SELECTED SALES AGENT AGREEMENT
THIS SELECTED SALES AGENT AGREEMENT ("Agreement") between
XXXXXXX XXXXXX & COMPANY FINANCIAL SERVICES, INC., an Iowa corporation (the
"Dealer Manager"), and the Selected Sales Agent identified in Exhibit A attached
hereto and incorporated herein by reference (the "Agent").
RECITALS
WHEREAS, XXXXXXX GROWTH TRUST II, is a Delaware business trust
(the "Trust") of which XXXXXXX XXXXXX & COMPANY PLANNING, INC. is the Trust
Advisor.
WHEREAS, the Trust proposes to offer and sell shares of
beneficial interest (the "Shares") to the general public, pursuant to a public
offering (the "Offering")registered with the Securities and Exchange Commission
(the "SEC") under the Securities Act of 1933, as amended (the "Securities Act").
WHEREAS, the Dealer Manager is a corporation presently in good
standing in the State of Iowa, is a member presently in good standing of the
National Association of Securities Dealers, Inc. (the "NASD"), and is presently
registered as a broker-dealer with the SEC.
WHEREAS, the Dealer Manager has heretofore been designated the
Dealer Manager to manage the sale by others of the Shares pursuant to the
terms of the Offering.
WHEREAS, the Agent is a member presently in good standing of
the NASD, is presently registered as a broker-dealer with the SEC and is
presently licensed by the appropriate regulatory agency of each state in which
it will offer and sell the Shares, as a securities broker-dealer qualified to
offer and sell to members of the public securities of the type represented by
the Shares.
WHEREAS, the Trust Advisor, on behalf of the Trust, has filed
with the SEC a registration statement on Form N-2, including a preliminary
prospectus, for the registration of the Shares under the Securities Act. Such
registration statement, as it may be amended, and the prospectus included
therein at the time the registration statement becomes effective, including any
supplements and amendments to such documents after the effective date of
registration statement, are herein referred to as the "Registration Statement"
and the "Prospectus", respectively.
WHEREAS, the offer and sale of the Shares shall be made
pursuant to the terms and conditions of the Registration Statement and the
Prospectus, and further pursuant to the terms and conditions of all applicable
securities laws of all states in which the Shares are offered and sold.
WHEREAS, the Dealer Manager desires to retain the Agent to use
its best efforts to sell the Shares, and the Agent is willing and desires to
serve as an agent for the Dealer Manager for the sale of the Shares upon the
terms and conditions hereinafter set forth.
TERMS
NOW, THEREFORE, in consideration of the premises and terms and
conditions hereof, it is agreed as follows:
1. EMPLOYMENT.
1. Subject to the terms and conditions herein set
forth, the Dealer Manager hereby employs the Agent as an agent to use its
best efforts to sell for the Trust's account a portion of the Shares. The
Agent hereby accepts such employment and covenants, warrants and agrees that
all Shares sold by it will be sold according to all of the terms and
conditions of the Registration Statement, the Conduct Rules of the NASD and
all applicable state and federal laws, including the Securities Act and any
and all regulations and rules pertaining thereto heretofore or hereafter
issued by the SEC. Neither the Agent nor any other person shall have any
authority or give any information or make any representations in connection
with any offer or sale of the Shares other than as contained in the
Prospectus and as is otherwise expressly authorized in writing by the Dealer
Manager.
2. The Agent shall use its best efforts as agent,
promptly following receipt of written notice from the Dealer Manager of the
effective date of the Registration Statement, to sell a portion of the Shares
at the price per Share to be specified in, and in such quantities and to such
persons and according to such terms as are all contained in, the Registration
Statement and the Prospectus. The Agent shall comply with all requirements
set forth in the Registration Statement and the Prospectus. The Agent shall
use and distribute, in conjunction with the offer and sale of the Shares,
only the Prospectus and such sales literature and advertising as shall
conform in all respects to any restrictions of local law and the applicable
requirements of the Securities Act. The Dealer Manager reserves the right to
establish such additional procedures as it may deem necessary to insure
compliance with the requirements of the Registration Statement, and the Agent
shall comply with all such additional procedures to the extent that it has
received written notice thereof.
