EXHIBIT 10.3
CORPORATE PROPERTY ASSOCIATES 17 - GLOBAL INCORPORATED
00 XXXXXXXXXXX XXXXX
XXX XXXX, XX 00000
SALES AGENCY AGREEMENT
November 30, 2007
Xxxxx Financial, LLC
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Corporate Property Associates 17 - Global Incorporated, a Maryland corporation
(the "Company"), hereby confirms its agreement with you as follows:
1. Introduction. This Sales Agency Agreement (the "Agreement") sets forth
the understandings and agreements between the Company and you whereby you will
offer and sell on a best efforts basis for the account and risk of the Company,
along with a group of Selected Dealers (as defined in Section 3(c) below) to be
formed with your assistance, up to 250,000,000 shares of common stock, par value
$0.001 per share (each a "Share," and collectively, the "Shares") of the
Company, of which 50,000,000 Shares are being offered pursuant to the Company's
Distribution Reinvestment and Stock Purchase Plan (the "DRIP"), registered on
Form S-11. Shares sold to the public other than through the DRIP shall be sold
at $10 per share (subject to certain volume discounts) and shares sold through
the DRIP shall be sold at $9.50 per share (the "Offering"). The Shares are more
fully described in the Registration Statement referred to below.
2. Representations and Warranties of the Company.
The Company represents, warrants and agrees that:
(a) Registration Statement and Prospectus. The Company has filed with
the Securities and Exchange Commission (the "Commission") a registration
statement on Form S-11 (File No. 333-140842), for the registration of the
Shares under the Securities Act of 1933, as amended (the "Securities Act")
and the regulations thereunder (the "Regulations"). The registration
statement, as amended, (including financial statements, exhibits and all
other documents related thereto filed as a part thereof or incorporated
therein), and any registration statement filed under Rule 462(b) of the
Securities Act, are herein called the "Registration Statement" and the
prospectus contained therein is called the "Prospectus," respectively,
except that if the Registration Statement is amended by a post-effective
amendment, the term "Registration Statement" shall, from and after the
declaration of effectiveness of such post-effective amendment, refer to the
Registration Statement as so amended and the term "Prospectus" shall refer
to the Prospectus as so amended, and if the Prospectus filed by the Company
pursuant to Rule 424(b) or 424(c) of the Regulations shall differ from the
Prospectus on file at the time the Registration Statement or any
post-effective amendment shall become effective, the term "Prospectus"
shall refer to the Prospectus filed pursuant to either of such Rules from
and after the date on which it shall have been filed with the Commission.
Further, if a separate prospectus is filed and becomes effective with
respect solely to the
DRIP (a "DRIP Prospectus"), the term "Prospectus" shall refer to such DRIP
Prospectus from and after the declaration of effectiveness of such DRIP
Prospectus.
(b) Compliance with the Securities Act. The Registration Statement has
been prepared and filed by the Company and has been declared effective by
the Commission. Neither the Commission nor any state securities authority
has issued any order preventing or suspending the use of any Prospectus
filed with the Registration Statement or any amendments or supplements
thereto and no proceeding for that purpose has been instituted, or to the
Company's knowledge, is threatened or contemplated by the Commission or by
the states securities authorities. At the time the Registration Statement
became effective (the "Effective Date") and at the time that any
post-effective amendments thereto or any additional registration statement
filed under Rule 462(b) of the Securities Act becomes effective, the
Registration Statement or any amendment thereto (1) complied, or will
comply, as to form in all material respects with the requirements of the
Securities Act and the Regulations and (2) did not or will not contain an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein not misleading. When the
Prospectus or any amendment or supplement thereto is filed with the
Commission pursuant to Rule 424(b) or 424(c) of the Regulations and at all
times subsequent thereto through the date on which the Offering is
terminated ("Termination Date"), the Prospectus (as amended or as
supplemented) will comply in all material respects with the requirements of
the Securities Act and the Regulations, and will not include any 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 the light
of the circumstances under which they were made, not misleading.
(c) The Company. The Company has been duly incorporated and validly
exists as a corporation in good standing under the laws of the State of
Maryland with full power and authority to conduct the business in which it
is engaged in as described in the Prospectus. The Company is duly qualified
to do business as a foreign corporation and is in good standing in each
other jurisdiction in which it owns or leases property of a nature, or
transacts business of a type that would make such qualification necessary
except where the failure to be so qualified or in good standing could not
have, individually or in the aggregate, a material adverse effect on the
financial condition, stockholders' equity, results of operation or business
of the Company, taken as a whole (a "Material Adverse Effect").
(d) The Shares. The Shares, when issued, will be duly and validly
issued, fully paid and non-assessable and will conform in all material
respects to the description thereof contained in the Prospectus; no holder
thereof will be subject to personal liability for the obligations of the
Company solely by reason of being such a holder; such Shares are not
subject to the preemptive rights of any shareholder of the Company; and all
corporate action required to be taken for the authorization, issue and sale
of such Shares has been validly and sufficiently taken.
(e) Violations. The Company is not in violation of its Articles of
Incorporation ("Articles") or Bylaws or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease
or other agreement or instrument to which it is a party or by which it or
any of its properties is bound.
(f) Taxes. The Company has filed all federal, state and foreign income
tax returns which have been required to be filed on or before the due date
(taking into account all extensions of time to file). The Company has paid
or provided for the payment of all taxes indicated by said returns and all
assessments received by the Company to the extent that such taxes or
assessment have become due, except where the Company is contesting such
assessments in good faith and except for such taxes and assessments of
immaterial amounts, the failure of which to pay, would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
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(g) Pending Action. Except as disclosed in the Registration Statement
and the Prospectus, there is no action, suit or proceeding pending or, to
the best of the knowledge, information and belief of the Company,
threatened to which the Company is a party, before or by any court or
governmental agency or body which would reasonably be expected to have a
Material Adverse Effect.
