Rule 424(b)(3)
No. 333-47411
CNL HEALTH CARE PROPERTIES, INC.
This Supplement is part of, and should be read in conjunction with, the
Prospectus dated September 18, 1998. Capitalized terms used in this Supplement
have the same meaning as in the Prospectus unless otherwise stated herein.
CNL HEALTH CARE PROPERTIES, INC. PROSPECTUS
Shares of Common Stock
$2,500,000 -- Minimum
Minimum Purchase -- 250 Shares ($2,500)
100 Shares ($1,000) for IRAs and Keogh and Pension Plans
(Minimum purchase may be higher in certain states)
CNL HEALTH CARE PROPERTIES, INC. (the "Company") is a Maryland
corporation which intends to qualify for federal income tax purposes as a real
estate investment trust (a "REIT"). The Company may sell up to 15,500,000 shares
of common stock (the "Shares"), including 500,000 Shares pursuant to the
Company's reinvestment plan, for a maximum of $155,000,000. The Company has been
formed primarily to acquire real estate properties (the "Properties") related to
health care and seniors' housing facilities (the "Health Care Facilities")
located across the United States. The Health Care Facilities may include,
congregate living, assisted living and skilled nursing facilities, continuing
care retirement communities and life care communities, and medical office
buildings and walk-in clinics. The Properties will be leased on a long term,
"triple-net" basis to operators of the Health Care Facilities. Under the
Company's triple-net leases, the tenant generally will be responsible for
property costs associated with ongoing operations, including repairs,
maintenance, property taxes, utilities, and insurance.
There are material risks associated with an investment in the Company
(see "Risk Factors" at Page 9), including the following:
o The Company currently owns no Properties, and investors, therefore,
will not have any opportunity to evaluate the Properties that the
Company will acquire.
o If the Company raises only $2,500,000 from sales of Shares, it will
acquire no more than two medical office buildings or walk-in clinics,
and will have reduced diversification of its investments. Reduced
diversification will increase the potential adverse effect on the
Company from an underperforming tenant or an underperforming facility
type. In the event it raises only $2,500,000 from sales of Shares, the
Company will not provide mortgage financing (the "Mortgage Loans").
o The Company will rely on CNL Health Care Advisors, Inc. (the "Advisor")
with respect to all investment decisions, subject to approval by the
Board of Directors in certain circumstances. The Advisor and its
Affiliates have no previous experience in investing in health care
Properties, which could result in the Company's failure to meet its
investment objectives.
o The Advisor and its Affiliates are or will be engaged in other
activities that will result in conflicts of interest with the services
that the Advisor will provide to the Company, and could take actions
that are more favorable to such other entities than to the Company. Any
such conflicts could have a negative impact on the Company's financial
performance and, consequently, on Distributions.
o There is currently no public trading market for the Shares, and there
is no assurance that one will develop. Although the Company currently
intends to seek listing on a national securities exchange or over-the
counter market of its common stock ("Listing") within five to ten years
from the date the offering commences, Listing does not assure
liquidity. If the Shares are not listed within ten years of
commencement of the offering, as to which there can be no assurance,
the Company will commence the orderly sale of its assets and the
distribution of the proceeds.
o The Company has not obtained a financing commitment and may be unable
to do so on satisfactory terms. The failure to obtain financing may
impede the acquisition of Properties and the making of Mortgage Loans
and equipment financing ("Secured Equipment Leases"). Because no
proceeds from the sale of Shares will be used to fund Secured Equipment
Leases, the Secured Equipment Lease program is dependent upon the
Company obtaining financing.
o In addition to general market and economic conditions, the Company is
subject to risks arising out of government regulation of the health
care industry, which may reduce the value of the Company's investments
and the amount of revenues the Company receives from tenants. Certain
of the Company's tenants may be dependent upon government
reimbursements and certain other of the Company's tenants, to the
extent that they are not dependent upon government reimbursements, may
be dependent on their success in attracting senior citizens with
sufficient independent means to pay for the tenants' services.
o The Company may, without the approval of a majority of the Independent
Directors, incur debt totalling up to 300% of the value of the net
assets of the Company, including debt to make Distributions to
stockholders in order to maintain its status as a REIT. The Company may
not be able to meet its debt service obligations, and, to the extent
that such obligations cannot be met, the Company may lose its
investment in any Properties that secure underlying indebtedness on
which the Company has defaulted.
o The Company may not qualify or remain qualified as a REIT for federal
income tax purposes, which could result in subjecting the Company to
federal income tax on its taxable income at regular corporate rates,
thereby reducing the amount of funds available for paying Distributions
to stockholders.
