SOLICITING DEALER AGREEMENT FOR
Exhibit (1)(b)
FOR
___________________________________________
Print Name of Dealer
The
undersigned, International Assets Advisory, LLC a Florida limited
liability company (the “Managing Broker Dealer”), has
entered into an agreement (the “Managing Broker Dealer
Agreement”) with MCI Income Fund V, LLC, a Delaware limited
liability company (the “Company”), in connection with
the offering and sale by the Company of Securities in the Company
(“the “Offering”) pursuant to which the Managing
Broker Dealer has agreed to use its best efforts to form and
manage, as the Managing Broker Dealer, a group of securities
dealers (the “Dealers”) for the purpose of soliciting
offers for the purchase of the Securities. A copy of the Managing
Broker Dealer Agreement is attached as Exhibit A. The terms of the
Offering are set forth in the Offering Statement and Offering
Circular, as may be supplemented or amended from time to time
(collectively the “Offering Documents”). The Securities
will be offered during a period commencing on the effective date of
the Offering Documents and continuing until the Offering
Termination Date. Capitalized terms used but not defined herein
shall have the meanings ascribed to them in the Offering
Documents.
You are
invited to become a Dealer and by your confirmation hereof you
agree to act in such capacity and to participate in the
distribution of the Offering to the public on a “best efforts
basis”. By your acceptance of this Agreement, you will become
one of the Dealers and will be entitled to and subject to the
indemnification provided herein, wherein the Dealers severally
agree to indemnify and hold harmless the Company and the Managing
Broker Dealer for certain actions as well as the indemnification
and contribution provisions contained in the Managing Broker Dealer
Agreement.
1. Dealer
Representations.
1.1 Dealer hereby
confirm that it is duly organized, validly existing, and in good
standing under the laws of its registered state with full power and
authority to conduct its business and own its assets. Dealer is
qualified, registered and/or licensed to conduct its business in
the jurisdictions that the conduct of its business requires such
qualification, registration or license, and that you will take all
steps necessary to ensure that at all times during the conduct of
the Offering that it remains in good standing and qualified,
registered or licensed to do business in such
jurisdictions.
1.2 Dealer hereby
confirm that you: (i) are a member in good standing of the
Financial Industry Regulatory Authority, Inc.
(“FINRA”); (ii) are qualified and duly registered to
act as a broker dealer within all states in which you will sell the
Securities; (iii) are a broker dealer duly registered with the
Securities and Exchange Commission (the “SEC”) pursuant
to the Securities Exchange Act of 1934, as amended (the
“Exchange Act”); (iv) will maintain all such
registrations and qualifications in good standing for the duration
of your involvement in the Offering; (v) have not received any
notice of proceedings relating to the revocation or modification of
your registration or license as a broker dealer or any other FINRA
or governmental licenses or permits which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), prospects, net
worth, earnings, cash flows, business, operations or properties of
the Dealer; (vi) will comply with all applicable federal and state
laws, rules, regulations and requirements and FINRA rules; (vii)
have all required licenses and permits, and will immediately notify
the Managing Broker Dealer and the Company in writing if any such
registration, qualification, license or permit is terminated or
suspended, or if notice of any proceeding relating to the
revocation or modification of your registration or license as a
Broker Dealer or any other FINRA or governmental licenses or
permits is received by the Dealer.
1.3 Dealer hereby
confirms that any independent contractors and registered
representatives acting on behalf of the Dealer have the appropriate
securities registrations and licenses to offer and solicit
purchasers for the Securities, and that the Dealer will provide to
the Managing Broker Dealer and the Company an updated list of
registered representatives approved to offer and solicit purchasers
for the Securities upon request.
1.4 Dealer hereby
confirms that this Agreement, when executed by Dealer, will have
been duly and validly authorized, executed and delivered by the
Dealer, and will be a valid and binding agreement of the Dealer,
enforceable in accordance with its terms.
1.5 Dealer hereby
confirms that the consummation of the transactions contemplated
herein and those contemplated by the Offering Documents will not
conflict with or result in a breach or violation of (a) the
charter, bylaws or similar organizational documents of the Dealer,
(b) any order, rule or regulation directed to the Dealer by any
court or any federal or state regulatory body or administrative
agency having jurisdiction over the Dealer or its affiliates, or
(c) the terms of any indenture, mortgage, deed of trust, loan or
credit agreement, promissory note, lease, statutory trust,
servicing agreement, contract, arrangement, understanding, document
or any other instrument to which the Dealer is a party or by which
it is bound or pursuant to which its assets are
subject.
1.6 Dealer hereby
confirm that there is no claim, action, suit, controversy, audit,
arbitration, mediation or proceeding (collectively, any
“Action”), before or by any regulatory authority,
pending or, to the knowledge of Dealer, threatened, that adversely
affects the Offering, to which the Dealer is a party, or to which
any of its assets is subject, that would prevent or restrict the
consummation of the transactions contemplated by this Agreement.
For purposes of this provision, a “regulatory
authority” means any of FINRA, a U.S. national securities
exchange, the United States, any state or other political
subdivision thereof and any other foreign or domestic entity or
government exercising or having the authority to exercise
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
1.7 Dealer hereby
agrees to solicit, as an independent contractor and not as the
Managing Broker Dealer’s agent, or as an agent of the Company
or its affiliates, persons acceptable to the Company to purchase
the Securities pursuant to the subscription agreement (the
“Subscription Agreement”) in the form attached to the
Offering Documents and in accordance with the terms of the Offering
Documents, and to diligently make inquiries as required by this
Agreement, the Offering Documents or applicable law with respect to
prospective Investors in order to ascertain whether a purchase of
the securities is suitable for the Investor. In accordance with the
instructions set forth in the Subscription Agreement, all complete
Subscription Agreements and customer funds for the purchase of the
Securities received by you with respect to any Subscription
Agreement shall be transmitted as provided in Section 1.17 of this
Agreement. In the event the Managing Broker Dealer receives any
customer funds for the Securities, the Managing Broker Dealer will
transmit such customer funds not later than noon of the next
business day following receipt of such funds for purchase of the
Securities pursuant to the instructions set forth in Section 1.17
of this Agreement. No Subscription Agreement shall be effective
unless and until accepted by the Company.