(h) Financial Statements. The financial statements of the Company,
including the notes thereto, filed as part of the Registration Statement
and those included in the Prospectus present fairly in all material
respects the financial position of the Company as of the date indicated and
the results of its operations for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis and comply with the
requirements of Regulation S-X promulgated by the Commission; and
PricewaterhouseCoopers LLP, whose report is filed with the Commission as a
part of the Registration Statement, are independent accountants as required
by the Securities Act and the Regulations.
(i) No Subsequent Material Events. Since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, except as may otherwise be stated in or contemplated by the
Registration Statement and the Prospectus, (a) there has not been any
material adverse change in the condition (financial or otherwise) of the
Company or in the earnings, affairs or business prospects of the Company,
whether or not arising in the ordinary course of business, and (b) there
have not been any material transactions entered into by the Company except
in the ordinary course of business.
(j) Investment Company Act. The Company does not intend to conduct its
business so as to be an "investment company" as that term is defined in the
Investment Company Act of 1940, as amended and the rules and regulations
thereunder, and it will exercise reasonable diligence to ensure that it
does not become an "investment company" within the meaning of the
Investment Company Act of 1940.
(k) Authorization of Agreement. This Agreement and the Advisory
Agreement (the "Advisory Agreement") among the Company, Xxxxx Asset
Management Corp. (the "Advisor") and CPA(R):17 Limited Partnership have
been duly and validly authorized, executed and delivered by the Company and
CPA(R):17 Limited Partnership and constitute the valid agreements of the
Company and CPA(R):17 Limited Partnership enforceable in accordance with
their terms. The execution and delivery of this Agreement and the Advisory
Agreement, the consummation of the transactions herein and therein
contemplated and the compliance with the terms of this Agreement and the
Advisory Agreement by the Company and CPA(R):17 Limited Partnership will
not conflict with or constitute a default under (1) the Articles or bylaws
of the Company or the Operating Partnership Agreement of CPA(R):17 Limited
Partnership or (2) any indenture, mortgage, deed of trust, lease or other
agreement or instrument to which the Company is a party, or (3) any law,
order, rule or regulation, writ, injunction or decree of any government,
governmental instrumentality or court, domestic or foreign, having
jurisdiction over the Company, or any of its property, except in the case
of clauses (2) and (3), where such conflict, breach, violation or default
would not reasonably be expected to have individually or in the aggregate,
a Material Adverse Effect and except to the extent that the enforceability
of the indemnity and/or contribution provisions contained in Section 8 of
this Agreement may be limited under applicable securities law; and no
consent, approval, authorization or order of any court or other
governmental agency or body has been or is required for the performance of
this Agreement or the Advisory Agreement by the Company, or CPA(R):17
Limited Partnership, or for the consummation of the transactions
contemplated hereby and thereby (except such as have been obtained under
the Securities Act or as may be required under state securities or "blue
sky" laws in connection with the distribution of the Shares).
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(l) Description of Agreements. The Company is not a party to or bound
by any contract or other instrument of a character required to be described
in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement that is not described and filed as
required.
(m) Qualification as a Real Estate Investment Trust. The Company
intends to satisfy the requirements of the Internal Revenue Code of 1986 as
amended (the "Code") for qualification of the Company as a real estate
investment trust. Commencing with the taxable year ending December 31,
2007, the Company has been organized and has operated in conformity with
the requirements for qualification as a real estate investment trust under
the Code and its actual method of operation has enabled it and its proposed
method of operation as described in the Prospectus will enable it to
continue to meet the requirements for taxation as a real estate investment
trust under the Code.
3. Sales of Shares. On the basis of the representations, warranties and
covenants herein contained, but subject to the terms and conditions herein set
forth, the Company hereby appoints you as its sales agent ("Sales Agent") to
solicit purchasers, along with the Selected Dealers, for the Shares during the
period (the "Effective Term") from the Effective Date to the Termination Date,
including the Shares pursuant to the DRIP, each in the manner described in the
Registration Statement. Subject to the performance by the Company of all
obligations to be performed by it hereunder and the completeness and accuracy of
all of its representations and warranties, you agree to use your best efforts as
Sales Agent, promptly following written or telegraphic receipt of notice of the
Effective Date from the Company, to offer and sell such number of Shares as
contemplated by this Agreement at the price stated in the Prospectus.
(a) Purchase of Shares. The purchase of Shares must be made during the
offering period described in the Prospectus, or after such offering period
in the case of purchases made pursuant to the DRIP (each such purchase
hereinafter defined as an "Order"). Persons desiring to purchase Shares are
required to (i) deliver to you or the appropriate Selected Dealer a check
in the amount of $10 per Share purchased (subject to certain volume
discounts or other discounts as described in the Prospectus) payable to
Xxxxx Fargo Bank, N. A., until subscription proceeds reach $10 million and
thereafter to the Bank of the West (each of such Xxxxx Fargo Bank, N.A. and
the Bank of the West being an "Agent Bank"), or (ii) authorize a debit of
such amount to the account such purchaser maintains with you, the
appropriate Selected Dealer. During the Offering and until the first
valuation of the Company's assets is completed, Shares issued pursuant to
the DRIP shall be purchased at $9.50 per share. Subsequent to the first
annual valuation of the Company's assets, the price of shares purchased
pursuant to the DRIP will be 95% of the then-current net asset value. For
investors residing in certain states, an order form in the form attached to
the Prospectus (each an "Order Form") must be completed and submitted to
the Company. On a daily basis, you will submit all checks received from
investors and transfer, via Federal Reserve bank wire, the total amount
debited from investor accounts for the purchase of Shares along with a list
including the name, address and telephone number of, the social security
number or taxpayer identification number of, the brokerage account number
of (if applicable), the number of Shares purchased by, any election to
participate in the DRIP by, and the total dollar amount of investment by,
each investor on whose behalf checks are submitted or the wire transfer is
made. You also will forward all Order Forms to the Company. You shall use
your best efforts to wire such funds or transmit checks to the applicable
Agent Bank not later than noon of the next business day after receipt by
you from your customer of each Order. You will advise the applicable Agent
Bank whether the funds you are submitting are attributable to individual
retirement accounts, Xxxxx plans, or any other employee benefit plan
subject to Title I of the Employee Retirement Income Security Act of 1974
or from some other type of investor.
