ATEL CAPITAL EQUIPMENT FUND VII, L.P.
SELECTED DEALERS AGREEMENT
San Francisco, California
..................., 199_
Gentlemen:
The undersigned, ATEL Securities Corporation (the "Dealer Manager"),
has entered into an agreement (the "Selling Agreement") with ATEL CAPITAL
EQUIPMENT FUND VII, L.P., a California limited partnership (the "Partnership")
and its general partner pursuant to which the undersigned has agreed to use its
best efforts to form and manage, as Dealer Manager, a group of securities
dealers (the "Soliciting Dealers") for the purpose of soliciting offers for the
purchase of units of limited partnership interest ("Units") in the Partnership.
The terms of the offering are set forth in the Partnership's Registration
Statement No. 33-_____, on Form S-1 which was filed with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities Act of 1933,
as amended (the "1933 Act"). Such registration statement in the form in which it
became effective is referred to herein as the "Registration Statement" and the
prospectus included therein, in the form in which it became effective and in the
form as first filed with the Commission pursuant to its Rule 424, is referred to
herein as the "Prospectus." The terms used but not otherwise defined in this
Agreement have the same meanings as in the Prospectus.
You are invited to become one of the Soliciting Dealers and by your
confirmation hereof you agree to act in such capacity and to use your best
efforts, in accordance with the following terms and conditions, to find
purchasers for the Units. You hereby confirm that you are a member in good
standing of the National Association of Securities Dealers, Inc. ("NASD").
l. You hereby agree to solicit, as an independent contractor and not as
our agent or as an agent of the Partnership or its general partner, persons
acceptable to the general partner to enter into the Subscription Agreement in
the form attached to the Prospectus. Until such time as subscription proceeds
for a total of not less than 120,000 Units are received, accepted and deposited
with the escrow agent, all subscription checks shall be payable to "Bank of
America - ACDF VII Escrow." All Subscription Agreements solicited by you shall
be transmitted promptly to the Dealer Manager in accordance with the
instructions set forth in the Subscription Agreements, and all funds received by
you with respect to any Subscription Agreement shall be promptly transmitted to
the Dealer Manager. As used herein the term "promptly transmitted" shall have
the meaning set forth in Rule 15c2-4 under the Securities Exchange Act of 1934
(the "1934 Act"), as interpreted in NASD Notice to Members 84-64 which requires
that during the escrow
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period checks be transmitted from you to us as the "Processing Broker-Dealer" by
the end of the next business day following receipt by you. We in turn will
transmit subscriptions and funds received during the escrow period to the escrow
agent not later than noon of the second business day following receipt of same
by us. After subscriptions for a minimum of 120,000 Units have been received,
accepted and deposited with the escrow agent, and subscription proceeds are
thereafter released to the Partnership pursuant to the terms of the escrow
agreement, all further subscription checks shall be payable directly to the
Partnership. No Subscription Agreement shall be effective unless and until
accepted by the general partner, and in no event will a subscription be
effective until five days after the investor has received a Prospectus.
You agree that you will:
(a) (i) diligently make inquiries as required by law of all
prospective investors in order to ascertain whether a purchase
of Units is suitable for the investors and (ii) inform each
prospective investor of all pertinent facts relating to the
liquidity and marketability of the Units during the term of
the investment;
(b) have reasonable grounds to believe, on the basis of
information obtained from the participant concerning his
investment objectives, other investments, financial situation
and needs, and any other information known by you, that:
(i) the participant is or will be in a
financial position appropriate to enable him to
realize to a significant extent the benefits
described in the Prospectus;
(ii) the participant has a fair market net
worth sufficient to sustain the risks inherent in the
program, including loss of investment and lack of
liquidity; and
(iii) the program is otherwise suitable
for the participant;
(c) maintain copies of all Subscription Agreements and
information relating to suitablity determinations in your
records for the longer of (i) six years from the date of
investment, (ii) the period prescribed by Rule 17a-4 under the
1934 Act, or (iii) the period required by applicable state
blue sky laws;
(d) execute no transaction in a discretionary account
without prior written approval of the transaction by the
investor; and
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(e) comply in all respects with the Conduct Rules of
the NASD in the conduct of the offering of Units.