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1.8 Dealer understands
that the offering of Securities is made on a “best
efforts” basis, as described in the Offering Documents.
Dealer further understands and agrees that its compensation under
this Agreement for the sale of Securities is conditioned upon the
Company’s acceptance of sales by you, and that the failure to
accept a purchase for Securities shall relieve the Company, the
Managing Broker Dealer or any other party of any obligation to pay
you for any services rendered by you in connection with the sale of
Securities under this Agreement or otherwise.
1.9 Dealer agrees that
before participating in the Offering, you will have reasonable
grounds to believe that based on information made available to you
by the Managing Broker Dealer and/or the Company through the
Offering Documents that all material facts are adequately and
accurately disclosed in the Offering Documents and provide a basis
for evaluating the Company and the Securities.
1.10 Dealer
agrees not to execute any transaction in which an Investor invests
in the Securities in a discretionary account without prior written
approval of the transaction by the Investor.
1.11 Dealer
agrees to comply in all respects with the purchase procedures and
plan of distribution set forth in the Offering Documents. Further,
you agree that although you may receive due diligence and other
information regarding the Offering from the Company in electronic
form, you will not distribute to any prospective Investor or any
other person any such material.
1.12 All
subscriptions solicited by Dealer will be strictly subject to
confirmation by the Managing Broker Dealer and acceptance thereof
by the Company. The Managing Broker Dealer and the Company reserve
the right in their absolute discretion to reject any such
subscription and to accept or reject subscriptions in the order of
their receipt by the Company, as appropriate or otherwise. Neither
you nor any other person is authorized to and neither you nor any
of your employees, agents or representatives shall give any
information or make any representation other than those contained
in the Offering Documents or in any supplemental sales literature
furnished by the Managing Broker Dealer or the Company for use in
making solicitations in connection with the offer and sale of the
Securities.
1.13 Upon
authorization by the Managing Broker Dealer, you may offer the
Securities at the Offering price set forth in the Offering
Documents, subject to the terms and conditions
thereof.
1.14 The
Company or the Managing Broker Dealer will provide you with such
number of copies of the Offering Documents and such number of
copies of amendments and supplements thereto as you may reasonably
request. Dealer will be responsible for correctly placing orders of
such materials, and will reimburse the Company or the Managing
Broker Dealer for any costs incurred in connection with
unreasonable or mistaken orders. The Managing Broker Dealer also
understands that the Company may provide you with certain
supplemental sales material to be used by you in connection with
the solicitation of purchases of the Securities. If you elect to
use such supplemental sales material, you agree that such material
shall not be used in connection with the solicitation or purchase
of the Securities unless accompanied or preceded by the Offering
Documents, as then currently in effect, and as it may be amended or
supplemented in the future.
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1.15 The
Managing Broker Dealer shall have full authority to take such
action as it may deem advisable with respect to all matters
pertaining to the Offering. The Managing Broker Dealer shall be
under no liability to you except for gross negligence or willful
misconduct and for obligations expressly assumed by it in this
Agreement. Nothing contained in this section is intended to operate
as, and the provisions of this section shall not constitute a
waiver by you, of compliance with any provision of applicable
federal or state law, rules or regulations and the FINRA
rules.
1.16 Unless
otherwise directed by the Company, you will instruct all Investors
to make their subscription payment payable to MCI Income Fund V,
LLC, with payment in full by check, ACH or wire of your
subscription purchase price in accordance with the instructions in
the Offering’s Subscription Agreement.
1.17 Dealer
will limit the offering of the Securities to persons whom you have
reasonable grounds to believe, and in fact believe, after
conducting a reasonable inquiry and due diligence of the Offering
in accordance with FINRA rules, meet the financial suitability and
other Investor requirements set forth in the Offering
Documents.
1.18 Dealer
will provide each prospective Investor with a copy of the Offering
Documents at the time of the initial offering and prior to any sale
and provide said Investor to ask questions of and to receive
answers from the Company concerning the terms and conditions of the
Offering.
1.19 Dealer
will immediately bring to the attention of the Company and the
Managing Broker Dealer any circumstance or fact which causes you to
believe the Offering Documents, or any other literature distributed
pursuant to the Offering, or any information supplied to
prospective Investors in their purchase materials, may be
inaccurate or misleading.
1.20 Dealer
agree that in recommending to an Investor the purchase or sale of
the Securities, you shall have reasonable grounds to believe, on
the basis of information obtained from the prospective Investor
concerning his or her investment objectives, other investments,
financial situation and needs, and any other information known by
you, that:
1.20.1 The
prospective Investor meets the investor suitability requirements
set forth in the Offering Documents and the acquisition of
Securities is otherwise a suitable investment for such Investor as
may be required by all applicable laws, rules and
regulations;
1.20.2 The
prospective Investor is or will be in a financial position
appropriate to enable him or her to realize to a significant extent
the benefits described in the Offering Documents;
1.20.3 The
prospective Investor has a fair market net worth sufficient to
sustain the risks inherent in an investment in the Securities,
including, but not limited to, the total loss of the investment,
lack of liquidity and other risks described in the Offering
Documents; and
1.20.4 An
investment in the Securities is otherwise suitable for the
prospective Investor.