All Orders solicited by you will be strictly subject to review and
acceptance by the Company and the Company reserves the right in its
absolute discretion to reject any Order or to accept or reject Orders in
the order of their receipt by the Company or otherwise. Within 30 days of
receipt of an Order, the
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Company must accept or reject such Order. If the Company elects to reject
such Order, within 10 business days after such rejection, it will notify
the purchaser of such fact and cause the return of such purchaser's funds
submitted with such application and any interest earned thereon. If you
receive no notice of rejection within the foregoing time limits or if funds
submitted by the purchaser are released from escrow to the Company within
the foregoing time limits, the Order shall be deemed accepted. You agree to
make every reasonable effort to determine that the purchase of Shares is a
suitable and appropriate investment for each potential purchaser of Shares
based on information provided by such purchaser regarding such purchaser's
financial situation and investment objectives. You agree to maintain copies
of the Orders received from investors.
(b) Closing Dates and Delivery of Shares. In no event shall a sale of
Shares to an investor be completed until at least five business days after
the date the investor receives a copy of the Prospectus. On the date Shares
are first issued to shareholders (such date being herein referred to as the
"Initial Closing Date"), the applicable Agent Bank will at such time and
place as instructed by you and the Company (which instruction shall be
subject to the satisfaction on such date of the conditions contained
herein), deliver to the Company or its designee immediately available funds
in an amount equal to the escrow funds maintained by the Company and on
deposit in the escrow account of the applicable Agent Bank prior to the
date designated by the Company. If, after the Initial Closing Date,
additional sales of Shares are made, on each such date (each such date
being referred to as an "Additional Closing Date") and at each such time
and place as instructed by you and the Company (which instruction shall be
subject to the satisfaction on each such date of the conditions contained
herein), the applicable Agent Bank shall be required to deliver to the
Company or its designee immediately available funds in an amount equal to
the escrow funds on deposit in the escrow account of the applicable Agent
Bank prior to the date specified by the Company. The Initial Closing Date
and each Additional Closing Date are each herein referred to as a "Closing
Date." Closing dates for purchases made pursuant to the DRIP will be as set
forth in the DRIP.
(c) Selected Dealers. The Shares offered and sold under this
Agreement, other than sales made by the Company directly to its officers
and directors, shall be offered and sold only by you as Sales Agent and by
a selling group of brokers or dealers (the "Selected Dealers"), all of whom
must be members in good standing of the Financial Industry Regulatory
Authority (the "FINRA"), who execute Selected Dealer Agreements with you
substantially in the form attached hereto as Exhibit A, all of whom are
acceptable to the Company and you (which acceptance shall not be
unreasonably withheld by you). You will assist the Company in forming the
selling group of Selected Dealers. No firm shall be invited to join the
selling group of Selected Dealers if it is (i) currently subject to any
suspension or expulsion pursuant to the rules and regulations of the
Commission, the state securities commissions of any of the fifty states,
the New York Stock Exchange, Inc. or the American Stock Exchange, Inc. as
those rules and regulations relate to broker-dealers, or the rules and
regulations of the FINRA or (ii) a "discount broker" as that term is
commonly understood in the brokerage industry. The Company and the Advisor
or an affiliate thereof agree to participate in your marketing efforts to
the extent that you may reasonably request and, without limiting the
generality of the foregoing, agree to visit the offices of Selected Dealers
as you may reasonably designate.
(d) Compensation. In consideration for your execution of this
Agreement, and for the performance of your obligations hereunder, the
Company agrees to pay or cause to be paid to you a selling commission (the
"Selling Commission") of six and one-half percent ($0.65) of the price of
each Share (except for Shares sold pursuant to the DRIP, as to which no
Selling Commissions shall be paid) sold by you or by a Selected Dealer;
provided, however, that your Selling Commission shall be reduced with
respect to volume sales of Shares to single purchasers (as defined in the
Prospectus). In the case of such volume sales to single purchasers, on
orders of $250,000 or more your Selling Commission shall be reduced by the
amount of the Share purchase price discount. In the case of such volume
sales to single
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purchasers, your Selling Commission will be reduced for each incremental
share purchase in the total volume ranges set forth in the table below.
Such reduced share price will not affect the amount received by the Company
for investment. The following table sets forth the reduced Share purchase
price and Selling Commission payable to you:
PURCHASE PRICE PER SHARE FOR SELLING COMMISSION PER SHARE
VOLUME DISCOUNT RANGE FOR A INCREMENTAL SHARE IN VOLUME ON TOTAL SALE FOR INCREMENTAL
SINGLE PURCHASER DISCOUNT RANGE SHARE IN VOLUME DISCOUNT RANGE
--------------------------- ---------------------------- ------------------------------
$ 2000 - $250,000 $10.00 $0.65
$250,001 - $500,000 $ 9.85 $0.50
$500,001 - $750,000 $ 9.70 $0.35
$750,001 - $1,000,000 $ 9.60 $0.25
$1,000,001- $5,000,000 $ 9.50 $0.15
As an example, a single purchaser would receive 50,380.7107 Shares rather
than 50,000 Shares for his/her or its investment of $500,000 and the Selling
Commission would be $28,940. On the first $250,000 of the investment there would
be no discount and the purchaser would receive 25,000 Shares at $10 per share.