3. All checks received for purchase of any of the
Shares shall be made out to "Firstar Bank, N.A., Escrow Agent," until the
minimum number of Shares is sold and thereafter to Xxxxxxx Growth Trust II,
and shall be forwarded by the Agent, no later than noon of the business day
following receipt, to the Dealer Manager; PROVIDED, however, that in the case
of the Agent who receives payment from investors who authorize the Agent to
debit their customer accounts, checks that represent funds obtained in this
manner will be forwarded by the Agent to the Dealer Manager no later than the
end of the next business day following their receipt. The Dealer Manager
shall deposit such checks no later than the second business day (no later
than the first business day in the case of checks that represent funds
obtained by Agents through the debiting of investors' accounts) following
receipt in an escrow account established at Firstar Bank, N.A. (the "Escrow
Agent"), solely for such deposits and under an Escrow Agreement between the
Trust and the Escrow Agent and, following the sale of the minimum number of
Shares, in the account of Xxxxxxx Growth Trust II. Funds held in escrow in
account with the Escrow Agent, or in an escrow account with such other
substantial commercial bank designated by the Trust as successor escrow agent
(the "Escrow Account"),
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will be held under and subject to the terms of an Escrow Agreement entered into
between the Trust and the Escrow Agent.
4. During the full term of this Agreement, the
Dealer Manager shall have full authority to take such action as it may deem
advisable in respect of all matters pertaining to the performance of the
Agent under this Agreement.
5. The Shares shall be offered and sold only where
the Shares may be legally offered and sold and only to such persons in such
states as shall be legally qualified to purchase the Shares. The Trust and
the Trust Advisor contemplate selling the Shares in those states listed in
the attached Exhibit B, and unless the Agent shall receive written notice
from the Dealer Manager authorizing the offering and sale of Shares in states
other than those set forth on such Exhibit, no Shares shall be offered or
sold in any other states.
6. Notwithstanding anything herein to the
contrary, the Agent shall have no obligation under this Agreement to purchase
any of the Shares for its own account.
2. COMPENSATION TO THE AGENT. The Dealer Manager shall
pay the Agent, as compensation for services to be rendered by the Agent
hereunder, a commission on each Share sold as follows: less than $500,000 in
shares sold to a particular buyer, 7% on the entire amount invested by that
buyer; $500,000 to $999,999 in shares sold to a particular buyer, 5% on the
entire amount invested by that buyer; $1,000,000 or more in shares sold to a
particular buyer, 2% on the entire amount invested by that buyer, which
commission rates shall remain in effect during the full term of this
Agreement unless otherwise changed by an agreement in writing between the
parties hereto. A sale of a Share shall be deemed to be completed when a
properly completed Subscription Agreement has been received from the Agent by
the Dealer Manager, payment of the full purchase price of each purchased
Share has been received by the Dealer Manager in good funds, from a buyer who
satisfies each of the terms and conditions of the Registration Statement and
Prospectus, and the Trust has accepted such subscription. Such compensation
due under this paragraph shall be payable to the Agent by the Dealer Manager
within a reasonable time after the end of the month of receipt of the full
purchase price; PROVIDED, HOWEVER, that no commissions will be paid to the
Agent with respect to any Shares sold until the Dealer Manager receives such
commissions from the Trust; PROVIDED FURTHER that no commission shall be due
or paid to the Agent with respect to any Shares sold unless and until the
purchase price for the Shares is released from the Escrow Account to the
Trust in accordance with the Prospectus and the Escrow Agreement, or after
the minimum number of Shares has been sold, until the purchase price for the
Shares is paid to the Trust. If a particular buyer uses the same name and
brokerage account to effect multiple purchases of Shares, all of such buyer's
purchases shall be combined for purposes of computing the commission. The
commission rate thus determined shall apply to the aggregate of the multiple
purchases by such buyer.
3. COOPERATION OF OTHER BROKER-DEALERS. It is expressly
agreed by the Dealer Manager and the Agent that the Dealer Manager may
cooperate with other broker-dealers who are licensed members of the NASD,
registered as broker-dealers with the SEC and duly licensed by the
appropriate regulatory agency of each state in which they will offer and sell
the Shares ("NASD Brokers"). Such other NASD Brokers may be employed by the
Dealer Manager as agents on terms and conditions identical or similar to this
Agreement and shall receive such rates of commission as are agreed to between
the Dealer Manager and the respective other NASD Brokers and as are in
accordance with the terms of the Registration
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Statement, and to that extent such other NASD Brokers shall compete with the
Agent in the sale of the Shares.
4. CONDITIONS TO THE AGENT'S OBLIGATIONS. The Agent's
obligations hereunder are subject, during the full term of this Agreement and
the Offering, to:
1. the performance by the Dealer Manager of its
obligations hereunder; and
2. the conditions that: (i) the Registration
Statement shall become and remain effective; (ii) the NASD shall have
indicated that it does not object to the underwriting arrangements with
respect to the Offering; and (iii) no stop order shall have been issued
suspending the effectiveness of the Offering.