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1.21 Dealer
agrees to retain in your records and make available to the Managing
Broker Dealer and to the Company, for a period of at least six (6)
years following the Offering Termination Date, a record of the
information obtained pursuant to your engagement hereunder,
including without limitation all of the information used by you to
determine that (i) each person who purchases the Securities
pursuant to a Subscription Agreement solicited by you is within the
permitted class of Investors under the requirements of the
jurisdiction in which such Investor is a resident, (ii) each such
person met the suitability requirements set forth in the Offering
Documents and the Subscription Agreement (both at the time of the
initial purchase and at the time of any additional purchases),
(iii) each such person is suitable for such investment and the
basis on which such suitability determination was made, and (iv) a
representation of each such person that it is investing for
investment and not with a view toward distribution.
1.22 Dealer
agrees that upon request by the Managing Broker Dealer, you will
furnish a complete list of all persons who have been offered the
Securities and such persons’ place of residence.
1.23 Dealer
agrees that before executing a purchase transaction in the
Securities, you will inform the prospective Investor and his or her
purchaser representative, if any, of all pertinent facts relating
to the liquidity and marketability of the Securities, as
appropriate, during the term of the investment.
1.24 Dealer
agrees to comply with the record keeping requirements of the
Exchange Act, including but not limited to, Rules 17a-3 and 17a-4
promulgated under the Exchange Act. Dealer further agrees to keep
such records with respect to each customer who purchases Bonds, his
suitability and the amount of Bonds sold and to retain such records
for such period of time as may be required by the SEC, FINRA or the
Company.
1.25 Dealer
agrees not to rely upon the efforts of the Managing Broker Dealer
in (i) performing due diligence related to the Company (including
its members, managers, officers, directors, employees and
affiliates), the Securities, or the suitability thereof for any
Investors and (ii) determining whether the Company has adequately
and accurately disclosed all material facts upon which to provide a
basis for evaluating the Company to the extent required by
applicable federal and state law, rules and regulations and FINRA
Rules. Dealer further agrees that it is solely responsible for
performing adequate due diligence, and you agree to perform
adequate due diligence as required by federal and state law, rules
and regulations and FINRA Rules.
1.26 Dealer
are not authorized or permitted to give, and will not give, any
information or make any representation (written or oral) concerning
the Offering except as set forth in the Offering Documents and any
advertising and supplemental sales literature approved by the
Company and the Managing Broker Dealer to be distributed by the
Managing Broker Dealer in connection with the Offering, whether
designated solely for “broker-dealer use only” or
otherwise and regardless of how labeled or described
(“Authorized Sales Materials”). Dealer will refrain
from making any representations to any prospective Investor other
than those contained in the Offering Documents, and will not allow
any other written materials to be used to describe the potential
investment to prospective Investors other than the Offering
Documents or Authorized Sales Materials.
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1.27 Dealer
will refrain from distributing any material to prospective
Investors that is marked “Financial Advisor Use Only”
or “Broker Dealer Use Only,” or any other due diligence
material related to the Offering received by you.
1.28 The
Dealer hereby represents and warrants to the Managing Broker Dealer
and to the Company that none of the Dealer any of its predecessors,
any affiliates, any director, general partner, managing member,
officer, promoter connected with the Managing Broker Dealer in any
capacity, or persons who own 20% or more of the Dealer, or any
person receiving any direct or indirect compensation from the
Dealer with respect to the Offering (“Dealer Covered
Person”) is subject to any of the “Bad Actor”
disqualifications described in Rule 262(a) under the Securities Act
(a “Disqualification Event”), except for a
Disqualification Event covered by Rule 262(b). Dealer has exercised
reasonable care to determine whether any Dealer Covered Person is
subject to a Disqualification Event. The Dealer has complied, to
the extent applicable, with its disclosure obligations under Rule
506(e), and has furnished to the Managing Broker Dealer a copy of
any disclosures provided thereunder. The Dealer will complete and
sign the 262 Covered Person Questionnaire attached hereto as
Exhibit B.
1.29 The
representations and warranties made in Section 1.29 are and shall
be continuing representations and warranties throughout the term of
the Offering. The Dealer agrees to immediately notify the Managing
Broker Dealer in writing if (i) any such person described in Rule
262(a) of Regulation A becomes, or is likely to become, a
“Bad Actor” during the course of the Offering or (ii)
if any other representations or warranties becomes
untrue.
1.30 In
the event that any of these representations or warranties becomes
untrue, you will immediately notify the Company and the Managing
Broker Dealer in writing of the fact which makes the representation
or warranty untrue.
2. Compensation.
Subject to certain conditions, and in consideration of your
services hereunder, the Managing Broker Dealer will pay you sales
commissions and marketing allowances as follows: (i) 6.0% of the
purchase price of the Securities (the “Total Sales”)
sold by you; provided, however, that this amount may be reduced to
the extent the Managing Broker Dealer negotiates a lower commission
rate with you, in which event the commission rate will be the lower
agreed upon rate (the above being referred to as the
“Commissions”), and (ii) a non- accountable marketing
and a due diligence allowance of up to 1.0% of the Total Sales (the
“Allowance”). Payment of the Commissions and the
Allowance shall be subject to the following
conditions:
2.1 No Commissions or
Allowance will be payable with respect to any Subscription
Agreements that are rejected by the Company or the Managing Broker
Dealer, or if the Company terminates the Offering for any reason
whatsoever.