On the remaining $250,000, the per share price would be $9.85 and the purchaser
would receive 25,380.7107 Shares.
Selling Commissions for purchases of $5,000,000 or more are negotiable but
in no event will the proceeds to the Company be less than $9.35 per Share.
Selling Commissions paid will in all cases be the same for the same level of
sales.
The Company will pay to you for reallowance to Selected Dealers only, the
amount of any due diligence expense reimbursement paid to the Selected Dealers
which you have agreed to pay in the amount of up to one-half percent of the
total proceeds received by the Company from Shares sold by each Selected Dealer
to which you have agreed to make such reimbursement.
From your total Selling Commissions, you agree to reallow to each Selected
Dealer with whom you have entered into a Selected Dealer Agreement the full
$0.65 Selling Commission per Share for Shares sold by the Company pursuant to
Orders solicited by such Selected Dealer and up to the full amount of the $0.20
per Share Selected Dealer Fee (as defined in the Selected Dealer Agreement) paid
to you by the Company with respect to Shares solicited by the Selected Dealer.
The Company will pay to you a Wholesaling Fee of $0.15 per Share sold. This fee
is intended to cover your wholesaling expenses. No Selling Commissions, Selected
Dealer Fees or Wholesaling Fees will be paid in connection with purchases of
Shares made through the DRIP.
No payment of Selling Commissions will be made by the Company with respect
to Orders (or portions thereof), which are rejected by the Company. In addition,
we will not pay you a Selected Dealer Fee if the aggregate underwriting
compensation to be paid to us, you and the other Selected Dealers in connection
with the Offering and sale of the Shares (including such Selected Dealer Fee)
exceed the limitations prescribed by the FINRA. Selling Commissions, Selected
Dealer Fees and Wholesaling Fees will be paid within five business days
following any Closing Date with respect to the Shares sold to purchasers whose
Shares are issued on such Closing Date. Selling Commissions, Selected Dealer
Fees and Wholesaling Fees will be payable only with respect to transactions
lawful in the jurisdictions where they occur, (Purchases of Shares by W. P.
Xxxxx & Co. LLC, its Affiliates or any Selected Dealer or any of their employees
shall be net of Selling Commissions).
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The Company represents that neither it nor any of its affiliates have
offered or sold any Shares pursuant to this Offering, other than directly to the
Company's officers and directors and to registered investment advisers, and
agrees that, through the date on which the Offering is terminated (the
"Termination Date"), the Company will not offer or sell any Shares otherwise
than through you as herein provided, except to its officers and directors and to
registered investment advisers.
(e) Finders Fee. Neither the Company nor any Selected Dealer
participating in the Offering shall, 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 to such
advisor to advise the purchase of Shares; provided, however, that normal
Selling Commissions payable to a registered broker-dealer or other properly
licensed person for selling Shares shall not be prohibited hereby.
(f) Wholesaling Activities. You hereby agree to provide the following
additional services for the Company:
(i) reviewing sales literature prepared by the Company to be used
in the offer and sale of the Shares for compliance with the Securities
Act and the Regulations thereunder, the Conduct Rules of the FINRA and
the "blue sky" laws of any jurisdiction in which such material is used
("Blue Sky Law"). The sales literature may include, but not be limited
to, a slide presentation, a property acquisition report, a brochure
and seminar invitations for presentation and distribution to the
public and an audio program, a video program and a brochure for
presentation and distribution to broker-dealers;
(ii) assisting broker-dealers participating in the Offering by
coordinating broker-dealer seminars, informational meetings,
distributing brochures and other sales literature designed for
broker-dealers and providing information and answering any questions
with regard to the Offering; and
(iii) assisting the Company in enlisting broker-dealers to
participate in the Offering as Selected Dealers.
4. Covenants. The Company covenants to you and each Selected Dealer that it
will:
(a) Commission Orders. Use its best efforts to cause the Registration
Statement and any subsequent amendments thereto, to become effective as
promptly as possible, and will promptly notify you and confirm the notice
in writing if requested, (i) when the Registration Statement and any
post-effective amendment thereto become effective, (ii) of the issuance by
the Commission or any state securities authority of any jurisdiction of any
stop order or of the initiation, or the threatening, of any proceedings for
that purpose or of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction or of the institution or threatening
of any proceedings for any of such purposes, (iii) of the receipt of any
comments from the Commission with respect to the Registration Statement,
and (iv) of any request by the Commission for any amendment to the
Registration Statement as filed or any amendment or supplement to the
Prospectus or for additional information relating thereto. The Company and
you will make every reasonable effort to prevent the issuance by the
Commission of a stop order or a suspension order and if the Commission
shall enter a stop order or suspension order at any time, the Company will
make every reasonable effort to obtain the lifting of such order at the
earliest possible moment.
(b) Registration Statement. Deliver to you and Selected Dealers
without charge the Registration Statement and each amendment thereto, and
as soon as the Registration Statement or any amendment or supplement
thereto become effective, such number of copies of the Prospectus (as
amended or supplemented), the Registration Statement and supplements and
amendments thereto, if any (without exhibits), as you may reasonably
request. The Company hereby consents to the use of the
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Prospectus or any amendment or supplement thereto by you and Selected
Dealers both in connection with the Offering and for such period of time
thereafter as the Prospectus is required to be delivered in connection
therewith.