March 19, 1999 Prospectus Dated September 18, 1998
<PAGE>
o The Company anticipates that it will pay substantial fees to Affiliates
of the Company and estimates that approximately 9% of the proceeds from
the sale of Shares will be paid in fees and expenses to Affiliates of
the Company for services and as reimbursement for Organizational and
Offering Expenses incurred on behalf of the Company. The amount of
proceeds that will be available to purchase Properties and to make
Mortgage Loans will be decreased as a result of such payments.
Of the proceeds from the sale of Shares, approximately 84% will be used
to acquire Properties and make Mortgage Loans, and approximately 9% will be paid
in fees and expenses to Affiliates of the Company for their services and as
reimbursement for Organizational and Offering Expenses incurred on behalf of the
Company; the balance will be used to pay other expenses of the offering.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Price to Selling Proceeds to
Public Commissions(1) Company(2)(3)
-------- -------------- -------------
Per Share $ 10.00 $ 0.75 $ 9.25
- ---------
Total Minimum $ 2,500,000 $ 187,500 $ 2,312,500
- -------------
Total Maximum(4) $155,000,000 $11,625,000 $143,375,000
- -------------
(footnotes on following page)
CNL SECURITIES CORP.
September 18, 1998
(1) CNL Securities Corp. (the "Managing Dealer") will receive Selling
Commissions of 7.5% on sales of Shares, subject to reduction in certain
circumstances. The Managing Dealer, which is an Affiliate of the
Company, may engage other broker-dealers that are members of the
National Association of Securities Dealers, Inc. or other entities
exempt from broker-dealer registration (collectively, the "Soliciting
Dealers") to sell Shares and reallow to them commissions of up to 7%
with respect to Shares which they sell. The amounts indicated for
Selling Commissions assume that reduced Selling Commissions are not
paid in connection with the purchase of any Shares and do not include a
0.5% marketing support and due diligence expense reimbursement fee
payable to the Managing Dealer, all or a portion of which may be
reallowed to certain Soliciting Dealers, with prior written approval
from, and in the sole discretion of, the Managing Dealer. See "The
Offering -- Plan of Distribution" for a description of the marketing
support and due diligence expense reimbursement fee payable to the
Managing Dealer. The Company also will issue to the Managing Dealer a
warrant (the "Soliciting Dealer Warrants") to purchase one share of
common stock for every 25 Shares sold, to be exercised, if at all,
during the five-year period commencing with the date the offering
begins (the "Exercise Period"), at a price of $12.00 per share. 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. See "Summary of Articles of Incorporation and
Bylaws -- Description of Capital Stock -- Soliciting Dealer Warrants"
and "The Offering -- Plan of Distribution."
(2) Before deducting (i) Organizational and Offering Expenses of the
Company estimated to be 3% of gross offering proceeds computed at
$10.00 per Share sold ("Gross Proceeds") and (ii) the marketing support
and due diligence expense reimbursement fee. Organizational and
Offering Expenses exclude Selling Commissions and the marketing support
and due diligence reimbursement fee.
(3) In addition, assuming 15,500,000 Shares, including 500,000 Shares
available to stockholders participating in the Company's Reinvestment
Plan, are sold and 600,000 Soliciting Dealer Warrants are issued to the
Managing Dealer, $480 of additional proceeds will be raised, and
assuming all such warrants are exercised at the exercise price of
$12.00 per share, a total of $7,200,000 of additional proceeds will be
raised. No Selling Commissions or marketing support and due diligence
expense reimbursement fee will be paid in connection with the issuance
of the Soliciting Dealer Warrants or the shares issuable upon the
exercise thereof.
(4) Includes 500,000 Shares which may be issued pursuant to the Company's
Reinvestment Plan. Those stockholders who elect to participate in the
Reinvestment Plan will have their Distributions reinvested in
additional Shares.