2.2 No Commissions or
Allowance will be payable to you with respect to any sale of the
Securities by you unless and until such time as the Company has
received the total proceeds of any such sale and the Managing
Broker Dealer has received the aggregate amount of sales commission
to which it is entitled.
2.3 All other expenses
incurred by you in the performance of your obligations hereunder,
including, but not limited to, expenses related to the Offering and
any attorneys’ fees, shall be at your sole cost and expense,
and the foregoing shall apply notwithstanding the fact that the
Offering is not consummated for any reason.
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3. Solicitation.
In soliciting persons to acquire the Securities, you agree to
comply with all applicable federal and state laws, rules and
regulations and FINRA rules and, in particular, you agree that you
will not give any information or make any representations other
than those contained in the Offering Documents and in any
Authorized Sales Materials furnished to you by the Managing Broker
Dealer or the Company for use in making such
solicitations.
4. Offer
and Sale Activities.
It is understood that under no circumstances will you engage in any
activities hereunder in any state other than those for which
permission has been granted by the Managing Broker Dealer to you,
as evidenced by written acknowledgment by the Managing Broker
Dealer that such state has been cleared for offer and sale
activity. It is further understood that you shall notify the
Company of Subscription Agreements you receive within two (2)
business days of receipt so that the Company may make any required
federal or state law filings.
5. Relationship
of Parties. Nothing
herein shall constitute the Dealers as an association, partnership,
unincorporated business, or other separate entity. The Managing
Broker Dealer shall be under no liability to make any payment to
you except out of the funds received by it from the Company as
hereinabove provided, and the Managing Broker Dealer shall not be
under any liability for, or in respect of the value or validity of
the Subscription Agreement, the Securities or the performance by
anyone of any agreement on its part, or for, or in respect of any
matter connected with this Agreement, except for gross negligence
or willful misconduct by the Managing Broker Dealer, and for
obligations expressly assumed by the Managing Broker Dealer in this
Agreement.
6. Indemnification
and Contribution.
Dealer hereby agree and acknowledge that you shall be entitled to
the rights, and be subject to the obligations and liabilities, of
the indemnification and contribution provisions contained in the
Managing Broker Dealer Agreement. Additionally, without limitation,
you hereby agree and acknowledge that you shall be entitled to the
rights and be subject to the obligations and liabilities of Section
6.1 herein, by which the Dealers shall severally agree to indemnify
and hold harmless the Company and the Managing Broker Dealer and
their respective owners, managers, members, partners, directors,
officers, employees, agents, attorneys and
accountants.
6.1 Indemnification by the Dealer.
Subject to the conditions set forth below, each Dealer agrees to
indemnify and hold harmless the Company and the Managing Broker
Dealer and their respective owners, managers, members, partners,
directors, officers, employees, agents, attorneys and accountants
(the “CMBD Parties”), against any and all loss,
liability, claim, damage and expense whatsoever
(“Loss”) arising out of or based upon:
6.1.1 Any
verbal or written representations or use of sales materials in
connection with the Offering made by such Dealer, its employees, or
affiliates in violation of any applicable federal or state laws,
rules and regulations, FINRA rules, or this Agreement;
6.1.2 Such
Dealer’s failure to comply with any of the applicable federal
or state laws, rules or regulations or FINRA requirements and rules
of FINRA;
6.1.3 The
breach by such Dealer of any term, condition, representation,
warranty, or covenant of this Agreement; or
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6.1.4 The
failure by any Investor to comply with the Investor Suitability
Requirements set forth in the section captioned “Who May
Invest” in the Offering Documents.
6.2 If any action is
brought against the CMBD Parties in respect of which indemnity may
be sought hereunder, the Company or the Managing Broker Dealer
shall promptly notify the applicable Dealer in writing of the
institution of such action, and the Dealer shall assume the defense
of such action. The affected CMBD Parties shall have the right to
employ counsel in any such case. The reasonable fees and expenses
of such counsel shall be at such Dealer’s expense and
authorized in writing by such Dealer, provided that such Dealer
will not be obligated to pay for legal fees and expenses for more
than one law firm in connection with the defense of similar claims
arising out of the same alleged acts or omissions.
6.3 The Dealer agrees
to promptly notify the Company and the Managing Broker Dealer of
the commencement of any litigation or proceedings against the
Dealer or any of the Dealer’s officers, directors, partners,
affiliates, or agents in connection with the Offering.
6.4 The indemnity
provided to the Managing Broker Dealer pursuant to this Section 6
shall not apply to the extent that any Loss arises out of or is
based upon any untrue statement or alleged untrue statement of
material fact made by the Managing Broker Dealer or any agent of
the Managing Broker Dealer, or any omission or alleged omission of
a material fact required to be disclosed by the Managing Broker
Dealer or any agent of the Managing Broker Dealer.
6.5 The indemnity
provided to the Company pursuant to this Section 6 shall not apply
to the extent that any Loss arises out of or is based upon any
untrue statement or alleged untrue statement of material fact made
by the Company or any agent of the Company (other than the Managing
Broker Dealer), or any omission or alleged omission of a material
fact required to be disclosed by the Company or any agent of the
Company (other than the Managing Broker Dealer).
7. Privacy
Act. To protect
Customer Information (as defined below) and to comply as may be
necessary with the requirements of the Xxxxx-Xxxxx-Xxxxxx Act, the
relevant state and federal regulations pursuant thereto and state
privacy laws, the parties wish to include the confidentiality and
non-disclosure obligations set forth herein.