(c) "Blue Sky" Qualifications. Endeavor in good faith, in cooperation
with you, Selected Dealers and counsel to Selected Dealers, at or prior to
the time the Registration Statement becomes effective, to seek the approval
of the Offering by the FINRA, and to qualify the Shares for offering and
sale under the securities laws of all 50 states and the District of
Columbia, except in those jurisdictions you may reasonably designate,
provided, however, the Company shall not be obligated to subject itself to
taxation as a party doing business in any such jurisdiction. In each
jurisdiction where such qualification shall be effected, the Company will,
unless you agree that such action is not at the time necessary or
advisable, file and make such statements or reports as are or may
reasonably be required by the laws of such jurisdiction.
(d) Amendments and Supplements. If during the time when a Prospectus
is required to be delivered under the Securities Act, any event relating to
the Company shall occur as a result of which it is necessary, in the
opinion of the Company's counsel, to amend or supplement the Prospectus in
order to make the Prospectus not misleading in light of the circumstances
existing at the time it is delivered to an investor, the Company will
forthwith prepare and furnish without expense to you and the Selected
Dealers, a reasonable number of copies of an amendment or amendments of, or
a supplement or supplements to, the Registration Statement or the
Prospectus which will amend or supplement the Registration Statement or
Prospectus so that as amended or supplemented it will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
During the time when a Prospectus is required to be delivered under the
Securities Act, the Company shall comply in all material respects with all
requirements imposed upon it by the Securities Act, as from time to time in
force, so far as necessary to permit the continuance of sales of the Shares
in accordance with the provisions hereof and the Prospectus.
(e) Copies of Reports. During the Offering, you will be furnished with
the following:
(i) as soon as practicable after they have been sent by the
Company to the shareholders or to any class of security holders of the
Company or filed with the Commission, copies of each annual and
interim financial and each other report provided to such shareholder;
(ii) as soon as practicable, copies of every press release issued
by the Company and every material news item and article in respect of
the Company or its affairs released by the Company; and
(iii) additional documents and information with respect to the
Company and its affairs as you may from time to time reasonably
request.
(f) Sales Material. Will deliver to you from time to time, all
advertising and supplemental sales material (whether designated solely for
broker-dealer use or otherwise) proposed to be used or delivered in
connection with the Offering, prior to the use or delivery to third parties
of such material, and will not so use or deliver, in connection with the
Offering, any such material to which you or your counsel shall reasonably
object or disapprove within seven days of delivery of such material to you
or which shall be reasonably disapproved by your counsel within such
seven-day period.
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(g) Use of Proceeds. Apply the proceeds from the sale of Shares as set
forth in the section of the Prospectus entitled "Estimated Use of Proceeds"
and operate the business of the Company in accordance with the descriptions
of its business set forth in the Prospectus.
(h) Prospectus Delivery. In case you or any Selected Dealer is
required to deliver a Prospectus in connection with sales of any of the
Shares at any time nine months or more after the Effective Date, upon your
or such Selected Dealer's request, the Company will, at its expense,
prepare and deliver to you or such Selected Dealer as many copies as you
may request of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Securities Act.
(i) Financial Statements. Make generally available to its security
holders as soon as practicable, but not later than 60 days after the close
of the period covered thereby, an earnings statement of the Company (in
form complying with the provisions of Rule 158 under the Securities Act)
covering a period of 12 months beginning after the Effective Date but not
later than the first day of the Company's fiscal quarter next following the
Effective Date.
(j) Compliance with Exchange Act. Comply with the requirements of the
Securities Exchange Act of 1934 ("Exchange Act") relating to the Company's
obligation to file periodic reports including annual reports on Form 10-K,
quarterly reports on Form 10-Q and current reports on Form 8-K.
5. Covenants of the Sales Agent. You covenant and agree with the Company as
follows;
(a) Compliance with Laws. In connection with the offer and sale of
Shares, you shall comply with any applicable requirements of the Securities
Act, the Exchange Act and the applicable state securities or "blue sky"
laws, and the rules and regulations thereunder.
(b) Accuracy of Information. No information supplied by you for use in
the Registration Statement will contain any untrue statements of a material
fact or omit to state any material fact necessary to make such information
not misleading.
(c) No Additional Information. You will not give any information or
make any representation in connection with the offering of the Shares other
than that contained in the Prospectus.
(d) Sale of Shares. You shall act as Sales Agent and solicit, directly
or through Selected Dealers, purchasers of the Shares only in the
jurisdictions in which you have been advised by the Company that such
solicitations can be made and in which you or the soliciting Selected
Dealer, as the case may be, are qualified to so act.
(f) Licensing. Any person employed or retained by either the Company
or you to provide sales support or wholesaling services in support of you
or your clients shall be licensed in accordance with all applicable laws
and will comply with all applicable federal and state securities laws and
regulations.
