As filed with the Securities and Exchange Commission on June 11, 1999
Registration No. 333-67787
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. ONE
TO
FORM S-11
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933, AS AMENDED
CNL HOSPITALITY PROPERTIES, INC.
(Exact Name of Registrant as Specified in Charter)
400 East South Street
Orlando, Florida 32801
Telephone: (407) 650-1000
(Address of principal executive offices)
James M. Seneff, Jr.
Chief Executive Officer
400 East South Street
Orlando, Florida 32801
Telephone: (407) 650-1000
(Name, Address and Telephone
Number of Agent for Service)
COPIES TO:
THOMAS H. McCORMICK, ESQUIRE
PATRICK T. CONNORS, ESQUIRE
Shaw Pittman 2300 N
Street, N.W.
Washington, D.C. 20037
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 36. Financial Statements and Exhibits.
(a) Not applicable.
(b) Exhibits:
1.1 Form of Managing Dealer Agreement (Filed herewith.)
1.2 Form of Participating Broker Agreement (Filed herewith.)
*1.3 Form of Warrant Purchase Agreement
*3.1 CNL American Realty Fund, Inc. Articles of Incorporation
(Previously filed as Exhibit 3.1 to the Registrant's
Registration Statement on Form S-11 (Registration No.
333-9943) (the "1996 Form S-11") and incorporated herein
by reference.)
*3.2 CNL American Realty Fund, Inc. Amended and Restated
Articles of Incorporation (Previously filed as Exhibit 3.2
to the 1996 Form S-11 and incorporated herein by
reference.)
*3.3 CNL American Realty Fund, Inc. Bylaws (Previously filed as
Exhibit 3.3 to the 1996 Form S-11 and incorporated herein
by reference.)
*3.4 Articles of Amendment to the Amended and Restated Articles
of Incorporation of CNL American Realty Fund, Inc. dated
June 3, 1998. (To change the name of the Company from CNL
American Realty Fund, Inc. to CNL Hospitality Properties,
Inc.) (Previously filed as Exhibit 3.4 to the 1996 Form
S-11 and incorporated herein by reference.)
*3.5 Articles of Amendment to the Amended and Restated Articles
of Incorporation of CNL Hospitality Properties, Inc. dated
May 26, 1999.
*4.1 CNL American Realty Fund, Inc. Articles of Incorporation
(Previously filed as Exhibit 3.1 and incorporated herein
by reference.)
*4.2 CNL American Realty Fund, Inc. Amended and Restated
Articles of Incorporation (Previously filed as Exhibit 3.2
and incorporated herein by reference.)
*4.3 CNL American Realty Fund, Inc. Bylaws (Previously filed as
Exhibit 3.3 and incorporated herein by reference.)
*4.4 Form of Reinvestment Plan (Included in the Prospectus as
Appendix A and incorporated herein by reference.)
*4.5 Articles of Amendment to the Amended and Restated Articles
of Incorporation of CNL American Realty Fund, Inc. dated
June 3, 1998. (Previously filed as Exhibit 3.4 to the 1996
Form S-11 and incorporated herein by reference.)
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* Previously filed
<PAGE>
*4.6 Articles of Amendment to the Amended and Restated Articles
of Incorporation of CNL Hospitality Properties, Inc. dated
May 26, 1999. (Previously filed as Exhibit 3.5 and
incorporated herein by reference.)
*5 Opinion of Shaw Pittman as to the legality of the
securities being registered by CNL Hospitality Properties,
Inc.
*8 Opinion of Shaw Pittman regarding certain material tax
issues relating to CNL Hospitality Properties, Inc.
*10.1 Form of Escrow Agreement between CNL Hospitality
Properties, Inc. and SouthTrust Asset Management Company
of Florida, N.A.
*10.2 Form of Advisory Agreement (Previously filed as Exhibit
10.2 to the 1996 Form S-11 and incorporated herein by
reference.)
*10.3 Form of Joint Venture Agreement
*10.4 Form of Indemnification and Put Agreement (Previously
filed as Exhibit 10.4 to the 1996 Form S-11 and
incorporated herein by reference.)
*10.5 Form of Unconditional Guaranty of Payment and Performance
(Previously filed as Exhibit 10.5 to the 1996 Form S-11
and incorporated herein by reference.)
*10.6 Form of Purchase Agreement (Previously filed as Exhibit
10.6 to the 1996 Form S-11 and incorporated herein by
reference.)
*10.7 Form of Lease Agreement including Rent Addendum,
Construction Addendum and Memorandum of Lease (Previously
filed as Exhibit 10.7 to the 1996 Form S-11 and
incorporated herein by reference.)
*10.8 Form of Reinvestment Plan (Included in the Prospectus as
Appendix A and incorporated herein by reference.)
*10.9 Form of Indemnification Agreement dated as of July 9,
1997, between CNL American Realty Fund, Inc. and each of
James M. Seneff, Jr., Robert A. Bourne, G. Richard
Hostetter, J. Joseph Kruse, Richard C. Huseman, Charles A.
Muller, Jeanne A. Wall and Lynn E. Rose, dated as of
October 31, 1998, between CNL Hospitality Properties, Inc.
and C. Brian Strickland dated as of January 7, 1999,
between CNL Hospitality Properties, Inc. and John A.
Griswold, dated as of February 10, 1999, between CNL
Hospitality Properties, Inc. and each of Charles E. Adams
and Craig M. McAllaster and dated as of February 24, 1999,
between CNL Hospitality Properties, Inc. and each of
Matthew W. Kaplan and Lawrence A. Dustin. (Previously
filed as Exhibit 10.9 to the 1996 Form S-11 and
incorporated herein by reference.)
*10.10 Agreement of Limited Partnership of CNL Hospitality
Partners, LP (Previously filed as Exhibit 10.10 to the
1996 Form S-11 and incorporated herein by reference.)
*10.11 Hotel Purchase and Sale Contract between CNL Real Estate
Advisors, Inc. and Gwinnett Residence Associates, LLC,
relating to the Residence Inn - Gwinnett Place (Previously
filed as Exhibit 10.11 to the 1996 Form S-11 and
incorporated herein by reference.)
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* Previously filed
<PAGE>
*10.12 Assignment and Assumption Agreement between CNL Real
Estate Advisors, Inc. and CNL Hospitality Partners, LP,
relating to the Residence Inn - Gwinnett Place (Previously
filed as Exhibit 10.12 to the 1996 Form S-11 and
incorporated herein by reference.)
*10.13 Hotel Purchase and Sale Contract between CNL Real Estate
Advisors, Inc. and Buckhead Residence Associates, LLC,
relating to the Residence Inn - Buckhead (Lenox Park)
(Previously filed as Exhibit 10.13 to the 1996 Form S-11
and incorporated herein by reference.)
*10.14 Assignment and Assumption Agreement between CNL Real
Estate Advisors, Inc. and CNL Hospitality Partners, LP,
relating to the Residence Inn - Buckhead (Lenox Park)
(Previously filed as Exhibit 10.14 to the 1996 Form S-11
and incorporated herein by reference.)
*10.15 Lease Agreement between CNL Hospitality Partners, LP and
STC Leasing Associates, LLC, dated August 1, 1998,
relating to the Residence Inn - Gwinnett Place (Previously
filed as Exhibit 10.15 to the 1996 Form S-11 and
incorporated herein by reference.)
*10.16 Lease Agreement between CNL Hospitality Partners, LP and
STC Leasing Associates, LLC, dated August 1, 1998,
relating to the Residence Inn - Buckhead (Lenox Park)
(Previously filed as Exhibit 10.16 to the 1996 Form S-11
and incorporated herein by reference.)
*10.17 Master Revolving Line of Credit Loan Agreement with CNL
Hospitality Properties, Inc. and Colonial Bank, dated July
31, 1998 (Previously filed as Exhibit 10.17 to the 1996
Form S-11 and incorporated herein by reference.)
*10.18 Master Loan Agreement by and between CNL Hotel Investors,
Inc. and Jefferson-Pilot Life Insurance Company, dated
February 24, 1999 (Previously filed as Exhibit 10.18 to
the 1996 Form S-11 and incorporated herein by reference.)
*10.19 Securities Purchase Agreement between CNL Hospitality
Properties, Inc. and Five Arrows Realty Securities II
L.L.C., dated February 24, 1999 (Previously filed as
Exhibit 10.19 to the 1996 Form S-11 and incorporated
herein by reference.)
*10.20 Subscription and Stockholders' Agreement among CNL Hotel
Investors, Inc., Five Arrows Realty Securities II L.L.C.,
CNL Hospitality Partners, LP and CNL Hospitality
Properties, Inc., dated February 24, 1999 (Previously
filed as Exhibit 10.20 to the 1996 Form S-11 and
incorporated herein by reference.)
*10.21 Registration Rights Agreement by and between CNL
Hospitality Properties, Inc. and Five Arrows Realty
Securities II L.L.C., dated February 24, 1999 (Previously
filed as Exhibit 10.21 to the 1996 Form S-11 and
incorporated herein by reference.)
*23.1 Consent of PricewaterhouseCoopers LLP, Certified Public
Accountants, dated May 21, 1999
*23.2 Consent of Shaw Pittman (Contained in its opinion filed
herewith as Exhibit 5 and incorporated herein by
reference.)