NEITHER THE ATTORNEY GENERAL OF THE STATE OF NEW YORK NOR THE ATTORNEY
GENERAL OF THE STATE OF NEW JERSEY OR THE BUREAU OF SECURITIES OF THE STATE OF
NEW JERSEY HAS PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
All subscription funds for Shares will be deposited in an
interest-bearing escrow account with SouthTrust Asset Management Company of
Florida, N.A., which will act as the escrow agent for this offering, until
subscription funds for the Company's Shares total $2,500,000. Subscription funds
will be released from escrow to the Company to be used for Company purposes
within approximately 30 days after the minimum is reached. No sale of Shares
shall be completed until at least five business days after the date on which the
subscriber receives a copy of this Prospectus. No Shares will be sold unless
subscriptions for at least 250,000 Shares ($2,500,000) have been obtained within
one year after the initial date of this Prospectus. In no event will
subscription funds be held in escrow for longer than one year, and any refunds
of subscriptions due to the failure of the Company to reach the required minimum
shall be returned promptly with interest. Pursuant to the requirements of the
Commissioner of Securities of the State of Pennsylvania, subscriptions from
Pennsylvania residents may not be released from escrow, or included in
determining whether the $2,500,000 minimum for the Company has been reached,
until subscriptions for Shares totalling at least $7,775,000 have been received
from all sources. The offering of Shares will terminate no later than September
18, 1999 (one year after the initial date of this Prospectus), unless the
Company elects to extend it to a date no later than September 18, 2000 (two
years after the initial date of this Prospectus), in states that permit such
extension.
PENNSYLVANIA INVESTORS: Because the minimum offering is less than
$15,500,000, all Pennsylvania investors are cautioned to evaluate carefully the
Company's ability fully to accomplish its stated objectives and to inquire as to
the current dollar volume of subscriptions for the Shares.
NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THIS OFFERING TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN
ANY STATE IN WHICH SUCH OFFER OR SALE WOULD BE UNLAWFUL, AND NO SUBSCRIPTION
WILL BE ACCEPTED FROM ANY PERSON WHO DOES NOT MEET THE SUITABILITY STANDARDS SET
FORTH HEREIN. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE HEREUNDER
SHALL CREATE, UNDER ANY CIRCUMSTANCES, AN IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. IF, HOWEVER, ANY
MATERIAL CHANGE OCCURS WHILE THIS PROSPECTUS IS REQUIRED BY LAW TO BE DELIVERED,
THIS PROSPECTUS WILL BE AMENDED OR SUPPLEMENTED ACCORDINGLY.
THE USE OF FORECASTS IN THIS OFFERING IS PROHIBITED. ANY
REPRESENTATIONS TO THE CONTRARY, AND ANY PREDICTIONS, WRITTEN OR ORAL, AS TO THE
AMOUNT OR CERTAINTY OF ANY PRESENT OR FUTURE CASH BENEFIT OR TAX CONSEQUENCE
WHICH MAY FLOW FROM AN INVESTMENT IN THIS COMPANY IS PROHIBITED.
THE OFFERING -- ESCROW ARRANGEMENTS
ESCROW ARRANGEMENTS
Subscription proceeds will be received in trust and deposited in a
separate account with SouthTrust Asset Management Company of Florida, N.A. (the
"Bank"). No Shares will be sold by the Company, no commissions or fees will be
paid by it, and the initial admission of investors of the Company will not take
place unless subscriptions have been accepted for at least 250,000 Shares
($2,500,000) and subscription funds from investors who place telephonic orders
have been on deposit with the Bank for at least 15 days from the date written
confirmation is mailed to the investor by the Managing Dealer. If subscriptions
for at least $2,500,000 have not been received, accepted, and paid for within
one year from the initial date of this Prospectus, all funds received will be
promptly repaid in full, with any interest earned thereon.
The Escrow Agreement between the Company and the Bank provides that
escrowed funds will be invested by the Bank in an interest-bearing account with
the power of investment in short-term, highly liquid securities issued or
guaranteed by the U.S. Government, other investments permitted under Rule 15c2-4
of the Securities Exchange Act of 1934, as amended, or, upon receipt of
subscription proceeds for at least 250,000 Shares (provided that subscription
funds from investors who place telephonic orders have been on deposit with the
Bank for at least 15 days), in other short-term, highly liquid investments with
appropriate safety of principal. Such subscription funds will be released
periodically (at least once per month) upon admission of stockholders to the
Company.