6. Payment of Expenses.
(a) Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or if this Agreement is terminated, the Company
will pay, in addition to the compensation described in Section 3(d) (which
you may retain up to the point of termination unless this agreement is
terminated without any Shares being sold, in which case no such
compensation shall be paid), all fees and expenses incurred in connection
with the formation, qualification and registration of the Company and in
marketing, distributing and processing the Shares under applicable Federal
and state law, and any other
9
fees and expenses actually incurred and directly related to the offering
and sale of the Shares and your other obligations under this Agreement,
including such fees and expenses as: (i) the preparing, printing, filing
and delivering of the Registration Statement (as originally filed and all
amendments thereto) and of any preliminary prospectus and of the Prospectus
and any amendments thereof or supplements thereto and the preparing and
printing of the Selected Dealer Agreements, this Agreement and Order Forms,
including the cost of all copies thereof and any financial statements or
exhibits relating to the foregoing supplied to you or the Selected Dealers
in quantities reasonably requested by you; (ii) the preparing and printing
of the solicitation material and related documents and the filing and/or
recording of such certified certificates or other documents necessary to
comply with the laws of the State of Maryland for the formation of a
corporation and thereafter for the continued good standing of a Company;
(iii) the issuance and delivery of the Shares, including any transfer or
other taxes payable thereon; (iv) any escrow arrangements in connection
with the transactions described herein, including any compensation or
reimbursement to an escrow agent for its services as such; (v) the
qualification or registration of the Shares under state securities or "blue
sky" laws; (vi) the filing fees payable to the Commission and to the FINRA;
(vii) the preparation and printing of advertising material in connection
with and relating to the Offering, including the cost of all sales
literature and investor and broker-dealer sales and information meetings;
(viii) the cost and expenses of counsel and accountants of the Company; and
(ix) any other expenses of issuance and distribution of the Shares. The
Company shall also reimburse directly all other entities for the expenses
of the type described in clauses (i) through (ix) of the preceding sentence
incurred directly by those entities at your request.
(b) Sales Incentive Programs. Subject to the satisfactory completion
of any regulatory reviews and examinations which may be required, the prior
review and approval and the rules of the FINRA (including Rule 2710
(c)(6)(B)(xiii)) and approval by the Company or the Advisor, the Company,
the Advisor and Affiliates of the Advisor may establish sales incentive
programs for your associated persons or the associated persons of Selected
Dealers only. Sales incentives will be deemed to be additional
compensation. The aggregate value of incentives paid directly to an
individual associated person during the Offering will not exceed $100 in
any given year.
(c) Limitation. Notwithstanding the foregoing, the total compensation
paid to the Sales Agent and Selected Dealers from any source in connection
with the Offering pursuant to Section 3(d) hereof and this Section 6 shall
not exceed the limitations prescribed by the FINRA. The Company and you
agree to monitor the payment of all fees and expense reimbursements to
assure that the FINRA limitations are not exceeded.
7. Conditions of Your Obligations. Your obligations hereunder shall be
subject to the continued accuracy throughout the Effective Term of the
representations, warranties and agreements of the Company, to the performance by
the Company of its obligations hereunder and to the following terms and
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement shall have initially become effective not later than 5:30 p.m.,
Eastern time, on the date of this Agreement, at any time during the term of
this Agreement, no stop order shall have been issued or proceedings
therefor initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission and state securities
administrators shall have been complied with to the reasonable satisfaction
of your counsel and no stop order or similar order shall have been issued
or proceedings therefor initiated or threatened by any state securities
authority in any jurisdiction in which the Company intends to offer Shares.
(b) Stop Orders. On the Effective Date and during the Effective Term
no order suspending the sale of the Shares in any jurisdiction (except the
Designated Jurisdictions) nor any stop order issued
10
by the Commission shall have been issued, and on the Effective Date and
during the Effective Term no proceedings relating to any such suspension or
stop orders shall have been instituted, or to the knowledge of the Company,
shall be contemplated.
(c) Information Concerning the Advisor. On the Effective Date, you
shall receive a letter dated the Effective Date from the Advisor,
confirming that: (1) the Advisory Agreement has been duly and validly
authorized, executed and delivered by the Advisor and constitutes a valid
agreement of the Advisor enforceable in accordance with its terms; (2) the
execution and delivery of the Advisory Agreement, the consummation of the
transactions therein contemplated and compliance with the terms of the
Advisory Agreement by the Advisor will not conflict with or constitute a
default under its articles of incorporation or bylaws or any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which
the Advisor is a party, or any law, order, rule or regulation, writ,
injunction or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Advisor, or any of
its property; (3) no consent, approval, authorization or order of any court
or other governmental agency or body has been or is required for the
performance of the Advisory Agreement by the Advisor, or for the
consummation of the transactions contemplated thereby; and (4) the Advisor
is a corporation duly formed, validly existing and in good standing under
the laws of the State of Delaware and is duly qualified to do business as a
foreign corporation in each other jurisdiction in which the nature of its
business would make such qualification necessary.
If any of the conditions specified in this Section 7 shall not have been
fulfilled when and as required by this Agreement, this Agreement and all
your obligations hereunder may be canceled by you by notifying the Company
of such cancellation in writing or by telecopy at any time, and any such
cancellation or termination shall be without liability of any party to any
other party except as otherwise provided in Sections 3(d), 6, 8, 9 and 10
hereof.
All certificates, letters and other documents referred to in this Section 7
will be in compliance with the provisions hereof only if they are
reasonably satisfactory in form and substance to you and your counsel. The
Company will furnish you with conformed copies of such certificates,
letters and other documents, as you shall reasonably request.