*23.3 Consent of Arthur Andersen LLP, Certified Public
Accountants, dated May 21, 1999
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* Previously filed
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-11 and has duly caused this
Post-Effective Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Orlando,
State of Florida, on June 11, 1999.
CNL HOSPITALITY PROPERTIES, INC.
(Registrant)
By: /s/ James M. Seneff, Jr.
James M. Seneff, Jr.
Chairman of the Board and Chief
Executive Officer
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed
below by the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C>
Signature Title Date
--------- ----- ----
/s/ James M. Seneff, Jr. Chairman of the Board and June 11, 1999
---------------------------------------- Chief Executive Officer
JAMES M. SENEFF, JR. (Principal Executive Officer)
/s/ Robert A. Bourne Director and President June 11, 1999
---------------------------------------- (Principal Financial Officer)
ROBERT A. BOURNE
/s/ Mathew W. Kaplan Director June 11, 1999
----------------------------------------
MATHEW W. KAPLAN
/s/ Charles E. Adams Independent Director June 11, 1999
----------------------------------------
CHARLES E. ADAMS
/s/ Lawrence A. Dustin Independent Director June 11, 1999
----------------------------------------
LAWRENCE A. DUSTIN
/s/ John A. Griswold Independent Director June 11, 1999
----------------------------------------
JOHN A. GRISWOLD
/s/ Craig M. McAllaster Independent Director June 11, 1999
----------------------------------------
CRAIG M. MCALLASTER
</TABLE>
Exhibit 1.1
Form of Managing Dealer Agreement
<PAGE>
MANAGING DEALER AGREEMENT
THIS AGREEMENT, dated as of ___________, 1999, is made by and between
CNL HOSPITALITY PROPERTIES, INC., a Maryland corporation (the "Company"); and
CNL SECURITIES CORP., a Florida corporation (the "Managing Dealer").
WHEREAS, the Company proposes to offer and sell up to an aggregate of
27,500,000 shares of common stock in the Company (the "Shares") to the public
pursuant to a public offering and 1,000,000 shares of common stock in the
Company issuable upon the exercise of warrants granted to the Managing Dealer;
WHEREAS, the Managing Dealer is registered with the National
Association of Securities Dealers, Inc. as a broker-dealer, and is presently or,
prior to any offers or sales of Shares, will be licensed in all fifty states,
the District of Columbia, and the Commonwealth of Puerto Rico as a broker-dealer
qualified to offer and sell to the public securities of the type represented by
the Shares; and
WHEREAS, the Company desires to retain the Managing Dealer to use its
best efforts to sell the Shares and to manage the sale by others of the Shares,
and the Managing Dealer is willing and desires to serve as the Managing Dealer
for the Company for the sale of the Shares upon the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the Company and the Managing
Dealer agree as follows:
SECTION 1
DEFINITIONS
Whenever used in this Agreement, the following terms shall have the
following specified meanings.
1.1 "NASD" means the National Association of Securities Dealers, Inc.
1.2 "Offering" means the offering of up to 27,500,000 Shares of CNL
HOSPITALITY PROPERTIES, INC. to the public pursuant to the terms and conditions
of the Registration Statement.
1.3 "Offering Period" means the period commencing on the effective date
of the Registration Statement and ending on the earliest of the following: (i)
the later of one year after the initial date of the Prospectus or, at the
Company's election, two years after the initial date of the Prospectus; (ii) the
acceptance by the Company of subscriptions for 27,500,000 Shares, with 2,500,000
of such Shares available only to investors who participate in the Company's
dividend reinvestment plan, subject to Paragraph 3.8 hereof; (iii) the
termination of the Offering by the Company; (iv) the termination of the
effectiveness of the Registration Statement; or (v) the termination of the
Company.
1.4 "Participating Brokers" mean those broker-dealers engaged by the
Managing Dealer to participate in the Offering pursuant to Paragraph 3.2.
1.5 "Prospectus" means the final prospectus included in the
Registration Statement, pursuant to which the Company will offer Shares to the
public, as the same may be amended or supplemented from time to time after the
effective date of the Registration Statement.
1.6 "Registration Statement" means the registration statement pursuant
to which the Company has registered the Shares with the SEC as provided in the
Securities Act of 1933, as amended, as such registration statement may be
amended or supplemented from time to time.
1.7 "SEC" means the Securities and Exchange Commission.
1.8 "Shares" mean the shares of Common Stock of the Company, par value
$0.01 per share, with a purchase price of $10.00 per share. An aggregate of up
to 27,500,000 Shares will be offered pursuant to the Registration Statement.
1.9 "Soliciting Dealer Warrant" means a warrant to purchase one share
of common stock of the Company for every 25 Shares sold through the Offering,
which are issuable to the Managing Dealer (all or a portion of which may be
reallowed to Soliciting Dealers with prior written approval from, and in the
sole discretion of, the Managing Dealer and are to be exercised during the
five-year period commencing with the date the Offering begins (the "Exercise
Period"), at a price of $12.00 per share.
1.10 "State Regulatory Authorities" mean the commissions, departments,
agencies or other authorities in the fifty states, the District of Columbia, and
the Commonwealth of Puerto Rico which regulate the offer and sale of securities.
1.11 "Company" means CNL Hospitality Properties, Inc., a Maryland
corporation.
SECTION 2
APPOINTMENT
Subject to the terms and conditions set forth in this Agreement,
including Paragraph 3.8 hereof, the Company hereby appoints the Managing Dealer
as the managing dealer of the Offering to use its best efforts to sell up to
27,500,000 Shares of the Company and to manage the sale by others of such Shares
for the Company's account. The Managing Dealer hereby accepts such appointment.
SECTION 3
SALE OF SHARES
3.1 Best Efforts. The Managing Dealer shall use its best efforts during
the Offering Period to sell or cause to be sold the Shares in such quantities
and to such persons and in accordance with such terms as are set forth in this
Agreement, the Prospectus and the Registration Statement. Notwithstanding
anything herein to the contrary, the Managing Dealer shall have no obligation
under this Agreement to purchase any of the Shares for its own account.
3.2 Association of Other Broker-Dealers. The Company hereby
acknowledges and agrees that the Managing Dealer may engage Participating
Brokers to participate in the Offering, provided that (i) all Participating
Brokers are registered with the NASD and are duly licensed by the State
Regulatory Authorities in the jurisdictions in which they will offer and sell
Shares or exempt from broker-dealer registration with the NASD and the State
Regulatory Authorities, and (ii) all such engagements are evidenced by written
agreements, the terms and conditions of which substantially conform to the form
of Participating Broker Agreement approved by the Company and attached hereto as
Exhibit A (the "Participating Broker Agreement"). The Managing Dealer is
authorized to reallow so much of the commissions which it receives under
Paragraph 4.1 to Participating Brokers as it sees fit.
3.3 Telephonic Subscriptions.
(a) The Managing Dealer may permit certain Participating
Brokers to accept telephonic or other oral subscriptions for Shares;
provided, however, that any such Participating Broker agrees that: (i)
the registered representative and branch manager of the Participating
Broker shall execute the subscription agreement on behalf of any
investor who telephonically or orally subscribes for Shares; (ii) the
Participating Broker shall not charge investors who telephonically or
orally subscribe for Shares any additional fees, including but not
limited to fees relating to opening an account with the Participating
Broker; and (iii) the Participating Broker shall not accept telephonic
or oral subscriptions for Shares from any investor unless such investor
has received a copy of the Company's Prospectus prior to making a
decision to invest. The Managing Dealer shall enter into a written
agreement with each Participating Broker who wishes to accept
telephonic or other oral subscriptions for Shares from investors in
certain states more particularly identified in the Prospectus, pursuant
to which the Participating Broker shall agree to explain to such
investor that: (i) the investor shall have the right to rescind such
subscription for a period of ten (10) days following the receipt of the
Confirmation (as hereinafter defined); and (ii) unless the investor
rescinds such subscription within the applicable period of time, the
investor shall be bound by the subscription agreement. The Managing
Dealer shall confirm the receipt of subscriptions for Shares which have
been subscribed for by telephone or other oral instructions by written
notice to the investor (the "Confirmation"). Such Confirmation shall be
mailed to the investor not later than seven (7) days after the date on
which the investor's funds are deposited, shall contain a statement
that the investor has a right to rescind his subscription, and shall be
accompanied by a Prospectus and a Subscriber's Signature Page.
(b) Notwithstanding anything to the contrary contained in
Paragraph 4.3(a) of this Agreement, in the event that the Company pays
any commission to the Managing Dealer for sale by a Participating
Broker of one or more Shares pursuant to a telephonic or other oral
subscription where representatives of such Participating Broker execute
the subscription agreement relating to such Shares, and the
subscription is rescinded as to one or more of the Shares covered by
such subscription, the Company shall decrease the next payment of
commissions or other compensation otherwise payable to the Managing
Dealer by the Company under this Agreement by an amount equal to the
commission rate established in Paragraph 4.1 of this Agreement,
multiplied by the number of Shares as to which the subscription is
rescinded. In the event that no payment of commissions or other
compensation is due to the Managing Dealer after such withdrawal
occurs, the Managing Dealer shall pay the amount specified in the
preceding sentence to the Company within ten (10) days following
receipt of notice by the Managing Dealer from the Company stating the
amount owed as a result of rescinded subscriptions.
