Exhibit 1.2
Selected Dealer Agreement
September __, 1996
First Financial United Investments, Ltd.
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Gentlemen:
1. General. We understand that First Financial United Investments,
Ltd., as selling group manager ("Selling Group Manager"), is entering into
this Agreement with us and other firms who may be offered the right to sell
to the public shares of beneficial interest ("Shares") of United Mortgage
Trust, a Maryland real estate investment trust (hereinafter, the "Issuer"
or the "Company"). We agree to participate as a "Selected Dealer" in
offering the Shares to the public pursuant to the Company's Registration
Statement on Form S-11 filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Securities Act"),
subject to the terms of (a) this Agreement, (b) the Selling Group Manager
Agreement between the Issuer and the Selling Group Manager, as amended from
time to time, and (c) the Selling Group Manager's instructions which may be
forwarded to the selected dealers from time to time. We agree that our
participation is subject to the eligibility of the Shares for sale to the
public only in those states where such offers or sales may lawfully be
made.
The terms and conditions of this Agreement shall be applicable to any
public offering of Shares of the Issuer wherein the Selling Group Manager
is responsible for managing or otherwise implementing the sale of the
Shares to the public on a "best efforts" basis through selected dealers
("Selected Dealers"), provided that the Selling Group Manager has invited
our participation in such Offering and expressly informed us that such
terms and conditions shall be applicable, and we have elected to
participate as a Selected Dealer in such Offering. Any such offering of the
Shares in which you are acting as a selling group manager on behalf of the
Issuer is hereinafter called the "Offering."
The term "preliminary prospectus" means, in the case of an Offering
registered under the Securities Act any preliminary prospectus relating to
the Offering of Shares or any preliminary prospectus supplement together
with a prospectus relating to such Offering and, in the case of an Offering
not registered under the Securities Act, any preliminary offering circular
relating to the Offering or any preliminary offering circular supplement
together with an offering circular relating to such Offering; the term
"prospectus" means, in the case of an Offering registered under the
Securities Act, the prospectus, together with the final prospectus
supplement, if any, relating to such Offering, filed pursuant to Rule
424(b) or Rule 424(c) under the Securities Act and, in the case of an
Offering not registered under the Securities Act, the final offering
circular, including any supplements, relating to such Offering.
2. Conditions of Offering; Acceptance and Purchase. We understand
and agree to the following terms and conditions:
(a) Pursuant to the terms and conditions herein set forth, we agree
to use our best efforts as an independent contractor, and not as
an agent of the Selling Group Manager or
First Financial United Investments, Ltd.
September __, 1996
Page 2
the Issuer, to find subscribers acceptable to the Issuer
("Investors") for the Shares at a public offering price of $20
per share. Each Investor must subscribe for not less than the
minimum subscription of 250 Shares (50 Shares for IRA's and
▇▇▇▇▇▇ plans). Any Offering will be subject to delivery of the
Shares by the Issuer, the approval of all legal matters by
counsel, acceptance of each subscription by the Issuer, and the
satisfaction of other conditions, and may be made on the basis of
reservation of Shares or an allotment against subscription. No
subscription for Shares shall be effective unless and until
accepted by the Issuer. The Issuer has reserved the right, at its
sole discretion, to refrain from accepting any subscription
submitted.
(b) Subscription Materials; Escrow Account. Each person solicited by
us who desires to purchase shares will be required to complete
and execute an Subscription Agreement (as set forth in the
Prospectus) and to complete and execute such other documents as
the Issuer may require (collectively, the "Subscription
Documents"). Payment for subscription may be made by or on behalf
of an investor (i) by delivery of a check made payable to "Texas
Commerce Bank Escrow Account No. _____" (the "Escrow Account") or
(ii) wire transfer to the Escrow Account. Each subscriber must
have his subscription payment in the Escrow Account in
immediately available funds (i.e., all checks must clear) on or
before the specified settlement date (the "Settlement Date").
(c) Minimum Offering. If subscriptions for at least 125,000 Shares
(the "Minimum Number of Shares") are not accepted by the Issuer
and fully paid for by a minimum of 100 Investors in accordance
with the terms of the Offering within a period of one (1) year
following the Public Offering Date (as such term is hereinafter
defined)(the "Initial Offering Termination Date"), this Agreement
shall automatically terminate and the full proceeds from the sale
of such Shares as may have been sold, without any deductions
whatsoever, together with interest thereon as provided in the
Prospectus, shall be returned forthwith to the subscribers.