The interest, if any, earned on subscription proceeds prior to their
release from escrow, within 30 days after the date a subscriber is admitted to
the Company as a stockholder, will be distributed to each subscriber. After the
initial admission of stockholders to the Company in connection with the sale of
at least 250,000 Shares, interest will be payable only to those subscribers
whose funds have been held in escrow by the Bank for at least 20 days.
Stockholders will not otherwise be entitled to interest earned on Company funds
or to receive interest on their Invested Capital.
<PAGE>
APPENDIX D
SUBSCRIPTION DOCUMENT
-----------------------------------------------
THE FOLLOWING INFORMATION UPDATES AND
REPLACES THE CORRESPONDING INFORMATION IN
APPENDIX D TO THE ATTACHED PROSPECTUS, DATED
SEPTEMBER 18, 1998.
-----------------------------------------------
<PAGE>
-------------------------------------
| |
| CNL |
| Health Care |
| Properties, Inc. |
| |
-------------------------------------
Up to 15,500,000 Shares -- $10.00 per Share
Minimum Purchase -- 250 Shares ($2,500)
100 Shares ($1,000) for IRAs, Keogh, and Qualified Plans
(Minimum purchase may be higher in certain states)
================================================================================
PLEASE READ CAREFULLY this Subscription Agreement and the Notices (on the back
of the Agreement) before completing this document. TO SUBSCRIBE FOR SHARES,
complete and sign, where appropriate, and deliver the Subscription Agreement,
along with your check, to your Registered Representative. YOUR CHECK SHOULD BE
MADE PAYABLE TO:
SOUTHTRUST ASSET MANAGEMENT COMPANY OF FLORIDA, N.A.
ALL ITEMS ON THE SUBSCRIPTION AGREEMENT MUST BE COMPLETED IN ORDER FOR YOUR
SUBSCRIPTION TO BE PROCESSED.
================================================================================
Overnight Packages: Regular Mail Packages:
Attn: Investor Services Attn: Investor Services
400 E. South Street Post Office Box 1033
Orlando, Florida 32801 Orlando, Florida 32802-1033
For Telephone Inquiries:
CNL SECURITIES CORP.
(407) 650-1000 OR (800) 522-3863
<PAGE>
CNL Health Care Properties, Inc.
1._______________INVESTMENT_____________________________________________________
This subscription is in the amount of $ for the purchase of Shares ($10.00 per
Share). The minimum initial subscription is 250 Shares ($2,500); 100 Shares
($1,000) for IRA, Keogh and qualified plan accounts (except in states with
higher minimum purchase requirements).
|_| ADDITIONAL PURCHASE |_| REINVESTMENT PLAN - Investor elects to
participate in Plan (See prospectus for
details.)
2._______________SUBSCRIBER INFORMATION_________________________________________
Name (1st)_______________________ |_| M |_| F Date of Birth (MM/DD/YY)________
Name (2nd)_______________________ |_| M |_| F Date of Birth (MM/DD/YY)________
Address_________________________________________________________________________
City_______________________________ State______________ Zip Code______________
Custodian Account No.______________________ Daytime Phone # (____)_____________
|_| U.S. Citizen |_| Resident Alien |_| Foreign Resident Country___________
|_| Check if Subscriber is a U.S. citizen residing outside the U.S.
Income Tax Filing State_________________________
ALL SUBSCRIBERS: State of Residence of Subscriber/Plan Beneficiary
(required)_____________________________________________________
Taxpayer Identification Number: For most individual taxpayers, it is their
Social Security number. Note: If the purchase is in more than one name, the
number should be that of the first person listed. For IRAs, Keoghs and qualified
plans, enter both the Social Security number and the custodian taxpayer
identification number.
Taxpayer ID#_____-____________ Social Security________-_______-_________
3._______________INVESTOR MAILING ADDRESS_______________________________________
For the Subscriber of an IRA, Keogh, or qualified plan to receive informational
mailings, please complete if different from address in Section 2.
Name____________________________________________________________________________
Address_________________________________________________________________________
City_____________________________ State______________ Zip Code______________
Daytime Phone #(_____)___________________
4._______________DIRECT DEPOSIT ADDRESS_________________________________________
Investors requesting direct deposit of distribution checks to another financial
institution or mutual fund, please complete below. In no event will the Company
or Affiliates be responsible for any adverse consequences of direct deposit.