3.4 Suitability and Minimum Purchase Requirements.
(a) The Managing Dealer will use every reasonable effort, to
the extent it sells Shares to investors, to assure that any such Shares
are sold only to investors who:
(i) meet the investor suitability standards,
including the minimum income and net worth standard
established by the Company, and minimum purchase requirements
set forth in the Registration Statement;
(ii) can reasonably benefit from the Company based on
the prospective investor's overall investment objectives and
portfolio structure;
(iii) are able to bear the economic risk of the
investment based on each prospective investor's overall
financial situation; and
(iv) have apparent understanding of: (A) the
fundamental risks of the investment; (B) the risk that the
prospective investor may lose the entire investment; (C) the
lack of liquidity of the Shares; (D) the restrictions on
transferability of the Shares; (E) the background and
qualifications of the officers and directors of CNL
Hospitality Advisors, Inc., the advisor to the Company (the
"Advisor"); and (F) the tax consequences of an investment in
the Shares.
(b) The Managing Dealer will make the determinations required
to be made by it pursuant to Paragraph 3.4(a) above based on
information it has obtained from a prospective investor, including, at
a minimum, but not limited to the prospective investor's age,
investment objectives, investment experience, income, net worth,
financial situation, other investments of the prospective investor, as
well as any other pertinent factors deemed by the Managing Dealer to be
relevant.
(c) The Managing Dealer shall maintain such records evidencing
compliance with the determination of the investor suitability standards
and minimum purchase requirements set forth in the Registration
Statement, as required by Paragraphs 3.4(a) and 3.4(b) above for a
period of not less than six (6) years, or for such greater time period
as shall comply with all applicable federal, state and other regulatory
requirements.
(d) In addition to the foregoing, the Managing Dealer shall
comply fully with all the applicable provisions of the NASD's Conduct
Rules and the following provisions:
(i) the Managing Dealer shall have reasonable grounds
to believe, based upon information provided by the investor
concerning his investment objectives, other investments,
financial situation and needs, and upon any other information
known by the Managing Dealer, that (A) each investor to whom
the Managing Dealer sells Shares is or will be in a financial
position appropriate to enable him to realize to a significant
extent the benefits (including tax benefits) of an investment
in the Shares, (B) each investor to whom the Managing Dealer
sells Shares has a fair market net worth sufficient to sustain
the risks inherent in an investment in the Shares (including
potential loss and lack of liquidity), and (C) the Shares
otherwise are or will be a suitable investment for each
investor to whom the Managing Dealer sells Shares, and the
Managing Dealer shall maintain files disclosing the basis upon
which the determination of suitability was made;
(ii) the Managing Dealer shall not execute any
transaction involving the purchase of Shares in a
discretionary account without prior written approval of the
transaction by the investor;
(iii) the Managing Dealer shall have reasonable
grounds to believe, based upon the information made available
to it, that all material facts are adequate and accurately
disclosed in the Registration Statement and provide a basis
for evaluating the Shares;
(iv) in making the determination set forth in item
(iii) above, the Managing Dealer shall evaluate items of
compensation, properties, tax aspects, financial stability and
experience of the sponsor, conflicts of interest and risk
factors, and any other information deemed pertinent by it; and
(v) prior to executing a purchase transaction in the
Shares, the Managing Dealer shall have informed the
prospective investor of all pertinent facts relating to the
liquidity and marketability of the Shares.
(e) The Managing Dealer shall comply with the requirements for
determining the suitability of investors who elect to participate in
the Reinvestment Plan (the "Reinvestment Plan") in accordance with the
procedure set forth in Paragraph 6 of such Reinvestment Plan in the
form of Appendix A to the Prospectus.
3.5 Sales Literature. The Managing Dealer shall use and distribute in
conjunction with the offer and sale of any Shares only the Prospectus and such
sales literature and advertising as shall have been previously approved in
writing by the Company.
3.6 Jurisdictions. The Managing Dealer shall cause Shares to be offered
and sold only in those jurisdictions specified in writing by the Company for
whose account Shares are then offered for sale, and such list of jurisdictions
shall be updated by the Company as additional states are added. The Company
shall specify only such jurisdictions in which the offering and sale of its
Shares has been authorized by appropriate State Regulatory Authorities. No
Shares shall be offered or sold for the account of the Company in any other
states.
3.7 Escrow. All funds received by the Managing Dealer for the sale of
Shares shall be deposited in an escrow account established by the Company at
SouthTrust Asset Management Company of Florida, N.A. (the "Escrow Agent"), by
the close of the first business day following receipt of such funds by the
Managing Dealer. Such escrow account shall be denominated "ESCROW ACCOUNT FOR
THE BENEFIT OF SUBSCRIBERS FOR COMMON STOCK OF CNL HOSPITALITY PROPERTIES, INC."
Checks may be made payable to either the Escrow Agent or the Company. The
Managing Dealer may authorize certain Participating Brokers which are "$250,000
broker-dealers" to instruct their customers to make their checks for Shares
subscribed for payable directly to the Participating Broker. In such case, the
Soliciting Dealer will collect the proceeds of the subscribers' checks and issue
a check made payable to the order of the Escrow Agent for the aggregate amount
of the subscription proceeds.
SECTION 4
COMPENSATION
4.1 Commissions.
(a) The Company shall pay to the Managing Dealer, as
compensation for all services to be rendered by the Managing Dealer
pursuant to this Agreement, a commission equal to seven and one-half
percent (7.5%) of the selling price of each Share for which a sale is
completed, regardless of whether such Share is sold by the Managing
Dealer or a Participating Broker; provided, however, that the Company
will pay reduced commissions or may eliminate commissions on certain
sales of Shares, including the reduction or elimination of commissions
in accordance with, and on the terms set forth in, the Prospectus and
the following paragraph of this Paragraph 4.1, which reduction or
elimination of commissions will not change the net proceeds to
<PAGE>
the Company. Shareholders who elect to participate in the Reinvestment
Plan will be charged commissions on Shares purchased for their accounts
on the same basis as investors who otherwise purchase Shares in the
Offering.
(b) A registered principal or representative of the Managing
Dealer or a Participating Broker, employees, officers, and directors of
the Company or the Advisor, any of their Affiliates (and the families
of any of the foregoing persons), and any Plan (as defined in the
Prospectus) established exclusively for the benefit of such persons or
entities may purchase Shares net of 7% commissions, at a per Share
purchase price of $9.30. In addition, clients of an investment adviser
registered under the Investment Advisers Act of 1940, as amended, who
have been advised by such adviser on an ongoing basis regarding
investments other than in the Company, and who are not being charged by
such adviser or its Affiliates, through payment of commissions or
otherwise, for the advice rendered by such adviser in connection with
the purchase of the Shares, may purchase the Shares net of commissions.
In addition, brokers that have a contractual arrangement with their
clients for the payment of fees which is consistent with accepting
selling commissions, in their sole discretion, may elect not to accept
any selling commissions offered by the Company for Shares that they
sell. In that event, such Shares shall be sold to the investor net of
all selling commissions, at a per share purchase price of $9.30.
4.2 Marketing Support and Due Diligence. The Company shall pay to the
Managing Dealer a nonaccountable fee for expenses incurred in selling and
marketing the Shares and for bona fide expenses incurred in connection with due
diligence activities. This marketing support and due diligence expense
reimbursement fee shall be equal to one-half of one percent (0.5%) of the
selling price of each Share for which a sale is completed, regardless of whether
such Share is sold by the Managing Dealer or a Participating Broker. All due
diligence expense reimbursements shall be paid by the Managing Dealer from this
fee.
4.3 Completed Sale.
(a) A sale of a Share shall be deemed to be completed under
Paragraph 4.1 if and only if (i) the Company has received a properly
completed and executed subscription agreement, together with payment of
the full purchase price of each purchased Share, from or, in accordance
with Paragraph 3.3(a), on behalf of an investor who satisfies the
applicable suitability standards and minimum purchase requirements set
forth in the Registration Statement as determined by the Managing
Dealer in accordance with the provisions of this Agreement; (ii) the
Company has accepted such subscription; and (iii) such investor has
been admitted as a shareholder of the Company.
(b) The Managing Dealer hereby acknowledges and agrees that
the Company, in its sole and absolute discretion, may accept or reject
any subscription, in whole or in part, for any reason whatsoever, and
no commission will be paid to the Managing Dealer with respect to that
portion of any subscription which is rejected.
4.4 Payment. Except as provided in "The Offering -- Plan of
Distribution" of the Prospectus, the commissions specified in Paragraph 4.1 for
the sale of any Share shall be payable in cash by the Company, as specified in
Paragraph 4.1, no later than the end of the calendar month in which the investor
subscribing for the Share is admitted as a shareholder of the Company. Investors
whose subscriptions for Shares are accepted shall be admitted no later than the
end of the calendar month in which such subscriptions are accepted. The Company
will accept or reject all subscriptions within 30 days after receipt.
Notwithstanding anything to the contrary contained herein, in the event that the
Company pays any commission to the Managing Dealer for sale by a Participating
Broker of one or more Shares and the subscription is rescinded as to one or more
of the Shares covered by such subscription, the Company shall decrease the next
payment of commissions or other compensation otherwise payable to the Managing
Dealer by the Company under this Agreement by an amount equal to the commission
rate established in Paragraph 4.1 of this Agreement, multiplied by the number of
Shares as to which the subscription is rescinded. In the event that no payment
of commissions or other compensation is due to the Managing Dealer after such
withdrawal occurs, the Managing Dealer shall pay the amount specified in the
preceding sentence to the Company within ten (10) days following receipt of
notice by the Managing Dealer from the Company stating the amount owed as a
result of rescinded subscriptions.