5. CONDITIONS TO THE DEALER MANAGER'S OBLIGATIONS. The
obligations of the Dealer Manager hereunder are subject, during the full term
of this Agreement and the Offering, to the conditions that: (a) at the
effective date of the Registration Statement, and thereafter during the term
of this Agreement while any Shares remain unsold, the Registration Statement
shall remain in full force and effect authorizing the offer and sale of the
Shares; (b) no stop order suspending the effectiveness of the Offering or
other order restraining the offer or sale of the Shares shall have been
issued or proceedings theretofore initiated or threatened by any state
regulatory agency or the SEC; and (c) the Agent shall have satisfactorily
performed all of its obligations hereunder.
6. COVENANTS OF THE DEALER MANAGER. The Dealer Manager
covenants, warrants and represents, during the full term of this Agreement,
that:
1. It shall use its best efforts to prevent the
sale of the Shares through persons other than NASD Brokers.
2. It shall provide the Agent, upon request, with
a copy of any letter from the NASD in which the NASD indicates that it does
not object to the underwriting arrangements with respect to the Offering.
3. It shall use its best efforts to cause the
Trust and the Trust Advisor to maintain the effectiveness of the Registration
Statement and to file such amendments to the Registration Statement as may be
reasonably necessary for that purpose.
4. It shall advise the Agent whenever and as soon
as it receives or learns of any order issued by the SEC or any state
regulatory agency or any other regulatory agency which suspends the
effectiveness of the Registration Statement or prevents the use of the
Prospectus or which otherwise prevents or suspends the Offering of the Shares
or receives notice of any proceedings regarding any such order.
5. It shall use its best efforts to prevent the
issuance of any order described in subsection (d) above and to obtain the
lifting of any such order if issued.
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6. It shall give the Agent written notice by
telegram or facsimile transmission when the Registration Statement becomes
effective and shall deliver to the Agent such number of copies of the
Prospectus, and any supplements and amendments thereto, in the form in which
filed with the SEC, as the Agent may reasonably request in connection with
the sale of the Shares, which Prospectus shall in all respects conform to the
applicable requirements of the Securities Act and all applicable rules and
regulations promulgated thereunder, and which Prospectus shall not contain
any untrue statement of a material fact required to be stated therein, in
light of the circumstances under which they are made, not misleading.
7. It shall make available such number of copies
of the Prospectus as the Agent reasonably requests for the purposes
contemplated by the Securities Act, the Securities Exchange Act of 1934 (the
"Exchange Act") and the rules and regulations promulgated thereunder.
8. It shall promptly notify the Agent of any
post-effective amendments or supplements to the Registration Statement or
Prospectus and shall furnish the Agent with copies thereof.
9. It shall keep the Agent fully informed of any
material development to which the Trust is a party or which concerns the
business and condition of the Trust, of which the Dealer Manager has
knowledge.
10. It, in conjunction with the Trust Advisor,
shall use its best efforts to cause, at or prior to the time the Registration
Statement becomes effective, the qualification (or exemption from
qualification) of the Shares for offering and sale under the securities laws
of all states listed on Exhibit B attached hereto.
11. It undertakes to comply with Rules 2730, 2740,
2420 and 2750 of the Conduct Rules of the NASD.
7. COVENANTS OF THE AGENT. The Agent covenants, warrants
and represents that:
1. Based upon a review, to the extent relevant to
the Offering, of the items referred to in Rule 2810(b)(3)(B) of the Conduct
Rules of the NASD, the Prospectus and other materials made available to it by
the Trust Advisor, it has reasonable grounds to believe that all material
facts relating to the Offering are adequately disclosed and provide a basis
for evaluating the Offering.
2. At the date of execution of this Agreement, it
has complied with the provisions of Rules 2810(b)(2) and 2810(b)(3) of the
Rules of the NASD.
3. In recommending to a prospective Subscriber the
purchase, sale or exchange of Shares, the Agent shall have, and shall insure
that all persons associated with
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the Agent ("Associates") making such recommendations shall have, reasonable
grounds to believe, on the basis of information obtained from the prospective
Subscriber concerning his investment objectives, other investments, financial
situation and needs, and any other information known by the Agent or such
Associates, that the prospective Subscriber satisfies the criteria as to
suitability set forth in Rule 2810(b)(2) of the NASD Rules, and prior to
executing a purchase transaction with respect to Shares, the Agent shall, and
shall insure that each of its Associates proposing to execute such a transaction
shall, inform the prospective Subscriber of all pertinent facts relating to the
liquidity and marketability of the Shares during the term of the investment.