Pending the sale of the Minimum Number of Shares as aforesaid,
the full purchase price shall be held in the Escrow Account at
Texas Commerce Bank in Houston, Texas.
If subscriptions for the Minimum Number of Shares are
accepted by the Issuer and fully paid for as aforesaid, then the
sales shall be declared effective and the escrow agent shall
deliver to the Selling Group Manager from the proceeds derived
from the sale of such Shares the commissions and the proportion
of non-accountable expense allowance payable to the Selling Group
Manager and the Selected Dealers on the sale of such Shares; and
the balance of the said proceeds shall be remitted to the Issuer.
The Selling Group Manager will promptly remit to us the Selected
Dealer compensation provided in Section 2(e) below.
(d) Closings After the Initial Offering. After the Initial Closing
Date (as defined in the Selling Group Manager Agreement),
additional closings of the sale of Shares are
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September __, 1996
Page 3
anticipated to occur monthly (each an "Additional Closing Date").
If subscription for more than the Minimum Number of Shares are
accepted by the Issuer and fully paid for by the Initial Offering
Termination Date, then as to all Shares sold thereafter pursuant
to the Offering, as funds are received by the escrow agent from
the sale thereof (and following acceptance of such subscription
by the Issuer) they shall be held until the Additional Closing
Date first following the date when the escrow agent is in
possession of immediately available funds with respect to the
subscription in question. Following such date, the Issuer shall
cause the issuance and delivery of definitive share certificates
in accordance with the instructions of the Selling Group Manager.
Upon each such delivery ("Delivery Date(s)") the net proceeds
(offering prices less the Selling Group Manager's and Selected
Dealers' commission and non-accountable expense allowance) shall
be immediately forwarded to the Issuer by the escrow agent.
(e) Selected Dealer Compensation. As sole compensation, we will be
entitled to receive a commission equal to __% of the gross sales
price of the Shares sold by or through us.
(f) Supplementary Terms and Conditions. You may advise us by
facsimile, telegram, telex or other form of written communication
("Written Communication") of the particular method and
supplementary terms and conditions (including, without
limitation, the information as to prices and offering date
referred to in Section 3(b) of this Agreement) of any Offering in
which we are invited to participate. To the extent such
supplementary terms and conditions are inconsistent with any
provision herein, such terms and conditions shall supersede any
such provision. Unless otherwise indicated in any such Written
Communication, acceptances and other communications by us with
respect to any Offering will be sent to the Selling Group Manager
at the address for notices provided in Section 7 below.
3. Representations, Warranties and Agreements.
(a) Prospectuses. You shall provide us with such number of copies of
each preliminary prospectus, the Prospectus and any supplement thereto
relating to each Offering as we may reasonably request. If the Shares will
be registered under the Securities Act, we represent that we are familiar
with Rule 15c2-8 under the Securities Exchange Act of 1934 ("Exchange Act")
relating to the distribution of preliminary and final prospectuses and
agree that we will comply therewith, we agree to keep an accurate record of
our distribution (including dates, number of copies and persons to whom
sent) of copies of the Prospectus or any preliminary prospectus (or any
amendment or supplement to any thereof), and promptly upon request by you,
to bring all subsequent changes to the attention of anyone to whom such
material shall have been furnished, and we agree to furnish to persons who
receive a confirmation of sale a copy of the Prospectus filed pursuant to
Rule 424(b) or Rule 424(c) under the Securities Act. If the Shares will not
be registered under the Securities Act, we agree that we will deliver all
preliminary and final offering circulars required for compliance with
First Financial United Investments, Ltd.
September __, 1996
Page 4
the applicable laws and regulations governing the use and distribution of
offering circulars by underwriters, and, to the extent consistent with such
laws and regulations, we confirm that we have delivered and agree that we
will deliver all preliminary and final offering circulars which would be
required if the provisions of Rule 15c2-8 under the Exchange Act applied to
this offering. We agree that in offering Shares we will rely upon no
statements whatsoever, written or oral, other than the statements in the
Prospectus delivered to us by you. We will not be authorized by the Issuer
or any other seller of Shares offered pursuant to a Prospectus or by any
underwriters to give any information or to make any representation not
contained in the Prospectus in connection with the sale of such Shares.