Certain stockholders may agree with their participating Soliciting
Dealer and the Managing Dealer to have Selling Commissions relating to their
Shares paid over a seven year period pursuant to a deferred commission
arrangement (the "Deferred Commission Option"). Stockholders electing the
Deferred Commission Option will be required to pay a total of $9.40 per Share
purchased upon subscription, rather than $10.00 per Share, with respect to which
$0.15 per Share will be payable as Selling Commissions due upon subscription,
$0.10 of which may be reallowed to the Soliciting Dealer by the Managing Dealer.
For each of the six (6) years following such subscription on a date to be
determined by the Managing Dealer, $0.10 per Share will be paid by the Company
as deferred Selling Commissions with respect to Shares sold pursuant to the
Deferred Commission Option, which amounts will be deducted from and paid out of
distributions otherwise payable to such stockholders holding such Shares and may
be reallowed to the Soliciting Dealer by the Managing Dealer. The net proceeds
to the Company will not be affected by the election of the Deferred Commission
Option. Under this arrangement, a stockholder electing the Deferred Commission
Option will pay a one-percent (1%) Selling Commission per year thereafter for
the next six (6) years which will be deducted from and paid by the Company out
of distributions otherwise payable to such stockholder. At such time, if any,
that the Company's Shares are listed on a national securities exchange or
over-the-counter market, the Company shall have the right to require the
acceleration of all outstanding payment obligations under the Deferred
Commission Option.
4.5 Sales Incentives. The Company or its Affiliates also may provide
incentive items for registered representatives of the Managing Dealer and the
Participating Brokers, which in no event shall exceed an aggregate of $100 per
annum per participating salesperson. In the event other incentives are provided
to registered representatives of the Managing Dealer or the Participating
Brokers, they will only be paid in cash and such payments will only be made to
the Managing Dealer or the Participating Brokers rather than their registered
representatives. Before any such sales incentive program is offered, the Company
agrees to obtain prior approval of the terms of such program from the NASD.
4.6 Wholesaling Compensation. The Company hereby acknowledges that the
Managing Dealer may pay each of its wholesalers one percent (1%) of the gross
sales price (computed at $10.00 per Share) of all Shares sold in such
wholesaler's geographic territory (as the same may be established from time to
time by agreement between the Managing Dealer and one or more of its
wholesalers) but not in excess, in the aggregate, of one percent (1%) of the
gross sales price (computed at $10.00 per Share) of all Shares sold, or a
maximum of 27,500,000 Shares. The Company and the Managing Dealer hereby agree
that the Company shall have no obligation to pay any portion of such amounts.
The Company hereby agrees to reimburse reasonable out-of-pocket expenses that
such wholesalers incur in connection with the distribution of its Shares from
and after such time as at least 250,000 Shares have been sold for the account of
the Company; provided, however, that in no event will the Managing Dealer or the
Company pay any amounts to any person if (i) such amounts constitute
"underwriting compensation," and (ii) payment of such amounts could cause total
underwriting compensation paid to underwriters, broker-dealers, or affiliates
thereof from any source, and deemed to be in connection with or related to the
distribution of the Offering, to exceed then-applicable compensation NASD
guidelines.
4.7 Soliciting Dealer Warrants. The Company shall issue to the Managing
Dealer a Soliciting Dealer Warrant for every 25 Shares sold through the
Offering, up to a maximum of 1,000,000 Soliciting Dealer Warrants to purchase an
equivalent number of shares of common stock of the Company. The Soliciting
Dealer Warrants will be issued quarterly commencing 60 days after the date on
which the Shares are first sold pursuant to the Offering. All or any part of
such Soliciting Dealer Warrants may be reallowed to certain Soliciting Dealers
with prior written approval from, and in the sole discretion of, the Managing
Dealer unless prohibited by federal or state securities laws. The Company will
not issue Soliciting Dealer Warrants to the Managing Dealer, and the Managing
Dealer will not transfer Soliciting Dealer Warrants, in connection with the sale
of Shares to residents of Minnesota or Texas. Each Soliciting Dealer Warrant
will entitle the holder to purchase one share of common stock from the Company
for $12.00 during the five-year period commencing with the date the Offering
begins (the "Exercise Period"); provided however, that Soliciting Dealer
Warrants will not be exercisable until one year from the date of issuance.
Holders of Soliciting Dealer Warrants may not exercise the Soliciting Dealer
Warrants to the extent such exercise would jeopardize the Company's status as a
REIT.
SECTION 5
TERM OF AGREEMENT
5.1 Commencement and Expiration. This Agreement shall commence as of
the date first above written and, unless sooner terminated pursuant to Paragraph
5.2 or by operation of law or otherwise, shall expire at the end of the Offering
Period.
5.2 Termination. Any party may terminate this agreement at any time and
for any reason by giving 30 days prior written notice of intention to terminate
to each other party hereto.
5.3 Obligations Surviving Expiration or Termination.
(a) In addition to any other obligations of the Managing
Dealer that survive the expiration or termination of this Agreement,
the Managing Dealer, upon the expiration or termination of this
Agreement, shall (i) promptly deposit any and all funds in its
possession which were received from investors for the sale of Shares
into the appropriate escrow account specified in Paragraph 3.7 or, if
the minimum number of Shares have been sold and accepted by the
Company, into such other account as the Company may designate; and (ii)
promptly deliver to the Company all records and documents in its
possession which relate to the Offering and are not designated as
dealer copies. The Managing Dealer, at its sole expense, may make and
retain copies of all such records and documents, but shall keep all
such information confidential. The Managing Dealer shall use its best
efforts to cooperate with the Company to accomplish an orderly transfer
of management of the Offering to a party designated by the Company.
(b) In addition to any other obligations of the Company that
survive the expiration or termination of this Agreement, the Company,
upon expiration or termination of this Agreement, shall pay to the
Managing Dealer all commissions to which the Managing Dealer is or
becomes entitled under Section 4 at such time or times as such
commissions become payable pursuant to Paragraph 4.3.
<PAGE>
SECTION 6
COVENANTS OF THE MANAGING DEALER
The Managing Dealer covenants, warrants and represents, during the full
term of this Agreement, that:
(a) it is (i) a corporation duly organized and validly
existing under the laws of the State of Florida, (ii) a member of the
NASD, and (iii) a broker-dealer registered under the securities laws of
all fifty states, the District of Columbia, and the Commonwealth of
Puerto Rico.
(b) it will use its best efforts to assure that all Shares are
offered and sold in accordance with (i) the terms of the Registration
Statement, the Prospectus and this Agreement, (ii) the requirements of
applicable federal and state securities laws and regulations, and (iii)
the applicable rules of the NASD, including, without limitation, the
NASD's Conduct Rules;
(c) it will cause the Shares to be offered or sold only in
those jurisdictions specified in writing by the Company;
(d) it will not use any offering or selling materials other
than materials furnished or previously approved in writing by the
Company; and
(e) it either (i) will not purchase Shares for its own account
or (ii) will hold all such Shares for investment.
SECTION 7
COVENANTS OF THE COMPANY
The Company covenants, warrants and represents, during the full term of
this Agreement, that:
(a) it will use its best efforts to maintain the effectiveness
of the Registration Statement, and will file, or cause to be filed,
such amendments to the Registration Statement as may be reasonably
necessary for that purpose;
(b) it will use its best efforts to (i) prevent the issuance
of any order by the SEC, any State Regulatory Authority or any other
regulatory authority which suspends the effectiveness of the
Registration Statement, prevents the use of the Prospectus, or
otherwise prevents or suspends the Offering, and (ii) obtain the
lifting of any such order if issued;
(c) it will give the Managing Dealer written notice when the
Registration Statement becomes effective and shall deliver to the
Managing Dealer a signed copy of the Registration Statement, including
its exhibits, and such number of copies of the Registration Statement,
without exhibits, and the Prospectus, and any supplements and
amendments thereto which are finally approved by the SEC, as the
Managing Dealer may reasonably request for sale of the Shares, which
Prospectus shall not contain any untrue statement of a material fact
required to be stated therein or omit any material statement necessary
to make the statements therein, in light of the circumstances under
which they are made, not misleading;
(d) if at any time any event occurs and becomes known to the
Company prior to the end of the Offering Period, as a result of which
the Registration Statement or Prospectus would include an untrue
statement of a material fact or, in view of the circumstances under
which they
<PAGE>
were made, omit to state any material fact necessary to make the
statements therein not misleading, the Company will effect the
preparation of an amended or supplemented Registration Statement or
Prospectus which will correct such statement or omission;
(e) it will promptly notify the Managing Dealer of any
post-effective amendments or supplements to the Registration Statement
or Prospectus;
(f) it will, during the full term of this Agreement, abide by
all applicable provisions of its governing instruments, as the same may
be amended; and
(g) it will use its best efforts to cause, at or prior to the
time the Registration Statement becomes effective, the qualification or
registration of the Shares for offering and sale under the securities
laws of such jurisdictions as shall be determined by the Company.
SECTION 8
PAYMENT OF COSTS AND EXPENSES
8.1 Managing Dealer. The Managing Dealer shall pay all costs and
expenses incident to the performance of its obligations under this Agreement
which are not expressly assumed by the Company under Paragraph 8.2 below.