Furthermore, you expressly agree to be bound by the escrow agreement
executed by the Partnership for the deposit of subscription proceeds pending
receipt and acceptance of subscriptions for a minimum of 120,000 Units.
All subscriptions solicited by you will be strictly subject to
confirmation by us and acceptance thereof by the Partnership and we, the
Partnership and its general partner, reserve the right in our and its
uncontrolled discretion to reject any such subscription and to accept or reject
subscriptions in the order of their receipt by the Partnership or otherwise. A
sale of a Unit shall be deemed to be completed only after (i) the Partnership
receives a properly completed subscription agreement from the Soliciting Dealer,
together with payment of the full purchase price of each purchased Unit from a
buyer who satisfies each of the terms and conditions of the Registration
Statement and Prospectus; (ii) a period of five days has passed following the
receipt by the investor of a Prospectus; and (iii) such subscription agreement
has been accepted in writing by the general partner. Neither you nor any other
person is authorized to give any information or make any representation other
than those contained in the Prospectus or in any supplemental sales literature
furnished by the Dealer Manager or the Partnership for use in making
solicitations in connection with the offer and sale of the Units.
Upon release by us, you may offer the Units at the public offering
price, subject to the terms and conditions hereof.
2. We understand that the Partnership will provide you with such number
of copies of the enclosed Prospectus and such number of copies of amendments and
supplements thereto as you may reasonably request. In this connection, the
Partnership and its general partner have represented and warranted to us that
the Registration Statement and the Prospectus, and all amendments or supplements
thereto, will contain all statements which are required to be stated therein in
accordance with the 1933 Act and the Rules and Regulations thereunder, and
neither the Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, will contain any untrue statement of a material fact or omit
any material fact required to be stated therein or necessary to make the
statements therein not misleading. It is understood by the Partnership and its
general partner that Section (b)(3) of Rule 2810 of the Conduct Rules of the
NASD requires that you determine that all material facts relating to the subject
offering are adequately and accurately disclosed to prospective subscribers and
provide a basis for evaluating the offering, and the Partnership and its general
partner therefore have specifically represented and warranted to us that:
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(i) all items of compensation payable to them and their affiliates are
and will be set forth in the Prospectus under the caption "Management
Compensation";
(ii) all types of Equipment to be acquired by the Partnership are and
will be described in the Prospectus under the caption "Investment
Objectives and Policies - Types of Equipment" or in a supplement to be
included inside the back cover of the
Prospectus;
(iii) all material tax aspects are and will be set forth in the
Prospectus under the captions "Income Tax Consequences" and "Risk
Factors";
(iv) the financial position and business experience of the general
partner and of those affiliates of the general partner who are of
relevance to the subject offering are and will be accurately and
adequately reflected in the Prospectus under the captions "Management"
and "Prior Performance Summary";
(v) all material conflicts of interest and risk factors are and will be
set forth in the Prospectus under the captions "Conflicts of Interest"
and "Risk Factors"; and
(vi) all pertinent facts relating to the liquidity and marketability of
the Units are and will be set forth in the Prospectus under the
captions "Risk Factors - Limited Transferability of Units" and "Summary
of the Partnership Agreement - Transferability of Units."
We also understand that the Partnership may provide you with certain
supplemental sales material to be used by you in connection with the
solicitation of Units in the Partnership. In the event you elect to use such
supplemental sales material, you agree that such material shall not be used in
connection with the solicitations of Units unless accompanied or preceded by the
Prospectus as then currently in effect and as it may be amended or supplemented
in the future, unless you are notified by us that such material has been
prepared and cleared for use in compliance with the SEC's Rule 134.