This representation will survive the termination of this Agreement.
4. It shall maintain in its files, for the longer
of the period prescribed by SEC Rule 17a-4 or the period prescribed by the
state blue sky laws applicable to it, documents disclosing the basis upon
which the determination of suitability was reached as to each Subscriber who
subscribes for Shares through it.
5. It shall not execute any transaction for a
Subscriber in connection with the Offering in a discretionary account without
the prior written approval of such transaction by such Subscriber.
6. It shall not accept, or permit its employees to
accept, sales incentive items other than in compliance with NASD Rules
2810(b)(4)(E) and (F).
7. It is familiar with Release No. 4968 and Rule
15c2-8 under the Exchange Act, which relate to the distribution of
preliminary and final prospectuses, and will comply therewith.
8. It agrees to be bound by the terms of the
Escrow Agreement.
9. It shall provide the Dealer Manager with signed
subscription documents or confirmations of such subscriptions for each
investment, as requested by the Dealer Manager in its sole discretion.
8. PAYMENT OF COSTS AND EXPENSES. The Agent shall pay
all costs and expenses incident to the performance of its obligations under
this Agreement, including:
1. All expenses incident to the preparation,
printing and filing of all advertising originated by it related to the sale
of the Shares; and
2. All other costs and expenses incurred in
connection with its sales efforts related to the sales of the Shares, except
costs and expenses the Dealer Manager has expressly assumed and are incurred
in connection with its due diligence with respect to the Offering.
9. INDEMNIFICATION.
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1. The Agent shall indemnify, defend and hold
harmless the Dealer Manager, its officers, directors, employees and agents
against all losses, claims, demands, liabilities and expenses, including
reasonable legal and other expenses incurred in defending such claims or
liabilities, whether or not resulting in any liability to the Dealer Manager,
its officers, directors, employees or agents, which they or any of them may
incur, arising out of the offer or sale by the Agent of any Shares, pursuant
to this Agreement, or arising out of the breach by the Agent of any of the
terms and conditions of this Agreement, including but not limited to alleged
violations of the Securities Act and/or the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), OTHER THAN any claim, demand or liability
arising from any untrue statement or alleged untrue statement of a material
fact contained in the Prospectus or the Registration Statement, as filed and
in effect with the SEC, or any amendment or supplement thereto, or in any
application prepared by the Trust Advisor and filed with any state regulatory
agency in order to register or qualify the Shares under the securities laws
thereof (the "blue sky applications"), or in any supplemental sales material
which is prepared by the Trust Advisor for distribution to prospective
investors, or which shall arise out of or be based upon any omission or
alleged omission to state therein a material fact required to be stated in
the Prospectus or the Registration Statement or any of the blue sky
applications or such supplemental sales material necessary to make the
statements therein not misleading. This indemnity provision shall survive the
termination of this Agreement.
2. The Dealer Manager shall indemnify, defend and
hold harmless the Agent, its officers, directors, employees and agents
against all losses, claims, demands, liabilities and expenses, including
reasonable legal and other expenses incurred in defending such claims or
liabilities, whether or not resulting in any liability to the Agent, its
officers, directors, employees or agents, which they or any of them may
incur, including but not limited to alleged violations of the Securities Act
and/or the Exchange Act, BUT ONLY to the extent that such losses, claims,
demands, liabilities and expenses shall arise or be based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus or the Registration Statement, as filed and in effect with the
SEC, or any amendment or supplement thereto, or in any of the blue sky
applications, or in any supplemental sales material which is prepared by the
Trust Advisor for distribution to prospective investors, or which shall arise
out of or be based upon any omission or alleged omission to state therein a
material fact required to be stated in the Prospectus or the Registration
Statement or the blue sky applications or such supplemental sales material
necessary to make the statements made therein not misleading. This indemnity
provision shall survive the termination of this Agreement.