(b) Offer and Sale to the Public. With respect to any Offering of
Shares you will inform us by a Written Communication of any change to the
public offering price, the selling commission to Selected Dealers or the
time when we may commence selling Shares to the public. After such public
offering has commenced, you may change the public offering price or the
selling commission. With respect to each Offering of Shares, until the
provisions of this Section 3(b) shall be terminated pursuant to Section 5,
we agree to offer Shares to the public only at the public offering price as
provided in the Prospectus.
(c) Open Market Transactions. We agree not to bid for, purchase,
attempt to purchase, or sell, directly or indirectly, any Shares, any other
securities of the Issuer of the same class and series as the Shares, or any
other securities of the Issuer as you may designate, except as brokers
pursuant to unsolicited orders and as otherwise provided in this Agreement.
We agree not to effect, or attempt to induce others to effect, directly or
indirectly, any transactions in or relating to put or call options on any
Shares of such Issuer, except to the extent permitted by Rule 10b-6 under
the Exchange Act as interpreted by the Securities and Exchange Commission.
An opening uncovered writing transaction in options to acquire Shares for
our account or for the account of any customer shall be deemed, for
purposes of the preceding sentence, to be a transaction effected by us in
or relating to put or call options on stock of the Issuer not permitted by
Rule 10b-6. The term "opening uncovered writing transaction" means an
opening sale transaction where the seller intends to become a writer of an
option to purchase stock to which it does not own or have the right to
acquire upon exercise of conversion or option rights.
(d) NASD. We represent that we are actually engaged in the investment
banking or securities business and we are either a member in good standing
of the NASD, or, if not such a member, a foreign dealer not eligible for
membership. If we are such a member we agree that in making sales of the
Shares we will comply with all applicable rules of the NASD, including,
without limitation, the NASD's Interpretation with Respect to Free-Riding
and Withholding and Section 24 of Article III of the Rules of Fair
Practice. If we are such a foreign dealer, we agree not to offer or sell
any Shares in the United States of America except through you and in making
sales of Shares outside the United States of America we agree to comply as
though we were a member with such Interpretation and Sections 8.24 and 36
of Article III of the NASD's Rules of Fair Practice and to comply with
Section 25 of such Article III as it applies to a nonmember broker or
dealer in a foreign country.
First Financial United Investments, Ltd.
September __, 1996
Page 5
(e) Relationship among the Selling Group Manager and Selected
Dealers. We are not authorized to act as agent for you, the Issuer or any
Selected Dealer or other seller of any Shares in offering the Shares to the
public or otherwise. Nothing contained herein or in any Written
Communication from you shall cause the Selected Dealers to be or become
partners with the Selling Group Manager or the Issuer or with one another.
We shall be under no obligation to you except for obligations assumed
hereby or in any Written Communication from you in connection with any
Offering. In connection with any Offering we agree to pay our proportionate
share of any claim, demand or liability, asserted against us, and the other
Selected Dealers or any of them, or against the Selling Group Manager or
the Issuer, if any, based on any claim that such Selected Dealers or any of
them constitute an association, unincorporated business or other separate
entity, including in each case our proportionate share of any expense
incurred in defending against any such claim, demand or liability.
(f) Blue Sky Laws. Upon application to you, you will inform us as to
the jurisdictions in which you believe the Shares have been qualified for
sale under the respective securities laws or "blue sky laws" of such
jurisdictions. Notwithstanding the above, we understand and agree that
compliance with the securities or "blue sky laws" in each jurisdiction in
which we shall offer or sell any of the Shares shall be our sole
responsibility and that you assume no responsibility or obligations as to
the eligibility of the Shares for sale or our right to sell the Shares in
any jurisdiction.
(g) Compliance with Law. We agree that in selling Shares pursuant to
any Offering (which agreement shall also be for the benefit of the Issuer
or other seller of such Shares) we will comply with the applicable
provisions of the Securities Act and the Exchange Act, the applicable rules
and regulations of the Securities and Exchange Commission thereunder, the
applicable rules and regulations of the NASD and the applicable rules and
regulations of any securities exchange having jurisdiction over the
Offering. You and the Issuer shall have full authority to take such action
as you may deem advisable in respect of all matters pertaining to any
Offering. Neither you, the Issuer nor any Selected Dealer shall be under
any liability to us, except for lack of good faith and for obligations
expressly assumed by you in this Agreement; provided, however, that nothing
in this sentence shall be deemed to relieve you from any liability imposed
by the Securities Act.
4. Selected Dealer's Employees. We have assumed full responsibility
for proper training and instruction of our employees and representatives
concerning the selling methods to be used by them in connection with the
offer and sale of the Shares, giving special emphasis to the principles of
suitability and full disclosure to prospective investors and the
prohibitions against "free-riding and withholding."