8.2 Company. The Company shall pay all costs and expenses related
to:
(a) the registration of the offer and sale of the Shares with
the SEC, including the cost of preparation, printing, filing and
delivery of the Registration Statement and all copies of the Prospectus
used in the Offering, and any amendments or supplements to such
documents;
(b) the preparation and printing of the form of subscription
agreement to be used in the sale of the Shares;
(c) the qualification or registration of the Shares under
state securities or "blue sky" laws of states where the Shares are to
be offered or sold;
(d) the filing of the Registration Statement and any related
documents, including any amendments or supplements to such documents,
with the NASD;
(e) any filing fees, and fees and disbursements to counsel,
accountants and escrow agents which are in any way related to any of
the above items; and
(f) the preparation, printing and filing of all advertising
originated by it relating to the sale of Shares.
SECTION 9
INDEMNIFICATION
The Managing Dealer agrees to indemnify, defend and hold harmless the
Company from 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 Company, which the
Company may incur in connection with the offer or sale of any Shares, either by
the Managing Dealer pursuant to this Agreement or any Participating Broker
acting on the Managing Dealer's behalf pursuant to the Participating Broker
Agreement which arise out of or are based upon (i) an untrue statement or
alleged untrue statement of a material fact, or any omission or alleged omission
of a material fact, other than a statement or omission contained in the
Prospectus, the Registration Statement, or any state securities filing which was
not based on information supplied to the Company by the Managing Dealer or a
Participating Broker; or (ii) the breach by the Managing Dealer or any
Participating Broker acting on its behalf of any of the terms and conditions of
this Agreement or any Participating Broker Agreement, including, but not limited
to, alleged violations of the Securities Act of 1933, as amended.
SECTION 10
MISCELLANEOUS
10.1 Notices. Any notice, approval, request, authorization, direction
or other communication under this Agreement shall be given in writing and shall
be deemed to be delivered when delivered in person or deposited in the United
States mail, properly addressed and stamped with the required postage,
registered or certified mail, return receipt requested, to the intended
recipient as set forth below.
If to the Company: CNL Hospitality Properties, Inc.
400 East South Street
Orlando, Florida 32801
Attention: James M. Seneff, Jr., Chairman of
the Board
If to the Managing Dealer: CNL Securities Corp.
400 East South Street
Orlando, Florida 32801
Attention: Robert A. Bourne, President
Any party may change its address specified above by giving each other party
notice of such change in accordance with this Paragraph 10.1.
10.2 Invalid Provision. The invalidity or unenforceability of any
provision of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provision were omitted.
10.3 No Partnership. Nothing in this Agreement shall be construed or
interpreted to constitute the Managing Dealer as in association with or in
partnership with the Company, and instead, this Agreement only shall constitute
the Managing Dealer as a dealer authorized by the Company to sell and to manage
the sale by others of the Shares according to the terms set forth in the
Registration Statement, the Prospectus or this Agreement.
10.4 No Third Party Beneficiaries. No provision of this Agreement is
intended to be for the benefit of any person or entity not a party to this
Agreement, and no third party shall be deemed to be a beneficiary of any
provision of this Agreement. Further, no third party shall by virtue of any
provision of this Agreement have a right of action or an enforceable remedy
against either party to this Agreement.
10.5 Survival. Paragraph 5.3 and Section 9 and all provisions of this
Agreement which may reasonably be interpreted or construed as surviving the
expiration or termination of this Agreement shall survive the expiration or
termination of this Agreement.
10.6 Entire Agreement. This Agreement constitutes the complete
understanding among 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 all parties hereto.
10.7 Successors and Assigns. No party shall assign (voluntarily, by
operation of law or otherwise) this Agreement or any right, interest or benefit
under this Agreement without the prior written consent of each other party.
Subject to the foregoing, this Agreement shall be fully binding upon, inure to
the benefit of, and be enforceable by, the parties hereto and their respective
successors and assigns.
10.8 Nonwaiver. The failure of any party to insist upon or enforce
strict performance by any other party of any provision of this Agreement or to
exercise any right under this Agreement shall be construed as a waiver or
relinquishment to any extent of such party's right to assert or rely upon any
such provision or right in that or any other instance; rather, such provision or
right shall be and remain in full force and effect.
10.9 Applicable Law. This Agreement shall be interpreted, construed and
enforced in all respects in accordance with the laws of the State of Florida.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
Company: CNL HOSPITALITY PROPERTIES, INC.
By: __________________________________
JAMES M. SENEFF, JR., Chairman of the Board
Managing Dealer: CNL SECURITIES CORP.
By: __________________________________
ROBERT A. BOURNE, President
EXHIBIT 1.2
Form of Participating Broker Agreement
<PAGE>
PARTICIPATING BROKER AGREEMENT
CNL HOSPITALITY PROPERTIES, INC.
THIS PARTICIPATING BROKER AGREEMENT (the "Agreement") is made and
entered into as of the day indicated on Exhibit A attached hereto and by this
reference incorporated herein, between CNL SECURITIES CORP., a Florida
corporation (the "Managing Dealer"), and the Participating Broker (the "Broker")
identified in Exhibit A hereto.
WHEREAS, CNL HOSPITALITY PROPERTIES, INC. is a Maryland corporation
(the "Company"); and
WHEREAS, the Company proposes to offer and sell up to 27,500,000 shares
of Common Stock of the Company (the "Shares") to the general public, pursuant to
a public offering (the "Offering") of the Shares pursuant to a prospectus (the
"Prospectus") filed with the Securities and Exchange Commission ("SEC"); and
WHEREAS, the Managing Dealer, which has heretofore entered into a
Managing Dealer Agreement with the Company pursuant to which it has been
designated the managing dealer to sell and manage the sale by others of the
Shares pursuant to the terms of such agreement and the Offering, is a
corporation incorporated in and presently in good standing in the State of
Florida, and is presently registered with the Florida Securities Commission and
with the National Association of Securities Dealers, Inc. ("NASD") as a
securities broker-dealer qualified to offer and sell to members of the public
securities of the type represented by the Shares; and
WHEREAS, the Broker is an entity, as designated in Exhibit A hereto,
organized and presently in good standing in the state or states designated in
Exhibit A hereto, presently registered as a broker-dealer with the NASD, and
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 or exempt from all such registration requirements; and
WHEREAS, the Company has filed with the SEC a registration statement on
Form S-11, including a preliminary or final prospectus, for the registration of
the Shares under the Securities Act of 1933, as amended (such registration
statement, as it may be amended, and the prospectus and exhibits on file with
the SEC at the time the registration statement becomes effective, including any
post-effective amendments or supplements to such registration statement or
prospectus after the effective date of registration, being herein respectively
referred to as the "Registration Statement" and the "Prospectus"); and
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; and
WHEREAS, the Managing Dealer desires to retain the Broker to use its
best efforts to sell the Shares, and the Broker is willing and desires to serve
as a broker for the Managing Dealer for the sale of the Shares upon the
following terms and conditions;
NOW, THEREFORE, in consideration of the premises and terms and
conditions thereof, it is agreed between the Managing Dealer and the Broker as
follows.
1. Employment.
(a) Subject to the terms and conditions herein set forth, the
Managing Dealer hereby employs the Broker to use its best efforts to sell for
the account of the Company a portion of the Shares described in the Registration
Statement, as specified on Exhibit A hereto. The Broker hereby accepts such
employment and covenants, warrants and agrees to sell the Shares according to
all of the terms and conditions of the Registration Statement, all applicable
state and federal laws, including the Securities Act of 1933, as amended, and
any and all regulations and rules pertaining thereto, heretofore or hereafter
issued by the SEC and the NASD. Neither the
<PAGE>
Broker nor any other person shall have any authority to give any information or
make any representations in connection with any offer or sale of the Shares
other than as contained in the Prospectus, as amended and supplemented, and as
is otherwise expressly authorized in writing by the Managing Dealer.
(b) The Broker shall use its best efforts, promptly following
receipt of written notice from the Managing Dealer of the effective date of the
Registration Statement, to sell the Shares in such quantities and for the
account of Company as shall be agreed between the Broker and the Managing Dealer
and specified on Exhibit A hereto, and to such persons and according to all such
terms as are contained in the Registration Statement and the Prospectus. The
Broker shall comply with all requirements set forth in the Registration
Statement and the Prospectus. The Broker shall use and distribute, in connection
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 of 1933, as
amended, and which has been approved in writing by the Company or the Managing
Dealer. The Managing Dealer reserves the right to establish such additional
procedures as it may deem necessary to ensure compliance with the requirements
of the Registration Statement, and the Broker shall comply with all such
additional procedures to the extent that it has received written notice thereof.
