Exhibit 99.2
SELLING DEALER AGREEMENT
WITH ANTHEM SECURITIES, INC.
TO:
RE: LEASE EQUITY APPRECIATION FUND I, L.P.
Ladies and Gentlemen:
Lease Equity Appreciation Fund I, L.P. (the "Partnership") is offering units
of limited partnership interest (the "Units"). The Units and the offering are
described in the enclosed Prospectus dated o , 2002 (the "Prospectus").
Prospectuses relating to the Units have been furnished to you with this
Agreement.
Our firm, Anthem Securities, Inc. (the "Dealer-Manager"), has entered into a
Dealer-Manager Agreement with the Partnership for sales of the Units, a copy
of which has been furnished to you and is incorporated in this Agreement by
this reference. Pursuant to the Dealer-Manager Agreement, the Dealer-Manager
has been authorized to select certain members (the "Selling Dealers") in good
standing of the National Association of Securities Dealers, Inc. (the "NASD")
to participate in the offering of the Units on a "best efforts" basis.
You are invited to become one of the Selling Dealers, on a non-exclusive
basis. By your acceptance below you will have agreed to act in that capacity
and to use your best efforts, in accordance with the following terms and
conditions, to solicit subscriptions for the Units in all jurisdictions in
which you are registered as a broker-dealer in good standing except for those
set forth on Schedule A hereto.
1. Representations, Warranties and Covenants of Selling Dealer. You
represent, warrant and covenant to the Dealer-Manager that:
(a) You are a corporation or other entity duly organized, validly
existing and in good standing under the laws of the state of your
formation and are duly qualified to do business and in good standing
under the laws of any jurisdiction in which your ownership of property or
conduct of business requires you to be so qualified. You have all
requisite power and authority to enter into this Agreement and to carry
out your obligations under this Agreement.
(b) This Agreement when executed by you will be duly authorized, executed
and delivered by you and will be a valid and binding agreement on your
part and enforceable in accordance with its terms except as may be
limited by the effect of bankruptcy, insolvency, moratorium, preferential
or fraudulent conveyance or other similar laws or equitable principles
relating to or affecting the rights of creditors generally, by general
principles of equity, and by public policy relating to claims for
indemnification for securities laws violations.
(c) The consummation of the transactions contemplated by this Agreement
and the Prospectus will not result in any breach of any of the terms or
conditions of, or constitute a default under, your organizational
documents, bylaws, any indenture, agreement or other instrument to which
you are a party or by which you are bound, or violate any order
applicable to you of any court, regulatory body or administrative agency
having jurisdiction over you.
(d) You are duly registered as a broker-dealer under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and you are a member
in good standing of the NASD. You are duly registered as a broker-dealer
in the jurisdictions where you are required to be registered in order to
carry out your obligations as contemplated by this Agreement and the
Prospectus. You agree to maintain all the foregoing registrations in good
standing throughout the term of the offer and sale of the Units and you
agree to comply with all statutes and other requirements applicable to
you as a broker-dealer under those registrations.
(e) You will comply with all the provisions of the Securities Act of
1933, as amended (the "1933 Act"), insofar as the 1933 Act applies to
your activities under this Agreement. Further, you will not
1
engage in any activity which would cause the offer and/or sale of the
Units not to comply with the 1933 Act, the 1934 Act, applicable rules and
regulations of the Securities and Exchange Commission (the "Commission"),
applicable state securities laws and regulations, this Agreement or the
NASD Conduct Rules.
(f) You have received copies of the Prospectus and you have relied only
on the statements contained in the Prospectus and not on any other
statements whatsoever, either written or oral, with respect to the
Partnership, the Units or the offering.
(g) You agree that you shall not place any advertisement or other
solicitation with respect to the Units (including, without limitation,
any material for use in any newspaper, magazine, radio or television
commercial, telephone recording, motion picture, or other public media)
without the prior written approval of the Partnership, and without the
prior filing with and review of the form and content thereof by the
Commission, the NASD and the securities authorities of the states where
such advertisement or solicitation is to be circulated. Any such
advertisements or solicitations shall be at your expense.
(h) If a supplement or amendment to the Prospectus (each, a "Supplement")
is prepared and delivered to you by the Partnership or the Dealer-
Manager, you agree to distribute such Supplement to every person who has
previously received a copy of the Prospectus from you and you further
agree to include such Supplement or Amendment in all future deliveries of
any Prospectus.
