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WELCO SECURITIES, INC.
OFFERING OF
$40,000,000
SENIOR THRIFT CERTIFICATES
OF
WALNUT EQUIPMENT LEASING CO., INC.
SELECTED DEALERS AGREEMENT
WELCO SECURITIES, INC., Suite 105, One Belmont Avenue, Bala Cynwyd,
Pennsylvania 19004 (the "Underwriter"), invites your participation as a
Participating Dealer ("Participating Dealer") in an offering of $40,000,000 in
principal amount of Senior Thrift Certificates referred to herein as "the
Certificates" (offered in minimum denominations of $100 per Certificate) which
is also referred to herein as the "Securities", being offered by Walnut
Equipment Leasing Co., Inc. (the "Company"). The Securities are more
particularly described in the enclosed Prospectus, additional copies of which
will be supplied in reasonable quantities upon request. The Company through
the Underwriter is offering the Securities subject to the terms of this
Agreement, the Underwriter's instructions which may be forwarded to the
Participating Dealers from time to time, and is made only to Selected Dealers
who are members in good standing of the National Association of Securities
Dealers, Inc. ("NASD") or foreign dealers who are not eligible for membership
in the NASD and who agree to abide by the Rules of Fair Practice of the NASD,
including Sections 8, 24, 25 and 36 thereof, and the interpretations of the
NASD's Board of Governors with respect to free-riding and withholding in making
sales to purchasers outside the United States and not to effect sales of the
Securities within the United States, its territories or its possessions, or to
persons who are citizens thereof or residents therein. This invitation is made
by the Underwriter only if the Company's Securities may be lawfully offered to
dealers in your state. The terms and conditions of this invitation are as
follows:
1. ACCEPTANCE OF ORDERS. Orders received from the Participating Dealer
will be accepted only at the price, in the amounts, and on the terms which are
set forth in the Company's Prospectus.
2. SELLING CONCESSION. As a Participating Dealer, you will be allowed a
concession of 1/15 of 1% per month for each month of the principal amount of
all Fixed Rate Certificates sold by you.
3. STATUS OF DEALER. The Participating Dealer agrees to purchase the
Company's Securities being offered for its customers only through the
Underwriter, and all such purchases shall be made only upon orders already
received by the Participating Dealer from its customers. In all sales of the
Company's Securities to the public the Participating Dealer shall confirm as
agent for another.
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4. DELIVERY OF FUNDS. The Participating Dealer will promptly transmit
directly to the Company, all funds received from the purchasers and a
confirmation of a record of each sale which will set forth the name, address,
and social security number of each individual purchaser, the maturity requested
for each Certificate purchased, and if there is more than one registered owner,
whether the certificate or certificates evidencing the ownership of the
security purchased are to be issued to the purchasers in joint tenancy or
otherwise. Also, each Participating Dealer shall report, in writing, to the
Company the principal amount of Certificates which have been sold in each state
and the number of persons in each such state who purchased the Company's
Securities from the Participating Dealer. Each sale may be rejected by the
Company, and if rejected, the Underwriter as agent for the Company will return
to you all funds paid by the purchaser which have been received by the Company.
In such event, the Participating Dealer will return to the purchaser within
five (5) business days after actual receipt from the Underwriter the full
purchase price paid by the purchaser. For purposes of this Agreement, a
purchaser is a subscriber for the principal amount of Certificates until such
time as his subscription is received and accepted by the Underwriter as agent
for the Company.
5. PAYMENT. Payment for the Company's Securities shall accompany all
confirmations and applications. All checks and other orders for payment of
money shall be made payable to "Walnut Equipment Leasing Co., Inc." Securities
sold by the Participating Dealer shall be available for delivery from the
Company.
6. DEALER'S UNDERTAKINGS. No person is authorized to make any
representations concerning the Company's Securities except those contained in
the Company's Prospectus. The Participating Dealer will not sell the Company's
Securities pursuant to this Agreement unless the Prospectus is furnished to the
purchaser at least 48 hours prior to the mailing of the confirmation of sale,
or is sent to such person under such circumstances that it would be received by
him 48 hours prior to his receipt of a confirmation of the sale. The
Participating Dealer agrees not to use any supplemental sales literature of any
kind without prior written approval of the Company unless it is furnished by
the Company for such purpose. In offering and selling the Company's
Securities, the Participating Dealer will rely solely on the representations
contained in the Company's Prospectus. Additional copies of the Prospectus
will be supplied by the Company in reasonable quantities upon request.
7. CONDITIONS OF OFFERING. All sales will be subject to delivery by the
Company to the purchaser of certificates evidencing the principal indebtedness
of Certificates.