(c) The Broker shall be permitted to accept subscriptions for
the Shares by telephone from residents of those states identified on Schedule A
attached hereto and made a part hereof provided that: (1) the registered
representative and branch manager of the Broker execute the subscription
agreement on behalf of any investor who subscribes for Shares by telephone; and
(2) the Broker does not charge any additional fees, including, but not limited
to fees relating to opening an account with the Broker, to any investor who
telephonically or orally subscribes for Shares. It is understood and agreed
between the Managing Dealer and the Broker that the Managing Dealer may, in its
discretion, change, modify, add to or delete from the list of states identified
on Schedule A. Any such modification shall be effective ten days from the date
written notice to the Broker has been mailed by the Managing Dealer. The Broker
shall not execute a subscription agreement on behalf of any investor who
subscribes for Shares by telephone unless such investor has specifically
authorized the registered representative and the branch manager of the Broker to
execute the subscription agreement on behalf of such investor and has made or
agreed to make full payment for all Shares covered by such subscription
agreement. Notwithstanding anything contained herein to the contrary, the Broker
shall have no authority to make representations on behalf of an investor or to
initial representations contained in the subscription agreement on behalf of an
investor. In connection with telephonic or other oral subscriptions for Shares,
the Broker represents and warrants as follows: (i) that a Prospectus was
delivered to the investor before the investor made a decision to invest; (ii)
that the investor meets the suitability requirements set forth in the
Prospectus; and (iii) that, in compliance with the NASD's Conduct Rules, the
Broker has reasonable grounds to believe that the investment in the Company is
suitable for the investor, based upon information supplied by the investor to
such Broker. Further, the Broker shall explain to any investor from a state
identified in the Prospectus as having such additional requirements, that: (i)
the investor has the right to rescind such subscription for a period of at least
ten days following the date written confirmation of the subscription has been
received by the investor from the Managing Dealer; and (ii) unless the investor
rescinds such subscription within the applicable period of time, the investor
shall be bound by the subscription agreement.
(d) Notwithstanding anything to the contrary contained in
Section 2 of this Agreement, in the event that the Managing Dealer pays any
commission to the Broker for sale of one or more Shares, including, but not
limited to those Shares sold pursuant to a telephonic or other oral subscription
therefor, where representatives of the Broker execute the subscription agreement
relating to such Shares, and the subscription is rescinded as to one or more of
the Shares covered by such subscription, the Managing Dealer shall decrease the
next payment of commissions or other compensation otherwise payable to the
Broker by the Managing Dealer under this Agreement by an amount equal to the
commission rate established in Section 2 and Exhibit A of this Agreement,
multiplied by the number of Shares as to which the subscription is rescinded. In
the event that no payment of commissions or other compensation is due to the
Broker after such withdrawal occurs, the Broker shall pay the amount specified
in the preceding sentence to the Managing Dealer within ten (10) days following
mailing of notice to the Broker by the Managing Dealer stating the amount owed
as a result of rescinded subscriptions.
(e) All monies received for purchase of any of the Shares
shall be forwarded by the Broker to the Managing Dealer for delivery to
SouthTrust Asset Management Company of Florida, N.A. (the "Escrow Agent"), where
such monies will be deposited in an escrow account established by the Company
solely for such subscriptions. The Broker may accept checks made payable to
either the Company or the Escrow Agent. Subscriptions will be executed as
described in the Registration Statement or as directed by the Managing Dealer.
The monies shall be deposited or transmitted by the Broker to the Managing
Dealer no later than the close of business of the first business day after
receipt of the subscription documents by the Broker; provided, however, that if
the Broker maintains a branch office, the branch office shall transmit the
subscription documents and check to the Broker by the close of business on the
first business day following their receipt by the branch office and the Broker
shall review the subscription documents and check to ensure their proper
execution and form and, if they are acceptable, transmit the check to the
Managing Dealer by the close of business on the first business day after their
receipt by the Broker. Pursuant to the terms of the Managing Dealer Agreement,
the Managing Dealer will transmit the check or monies to the Escrow Agent by no
later than the close of business on the first business day after the check is
received from the Broker.
(f) During the full term of this Agreement, the Managing
Dealer shall have full authority to take such action as it may deem advisable in
respect to all matters pertaining to the performance of the Broker under this
Agreement.
(g) The Shares shall be offered and sold by the Broker only
where the Shares may be legally offered and sold, and only to such persons in
such states who shall be legally qualified to purchase the Shares. The Managing
Dealer shall give the Broker written notice at the time of effectiveness of
those states in which the offering and sale of Shares may be made, and shall
amend such notice thereafter as additional states are added; no Shares shall be
offered or sold in any other states.
(h) The Broker shall have no obligation under this Agreement
to purchase any of the Shares for its own account.
(i) The Broker will use every reasonable effort to assure that
Shares are sold only to investors who:
(1) meet the investor suitability standards,
including the minimum income and net worth standard established by the
Company, and minimum purchase requirements set forth in the
Registration Statement;
(2) can reasonably benefit from the Company based on
the prospective investor's overall investment objectives and portfolio
structure;
(3) are able to bear the economic risk of the
investment based on each prospective investor's overall financial
situation; and
(4) have apparent understanding of: (a) the
fundamental risks of the investment; (b) the risk that the prospective
investor may lose the entire investment; (c) the lack of liquidity of
the Shares; (d) the restrictions on transferability of the Shares; (e)
the background and qualifications of the officers and directors of CNL
Hospitality Advisors, Inc., the advisor to the Company (the "Advisor");
and (f) the tax consequences of an investment in the Shares.
The Broker will make the determinations required to
be made by it pursuant to subparagraph (i) based on information it has
obtained from a prospective investor, including, at a minimum, but not
limited to, the prospective investor's age, investment objectives,
investment experience, income, net worth, financial situation, other
investments of the prospective investor, as well as any other pertinent
factors deemed by the Broker to be relevant.
(j) In addition to complying with the provisions of
subparagraph (i) above, and not in limitation of any other obligations of the
Broker to determine suitability imposed by state or federal law, the Broker
agrees that it will comply fully with all of the applicable provisions of the
NASD's Conduct Rules, and the following provisions:
(1) The Broker shall have reasonable grounds to
believe, based upon information provided by the investor concerning his
investment objectives, other investments, financial situation and
needs, and upon any other information known by the Broker, that (A)
each investor to whom the Broker sells Shares is or will be in a
financial position appropriate to enable him to realize to a
significant extent the benefits (including tax benefits) of an
investment in the Shares, (B) each investor to whom the Broker sells
Shares has a fair market net worth sufficient to sustain the risks
inherent in an investment in the Shares (including potential loss and
lack of liquidity), and (C) the Shares otherwise are or will be a
suitable investment for each investor to whom it sells Shares, and the
Broker shall maintain files disclosing the basis upon which the
determination of suitability was made;
(2) The Broker shall not execute any transaction
involving the purchase of Shares in a discretionary account without
prior written approval of the transactions by the investor;
(3) The Broker shall have reasonable grounds to
believe, based upon the information made available to it, that all
material facts are adequately and accurately disclosed in the
Registration Statement and provide a basis for evaluating the Shares;
(4) In making the determination set forth in
subparagraph (3) above, the Broker shall evaluate items of
compensation, physical properties, tax aspects, financial stability and
experience of the sponsor, conflicts of interest and risk factors,
appraisals, as well as any other information deemed pertinent by it;
(5) If the Broker relies upon the results of any
inquiry conducted by another member of the NASD with respect to the
obligations set forth in subparagraphs (3) or (4) above, the Broker
shall have reasonable grounds to believe that such inquiry was
conducted with due care, that the member or members conducting or
directing the inquiry consented to the disclosure of the results of the
inquiry and that the person who participated in or conducted the
inquiry is not a sponsor or an affiliate of the sponsor of the Company;
and
(6) Prior to executing a purchase transaction in the
Shares, the Broker shall have informed the prospective investor of all
pertinent facts relating to the liquidity and marketability of the
Shares.
(k) The Broker agrees that it will comply with Rules 2730,
2740 and 2750 of the NASD's Conduct Rules.
(l) The Broker agrees to retain in its files, for a period of
at least six (6) years, information which will establish that each purchaser of
Shares falls within the permitted class of investors.
(m) The Broker shall not, directly or indirectly, pay or award
any finder's fees, commissions or other compensation to any persons engaged by a
potential investor for investment advice as an inducement to such advisor to
advise the potential investor to purchase Shares in the Company.
(n) The Broker either (i) shall not purchase Shares for its
own account or (ii) shall hold for investment any Shares purchased for its own
account.
(o) The Broker hereby confirms that it is familiar with
Securities Act Release No. 4968 and Rule 15c2-8 under the Securities Exchange
Act of 1934, relating to the distribution of preliminary and final prospectuses,
and confirms that it has and will comply therewith.
(p) The Broker shall deliver a copy of the Articles of
Incorporation of the Company with each Prospectus that is delivered to potential
investors in Mississippi.
(q) The Broker shall not in any way participate in, or effect
the sale or transfer of Shares in connection with, a tender offer with respect
to shares of the Company's common stock, whether or not such offer is subject to
Section 14(d)(1) of the Securities Exchange Act of 1934, as amended, other than
with the written consent of the Company and/or the Managing Dealer.