Company_________________________________________________________________________
Address_________________________________________________________________________
City____________________________ State_____________ Zip Code _______________
Account No._______________________________ Phone #(_______)____________________
5._______________FORM OF OWNERSHIP______________________________________________
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(Select only one) |_| JOINT TENANTS WITH RIGHT OF SURVIVORSHIP - all parties must sign (8)
|_| INDIVIDUAL - one signature required (1) |_| A MARRIED PERSON/SEPARATE PROPERTY - one signature required (34)
|_| HUSBAND AND WIFE, AS COMMUNITY |_| KEOGH (H.R.10) - trustee signature required (24)
PROPERTY - two signatures required (15)
|_| CUSTODIAN - custodian signature required (33)
|_| TENANTS IN COMMON - two signatures required (9) |_| PARTNERSHIP (3)
|_| TENANTS BY THE ENTIRETY - |_| NON-PROFIT ORGANIZATION (12)
two signatures required (31)
|_| PENSION PLAN - trustee signature(s) required (19)
|_| S-CORPORATION (22) |_| PROFIT SHARING PLAN - trustee signature(s) required (27)
|_| C-CORPORATION (5) |_| CUSTODIAN UGMA-STATE of __________ - custodian signature required (16)
|_| IRA - custodian signature required (23) |_| CUSTODIAN UTMA-STATE of __________ - custodian signature required (42)
|_| ROTH IRA - custodian signature required (36) |_| estate - Personal Representative signature required (13)
|_| SEP - custodian signature required (38) |_| REVOCABLE GRANTOR TRUST - grantor signature required (25)
|_| TAXABLE TRUST (7) |_| IRREVOCABLE TRUST - trustee signature required (21)
|_| TAX-EXEMPT TRUST (20)
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|_| SUBSCRIBER elects to have the Shares covered by this subscription placed in
a new sponsored IRA account offered by Franklin Bank as custodian. IRA documents
will be sent to subscriber upon receipt of subscription documents. There is no
annual fee involved for CNL Health Care Properties, Inc. investments.
<PAGE>
CNL Health Care Properties, Inc.
6._______________SUBSCRIBER SIGNATURES__________________________________________
If the Subscriber is executing the Subscriber Signature Page, the Subscriber
understands that, BY EXECUTING THIS AGREEMENT A SUBSCRIBER DOES NOT WAIVE ANY
RIGHTS HE MAY HAVE UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE
ACT OF 1934 OR UNDER ANY STATE SECURITIES LAW:
X X
---------------------------- --------- --------------------------- ---------
Signature of 1st Subscriber Date Signature of 2nd Subscriber Date
7._______________BROKER/DEALER INFORMATION______________________________________
Broker/Dealer NASD Firm Name____________________________________________________
Registered Representative_______________________________________________________
Branch Mail Address_____________________________________________________________
City_______________ State_______ Zip Code_______ |_| Please check if new address
Phone #(_____)________________ Fax #(_____)_______________ |_| Sold CNL before
Shipping Address_____________________ City__________ State_______ Zip Code______
|_| Telephonic Subscriptions (check here): If the Registered Representative
and Branch Manager are executing the signature page on behalf of the
Subscriber, both must sign below. Registered Representatives and Branch
Managers may not sign on behalf of residents of Florida, Iowa, Maine,
Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New
Mexico, North Carolina, Ohio, Oregon, South Dakota, Tennessee or
Washington. [NOTE: Not to be executed until Subscriber(s) has (have)
acknowledged receipt of final prospectus.] Telephonic subscriptions may
not be completed for IRA accounts.
|_| Deferred Commission Option (check here): The Deferred Commission Option
means an agreement between a stockholder, the participating
Broker/Dealer and the Managing Dealer to have Selling Commissions paid
over a seven year period as described in "The Offering -- Plan of
Distribution." This option will only be available with prior
authorization by the Broker/Dealer.
|_| Registered Investment Advisor (RIA) (check here): This investment is
made through the RIA in its capacity as an RIA and not in its capacity
as a Registered Representative, if applicable. If an owner or principal
or any member of the RIA firm is an NASD licensed Registered
Representative affiliated with a Broker/Dealer, the transaction should
be conducted through that Broker/Dealer, not through the RIA.