8. FAILURE OF ORDER. If an order is rejected or if a payment is received
which proves insufficient or worthless, any compensation paid to the
Participating Dealer shall be returned either by the Participating Dealer's
remittances in cash or by a charge against the account of the Participating
Dealer, as the Underwriter may elect.
9. REPRESENTATIONS AND AGREEMENTS OF DEALERS. By accepting this
Agreement, the Participating Dealer represents that: it is registered as a
Broker/Dealer under the Securities Exchange Act of 1934, as amended; it is
qualified to act as a dealer in the states or other jurisdictions in which
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it offers the Company's Securities; it is a member in good standing of the
National Association of Securities Dealers, Inc.; and it will maintain such
registration, qualifications and memberships throughout the term of this
Agreement. Further, the Participating Dealer agrees to comply with all
applicable federal laws; the laws of the state or other jurisdictions
concerned; and the Rules and Regulations of the National Association of
Securities Dealers, Inc. Further, the Participating Dealer agrees that it will
not offer or sell the Company's Securities in any state or jurisdiction except
where the Securities are qualified for sale. The Participating Dealer shall not
be entitled to any compensation during any period in which it has been
suspended or expelled from membership in the National Association of Securities
Dealers, Inc. The Participating Dealer will be advised concerning the states
where the Certificates have been registered for sale.
10. DEALER'S EMPLOYEES. By accepting this Agreement, the Participating
Dealer has assumed full responsibility for thorough and prior training of its
representatives concerning the selling methods to be used in connection with
the offer and sale of the Company's Securities, giving special emphasis to the
principles of full and fair disclosure to prospective investors and the
prohibition against "Free-Riding and Withholding."
11. PARTICIPATING DEALER'S INDEMNIFICATION. The Participating Dealer
hereby agrees to indemnify and to hold harmless the Underwriter and each
person, if any, who controls the Underwriter within the meaning of Section 15
of the Securities Act of 1933, as amended, from and against any and all losses,
claims, damages, or liabilities to which the Underwriter may become subject
under the Securities Act of 1933, as amended, or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon information contained in the Registration Statement,
or other documents filed with the Securities and Exchange Commission to the
extent such information is supplied by the Participating Dealer to the
Underwriter for inclusion therein, or are based upon alleged misrepresentations
or omissions to state material facts in connection with statements made by the
Participating Dealer or the Participating Dealer's salesmen orally or by other
means; and the Participating Dealer will reimburse the Underwriter for any
legal or other expenses reasonably incurred in connection with the
investigation of or the defending of any such action or claim. The Underwriter
shall, after receiving the first Summons or other legal process disclosing the
nature of the action being served upon it, in any proceeding in respect of
which indemnity may be sought by the Underwriter hereunder, promptly notify the
Participating Dealer in writing of the commencement thereof and the
Participating Dealer shall be entitled to participate in (and, to the extent
the Participating dealer shall wish, to direct) the defense, which shall be
conducted by counsel of good standing satisfactory to the Underwriter. If the
Participating Dealer shall fail to provide such defense, the Underwriter may
defend such action at the Participating Dealer's cost and expense. The
Participating Dealer's obligation under this paragraph shall survive the
termination of this Agreement.
12. COMPLIANCE WITH NASD BY-LAWS AND REGULATIONS. Each participating
dealer shall conduct itself in a manner consistent with the provisions of
Section 12 of Schedule E to the NASD By-Laws, and no transaction in the
Securities to be offered will be executed by any member in a discretionary
account without the prior specific written approval of the customer.
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Investor's checks will be transmitted directly to the Company by noon of
the next business day following receipt.
13. EXPENSES. No expenses will be charged to Participating Dealers. A
single transfer tax, if any, on the sale of the Securities by the Participating
Dealer to its customer will be paid when such Securities are delivered to the
Participating Dealer for delivery to its customers. However, the Participating
Dealer will pay its proportionate share of any transfer tax or any other tax
(other than the single transfer tax described above) if any such tax shall be
from time to time assessed against the Underwriter and other Participating
Dealers.
14. COMMUNICATIONS. All communications to the Underwriter should be sent
to the address shown in the opening paragraph of this Agreement. Any notice to
the Participating Dealer shall be properly given if mailed or telephone to the
Participating Dealer below. This Agreement shall be construed according to the
laws of the Commonwealth of Pennsylvania.
15. ASSIGNMENT AND TERMINATION. This Agreement may not be assigned by the
Participating Dealer without the Underwriter's consent. This Agreement will
terminate upon the termination of the Offering except that either party may
terminate this Agreement at any time by giving written notice to the other.
Accepted on:---------------------------- WELCO SECURITIES, INC.
Firm Name:------------------------------ -------------------------------
Kenneth S. Shapiro, President
By:-------------------------------------
(Signature)
Address:--------------------------------
Telephone:------------------------------
I.R.S. Employer Identification No.--------------------------