(i) In connection with any offer or sale of the Units, you agree (i) to
comply in all respects with restrictions and procedures set forth in the
Prospectus and the Partnership's Amended and Restated Agreement of
Limited Partnership, a copy of which is an appendix to the Prospectus
(the "Partnership Agreement"), (ii) not to make any statement
inconsistent with the statements in the Prospectus or the Partnership
Agreement, (iii) not to provide any written information, statements or
sales literature other than the Prospectus and such other material as
shall be provided to you by the Partnership or specifically authorized in
writing by the Partnership, and (iv) not to make any untrue statement of
a material fact or omit to state a material fact necessary in order to
make statements made, in light of the circumstances under which they were
made, not misleading in connection with the Partnership, the Units or the
offering.
(j) Prior to the sale of any of the Units and in accordance with Rules
2810(b)(2) and (3) of the NASD Conduct Rules you shall have reasonable
grounds to believe that a purchase of the Units is a suitable and
appropriate investment for each subscriber. In making this determination,
you shall ascertain that the subscriber:
(i) meets the minimum income and net worth standards set forth in
the Prospectus;
(ii) can reasonably benefit from an investment in the Units based on
the subscriber's overall investment objectives and portfolio
structure;
(iii) is able to bear the economic risk of an investment in the
Units based on the subscriber's overall financial situation; and
(iv) has apparent understanding of the fundamental risks of an
investment in the Units; the risk that the subscriber may lose his
or her entire investment; the lack of liquidity of the Units; the
restrictions on transferability of the Units; the background and
qualifications of the General Partner and the persons responsible
for managing the Partnership; and tax consequences of an investment
in the Units.
You and the Selling Dealers shall maintain records on the information
used to determine that the investment in the Units is suitable and
appropriate for each subscriber, and shall maintain these records for at
least six years after the Offering Termination Date, as such term is
defined in the Dealer-Manager Agreement.
(k) You agree to use your best efforts in the solicitation and sale of
the Units, including ensuring that the prospective purchasers properly
execute the subscription agreement, a form of which is an exhibit to the
Prospectus (the "Subscription Agreement"), together with any additional
forms provided in any
2
Supplement or otherwise provided to you by the Partnership or the Dealer-
Manager to be completed by prospective purchasers.
You acknowledge and agree that the Partnership shall have the right to
reject any subscription at any time for any reason without liability to
it. Investor funds and executed Subscription Agreements shall be
transmitted as set forth in Section 11 of this Agreement.
(l) Your representations and warranties made in this Agreement are and
will be true and correct at each applicable closing on Unit sales and you
will have fulfilled all your obligations under this Agreement at the
applicable closing date.
2. Commissions.
(a) Subject to the receipt of the minimum subscription proceeds as
described in the Dealer-Manager Agreement (the "Minimum Subscription
Amount"), the restrictions with respect to sales to Iowa and Pennsylvania
residents described in the Dealer-Manager Agreement, and the exceptions
for sales to LEAF Asset Management Inc., the general partner of the
Partnership (the "General Partner"), its officers, directors and
Affiliates (as such term is defined in the Partnership Agreement),
Selling Dealers and their registered representatives and principals, the
Dealer-Manager is entitled to receive from the Partnership, a commission
(the "Sales Commission") of 8% of the purchase price of each subscription
obtained by the Dealer-Manager or the Selling Dealers and accepted and
closed on by the Partnership. In addition, and subject to the above
conditions and qualifications, the General Partner has undertaken to pay
(from its Organization and Offering Expense Allowance, as such term is
defined in the Partnership Agreement) an amount equal to the Selling
Dealers' bona fide accountable due diligence expenses per Unit to a
maximum of 1/2 of 1% of the purchase price of each subscription obtained
by the Dealer-Manager or the Selling Dealers and accepted and closed on
by the Partnership (the "Due Diligence Reimbursement").
Subject to the terms and conditions set forth in this Agreement,
including the Dealer-Manager's receipt from you of the documentation
required of you in Section 1 of this Agreement, and to the exceptions and
conditions set forth in the first paragraph of this Section 2(a), the
Dealer-Manager (i) agrees to pay you the Sales Commission and (ii) agrees
to use its best efforts to cause the General Partner to pay you the Due
Diligence Reimbursement, in each case with respect to those subscriptions
sold by you and accepted and closed on by the Partnership, within seven
business days after the Dealer-Manager has received the Sales Commissions
and Due Diligence Reimbursement on the subscriptions.