8. Indemnification.
(a) Indemnification by the Company. Subject to the conditions set
forth below and those included in the Articles and Bylaws, the Company
agrees to indemnify and hold harmless you, each Selected Dealer and each
person, if any, who controls you or any such Selected Dealer within the
meaning of Section 15 of the Securities Act, from and against any and all
loss, liability, claim, damage and expense whatsoever (including but not
limited to any and all expenses whatsoever reasonably incurred in
investigating, preparing for, defending against or settling any litigation,
commenced or threatened, or any claim whatsoever) arising out of or based
upon: (1) any untrue or alleged untrue statement of a material fact
contained (i) in the Registration Statement at the time it became effective
or in the Prospectus (as from time to time amended or supplemented) or any
related preliminary prospectus; or (ii) in any application or other
document (in this Section 8 collectively called "application") executed by
the Company or based upon information furnished by the Company and filed in
any jurisdiction in order to qualify the Shares under the securities laws
thereof or (2) the omission or alleged omission from the Registration
Statement (or any amendment thereto) at the time it became effective or
from the Prospectus, of a material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances
under which they were made not misleading; provided however that the
Company shall not be liable in any such case to the extent any such
statement or omission was made in reliance upon and in conformity with
written information furnished to the Company by you expressly for use in
the Registration Statement or related preliminary prospectus or Prospectus
or any amendment or supplement
11
thereof or in any of such applications or in any such sales as the case may
be. Notwithstanding the foregoing, the Company shall not indemnify the
Sales Agent for any losses, liabilities or expenses arising from or out of
an alleged violation of federal or state securities laws unless: there has
been a successful adjudication on the merits of each count involving
alleged securities law violations as to the particular indemnitee, (ii)
such claims have been dismissed with prejudice on the merits by a court of
competent jurisdiction as to the particular indemnitee or (iii) a court of
competent jurisdiction approves a settlement of the claims against a
particular indemnitee and finds that indemnification of the settlement and
the related costs should be made, and the court considering the request for
indemnification has been advised of the position of the Commission and of
the published position of any state securities regulatory authority in
which securities of the Company were offered or sold as to indemnification
for violations of securities laws.
(b) Indemnification by You. Subject to the conditions set forth below,
you agree to indemnify and hold harmless the Company, each of its
directors, those of its officers who have signed the Registration Statement
and each other person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act to the same extent as the foregoing
indemnity from the Company but only with respect to an untrue statement or
alleged untrue statement of a material fact or omission or alleged omission
to state a material fact in the Registration Statement (as from time to
time amended or supplemented) or Prospectus, or any related preliminary
prospectus, or any application made in reliance upon or, in conformity
with, written information furnished by you expressly for use in such
Registration Statement or Prospectus or any amendment or supplement
thereto, or in any related preliminary prospectus or in any of such
applications.
(c) Procedure for Making Claims. Each indemnified party shall give
prompt notice to each indemnifying party of any claim or action (including
any governmental investigation) commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify any
indemnifying party shall not relieve it from any liability, except to the
extent it has been materially prejudiced by such failure, and in any event
shall not relieve it from any liability that it may have otherwise than on
account of this indemnity agreement. The indemnifying party, jointly with
any other indemnifying parties receiving such notice, shall assume the
defense of such action with counsel chosen by it and reasonably
satisfactory to the indemnified parties defendant in such action, unless
such indemnified parties reasonably object to such assumption on the ground
that there may be legal defenses available to them which are different from
or in addition to those available to such indemnifying party. Any
indemnified party shall have the right to employ a separate counsel in any
such action and to participate in the defense thereof but the reasonable
fees and expenses of such counsel shall be borne by such party unless such
party has objected in accordance with the preceding sentence, in which
event such fees and expenses shall be borne by the indemnifying parties.
Except as set forth in the preceding sentence, if an indemnifying party
assumes the defense of such action, the indemnifying party shall not be
liable for any fees and expenses of separate counsel for the indemnified
parties incurred thereafter in connection with such action. In no event
shall the indemnifying parties be liable for the reasonable fees and
expenses of more than one counsel for all indemnified parties in connection
with any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
The indemnity agreements contained in this Section 8 and the warranties and
representations contained in this Agreement shall remain in full force and
effect regardless of any investigation made by or on behalf of the
indemnified party and shall survive any termination of this Agreement. An
indemnifying party shall not be liable to an indemnified party on account
of any settlement, compromise or consent to the entry of judgment of any
claim or action effected without the consent of such indemnifying party.
The Company agrees promptly to notify you of the commencement of any
litigation or proceedings against the Company in connection with the issue
and sale of the Shares or in connection with the Registration Statement or
Prospectus.
12
(d) Contribution. Subject to the limitations set forth in Section 8(a)
hereof and in order to provide for just and equitable contribution where
the indemnification provided for in this Section 8 is unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, liabilities, claims, damages or
expenses (or actions in respect thereof) referred to therein, except by
reason of the terms thereof, the Company on the one hand and you on the
other shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, liabilities, claims, damages or expenses
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and
you on the other from the Offering based on the public offering price of
the Shares sold and the Selling Commissions received by you with respect to
such Shares sold. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits
referred to above but also the relative fault of the Company on the one
hand and you on the other in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and you on the other shall be deemed to be in the same proportion as
(i) the aggregate net compensation retained by the Company and its
affiliates for the purchase of Shares and (ii) the total proceeds from the
Offering (net of Selling Commissions, Selected Dealer Fees and Wholesaling
Fees but before deducting expenses) received by the Company bear to the
total Selling Commissions received by you. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the Company on the one
hand or you on the other. The Company agrees with you that it would not be
just and equitable if contribution pursuant to this subsection (d) were
determined by pro rata allocation, or by any other method of allocation
which does not take account of the equitable considerations referred to
above in this subsection (d). The amount paid or payable by an indemnified
party as a result of the losses, liabilities, claims, damages or expenses
(or action in respect thereof) referred to above in this subsection (d)
shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this subsection
(d), you shall not be required to contribute any amount in excess of the
amount by which the total price of the Shares sold by you to the public
exceeds the amount of any damages which you have otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act or Section 10(b) of the
Securities Exchange Act of 1934, as amended) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, any person that controls
you within the meaning of Section 15 of the Securities Act shall have the
same right to contribution as you, and each person who controls the Company
within the meaning of Section 15 of the Securities Act shall have the same
right to contribution as the Company.
9. Representations and Agreements to Survive. All representations,
warranties and agreements contained in this Agreement or in certificates shall
remain operative and in full force and effect regardless of any investigation
made by any party, and shall survive the Termination Date.