7.1 Customer Information.
“Customer Information” means any information contained
on a customer’s application or other form and all nonpublic
personal information about a customer that a party receives from
the other party. Customer Information shall include, but not be
limited to, name, address, telephone number, social security
number, health information and personal financial information
(which may include consumer account number).
7.2 Usage and Nondisclosure. The
parties understand and acknowledge that they may be financial
institutions subject to applicable federal and state customer and
consumer privacy laws and regulations, including Title V of the
Xxxxx-Xxxxx-Xxxxxx Act (15 U.S.C. 6801, et seq.) and regulations
promulgated thereunder (collectively, the “Privacy
Laws”), and any Customer Information that one party receives
from the other party is received with limitations on its use and
disclosure. The parties agree that they are prohibited from using
the Customer Information received from the other party other than
(i) as required by law, regulation or rule or (ii) to carry out the
purposes for which one party discloses Customer Information to the
other party pursuant to this Agreement, as permitted under the use
in the ordinary course of business exception to the Privacy
Laws.
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7.3 Safeguarding Customer
Information. The parties shall establish and maintain
safeguards against the unauthorized access, destruction, loss, or
alteration of Customer Information in their control which are no
less rigorous than those maintained by a party for its own
information of a similar nature. In the event of any improper
disclosure of any Customer Information, the party responsible for
the disclosure will immediately notify the other
party.
7.4 Survivability. The provisions
of Section 6 and this Section 7 shall survive the termination of
this Agreement.
8. Survival
of Representations and Warranties. Except as the context otherwise
requires, all representations, warranties and agreements contained
in this Agreement and in the applicable provisions of the Managing
Broker Dealer Agreement shall be deemed to be representations,
warranties and agreements at and through the Offering Termination
Date, and such representations, warranties and agreements by the
Managing Broker Dealer or the Dealers, including the indemnity
agreements contained in Sections 6 and 9, the contribution
agreements contained in Section 10 of the Managing Broker Dealer
Agreement, and the indemnity agreement contained in Section 6
herein, shall remain operative and in full force and effect
regardless of any investigation made by the Managing Broker Dealer,
the Dealers and/or any controlling person, and shall survive the
sale of, and payment for, the Securities and the termination of
this Agreement.
9. Termination.
The Dealer will suspend or terminate the solicitation of potential
Investors in the Offering immediately upon request of the Company
or the Managing Broker Dealer and will resume the solicitation of
potential Investors in the Offering upon the subsequent request of
the Company or the Managing Broker Dealer. This Agreement may be
terminated by the Managing Broker Dealer at any time upon five (5)
days’ prior written notice to the other party.
10. Managing
Broker Dealer Obligations.
10.1 Notifications.
Managing Broker Dealer shall provide prompt written notice to the
Dealers of any material changes to the Managing Broker Dealer that
in its judgment could materially and adversely affect a Dealer with
respect to this Offering.
10.2 Records.
The Managing Broker Dealer shall retain in its records and make
available to the Dealers, for a period of at least six (6)
years’ following the Offering Termination Date, any
communications and information with respect to a prospective
Investor’s suitability to invest in the Offering that has
otherwise not been provided to a Dealer.
11. Governing
Law; Venue. This
Agreement and its Exhibits shall be governed by, subject to and
construed in accordance with, the laws of the State of Florida
without regard to conflict of law provisions. The parties hereby
irrevocably consent to personal jurisdiction and exclusive venue in
Orange County, Orlando, Florida for any action (including
arbitration) brought by either party arising out of or in
connection with this Agreement and waives any objection that it may
have to the laying of venue in any such court or that such court is
an inconvenient forum or does not have personal jurisdiction over
them. The parties hereby waive trial by jury.
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12. Arbitration.
ANY DISPUTE, CLAIM OR CONTROVERSY ARISING OUT OF, OR RELATING TO,
THIS AGREEMENT, OR THE INTERPRETATION THEREOF, SHALL BE SETTLED BY
ARBITRATION UNDER THE THEN PREVAILING RULES OF FINRA IN ORLANDO,
FLORIDA. DEALER AGREES THAT EXCLUSIVE JURISDICTION AND JUDGMENT
UPON THE AWARD RENDERED MAY BE ENTERED IN ANY COURT LOCATED IN
ORANGE COUNTY, ORLANDO, FLORIDA.
13. Severability.
If any portion of this Agreement shall be held invalid or
inoperative, then so far as is reasonable and possible (i) the
remainder of this Agreement shall be considered valid and operative
and (ii) effect shall be given to the intent manifested by the
portion held invalid or inoperative.
14. Counterparts.
This Agreement may be executed in two (2) or more counterparts,
each of which shall be deemed to be an original, and together which
shall constitute one and the same instrument.
15. Modification,
Assignment or Amendment. Managing Broker Dealer may amend or
assign this Agreement at any time with or without notice to Dealer.
This Agreement may not be amended or assigned by Dealer except by
written agreement executed by the parties hereto.
16. Notices.
All notices or other communications required or permitted hereunder
shall be in writing and shall be deemed given or delivered: (i)
when delivered personally or by commercial messenger; (ii) one
business day following deposit with a recognized overnight courier
service, provided such deposit occurs prior to the deadline imposed
by such service for overnight delivery; (iii) when transmitted, if
sent by email electronic communication, provided confirmation of
receipt is received by sender and such notice is sent by an
additional method provided hereunder, in each case above provided
such communication is addressed to the intended recipient thereof
as set forth below:
If to
the Managing Broker Dealer:
International
Assets Advisory, LLC
000 X.
Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx
00000
Attention: Xxxx
Xxxxxxxxx
Email
Address: xxxxxxxxxx@xxxx.xxx
If to
the Company:
0000
Xxxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx,
Xxxxx 00000
Attention: Xxxxx
Xxxxx
Email
Address: xxxxxx@xxxxxxxxxxx.xxx
If sent
to you, it shall be delivered to your address set forth below. The
notice shall be deemed to be received on the date of its actual
receipt by the party entitled thereto.
