforming to the foregoing instructions shall return such
check directly to such Subscriber no later than the end of the next
business day following its receipt. Checks received by Soliciting
Dealers which conform to the foregoing instructions shall be
transmitted to the Dealer-Manager with accompanying subscription
documents pursuant to one of the following methods:
(i) Where, pursuant to a Soliciting Dealer's internal
supervisory procedures, internal supervisory review is
conducted at the same location at which subscription
documents and checks are received, such checks will be
transmitted by noon of the next business day following
receipt by the Soliciting Dealer; and
(ii) Where, pursuant to a Soliciting Dealer's internal
supervisory procedures, final internal supervisory review
is conducted at a different location, checks will be
transmitted by noon of the next business day following
receipt by the Soliciting Dealer to the office of the
Soliciting Dealer conducting such final internal
supervisory review (the "Final Review Office"). The Final
Review Office will in turn transmit such checks for
deposit to the Escrow Agent by noon of the next business
day following receipt thereof by the Final Review Office.
The Dealer-Manager will forward all checks to the Escrow Agent as
soon as practicable following processing. In conjunction with all of
the foregoing procedures, investor checks and subscription
documentation delivered on Saturdays, Sundays and holidays will be
treated as not having been received until the first business day
thereafter.
(f) You will maintain in your files documents disclosing the basis upon
which the determination of suitability was reached as to each
potential investor. You hereby represent that you will communicate to
each of your sales agents, representatives and other appropriate
persons associated with you the above-referenced suitability
standards. Notwithstanding the provisions of this Section 1, you
shall not execute any transaction in the Fund in a discretionary
account without prior written approval of the transaction by the
potential investor.
3
(g) Prior to participating in the offering of the Fund, you or a person
associated with you shall have reasonable grounds to believe, based
on information made available to you or such person by the General
Partner through the Prospectus or other materials, that all material
facts are adequately and accurately disclosed and provide a basis for
evaluating the Fund.
(h) In determining the adequacy of disclosed facts pursuant to Section
1(g) hereof, you or a person associated with you shall obtain
information on material facts relating at a minimum to the following,
if relevant in view of the nature of the Fund:
(i) items of compensation;
(ii) physical properties;
(iii) tax aspects;
(iv) financial stability and experience of the General
Partner;
(v) the Fund's conflicts and risk factors; and
(vi) appraisals and other pertinent reports.
(i) For purposes of Sections 1(g) and 1(h) hereof, you or a person
associated with you may rely upon the results of an inquiry conducted
by another member or members of the NASD, provided that:
(i) You or such person associated with you has reasonable
grounds to believe that such inquiry was conducted with
due care;
(ii) The results of the inquiry were provided to you or such
person associated with you with the consent of the NASD
member or members conducting or directing the inquiry; and
(iii) No NASD member that participated in the inquiry is a
sponsor of the Fund or an affiliate of such a sponsor.
(j) Prior to executing a purchase transaction in the Fund, you or a
person associated with you shall inform the prospective investor of
all pertinent facts relating to the liquidity and marketability of an
investment in the BACs during the term of the prospective investment
in the Fund.
(k) You shall not, directly or indirectly, pay or award any finder's
fees, commissions or other compensation to any person engaged by a
potential investor for investment advice as an inducement for such
advisor to advise the purchase of BACs; provided, however, that
normal sales commissions payable to a duly registered broker-dealer
or other properly licensed person, who is a member of the NASD, for
selling BACs shall not be prohibited hereby.
4
(l) You shall comply with Rules 2730, 2740, 2420 and 2750 of the NASD
Conduct.
(m) So long as the BACs have not been included on NASDAQ or listed on an
exchange, you shall, in recommending the purchase, sale or exchange
of BACs to an investor, (i) inform such investor of all pertinent
facts relating to the liquidity and marketability of BACs in
accordance with Rule 2810 of the Conduct Rules of the National
Association of Securities Dealers, Inc.; and (ii) have reasonable
grounds to believe, based on information obtained from the investor,
that an investment in the BACs is suitable for such investor in
accordance with Rule 2810 of the Conduct Rules.
SECTION 2. COMPENSATION OF SOLICITING DEALERS.