We shall have full authority to take such action as we may deem
advisable in respect of all matters pertaining to the offering. We shall be
under no liability to you except for lack of good faith and for obligations
expressly assumed by us in this Agreement. Nothing contained in this paragraph
is intended to operate as, and the provisions of this paragraph shall not
constitute, a waiver by you of compliance with any provision of the 1933 Act, or
of the rules and regulations thereunder.
You confirm that you are familiar with Securities Act Release No. 4968
and Rule l5c2-8 under the 1934 Act, relating to the distribution of preliminary
and final prospectuses, and confirm that you have complied and will comply
therewith. We will make
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available to you, to the extent they are made available to us by the
Partnership, such number of copies of the Prospectus as you may reasonably
request for the purposes contemplated by the 1933 Act and the applicable rules
and regulations thereunder.
You agree that you will exercise due diligence in determining that all
material facts are adequately and accurately disclosed in the Prospectus. For
purposes of compliance with Sections (b)(3)(A) and (B) of Rule 2810 of the
Conduct Rules of the NASD regarding due diligence, it is understood and agreed
that you may rely upon the results of an inquiry conducted by another member or
members of the NASD, provided that:
(1) you have reasonable grounds to believe that such
inquiry was conducted with due care;
(2) the results of the inquiry were provided to you with
the consent of the member or members conducting or directing
the inquiry; and
(3) no member that participated in the inquiry is a
sponsor of the Partnership or an Affiliate of such sponsor.
3. We will be entitled to receive from the Partnership a selling
commission equal to 9.5% of the Gross Proceeds. For your services hereunder,
subject to the condition that Subscription Agreements for a minimum of 120,000
Units have been received and accepted by the general partner by the termination
date of the offering, you will receive from us a selling commission equal to 8%
of the proceeds from all Subscription Agreements solicited by you and accepted
by the general partner. No other payment or reimbursement of selling
compensation or expenses will be made hereunder unless and until we have
executed an addendum to this Agreement setting forth the terms of such payment
or reimbursement.
In the event that a sale of Units for which you have solicited a
Subscription Agreement shall not occur, whether by reason of the failure of any
condition specified herein or in the Subscription Agreement or the Selling
Agreement, rejection of the subscription by the Partnership or otherwise, no
payment with respect to such Unit shall be made to you. Further, it is
understood and agreed that we shall be under no obligation to make payment to
you, and you expressly waive payment, of any commission hereunder except to the
extent that we shall have first received from the Partnership the selling
commission to which we are entitled in connection with the subject transaction.
Any payment to you will be payable only with respect to transactions lawful in
the jurisdictions where they occur.
We as Dealer Manager may, in our discretion, rebate to a purchaser of
Units the selling commissions otherwise payable in connection with any
investment in Units by the general partner, a Soliciting Dealer or any Affiliate
or employee of the foregoing. Any such rebate will only be made if and to the
extent that the
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Soliciting Dealer which would otherwise be entitled to a selling commission on
any such transaction agrees to such rebate. Therefore, we will by separate
letter agreement establish the amount of selling commission rebate, if any, on
transactions for which you would otherwise be entitled to the full selling
commission, but which are eligible for the rebate. It shall be your
responsibility to notify your Affiliates and employees as to the amount, if any,
which you agree to rebate.
As described in the Prospectus, we may from time to time during the
offering establish a non-cash sales incentive bonus program, subject to prior
NASD approval and compliance with all applicable NASD rules and procedures.
4. This Agreement may be terminated by us at any time upon
five days' written notice to you.
5. In soliciting persons to acquire the Units, you agree to comply with
any applicable requirements of the 1933 Act, the 1934 Act, the published rules
and regulations thereunder and the Conduct Rules of the NASD and, in particular,
you agree that you will not give any information or make any representation
other than those contained in the Prospectus and in any supplemental sales
literature furnished to you by the Partnership or us for use in making such
solicitations. You further confirm and agree that, in connection with any
assistance you may provide in the sale or transfer of Units, you will fulfill
your obligations pursuant to Sections (b)(2)(B) and (b)(3)(D) of Rule 2810 of
the Conduct Rules of the NASD.