2. Compensation of Broker
The Managing Dealer shall pay the Broker, as compensation for all
services to be rendered by the Broker hereunder, a commission equal to 7.0% on
sales of Shares by such Broker, as set forth in Exhibit A hereto, subject to
reduction as specified in this Section 2 and the Prospectus. The Managing
Dealer, in its sole discretion, may reallow to the Broker, from its marketing
support and due diligence expense reimbursement fee, up to an additional 0.5% on
sales of Shares by such Broker, based on such factors as the number of Shares
sold by the Broker, the assistance of the Broker in marketing the Offering, and
bona fide due diligence expenses incurred by the Broker. Such commission rates
shall remain in effect during the full term of this Agreement unless otherwise
changed by a written agreement between the parties hereto. A sale of Shares
shall be deemed to be completed only after the Company receives a properly
completed subscription agreement for Shares from the Broker evidencing the fact
that the investor had received a final Prospectus for a period of not less than
five (5) full business days, together with payment of the full purchase price of
each purchased Share from a buyer who satisfies each of the terms and conditions
of the Registration Statement and Prospectus, and only after such subscription
agreement has been accepted in writing by the Company. Such compensation shall
be payable to the Broker by the Managing Dealer after such acceptance of the
subscription agreement; provided, however, that compensation or commissions
shall not be paid by the Managing Dealer: (i) other than from funds received as
compensation or commissions from the Company for the sale of its Shares; (ii)
until any and all compensation or commissions payable by the Company to the
Managing Dealer have been received by the Managing Dealer; and (iii) if the
commission payable to any broker-dealer or salesman exceeds the amount allowed
by any regulatory agency. The Broker shall not reallow any commissions to
non-NASD members. The Company (and the Managing Dealer) may pay reduced
commissions or may eliminate commissions on certain sales of Shares, including
the reduction or elimination of commissions in accordance with the following
paragraph of this Section 2. Any such reduction or elimination of commissions
will not, however, change the net proceeds to the Company.
The Company also shall issue to the Managing Dealer a warrant (the
"Soliciting Dealer Warrants") for every 25 Shares sold through the Offering, up
to a maximum of 1,000,000 Soliciting Dealer Warrants, to purchase an equivalent
number of shares of common stock of the Company. The Soliciting Dealer Warrants
will be issued quarterly commencing 60 days after the date on which the Shares
are first sold pursuant to the Offering. All or any part of such Soliciting
Dealer Warrants may be reallowed to certain Brokers with prior written approval
from, and in the sole discretion of, the Managing Dealer unless prohibited by
federal or state securities laws. The Company will not issue Soliciting Dealer
Warrants to the Managing Dealer, and the Managing Dealer will not transfer
Soliciting Dealer Warrants, in connection with the sale of Shares to residents
of Minnesota or Texas. Each Soliciting Dealer Warrant will entitle the holder to
purchase one share of common stock from the Company for $12.00 during the
five-year period commencing with the date the Offering begins (the "Exercise
Period"); provided, however, that Soliciting Dealer Warrants will not be
exercisable until one year from the date of issuance. Holders of Soliciting
Dealer Warrants may not exercise the Soliciting Dealer Warrants to the extent
such exercise would jeopardize the Company's status as a REIT. No Soliciting
Dealer Warrants will be issued relating to the Shares sold through the Company's
Reinvestment Plan.
A registered principal or representative of the Managing Dealer or a
Broker, employees, officers, Directors, and directors of the Company or the
Advisor, or any of their Affiliates (and the families of any of the foregoing
persons), and any Plan (as defined in the Prospectus) established exclusively
for the benefit of such persons may purchase Shares net of 7% commissions, at a
per Share purchase price of $9.30. In addition, clients of an investment adviser
registered under the Investment Advisers Act of 1940, as amended, who have been
advised by such adviser on an ongoing basis regarding investments other than in
the Company, and who are not being charged by such adviser or its Affiliates,
through the payment of commissions or otherwise, for the advice rendered by such
adviser in connection with the purchase of the Shares, may purchase the Shares
net of commissions. In addition, brokers that have a contractual arrangement
with their clients for the payment of fees which is consistent with accepting
selling commissions, in their sole discretion, may elect not to accept any
selling commissions offered by the Company for Shares that they sell. In that
event, such Shares shall be sold to the investor net of all selling commissions,
at a per share purchase price of $9.30.
Certain stockholders may agree with their participating Broker and the
Managing Dealer to have commissions relating to their Shares paid over a seven
year period pursuant to a deferred commission arrangement (the "Deferred
Commission Option"). Stockholders electing the Deferred Commission Option will
be required to pay a total of $9.40 per Share purchased upon subscription,
rather than $10.00 per Share, with respect to which $0.15 per Share will be
payable as commissions due upon subscription, $0.10 of which may be reallowed to
the Broker by the Managing Dealer. For each of the six years following such
subscription on a date to be determined by the Managing Dealer, $0.10 per Share
will be paid by the Company as deferred commissions with respect to Shares sold
pursuant to the Deferred Commission Option, which amounts will be deducted from
and paid out of distributions otherwise payable to such stockholders holding
such Shares and may be reallowed to the Broker by the Managing Dealer. The net
proceeds to the Company will not be affected by the election of the Deferred
Commission Option. Under this arrangement, a stockholder electing the Deferred
Commission Option will pay a 1% Broker commission per year thereafter for the
next six years which will be deducted from and paid by the Company out of
distributions otherwise payable to such stockholder. At such time, if any, that
the Company's Shares are listed on a national securities exchange or
over-the-counter market, the Company shall have the right to require the
acceleration of all outstanding payment obligations under the Deferred
Commission Option.
The Managing Dealer shall pay the Broker commissions on Shares
purchased pursuant to the Company's Reinvestment Plan on the same basis as
commissions paid for Shares otherwise purchased in the Offering. No Broker
commissions will be paid in connection with shares of common stock issued upon
the exercise of the Soliciting Dealer Warrants.
3. Association with Other Dealers.
It is expressly understood between the Managing Dealer and the Broker
that the Managing Dealer may cooperate with other broker-dealers who are
registered as broker-dealers with the NASD and duly licensed by the appropriate
regulatory agency of each state in which they will offer and sell the Shares or
with broker-dealers exempt from all such registration requirements. Such other
participating broker-dealers may be employed by the Managing Dealer as brokers
on terms and conditions identical or similar to this Agreement and shall receive
such rates of commission as are agreed to between the Managing Dealer and the
respective other participating broker-dealers and as are in accordance with the
terms of the Registration Statement. The Broker understands that, to that
extent, such other participating broker-dealers shall compete with the Broker in
the sale of the Shares.
4. Conditions of the Broker's Obligations.
The Broker's obligations hereunder are subject, during the full term of
this Agreement and the Offering, to (a) the performance by the Managing Dealer
of its obligations hereunder; and (b) the conditions that: (i) the Registration
Statement shall become and remain effective; and (ii) no stop order shall have
been issued suspending the effectiveness of the Offering.
5. Conditions to the Managing Dealer's Obligations.
The obligations of the Managing Dealer 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 nor
proceedings therefor initiated or threatened by any state regulatory agency or
the SEC; and (c) the Broker shall have satisfactorily performed all of its
obligations hereunder.
6. Covenants of the Managing Dealer.
The Managing Dealer covenants, warrants and represents, during the full
term of this Agreement, that:
(a) It shall use its best efforts to prevent the sale of the
Shares through persons other than registered NASD broker-dealers.
(b) It shall use its best efforts to cause the Company to
maintain the effectiveness of the Registration Statement and to file such
applications or amendments to the Registration Statement as may be reasonably
necessary for that purpose.
(c) It shall advise the Broker whenever and as soon as it
receives or learns of any order issued by the SEC, 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 or sale of the Shares, or receives notice of
any proceedings regarding any such order.
(d) It shall use its best efforts to prevent the issuance of
any order described herein at subparagraph (c) hereof and to obtain the lifting
of any such order if issued.
<PAGE>
(e) It shall give the Broker written notice when the
Registration Statement becomes effective and shall deliver to the Broker such
number of copies of the Prospectus, and any supplements and amendments thereto,
which are finally approved by the SEC, as the Broker may reasonably request for
sale of the Shares.
(f) It shall promptly notify the Broker of any post-effective
amendments or supplements to the Registration Statement or Prospectus, and shall
furnish the Broker with copies of any revised Prospectus and/or supplements and
amendments to the Prospectus.
(g) To the extent to which the Managing Dealer has knowledge,
it shall keep the Broker fully informed of any material development to which the
Company is a party or which concerns the business and condition of the Company.
(h) In conjunction with the Company, it shall use its best
efforts to cause, at or prior to the time the Registration Statement becomes
effective, the qualification of the Shares for offering and sale under the
securities laws of such states as the Company shall elect.
7. Payment of Costs and Expenses.
The Broker shall pay all costs and expenses incident to the performance
of its obligations under this Agreement, including:
(a) All expenses incident to the preparation, printing and
filing of all advertising originated by it related to the sale of the Shares;
and
(b) All other costs and expenses incurred in connection with
its sales efforts related to the sales of the Shares which are not expressly
assumed by the Company in its Managing Dealer Agreement with the Managing
Dealer.
8. Indemnification.
The Broker agrees to indemnify, defend and hold harmless the Company,
its affiliates and their or its officers, directors, trustees, employees and
agents, including the Managing Dealer, against all losses, claims, demands,
liabilities and expenses, joint or several, including reasonable legal and other
expenses incurred in defending such claims or liabilities, whether or not
resulting in any liability to the Company, its affiliates and their or its
officers, directors, trustees, employees or agents, which they or any of them
may incur arising out of the offer or sale by the Broker, or any person acting
on its behalf, of any Shares pursuant to this Agreement if such loss, claim,
demand, liability, or expense arises out of or is based upon (i) an untrue
statement or alleged untrue statement of a material fact, or any omission or
alleged omission of a material fact, other than a statement, omission, or
alleged omission by the Broker which is also, as the case may be, contained in
or omitted from the Prospectus or the Registration Statement and which statement
or omission was not based on information supplied to the Company or the Managing
Dealer by such Broker; or (ii) the breach by the Broker, or any person acting on
its behalf, of any of the terms and conditions of this Agreement. This indemnity
provision shall survive the termination of this Agreement.