As compensation for the services of the Soliciting Dealers hereunder, the
Dealer-Manager will re-allow, as a Selling Commission, a portion of the funds
received by it from the Fund in an amount up to seven per cent (7%) of the
purchase price for each BAC sold to a Subscriber through such Soliciting
Dealer's efforts with respect to the Fund. However, for purchases of more than
10,000 BACs, the selling commission will be as follows: first 10,000 BACs, up to
7.0%; next 10,000 BACs, up to 6.5%; next 10,000 BACs, up to 5.5%; next 10,000
BACs, up to 4.5%; next 10,000 BACs, up to 3.5%; and next 10,000 BACs and over,
up to 2.5%. In addition, the Dealer-Manager may re-allow to the Soliciting
Dealers hereunder, a non-accountable expense allowance in an amount up to one
percent (1%) of the purchase price for each BAC sold to a Subscriber though such
Soliciting Dealer's efforts with respect to the Fund. Upon request, the
Soliciting Dealer may receive reimbursement for accountable, out-of-pocket due
diligence expenses incurred by the Soliciting Dealer for due diligence performed
on the Fund or the Dealer Manager. No reimbursement shall be made for any
marketing expenditures, including but not limited to, seminars. A Soliciting
Dealer shall be entitled to the foregoing compensation only if (i) the insertion
of such Soliciting Dealer's name has been made in the Investor Information Form
relating to the Subscriber's BACs, (ii) an account executive from such
Soliciting Dealer has executed the certification contained in Part II of the
Subscriber's Investor Information Form, (iii) such Soliciting Dealer has
executed this Agreement in the form hereof and delivered it to the Dealer
Manager, and (iv) the Subscriber is admitted as a BAC Holder for the number of
BACs indicated in his Investor Information Form.
SECTION 3. BLUE SKY AND SECURITIES LAWS.
The Dealer-Manager assumes no obligation or responsibility in respect of
the qualification of the BACs under the laws of any jurisdiction. The Blue Sky
Survey for the Fund indicates or will indicate the jurisdictions in which it is
believed that offers and sales of the BACs may be effected under the applicable
Blue Sky or state securities laws. In effecting offers or sales in a
jurisdiction, you will comply with all special conditions and limitations
imposed by such jurisdiction, as set forth in the Blue Sky Survey for the Fund.
If the Blue Sky Survey for the Fund is not enclosed herewith, it will be made
available to you at a later date. Under no circumstances will you, as a
Soliciting Dealer, engage in any activities hereunder in any jurisdiction (a)
which is not listed in the Blue Sky Survey as a jurisdiction in which offers and
sales of the BACs may be effected under the Blue Sky or
5
state securities laws of such jurisdiction or (b) in which you may not lawfully
so engage. The Blue Sky Survey shall not be considered solicitation material, as
that term is herein used.
SECTION 4. TERMINATION.
This Agreement may be terminated by written or telegraphic notice to you
from the Dealer-Manager, or upon the expiration or termination of the offering
of BACs, provided, however, that such termination shall not relieve the
Dealer-Manager of the obligation to pay when due all fees payable to you
hereunder or its obligations referred to under Section 6 hereof, and shall not
relieve you of any obligation or any liability under this Agreement, and all
representations and warranties shall survive the termination of this Agreement.
SECTION 5. LIABILITY OF THE PARTIES.
Nothing herein contained shall constitute the Dealer-Manager, the
Soliciting Dealers, the General Partner and the Fund as an association,
partnership, unincorporated business or other separate entity, nor shall
anything herein contained render the Dealer-Manager, the General Partner or the
Fund liable for the obligations of any of the Soliciting Dealers. Neither the
Dealer-Manager, the General Partner nor the Fund shall be under any liability to
any Soliciting Dealer or any other person for any act or omission or any matter
connected with this Agreement or the Fund, except for obligations expressly
assumed by an association, partnership, unincorporated business or other
separate entity in this Agreement.
SECTION 6. INDEMNIFICATION.