5. Termination; Supplements and Amendments. This Agreement may be
terminated by either party hereto upon five business days' written notice
to the other party, provided that with respect to any Offering, this
Agreement as it applies to such Offering shall remain in full force and
effect and shall terminate with respect to such Offering in accordance with
the last sentence of this Section; provided further that the
Indemnification provisions of Section 6 of this Agreement shall continue as
therein provided. This Agreement may be supplemented or amended by you by
written
First Financial United Investments, Ltd.
September __, 1996
Page 6
notice thereof to us, and any such supplement or amendment to this
Agreement shall be effective with respect to any Offering to which this
Agreement applies after the date of such supplement or amendment. Each
reference to "this Agreement" herein shall, as appropriate, be to this
Agreement as so amended and supplemented. The terms and conditions set
forth in Sections 3(b) and (c) with regard to any Offering will terminate
at the close of business on the thirtieth day after the completion date of
the initial public offering of the Shares to which such Offering relates,
but such terms and conditions, upon notice to us, may be terminated by you
at any time.
6. Indemnification. The Issuer and the Selling Group Manager have
agreed to certain indemnities, as more particularly set forth in the
Selling Group Manager Agreement between the parties which has been filed as
an exhibit to the Issuer's Registration Statement. We agree to indemnify
and hold harmless the Issuer, the Selling Group Manager, each of the
Issuer's officers and directors who signed the Registration Statement, and
each person, if any, who controls the Issuer or the Selling Group Manager
within the meaning of Section 15 of the Securities Act, as amended, against
any and all loss, liability, claim, damage and expense (a) but only with
respect to untrue statements or omissions, or alleged untrue statements or
omissions made in the registration statement or the prospectus or any
amendment or supplement to it in reliance upon and in conformity with
written information, if any, furnished to the Issuer by us expressly for
use in the registration statement (or any amendment to it) or the
prospectus (or any amendment or supplement to it) or (b) based upon alleged
misrepresentations or omissions to state material facts in connection with
statements made by us or our employees, salespersons or representatives,
orally or by other means; and we will reimburse the Issuer and the Selling
Group Manager for any legal or other expenses reasonably incurred in
connection with the investigation of or the defending of any such action or
claim. The provisions of this Section shall survive for the applicable
limitations period under the Securities Act.
7. Communications. All communications to the Selling Group Manager
shall be sent by mail or facsimile with confirmation copy by mail to the
address or facsimile number set forth below:
First Financial United Investments, Ltd.
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Mr. ▇▇▇ ▇▇▇▇
Any notice to the Selected Dealer shall be properly given if mailed or
Faxed to the Selected Dealer at the address or Fax number indicated under
the Selected Dealer's signature line below. Either party may change its
address for notices hereunder by providing written notice of its new
address and Fax number to the other party hereto as provided above.
8. Successors and Assigns. This Agreement shall be binding on, and
inure to the benefit of the parties hereto and other persons specified or
indicated in Section 1, and the respective
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September __, 1996
Page 7
successors and assigns of each of them. This Agreement may not be assigned
by the Selected Dealer without the Selling Group Manager's prior written
consent.
9. Governing Law. This Agreement and the terms and conditions set
forth herein with respect to any Offering together with such amended or
supplementary terms and conditions with respect to such Offering as may be
contained in any Written Communication from you to us in connection
therewith shall be governed by, and construed in accordance with, the laws
of the State of Texas.
By signing this Agreement we confirm that our offering of the Shares
to the public, or our acceptance of any reservation of any Shares pursuant
to an Offering, shall constitute (1) acceptance of and agreement to other
terms and conditions of this Agreement (as supplemented and amended
pursuant to Section 5) together with and subject to any supplementary terms
and conditions contained in any Written Communication from you in
connection with such Offering, all of which shall constitute a binding
agreement between us and you, (ii) confirmation that our representations
and warranties set forth in Section 3 are true and correct at that time and
(iii) confirmation that our agreements set forth herein have been and will
be performed by us to the extent and at the times required thereby.
Very truly yours,
_______________________________________
(Name of Firm)
By: ___________________________________
Address: ________________________
________________________
Telephone: ________________________
Fax: ________________________
Confirmed as of the date
first above written.
First Financial United
Investments, Ltd.
By: _________________________________
Name: _______________________________
Title: ______________________________