10
17. Parties.
This Agreement shall be binding upon and inure solely to the
benefit of the parties hereto, the persons referred to in Sections
8, 9 and 10 of the Managing Broker Dealer Agreement and Section 6
herein, their respective successors, legal representatives, heirs
and assigns, and no other person shall have or be construed to have
any legal or equitable right, remedy or claim under, in respect of,
or by virtue of, this Agreement or any provision herein
contained.
18. Delay.
Neither the failure nor any delay on the part of any party to this
Agreement to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall a
waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any subsequent occurrence.
19. Recovery
of Costs. If any
legal action or other proceeding is brought for the enforcement of
this Agreement, or because of an alleged dispute, breach, default
or misrepresentation in connection with any of the provisions of
this Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys’ fees and other
costs incurred in that action or proceeding (and any additional
proceeding for the enforcement of a judgment) in addition to any
other relief to which it or they may be entitled.
20. Entire
Agreement. This
Agreement, along with the applicable provisions of the Managing
Broker Dealer Agreement, constitute the entire understanding
between the parties hereto and supersede any prior understandings
or written or oral agreements between them respecting the subject
matter hereof.
21. Anti-Money
Laundering Compliance Programs. Each Dealer’s acceptance of this
Agreement constitutes a representation to the Managing Broker
Dealer that the Dealer has established and implemented an
anti-money laundering (“AML”) compliance program
(“AML Program”), in accordance with FINRA Rule 3310 and
Section 352 of the Money Laundering Abatement Act and Section 326
of the Patriot Act of 2001, which are reasonably expected to detect
and cause reporting of suspicious transactions in connection with
the sale of Securities. In addition, the Dealer represents that it
has established and implemented a program (“OFAC
Program”) for compliance with OFAC and will continue to
maintain its OFAC Program during the term of this Agreement. Upon
request by the Managing Broker Dealer at any time, the Dealer
hereby agrees to (i) furnish a copy of its AML Program and OFAC
Program to the Managing Broker Dealer for review and (ii) furnish a
copy of the findings and any remedial actions taken in connection
with the Dealer’s most recent independent testing of its AML
Program and/or its OFAC Program.
11
The
parties acknowledge that for the purposes of the FINRA rules the
Investors who purchase Securities through the Dealer are
“Customers” of the Dealer and not the Managing Broker
Dealer. Nonetheless, to the extent that the Managing Broker Dealer
deems it prudent, the Dealer shall cooperate with the Managing
Broker Dealer’s auditing and monitoring of the Dealer’s
AML Program and its OFAC Program by providing, upon request,
information, records, data and exception reports, related to the
Company’s bond holders introduced to, and serviced by, the
Dealer (the “Customers”). Such documentation could
include, among other things: (i) copies of Dealer’s AML
Program and its OFAC Program; (ii) documents maintained pursuant to
the Dealer’s AML Program and its OFAC Program related to the
Customers; (iii) any suspicious activity reports filed related to
the Customers; (iv) audits and any exception reports related to the
Dealer’s AML activities; and (v) any other files maintained
related to the Customers. In the event that such documents reflect,
in the opinion of the Managing Broker Dealer, a potential violation
of the Managing Broker Dealer’s obligations in respect of its
AML or OFAC requirements, the Dealer will permit the Managing
Broker Dealer to further inspect relevant books and records related
to the Customers (with respect to the Offering) and/or the
Dealer’s compliance with AML or OFAC requirements.
Notwithstanding the foregoing, when so directed by his or her legal
counsel, the Dealer shall not be required to provide to the
Managing Broker Dealer any documentation that could potentially
cause the Dealer to lose the benefit of an attorney-client
privilege or other privilege which it may be entitled to assert
relating to the discoverability of documents in any civil or
criminal proceedings. The Dealer hereby represents that it is
currently in compliance with all AML rules and all OFAC
requirements, specifically including, but not limited to, the
Customer Identification Program requirements under Section 326 of
the USA PATRIOT Act. The Dealer hereby agrees, upon request by the
Managing Broker Dealer to (i) provide an annual certification to
the Managing Broker Dealer that, as of the date of such
certification (A) its AML Program and its OFAC Program are
consistent with the AML Rules and OFAC requirements, (B) it has
continued to implement its AML Program and its OFAC Program and (C)
it is currently in compliance with all AML Rules and OFAC
requirements, specifically including, but not limited to, the
Customer Identification Program requirements under Section 326 of
the USA PATRIOT Act and (ii) perform and carry out, on behalf of
both the Managing Broker Dealer and the Company, the Customer
Identification Program requirements in accordance with Section 326
of the USA PATRIOT Act and applicable SEC and Treasury Department
Rules thereunder.
22. Due
Diligence. Pursuant
to the Managing Broker Dealer Agreement, the Company will authorize
a collection of information regarding the Offering (the “Due
Diligence Information”), which collection the Company may
amend and supplement from time to time, to be delivered by the
Managing Broker Dealer to the Dealer (or their agents performing
due diligence) in connection with its due diligence review of the
Offering. In the event the Dealer (or its agent performing due
diligence) requests access to additional information or otherwise
wishes to conduct additional due diligence regarding the Offering,
the Company, or the Company’s sponsor or the sponsor’s
affiliates. The Managing Broker Dealer will reasonably cooperate
with the Dealer to accommodate such request. All Due Diligence
Information received by the Dealer in connection with its due
diligence review of the Offering is confidential and shall be
maintained as confidential and not disclosed by the Dealer, except
to the extent such information is disclosed in the Offering
Documents.