Under the Dealer-Manager Agreement, a copy of which is included as an
Exhibit to the Registration Statement, the General Partner has agreed to
indemnify and hold harmless various parties, including each Soliciting Dealer
and any party who controls such Soliciting Dealer within the meaning of the 1933
Act and the 1934 Act, from certain liabilities, and the Dealer-Manager and the
Soliciting Dealers have similarly agreed to indemnify the Fund and the General
Partner and certain associated parties. The indemnification provisions of the
Dealer-Manager Agreement are attached hereto as Exhibit A. In executing the
Dealer-Manager Agreement, to which the form of this Soliciting Dealer Agreement
is attached as Exhibit A, the Dealer-Manager acted as the representative of each
of the Soliciting Dealers, and the Soliciting Dealers shall thus be deemed to be
in privity of contract with the Fund and the General Partner. By your acceptance
hereof, you ratify the action of the Dealer-Manager in executing the
Dealer-Manager Agreement on your behalf. Furthermore, you hereby indemnify the
Dealer-Manager and hold it harmless for any losses, claims, damages, costs and
other expenses (including reasonable attorneys' fees and costs) incurred by the
Dealer-Manager as a result of your violation or breach of the terms (including
your covenants, representations and warranties under the Dealer-Manager
Agreement), conditions and obligations of this Agreement. The Dealer-Manager
hereby agrees to indemnify each Soliciting Dealer and hold it harmless for any
losses, claims, damages, costs and other expenses (including reasonable
attorneys' fees and costs) incurred by a Soliciting Dealer as a result of the
6
Dealer-Manager's violation or breach of the terms (including its representations
and warranties under the Dealer-Manager Agreement) of this Agreement.
SECTION 7. NOTICES.
Any notice hereunder shall be in writing or by telegram and, if to you as
a Soliciting Dealer, shall be deemed to have been duly given if mailed or
telegraphed to you at the address set forth below, and if to the Dealer-Manager,
if delivered or sent to us at Xxx Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
SECTION 8. PARTIES IN INTEREST.
The Agreement herein set forth is intended solely for the benefit of each
Soliciting Dealer, the General Partner, the Dealer-Manager and the Fund (and to
the extent provided in Section 6 hereof certain parties associated therewith,
and their successors and assigns), and no other person shall acquire or have any
right by virtue of this Agreement, and the terms "successors and assigns," as
used herein, shall not include any Subscriber for or purchasers of the BACs, as
such.
SECTION 9. GOVERNING LAW.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware.
SECTION 10. AMENDMENT.
This Agreement may be amended by an agreement in writing signed by all of
the parties hereto.
SECTION 11. CONFIRMATION.
Please confirm your agreement to become one of the Soliciting Dealers
under the terms and conditions herein set forth by signing and returning the
confirmation on the enclosed duplicate copy of this letter to the undersigned
Boston Capital Securities, Inc., Xxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxxxx.
Very truly yours,
BOSTON CAPITAL SECURITIES, INC.
By:
---------------------------
Xxxxxxx X. XxXxxxxx
President
7
CONFIRMED:
_________________, 200__
SOLICITING DEALER
-----------------------
By:
Authorized Signature
Address of Soliciting Dealer:
-----------------------------------
Xxxxxx
-----------------------------------
Xxxx Xxxxx Zip Code
8
Commission Officer:
------------------------
Due Diligence Officer:
------------------------
Marketing Officer:
------------------------
------------------------
------------------------
*If applicable, please enclose lists of Branch Offices, Branch Managers and
Registered Representatives.
9
Exhibit A to
Soliciting Dealer Agreement
SECTION 7. INDEMNIFICATION.
(a) The General Partner will indemnify and hold harmless the
Dealer-Manager and each Soliciting Dealer from and against any and all losses,
claims, damages or liabilities, joint or several, to which the Dealer-Manager
and any Soliciting Dealer may become subject, under the 1933 Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon a breach or alleged breach by the
General Partner of any of his representations and warranties or upon an untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; and the
General Partner will reimburse the Dealer-Manager and each such Soliciting
Dealer for any legal or other expenses (including, but not limited to,
reasonable attorneys' fees) reasonably incurred by the Dealer-Manager and such
Soliciting Dealer in connection with investigating or defending any such claim
or action instituted against the Dealer-Manager or any such Soliciting Dealer,
whether or not resulting in any liability.
The indemnity agreement in this Section 7(a) will be in addition to any
liability which the General Partner may otherwise have and shall extend upon the
same terms and conditions to each person, if any, who controls the
Dealer-Manager and any Soliciting Dealer within the meaning of the 1933 Act or
the 1934 Act, or is a registered representative of such Dealer-Manager or
Soliciting Dealer.