(a) The Managing Dealer agrees to indemnify, defend and hold
harmless the Broker, 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, which they
or any of them may incur, including, but not limited to alleged violations of
the Securities Act of 1933, as amended, but only to the extent that such losses,
claims, demands, liabilities and expenses shall arise out of or be based upon
(i) any untrue statement of a material fact contained in the Prospectus or the
Registration Statement, as filed and in effect with the SEC, or in any amendment
or supplement thereto, or in any application prepared or approved in writing by
counsel to the Company 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 (ii) 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 necessary to make such statements,
and any part thereof, not misleading; provided, further, that any such untrue
statement, omission or alleged omission is not based on information included in
any such document which was supplied to the Managing Dealer, the Company, or any
officer of the Company by such Broker. This indemnity provision shall survive
the termination of this Agreement.
(b) No indemnifying party shall be liable under the indemnity
agreements contained in subparagraphs (a) and (b) above unless the party to be
indemnified shall have notified such indemnifying party in writing promptly
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon the party to be indemnified, but
failure to notify an indemnifying party of any such claim shall not relieve it
from any liabilities which it may have to the indemnified party against whom
action is brought other than on account of its indemnity agreement contained in
subparagraphs (a) and (b) above. In the case of any such claim, if the party to
be indemnified notified the indemnifying party of the commencement thereof as
aforesaid, the indemnifying party shall be entitled to participate at its own
expense in the defense of such claim. If it so elects, in accordance with
arrangements satisfactory to any other indemnifying party or parties similarly
notified, the indemnifying party has the option to assume the entire defense of
the claim, with counsel who shall be satisfactory to such indemnified party and
all other indemnified parties who are defendants in such action; and after
notice from the indemnifying party of its election so to assume the defense
thereof and the retaining of such counsel by the indemnifying party, the
indemnifying party shall not be liable to such indemnified party under
subparagraphs (a) and (b) above for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof, other
than for the reasonable costs of investigation.
9. Term of Agreement.
This Agreement shall become effective at 8:00 A.M. (Eastern Standard
Time) on the first full business day following the day on which the Registration
Statement becomes effective, or if later, the date on which this Agreement is
executed by the Managing Dealer and the Broker. The Broker and the Managing
Dealer may each prevent this Agreement from becoming effective, without
liability to the other, by written notice before the time this Agreement would
otherwise become effective. After this Agreement becomes effective, either party
may terminate it at any time for any reason by giving thirty (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 for offer and sale of the Shares shall
cease to be effective; (b) the Company shall be terminated; or (c) the Broker's
license or registration to act as a broker-dealer shall be revoked or suspended
by any federal, self-regulatory or state agency and such revocation or
suspension is not cured within ten (10) days from the date of such occurrence.
In any event, this Agreement shall be deemed suspended during any period for
which such license is revoked or suspended.
10. Notices.
All notices and communications hereunder shall be in writing and shall
be deemed to have been given and delivered when deposited in the United States
mail, postage prepaid, registered or certified mail, to the applicable address
set forth below.
If sent to the Managing Dealer:
CNL SECURITIES CORP.
400 East South Street
Orlando, Florida 32801
Attention: Robert A. Bourne, President
If sent to the Broker: to the person whose name and address are
identified in Exhibit A hereto.
11. Successors.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto, and shall not be assigned or transferred by the Broker by
operation of law or otherwise.
12. Miscellaneous.
(a) This Agreement shall be construed in accordance with the
applicable laws of the State of Florida.
<PAGE>
(b) Nothing in this Agreement shall constitute the Broker as
in association with or in partnership with the Managing Dealer. Instead, this
Agreement shall only authorize the Broker to sell the Shares according to the
terms as expressly set forth herein; provided, further, that the Broker shall
not in any event have any authority to act as the agent or broker of the
Managing Dealer except according to the terms expressly set forth herein.
(c) This Agreement, including Exhibit A and Schedule A hereto,
embodies the entire understanding between the parties to the Agreement, and no
variation, modification or amendment to this Agreement shall be deemed valid or
effective unless it is in writing and signed by both parties hereto.
(d) 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.
(e) This Agreement may be executed in counterpart copies, each
of which shall be deemed an original but all of which together shall constitute
one and the same instrument comprising this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year indicated on Exhibit A hereto.
MANAGING DEALER FOR:
BROKER: CNL HOSPITALITY PROPERTIES, INC.
_______________________________________ CNL SECURITIES CORP.
(Name of Broker)
By:_____________________________________ By_______________________________
Print Name:_____________________________ Print Name:______________________
Title:__________________________________ Title:___________________________
Witness:________________________________ Witness:_________________________
<PAGE>
EXHIBIT A
TO
PARTICIPATING BROKER AGREEMENT
OF
CNL HOSPITALITY PROPERTIES, INC.
This Exhibit A is attached to and made a part of that certain
Participating Broker Agreement, dated as of the ___ day of _________________,
_______, by and between CNL SECURITIES CORP., as Managing Dealer, and
________________________________, as Broker.
1. Date of Agreement: ____________________________________________________
2. Identity of Broker:
Name:__________________________________________________________________
Firm NASD (CRD) No:____________________________________________________
Type of Entity_________________________________________________________
(To be completed by Broker, e.g., corporation,
partnership or sole proprietorship.)
State Organized in:____________________________________________________
(To be completed by Broker)
Qualified To Do Business and in Good Standing in the Following
Jurisdictions (including your state of organization) (Note:
Qualification to do business in any jurisdiction is generally a
requirement imposed by the secretary of state or other authority of
jurisdictions in which you do business, and is not related to your
holding a license as a securities broker-dealer in such jurisdictions.
Questions concerning this matter should be directed to you or your
legal counsel.):
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
(To be completed by Broker)
Licensed as Broker-Dealer in the Following States: ____________________
-----------------------------------------------------------------------
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(To be completed by Broker)
<PAGE>
3. Schedule of Commissions Payable to Participating Broker (see Section
2 of Agreement):
Number of Shares
Purchased In Sales Price As a Percentage
Individual Order To Subscriber of the Sales Price(1) Dollar Amount
---------------- ------------- --------------------- -------------
1 or more $10.00 7.0% $0.70
4. Name and Address for Notice Purposes (see Paragraph 10 of Agreement):
Name: _________________________________________________________________
Title: _______________________________________________________________
Company: ______________________________________________________________
Address: ______________________________________________________________
City, State and Zip Code:______________________________________________
Telephone Number (including area code): _______________________________
5. Please complete the following for our records:
(a) Please name those individuals who hold the following
positions:
President:____________________________________________________
Due Diligence Officer:________________________________________
Marketing Director:___________________________________________
In-House Editor:______________________________________________
(b) Does your company hold national or regional conferences?
Yes _____ No _____
If so, when?__________________________________________________
Who is the coordinator?_______________________________________
(c) How many representatives are registered with your broker-
dealer?_______________________________________________________
PLEASE ENCLOSE A CURRENT LIST. ALL INFORMATION WILL BE HELD IN
CONFIDENCE.
(1) Subject to reduction as set forth in Section 2 of the Participating Broker
Agreement.
<PAGE>
(d) Does your firm publish a newsletter? Yes _____ No _____
What is/are the frequency of the publication(s)?
_____Weekly _____Monthly _____Quarterly
_____Bi-weekly _____Bi-monthly _____Other (please specify)
PLEASE PLACE CNL ON YOUR MAILING LIST AND PROVIDE A SAMPLE OF
THE PUBLICATION IF AVAILABLE.
(e) Does your firm have regular internal mailings, or bulk package
mailings to representatives? Yes _____ No _____
PLEASE PLACE CNL ON YOUR MAILING LIST AND PROVIDE A SAMPLE OF
THE PUBLICATION IF AVAILABLE.
(f) Does your firm have a computerized electronic mail (E-Mail)
system for your representatives?
Yes _____ No _____
If so, please provide e-mail address: ________________________
(g) Website address: _____________________________________________
Person responsible: __________________________________________
<PAGE>
SCHEDULE A
TO
PARTICIPATING BROKER AGREEMENT
OF
CNL HOSPITALITY PROPERTIES, INC.
TELEPHONIC SUBSCRIPTION AUTHORIZATION
This Schedule A is attached to and made a part of that certain
Participating Broker Agreement, dated as of the ___ day of ____________________,
___________, by and between CNL SECURITIES CORP., as Managing Dealer, and
_____________________________________________, as Broker.
The list of states in which the Broker is permitted to accept
telephonic subscriptions shall be those states identified by Item 2 of Exhibit
A, as amended from time to time, to the Broker Agreement between the parties
hereto, as states in which the Broker is licensed as a Broker-Dealer, except for
the following states in which the Broker is specifically prohibited from
accepting telephonic subscriptions: Florida, Iowa, Maine, Massachusetts,
Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Mexico, North
Carolina, Ohio, Oregon, South Dakota, Tennessee and Washington.
Initials: ______________ -- CNL SECURITIES CORP.
______________ -- PARTICIPATING BROKER
DEFERRED COMMISSION OPTION AUTHORIZATION
Authorization is hereby given for registered representatives to select,
at the request of the investor, the deferred commission option, as explained in
Section 2, paragraph 4 of the Participating Broker Agreement.
Initials: ______________ -- CNL SECURITIES CORP.
______________ -- PARTICIPATING BROKER
<PAGE>