(b) Notwithstanding anything in this Agreement to the contrary, you agree
to waive payment of your Sales Commissions and Due Diligence
Reimbursement until the Dealer-Manager (or, in the case of the Due
Diligence Reimbursement, the General Partner) receives the related
amounts owed to it pursuant to the Dealer-Manager Agreement (or, in the
case of the Due Diligence Reimbursement, the Partnership Agreement), and
further agree that the Dealer-Manager's or General Partner's liability
for such amounts is limited solely to the proceeds of the related amounts
owed to and received by it under the Dealer-Manager Agreement or
Partnership Agreement.
(c) If the Partnership does not receive the Minimum Subscription Amount,
nothing will be payable to you and all funds advanced by subscribers will
be returned to them with interest earned, if any.
3. State Securities Registration. The Partnership may elect not to qualify
or register Units in any state in which it deems such qualification or
registration is not warranted for any reason in its sole discretion. The
Dealer-Manager shall advise you as to the jurisdictions in which the
Units have been qualified for sale or in which they are exempt from
qualification. Notwithstanding the foregoing, the Dealer-Manager, the
Partnership and the General Partner have not assumed and will not assume
any obligation or responsibility with respect to your right to act as a
broker or dealer with respect to the Units in any jurisdiction.
4. Expenses of Sale. Except as otherwise specifically set forth in this
Agreement, the expenses in connection with the offer and sale of the
Units shall be payable as set forth below.
3
(a) The Dealer-Manager shall pay all expenses incident to the performance
of its obligations under this Agreement, including the fees and expenses
of its attorneys and accountants, even if the offering is not
successfully completed.
(b) You shall pay all expenses incident to the performance of your
obligations under this Agreement, including the fees and expenses of your
own counsel and accountants, even if this offering is not successfully
completed.
5. Conditions of Your Duties. Your obligations under this Agreement, as of
the date of this Agreement and at each applicable closing date, shall be
subject to the performance by the Dealer-Manager of its obligations under
this Agreement and to the performance by the Partnership of its
obligations under the Dealer-Manager Agreement.
6. Conditions of Dealer-Manager's Duties. The Dealer-Manager's obligations
under this Agreement, including the duty to pay compensation as set forth
in Section 2, shall be subject to the accuracy, as of the date of this
Agreement and at each applicable closing date (as if made at such closing
date) of your representations and warranties made in this Agreement, and
to the performance by you of your obligations under this Agreement, and
to receipt by the Dealer-Manager, at or before the applicable closing
date, of a fully executed Subscription Agreement for each purchaser.
7. Indemnification.
(a) You agree to indemnify, defend and hold harmless the Dealer-Manager
and any person who controls the Dealer-Manager within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act from and against
any and all losses, claims, damages, liabilities and expenses (including
but not limited to reasonable attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation) ("Losses")
which the indemnified party or parties may incur under federal or state
law, or otherwise, arising out of or based upon any breach by you of any
of your representations, warranties, covenants, duties or obligations
contained herein.
(b) If any action, suit or proceeding shall be brought against any
indemnified party in respect of which indemnity may be sought pursuant to
Section 7(a), such indemnified party shall promptly notify you in
writing, and you may elect to assume the defense thereof, including the
employment of counsel (which counsel shall be reasonably acceptable to
such indemnified party) and payment of all reasonable fees and expenses.
The failure or delay by an indemnified party to notify you shall not
relieve you from liability which you may have to an indemnified party
unless such failure or delay materially prejudices your ability to defend
such action, suit or proceeding on behalf of such indemnified party. Such
indemnified party shall have the right to employ separate counsel in any
such action, suit or proceeding and to participate in (but not control)
the defense thereof, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) you have agreed in
writing to pay such fees and expenses, (ii) you have failed to assume the
defense or employ counsel reasonably satisfactory to such indemnified
party or (iii) the named parties to any such action, suit or proceeding
(including any impleaded parties) include both such indemnified party and
you, and such indemnified party shall have been advised by its counsel
that representation of such indemnified party and you by the same counsel
would be inappropriate under applicable standards of professional conduct
(whether or not such representation by the same counsel has been
proposed) due to actual or potential differing interests between it and
you (in which case you shall not have the right to assume the defense of
such action, suit or proceeding on behalf of such indemnified party) or
that there may be legal defenses available to such indemnified party that
are different from or in addition to those available to you. It is
understood, however, that you shall, in connection with any one such
action, suit or proceeding or separate but substantially similar or
related actions, suits or proceedings in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of only one separate firm of attorneys (in
addition to any local counsel) at any time for all such indemnified
parties not having actual or potential differing interests with you or
among themselves, which firm shall be designated in writing by the
indemnified party or parties, and that all such fees and expenses shall
be
4
reimbursed as they are incurred. You shall not be liable for any
settlement of any such action, suit or proceeding effected without your
written consent (which consent shall not be unreasonably withheld), but
if settled with such written consent, or if there be a final judgment for
the plaintiff in any such action, suit or proceeding, you agree to
indemnify and hold harmless any Underwriter Indemnified Party, to the
extent provided in the preceding paragraph, from and against any Loss by
reason of such settlement or judgment.