(b) The Dealer-Manager and each Soliciting Dealer will indemnify and hold
harmless the General Partner and the Fund from and against any and all losses,
claims, damages or liabilities to which the General Partner and the Fund may
become subject insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) the failure or
alleged failure by the Dealer-Manager and/or such Soliciting Dealer to perform
fully and to act in compliance with the provisions of this Agreement or the
Dealer-Manager Agreement, or (ii) any untrue statement or alleged untrue
statement of any material fact made by the Dealer-Manager or such Soliciting
Dealer to any offeree or purchaser of any of the BACs (other than any statement
contained in the Prospectus or any Authorized Sales Literature, or any amendment
or supplement thereto), or (iii) any omission or alleged omission by the
Dealer-Manager or such Soliciting Dealer to state to any offeree or purchaser of
any of the BACs a material fact necessary in order to make the statements made
to such offeree or purchaser not misleading in light of the circumstances under
which they were made (other than any such material fact omitted from the
Prospectus, or any amendment or supplement thereto), and will reimburse any
legal or other expenses (including, but not limited to, reasonable attorneys'
fees)
10
reasonably incurred by the General Partner or the Fund in connection with
investigating or defending any such claim or action, whether or not resulting in
any liability.
The indemnity agreement in this Section 7(b) will be in addition to any
liability which the Dealer-Manager and/or such Soliciting Dealer may otherwise
have and shall extend upon the same terms and conditions to the person signing
the Registration Statement on behalf of the Fund and each person, if any, who
controls the General Partner or the Fund within the meaning of the 1933 Act or
1934 Act.
(c) No person shall be liable under the indemnity agreements contained
under Sections 7(a) and (b) hereof unless the person requesting indemnification
has notified such indemnifying party within ten (10) business days after the
summons or other first legal process giving notice of the nature of the claim
has been served upon the indemnified party, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 7, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve him or it
from any liability which he or it may have to any indemnified party otherwise
than under this Section 7. In case any such action is brought against any
indemnified party and he or it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that he or it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of his or its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section 7 for any legal or other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation.
(d) If the right to indemnification provided for in paragraphs (a), (b)
or (c) of this Section 7 would by its terms be available to a person hereunder
(collectively, the "Indemnified Parties" and individually, an "Indemnified
Party"), but is held to be unavailable by a court of competent jurisdiction for
any reason other than because of the terms of such indemnification provision,
then, the General Partner, the Dealer-Manager and the Soliciting Dealers
(collectively, the "Indemnifying Parties" and individually, an "Indemnifying
Party") shall contribute to the aggregate of such losses, claims, damages and
liabilities as are contemplated in those paragraphs (including, but not limited
to, any investigation, legal and other expenses incurred in connection with, and
any amount paid in settlement of, any claim, action, suit or proceeding) in the
ratio in which the proceeds of the offering of the BACs have been actually
received by each such Indemnifying Party. For purposes of the preceding
sentence, proceeds paid to an Indemnifying Party hereunder and subsequently paid
to another Indemnifying Party or Indemnifying Parties pursuant to this
Agreement, the Fund Agreement for the Fund or otherwise, shall be deemed
received by the last of such Indemnifying Parties to whom or to which such
proceeds were paid; provided, however, that proceeds paid to the Fund and not
subsequently paid to the Dealer-Manager or such Soliciting Dealer shall be
considered to be received by the General Partner. However, the right of
contribution described in the preceding sentences is subject to the following
limitations:
11
(i) In no case shall any Indemnifying Party and the
persons who control such Indemnifying Party within the meaning of applicable
state and federal securities laws be required to contribute any amount in excess
of the aggregate offering proceeds actually received by it and them (determined
as described above); and
(ii) No person guilty of fraudulent misrepresentation within the
meaning of Section 11(f) of the 1933 Act shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
Any Indemnified Party entitled to contribution will, promptly after receipt of
such notice of commencement of any action, suit, proceeding or claim against him
or it in respect of which a claim for contribution may be made against another
Indemnifying Party or Indemnifying Parties, notify such other Indemnifying Party
or Indemnifying Parties. Failure to so notify such other Indemnifying Party or
Indemnifying Parties shall not relieve such other Indemnifying Party or
Indemnifying Parties from any other obligation it or they may have hereunder or
otherwise. If such other Indemnifying Party or Indemnifying Parties are so
notified, such other Indemnifying Party or Indemnifying Parties shall be
entitled to participate in the defense of such action, suit, proceeding or claim
at its or their own expense or in accordance with arrangements satisfactory to
all parties who may be required to contribute. After notice from such other
Indemnifying Party or Indemnifying Parties to the Indemnified Party entitle to
contribution of its or their election to assume its or their own defense, the
Indemnifying Party or Indemnifying Parties so electing shall not be liable for
any legal or other expenses of litigation subsequently incurred by the
Indemnified Party entitled to contribution in connection with the defense
thereof, other than the reasonable costs of investigation. No person shall be
required to contribute with respect to any action or claim settled without his
or its consent.
12