12
23. Electronic
Delivery of Information; Electronic Processing of
Subscriptions.
Pursuant to the Managing Broker Dealer Agreement, the Company has
agreed to confirm all orders for the purchase of Securities
accepted by the Company. In addition, the Company, the Managing
Broker Dealer and/or third parties engaged by the Company or the
Managing Broker Dealer may, from time to time, provide to the
Dealer copies of investor letters, annual reports and other
communications provided to the Company investors. The Dealer agrees
that, to the extent practicable and permitted by law, all
confirmations, statements, communications and other information
provided to or from the Company, the Managing Broker Dealer, the
Dealer and/or their agents or customers may be provided
electronically, as a preference but not as a
requirement.
With
respect to Securities held through custodial accounts, the Dealer
agrees and acknowledges that to the extent practicable and
permitted by law, all confirmations, statements, communications and
other information provided from the Company, the Managing Broker
Dealer and/or their agents to Company investors may be provided
solely to the custodian that is the registered owner of the
Securities, rather than to the beneficial owners of the Securities.
In such case it shall be the responsibility of the custodian to
distribute the information to the beneficial owners of
Securities.
The
Dealer agrees and acknowledges that the Managing Broker Dealer may,
as a preference but not as a requirement, use an electronic
platform to process subscriptions, including but not limited to the
Depository Trust Company (DTC) model. If an electronic platform is
used, the Dealer agrees to cooperate with the processing of
subscriptions through such an electronic platform if reasonably
practical.
24. Managing
Broker Dealer Representations. The Managing Broker Dealer hereby
represents and warrants that none of the Managing Broker Dealer,
any of its predecessors, any affiliates, any director, general
partner, managing member, officer, promoter connected with the
Managing Broker Dealer in any capacity, or persons who own 20% or
more of the Managing Broker Dealer (“Managing Broker Dealer
Covered Person”) is subject to any of the “Bad
Actor” disqualifications described in Rule 262(a) under the
Securities Act (a “Disqualification Event”), except for
a Disqualification Event covered by Rule 262(b). The Managing
Broker Dealer has exercised reasonable care to determine whether
any Managing Broker Dealer Covered Person is subject to a
Disqualification Event. The Managing Broker Dealer has complied, to
the extent applicable, with its disclosure obligations under Rule
262(a), and has furnished to the Company a copy of any disclosures
provided thereunder.
The
representations and warranties made in this Section 24 are and
shall be continuing representations and warranties throughout the
term of the Offering. In the event that any of these
representations or warranties becomes untrue, the Managing Broker
Dealer will immediately notify the Dealer in writing of the fact
which makes the representation or warranty untrue.
25. Third
Party Beneficiaries.
The Company and its affiliates, successors and assigns shall be
express third party beneficiaries of Section 1.29 of this
Agreement.
[THE REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]
13
If the
foregoing correctly sets forth the understanding between the
Managing Broker Dealer and the Dealer, please so indicate in the
space provided below for that purpose.
AGREED
AND ACCEPTED:
Firm:____________________________________________________________________________________________________
Firm
CRD:_________________________________________
|
By:
|
__________________________________________________ |
|
Date:
|
__________________________________________________ |
Name:
____________________________________________
Title:
_____________________________________________
Email:
____________________________________________
Address:
__________________________________________________
__________________________________________________
__________________________________________________
Phone:____________________________________________
AGREED
AND ACCEPTED:
International
Assets Advisory, LLC
By:__________________________________________________
Xxxxxxx Xxxxxxx,
COO
14
EXHIBIT A
MANAGING BROKER DEALER AGREEMENT
See
attached.
15
EXHIBIT B
COVERED PERSON QUESTIONNAIRE
The
undersigned gives these answers in this “Covered Person
Questionnaire” in connection with the following-described
offering of securities:
Name of
Company:
Name of
Offering:
Offering
Date:
Reason for this
Questionnaire: Rule 262 of Regulation A,
promulgated by the Securities and Exchange Commission (the
“SEC”) under the Securities Act of 1933, as amended
(the “Act”), provides an exemption from the
registration requirements of certain private placement offerings.
However, this exemption is not available where any person
participating in the offering (“Covered Person”) is
disqualified due to specified past misconduct.
In
accordance with Rule 262 of Regulation A, MCI Income Fund V, LLC
(“Issuer”) is required to confirm the disciplinary
history of Covered Persons. In order to make this confirmation,
Issuer will rely upon the information provided in this
Questionnaire. Issuer may request updates of this verification on a
periodic basis or otherwise as may be deemed appropriate. The SEC
may require the disclosure of information provided in this
Questionnaire to potential investors or other persons.
“Covered
Person” includes:
●
The issuer, any
predecessor of the issuer, any affiliated issuer;
●
Any director,
executive
officer, other officer
participating in the offering, general partner or managing member
of the issuer;
●
Any beneficial
owner of 20% or more of the issuer’s
outstanding voting equity securities, calculated on the basis of
voting power;
●
Any promoter
connected with the issuer in any
capacity;
●
Any investment
manager of an issuer that is
a pooled investment fund;
●
Any person that has
been or will be paid (directly or indirectly) remuneration for
solicitation of
purchasers in connection with such sale of securities;
●
Any general partner
or managing member of any such investment manager or solicitor;
and
●
Any director,
executive
officer or other officer
participating in the offering of any such investment manager or
solicitor or general partner or managing member of such investment
manager or solicitor.