(c) The Dealer-Manager agrees to indemnify, defend and hold harmless you
and any person who controls you, within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act to the same extent as the
foregoing indemnity from you with respect to a breach by the Dealer-
Manager of its representations, warranties, covenants, duties or
obligations contained herein. If any action, suit or proceeding shall be
brought against an indemnified party in respect of which indemnity may be
sought pursuant to this paragraph (c), such indemnified party shall have
the rights and duties given to the Dealer-Manager by paragraph (b) above.
(d) If the indemnification provided for in this Section 7 is unavailable
to an indemnified party under subsections (a) or (c) of this Section 7 in
respect of any Losses, then each applicable indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such Losses in
such proportion as is appropriate to reflect the relative fault of you on
the one hand and of the Dealer-Manager on the other in connection with
the matters which resulted in such Losses, as well as any other relevant
equitable considerations.
(e) No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld),
effect any settlement of any pending or threatened action, suit or
proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are
the subject matter of such action, suit or proceeding.
(f) Any Losses for which an indemnified party is entitled to
indemnification or contribution under this Section 7 shall be paid by the
indemnifying party to the indemnified party as such Losses are incurred.
8. Representations and Agreements to Survive Delivery. All representations,
warranties and agreements of the Dealer-Manager and you in this
Agreement, and the indemnification agreements contained in Section 7 of
this Agreement, shall survive the delivery and execution of this
Agreement, and shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of you or any person
who controls you within the meaning of the Section 15 of the 1933 Act or
Section 20 of the 1934 Act, or by the Dealer-Manager or any person who
controls the Dealer-Manager, or any other indemnified party, and shall
survive sale or any closing on the sale of the Units under this
Agreement.
9. Termination. You shall have the right to terminate this Agreement, other
than the indemnification provisions of Section 7, by giving written
notice any time at or before a closing date:
(a) if the Dealer-Manager shall have failed, refused, or been unable at
or before such closing date, to perform any of its obligations under this
Agreement; or
(b) an event has materially and adversely affected the value of the
Units.
The Dealer-Manager may terminate this Agreement, other than the
indemnification provisions of Section 7, for any reason and at any time
by promptly giving written notice to you.
10. Format of Checks/Escrow Agent. Pending receipt of the Minimum
Subscription Amount (subject to the additional restrictions with respect
to Pennsylvania and Iowa resident as set forth in the Dealer-Manager
Agreement), the Dealer-Manager and you agree that all subscribers shall
be instructed to make their checks, drafts, or money orders payable
solely to "Lease Equity Appreciation Fund I, L.P., Escrow Account," and
you agree to comply with Rule 15c2-4 adopted under the 1934 Act.
If you receive a check, draft, or money order not conforming to the
foregoing instructions, you agree to return the check, draft, or money
order directly to the subscriber not later than the end of the next
5
business day following its receipt from the subscriber. If the Dealer-
Manager receives a check, draft, or money order not conforming to the
foregoing instructions, then the Dealer-Manager shall return the check,
draft, or money order to you not later than the end of the next business
day following its receipt by the Dealer-Manager and you shall then return
the check, draft, or money order directly to the subscriber not later
than the end of the next business day following its receipt from the
Dealer-Manager. Checks, drafts, or money orders received by you which
conform to the foregoing instructions shall be transmitted by you as
provided by under Section 11.
You agree that you are bound by the terms of the escrow agreement, a copy
of which is attached to the Dealer-Manager Agreement as Exhibit "A" (the
"Escrow Agreement").
11. Transmittal Procedures. You shall transmit received investor funds in
accordance with the following procedures.
(a) ▇▇▇▇▇▇▇ receipt of the Minimum Subscription Amount (subject to the
additional restrictions with respect to Pennsylvania and Iowa residents
as set forth in The Dealer-Manager Agreement), you shall promptly, on
receipt of any and all checks, drafts, and money orders received from
prospective purchasers of Units, transmit the same together with the
original executed Subscription Agreement to the Dealer-Manager by the end
of the next business day following receipt of the check, draft, or money
order by you. By the end of the next business day following receipt of
the check, draft, or money order and original executed Subscription
Agreement by the Dealer-Manager, the Dealer-Manager shall transmit the
check, draft, or money order and a copy of the executed Subscription
Agreement to the escrow agent (the "Escrow Agent") under the Escrow
Agreement, and the original executed Subscription Agreement and a copy of
the check, draft, or money order to the Partnership.