PLEASE READ CAREFULLY THE REVERSE SIDE OF THIS SIGNATURE PAGE AND SUBSCRIPTION
AGREEMENT BEFORE COMPLETING
X
----------------------------- --------------------- ------------------------
Principal, Branch Manager or Date Print or Type Name of
Other Authorized Signature Person Signing
X
------------------------------------ ------------ --------------------------
Registered Representative/Investment Date Print or Type Name of
Advisor Signature Person Signing
- --------------------------------------------------------------------------------
Make check payable to : SOUTHTRUST ASSET MANAGEMENT COMPANY OF FLORIDA, N.A.,
ESCROW AGENT
Please remit check and For overnight delivery, please send to:
subscription document to:
For Office Use Only *
CNL SECURITIES CORP. CNL SECURITIES CORP. Sub.# _________________
Attn: Investor Services Attn: Investor Services
P. O. Box 1033 400 E. South Street Admit Date_____________
Orlando, FL 32802-1033 Orlando, FL 32801
(800) 522-3863 (407) 650-1000 Amount_________________
(800) 522-3863
Region_________________
RSVP#__________________
- --------------------------------------------------------------------------------
<PAGE>
NOTICE TO ALL INVESTORS:
(a) The purchase of Shares by an IRA, Keogh, or other tax-qualified plan does
not, by itself, create the plan.
(b) The Company, in its sole and absolute discretion, may accept or reject the
Subscriber's subscription which if rejected will be promptly returned to the
Subscriber, without interest. Non-U.S. stockholders (as defined in the
Prospectus) will be admitted as stockholders with the approval of the Advisor.
(c) THE SALE OF SHARES SUBSCRIBED FOR HEREUNDER MAY NOT BE COMPLETED UNTIL AT
LEAST FIVE BUSINESS DAYS AFTER THE DATE THE SUBSCRIBER RECEIVES A FINAL
PROSPECTUS. EXCEPT AS PROVIDED IN THIS NOTICE, THE NOTICE BELOW, AND IN THE
PROSPECTUS, THE SUBSCRIBER WILL NOT BE ENTITLED TO REVOKE OR WITHDRAW HIS
SUBSCRIPTION.
The subscriber is asked to refer to the prospectus concerning the Deferred
Commission Option outlined in "The Offering -- Plan of Distribution." This
option will only be available with prior authorization by the Broker/Dealer .
NOTICE TO NORTH CAROLINA RESIDENTS: By signing this Subscription Agreement,
North Carolina investors acknowledge receipt of the Prospectus and represent
that they meet the suitability standards for North Carolina investors listed in
the Prospectus.
BROKER/DEALER AND FINANCIAL ADVISOR:
By signing this subscription agreement, the signers certify that they recognize
and have complied with their obligations under the NASD's Conduct Rules, and
hereby further certify as follows: (i) a copy of the Prospectus, including the
Subscription Agreement attached thereto as Appendix D, as amended and/or
supplemented to date, has been delivered to the Subscriber; (ii) they have
discussed such investor's prospective purchase of Shares with such investor and
have advised such investor of all pertinent facts with regard to the liquidity,
valuation, and marketability of the Shares; and (iii) they have reasonable
grounds to believe that the purchase of Shares is a suitable investment for such
investor, that such investor meets the suitability standards applicable to such
investor set forth in the Prospectus and related supplements, if any, that such
investor is legally capable of purchasing such Shares and will not be in
violation of any laws for having engaged in such purchase, and that such
investor is in a financial position to enable such investor to realize the
benefits of such an investment and to suffer any loss that may occur with
respect thereto and will maintain documentation on which the determination was
based for a period of not less than six years; (iv) under penalties of perjury,
(a) the information provided in this Subscription Agreement to the best of our
knowledge and belief is true, correct, and complete, including, but not limited
to, the number shown above as the Subscriber's taxpayer identification number;
(b) to the best of our knowledge and belief, the Subscriber is not subject to
backup withholding either because the Subscriber has not been notified that the
Subscriber is subject to backup withholding as result of failure to report all
interest or dividends or the Internal Revenue Service has notified the
subscriber that the Subscriber is no longer subject to backup withholding under
Section 3406(a)(1)(C) of the Internal Revenue Code of 1986, as amended; and (c)
to the best of our knowledge and belief, the Subscriber is not a nonresident
alien, foreign corporation, foreign trust, or foreign estate for U.S. tax
purposes, and we hereby agree to notify the Company if it comes to the attention
of either of us that the Subscriber becomes such a person within sixty (60) days
of any event giving rise to the Subscriber becoming such a person.