10. Effective Date, Term and Termination of this Agreement.
(a) This Agreement shall become effective as of the date it is
executed by all parties hereto. You or the Company may elect to terminate
this Agreement prior to the time the Registration Statement is declared
effective by the Commission without liability of any party to any other
party, except as provided in Section 10(e) hereof.
13
(b) You shall have the right to terminate this Agreement at any time
during the Effective Term without liability of any party to any other party
except as provided in Section 10(e) hereof if: (i) any representations or
warranties hereunder shall be found to have been incorrect; or (ii) the
Company shall fail, refuse or be unable to perform any condition of its
obligations hereunder, or (iii) the Prospectus shall have been amended or
supplemented despite your objection to such amendment or supplement as
provided in subsection (a) of Section 2 hereof, or (iv) all trading on the
New York Stock Exchange or the American Stock Exchange shall have been
suspended, or minimum or maximum prices for trading generally shall have
been fixed, or maximum ranges for prices for all securities shall have been
required, on the New York Stock Exchange or the American Stock Exchange by
such exchanges or by order of the Commission or any other governmental
authority having jurisdiction; or (v) the United States shall have become
involved in a war or major hostilities or a material escalation of
hostilities or acts of terrorism involving the United States or other
national or international calamity or crisis (other than hostilities
including Iraq and Afghanistan); or (vi) a banking moratorium shall have
been declared by a state or federal authority or person; or (vii) the
Company shall have sustained a material or substantial loss by fire, flood,
accident, hurricane, earthquake, theft, sabotage or other calamity or
malicious act which, whether or not said loss shall have been insured, will
in your good faith opinion make it inadvisable to proceed with the offering
and sale of the Shares; or (viii) there shall have been, subsequent to the
dates information is given in the Registration Statement and the
Prospectus, such change in the business, properties, affairs, condition
(financial or otherwise) or prospects of the Company whether or not in the
ordinary course of business or in the condition of securities markets
generally as in your good faith judgment would make it inadvisable to
proceed with the offering and sale of the Shares, or which would materially
adversely affect the operations of the Company.
(c) If this Agreement shall be terminated for reason of any failure on
the part of the Company to perform any undertaking or satisfy any condition
of this Agreement to be performed or satisfied by them pursuant to Section
7 hereof, you may elect to terminate this Agreement without liability of
any party to any other party except as provided in Section 10(e) hereof.
(d) The Company shall have the right to terminate this Agreement
without cause on 60 days' notice in writing to you without penalty, subject
to liability as provided in Section 10(e) hereof.
(e) In the event this Agreement is terminated by any party pursuant to
Sections 10(a), 10(b), 10(c) or 10(d) hereof, the Company shall pay all
expenses of the Offering as required by Section 6 hereof and no party will
have any additional liability to any other party except for any liability
which may exist under Section 8 hereof; and provided further, that if you
terminate your participation in the Offering in other than good faith, the
Company shall not be responsible for the expenses described in clause (vii)
of subsection (a) of Section 6 hereof other than expenses of counsel to the
Selected Dealers. In no event will the Company be liable to reimburse you
for expenses other than your actual and reasonable out-of-pocket expenses.
(f) If you elect to terminate this Agreement as provided in this
Section 10, you shall notify the Company promptly by telephone or telegram
with confirmation by letter. If the Company elects to terminate this
Agreement as provided in this Section 10, the Company shall notify you
promptly by telephone or telegram with confirmation by letter.
11. Notices.
(a) All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and if sent to you shall be
mailed, or personally delivered, to you at 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, and if sent to the Company shall be mailed, or personally
delivered, to the
14
Company at 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Mr.
Wm. Xxxx Xxxxx and Xx. Xxxxxx X. XxXxx.
(b) Notice shall be deemed to be given by you to the Company or by the
Company to you when it is mailed or personally delivered as provided in
subsection (a) of this Section 11.
12. Parties. This Agreement shall inure solely to the benefit of, and shall
be binding upon you, the Company, and the controlling persons, directors and
officers referred to in Section 8 hereof, and their respective successors, legal
representatives and assigns, and no other person shall have or be construed to
have any legal or equitable right, remedy or claim under or in respect of or by
virtue of this Agreement or any provision herein contained, except that the
Selected Dealers shall have the rights granted to them pursuant to Section 8
hereof. Notwithstanding the foregoing, this Agreement may not be assigned
without the consent of the parties hereto.
13. Construction. This Agreement shall be construed in accordance with the
laws of the State of New York applicable to agreements to be made and performed
entirely within such state.
14. Finders' Fees. You shall have no liability for any finders' fees owed
in connection with the transactions contemplated by this Agreement.
15. Severability. Any provision of this Agreement, which is invalid or
unenforceable in any jurisdiction, shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions hereof, and any such invalidity or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provisions in
any other jurisdiction.
16. Additional Offerings. The terms of this Agreement may be extended to
cover additional offerings of shares of the Company by the execution by the
parties hereto of an addendum identifying the shares and registration statement
relating to such additional offering. Upon execution of such addendum, the terms
"Shares", "Offering", "Registration Statement" and "Prospectus" set forth herein
shall be deemed to be amended as set forth in such addendum.
15
If the foregoing correctly sets forth the understanding between you and the
Company, please so indicate in the space provided on the attached page for that
purpose, whereupon this letter shall constitute a binding agreement between us.
CORPORATE PROPERTY ASSOCIATES 17 -
GLOBAL INCORPORATED
By: /s/ Xxx X. Xxxxx
-----------------------------------
Xxx X. Xxxxx
Its: President
Accepted as of the Date first above
Written:
XXXXX FINANCIAL, LLC
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Xxxxxx X. Xxxxxx
Its: Executive Director and Chief
Management Officer
16
EXHIBIT INDEX
Exhibit A - Selected Dealer Agreement