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10. TERM OF AGREEMENT. This Agreement shall become
effective at the time the Dealer Manager releases the Shares for offering by
letter or telegram. The Agent and the Dealer Manager may each prevent this
Agreement from becoming effective, without liability to the other, by written
notice before the time this Agreement otherwise could become effective. After
this Agreement becomes effective, either party may terminate it at any time
for any reason by giving 30 days' written notice to the other party;
PROVIDED, HOWEVER, that this Agreement shall in any event automatically
terminate at the first occurrence of any of the following events: (a) the
Registration Statement shall cease to be effective; (b) the Offering shall be
terminated; or (c) the Agent's license or registration to act as a
broker-dealer shall be revoked or suspended by any federal or state
regulatory agency and such revocation or suspension is not cured within 10
days from the date of such occurrence.
11. NOTICES. All notices and communications hereunder
shall be in writing and, if sent to the Dealer Manager, shall be mailed to:
XXXXXXX XXXXXX & COMPANY FINANCIAL SERVICES, INC.
000 Xxxx Xxxxxx, Xxxxxxxx X
XX Xxx 000, Xxxxxx, Xxxx 00000-0000.
or, if sent to the Agent, shall be mailed to the person whose
name and address is identified in Exhibit A attached hereto.
12. SUCCESSORS. This Agreement may not be assigned or
transferred by the Agent by operation of law or otherwise.
13. CONSTRUCTION.
1. This Agreement shall be governed by, and
construed in accordance with, the applicable laws of the State of Iowa
without regard to any provision or rule of law which would require the
application of the law of any state other than Iowa.
2. Nothing in this Agreement shall constitute the
Agent as in association or in partnership with the Dealer Manager, and,
instead, this Agreement shall only constitute the Agent as an independent
contractor (and not as an employee or other agent of the Dealer Manager)
authorized by the Dealer Manager to sell the Shares according to the terms
expressly set forth herein, provided that the Agent shall not in any event
have any authority to act in connection with the Offering except according to
the terms expressly set forth herein.
3. If any provision of this Agreement shall be
deemed void, invalid or ineffective for any reason, the remainder of the
Agreement shall remain in full force and effect.
4. This Agreement embodies the entire
understanding between the parties hereto, and no variation, modification or
amendment to this Agreement shall be deemed valid or effective unless and
until it is signed by both parties hereto.
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SIGNATURE PAGE FOR SELECTED SALES AGENT AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement
on the day and year set forth below.
DEALER MANAGER: AGENT:
XXXXXXX XXXXXX & COMPANY
FINANCIAL SERVICES, INC.
----------------------------------
(Broker/Dealer Name)
By: By:
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XXXXXX X. XXXXXXX, President
----------------------------------
(Print Name and Title)
Date: Date:
-------------------------------- -----------------------------
AGENTS: PLEASE EXECUTE TWO COPIES AND RETURN BOTH TO XXXXXXX XXXXXX &
COMPANY FINANCIAL SERVICES, INC.
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EXHIBIT A
PLEASE EXECUTE AND RETURN TWO COPIES OF THE SELECTED SALES AGENT AGREEMENT.
SUBSEQUENTLY, ONE EXECUTED COPY WILL BE RETURNED BY XXXXXXX XXXXXX & COMPANY
FINANCIAL SERVICES, INC. FOR YOUR RECORDS.
I. PERSON TO RECEIVE COMMISSION
Name Firm Name
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Title Address
-------------------------- ----------------------------
(Street Address/P.O. Box)
Telephone:
--------------------- -----------------------------
(City) (State) (ZIP)
II. DUE DILIGENCE OFFICER
Name
--------------------------------------------------------------------
(Telephone)
Address
------------------------------------------------------------------
(Street) (City) (State) (ZIP)
III. INFORMATION CONCERNING FIRM
Address
------------------------------------------------------------------
(Headquarters) (City) (State) (ZIP)
------------------------------------- ---------------------------------
(Telephone) (Facsimile Number)
Type of Entity: [ ] Corporation [ ] Partnership
[ ] Proprietorship [ ] Other (describe)
---------------------------------
Federal Tax I.D. No.
--------------------
Organized in
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(State)
Licensed as Broker-Dealer in
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(List States or Provide Attachment Listing States)
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IV. ADDITIONAL INFORMATION
In order to expedite all transmissions and correspondence, Xxxxxxx
Xxxxxx & Company Financial Services, Inc. requests that each Firm
include with the executed copy of the Selected Sales Agent Agreement a
list containing the following information concerning each branch
office: (A) branch address and telephone number; (B) name of branch
manager; (C) registered representatives working out of each branch
office; and (D) the names, addresses and telephone numbers of any other
appropriate members of Firm involved in sales management.
EXHIBIT B
STATES IN WHICH SHARES MAY BE OFFERED AND SOLD