(b) On receipt by you of notice from the Partnership or the Dealer-
Manager that the Minimum Subscription Amount (subject to the additional
restrictions with respect to Pennsylvania and Iowa residents as set forth
in The Dealer-Manager Agreement) has been received, you agree that all
subscribers thereafter may be instructed, in the Partnership's sole
discretion, to make their checks, drafts, or money orders payable solely
to "Lease Equity Appreciation Fund I, L.P. Subscription Account"
Thereafter, you shall promptly, on receipt of any and all checks, drafts,
and money orders received from prospective purchasers of Units, transmit
the same together with the original executed Subscription Agreement to
the Dealer-Manager by the end of the next business day following receipt
of the check, draft, or money order by you. By the end of the next
business day following receipt of the check, draft, or money order and
original executed Subscription Agreement by the Dealer-Manager, the
Dealer-Manager shall transmit the check, draft, or money order and the
original executed Subscription Agreement to the Partnership.
12. Parties. This Agreement shall inure to the benefit of and be binding upon
you, the Dealer-Manager, and any respective successors and assigns. This
Agreement shall also inure to the benefit of the indemnified parties,
their successors and assigns. This Agreement is intended to be and is for
the sole and exclusive benefit of the parties hereto, and their
respective successors and assigns, and the indemnified parties and their
successors and assigns, and for the benefit of no other person. No other
person shall have any legal or equitable right, remedy or claim under or
in respect of this Agreement. No purchaser of any of the Units from you
shall be construed a successor or assign merely by reason of such
purchase.
13. Relationship. You are not authorized to hold yourself out as agent of the
Dealer-Manager, the General Partner, the Partnership or of any other
Selling Dealer. This Agreement shall not constitute you a partner of the
General Partner, the Dealer-Manager, the Partnership or of any other
Selling Dealer, nor render the General Partner, the Dealer-Manager, the
Partnership or any general partner thereof, or any other Selling Dealer
liable for any of your obligations.
14. Effective Date. This Agreement is made effective between the parties as
of the date accepted by you as indicated by your signature to this
Agreement.
15. Entire Agreement, Waiver. This Agreement constitutes the entire agreement
between the parties to this Agreement and shall not be amended or
modified in any way except by subsequent agreement executed
6
in writing, and no party shall be liable or bound to the other by any
agreement, except as specifically set forth in this Agreement. Any party
to this Agreement may waive, but only in writing, any term, condition, or
requirement under this Agreement which is intended for its own benefit,
and written waiver of any term or condition of this Agreement shall not
operate as a waiver of any other breach of the term or condition, nor
shall any failure to enforce any provision of this Agreement operate as a
waiver of the provision or any other provision of this Agreement.
16. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
17. Notices. All notices or requests or consents provided for or permitted to
be given pursuant to this Agreement must be in writing and must be given
by depositing same in the United States mail, addressed to the party to
be notified, postpaid, and registered or certified with return receipt
requested or by delivering such notice in person or by telecopier to such
party. Notice given by personal delivery or mail shall be effective upon
actual receipt. Notice given by telecopier shall be effective upon actual
receipt if received during the recipient's normal business hours, or at
the beginning of the recipient's next business day after receipt if not
received during the recipient's normal business hours. Any communications
from you shall be addressed to the Dealer-Manager at P.O. Box 926,
Coraopolis, Pennsylvania 15108-0926; Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇. Any notice
from the Dealer-Manager to you shall be deemed to have been duly given if
mailed, telecopied or telegraphed to you at your address shown below.
18. Acceptance. Please confirm your agreement to become a Selling Dealer
under the terms and conditions set forth above by signing and returning
the enclosed duplicate copy of this Agreement to us at the address set
forth above.
Sincerely,
, 2002 ANTHEM SECURITIES, INC.
By:
Name:
Its:
ACCEPTANCE:
We accept your invitation to become a Selling Dealer under the terms and
conditions set forth in the above Agreement and confirm that all of the
representations and warranties therein concerning a Selling Dealer are true
and correct with respect to us. We hereby acknowledge receipt of copies of the
Prospectus and a copy of the Dealer-Manager Agreement referred to above.
_________________________________________________ , 2002 ______________________________________________________________________ ,
a(n) corporation,
ATTEST:
By:
(SEAL) Secretary ___________________________________________________________ , President
(Address) _____________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
7