Please answer each of the following questions by indicating
“Yes” or “No.” If you answer
“Yes” to any of the questions, please describe the underlying events
and circumstances, including dates and any ongoing or related
activities.
16
Broker Dealer
Name:
Please
provide all previous names of the Broker Dealer and its
affiliates:
Business Address: ____________________________________________________________________________________
Business Telephone:____________________________________________________________________________________
Contact
Email Address: _________________________________________________________________________________
The
above named Broker Dealer and its Covered Persons shall be referred
to collectively and individually as “you”.
QUESTIONS
1. In the ten (10)
years preceding the date of the Offering (the “Offering
Date”), have you been convicted of any felony or
misdemeanor:
(i) In connection with
the purchase or sale of any security;
(ii) Involving
the making of any false filing with the SEC; or
(iii) Arising
out of the conduct of the business of an underwriter, broker,
dealer, municipal securities dealer, investment advisor or paid
solicitor of purchasers of securities?
☐
No
☐
Yes,
please explain:_____________________________________________________________________________
____________________________________________________________________________________________________
2. In
the five (5) years preceding the date of the Offering (the
“Offering Date”), have you been subject to any court order, judgment or decree
that restrains or enjoins you from engaging or continuing to engage
in any conduct or practice:
(i) In
connection with the purchase or sale of any security;
(ii) Involving
the making of any false filing with the SEC; or
(iii) Arising
out of the conduct of the business of an underwriter, broker,
dealer, municipal securities dealer, investment adviser, or paid
solicitor of purchasers of securities?
☐
No
☐
Yes,
please explain:_____________________________________________________________________________
____________________________________________________________________________________________________
17
3. Have
you ever been subject to any final order from the U.S.
Commodity Futures Trading Commission, federal banking agencies, the
National Credit Union Administration, or state regulators of
securities, insurance, banking, savings associations or credit
unions that:
(i) At
the time of the filing of the offering statement, bars you
from:
(A) Association with an entity regulated by
such commission or agency, or officer;
(B) Engaging in the
business of securities, insurance or banking; or
(C) Engaging in savings
association or credit union activities; or
(ii)
Constitutes
a final
order based on a violation of any law or regulation
that prohibits fraudulent, manipulative, or deceptive conduct
entered within ten years before such filing of
the offering
statement?
☐
No
☐
Yes,
please explain:_____________________________________________________________________________
____________________________________________________________________________________________________
4. Have
you ever been subject to any order of the SEC that:
(i) Suspends
or revokes your registration as a broker, dealer, municipal
securities dealer or investment adviser;
(ii) Places
on you limitations on the activities, functions or operations of,
or imposes civil money penalties; or
(iii) Bars
you from being associated with any entity or from participating in
the offering of any xxxxx stock?
☐
No
☐
Yes,
please explain:_____________________________________________________________________________
____________________________________________________________________________________________________
5. In
the five (5) years preceding the Offering Date, have you been
subject to any order of the SEC ordering you to cease and desist
from committing or causing a violation or future violation
of:
(i) Any
scienter-based (knowledge of wrongdoing) anti-fraud provision of
the federal securities laws; or
18
(ii) Section
5 of the Securities Act of 1933, as amended (the “Securities
Act”) covering prohibitions relating to interstate
commerce and the mails?
☐
No
☐
Yes,
please explain:_____________________________________________________________________________
____________________________________________________________________________________________________
6. Have
you ever been suspended or expelled from membership in, or
suspended or barred from association with
a member of, a registered national securities exchange or a
registered national or affiliated securities association for
any act or
omission to act constituting
conduct inconsistent with just and equitable principles of
trade?
☐
No
☐
Yes,
please explain:_____________________________________________________________________________
____________________________________________________________________________________________________
7. In
the five (5) years preceding the Offering Date, have you filed (as
a registrant or issuer), or were you named as an underwriter in,
any registration statement or offering statement filed with the SEC
that was the subject of a refusal order, stop order, or order
suspending the Regulation A exemption, or are you, on the date
hereof, the subject of an investigation or proceeding to determine
whether a stop order or suspension order should be
issued?
☐
No
☐
Yes,
please explain:_____________________________________________________________________________
____________________________________________________________________________________________________
8. In
the five (5) years preceding the Offering Date, have you been
subject to a United States Postal Service (“USPS”)
false representation order or are you currently subject to a
temporary restraining order or preliminary injunction with respect
to conduct alleged by the USPS to constitute a scheme or device for
obtaining money or property through the mail by means of false
representations?
☐
No
☐
Yes,
please explain:_____________________________________________________________________________
____________________________________________________________________________________________________
19
CERTIFICATION
By signing below, you acknowledge and agree to the
following:
(a) You represent and
warrant that the information provided by you in this Questionnaire
is true and correct to the best of your knowledge and belief after
a reasonable investigation, as of the date you sign the
Questionnaire;
(b) The Issuer is
relying on your representations and warranties contained herein for
the purpose of compliance with federal, state, and local law,
including without limitation the Securities Act of
1933;
(c) You will promptly
notify the Company of any changes in information provided in the
Questionnaire occurring after the date you sign the
Questionnaire;
(d) You give your
consent for the Issuer to rely upon the information provided in
this Questionnaire; and
(e) You acknowledge
that the SEC, another regulatory body or a court may require the
Issuer to publicly disclose the information you provided in this
Questionnaire, and you consent to such public
disclosure.
The foregoing answers are correct and complete to the best of my
knowledge and understanding after a reasonable
investigation.
__________________________________________________
__________________________________________________
Date
Signature
__________________________________________________
__________________________________________________
Title
Print
Name
20