6. We assume no obligation or responsibility in respect of the
qualification of the Units under the laws of any jurisdiction. The Blue Sky
Memorandum enclosed, or to be promptly furnished to you, indicates the states in
which it is believed by the Partnership that the Units are exempt from, or have
been qualified under, the applicable state securities or "blue sky" laws and the
restrictions, if any, on the rights of dealers to solicit sales thereof. It is
understood that under no circumstances will you engage in any activities
hereunder in any state which is not listed in said Blue Sky Memorandum as a
state in which the Units are exempt from, or qualified under, the state
securities or "blue sky" laws. Solicitations are to be made only by Soliciting
Dealers qualified to act as such for such purpose within the states in which
they make such solicitations.
7. Nothing contained herein shall constitute the Soliciting Dealers and
us, or any of them, an association, partnership, unincorporated business, or
other separate entity. We shall be under no liability to make any payment to you
except out of funds received by us from the Partnership as hereinabove provided,
and we shall not be under any liability for or in respect of the value or
validity of the Subscription Agreements, the Units, or the performance by anyone
of any agreement on its part, or for, or in respect of any matters connected
with this Agreement, except for
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lack of good faith, and for obligations expressly assumed by us in
this Agreement.
8. It is expressly understood 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 Units of the
Partnership. Such other NASD members may be employed by the Dealer Manager as
Soliciting Dealers 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 Soliciting Dealers and as are in
accordance with the terms of the Registration Statement, and to that extent such
other Soliciting Dealers shall compete with you in the sale of the Units.
9. Under the Selling Agreement, the general partner has agreed to
indemnify us, the Soliciting Dealers and each person, if any, who controls us or
any Soliciting Dealer within the meaning of the 1933 Act against certain
liabilities under such Act. Each Soliciting Dealer agrees to indemnify the
general partner and the Partnership as provided in Paragraph 7 of the Selling
Agreement and to indemnify us and each other Soliciting Dealer to the same
extent and in the same manner as such Soliciting Dealer agrees to indemnify the
general partner and the Partnership. In the execution of the Selling Agreement,
we shall be deemed to have acted as a representative of each of the Soliciting
Dealers, and the Soliciting Dealers shall be deemed to be in privity of contract
with the general partner and the Partnership.
10. Any notice from us to you as Soliciting Dealer shall be deemed to
have been duly given if mailed or telegraphed to you at your address set forth
below.
Please confirm this agreement to solicit persons to acquire Units on
the foregoing terms and conditions by signing and returning the form enclosed
herewith.
Very truly yours,
ATEL SECURITIES CORPORATION
By: ______________________________
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ATEL Securities Corporation
235 Pine Street, 6th Floor
San Francisco, California 94104
RE: ATEL Capital Equipment Fund VII, L.P.
Gentlemen:
The undersigned confirms its agreement to act as a Soliciting Dealer as
referred to in the foregoing Soliciting Dealers Agreement, subject to the terms
and conditions of such Agreement. The undersigned confirms that it is a member
in good standing of the National Association of Securities Dealers, Inc.
PLEASE NOTE: The undersigned further confirms that its registered
representatives (check one):
__ are authorized
__ are not authorized
to subscribe for Units for their own account on terms which include a rebate of
commissions otherwise payable on their investment, as described in the
Prospectus under "Plan of Distribution."
Dated: ________, 199_. ________________________________________
(Print Name of Firm)
By: ____________________________________
(Authorized Representative)
----------------------------------------
(Print Name of Authorized Representative)
Address___________________________
----------------------------------
Phone Number (___)________________
Send Due Diligence Information To: Send Marketing Information To:
- -------------------------------- ------------------------------
- -------------------------------- ------------------------------
Send Commission Checks To:
--------------------------
--------------------------
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