<PAGE>
Franklin Bank, N.A.
- --------------------------------------------------------------------------------
FRANKLIN BANK, N.A., INDIVIDUAL RETIREMENT ACCOUNT APPLICATION
ACCOUNTHOLDER INFORMATION: NAME _______________________________________________
DISCLAIMER:
Franklin Bank, N.A. is a national bank, not associated with CNL Group,
Inc. or any CNL entity. Franklin Bank, N.A. is a custodian for IRAs and will act
in a custodial capacity for all beneficial owners of IRAs. CNL has no
affiliation with Franklin Bank, N.A.
It is not reasonable to project the growth of your IRA investments
include assets other than bank time deposits or savings accounts. Therefore,
your final account balance will depend upon many factors - the amount of your
contributions, the amount of time the funds are invested, the earnings and/or
losses from the investments, expenses incurred such as brokerage commissions and
trustee's fees and the overall performance of your investments. We expressly
state that the growth in the value of your IRA cannot be guaranteed or
projected.
SIGNATURES IMPORTANT: Please read before signing.
I understand the eligibility requirements for the type of IRA
deposit I am making and I state that I do qualify to make the
deposit. I understand that the terms and conditions which
apply to the Individual Retirement Account are contained in
this Application and Form 5305A (which will be provided
within 10 days of our receipt of this application). I agree
to be bound by those terms and conditions. I understand that
I will not be required to pay an annual fee as long as all
investments in this IRA are sponsored by a CNL entity. Within
seven (7) days from the date I establish the Individual
Retirement Account I may revoke it without penalty by mailing
or delivering a written notice to the Custodian.
I assume complete responsibility for:
1. Determining that I am eligible for an IRA each year I make
a contribution.
2. Insuring that all contributions I make are within the
limits set forth by the tax laws.
3. The tax consequences of any contribution (including
rollover contributions) and distributions.
Signature _______________________________________
Accountholder
________________________________________ _______________
Authorized Signature Trustee Date
DESIGNATION OF
BENEFICIARY(IES): I designate the individual(s) named below as my primary and
contingent Beneficiary(ies) of the IRA. I revoke all prior IRA
Beneficiary designations, if any, made by me. I understand
that I may change or add Beneficiaries at any time by
completing and delivering the proper form to the Custodian.
(If you wish to name more than one Beneficiary, attach a list
of each Beneficiary's name, social security number,
relationship to you and percentage share in this IRA.) If any
primary or contingent Beneficiary dies before me, his or her
interest and the interest of his or her heirs shall terminate
completely, and the percentage share of any remaining
Beneficiary(ies) shall be increased on a pro rata basis.
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<S> <C>
Primary The following individual(s) shall be my Primary Beneficiary(ies):
Beneficiary(ies)
Name___________________________________________________ Social Security #___________________
Address________________________________________________ Date of Birth__________ Share______
_______________________________________________________ Relationship________________________
Contingent If none of the Primary Beneficiaries survive me, the following
individual(s) shall be my Beneficiary(ies):
Beneficiary(ies)
Name___________________________________________________ Social Security #___________________
Address________________________________________________ Date of Birth__________ Share______
_______________________________________________________ Relationship________________________
</TABLE>
Spousal Consent
I am the spouse of IRA accountholder named above. I agree to
my spouse's naming of a primary Beneficiary other than
myself. I acknowledge that I have received a fair and
reasonable disclosure of my spouse's property and financial
obligation. I also acknowledge that I shall have no claim
whatsoever against the Custodian for any payments to my
spouse's Beneficiary(ies).
_________________________________________ _______________
Spouse's Signature Date
- --------------------------------------------------------------------------------
Custodial Services P.O. Box 7090 Troy, MI 48007-7090
1-800-344-0667
<PAGE>
INVESTMENT OPTIONS:
|_| I would like to receive information regarding mutual fund investments.
|_| I would like to receive information regarding money market accounts.
Note: Franklin Bank, N.A. may consider other investment options for your IRA.
Please provide the following information on your options.
Fund Name_______________________________________________________________________
Sponsor Name____________________________________________________________________
Address_________________________________________________________________________
Account No._________________________________ Telephone #________________________
Registered Representative information:
Registered Representative's Name________________________________________________
Company_________________________________________________________________________
Address_________________________________________________________________________
Telephone #_____________________________________________________________________
